Yolanda Martes v. Chief Executive Officer of South Broward Hospital District , 683 F.3d 1323 ( 2012 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JUNE 15, 2012
No. 11-12464
________________________ JOHN LEY
CLERK
D.C. Docket No. 0:10-cv-61666-WPD
YOLANDA MARTES,
MARIA RAMIREZ,
PAULA NEHER,
FELIX RAPALO,
SHAWNEEQUA ELLIOTT,
as Guardian for J.A., a minor,
Plaintiffs-Appellants,
versus
CHIEF EXECUTIVE OFFICER OF SOUTH BROWARD HOSPITAL
DISTRICT,
SECRETARY, FLORIDA AGENCY FOR HEALTH CARE
ADMINISTRATION,
SECRETARY, FLORIDA DEPARTMENT OF CHILDREN AND FAMILIES,
SOUTH BROWARD HOSPITAL DISTRICT,
FLORIDA DEPARTMENT OF CHILDREN AND FAMILIES,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(June 15, 2012)
Before HULL and FAY, Circuit Judges, and BOWEN,* District Judge.
BOWEN, District Judge:
Yolanda Martes and four co-plaintiffs1 appeal the district court’s dismissal
of their amended complaint against Florida government defendants South Broward
Hospital District and its CEO (“SBHD”), the Florida Agency for Health Care
Administration and its secretary (“AHCA”), and the Florida Department of
Children and Families and its secretary (“DCF”). After review and oral argument,
we affirm.
I. BACKGROUND
The Medicaid Act, Title XIX of the Social Security Act, 42 U.S.C. § 1396 et
seq., is a federal aid program designed to provide federal funding to States that
choose to reimburse certain costs of medical treatment for needy persons. See
*
Honorable Dudley H. Bowen, Jr., United States District Judge for the Southern District
of Georgia, sitting by designation.
1
The co-plaintiffs are Maria Ramirez, Paula Neher, Felix Rapalo, and Shawneequa Elliot,
as guardian for J.A., a minor.
2
Schweiker v. Hogan, 457 U.S. 569, 571-72, 102 S. Ct. 2597, 2600 (1982).
Participation is voluntary, but if a State decides to participate, it must comply with
all federal statutory and regulatory requirements. Participating States are required
to provide medical assistance to the “categorically needy,” a group that includes
“individuals eligible for cash benefits under the Aid to Families with Dependent
Children (AFDC) program, the aged, blind, or disabled individuals who qualify for
supplemental security income (SSI) benefits, and other low-income groups such as
pregnant women and children entitled to poverty-related coverage.” Pharma.
Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 651 n.4, 123 S. Ct. 1855, 1861
n.4 (2003) (citing 42 U.S.C. § 1396a(a)(10)(A)(I)). At their option, States also
may provide medical assistance to the “medically needy,” which includes those
“who meet the nonfinancial eligibility requirements for inclusion in one of the
groups covered under Medicaid, but whose income or resources exceed the
financial eligibility requirements for categorically needy eligibility.” Id. at 651
n.5, 123 S. Ct. at 1861 n.5 (citing 42 U.S.C. § 1396(a)(10)(C)). Florida has
elected to provide medical assistance to the medically needy as well as the
categorically needy.
The plaintiffs are Medicaid “medically needy” program beneficiaries, who,
according to their amended complaint, “were illegally billed for medical services
3
provided by the defendant South Broward Hospital District . . . and other non-
party hospitals” when the hospitals (1) billed and received payment from
defendant AHCA, which administers Florida’s Medicaid program, and (2) billed
the plaintiffs for the same services and in excess of the amount to which the
defendant SBHD and other hospitals were entitled. The plaintiffs claim that this
billing practice violated both 42 U.S.C. § 1396a(a)(25)(C), the “balance billing”
provision of the federal Medicaid Act, and a similar Florida statute. As a result of
the alleged illegal billing, the plaintiffs claim that they “were deluged with
medical bills, hounded by collection agencies, had lawsuits filed against them, and
had their credit destroyed.”
