Amicus Curiae Brief — Health and Hospital Corporation of Marion County, et al., Petitioners v. Ivanka Talevski, Personal Representative of the Estate of Gorgi Talevski, Deceased
Supreme Court briefSep 23, 2022
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No. 21-806
In the
Supreme Court of the United States
HEALTH AND HOSPITAL CORPORATION OF
MARION COUNTY, et al.,
Petitioners,
v.
IVANKA TALEVSKI, PERSONAL REPRESENTATIVE
OF THE ESTATE OF GORGI TALEVSKI, DECEASED,
Respondent.
On Writ of Certiorari to the United States
Court of A ppeals for the Seventh Circuit
BRIEF OF THE NATIONAL ASSOCIATION OF
COMMUNITY HEALTH CENTERS AND THIRTYONE PRIMARY CARE ASSOCIATIONS AS AMICI
CURIAE IN SUPPORT OF RESPONDENT
Edward T. Waters
Counsel of Record
Matthew Sidney Freedus
Phillip A. Escoriaza
Rosie Dawn Griffin
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, N.W.
Washington, D.C. 20036
(202) 466-8960
ewaters@ftlf.com
Counsel for Amici Curiae
315476
A
(800) 274-3321 • (800) 359-6859
i
TABLE OF CONTENTS
Page
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . i
TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . iii
INTEREST OF AMICI CURIAE . . . . . . . . . . . . . . . . . . 1
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . 3
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I.
The Health Center Program and Health
Centers’ Medicaid Payment Rights: A
Carefully Reticulated Statutory Scheme
to Provide Health Care to Millions of
Medically Underserved Individuals . . . . . . . . . . 5
A. Health Centers: Accessible Health
Care and Services for the Medically
Underserved . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B. Congress Prohibits Health Centers
from Using PHS Act § 330 Grant Funds
to Subsidize the Costs of Services
to Medicaid Beneficiaries . . . . . . . . . . . . . . . 8
ii
Table of Contents
Page
C. FQHC Services are a Mandatory
Medicaid Benefit and State Medicaid
Programs Must Reimburse Health
Centers 100 Percent of the Reasonable
Costs of Services . . . . . . . . . . . . . . . . . . . . . 10
II. T h e H i s t o r i c I n t e r p l a y B e t w e e n
Congressional Action and this Court’s
Jurisprudence Makes Clear Congress’s
Intent that Health Centers’ Medicaid Payment
Rights be Enforceable via § 1983 . . . . . . . . . . . . 14
III. Health Centers’ Experience Enforcing
Medicaid Payment Rights Demonstrates the
Ease with which Courts Apply this Court’s
§ 1983 Jurisprudence to Adjudicate Statutory
Rights in Spending Clause Legislation . . . . . . 21
IV. Health Centers Have a Concrete Reliance
Interest in Maintaining the Stability
and Continuity of the Court’s § 1983
Jurisprudence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
iii
TABLE OF CITED AUTHORITIES
Page
Cases
Am. Indian Health & Servs. Corp. v. Kent,
24 Cal. App. 5th 772, 234 Cal. R. Ct. 3d 583
(Cal. Ct. App. 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
American Hosp. Ass’n v. Becerra,
596 U.S. , 142 S. Ct. 1896 (2022) . . . . . . . . . . . 24, 29
Ariz. All. for Cmty. Health Ctrs. v. Ariz. Health
Care Cost Containment Sy.,
F.4th , 2022 WL 4005328 (9th Cir. 2022) . . 11, 25
Arlington Cent. Sch. Dist. Bd. of Educ. v.
Murphy,
548 U.S. 291 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Armstrong v. Exceptional Child Center, Inc.,
575 U.S. 320 (2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Blessing v. Freestone,
520 U.S. 329 (1997) . . . . . . . . . . . . . . . . . . . . . 18, 21, 22
Cal. Ass’n of Rural Health Clinics v. Douglas,
738 F.3d 1007 (9th Cir. 2013) . . . . . . . . . . . . . . . passim
Cmty. Health Care Ass’n of N.Y. v. Shah,
770 F.3d 129 (2d Cir. 2014) . . . . . . . . . . . . . . . . . passim
Cmty. Health Center v. Wilson-Coker,
311 F.3rd 132 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
iv
Cited Authorities
Page
Concilio de Salud Integral de Loiza, Inc. v.
Perez-Perdomo,
551 F.3d 10 (1st Cir. 2008) . . . . . . . . . . . . . . . . . . 22, 25
Edelman v. Jordan,
415 U.S. 651 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Goldberg v. Kelly,
397 U.S. 254 (1970) . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Gonzaga University v. Doe,
536 U.S. 273 (2002) . . . . . . . . . . . . . . . . . . 18, 19, 21, 22
King v. Smith,
392 U.S. 309 (1968) . . . . . . . . . . . . . . . . . . . . . . 4, 15, 16
Legacy Cmty. Health Servs., Inc. v. Smith,
881 F.3d 358 (5th Cir. 2018) . . . . . . . . . . . . . . . . . 22, 23
Maine v. Thiboutot,
448 U.S. 1 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Merck & Co. v. Reynolds,
559 U.S. 633 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
N.J. Primary Care Ass’n, Inc. v.
N.J. Dep’t of Hum. Servs.,
722 F.3d 527 (3d Cir. 2013) . . . . . . . . . . . . 14, 22, 23, 25
Nat’l Fed’n of Indep. Bus. v. Sebelius,
567 U.S. 519 (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
v
Cited Authorities
Page
Off. of Pers. Mgmt. v. Richmond,
496 U.S. 414 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Pa. Pharms. Ass’n v. Houstoun,
283 F.3d 531 (3d Cir. 2002) . . . . . . . . . . . . . . . . . . . . . 22
Pee Dee Health Care, P.A. v. Sanford,
509 F.3d 203 (4th Cir. 2007) . . . . . . . . . . . . . . . . . . . . 11
Rio Grande Cmty. Health Ctr., Inc. v. Rullan,
397 F.3d 56 (1st Cir. 2005) . . . . . . . . . . . . . . . . . . 21, 25
Rosado v. Wyman,
397 U.S. 397 (1970) . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Suter v. Artist M.,
503 U.S. 347 (1992) . . . . . . . . . . . . . . . . . . 15, 17, 18, 19
Three Lower Cnties. Cmty. Health Servs., Inc. v.
Maryland,
498 F.3d 294 (4th Cir. 2007) . . . . . . . . . . . . . . . . passim
Townsend v. Swank,
404 U.S. 282 (1971) . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Washington State Grange v.
Washington State Republican Party,
552 U.S. 442 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Wilder v. Va. Hosp. Ass’n,
496 U.S. 498 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . 6, 16
vi
Cited Authorities
Page
Ysleta del Sur Pueblo v. Texas,
142 S. Ct. 1929 (2022) . . . . . . . . . . . . . . . . . . . . . . . . . 14
Statutes
42 U.S.C. § 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Public Health Service Act, § 330,
42 U.S.C. § 254b
§ 254b(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 6, 8
§ 254b(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
§ 254b(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
§ 254b(k)(3)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
§ 254b(k)(3)(E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
§ 254b(k)(3)(F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
§ 254b(k)(3)(G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8, 9
§ 254b(k)(3)(H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Social Security Act, Title XVIII,
42 U.S.C. §§ 1395 et seq.
§ 1395x(aa)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Social Security Act, Title XIX,
