Wilder v. Virginia Hospital Association

Citation110 S.Ct. 2510,110 L.Ed.2d 455,496 U.S. 498
Decision Date14 June 1990
Docket NumberNo. 88-2043,88-2043
PartiesL. Douglas WILDER, Governor of Virginia, et al., Petitioners v. VIRGINIA HOSPITAL ASSOCIATION
CourtUnited States Supreme Court
Syllabus

To qualify for federal financial assistance to help defray the cost of furnishing medical care to the needy under the Medicaid Act, States must submit to the Secretary of Health and Human Services for approval a plan which, inter alia, establishes a scheme for reimbursing health care providers. In 1980, Congress passed the Boren Amendment to the Act, which requires provider reimbursement according to rates that the "State finds, and makes assurances satisfactory to the Secretary," are "reasonable and adequate" to meet the costs of "efficiently and economically operated facilities." The State must also assure the Secretary that individuals have "reasonable access" to facilities of "adequate quality." Virginia's plan, under which providers are reimbursed according to a prospective formula, was approved by the Secretary in 1982 and again in 1986 after an amendment. In 1986, respondent, a nonprofit corporation composed of public and private hospitals operating in Virginia, filed suit against petitioner state officials for declaratory and injunctive relief under 42 U.S.C. § 1983, alleging that the state plan violates the Act because its reimbursement rates are not "reasonable and adequate." The District Court denied petitioners' motion to dismiss or for summary judgment, which was based on the claim that § 1983 does not afford respondent a cause of action. The Court of Appeals affirmed, concluding that providers may sue state officials for declaratory and injunctive relief under § 1983 to assure compliance with the Boren Amendment.

Held: The Boren Amendment is enforceable in a § 1983 action for declaratory and injunctive relief brought by health care providers. Pp. 508-524.

(a) Section 1983—which provides a cause of action for the "deprivation of any rights . . . secured by [federal] laws"—is inapplicable if (1) the statute in question does not create enforceable "rights" within § 1983's meaning, or (2) Congress has foreclosed such enforcement of the statute in the enactment itself. Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418, 423, 107 S.Ct. 766, 770, 93 L.Ed.2d 781. P. 508.

(b) The Boren Amendment creates a substantive federal "right," enforceable by providers under § 1983, to the adoption of reasonable and adequate reimbursement rates. There can be little doubt that providers are the intended beneficiaries of the amendment, see Golden State Tran- sit Corp. v. Los Angeles, 493 U.S. 103, 106, 110 S.Ct. 444, 448, 107 L.Ed.2d 420, since the amendment establishes a system for reimbursing such providers and is phrased in terms benefiting them. Moreover, the amendment imposes a "binding obligation" on the States that gives rise to enforceable rights, see Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 19, 101 S.Ct. 1531, 1541, 67 L.Ed.2d 694, since it is cast in mandatory rather than precatory terms, and since the provision of federal funds is expressly conditioned on compliance with the amendment. Petitioners' contention that Congress did not intend to require States to adopt rates that actually are reasonable and adequate is contrary to the statutory language, which requires the State to find that its rates satisfy these requirements and entitles the Secretary to reject a state plan upon concluding that the assurances given are unsatisfactory, and would render those requirements, and thus the entire reimbursement provision, essentially meaningless. Petitioners' contention is quickly dispelled by a review of the amendment's background and the legislative history, which demonstrate that the amendment was passed to free the States from restrictive reimbursement requirements previously imposed by the Secretary and not to relieve them of their fundamental obligation to pay reasonable rates, and that Congress intended to retain providers' pre-existing right to challenge rates as unreasonable in injunctive suits under § 1983. Furthermore, a State's flexibility to adopt rates that it finds to be reasonable and adequate does not, as petitioners contend, render the obligation imposed by the amendment too "vague and amorphous" to be judicially enforceable. See Golden State, supra, 493 U.S., at 106, 110 S.Ct., at 448. The statute and the Secretary's regulations set out factors which a State must consider in adopting its rates, and the statute requires the State, in making its findings, to judge the rates' reasonableness against the objective benchmark of an "efficiently and economically operated facility" while ensuring "reasonable access" to eligible participants. Although some knowledge of the hospital industry might be required to evaluate a State's findings, such an inquiry is well within the competence of the Judiciary. Pp. 509-520.