Count I of the plaintiffs’ four-count amended complaint alleges a cause of
action under 42 U.S.C. § 1983. Count I claims that SBHD’s billing violated 42
U.S.C. § 1396a(a)(25)(C) and a Florida statute and that AHCA and DCF violated
these statutes by failing “to adequately supervise, monitor and enforce [the
hospitals’] compliance” with the statutes. The plaintiffs seek damages, declaratory
and injunctive relief. The remaining three counts assert state law negligence and
fraud claims against defendants SBHD, AHCA and DCF.
The defendants each moved to dismiss the plaintiffs’ complaint. The
district court granted the defendants’ motions to dismiss as to Count I on grounds
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that 42 U.S.C. § 1396a(a)(25)(C) does not create an individual federal “right”
enforceable under § 1983. Having dismissed Count I, the district court declined to
exercise supplemental jurisdiction over the state law claims in Counts II through
IV and dismissed those counts without prejudice. The plaintiffs appealed.
II. STANDARD OF REVIEW
“We review the district court’s grant of a motion to dismiss de novo,
accepting the allegations in the complaint as true and construing them in the light
most favorable to the plaintiff.” DeYoung v. Owens, 646 F.3d 1319, 1324 n.2
(11th Cir. 2011).
III. DISCUSSION
Section 1983 provides a private cause of action against any person who,
under color of law, deprives an individual of “any rights, privileges, or immunities
secured by the Constitution and laws” of the United States. 42 U.S.C. § 1983.
Section 1983 provides a remedy for violations of rights secured by federal
statutory as well as constitutional law. Maine v. Thiboutot, 448 U.S. 1, 4, 100 S.
Ct. 2502, 2504 (1980). In order to seek redress through § 1983, “a plaintiff must
assert the violation of a federal right, not merely a violation of federal law.”
Blessing v. Freestone, 520 U.S. 329, 340, 117 S. Ct. 1353, 1359 (1997) (emphasis
in original); see also Gonzaga Univ. v. Doe, 536 U.S. 273, 283, 122 S. Ct. 2268,
5
2275 (2002) (“[I]t is rights, not the broader or vaguer ‘benefits’ or ‘interests,’ that
may be enforced under [§ 1983].”).2 Private rights of action to enforce federal
statutes enacted under the Spending Clause are particularly disfavored. See
Pennhurst State Sch. & Hosp. v. Alderman, 451 U.S. 1, 28, 101 S. Ct. 1531, 1545
(1981) (“In legislation enacted pursuant to the spending power, the typical remedy
for state noncompliance with federally imposed conditions is not a private cause of
action for noncompliance but rather action by the Federal Government to
terminate funds to the State.”)
A three-part test determines whether Spending Clause legislation, such as
the Medicaid Act, creates a right of action under § 1983: (1) Congress must have
intended that the statute in question benefit the plaintiff; (2) the asserted right must
not be so “vague and amorphous” that its enforcement would strain judicial
competence; and (3) the statute must clearly impose a mandatory obligation upon
the states. Blessing, 520 U.S. at 340-41, 117 S. Ct. at 1360. In Gonzaga
University v. Doe, the Supreme Court clarified and narrowed the first prong,
holding that “anything short of an unambiguously conferred right” does not
2
Plaintiffs-Appellants have relied upon the decision in Mallo v. Public Health Trust, 88
F. Supp. 2d 1376 (S.D. Fla. 2000), which recognized a § 1983 right of action based upon a
violation of § 1396a(a)(25)(C). However, as properly distinguished by the district court judge in
this case, the Mallo decision was decided prior to Gonzaga Univ. v. Doe, 536 U.S. 273, 122 S.
Ct. 2268 (2002), and relied upon a third party beneficiary analysis - an approach expressly
disclaimed by the Gonzaga Court.