42 U.S.C. § 1396 et seq.
§ 1396 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
§ 1396-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
§ 1396a(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
§ 1396a(a)(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
§ 1396a(a)(10)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11
§ 1396a(a)(13)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
§ 1396a(bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
vii
Cited Authorities
Page
§ 1396a(bb)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
§ 1396a(bb)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
§ 1396a(bb)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
§ 1396a(bb)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
§ 1396a(bb)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 22
§ 1396a(bb)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
§ 1396d(a)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . 10, 11, 12
§ 1396d(l)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
§ 1396d(l)(2)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rules
42 C.F.R. § 430.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 11
42 C.F.R. § 430.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11
42 C.F.R. § 430.35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
42 C.F.R. § 447.201(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U.S. Sup. Ct. R. 37.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Other Authorities
American Rescue Plan Act of 2021, Pub. L. 117-2,
§ 2601 (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Balanced Budget Act of 1997, Pub. L. 105-33,
§ 4712, 111 Stat. 251 (1997) . . . . . . . . . . . . . . . . . 12, 18
viii
Cited Authorities
Page
Bipartisan Budget Act of 2018, Pub. L. 115-123 (2018)
§ 50901(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 50901(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 50901(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
C on sol id at e d A ppr opr i at ion s A c t , 2 0 21,
Pub. L. 116-260, § 301 (2020) . . . . . . . . . . . . . . . . 19-20
Coronavirus Aid Relief and Economic Security Act,
Pub. L. 116-136 (2020)
§ 3211(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 3831 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Coronav i r us P repa redness and Response
Supplemental Appropriations Act, 2020,
Pub. L. 116-123, 134 Stat. 149 (2020) . . . . . . . . . . . . 20
Further Consolidated Appropriations Act, 2020,
Pub. L. 116-94 (2019)
§ 401(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 401(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Further Continuing Appropriations Act, 2020 and
Further Health Extenders Act of 2019,
Pub. L. 116-69 (2019)
§ 1101(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 1101(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
H.R. Con. Res. 231, 109th Cong. (2005) . . . . . . . . . . . . . 19
H.R. Conf. Rep. 103-761, 103rd Cong. (1994) . . . . . . . . 15
ix
Cited Authorities
Page
H.R. Rep. No. 101-247, repr inted in 1989
U.S.C.C.A.N. 2118–19 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Improving America’s Schools Act of 1994, Pub.
L. 103-382, § 555(a), 108 Stat. 3518 (1994) . . . . . . . . 17
Medicare Access and CHIP Reauthorization
Act of 2015, Pub. L. 114-10, § 221 (2015) . . . . . . . . . . 20
Medicare, Medicaid, and SCHIP Benef its
Improvement and Protection Act of 2000,
Pub. L. 106-554, § 702, 114 Stat. 2763 (2000) . . 13, 18
NACHC, Community Health Center Chartbook
2022 (Jan. 2022), https://w w w.nachc.org/
research-and-data /research-fact-sheetsand-infographics/2021-community-healthcenter-chartbook/ . . . . . . . . . . . . . . . . . . . . . . . . passim
NACHC, Federal Grant Funding, Federal
Health Center Ap p rop r iatio n Hi st o r y
F Y10 - F Y2 2 , h t t p s : / / w w w. n a c h c . o r g /
focus-areas/policy-matters/health-centerfunding/federal-grant-funding/ . . . . . . . . . . . . . . . . . 19
Omnibus Budget Reconciliation Act of 1989,
Pub. L. 101-239, § 6404, 103 Stat. 2106 (1989) . . . 9, 11
Omnibus Reconciliation Act of 1990, Pub. L.
101-508, § 4161 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . 11
x
Cited Authorities
Page
Patient Protection and Affordable Care Act,
Pub. L. 111-148, § 10501 (2010) . . . . . . . . . . . . . . . 13-14
Paycheck Protection Program and Healthcare
Enhancement Act, Pub. L. 116-139, H.R. 266,
134 Stat. 626 (2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Peter Shin et al., What are Talevski’s Implications
for Community Health Centers and their
Patients? Estimating the Impact of Losing
Federally Enforceable Medicaid FQHC
Payment Rights, Data Note, GW H ealth
Policy & M anagement M atters (Sept. 14,
2022) at 3−4, http://gwhpmmatters.com/whatare-talevskis-implications-community-healthcenters-and-their-patients-estimating-impact . . . . 26
Social Security Act Amendments of 1994, Pub.
L. 103-432, § 211(a), 108 Stat. 4398 . . . . . . . . . . . . . . 17
Special Health Revenue Sharing Act of 1975,
Pub. L. 94-63, 501 Stat. 342–46 . . . . . . . . . . . . . . . . . 7
S. Con. Res. 65, 109th Cong. (2005) . . . . . . . . . . . . . . . . 19
Third Continuing Appropriations for Fiscal
Year 2018, Pub. L. 115-96, § 3101 (2017) . . . . . . . . . 20
xi
Cited Authorities
Page
U.S. Dep’t of Health & Human Servs., Health
Res. & Servs. A dmin., National Health Center
Program Unifor m Data System (UDS)
Awardee Data (2022), https://data.hrsa.gov/
tools/data-reporting/program-data/national . . . . . . 28
U.S. Dep’t of Health & Human Servs., Health Res.
& Servs. A dmin., Bureau of Primary Health
Care, Health Center Program UDS Data: Table
9D: Patient Related Revenue (2020), https://data.
hrsa.gov/tools/data-reporting/program-data/
national/table?tableName=9D&year=2020 . . . . . . . 6
U.S. G ov ’ t A ccounta bilit y O ff., G.A.O. 19496, Health Centers: Trends in Revenue
and Grants Supported by the Community
Health Center Fund (2019) . . . . . . . . . . . . . . 20-21, 28
1
INTEREST OF AMICI CURIAE
The National Association of Community Health Centers
(NACHC), a nonprofit and tax-exempt organization, is the
national membership organization for federally-funded
community health centers, also known as Federallyqualified health centers, or FQHCs.1 Founded in 1971,
NACHC promotes health centers’ mission and purpose
through extensive education, training, and advocacy.
The thirty-one individual Amici Curiae Primary
Care Associations (“PCAs”) are State or regional
nonprofit organizations that provide training and technical
assistance to health centers and facilitate collaboration
between health centers and State authorities to best meet
constituent needs. The full list of Amici PCAs is printed
in an appendix to this brief.
Health centers are predominantly community-based,
patient-directed nonprofit organizations that receive,
or are eligible to receive, federal grant funding under
Section 330 of the Public Health Service Act and that
play a vital role in our nation’s health care safety-net
by providing primary and other health care and related
services to medically underserved populations in all fifty
states, the District of Columbia, Puerto Rico, and other
1. Pursuant to Supreme Court Rule 37.6, Amici certify that
no party or counsel for a party authored this brief in whole or in
part, and no such counsel or party made a monetary contribution
intended to fund the preparation or submission of this brief. No
person other than Amicus Curiae NACHC or its counsel made a
monetary contribution to preparation or submission of the brief.
The parties respectively filed blanket written consent to the filing
of amicus curiae briefs in support of either or neither party.
2
U.S. territories, regardless of any individual patient’s
insurance status or ability to pay. 42 U.S.C. § 254b(a)(1). In
addition to providing comprehensive care to approximately
one in eleven Americans, FQHCs serve on the front lines
in preventing, treating, and containing serious, nationwide
public health threats such as the HIV epidemic, the opioid
addiction crisis, and the ongoing COVID-19 pandemic.
Over the past 50 years, Congress has made substantial
appropriations for health center grants and has enacted
complementary Medicaid payment provisions to ensure
health centers’ continued viability.
Amici wish to apprise the Court of the broad-based
and far-reaching legal, social, and economic implications
this matter poses for health centers and the more than
twenty-eight million individual patients—in more than
11,700 rural and urban communities—for whom they
provide care. No health center is a party to this action,
but all health centers could be significantly impacted by
the Court’s decision in this case.
INTRODUCTION
Amici, appearing on behalf of the nation’s federallyfunded community health centers, urge the Court to
preserve its well-established § 1983 jurisprudence. As
detailed below, Congress created two federal health
care programs that serve as principal sources of public
funding for health centers: Section 330 of the Public
Health Service (“PHS”) Act and the Medicaid Program.
Congress has legislated consistently for years, striking
a careful balance between these programs by defining
their respective scopes, requiring health centers to
contract with State Medicaid agencies while assigning to
3
States clear payment obligations for services rendered to
beneficiaries, enacting detailed health centers’ payment
rights, and passing provisions to prevent cross-subsidies
between the programs, particularly impeding use of
Section 330 grants to make up insufficient Medicaid
payments by States.
While State Medicaid agencies have repeatedly
shirked their obligation to cover health centers’ costs in
treating Medicaid beneficiaries, threatening that balance,
Congress, legislating against the backdrop of the Court’s
§ 1983 jurisprudence, has reinforced health centers’
rights, aware that a § 1983 action is the well-established
mechanism to enforce such rights. Congress did not create
a separate mechanism to challenge State noncompliance
with health centers’ Medicaid payment rights. It did not
have to: doing so would have been redundant.
Contrary to petitioners’ framing of the first question
presented, no historical evidence compels the Court
to jettison its decades-long interpretation of the plain
text of § 1983. Congress’s decades of careful crafting of
interrelated provisions in the PHS and Medicaid Acts
amply demonstrate why this Court should not upend its
§ 1983 jurisprudence. To eviscerate § 1983 rights would
require ignoring clear statutory language and concluding,
against plain text and the weight of federal health care
program legislation, that Congress never intended these
express rights to apply to health centers. The Court should
reaffirm its Section 1983 jurisprudence.
SUMMARY OF THE ARGUMENT
The U.S. Department of Health and Human Services
(“HHS”) administers the Community Health Center
4
Program and the Medicaid Program. Both programs form
part of a carefully reticulated “dual funding mechanism”
that provides health centers financial resources to serve
the healthcare needs of the nation’s most vulnerable.
See Cmty. Health Care Ass’n of N.Y. v. Shah, 770 F.3d
129, 136 (2d Cir. 2014); Three Lower Cnties. Cmty.
Health Servs., Inc. v. Maryland, 498 F.3d 294, 303 (4th
Cir. 2007). To mitigate the risk that PHS Act § 330
grant funds offset losses resulting from the failure of
State Medicaid agencies to cover the costs of services to
Medicaid beneficiaries, Congress requires health centers
“to make every reasonable effort to collect reimbursement
for health services to beneficiaries . . . . on the basis of the
full amount of fees and payments for such services without
application of any discount.” 42 U.S.C. § 254b(k)(3)(F)–(G).
The historical interplay between congressional action
and this Court’s jurisprudence makes clear Congress’s
intent that health centers enforce their Medicaid payment
rights via 42 U.S.C. § 1983. Congress’s initial enactment
and each subsequent congressional endorsement of
FQHCs’ Medicaid payment rights occurred against
the clear, decades-long backdrop of this Court’s § 1983
jurisprudence, which, beginning in the late 1960s,
recognized that rights conferred on beneficiaries of
Social Security Act programs are among the “rights,
privileges, or immunities secured by the Constitution
and laws” enforceable through a § 1983 action. See, e.g.,
King v. Smith, 392 U.S. 309 (1968). Indeed, enforcement
of rights conferred via Spending Clause legislation has,
for federal courts, been an unremarkable, routine matter
for half a century.
Health centers’ suits under § 1983 have been crucial
to enforce Medicaid payment rights against unlawful
5
State action, and thereby protect the careful balance
Congress struck between the Health Center and Medicaid
programs. A ruling shutting the courts’ doors to health
centers’ enforcement actions would eliminate Congress’s
intended check on unlawful State Medicaid agency
practices, with millions of dollars in required payments at
stake, impacting scores of individual patients who depend
on health centers for their primary and preventive care
needs.
While the instant case directly implicates beneficiary
rights, the first question presented casts a considerably—
and unnecessarily—broad net that captures providers who,
like health centers, have express statutory rights against
unlawful State Medicaid payment practices. Removing
the intended vehicle for enforcing these rights— 42
U.S.C. § 1983—would contravene clear congressional
intent, nullify Congress’s solution to a well-documented
problem of chronic State Medicaid agency underpayment,
and disrupt a well-established legal framework on which
health centers have long relied to vindicate their statutory
payment rights and ensure they can continue to meet the
healthcare needs of the Nation’s most vulnerable.
ARGUMENT
I.
The Health Center Program and Health Centers’
Medicaid Payment Rights: A Carefully Reticulated
Statutory Scheme to Provide Health Care to
Millions of Medically Underserved Individuals
The U.S. Department of Health and Human Services
(“HHS”) administers two programs of critical importance
to both public health and the case at hand: the Community
6
Health Center Program and the Medicaid Program.
The former—authorized under Section 330 of the Public
Health Service (“PHS”) Act, 42 U.S.C. § 254b, and
administered through HHS’s Health Resources and
Services Administration (HRSA)—provides discretionary
grant funding to community-based health centers to
provide primary and preventive care and related services
to medically underserved populations without regard to
income level or insurance status. 42 U.S.C. §§ 254b(a)(1) &
(k)(3)(G)(iii). The latter program, authorized under Title
XIX of the Social Security Act, 42 U.S.C. § 1396 et seq.,
and administered through HHS’s Centers for Medicare
and Medicaid Services (“CMS”), is a jointly-funded,
jointly-administered State and Federal program enacted
to make health care available to individuals unable to
afford necessary medical services. See Wilder v. Va. Hosp.
Ass’n, 496 U.S. 498, 502 (1990). Since their inception, both
programs have been continually funded through periodic
Spending Clause legislation; they form part of a carefully
reticulated “dual funding mechanism” that provides health
centers financial resources to serve the health care needs
of the nation’s most vulnerable. Cmty. Health Care Ass’n
of N.Y., 770 F.3d at 136. 2 To ensure the programs are not
duplicative and that each respective funding source covers
only its intended costs, Congress has explicitly prohibited
cross-subsidies and provided health centers with special
payment rights—enforced via § 1983—to hold State
Medicaid agencies accountable for their full share when
Medicaid beneficiaries receive health center services.
2. Section 330 grants represent approximately fourteen
percent of health center revenue, while Medicaid payments represent
forty percent. See generally U.S. Dep ’t of Health & Human Servs.,
Health Res. & Servs. A dmin., Bureau of Primary Health Care,
Health Center Program UDS Data: Table 9D: Patient Related
Revenue (2020).
7
A.
Health Centers: Accessible Health Care and
Services for the Medically Underserved
For half a century, federally-funded community health
centers have been the main source of community-based,
cost-effective, and accessible health care for underserved
low-income and poor persons and families. Congress first
authorized the Health Center Program in Section 501 of
the Special Health Revenue Sharing Act of 1975, Pub.
L. 94-63, 89 Stat. 342–46. Health center patients are
disproportionately poor: ninety-one percent are under
200 percent of the Federal Poverty Line (“FPL”); sixtyeight percent of patients are at or below 100 percent FPL;
forty-eight percent of patients are Medicaid beneficiaries;
and twenty-three percent are uninsured. See NACHC,
Community Health Center Chartbook 2022 (Jan. 2022),
Fig. 1-6. Accordingly, most health center patients (seventynine percent) are either publicly insured—i.e., they are
Medicare or Medicaid beneficiaries (or dually eligible)—or
lack insurance altogether. Id. at Fig. 1-5.
Health centers provide services to one in every
eleven people in the United States at an estimated
annual costs savings of $1,263 (24 percent less) per
patient when compared to non-health center users. See
NACHC, supra, Fig. 4-8. The Health Center Program has
grown with ample bipartisan support. By design, health
centers “occupy a unique place in the health services
ecology.” Cmty. Health Care Ass’n of N.Y., 770 F.3d at 157.
Congress created the Health Center Program to provide
a “vital function in delivering healthcare to underserved
populations.” Three Lower Cnties., 498 F.3d at 303. To
receive § 330 grant funding, a health center must satisfy
HRSA that it is: located in a medically underserved area
8
or is serving a special, medically underserved population
such as the homeless, migrant or seasonal farmworkers, or
public housing residents; community−based with a patient
majority Board of Directors “who, as a group, represent
the individuals being served by the center;” providing
healthcare services to Medicaid recipients; and serving
all residents of its community. See 42 U.S.C. § 254b(a)(1),
(k)(3)(A), (E), (G)(i), (H)(i).
