Under a Supreme Court ruling issued June 8, nursing home residents are entitled to sue publicly-owned nursing homes for violations of rights under the Federal Nursing Home Reform Act (FNHRA).  The case is Health and Hospital Corporation of Marion County v. Talevski, and a seven-justice majority joined in the Court’s opinion.

Background

Gorgi Talevski was a resident at the Valparaiso Care and Rehabilitation center in Indiana, a nursing home owned by public entity Health and Hospital Corporation of Marion County (HHC).  Mr. Talevksi suffered from dementia and experienced physical and mental decline during his stay at the facility.  His family sued HHC and other parties in federal court, alleging in part that HHC violated his statutory right under FNHRA to be free from chemical restraints when it administered certain medications to him, and that it deprived him of rights relating to resident transfer and discharge procedures.

The lawsuit was based on a U.S. Code provision known as §1983, which provides that if a government entity subjects a person “to the deprivation of any rights … secured by the Constitution and laws,” the person whose rights were violated may bring suit against the government entity.  Talevksi argued that FNHRA provides such rights, and a resident of a governmentally owned nursing home may therefore bring a suit under §1983.

A federal district court in Indiana initially dismissed the claim, finding that FNHRA does not provide a private right of action under §1983.  The U.S. Court of Appeals for the Seventh Circuit reversed that decision, holding that FNHRA does provide such a right, and HHC appealed to the Supreme Court.

The Issues and the Court’s Decision

HHC advanced two arguments. The first and broader of these was that statutes such as the Social Security Act—in which Congress authorizes funding to be paid to States, provided States follow certain requirements and use the money in certain ways – do not establish rights that individuals may privately enforce against government actors. HHC asked the Court to rule that federal legislation based on the Congress’s constitutional “spending clause” power is essentially a contract between the federal government and State recipients of federal funds, and that private parties may not enforce such laws through §1983 because contracts were not generally enforceable by third-party beneficiaries at the time the statute was enacted in the 1870s. If the Court had accepted this wholesale argument, it would have limited a wide range of §1983 actions, such as claims against state Medicaid programs relating to beneficiary access to benefits. But the Court rejected it, holding that it did not square with the plain language of §1983 and declining to overturn decades of Supreme Court precedent.

The second and narrower argument was that, even if Spending Clause statutes can give rise to private rights enforceable under §1983 in some cases, Congress did not intend the specific FNHRA residents’ rights provisions at issue in the Talevski case to be enforceable in this way.

On this question, HHC’s primary argument was that Congress precluded or preempted a §1983 claim by creating a comprehensive enforcement system within FNHRA itself: requiring federal and state surveyors to conduct investigations, empowering the federal government to impose a range of escalating penalties on non-compliant facilities, including fines, denial of payment and termination, as well making administrative remedies available to residents.

LeadingAge supported this position, as did the federal government.  In a brief filed with the Court on behalf of the Biden Administration, the U.S. Solicitor General argued that Congress did not intend to permit enforcement of FNHRA under §1983, in addition to the system of enforcement mechanisms and remedies in FNHRA itself.  To find otherwise, the Administration argued, would mean nursing-home residents who reside in government facilities (roughly 7% of all facilities) could resort to §1983 while residents in private facilities could not, and reading FNHRA as a whole confirms that Congress did not intend that result.

The Court ruled otherwise, however, applying a two-step statutory construction analysis to conclude that the FNHRA resident rights provisions at issue in the case are enforceable through §1983.  It held that FNHRA unambiguously confers individual rights to residents, and that HHC had failed to show that Congress intended the administrative system established through the statute to be the exclusive avenue through which a resident may assert claims.  In essence, the Court discerned no incompatibility between private enforcement under §1983 and the remedial scheme that Congress created.

What the Decision Means

As a result of the Supreme Court’s decision, residents of government-owned and operated nursing homes will have the option to bring federal lawsuits under §1983 to enforce rights under FNHRA and seek remedies for violations of those rights, which will create significant additional exposure to claims and risks of liability for these facilities.

While the underlying case and the Court’s opinion addressed just two specific provisions of FNHRA—a right to be free from unnecessary physical or chemical restraints and to be discharged or transferred only when certain preconditions are satisfied—individuals will likely seek to enforce other FNHRA provisions that enumerate resident rights, beyond those involved in the case, based on the Court’s analysis.

This additional exposure could be a deterrent or disincentive to continued ownership of these facilities for counties, cities and other municipalities, and we can expect that government entities will carefully analyze the decision and evaluate its ramifications.  Ultimately, if local governments decide against nursing home ownership and operations due to increased risk of liability, it may result in limiting older adults’ access to care.

LeadingAge will continue to analyze the Court’s opinion and its implications for providers.