6
support an individual right of action under § 1983. Gonzaga, 536 U.S. at 283-84
& n.3, 122 S. Ct. at 2275-76 & n.3 (“Where a statute does not include this sort of
explicit ‘right- or duty-creating language,’ we rarely impute to Congress an intent
to create a private right of action.”).3 Further, if a federal statute’s text and
structure “provide some indication that Congress may have intended to create
individual rights, and some indication it may not have, that means Congress has
not spoken with the requisite ‘clear voice.’ Ambiguity precludes enforceable
rights.” 31 Foster Children v. Bush, 329 F.3d 1255, 1270 (11th Cir. 2003)
(quoting Gonzaga, 536 U.S. at 280, 122 S. Ct. at 2273).
In Arrington v. Helms, 438 F.3d 1336 (11th Cir. 2006), this Court distilled
Blessing’s first prong, as modified by Gonzaga, to require that courts consider:
whether the provision (1) contains individually focused, rights-creating
language; (2) has an individual, rather than systemwide or aggregate,
focus; and (3) lacks an enforcement mechanism for aggrieved
individuals.
438 F.3d at 1345.4 Applying these considerations, we held in Arrington that the
3
In Gonzaga, the Supreme Court held that the Family Educational Rights and Privacy
Act (“FERPA”) did not create a right actionable under § 1983, concluding that FERPA was
directed at the Secretary of Education’s authority to spend funds and was not therefore
“individually focused.” 536 U.S. at 287, 122 S. Ct. at 2277.
4
To be clear, Gonzaga declined to find a private right of action in FERPA because the
relevant provisions “contain no rights-creating language, they have an aggregate, not individual
focus, and they serve primarily to direct the Secretary of Education’s distribution of public funds
to education institutions.” 536 U.S. at 290, 122 S. Ct. at 2279.
7
provision of the Personal Responsibility and Work Opportunity Reconciliation Act
that controlled States’ distribution of federal funds to needy families, 42 U.S.C.
§ 657, did not confer a private right of distribution of child support payments
enforceable under § 1983. Id. at 1346-47. Likening § 657 to the statute at issue in
Gonzaga, we explained that § 657 speaks to states rather than to individuals.
Though § 657 referred to “family” as the recipient of federal funds, the statute did
so “only to explain how the state generally must distribute . . . funds.” Id. at 1346.
Accordingly, we made clear that in evaluating whether Congress intended to
establish a federal enforceable “right,” courts must look to whether the statute
contains unambiguous “rights-creating” language. Id. at 1345.
After applying these legal standards, the district court here concluded that
the statute at issue, 42 U.S.C. § 1396a(a)(25)(C), does not contain “‘rights-
creating’ language that is individually focused.” Section 1396a(a)(25)(C)
provides as follows:
A State plan for medical assistance must -
provide . . . that in the case of an individual who is entitled to
medical assistance under the State plan with respect to a service for
which a third party is liable for payment, the person furnishing the
service may not seek to collect from the individual (or any financially
responsible relative or representative of that individual) payment of an
amount for that service (i) if the total of the amount of the liabilities of
third parties for that service is at least equal to the amount payable for
8
that service under the plan (disregarding section 1306o of this title), or
(ii) in an amount which exceeds the lesser of (I) the amount which
may be collected under section 1396o of this title, or (II) the amount
by which the amount payable for that service under the plan
(disregarding section 1396o of this title), exceeds the total of the
amount of the liabilities of third parties for that service . . . .
42 U.S.C. § 1396a(a)(25)(C) (emphasis added). The language in
§ 1396a(a)(25)(C) merely restricts service providers from seeking to collect
certain payments from Medicaid recipients. Plaintiffs-Appellants, however, ask
this Court to recognize an enforceable federal right against anyone, particularly
Medicaid service providers such as defendant SBHD, who improperly bill
Medicaid recipients under this provision.
Congress clearly knows how to confer federal rights within a statutory
framework as evidenced by liability statutes located in the Truth in Lending Act,
15 U.S.C. § 1640(a) (“[A]ny creditor who fails to comply with any requirement
imposed under this part . . . is liable . . . .”); the Real Estate Settlement Procedures
Act, 12 U.S.C. § 2605(f) (“Whoever fails to comply with any provision of this
section shall be liable to the borrower . . . .”); and the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692k (“[A]ny debt collector who fails to comply with
any provision of this subchapter with respect to any person is liable to such person
. . . .”). Congress has enacted no such liability language for the balance billing
9
provision of the Medicaid Act. In fact, Congress has not enacted liability
language for any failure of a State to include in its Medicaid plan any required
provision listed in § 1396a(a). Thus, we are left to determine whether Congress
clearly intended to create an enforceable federal right.
Plaintiffs-Appellants point to the use of the word “individual” as evidence
that the statute creates an individual right. They argue that the statute
unambiguously protects individual Medicaid recipients from the predatory
collection efforts of those who furnish covered services. When surveying a statute
for rights-conferring language, however, incantation of the word “individual” is
not talismanic. Indeed, the word “individual” does not even appear in the statutes
recognized by the Gonzaga Court as creating individual rights, namely Title VI of
the Civil Rights Act of 1964 (“No person in the United States shall . . . be
subjected to discrimination under any program or activity receiving Federal
financial assistance” on the basis of race, color, or national origin. 42 U.S.C.
§ 2000d) and Title IX of the Education Amendments of 1972 (“No person in the
United States shall, on the basis of sex, . . . be subjected to discrimination under
any education program or activity receiving Federal financial assistance.” 20
U.S.C. § 1681(a)). See Gonzaga, 536 U.S. at 284 & n.3, 122 S. Ct. at 2275 & n.3
(emphasis in original). Rather, the relevant provisions of Title VI and Title IX are
10
singularly focused upon the individual protected, by stating “no person . . . shall
be subjected to discrimination.” Id. at 284, 122 S. Ct. at 2276.
In this case, § 1396a(a)(25)(C) does not focus on the individual Medicaid
recipient; rather, the statute’s focus is proscription of certain conduct by Medicaid
service providers. First, we must read § 1396a(a)(25)(C) in the context of the two
preceding subsections, § 1396a(a)(25)(A) and (B). In those two subsections,
Congress requires that State Medicaid plans specifically obligate States to (1)
ascertain the liability of third parties, 42 U.S.C. § 1396a(a)(25)(A) (“A State plan
for medical assistance must . . . provide that the State . . . will take all reasonable
measures to ascertain the legal liability of third parties . . . to pay for care and
services available under the plan . . . .”) , and (2) seek reimbursement from legally
liable third parties, id. § 1396a(a)(25)(B) (“A State plan for medical assistance
must . . . provide . . . that in any case where [third party] liability is found to exist
after medical assistance has been made available on behalf of the individual . . . ,
the State . . . will seek reimbursement for such assistance to the extent of such
legal liability.”).
Following from this, the next provision of § 1396a(a)(25), subsection (C),
simply provides that where an individual is entitled to Medicaid services “for
which a third party is liable for payment, the person furnishing the service may not
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seek to collect from the individual.” Id. § 1396a(a)(25)(C) (emphasis added).
Section 1396a(a)(25)(C) specifically requires a State Medicaid plan to prohibit
service providers from collecting payment from a Medicaid patient if a third party
is liable for the patient’s medical expenses. Id. It is a prohibition against service
providers billing Medicaid patients to the extent third parties are liable. See id.
Putting this provision in context, § 1396a(a)(25)(C) is formulated as a
requirement of a Medicaid State plan as it relates to third party liability for
payment of Medicaid patients’ medical expenses. In other words,
§ 1396a(a)(25)(C) ensures that State Medicaid plans contain language which
proscribes certain conduct of Medicaid service providers, i.e., balance billing. In
this sense, § 1396a(a)(25)(C) does not create an individual right. The focus
instead is upon the service provider and its billing practices.5 As the Supreme
Court has noted, “[s]tatutes that focus on the person regulated rather than the
individuals protected create ‘no implication of an intent to confer rights on a
particular class of persons.’” Gonzaga, 536 U.S. at 287, 122 S. Ct. at 2277 (quoted
sources omitted).
5
We note that the amended complaint in this case contains no allegation of third party
liability. Thus, should an individual federal right be recognized under § 1396a(a)(25)(C), there is
some question as to whether Plaintiffs-Appellants would even have standing to bring suit
because the mechanism for liability under the statute - having been balance billed for amounts
attributable to third parties - has not been triggered.
12
Our decision in 31 Foster Children v. Bush, 329 F.3d 1255 (11th Cir. 2003)
further demonstrates that a statute’s use of the term “individual” is not sufficient.
This Court held in 31 Foster Children that the statute at issue did not create an
individual right despite its use of the term “individual” with reference to the foster
children plaintiffs. 329 F.3d at 1272. This Court explained that “[t]he references
to individual children and their placements are made in the context of describing
what the [foster child case review] procedure is supposed to ensure, and such
provisions ‘cannot make out the requisite congressional intent to confer individual
rights enforceable by § 1983.’” Id. at 1272 (quoting Gonzaga, 536 U.S. at 289, 122
S. Ct. at 2278).6 Similarly here, the reference to “individual” is made in the
context of proscribing conduct by Medicaid service providers and does not make
out the requisite congressional intent to create, much less unambiguously create,
an enforceable federal right.
Prior to the Supreme Court’s explication of “rights-creating” language in
6
The third Gonzaga factor also weighs against finding an individual right because
§ 1396a(a)(25)(C) has no enforcement scheme for aggrieved individuals. Indeed, as the Supreme
Court has stated, the enforcement scheme for statutes enacted under the Spending Clause is
withdrawal of federal funds, rather than private suit. See Pennhurst State Sch. & Hosp. v.
Alderman, 451 U.S. 1, 28, 101 S. Ct. 1531, 1545 (1981) (“In legislation enacted pursuant to the
spending power, the typical remedy for state noncompliance with federally imposed conditions is
not a private cause of action for noncompliance but rather action by the Federal Government to
terminate funds to the State.”). The statute here articulates no means of federal or private
enforcement of the terms of the statute. As a result, it is unlikely that Congress intended for this
statute to be privately enforced.
13
Gonzaga, the Second Circuit addressed whether the third party liability provision
of § 1396a(a)(25) conferred a federal right enforceable under § 1983 upon health
care providers. See Wesley Health Care Ctr., Inc. v. DeBuono, 244 F.3d 280 (2d
Cir. 2001). Relying upon the Blessing factors, the Second Circuit held that
Congress did not intend the third party liability provisions of the Medicaid Act to
confer a benefit upon health care providers. Id. at 284. The court explained that
§ 1396a(a)(25) seeks to protect the Medicaid program from paying for health care
in situations where a third party has a legal obligation to pay for the care, calling
the provisions duties rather than benefits. Id. The Second Circuit specifically
noted that § 1396a(a)(25)(C) is “prohibitive: providers may not go after the
individual receiving care in an effort to evade the difficulties of securing third
party payment.”7 Id. In this respect, we similarly conclude that § 1396a(a)(25)(C)
is cast as a defense to improper billing rather than an expressly conferred right for
individual Medicaid recipients.
In short, the text and structure of § 1396a(a)(25)(C) do not focus on an
individual’s right to be free of improper balance billing. Rather, it speaks to the
7
We recognize that the Second Circuit in DeBuono examined whether § 1396a(a)(25)
gave a healthcare provider a cause of action against the New York Medicaid program. Here, the
question is whether that section provides an individual Medicaid patient with a cause of action
against the healthcare provider. Nonetheless, DeBuono’s discussion of the purposes of
§ 1396a(a)(25) also helps explain why the statute does not create an individual right.
14
obligations of the State and Medicaid service providers vis-à-vis third party
liability. In other words, Congress has not spoken with the requisite unambiguous,
clear voice to confer upon individual Medicaid recipients a federal right, a
violation of which would be actionable under § 1983.
IV. CONCLUSION
Upon concluding that 42 U.S.C. § 1396a(a)(25)(C) does not confer upon
Plaintiffs-Appellants a federal right enforceable under § 1983, we AFFIRM the
district court’s decision to dismiss the amended complaint.
15