(c) Congress has not foreclosed a private judicial remedy for enforcement of the Boren Amendment under § 1983, since there is no express provision to that effect in the Act, see Wright, supra, 479 U.S., at 423, 107 S.Ct., at 770, and since the statute does not create a remedial scheme that is sufficiently comprehensive to demonstrate an intent to preclude the remedy of § 1983 suits, see Middlesex County Sewerage Authority v. National Sea Clammers Assn., 453 U.S. 1, 20, 101 S.Ct. 2615, 2626, 69 L.Ed.2d 435. Because a primary purpose of the amendment was to reduce the Secretary's role in determining rate payment calculation methods, the Secretary's limited oversight function under the Act, which authorizes him to withhold approval of plans or to curtail federal funds in cases of noncompliance, is insufficient to demonstrate an intent to foreclose § 1983 relief. Cf. Wright, supra, 479 U.S., at 428, 107 S.Ct., at 773. Moreover, although a regulation requires States to adopt an appeals procedure by which individual providers may obtain administrative review of reimbursement rates, it also allows States to limit the issues that may be raised on review, and most States, including Virginia, do not allow providers to challenge the overall method by which rates are determined. Such limited state procedures cannot be considered a "comprehensive" scheme that precludes reliance on § 1983. See 479 U.S., at 429, 107 S.Ct., at 773. Pp. 520-523.

868 F.2d 653 (CA4 1989), affirmed.

BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. REHNQUIST, C.J., filed a dissenting opinion, in which O'CONNOR, SCALIA, and KENNEDY, JJ., joined, post, p. 524.

R. Claire Guthrie, Richmond, Va., for petitioners.

John G. Roberts, Jr., for U.S. as amicus curiae, supporting petitioners, by special leave of Court.

Walter Dellinger, for respondent.

Justice BRENNAN delivered the opinion of the Court.

This case requires us to determine whether a health care provider may bring an action under 42 U.S.C. § 1983 (1982 ed.) 1 to challenge the method by which a State reimburses health care providers under the Medicaid Act (Act), 79 Stat. 343, as amended, 42 U.S.C. § 1396 et seq. (1982 ed. and Supp. V). More specifically, the question presented is whether the Boren Amendment to the Act, which requires reimbursement according to rates that a "State finds, and makes assurances satisfactory to the Secretary, are- rea sonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities," 42 U.S.C. § 1396a(a)(13)(A) (1982 ed., Supp. V), is enforceable in an action pursuant to § 1983.

I
A.

Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals. § 1396. Although participation in the program is voluntary, participating States must comply with certain requirements imposed by the Act and regulations promulgated by the Secretary of Health and Human Services (Secretary). To qualify for federal assistance, a State must submit to the Secretary and have approved a "plan for medical assistance," § 1396a(a), that contains a comprehensive statement describing the nature and scope of the State's Medicaid program. 42 CFR § 430.10 (1989). The state plan is required to establish, among other things, a scheme for reimbursing health care providers for the medical services provided to needy individuals.

Section 1902(a)(13) of the Act sets out the requirements for reimbursement of health care providers. As amended in 1980 (Boren Amendment),2 the section provides that

"a State plan for medical assistance must—

. . . . .

"provide . . . for payment . . . of the hospital services, nursing facility services, and services in an intermediate care facility for the mentally retarded provided under the plan through the use of rates (determined in accordance with methods and standards developed by the State . . .) which the State finds, and makes assurances satisfactory to the Secretary, are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality and safety standards and to assure that individuals eligible for medical assistance have reasonable access . . . to inpatient hospital services of adequate quality." 42 U.S.C. § 1396a(a)(13)(A) (1982 ed., Supp. V) (emphasis added).

The Commonwealth of Virginia's State Plan for Medical Assistance was approved by the Secretary in 1982 and again in 1986 after an amendment was made. Complaint, ¶ 11, App. 11. Under the plan, health care providers are reimbursed for services according to a prospective formula—that is, reimbursement rates for various types of medical services and procedures are fixed in advance. Specifically, providers are divided into "peer groups" based on their...