As a condition of their § 330 grant funding, health
centers must provide patients a comprehensive array
of “required” and “additional” health care and enabling
services in, inter alia, family medicine, internal medicine,
pediatrics, obstetrics and g ynecolog y, diagnostic
laboratory and radiology, perinatal care, well-child care
and immunizations against vaccine-preventable diseases,
preventive health screenings and services, and emergency
care. See 42 U.S.C. §§ 254b(b)(1)–(2) (defining “required”
and “additional” services). Section 330 grant recipients
are Federally-qualified health centers (“FQHCs”) for
purposes of both the Medicare and Medicaid Programs,
as well as other federal public health programs. 42 U.S.C.
§§ 1395x(aa)(4) (Medicare), 1396d(l)(2)(B) (Medicaid).
FQHC status entitles health centers to specific payment
rights in those programs—discussed infra—that strike a
balance between FQHC’s § 330 grant funds and payments
for FQHC services to program beneficiaries.
B. Congress Prohibits Health Centers from Using
PHS Act § 330 Grant Funds to Subsidize the
Costs of Services to Medicaid Beneficiaries
States make payments directly to health centers
for services they furnish to Medicaid beneficiaries. See
9
42 C.F.R. § 430.0. To mitigate the risk that § 330 grant
funds offset Medicaid underpayment, Congress requires
health centers “to make every reasonable effort to
collect reimbursement for health services to [Medicaid]
beneficiaries” “on the basis of the full amount of fees and
payments for such services without application of any
discount.” 42 U.S.C. §§ 254b(k)(3)(F)–(G). The Health
Center Program’s early years made it apparent that,
despite health centers’ best efforts, State Medicaid
agencies often failed to pay the full cost of services. By the
late 1980s, Congress heard testimony that “on average,
Medicaid payment levels to Federally−funded health
centers cover less than 70 percent of the costs incurred
by the centers in serving Medicaid patients.” H.R. Rep.
No. 101-247, at 392–93, reprinted in 1989 U.S.C.C.A.N.
2118–19. The resulting payments from Health Center
Program funding to cover the Medicaid reimbursement
gap motivated Congress to enact Section 6404 of the
Omnibus Budget Reconciliation Act of 1989 (“OBRA”),
Pub. L. 101-239, 103 Stat. 2106 (1989). The legislation
guaranteed health centers are paid 100 percent of their
reasonable costs of providing services to Medicaid
beneficiaries “[t]o ensure that Federal ‘[PHS]’ Act grant
funds are not used to subsidize health center or program
services to Medicaid beneficiaries,” because “[t]o the
extent that the Medicaid program is not covering the cost
of treating its own beneficiaries, it is compromising the
ability of the centers to meet the primary care needs of
those without any public or private coverage whatsoever.”
H.R. Rep. No. 101-247, at 392–93; see also Three Lower
Cnties., 498 F.3d at 297 (Congress passed the “100 percent
reimbursement” requirement to ensure health centers do
not subsidize Medicaid); Cmty. Health Care Ass’n of N.Y.,
770 F.3d at 155 (Congress intended no § 330 subsidy of
10
Medicaid). As the Second Circuit explained, the § 330 and
Medicaid “dual funding mechanism allows the FQHC to
allocate most of its direct grant dollars towards treating
those who lack even Medicare or Medicaid coverage,”
Cmty. Health Center v. Wilson-Coker, 311 F.3rd 132,
134 n.2 (2d Cir. 2002), while ensuring grant funds do not
subsidize Medicaid.
C.
FQHC Services are a Mandatory Medicaid
Benefit and State Medicaid Programs Must
Reimburse Health Centers 100 Percent of the
Reasonable Costs of Services
FQHC services are a mandatory Medicaid benefit
for which States must fully reimburse health centers
in accordance with statutory requirements. 42 U.S.C.
§ 1396a(10)(A), 1396a(bb), 1396d(a)(2)(C). As a condition
of participation in Medicaid, states must comply with all
“detailed federally mandated standards.” Three Lower
Cnties., 498 F.3d at 297; accord Cmty. Health Care Ass’n
of N.Y., 770 F.3d at 135. Although States’ participation is
voluntary, “[b]y 1982 every State had chosen to participate
in Medicaid.” Nat’l Fed’n of Indep. Bus. v. Sebelius,
567 U.S. 519, 542 (2012). Each State Medicaid program
must submit to CMS a State plan, i.e., “a comprehensive
written statement . . . describing the nature and scope of
its Medicaid program and giving assurance that it will
be administered in conformity with” applicable statutes,
regulations, and official HHS issuances. See 42 U.S.C.
§ 1396a(a); 42 C.F.R. § 430.10. A State’s Medicaid program
becomes eligible for Federal financial participation —i.e.,
the federal/state sharing of the State’s expenditures—on
CMS approval of the State plan. See 42 U.S.C. § 1396-1
(“The sums made available under this section shall be used
11
for making payments to States which have submitted, and
had approved by the Secretary, State plans for medical
assistance”); 42 C.F.R. § 430.10 (delegating to CMS the
authority to approve State plans).
Each participating State must, at a minimum, cover
in its State plan certain specified services—commonly
called mandatory benefits. 42 U.S.C. § 1396a(a)(10); 42
C.F.R. §§ 430.0, 430.35; see also Cal. Ass’n of Rural
Health Clinics v. Douglas, 738 F.3d 1007, 1014–15 (9th
Cir. 2013); accord Ariz. All. for Cmty. Health Ctrs. v. Ariz.
Health Care Cost Containment Sy.,
F.4th
, 2022
WL 4005328, at *5 (9th Cir. 2022). Each State plan “must
[also] describe the policy and the methods to be used in
setting payment rates for each type of service included
in the State’s Medicaid program.” 42 C.F.R. § 447.201(b).
With the enactment of 1989 OBRA, § 6404, “Federallyqualified health center services” became a mandatory
Medicaid benefit for which States must provide a specified
payment. 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a)(2)(C). 3
Thus “[a] state Medicaid plan must provide payment for
[covered] services rendered by FQHCs and RHCs [rural
health clinics].” Am. Indian Health & Servs. Corp. v. Kent,
24 Cal. App. 5th 772, 778, 234 Cal. R. Ct. 3d 583, 587–88
(Cal. Ct. App. 2018) (citing 42 U.S.C. § 1396a(bb)); see also
Three Lower Cnties., 498 F.3d 294; Pee Dee Health Care,
P.A. v. Sanford, 509 F.3d 203, 207 (4th Cir. 2007). On a
per-visit basis, State Medicaid programs must reimburse
3. Congress created a Medicare FQHC benefit, effective
October 1, 1991, to further the same anti-subsidy approach 1989
OBRA implemented for Medicaid. See Omnibus Reconciliation Act
(“ORA”) of 1990, Pub. L. 101-508, § 4161 (1990).
12
each FQHC operating within its borders for 100 percent
of its reasonable and related costs in furnishing “[FQHC]
services” and “any other ambulatory services offered by
a [FQHC] and which are otherwise included in the [State
Medicaid] plan.” 42 U.S.C. §§ 1396a(bb)(1), 1396d(a)(2)
(C), 1396d(l)(2); see also Cmty. Health Care Ass’n of N.Y.,
770 F.3d at 136 (providing relevant historical context
and legislative history). The form of this 100 percent
reimbursement requirement has shifted over time. Its
initial formulation, in place for over a decade, required
participating States to reimburse FQHCs retrospectively
for “100 percent . . . of [each FQHC’s] costs which are
reasonable and related to the cost of furnishing such services
or based on such other tests of reasonableness, as the
Secretary prescribes in [FQHC Medicare] regulations . . . .”
42 U.S.C. § 1396a(a)(13)(C) (enacted in 1989 OBRA, repealed
and replaced in 2000); Three Lower Cnties., 498 F.3d at 297.
In 1997, three years before Congress mandated the
current FQHC Medicaid payment system, it enacted still
extant provisions that reinforced States’ obligation to
pay “100 percent” of each health center’s reasonable and
related costs of providing “FQHC services,” reduced only
by payments received from an MCO. The Balanced Budget
Act (“BBA”) of 1997, Pub. L. 105-33, § 4712, 111 Stat. 251
(1997), mandated that State Medicaid programs pay each
FQHC the difference, if any, between (1) its reasonable
costs of providing FQHC services and (2) payments made
to it by a State-contracted MCO. See 42 U.S.C. § 1396a(bb)
(5) (States shall make supplemental payments no less
frequently than every four months).
The current health center Medicaid pay ment
methodology, enacted in 2000 and codified at 42 U.S.C.
13
§ 1396a(bb), retained the 1997 BBA managed care
provisions and the 100-percent-of-reasonable-costs
reimbursement approach, utilized since the original
enactment of FQHC legislation in 1989 OBRA. The
Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act (“BIPA”) of 2000, Pub. L. 106-554, § 702,
114 Stat. 2763 (2000), established the current methodology,
which requires States to pay, effective January 1, 2001, a
fixed, per-visit rate unique to each health center, based on
100 percent of the FQHC’s reasonable costs in fiscal years
1999 and 2000, adjusted annually by an inflation factor and
as necessary to reflect any changes in the scope of services
during the fiscal year. 42 U.S.C. § 1396a(bb)(2), (3). For any
entity first qualifying as an FQHC after 2000, the pervisit rate is determined based on the rates established for
FQHCs in the same or adjacent area with a similar case
load, or (if no similar FQHCs exist) according to a similar
methodology or other tests of reasonableness as specified
by the HHS Secretary. 42 U.S.C. § 1396a(bb)(4). This
“prospective payment system” (“PPS”) relieved FQHCs
from annually submitting cost data, while maintaining
required patient visit data reporting and mandating full
Medicaid reimbursement. See Three Lower Cnties., 498
F.3d at 298.4
Health centers’ Medicaid payment rights have
remained virtually unaltered since 2000. 5 However,
4. The Medicaid statute permits State Medicaid agencies to
use an alternative payment methodology (“APM”) to the prospective
payment system, but only if the FQHC agrees and the APM results
in payments not less than the amount the FQHC would receive under
PPS. 42 U.S.C. § 1396a(bb)(6).
5. Congress reinforced FQHC payment rights in § 10501 of the
Patient Protection and Affordable Care Act (“ACA”), Pub. L. 111-
14
substantial underpayments have resulted from myriad
unlawful State Medicaid agency practices including,
inter alia: failure to fully reimburse at the PPS rate;
refusal to pay for services rendered to out-of-network
beneficiaries; refusal based on unlawful criteria to make
supplemental payments; significant delay in full payment;
and elimination from coverage of certain services included
in the FQHC Services mandatory benefit. See, e.g., N.J.
Primary Care Ass’n, Inc. v. N.J. Dep’t of Hum. Servs., 722
F.3d 527, 540 (3d Cir. 2013); Cmty. Health Care Ass’n, 770
F.3d at 153–55; Three Lower Cnties., 498 F.3d at 302–03;
Cal. Ass’n of Rural Health Clinics, 738 F.3d at 1015.
II. The Historic Interplay Between Congressional
Action and this Court’s Jurisprudence Makes Clear
Congress’s Intent that Health Centers’ Medicaid
Payment Rights be Enforceable via § 1983
The historic interplay between congressional action
and this Court’s jurisprudence makes clear Congress’s
intent that health centers enforce their Medicaid payment
rights via § 1983. While “[t]his Court generally assumes
that, when Congress enacts statutes, it is aware of this
Court’s relevant precedents,” no assumption need be made
with regard to the Court’s § 1983 jurisprudence. Ysleta del
Sur Pueblo v. Texas, 142 S. Ct. 1929, 1940 (2022) (internal
citation omitted); see also Merck & Co. v. Reynolds, 559
U.S. 633, 648 (2010) (“We normally assume that, when
Congress enacts statutes, it is aware of relevant judicial
precedent.”). Congress has reaffirmed health centers’
Medicaid payment rights, repeatedly strengthened and
148 (2010), establishing a prospective payment system for Medicare
services furnished at FQHCs, effective October 1, 2014.
15
expanded the Health Center Program since its first
authorization in 1975, and legislated to clarify that,
notwithstanding this Court’s decision in Suter v. Artist
M., 503 U.S. 347 (1992), rights created in Social Security
Act programs are enforceable “to the extent they were . . .
prior to [that] decision.” H.R. Conf. Rep. 103-761, 103rd
Cong., at 926 (1994) (discussed infra).
T he i n it i a l ena c t ment a nd ea ch subsequent
congressional endorsement of FQHCs’ Medicaid payment
rights occurred against the clear, decades-long backdrop
of this Court’s § 1983 jurisprudence, which, beginning in
the late 1960s, recognized that rights conferred on Social
Security Act program beneficiaries are among the “rights,
privileges, or immunities secured by the Constitution and
laws” enforceable through a § 1983 action. See, e.g., King,
392 U.S. at 311 (endorsing plaintiffs’ reliance on § 1983
to enforce beneficiaries’ rights in Aid to Families with
Dependent Children (“AFDC”)); Rosado v. Wyman, 397
U.S. 397 (1970) (clarifying program participants need
not pursue federal administrative remedies before filing
§ 1983 action to secure state officials’ compliance with
AFDC provisions); Goldberg v. Kelly, 397 U.S. 254 (1970)
(concluding AFDC recipients could challenge benefit
denial, reduction, or termination through § 1983 action);
Townsend v. Swank, 404 U.S. 282 (1971) (concluding
state eligibility standards contrary to federal AFDC
requirements were proper subject of § 1983 action).
In short, for approximately fifty years, Congress has
enacted enforceable rights in Spending Clause legislation
recognizing that “suits in federal court under § 1983 are
proper to secure compliance with the provisions of the
Social Security Act on the part of participating States.”
16
Edelman v. Jordan, 415 U.S. 651, 675 (1974) (citing
Rosado). Were that not assurance enough, in Maine
v. Thiboutot, 448 U.S. 1 (1980)—decided over forty
years ago—this Court held that “any doubt” about the
application of § 1983 had been resolved by more than half
a dozen decisions “involving Social Security Act (SSA)
claims” that had “relied on the availability of a § 1983
cause of action.” Id. at 4–5.
In 1989, when Congress added FQHC services to
the mandatory Medicaid benefits list and incorporated,
through OBRA, the requirement that States pay FQHCs
100 percent of their reasonable costs of providing
Medicaid services, a § 1983 action was the well-established
mechanism to enforce such rights; there was no need to
create a redundant enforcement mechanism to challenge
State noncompliance with health centers’ Medicaid
payment rights. See, e.g., King, 392 U.S. 309; Rosado, 397
U.S. 397; Goldberg, 397 U.S. 254; Townsend, 404 U.S. 282;
Edelman, 415 U.S. 651. Moreover, a year after OBRA’s
enactment, in Wilder v. Va. Hosp. Ass’n, 496 U.S. 498 (1990),
the Court held that providers could challenge, through a
§ 1983 action, State payment methodologies contrary to a
then in-effect statutory provision that required reasonable
and adequate Medicaid reimbursement rates. Of note,
the Wilder court rejected the State’s argument that the
HHS Secretary’s general authority to “curtail federal
funds to States whose plans are not in compliance with
the Act” was sufficient “to foreclose reliance on § 1983 to
vindicate federal rights.” Id. at 521–22; see also Armstrong
v. Exceptional Child Center, Inc., 575 U.S. 320, 328 (2015)
(concluding a “provision for the Secretary’s enforcement
by withholding funds might not, by itself, preclude the
availability of equitable relief”) (emphasis in original).
17
Any doubt as to congressional awareness of this
Court’s decisions is dispelled by an examination of
Congress’s 1994 reaction to the 1992 decision in Suter
v. Artist M., 503 U.S. 347 (1992). Via the colloquially
dubbed “Suter fix,” Congress not only affirmed decades
of this Court’s precedents, but also explicitly clarified that
“individuals who have been injured” by a State’s failure to
comply with Social Security Act program requirements
may seek redress in the federal courts “to the extent they
were able to prior to” the Suter decision. H.R. Conf. Rep.
103-761, at 926. In Suter, the Court had determined that
a § 1983 action was not available to enforce a provision
that required a foster-care program’s State plan to
“provide[] that, in each case, reasonable efforts will be
made” before “the placement of a child in foster care, to
prevent or eliminate the need for removal of the child from
his home,” and “to make it possible for the child to return
to his home.” Suter, 503 U.S. at 351 (quoting 42 U.S.C.
§ 671(a)(15) (1988)). The Court explained that “[t]he term
‘reasonable efforts’” placed “only a rather generalized
duty on the State,” and did not “confer an enforceable
right upon the Act’s beneficiaries.” Id. at 363.
Reacting to that decision in relatively short order,
Congress clarified—in the 1994 Improving America’s
Schools Act and Social Security Act Amendments,
respectively—that mere inclusion of a provision among a
Social Security Act program’s State plan requirements
does not render that provision unenforceable under § 1983.
See Improving America’s Schools Act of 1994, Pub. L.
103-382, § 555(a), 108 Stat. 3518, 4057–4058 (codified at
42 U.S.C. § 1320a-2); Social Security Act Amendments
of 1994, Pub. L. 103-432, § 211(a), 108 Stat. 4398, 4460
(codified at 42 U.S.C. § 1320a-10). While Congress left
18
undisturbed the Court’s holding regarding the State plan
requirement at issue in Suter, it added these identical
provisions to protect persons’ ability to enforce rightscreating language in Spending Clause legislation.
Congress’ post-Suter enactment of key health center
program Medicaid payment provisions in its 1997 BBA,
§ 4712 (managed care) and 2000 BIPA, § 702 (current
prospective payment methodology)—followed this Court’s
unbroken line of § 1983 precedents, including the decision
in Blessing v. Freestone, 520 U.S. 329 (1997). There, the
Court noted that although § 1983 “safeguards certain
rights conferred by federal statutes, a § 1983 plaintiff
“must assert the violation of a federal right, not merely a
violation of federal law” and provided a three-part test to
determine whether a particular statutory provision gives
rise to an enforceable federal right. Id. at 340–41.
Passed in 2000, three years after Blessing and with
presumptive Congressional awareness of that decision,
BIPA § 702 serves as the model of post-Blessing rightscreating draftsmanship, setting forth in mandatory
language a clear, well-formulated, binding obligation
on States to pay health centers according to a detailed
methodology set out in the statute. See 42 U.S.C.
§ 1396a(bb) (“Beginning with fiscal year 2001 with respect
to services furnished on or after January 1, 2001, and
each succeeding fiscal year, the [Medicaid] State plan
shall provide for payment for services . . . furnished by a
Federally-qualified heath center . . . in accordance with
the provisions of this subsection.”). Two years after BIPA’s
enactment, in Gonzaga University v. Doe, 536 U.S. 273
(2002), the Court elaborated that the inquiry is “whether
. . . Congress intended to confer individual rights upon a
19
class of beneficiaries” with “rights-creating language.” Id.
at 285, 290 (citations and quotations omitted). Throughout
the years, this Court’s § 1983 cases informed Congress’s
health center program legislation, including health centers’
right to payment based on 100 percent of reasonable costs
in OBRA (1989), the right to supplemental payments and
other Medicaid managed care provisions in BBA (1997),
and prospective payment system rights in BIPA (2000).
Indeed, Congress reaffirmed in 2005 that § 330 grant
funds should not subsidize Medicaid underpayments. See
H.R. Con. Res. 231, 109th Cong. (2005) (“Whereas without
the assurance of sufficient Medicaid funding under the
PPS, FQHCs would likely be forced to cross-subsidize
Medicaid underpayments with Federal [PHS Act § 330]
grant dollars intended to care for the uninsured.”); see also
S. Con. Res. 65, 109th Cong. (2005). These incremental
legislative actions, plus Congress’s Suter fix, confirm
that Spending Clause legislation gives rise to enforceable
rights in § 1983 actions.
Congress has neither disturbed, nor ever needed
to alter, health centers’ reliance on § 1983 as the
mechanism to enforce their Medicaid payment rights.
Instead, Congress has continued to provide significant
grant funding to health centers, secure in the knowledge
that States could not compel use of grant funds to
subsidize Medicaid and that health centers hold legally
enforceable rights to full Medicaid reimbursement. In
an uninterrupted chain of appropriations spanning fiscal
years 2011 through 2022, Congress has authorized $57.6
billion in health center grant funding.6 Congress has
6. See NACHC, Federal Grant Funding, Federal Health
Center Appropriation History FY10-FY22; see also Consolidated
20
additionally appropriated extensive direct pandemic
support to health centers, including over $9.6 billion
in COVID-19 supplemental funding.7 These funds, as
discussed supra, are meant to “fill the gap” between
operations’ costs and revenues, which exists in large part
due to health centers’ provision of services to uninsured
individuals and low-income patients who qualify for
mandatory sliding fee assistance, as well as costs incurred
in providing crucial—but largely unreimbursed—enabling
services like language interpretation and translation,
transportation, care management, and other beneficiary
supports. U.S. G ov ’t Accountability Off., G.A.O. 19Appropriations Act, 2021, Pub. L. 116-260 (2020), § 301 (health center
program funding extension through fiscal year 2023); Coronavirus
Aid Relief and Economic Security Act (CARES Act), Pub. L. 116-136,
§ 3831 (2020); Medicare Access and CHIP Reauthorization Act of
2015, Pub. L. 114-10, § 221 (2015); Third Continuing Appropriations
for Fiscal Year 2018, Pub. L. 115-96, § 3101 (2017); Bipartisan Budget
Act of 2018, Pub. L. 115-123 (2018), §§ 50901(a), 50901(c), 50901(d);
Further Continuing Appropriations Act, 2020 and Further Health
Extenders Act of 2019, Pub. L. 116-69 (2019), §§ 1101(a), 1101(c);
Further Consolidated Appropriations Act, 2020, Pub. L. 116-94
(2019), §§ 401(a), 401(c).
7. See Coronavirus Preparedness and Response Supplemental
Appropriations Act, 2020, Pub. L. 116-123, 134 Stat. 149 (2020)
($100 million for grants to prevent, prepare for, and respond to
coronavirus); CARES Act, § 3211(a) ($1.32 billion for grants for
prevention, diagnosis, and treatment of COVID-19); Paycheck
Protection Program and Healthcare Enhancement Act, Pub. L.
116-139, H.R. 266, Div. B, Tit. I, 134 Stat. 626 (2020) ($600 million
for grants for certain coronavirus-related costs); American Rescue
Plan Act of 2021, Pub. L. 117-2, § 2601 (2021) ($7.6 billion for
grants to cover costs of services, supplies and equipment related to
coronavirus and to modify, enhance and expand health care services
and infrastructure).
21
496, Health Centers: Trends in Revenue and Grants
Supported by the Community Health Center Fund at 13
(2019). 8 These grants, however, are not meant to backfill a
State’s obligation to cover the costs of services to Medicaid
beneficiaries.
III. Health Centers’ Experience Enforcing Medicaid
Payment Rights Demonstrates the Ease with which
Courts Apply this Court’s § 1983 Jurisprudence to
Adjudicate Statutory Rights in Spending Clause
Legislation
Health centers’ decades of experience protecting
their Medicaid payment rights in federal courts via § 1983
actions underscore that enforcement of Social Security
Act program rights through such actions has, for federal
courts, been an unremarkable, routine matter for half
a century. The standards this Court set out in Blessing
and Gonzaga, built on preceding cases, are eminently
workable, placing no strain on judicial competence.
Lower courts have had little trouble applying this
Court’s § 1983 precedents to health centers’ Medicaid
payment rights consistently and predictably. Five Circuit
Courts of Appeal have determined that health centers
may enforce Medicaid payment provisions through § 1983
actions. See Rio Grande Cmty. Health Ctr., Inc. v. Rullan,
397 F.3d 56 (1st Cir. 2005) (§ 1983 action to enforce
payment provisions in 42 U.S.C. § 1396a(bb)); Three Lower
8. Demand for care far outpaces funding. Health centers
incurred a cost of care gap exceeding $2 billion in services to
uninsured individuals in 2020 alone. NACHC Chartbook, Fig. 6-3.
A seventeen percent gap in Medicaid collections exacerbates this
underfunding. Id. at Fig. 6-1.
22
Cnties., 498 F.3d 294 (4th Cir. 2007) (same); Concilio de
Salud Integral de Loiza, Inc. v. Perez-Perdomo, 551
F.3d 10 (1st Cir. 2008) (§ 1983 action to challenge State
supplemental payment methodology under § 1396a(bb)(5));
N.J. Primary Care Ass’n, 722 F.3d 527 (3d Circuit holding
same); Cal. Ass’n of Rural Health Clinics, 738 F.3d 1007
(§ 1983 action in 9th Circuit to challenge State’s refusal to
cover services within FQHC services mandatory benefit);
accord Ariz. All. for Cmty. Health Ctrs., F.4th , 2022
WL 4005328, at *5; Legacy Cmty. Health Servs., Inc. v.
Smith, 881 F.3d 358, 371 n.13, 372, 373 (5th Cir. 2018), cert.
denied, 139 S. Ct. 211 (2018) (concluding § 1983 was proper
vehicle to enforce FQHC payment rights as Ҥ 1396a(bb)
issues a command to benefit FQHCs by requiring that they
are fully reimbursed”). A sixth Circuit Court of Appeals
permitted such a suit without discussing the issue. See
Cmty. Health Care Ass’n of N.Y., 770 F.3d 129 (2d Cir.
2014). No Court of Appeal has held to the contrary.
An illustrative example of express Congressional
intent communicated in keeping with well-established
§ 1983 precedents, Congress utilized specific “rightscreating language” in the Medicaid Act to “confer
individual rights” on health centers in “clear and
unambiguous terms.” Gonzaga, 536 U.S. at 290. Of course,
not all provisions in Spending Clause legislation give
rise to rights enforceable through § 1983 actions. See,
e.g., Blessing, 520 U.S. at 341 (Congress may foreclose
remedy); Gonzaga, 536 U.S. at 283 (“reject[ing] the notion
that our cases permit anything short of an unambiguously
conferred right to support a cause of action brought under
§ 1983”); see also Pa. Pharms. Ass’n v. Houstoun, 283 F.3d
531, 536 (3d Cir. 2002) (en banc) (“It is important to keep
in mind that the question whether a statute is intended
23
to benefit particular plaintiffs is quite different from
the question whether the statute in fact benefits those
plaintiffs.”). But health centers’ experience enforcing
their Medicaid payment rights provides ample evidence
that this Court’s analytical test is workable. See, e.g., N.J.
Primary Care Ass’n, 722 F.3d at 539 (applying Blessing/
Gonzaga and concluding health center may bring § 1983
action to vindicate right to full payment under Medicaid
statute but not to enforce requirement of federal approval
of State plan amendments).
The right to payment for services rendered to
Medicaid beneficiaries, as this Court requires, “is not
unduly vague nor amorphous such that the judiciary
cannot enforce it.” Pee Dee Health Care, P.A., 509 F.3d
at 212. On the contrary, courts have applied the statute’s
specific methodologies as intended, delivering the crucial
health center relief Congress envisioned. See, e.g., Rio
Grande, 397 F.3d at 75; Three Lower Cnties., 498 F.3d
at 301, 304; N.J. Primary Care Ass’n, 722 F.3d at 540
(“The provision sets forth a relatively simple equation. . .
. ”); Cal. Ass’n, 738 F.3d at 1013; Legacy, 881 F.3d at 372
(“Specific requirements that states reimburse FQHCs for
certain services, at certain amounts, are far from overly
vague or amorphous.”). Finally, the statute imposes a
mandatory obligation, requiring in § 1396a(bb) that the
State plan “shall provide for payment for services.” See,
e.g., Rio Grande, 397 F.3d at 74; Concilio, 551 F.3d at 17;
N.J. Primary Care Ass’n, 722 F.3d at 542; Three Lower
Cnties., 498 F.3d at 299; Cmty. Health Care Ass’n, 770
F.3d at 137; Cal. Ass’n, 738 F.3d at 1013; Legacy, 881 F.3d
at 372. These decisions enforcing health center payment
rights showcase the Court’s fundamental principle that
“[w]hen the statutory language is plain, the sole function of
24
the courts—at least where the disposition required by the
text is not absurd—is to enforce it according to its terms.”
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548
U.S. 291, 296 (2006) (internal quotation marks omitted).9
IV. Health Centers Have a Concrete Reliance Interest
in Maintaining the Stability and Continuity of the
Court’s § 1983 Jurisprudence
Health centers’ § 1983 suits have been crucial to
enforce Medicaid payment rights against unlawful state
action. As the Second Circuit recognized, “[f]rom the
creation of dual funding sources for FQHCs, in the form of
direct [PHS Act § 330] federal grants and indirect federal
Medicaid dollars filtered through the States, FQHCs faced
regulatory problems that, at least in part, compromised
their mission to treat a constituency of ‘those who lack…
even Medicaid coverage.’” Cmty. Health Care Ass’n of N.Y.,
770 F.3d at 136 (internal citation omitted). As Medicaid
reimbursements account for approximately forty percent
of a typical health center’s annual revenue, see supra n.2,
full and timely payment is critical.
9. This Court’s recent term provided further confirmation
that courts are aptly suited to resolve controversies over proper
enforcement of pay ment prov isions in Social Secur ity Act
programs. In American Hosp. Ass’n v. Becerra, 596 U.S. , 142 S.
Ct. 1896 (2022), the Court adjudicated a controversy over proper
application of a 340B program outpatient drug safety net hospital
payment provision. The Court’s unanimous opinion described the
reimbursement rate provision at issue in terms equally applicable to
health centers’ Medicaid payment provisions, explaining that “[t]he
statute…reflects a careful congressional focus not only on the goal
of proper reimbursement rates, but also on the appropriate means
to that end.” Id. at 1903.
25
State Medicaid agencies have repeatedly failed to
fully reimburse health centers as required by federal
law, jeopardizing their financial and operational viability.
See, e.g., Rio Grande, 397 F.3d at 76 (Puerto Rico’s failure
to make required payments “a key cause” of FQHC’s
“financial difficulties”); Concilio, 551 F.3d at 15 (“the only
wraparound [§ 1396a(bb)(5)] payments defendant has
ever made to [FQHC] plaintiffs were made as a result of
injunctive orders [entered in § 1983 suits FQHCs filed to
enforce their Medicaid payment rights]”); N.J. Primary
Care Ass’n, 722 F.3d at 534 (New Jersey’s insufficient
Medicaid payments “resulted in severe budget shortfalls,
including as much as $400,000 for one FQHC”); Three
Lower Cnties., 498 F.3d at 299 (Maryland’s Medicaid
payment methodology “invariably fails to close the gap
between the [MCO’s] payments [to FQHCs] and the
per-visit amount to which FQHCs are entitled under the
Medicaid Act. . . . For the most recent quarter on which
it presented data . . . the shortfall was on the order of
$500,000”); Cmty. Health Care Ass’n, 770 F.3d at 156–57
(rejecting New York’s claim that it owed FQHCs no
payments and its contention that FQHCs must absorb
the costs of providing out-of-network Medicaid services);
Cal. Ass’n of Rural Health Clinics, 738 F.3d at 1010–11
(California’s cost-cutting legislation impermissibly
eliminated certain mandatory FQHC services from
Medicaid coverage); accord Ariz. All. for Cmty. Health
, 2022 WL 4005328, at *5 (Arizona’s
Ctrs.,
F.4th
categorical exclusion of certain services within the FQHC
services mandatory benefit violated the Medicaid Act).
Currently, all but seven States (Alabama, Arkansas,
Delaware, Kansas, New Hampshire, South Dakota and
Wyoming) issue health centers’ Medicaid payments in
two steps, an interim payment followed by an additional
26
(“reconciled”) payment for the balance owed based on
a center’s annual PPS rate. Peter Shin et al., What are
Talevski’s Implications for Community Health Centers
and their Patients? Estimating the Impact of Losing
Federally Enforceable Medicaid FQHC Payment Rights,
Data Note, GW Health Policy & M anagement M atters
(Sept. 14, 2022) at 3−4. States often take years to
“reconcile” those interim payments, or fail to make them
altogether, thwarting Congress’s command against cross−
program subsidies and straining health center finances.
Based on 2021 data alone, health center revenue
withheld until interim payments are reconciled accounts
for $1.7 billion in California, as much as sixty percent of
health center revenue in Indiana, and fifty-four percent
in New Jersey. Id. at 4. And this money trickles slowly
to health centers: nationwide, in 2021, health centers
received a combined $643 million in late reconciled
payments to cover Medicaid services rendered in previous
years. Id. at 3. Left uncorrected, States’ failures to timely
reconcile interim payments against centers’ PPS rates
would lead to a 500,000 to 3.2 million reduction in patients
seen, staffing reductions of 4,500 to 29,000 full time
equivalents, and a reduction in patient visits of between
two million and thirteen million. Id. at 4. “Furthermore,
these estimates do not take into account the potential
impact of the Court’s decision on Medicaid beneficiaries
themselves. If beneficiaries were to lose their enforceable
right to coverage, PPS payments…would have no bearing
on health centers because their patients would have lost
Medicaid entirely and therefore, visits previously insured
through Medicaid would become uninsured visits [which
would need to be covered with § 330 grant funds or other
resources].” Id. at 4−5.
27
A recent survey of State and regional Primary Care
Associations conducted by Amicus NACHC shows the
operational impact for health centers of unlawful State
practices that cause PPS payment issues. Eleven of
sixteen responding PCAs—representing 289 health
centers in sixteen states (twenty-one percent of the
Nation’s centers), seven million patients (twenty-three
percent of the Nation’s 2021 total), and a combined $4.1
billion in Medicaid revenue, of which thirty-three percent
was derived from reconciled payments—indicated that
their member health centers had experienced problems
receiving full and timely Medicaid payments. Id. at 5. This
in turn created operational challenges including cancelled
or delayed development of new sites, delayed staff hiring,
staff retention problems, service termination, and reduced
operations. Id. Five PCAs indicated they were still
negotiating long-overdue health centers’ interim payment
settlements. Id. Health centers directly reported similar
issues. Out of the 148 responding health centers from
forty-one states and Puerto Rico, more than half (eightyone out of 148) reported at least one operational impact
when Medicaid payments fell below their anticipated
PPS rate, including: staff retention issues (twenty-three
percent), inability to make new hires (twenty-five percent),
and cancelled, delayed, or scaled-back plans to add or
expand sites or services (eleven, eighteen, and fifteen
percent, respectively). Id. at 6.
A ruling shutting the courts’ doors to health centers’
actions to correct, as Congress envisioned, unlawful
States’ Medicaid practices would directly impact scores
of individual patients who depend on health centers for
their primary and preventive care needs. Health centers
serve one in three people living in poverty in the United
28
States, one in every eight children, one in seven people
of a racial or ethnic minority, one in every five uninsured
persons, and one in every five Medicaid beneficiaries.
NACHC Chartbook, supra, Fig. 1-1. Health centers
provide services to more than 376,000 veterans and may be
the only primary care providers to vulnerable populations
in certain communities. U.S. Gov ’t Accountability Off.,
G.A.O. 19-496, Health Centers: Trends in Revenue and
Grants Supported by the Community Health Center
Fund at 1 (2019); NACHC Chartbook, Fig. 1-2. And the
program is growing. HHS’s data for the 2020 reporting
period places the total number of health centers at 1,375,
a twenty-two percent increase in the decade since 2010,
with 28,590,897 patients served that year. U.S. Dep’t of
Health & Human Servs., Health Res. & Servs. A dmin.,
National Health Center Program Uniform Data System
(UDS) Awardee Data (2022).
Today, as the nation responds to multiple public health
emergencies, tens of thousands of health center staff
continue serving their communities in all fifty states, the
District of Columbia, Puerto Rico, and other territories.
The continued viability of health centers as providers of
necessary primary care and related services to almost
thirty million people nationwide, as well as the viability of
thousands of other providers in Spending Clause programs,
turns in no small degree on recognition that Congress has
enacted unassailable provider (and individual beneficiary)
rights in Spending Clause legislation. For health centers,
Congress provided both express payment rights and an
established cause of action to enforce them.
To avoid negating congressional intent vis-à-vis the
health center program, Amici urge the Court to reaffirm
29
its sound, long-standing § 1983 jurisprudence, resolving
this matter on the narrowest basis for its disposition and
deciding only the questions necessary to its resolution.
See, e.g., Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414,
423 (1990); Washington State Grange v. Washington
State Republican Party, 552 U.S. 442, 450 (2008) (Court’s
“established practice” is to not “formulate a rule . . .
broader than is required by the precise facts to which
it is to be applied”) (quoting Ashwander v. TVA, 297
U.S. 288, 347 (1936) (Brandeis, J., concurring)). To hold
otherwise “would eviscerate…significant aspects of the
statutory text,” American Hosp. Ass’n, 142 S. Ct. at 1905,
obliterating the carefully designed, express payment
framework and enforceable program rights Congress
enacted against the backdrop of the Court’s § 1983
decisions, which read the statute as written, to provide a
vehicle to challenge States’ violations of “rights, privileges,
or immunities secured by the Constitution and laws.” 42
U.S.C. § 1983.
30
CONCLUSION
For the foregoing reasons, Amici respectfully urge
the Court to reaffirm its Section 1983 jurisprudence.
September 23, 2022
Respectfully submitted,
Edward T. Waters
Counsel of Record
Matthew Sidney Freedus
Phillip A. Escoriaza
Rosie Dawn Griffin
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, N.W.
Washington, D.C. 20036
(202) 466-8960
ewaters@ftlf.com
Counsel for Amici Curiae
APPENDIX
1a
Appendix
APPENDIX — LISTING
OF INDIVIDUAL AMICI
CURIAE PRIMARY CARE ASSOCIATIONS
1.
Alameda Health Consortium
2.
Arizona Alliance for Community Health Centers
3.
Association for Utah Community Health
4.
Bi-State Primary Care Association
5.
California Primary Care Association
6.
Colorado Community Health Network
7.
Community Care Network of Kansas
8.
Community Health Center Alliance for Patient Access
9.
Community Health Center Association of Connecticut
10. Community Health Center Association of Mississippi
11. DC Primary Care Association
12. Florida Association of Community Health Centers
13. Health Center Association of Nebraska
14. Illinois Primary Health Care Association
15. Indiana Primary Health Care Association
2a
Appendix
16. Iowa Primary Care Association
17. Maine Primary Care Association
18. Maryland Community Health System
19. Michigan Primary Care Association
20. Mid-Atlantic Association of Community Health
Centers
21. Minnesota Association of Community Health Centers
22. Montana Primary Care Association
23. National Health Care for the Homeless Council
24. New Jersey Primary Care Association
25. North Carolina Community Health Center Association
26. Northwest Regional Primary Care Association
27. Ohio Association of Community Health Centers
28. Pennsylvania Association of Community Health
Centers
29. Tennessee Primary Care Association
30. Texas Association of Community Health Centers
31. Washington Association for Community Health
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.