To continue reading

Request your trial
2126 cases
  • Olivia Y. ex rel. Johnson v. Barbour, No. CIV.A.3:04 CV 251LN.
    • United States
    • U.S. District Court — Southern District of Mississippi
    • November 18, 2004
    ...right is couched in mandatory, rather than precatory, terms. Id. (citing Blessing); see also Wilder v. Virginia Hospital Ass'n, 496 U.S. 498, 509, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990) (setting forth these three In Gonzaga University v. Doe, the Court emphatically "reject[ed] the notion th......
  • Applegate v. Said
    • United States
    • U.S. District Court — Eastern District of California
    • November 16, 2016
    ...the deprivation of any rights, privileges, or immunities secured by the Constitution and laws of the United States." Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 508 (1990) (quoting 42 U.S.C. § 1983). Section 1983 is not itself a source of substantive rights, but merely provides a method f......
  • Davis v. McClaran
    • United States
    • Tennessee Supreme Court
    • October 30, 1995
    ...Robinson, 468 U.S. 992, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984). A. THE ENFORCEABLE RIGHT EXCEPTION In Wilder v. Virginia Hospital Ass'n, 496 U.S. 498, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990), the United States Supreme Court synthesized its prior cases and formulated a three-part test for dete......
  • Guilford County Community Action Program v. Wilson, No. 1:03CV00427.
    • United States
    • U.S. District Court — Middle District of North Carolina
    • December 6, 2004
    ...& Housing Authority, 479 U.S. 418, 429, 107 S.Ct. 766, 773, 93 L.Ed.2d 781 (1987) and Wilder v. Virginia Hospital Association, 496 U.S. 498, 523, 110 S.Ct. 2510, 2525, 110 L.Ed.2d 455 (1990). In those two cases, the statutory provisions conferred an "objective" monetary entitlement upon pla......
  • Request a trial to view additional results
3 firm's commentaries
  • Enforcing Medicaid's Entitlement Still Uncertain In The Wake Of The Supreme Court's Douglas Decision
    • United States
    • Mondaq United States
    • March 12, 2012
    ...striking down a major piece of Spending Clause legislation this Term. Footnotes 1 Social Security Act § 1902(a), 42 U.S.C. § 1396a(a). 2 496 U.S. 498 (1990). 3 The federal civil rights statute, enacted in the aftermath of the Civil War, provides a cause of action for any individual who has ......
  • Enforcing Medicaid's Requirements In The Federal Courts
    • United States
    • Mondaq United States
    • June 22, 2022
    ...in federal court? In 1990, the Supreme Court answered this question in the affirmative. In Wilder v. Virginia Hospital Association, 496 U.S. 498 (1990), the Supreme Court held that if a health care provider wanted to challenge a state Medicaid plan's purported violation of a provision of se......
  • Enforcing Medicaid’s Requirements in the Federal Courts
    • United States
    • LexBlog United States
    • June 21, 2022
    ...in federal court? In 1990, the Supreme Court answered this question in the affirmative. In Wilder v. Virginia Hospital Association, 496 U.S. 498 (1990), the Supreme Court held that if a health care provider wanted to challenge a state Medicaid plan’s purported violation of a provision of se......
7 books & journal articles
  • A blessing in disguise: protecting minority faiths through state religious freedom non-restoration acts.
    • United States
    • Harvard Journal of Law & Public Policy Vol. 23 No. 2, March 2000
    • March 22, 2000
    ...1983,' or (2) `Congress has foreclosed such enforcement of the statute in the enactment itself.'" Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 508 (1990) (alteration in original) (quoting Wright v. Roanoke Redevelopment & Hous. Auth., 479 U.S. 418, 423 (1987). (337.) See Williams v. No......
  • Prisoners' Rights
    • United States
    • Georgetown Law Journal No. 110-Annual Review, August 2022
    • August 1, 2022
    ...of conf‌inement may properly bring suit under § 1983, 3204 a prisoner challenging “the very fact or duration of Va. Hosp. Ass’n, 496 U.S. 498, 508-09 (1990) (violations of federal statute not actionable under § 1983 if statute explicitly foreclosed such enforcement, did not create “enforcea......
  • THE BRANCH BEST QUALIFIED TO ABOLISH IMMUNITY.
    • United States
    • Notre Dame Law Review Vol. 93 No. 5, May 2018
    • May 1, 2018
    ...448 U.S. 1, 4 (1980) (recognizing enforceability of federal statutes generally under [section] 1983), and Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 508 (1990) ("A plaintiff alleging a violation of a federal statute will be permitted to sue under [section]1983 unless (1) 'the statute [does] n......
  • Enforceable rights, No Child Left Behind, and political patriotism: a case for open-minded section 1983 jurisprudence.
    • United States
    • University of Pennsylvania Law Review Vol. 153 No. 3, January 2005
    • January 1, 2005
    ...Congress intended to confer individual fights upon a class of beneficiaries."). (34) Id. at 285-86. (35) See Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 508 n.9 (1990) (asserting that the existence of section 1983 as an express remedy negates the separation of powers concerns that exist in imp......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT