# Opposition Brief — Shoppers Food Warehouse MD Corp. v. Moreno

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2000
- **Citation:** 530 U.S. 1270

## Text

No. 99-1738

In the
Supreme Court of the United States

CHILDREN'S SEASHORE HOUSE,
Petitioner,
Vv.

MICHELE K. GUHL, et al.,
Respondents.

On Petition for a Writ of Certiorari to the United
States Court of Appeals for the Third Circuit

BRIEF OF THE RESPONDENTS IN OPPOSITION TO
THE PETITION FOR A WRIT OF CERTIORARI

JOHN J. FARMER, JR.

ATTORNEY GENERAL OF NEW JERSEY
Attorney for Respondents

R.J. Hughes Justice Complex

PO BOX 112

Trenton, New Jersey 08625

(609) 633-1972

NANCY KAPLEN
Assistant Attorney General

RHONDA 5S. BERLINER-GOLD
Deputy Attorney General
Counsel of Record and On the Brief

i

QUESTION PRESENTED

Did the Court of Appeals for the Third Circuit and the
district court correctly determine that petitioner had no
standing to bring the 42 U.S.C. § 1983 complaint alleging
violation of the provisions of Title XIX of the Social Security
Act in regard to disproportionate share payments to out-of-
state hospitals.

li

TABLE OF CONTENTS

Page

CQUISSTBOIN PRRESSISINEMIE. 65 wo bec ccess i
TABLES OF CORRES 6 45 oer ee A ae ee ii
TABLE OF APWUGNEEL 6 6 dn 6¢ 665655 bw sad reins iii
TABLE OF AUTERUNEMEE Ss 0 6 6k bose ses cedes ili
STATUTORY PROVISIONS INVOLVED .......... ]
STATEDGENT OF THiS CAR. 6 nce ce ec teccs. 1
A. The Action and Decision Below ............ ]

B. Statutory Background................... 2
REASONS FOR DENYING THE WRIT........... 12

I. The Decision Below Correctly Determined That
CSH Had No Standing to Bring this Lawsuit... .14

A. Hospitals Are Not the Intended
RE 6 6 eres oe os ES 15

B. The BBA Does Not Impose a Binding
Obligation on the States to Make DSH

Payments to Hospitals ............. 15
C. The Obligation to Make DSH
Payments is too Vague to be
Judicially Enforced ............. 21

Il. There is No Irreconcilable Conflict Among
the Circuit Courts Meriting the Attention of
this Court in this Matter................ 23

ili

Ill. Social and Financial Significance Is Not a

Basis for Granting Certiorari............. 25
IV. There is no Need for this Court to Examine
this Matter on an Interlocutory Basis... ... . 26
CONCLUSION Pe a a arabe og eG gS aa So eee 27
TABLE OF APPENDIX

oN la

December 10, 1997 Letter to State Medicaid Directors
from Sally K. Richardson ................... 17a
35 Fed.Reg. at 10079....................... 20a

TABLE OF AUTHORITIES

Cases Cited:

American Construction Co. vy. Jacksonville,

T. & K. R. Co., 148 U.S. 372 ere 26
Blessing v. Freestone, 520 U.S. 329 (oo) ae 12,14,25
Blum v. Bacon, 457 U.S. 132 (1982)..... Rae as 20

Brotherhood of Locomotive Firemen v. Bangor &
Aroostook R. Co., 389 U.S. 327 i) a7

Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984)............ 18,20

Children's Hosp. and Health Ctr v. Belshe,
188 F.3d 1090 (9th Cir. 1999), petition for
certiorari filed, 68 U.S.L.W. 3595
(U.S. Mar. 9, 2000)(No. 99-1497).......... 13,19,23

iV

Children's Seashore House v. Waldman,

197 F.3d 654 (Sd Cir. 1999). ........... 16,17,21,23
Golden State Transit Corp. v. Los Angeles,

Se Pere es eee 12,14
Good Samaritan Hosp. v. Shalala,

pS a ee ee ee ee ee 20
Hall v. Sullivan, 129 F.3d 113, 1997 WL 643921

Se ER a ee ee a ee Cee eo 23
Hamilton-Brown Shoe Co. v. Wolf Bros. & Co.,

ee ee ee cs eee eee bee ee 27
Harris v. McRae, 448 U.S. 297 (1980) ............. 2
HCMF Corp. v. Gilmore, 26 F.Supp.2d 873

Pee, Wy BEDS rae SG A al a 828 oS Aca 18
Landgraf v. USI Film Products, 511 U.S. 264

SN aos wc 5 ae Ge EEN alae a a eee 24,25
Maine v. Thiboutot, 448 U.S. 1 (1980)............ 14

Pennhurst State School and Hospital v. Halderman,
* Va ee I so a ek ele Ge ae ae ees 14

Planned Parenthood Affiliates of Michigan v. Engles,
eg fo Ae | er rere 11

Queen of Angels/Hollywood Presbyterian Medical
Ctr. v. Shalala, 65 F.3d 1472 (9th Cir. 1995)..... 18,20

Rite Aid of Pennsylvania v. Houstoun, 171 F.3d 842
Cee a Ss ae ee se a a eee eae 3

Rosado v. Wyman, 397 U.S. 397 (1970)... ........ 20

V

Russello v. United States, 464 U.S. 16 ces 6a ee 19
Shalala v. Guernsey Mem. Hosp..,
WW WE. OF CHD. 6 ice ok son bon cdadbacal, 20
Thomas Jefferson Univ. v. Shalala, "
eR a es ee 20,21
Udall v. Tallman, 380 U.S. 1 (1965)... .. re ee 20,21

United States v. Congress of Industrial Organizations,
335 U.S. 106 (1948) ....................... 17

United States v. Stephens, 208 F.2d 105
a rN Ml ing. 19

United Wire, Metal & Machine Health and Welfare
Fund, et al. v. Morristown Memorial Hosp. , 793
F.Supp. 524 (D.N.J. 1992).................... 7

United Wire, etc. v. Morristown Memorial Hosp..,
995 F.2d 1179 (3rd Cir. 1993), cert. denied sub nom,
New Jersey Carpenters Welfare Fund v. Dunston,
510 U.S. 944 (1993)... 2... 7

West Virginia University Hospitals v. Casey, 885 F.2d
oe ee reer oe ee 4

Wilder v. Virginia Hospital Assoc.,
496 U.S. 498 (1990)... 2... 2... kk. 14,15,21-22

Will v. Michigan Dept. of State Police,
OP) US. TEN oo oon os wh occ. 1,25

Wright v. Roanoke Redevelopment and Housing
Authority, 479 U.S. 418 (1987)... .....0...008. 14

Vi

Statutes Cited:

S030. {0 2.3 es. eee 2
BVUELe. 1... ae 2,4
42 U.S.C. § 1396a(a)(5)..... OPO ree Ne he: 2
42 U.S.C. § Te oo i eee passim
USL. 19
USC. 42 eee 2
2 U.S.C. § Tee 64 kee ee ee passim
42 U.S.C. (19S Ree 16
42 U.S.C. § 1396e-40BIMA). 0. oo ee ce 18
42 U.S.C. § 1396r-4(c)(3)........ es enn ae 22-23
42. U.S.C. § 198MM... os ee 6,8,19
42 U.S.C. 4 19M. « 6 5 cnc eth eee 11,19
42 U.S.C. § 1396r-4((I)(A). oe eee ee eee 18
42 U.S.C. § 1396r-4(A(1)(A)()(b). . 2. ee ee ee 18
42 U.S.C. § 19064. os eA ee 19
42 U.2AL: 3 OR 4 48k een ee eee passim
Pub.L. No. 96-499, § 962(a).... 0... c ccc e cece ee. ;
Pub... Me. 97-26. 901 ce. ee 3

Vii

Pub. L. No. 100-203, TitleIV,§4112............. 6
Pub. L. No. 105-33, §4711(d)................. 10
Health Cue Reform Act of 1992, L. 1992, c. 160,

(Chapter 160), N.J.S.A. 26:2H-18.51 et — ee ee 7
N.J.S.A. 26:2H-18.51(c)........0.0........... 7
NJ.S.A. 26:2H-18.52. 2.0.00. eee. 7
N.J‘S.A. 26:2H-18.58(a).......2.0............. 8
N.J.S.A. 26:2H-18.58¢....................... 8
N.J.S.A. 26:2H-18.59.......0................ 8
N.J.S.A. 26:2H-18.59e....................... 8
N.J.S.A. 30:4D-3(c).. 2.020.000.0202... er
OM MONRO kee ss Sa cee. 2
si aisiniaiis walk Re OR ET EPO rola Ie 6

Regulations Cited:

beh hi die ins SE Oe 2
WOOT, FOIE os oo on ee 2
Te Ms GMM ok oro 8 484k Sd ee 26
42 C.P.R. § 490.33... cece 26
ek es. . 26

ie Sa Te 8 ee ee he ee eG 4-6
ee SS 6 5 52S eee eee aes 11
ee Re errr we Se ee eer an 8

Other Sources Cited:

ks SS SS eee eC ee Tee eer eee 17
H.R. Conf. Rep. No. 217., 105th Cong.,

BU Me SES ks x ok oo he ee ea eae 17
Come. Rec. 36305 (ume 25, 1997) . 2. cc ccs ae
QS Fed. Ree. SONG CAFES) ww i wes 3
45 Fed. Reg. SG009 (1963)... eee 4
So WOU. Ree. OTOOTS CIGD) «ok cc cee scene 12
GO Fo tiee. S42G5 COG). 6k ke eee cues 6
Bee TD. TRU CID 5 ov hs eee wee 11,24
pee ere re ee 11,24

STATUTORY PROVISIONS INVOLVED

Petitioner only set forth part of section 1923 of the
Social Security Act, codified at 42 U.S.C. § 1396r-4, in its
appendix. As the respondents refer to other portions of that
Statute in this brief, the entire section is reproduced at App.,
infra, la.

STATEMENT OF THE CASE

This interlocutory petition for a Writ of Certiorari
seeks to appeal part of the decision of the Court of Appeals
for the Third Circuit, finding that petitioner has no standing
under 42 U.S.C. § 1983 to bring this action based upon the
current hospital reimbursement provisions of Medicaid law.

A. The Action and Decision Below

The complaint in this matter was filed in the
federal district court for the District of New Jersey on May 8,
1998, after the Boren Amendment was repealed by Congress
and replaced by the Balanced Budget Act of 1997. It alleged
claims pursuant to 42 U.S.C. § 1983 for alleged violations of
Medicaid law and the Equal Protection Clause against officials
of the State of New Jersey acting in their official Capacity
only. Consequently, the only relief sought and available is
prospective injunctive relief, as any other relief would be
barred by the Eleventh Amendment. Will v. Michigan Dept.
of State Police, 491 U.S. 58 (1989).

On December 8, 1998, the district court granted
the State's motion to dismiss for failure to state a cause of
action. The district court held that Children's Seashore House
had no standing to bring its claim based upon Medicaid Law
and that its Equal Protection Clause claim was without merit.’

Children's Seashore House appealed to the United
States Court of Appeals for the Third Circuit. On November

' Children's Seashore House sought to amend its complaint to
add a claim pursuant to the Commerce Clause which was never addressed
by the district court.

2

30, 1999, the Third Circuit affirmed in part, reversed in part
and remanded the matter back to the district court. The Third
Circuit agreed with the district court that Children's Seashore
House did not have standing to pursue its claim premised on
the Medicaid Act, but found further fact finding was needed
on the Equal Protection claim. In addition, the Third Circuit
stated that on remand Children's Seashore House could renew
its motion to assert iis Commerce Clause claim. This matter
is currently pending before the district court on Petitioner's
claims pursuant to the Equal Protection Clause and the
Commerce Clause.

B. Statutory Background

The Medicaid program is a joint federal-state -
program designed to provide medical assistance to individuals
"whose income and resources are insufficient to meet the cost
of necessary medical services." 42 U.S.C. § 1396. Although
a State is not required to participate in the program, once a
state has been accepted into the program, it must comply with
the Medicaid statute and federal regulations. Harris v.
McRae, 448 U.S. 297 (1980). As required by 42 U.S.C. §
1396a(a)(5), the Department of Human Services (DHS) has
been designated as the single state agency responsible for
administering the Medicaid Program in New Jersey; the
Division of Medical Assistance and Health Services
(DMAHS) is charged with responsibility for the daily
operation of the program. N.J.S.A. 30:4D-3(c), 30:4D-5.

The State of New Jersey, in conformity with 42
U.S.C. § 1396a(a), must submit a State Plan to the United
States Department of Health and Human Services (HHS) for
approval. The State Plan describes the policy and methods
used to set payment rates for each type of service included in
the program in order to qualify for federal matching funds and
to ensure that its program conforms to federal requirements.
The State Plan, and any subsequent proposed amendment
(State Plan Amendment or SPA) must meet federal
requirements. 42 U.S.C. § 1396a(b); 42 C.F.R. §§ 430.10,

3

430.12. See Rite Aid of Pennsylvania v. Houstoun, 171 F.3d
842, 846 (3rd Cir. 1999). All initial State plans and
amendments are approved or disapproved by the Health Care
Financing Administration (HCFA), acting for the Secretary of
HHS.

Prior to legislation enacted by Congress in 1980
and 1981, certain institutional providers, including hospitals,
were reimbursed by state Medicaid agencies on a reasonable
cost basis, 48 Fed. Reg. 56046 (1983). The 1981 legislation
changed the standard for reimbursement of nursing and
intermediate care facilities. Pub.L. No. 96-499, § 962(a)
required that the rates paid to these providers through states’
Medicaid programs be "reasonable and adequate to meet the
costs which must be incurred by efficiently and economically
operated facilities." In 1981, the controlling statute, 42
U.S.C. § 1396a(a)(13)(A), was again amended to include
hospitals, and to require, inter alia, that states "take into
account the situation of hospitals which serve a
disproportionate number of low income patients with special
needs." Pub.L. No. 97-35, § 2173. This change is known as
the "Boren Amendment." As amended, Section
1396a(a)(13)(A) provided in relevant part as follows:

A State plan for medical assistance
must-- ... provide-- ... for payment
... Of the hospital ... services
provided under the plan through the
use of rates (determined in
accordance with methods and
standards developed by the State and
which, in the case of hospitals, take
into account the situation of hospitals
which serve a _ disproportionate
number of low income patients with
special needs ...) which the State
finds, and makes assurances
Satisfactory to the Secretary, are
reasonable and adequate to meet the

4

costs which must be incurred by
efficiently and economically operated
facilities in order to provide care and
services in conformity with applicable
State and Federal laws, regulations,
and quality and safety standards and
to assure that individuals eligible for
medical assistance have reasonable
access (taking into account
geographic location and reasonable
travel time) to inpatient hospital
services of adequate quality; and
such State makes further assurances,
satisfactory to the Secretary, for the
filing of uniform cost reports by each
hospital ... and periodic audits by the
State of such reports....42 U.S.C.A.
§ 1396a (West Supp.1989). [West
Virginia University Hospitals v.
Casey, 885 F.2d 11, 22 (3d Cir.
1989)].

Although the Secretary of Health and Human
Services promulgated regulations designed to implement the
Boren Amendment, the regulations did not include explicit
criteria for federal review of states' methods and standards for
establishing payment rates. Such a list, the Secretary
concluded, might be viewed as imposing federal standards for
payments rates, and as such would have been contrary to
Congress’ intent, which placed the responsibility for
developing such rates upon the states, 48 Fed. Reg. 56049
(1983). The regulations only required that a State, in order
to receive HCFA approval of a State plan change in payment
methods and standards, must:

(a)...make assurances satisfactory to
HCFA that the requirements set forth
in paragraphs (b) through (i) of this

5

section are being met, must submit
the related information required by §
447.255 of this subpart, and must
comply with all other requirements of

this subpart.

(b) Findings. Whenever the
Medicaid agency makes a change in
its methods and standards, but not
less often than annually, the agency
must make the following findings:

(1) Payment rates.

(i) The Medicaid agency pays for
inpatient hospital services and long-
term care facility services through the
use of rates that are reasonable and
adequate to meet the costs that must
be incurred by efficiently and
economically operated providers to
provide services in conformity with
applicable State and Federal laws,
regulations, and quality and safety
standards.

(ti) With respect to inpatient hospital
services--

(A) The methods and standards used
to determine payment rates take into
account the situation of hospitals
which serve a _ disproportionate
number of low income patients with

6

special needs...[42 C.F.R. §
447.253].?

A subsequent statute, 42 U.S.C. § 1396r-4,
implementing the requirements of 42 U.S.C. §
1396a(a)(13)(A), was added by Congress on December 22,
1987. It required states to submit a SPA to the Secretary by
July 1, 1988, defining disproportionate share hospitals, and
providing for increased payments to those hospitals as of July
1, 1988. Pub. L. No. 100-203, Title IV, § 4112. °

On September 30, 1988, New Jersey submitted to
HCFA SPA 88-29, which was intended to comport with 42
U.S.C. § 1396r-4. This SPA covered disproportionate share
("DSH") payments to various types of hospitals. It indicated
that New Jersey had a statewide pooling arrangement in
accordance with 42 U.S.C. § 1396r-4(e), and stated that New
Jersey would "reimburse disproportionate share hospitals
located in a state other than New Jersey according to the
approved Title XIX (Medicaid) reimbursement methodology
in the state in which the hospital is located." SPA 88-29 was

? HCFA has proposed to amend the regulations to remove this
entire provision as it is inconsistent with the Balanced Budget Act of 1997,
discussed infra. 64 Fed.Reg. 54263 (1999).

> Also in 1988, several amendments were made to 42 U.S.C. §
1396r-4, adding language which created an exception to the original
requirements imposed by that statute. New Jersey and other states that
met certain criteria came under § 1396r-4(e), captioned "special rule,"
which permitted states to limit DSH payments to acute care hospitals
involved in a statewide “pooling arrangement." The statewide pooling
arrangement referred to in the "special rule" was a function of New
Jersey's unique hospital rate-setting system. At the time 42 U.S.C. §
1396r-4(e) was enacted, New Jersey hospital rates were set by statute,
under an "all-payor” system which set the rates charged by hospitals for
the various paying entities. L.1978 c. 83 (Chapter 83). This rate system
included a statewide pooling arrangement, whereby all hospitals collected
an assessment to reimburse those hospitals which paid for a
"disproportionate share" of "uncompensated care.”

PR renee oN NT RS Te

7

later split into four parts; the out-of-state portion was
designated as SPA 88-29(d).*

In 1992, New Jersey's hospital rate setting system
was invalidated by the decision in United Wire, Metal &
Machine Health and Welfare Fund, et al. v. Morristown
Memorial Hosp., 793 F.Supp. 524, (D.N.J. 1992), and the
system was replaced by the State Legislature.°

Under the Health Care Reform Act of 1992, L.
1992, c. 160, (Chapter 160), N.J.S.A. 26:2H-18.51 et seq.,
effective January 1, 1993, the State replaced the rate-setting
system with a deregulated, free market system by calendar
year 1994 (1993 served as a transition year). In enacting
Chapter 160, the Legislature recognized a "need to continue
this State's current system of providing disproportionate share
payments to hospitals in the State," and thus created a funding
source for the State's hospitals. N.J.S.A. 26:2H-18.51(c).
Under Chapter 160, disproportionate share hospitals are
designated as such by the Commissioner of Human Services.
N.J.S.A. 26:2H-18.52. The actual payment of the charity
care subsidy, because it constitutes a DSH payment, is done
through DMAHS, so that the State can then submit claims for
federal financial participation (FFP). While the exact
formulas for distributing charity care have changed on several
occasions since 1992, as the result of legislative amendments,
the basic concept has remained unchanged.

Charity care payments, including DSH payments,
are made from the Health Care Subsidy Fund created by
Chapter 160. The Fund is a “nonlapsing fund” dedicated for

* As explained infra at n.8, this SPA was superseded the same
day it was approved.

* The issue in United Wire was unrelated to any issues in this
matter. The decision in United Wire was overturned in United Wire, etc.
v. Morristown Memorial Hosp., 995 F.2d 1179 (3rd Cir. 1993), cert.
denied sub nom, New Jersey Carpenters Welfare Fund v. Dunston,
510 U.S. 944 (1993), but the State Legislature had already changed the
payment system.

8

use by the State to (among other things) distribute charity care
subsidy payments to hospitals. N.J.S.A. 26:2H-18.58(a).
Funding for these charity care payments currently comes from
several sources as determined by the Legislature. N.J.S.A.
26:2H-18.58(a), N.J.S.A. 26:2H-18.58c. In each year since
1993, the Legislature has provided a specific, set amount to
be distributed. This fund is distributed to in-state hospitals
pursuant to specific statutory formulas (which have varied
from year to year). The formulas do two things: first, they
identify which particular acute care hospitals will be eligible
in a given year, and second, they determine how the limited
subsidy amount for that year will be distributed among those
eligible hospitals. See N.J.S.A. 26:2H-18.59, and 59e. Not
every acute care hospital in the State is eligible for or receives
a charity care subsidy in a given year. Nor does the subsidy
act as a strict “reimbursement,” covering all of a hospital’s
charity care expenses. Rather, it represents a particular
hospital’s percentage of the limited State-wide subsidy
amount, as set by the Legislature for that year.

Certain hospitals also receive an additional DSH
payment adjustment from the Hospital Relief Subsidy Fund.
N.J.A.C. 10:52-8.2(a)(4). This additional payment is based
upon the facility’s percentage of clients with AIDS,
tuberculosis, substance abuse and addiction and complex
birth.

During the time that New Jersey was revising its
hospital rate setting methodology, and after it had been
informed by HCFA that it did not need to make DSH
payments to out-of-state hospitals,° the State stopped making

® DMAHS Director Saul M. Kilstein was informed by William
L. Engelhardt, Acting Associate Regional Administrator of HCFA, in a
letter dated June 21, 1993, that the State could, if it wished, withdraw
SPA 88-29(d) (which had not yet been approved by HCFA), because it
was not required to make DSH payments to hospitals outside of the State’s
DSH pool, pursuant to 42 U.S.C. § 1396r-4(e).

9

je payments to out-of-state hospitals, on or about July 1,

An amended SPA concerning, inter alia, DSH
payments to out-of-state hospitals, SPA 96-30, was submitted
to HCFA on or about September 30, 1996. This SPA was
subsequently divided into two separate SPAs, and the part that
concerned DSH payments to out-of-state hospitals was
redesignated as SPA 96-30B. That SPA states that “[tJhe
New Jersey Medicaid Program will not make disproportionate
share hospital payments to any facility located in a state other
than New Jersey.” It was approved by HCFA on June 30,
1997, and had an effective date of September 20, 1996.°

The most significant event for purposes of this
matter occurred on August 5, 1997 when President Clinton
signed the Balanced Budget Act of 1997 (BBA). Section 4711
of the BBA replaced the Boren requirements with a new
Section 1902(a)(13)(A) of the Social Security Act. The new
Statute requires the State plan to provide

(A) for a _ public process for
determination of rates of payment
under the plan for hospital services,
nursing facility services, and services

” On page 5 of its petition, Children's Seashore House asserts
the amount it believes it would have been entitled to in DSH payments
from New Jersey during fiscal years 1996-1999. These figures were
neither presented to the district court nor the Court of Appeals below and
the respondent contests the accuracy of those amounts. Moreover, the
complaint in this matter only seeks prospective relief, as the Eleventh
Amendment would bar any claim for retroactive monetary damages, and
the complaint was not filed until May 8, 1998, after the statutory changes
repealing the Boren Amendment.

. On that same date, June 30, 1997, HCFA also approved SPA
88-29(d), with an effective date July 1, 1988. However, SPA 88-29(d)
was immediately superseded by SPA 96-30B.

—

10

of intermediate care facilities for the
mentally retarded under which --

(i) proposed rates, the
methodologies underlying __ the |
establishment of such rates, and

justifications for the proposed rates

are published,

(ii) providers, beneficiaries
and their representatives, and other
concerned State residents are given a
reasonable opportunity for review and
comment on the proposed rates,
methodologies, and justifications,

heed odes

(ili) final rates, the
methodologies underlying __ the
establishment of such rates, and
justifications for such final rates are
published, and

(iv) in the case of hospitals,
such rates take into account (in a
manner consistent with section 1923)
the situation of hospitals which serve
a disproportionate number of low-
income patients with special needs...
[42 U.S.C. § 1936a(a)(13)(A)].”

Thus, the State no longer must make "findings" and
"assurances" to the Secretary that the remmbursement rates are
"reasonable and adequate" to meet the costs which must be
incurred by "efficiently and economically operated facilities"

* The BBA was signed into law on August 5, 1997, and these
provisions apply to services furnished on or after October 1, 1997. Pub.
L. No. 105-33, § 4711(d).

1]

in order to provide care and services in conformity with
applicable laws, regulations and quality and safety standards
or to assure that individuals eligible for medical assistance
have "reasonable access" to inpatient hospital services of
adequate quality. Also removed is the requirement for
periodic audits.

The BBA also set state-specific DSH allotments.
Now codified at 42 U.S.C. § 1396r-4(f), states’ DSH
allotments were changed so that set amounts are provided
each year beginning with Fiscal Year 1998. Congress
reached a decision about how much each individual state was
entitled to receive and there is no evidence that it included in
its calculations that any state be required to give away
Significant portions of its DSH allotment to other states.

After the enactment of the BBA and in accord
with the public process requirements of the BBA, the State
adopted a regulation, N.J.A.C. 10:52-4.4(b), which provides
that “[t]he Division shall not reimburse out-of-State hospitals
for disproportionate share hospital (DSH) payments even if
the DSH payments are included in the Claim-specific
reimbursement methodology approved by the State Medicaid
agency in the state in which the hospital is located."
N.J.A.C. 10:52-4.4(b) was proposed on April 6, 1998, 30
N.J.R. 1258(a), and adopted on June 18, 1998, effective July
20, 1998, 30 N.J.R. 2653(a), following the public comment
period.'°

‘© The State did not actually have to comply with the public
notice requirements. HCFA has interpreted the Statutory language of the
BBA to mean that States are not required to subject their existing rates to
a public process. See, December 10, 1997 letter to State Medicaid
Directors, from Sally K. Richardson, 18a. This interpretation is entitled
to deference. See, e.g., Planned Parenthood Affiliates of Michigan v.
Engles, 73 F.3d 634 (6th Cir. 1996), discussing a similar letter from Sally
K. Richardson which was also sent to all state Medicaid Directors, and
noting that the court would “accord deference to this reasonable agency
interpretation of the statutory requirements of Medicaid" (Jd. at 638,
Citations omitted).

12
REASONS FOR DENYING WRIT

In this case, petitioner Children's Seashore House
("CSH") is not challenging the rates it receives for treating
Medicaid recipients from New Jersey as inadequate. Rather,
petitioner is challenging New Jersey's refusal to give it an
extra payment, known as a DSH payment.'' The DSH
payment is not payment for services rendered and is not
related to medical care. Rather, it is a subsidy to compensate
a qualifying hospital for the high percentage of otherwise
uncompensated care provided by the hospital. Petitioner
already receives a DSH payment from its home state,
Pennsylvania, which must take into account all charity care
provided by CSH, including those charity care patients it
treats from other states. 55 Fed.Reg. at 10079 (1990), 21a.

The courts below correctly held that CSH did not
have standing to pursue this 42 U.S.C. § 1983 action
predicated upon an alleged violation of Medicaid law.
Following the repeal of the Boren Amendment, the new
statutory scheme does not impose a binding obligation on
New Jersey to make any "payments" to hospitals. The only
requirement is that the State have "a public process" for
determination of rates of payment. Consequently, as the
three-prong test enunciated by this court in Golden State
Transit Corp. v. Los Angeles, 493 U.S. 103, 106 (1989) and
Blessing v. Freestone, 520 U.S. 329, 340-41 (1997), to
determine whether a plaintiff has standing to bring this action
has not been met, the courts below properly dismissed the
claim, and there is no basis for granting certiorari.

In addition, petitioner posits a split in authority
based upon this case and the Ninth Circuit's split decision in

'' Petitioner's allegation in foomote 9 on page 13 of its petition
that it recently reduced its licensed inpatient beds due to Medicaid
reimbursement reductions was never presented to the district court nor the
Court of Appeals below and the respondent does not admit that this is an
established fact. Moreover, this matter only concerns DSH payments, not
payment rates in general.

13

Children's Hosp. and Health Ctr v. Belshe, 188 F.3d 1090
(9th Cir. 1999), petition for certiorari filed, 68 U.S.L.W.
3595 (U.S. Mar. 9, 2000)(No. 99-1497). However, the
matter in the Ninth Circuit was Originally filed in 1995,
before the enactment of the BBA. In contrast, the case at bar
was filed in May 1998, after the enactment of the BBA, and
the petitioner waived its argument that the Boren Amendment
still applied on appeal to the circuit court. Moreover, the
Ninth Circuit never addressed the Standing issue present in
this matter. In addition, contrary to California, New Jersey
followed the public process required by the BBA. Therefore,
under either the Ninth Circuit's analysis or the Third Circuit's
analysis, the result would be the same and there is no
irreconcilable split meriting the attention of this Court.
Finally, the circuit court did not apply the BBA retroactively
as this matter was filed after the BBA was in effect.
Consequently, a circuit court decision as to whether hospitals
can continue to sue under the repealed-Boren Amendment is
irrelevant to the case at bar.

Furthermore, petitioner's argument regarding the
"social and financial" need for a private cause of action to
enforce the DSH provisions is not an adequate reason to grant
certiorari. Hospitals do not have Standing to sue pursuant to
§ 1983 in accordance with the well-established test for making
such determination. Consequently, there is no basis for
granting certiorari based upon public policy considerations
best left to the legislative action.

Lastly, this is an appeal of an interlocutory order.
The matter is currently Proceeding in the district court
following the remand by the Third Circuit. There is no
pressing need for this Court to hear this matter on an
interlocutory basis.

14

I. The Decision Below Correctly Determined That CSH
Had No Standing to Bring this Lawsuit

The courts below correctly held that CSH does not
have standing to bring this lawsuit pursuant to 42 U.S.C. §
1983. Consequently, this petition is without merit.

"Section 1983 provides a cause of action for ‘the
deprivation of any rights, privileges, or immunities secured
by the Constitution and laws' of the United States." Wilder
v. Virginia Hospital Assoc., 496 U.S. 498, 508 (1990).
Section 1983 provides a cause of action for violations of
federal statutes as well as the Constitution. Maine v.
Thiboutot, 448 U.S. 1, 4 (1980). However, a plaintiff will
not be permitted to sue under § 1983 where the statute does
not create enforceable rights, privileges or immunities within
the meaning of § 1983 or where Congress has foreclosed such
enforcement in the statute in the enactment itself. Wright v.
Roanoke Redevelopment and Housing Authority, 479 U.S.
418, 423 (1987).

In order to determine whether a federal law
creates a "federal right" that is enforceable under § 1983,
courts apply a three-prong test. First, the court must
determine whether "the provision in question was intend[ed]
to benefit the putative plaintiff." Golden State Transit Corp.
v. Los Angeles, 493 U.S. 103, 106 (1989) (citations and
internal quotations omitted). Second, if the provision was
intended to benefit the putative plaintiff, the court must
determine whether the provision merely reflects a
"congressional preference" for a certain kind of conduct
rather than a binding obligation on the governmental unit.
Only a binding obligation is enforceable. Pennhurst State
School and Hospital v. Halderman, 451 U.S. 1, 19 (1981).
Third, there is no enforceable right where the interest the
plaintiff asserts is "'too vague and amorphous'” such that it is
""beyond the competence of the judiciary to enforce." Golden
State, supra, 493 U.S. at 106, quoting Wright, supra, 479
U.S. at 431-32. See also Blessing v. Freestone, 520 U.S. 329,
340-41 (1997).

15

A. Hospitals Are Not the Intended Beneficiary

Applying the three-prong test in this Case, it is
Clear that health care providers are no longer the intended
beneficiaries of the reimbursement system. Contrary to the
prior language of the Boren Amendment which required the
state plan to provide for "payment," Wilder, 496 U.S. at 510,
the new legislative scheme only requires the state plan to
provide for "a public process" for determinations of rates of
payment. 42 U.S.C. § 1396a(a)(13)(A). Thus, the first
prong of the three prong test -- that health care providers are
the intended beneficiaries -- is not met.”

B. The BBA Does Not Impose a Binding Obligation on
the States to Make DSH Payments to Hospitals

Even assuming arguendo that the first prong could
be met, the second prong -- whether the legislative scheme
imposes a binding obligation on the States -- cannot be met.
First, the only binding obligation imposed by the new scheme
is to have a "public process" in place. 42 U.S.C. §
1396a(a)(13)(A). While that process includes publication of
Proposed and final rates, along with the underlying
methodologies for establishing those rates and the
justifications for those rates, there is no requirement as there
was with the Boren Amendment that the states make findings
and assurances that the rates are "reasonable and adequate."
As stated by the Third Circuit

2 Even if health care providers are still intended beneficiaries,
the State does not concede that out-of-state Providers, as opposed to in-
State providers, are the intended beneficiaries. Indeed, as set forth below,
HCFA has taken the position that the hospital reimbursement provisions
do not apply to out-of-state providers.

16

[Bly replacing the Boren Amendment
with a requirment that a State
establish a public process by which
its rates would be determined,
Congress has removed a party's
ability to enforce any substantive
right. [Children's Seashore House v.
Waldman, 197 F.3d 654, 659 (3d
Cir. 1999) (citations omitted)].

Nor does 42 U.S.C. § 1396r-4 create a binding

obligation on the States. Again, as the Third Circuit noted,

[42 U.S.C. §1396]r-4 imposes neither
procedural nor substantive
requirements on a state that provide a
basis for CSH to press its claims.
Rather, r-4 is a definitional provision
that describes certain procedures that
a state must satisfy, such as
submitting a qualifying plan to the
Secretary of Health and Human
Services by a certain date to establish
an adequate state disproportionate
Share hospital adjustment plan. 42
U.S.C. § 1396r-4(a). Moreover, r-4
sets the parameters of what is a DSH,
what constitutes an adequate payment
adjustment, and what limits are
placed on federal financial
participation and on state allotments
for each year. We are satisfied that
CSH cannot predicate its claim on
these provisions. [Children's
Seashore House, 197 F.3d at 659-
60].

17

The legislative history of the BBA makes Clear
that in repealing the Boren Amendment, Congress intended to
foreclose further lawsuits against the states. CSH's assertions
to the contrary notwithstanding, the amendment was designed
to free states from excessive federal Oversight, and to
eliminate the use of the Boren Amendment by hospitals and
nursing facilities as a basis for seeking judicial review as to
the adequacy of the rates established by the states. The House
Report explicitly declared, “It is the Committee intention that,
following enactment of this Act, neither this nor any other
Provision of Section 1902 will be interpreted as establishing
a cause of action for hospitals and nursing facilities relative to
the adequacy of the rates they receive.” H.R. Rep. No. 110-
149, at 591. That report also noted that under the Boren
Amendment, “[a] number of courts found that state systems
failed to meet the test of reasonableness and some states have
had to increase payments to these providers as a result of
these judicial interpretations." H.R. Rep. No. 149, supra, at
591, accord, H.R. Conf. Rep. No. 217., 105th Cong., Ist
Sess. 867 (1997). “The Boren amendment has produced
endless lawsuits ... Repealing the Boren amendment takes it
out of the courts.” Cong. Rec. $6305 (June 25, 1997),
Statement of Sen. Gramm.

House Conference Report No. 105-217 of July 30,
1997, the House/Senate conference agreement dealing with
the Boren Amendment, taken as a whole, demonstrates a clear
intent to repeal the Boren Amendment, and does not support
the interpretation given by petitioner. The statement of the
current law in the House Report (prior to the adoption of the
BBA) acknowledges that courts were invalidating states’
plans, and both the House and Senate reports state the intent
to repeal the Boren Amendment. See generally United States
v. Congress of Industrial Organizations, 335 U.S. 106, 112-
13 (1948)(remedial laws are to be interpreted in light of
previous experience and prior enactments).

Contrary to petitioner's argument that the BBA
strengthened the DSH provisions, the final version of the
BBA did not adopt the language of the House version which

18

specifically required that states take into account the situation
of hospitals that serve a disproportionate number of low-
income patients with special needs, and make assurances that
the average level of payments made to hospitals would not
drop for an 18 month period. A fair reading of the legislative
history supports the State's position that the BBA was
intended to limit suits brought under the Boren Amendment.
HCMF Corp. v. Gilmore, 26 F.Supp.2d 873, 879 (W.D.
Virginia 1998) ("The Balanced Budget Act of 1997 replaced
the repealed Boren Amendments standard with a public notice
process for states to follow in setting payment rates. There
can be but one reasonable conclusion from Congress's action:
Congress precluded a right of action under § 1983 for
reimbursement claims for services rendered on or after
October 1.")

Even if there is a binding obligation to make DSH
payments to in-state hospitals, the language of § 1396r-4
simply does not indicate any requirement to make DSH
payments to out-of-state providers. It is well settled that “[i}n
Statutory interpretation, the starting point is always ‘the
language [of the statute] itself.”” Queen of Angels/Hollywood
Presbyterian Medical Ctr. v. Shalala, 65 F.3d 1472, 1477
(9th Cir. 1995)(citations omitted). Under step one of the now
familiar two-part test enunciated in Chevron, U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 842-
43 (1984), a reviewing court first determines “whether
Congress has spoken directly to the precise question at issue.”
Id. at 842. If the intent of Congress is clear, that ends the
inquiry, because both the Court and the Secretary “must give
effect to the unambiguously expressed intent of Congress.”
Id. at 842-43.

The language of § 1396r-4 nowhere indicates any
requirement that out-of-state providers should be considered
in implementing the statute. To the contrary, it refers to
hospitals “in the state,” 42 U.S.C. § 1396r-4(b)(1)(A),
(defining a DSH institution); hospitals “in a state,” 42 U.S.C.
§ 1396r-4(f)(1)(A); the “statewide” arithmatic mean, 42
U.S.C. § 1396r-4(f)(1)(A)(I)(b); the utilization rate “for all

19
\

hospitals in the state” 42 U.S.C. § 1396r-4(f)(1)(D); and in 42
U.S.C. § 1396r-4(e), the “statewide” pooling arrangement.
Especially significant is Congress’ determination when
enacting the BBA to provide for specific state limits on the
amount of DSH each state is entitled to receive. 42 U.S.C. §
1396r-4(f). If Congress’ intent was to include out-of-state
providers in these calculations, it could have made this point
explicitly as it did in § 1396a(a)(16), requiring coverage of
services provided to recipients outside of their home state.
"[W]here Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it
is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion." Russello
v. United States, 464 U.S. 16, 23 (1983)(citations omitted).
The Court should not expand the coverage of the statute,
especially in light of the significant policy implications. See
United States v. Stephens, 208 F.2d 105, 107 (Sth Cir. 1953)
("[C]ourts cannot, upon the pretence [sic] of construing [a
Statute], enlarge its coverage to bring within it those not
expressly or by clear intendment embraced within its
terms.").

Moreover, the Secretary has interpreted § 1396r-4
not to apply to out-of-state providers. It is the Secretary’s
position that DSH payments need not be made to out-of-State
providers because the Medicaid statute does not require that
DSH payments be used for "medical assistance” or any other
Medicaid-related expenditure, but that the hospital can use the
money for any purpose. See Brief of United States as Amicus
Curiae, attorneys for the Secretary of Health and Human
Services, in Children's Hospital and Medical Center y.
Belshe, Docket No. C 95-1076 MHP (N.D. Cal.), at p.17
n.6. '° Further evidence of the Secretary's position on this

° In a split decision, the Ninth Circuit affirmed the district
court's opinion in that matter, finding that the Boren Amendment applied
to out-of-state providers notwithstanding the Secretary's interpretation to
the contrary. Children's Hospital and Health Center v. Belshe, 188 F.3d
1090 (9th Cir. 1999). A petition for a writ of certiorari is currently

20

issue is found in HCFA's acceptance of New Jersey's State
Plan Amendment specifically stating that New Iersey will not
make DSH payments to out-of-state hospitals."

Where Congress has not spoken to the precise
question at issue, “the question for the court is whether the
[Secretary’s interpretation] is based on a_ permissible
construction of the statute.” Chevron, 467 U.S. at 842-43;
Queen of Angels, 65 F.3d at 1477. A reviewing court need
not conclude that the Secretary’s interpretation of the statute
is the “only reasonable one, or even the ‘best’ one[,]” Queen
of Angels, 65 F.3d at 1477, and deference is due the
Secretary’s reasonable construction of a statute that she
administers. Id.; see also Rosado v. Wyman, 397 U.S. 397,
406-07 (1970). “Confronted with an ambiguous statutory
provision, we generally will defer to a permissible
interpretation espoused by the agency entrusted with its
implementation.” Good Samaritan Hosp. v. Shalala, 508
U.S. 402, 414 (1993) (citations omitted).

Similarly, where the Secretary’s interpretation of
her own regulations is reasonable, a reviewing court must
defer to that interpretation. Shalala v. Guernsey Mem. Hosp..,
514 U.S. 87, 94-95 (1995); see also Blum v. Bacon, 457 U.S.
132, 141 (1982)(“interpretation of any agency charged with
the administration of a statute is entitled to substantial
deference”); Thomas Jefferson Univ. v. Shalala, 512 U.S.
504, 512 (1994); Udall v. Tallman, 380 U.S. 1, 16
(1965)(“When the construction of an administrative regulation
rather than a statute is in issue, deference is even more clearly
in order.”). Accordingly, the Secretary’s administrative
interpretation of her regulations must be given “controlling
weight unless it is plainly erroneous or inconsistent with the

pending, 68 U.S.L.W. 3595 (U.S. Mar. 9, 2000)(No. 99-1497).

'* As HCFA explained in its Amicus brief in Children's Hospital
and Medical Center, its interpretation of the statute is that states can make
DSH payments to out-of-state providers, but they are not required to do
so.

21

regulation." Jd. at 16-17; accord Thomas Jefferson Univ.,
512 U.S. at 512.

Thus, as there is no Statutory requirement to make
DSH payments to out-of-state hospitals, this Court should
defer to the Secretary's interpretation. As the Third Circuit
noted, "federal approval of the amendment to the plan ...
could foreclose a statutory argument challenging the denial of
DSH payments." Children's Seashore House, 197 F.3d at
661.

C. The Obligation to Make DSH Payments is too
Vague to be Judicially Enforced

Lastly, CSH also cannot meet the third prong of
the test -- that the obligation is not too vague and amorphous
to be judicially enforced. There simply is no longer any
requirement in the statute and implementing regulations that
the State make elaborate “findings” in order to give
“assurances” to HCFA when seeking approval of a rate
change. Contrary to the Boren Amendment requirements,
there are no specific procedural or substantive requirements
which must be met in either 42 U.S.C. § 1396a(a)(13)(A) or
42 U.S.C. § 1396r-4, or any payment standard contained
within.

Under Wilder, the Supreme Court relied upon the
specificity of considerations that the states had to review
contained in the Boren Amendment, and measured the states’
compliance against a benchmark of “reasonable and adequate”
rates:

[T]he statute and regulation set out
factors which a State must consider in
adopting its rates. For example,
when determining methods for
calculating rates that are reasonably
related to the costs of an efficient
hospital, a State must consider: (1)
the unique situation (financial and

22

otherwise) of a hospital that serves a
disproportionate number of low
income patients, (2) the statutory
requirements for adequate care in a
nursing home, and (3) the special
situation of hospitals providing
inpatient care when long-term care at
a nursing home would be sufficient
but is unavailable. 42 U.S.C. §
1396a(a)(13)(A) (1982 ed., Supp. V).
In addition, the statute requires the
State, in making its findings, to judge
the reasonableness of its rates against
the objective benchmark of an
"efficiently and economically
operated facilit[y]" providing care in
compliance with federal and state
standards while at the same time
ensuring "reasonable access" to
eligible participants. [Wilder, 496
U.S. at 519, and n. 17].

It is abundantly clear that with the repeal of the Boren
Amendment, states are no longer required to review a laundry
list of considerations and measure whether an efficient facility
would be adequately reimbursed.

CSH argues that the criteria in 42 U.S.C. § 1396r-
4 requiring a payment adjustment for DSH hospitals
evidences Congress’ intent that it should receive a DSH
payment from New Jersey in addition to what it receives from
Pennsylvania. Not only is there no statutory language which
requires a state to make DSH payments to out-of-state
providers, the statute does not even require any specific level
of payment to any hospital, whether in-state or out-of-state.
For example, a state can pay “a minimum specified additional
payment” as long as the payment is “reasonably related” to
“costs, volume, or proportion of services.” 42 U.S.C. §

23

1396r-4(c)(3). This standard is Clearly too vague and
amorphous to be judicially enforced.

Having failed to establish the three prongs of the
test for standing, it is clear that CSH has no Standing to bring
this action challenging New Jersey's failure to make out-of-
state DSH payments as part of its hospital reimbursement
scheme. Consequently, the decisions below were correct and
there is no basis for granting this petition for a writ of
certiorari.

II. There Is No Irreconcilable Conflict Among the Circuit
Courts Meriting the Attention of this Court in this
Matter.

Petitioner posits that certiorari should be granted
because there is a conflict among the circuit courts as to
whether hospitals may continue to seek recourse against states
following the repeal of the Boren Amendment. However,
there is no irreconcilable conflict meriting the attention of this
Court.

The alleged conflict arises from the Ninth
Circuit's decision in Children's Hosp. and Health Ctr. y.
Belshe, supra, 188 F.3d 1090, wherein the court held that
California must either have payment methodologies that had
been validly determined under the Boren Amendment or that
complied with the new public process requirements of the
BBA. Id. at 1095. California did not adopt rates in
compliance with the public notice requirements of the BBA.
Therefore, the Ninth Circuit evaluated the rates to see if they
complied with the Boren Amendment.

In contrast, the Third Circuit in deciding this
matter did not apply the Boren Amendment and looked solely
to the BBA. Children's Seashore House, 197 F.3d at 659.

'° The other case cited by petitioner, Mall v. Sullivan, 129 F.3d
113, 1997 WL 643921 (2d Cir. 1997), is an unpublished opinion. In that
matter the parties agreed that as of whatever date the Boren Amendment

24

Unlike the Ninth Circuit case, this matter was filed after the
Boren Amendment was repealed and the BBA was already in
effect. Moreover, on appeal to the circuit court, CSH
abandoned its argument that the Boren Amendment applied to
this matter and argued solely that the BBA and § 1923 gave
rise to standing. Consequently, there is no basis for this Court
to grant certiorari on the issue of whether the Boren
Amendment still applies.

Furthermore, the Ninth Circuit did not even
address the standing issue which is the basis of the Third
Circuit's decision. The Ninth Circuit did not examine the
three-prong test or make any determination as to whether the
plaintiffs had standing to bring the suit under 42 U.S.C. §
1983. Thus, there is no direct legal conflict between the two
decisions.

Additionally, even under the holding of the Ninth
Circuit case, the ultimate outcome of this matter would not be
different because New Jersey complied with the public notice
requirements of the BBA. Contrary to California, following
the enactment of the BBA, New Jersey complied with the new
public process requirements of the BBA when it proposed an
administrative regulation on April 6, 1998, which was
adopted on June 18, 1998. 30 NJR 1258(a); 30 NJR 2653(a).
Consequently, under either circuit court's analysis, the Boren
Amendment is inapplicable and only the BBA applies to a
determination of the issue.

Lastly, petitioner's argument based upon
Landgraf v. USI Film Products, 511 U.S. 264 (1994), that the
BBA should not be applied retroactively is equally
unpersuasive. First, the BBA is not being applied
retroactively because New Jersey complied with the BBA's
public notice requirements after the BBA was enacted.
Moreover, this case was filed after the BBA was enacted and
after New Jersey complied with the BBA's requirements,

was repealed, the appeal would be moot because there cannot be
prospective relief to enforce requirements that have been repealed.

a

25

making the BBA the law in effect when the operative acts
occurred. Further, as this Court noted in Landgraf, "[t}he
first rule is that 'a court is to apply the law in effect at the
time it renders its decision.'" Jd. at 264 (citation omitted).
This is especially appropriate when the intervening statute
authorizes or affects the Propriety of prospective relief. Jd.
at 275. In the case at bar, the only relief available is
Prospective injunctive relief.'° Consequently, the court below
was correct in applying the law in effect at the time it
rendered its decision, which is the BBA.

Therefore, there is no need for this Court to grant
certiorari in this case. The ultimate outcome would be the
same whether analyzed based on the Third Circuit's decision
or Ninth Circuit's decision. Moreover, the two cases are
factually distinct and the reasoning utilized by the Third
Circuit below complies with this Court's decision in
Landgraf.

III. Social and Financial Significance Is Not a Basis for
Granting Certiorari

Petitioner asserts that this Court should grant
certiorari because DSH payments "implicate significant
portions of state and federal budgets" and because there needs
to be a method to ensure that states follow the requirements of
§ 1396r-4. However, these are policy issues that are best left
to Congress.

Balancing the social and financial concerns raised
by petitioner with the concerns faced by states under the
Boren Amendment, Congress enacted the BBA. As noted
above, the BBA does not require the payments petitioner
seeks. Instead of seeking relief in the appropriate forum, i.e.
Congress, petitioner is asking this Court to intervene in a

© This is a 42 U.S.C. § 1983 matter against state officials acting
in their official capacity Only. Therefore, the Eleventh Amendment bars
any monetary relief. Will v. Michigan Dept. of State Police, 491 U.S. 58
(1989)

26

policy, rather than legal, issue. Certiorari is simply
unwarranted in such a case. |

Furthermore, it is respectfully submitted that these
policy factors do not change the analysis of whether § 1396r-4
creates a private cause of action. The test is not whether it
would be a good thing to allow hospitals to contest their DSH
payments. Rather, the test is whether the statute was intended
to benefit the plaintiff; whether the provision imposes an
unambiguous binding obligation; and whether the interest
asserted is too vague and amorphous such that it is beyond the
competence of the judiciary to enforce. Blessing, supra, 520
U.S. at 340-41. As demonstrated above in Point I, § 1396r-4
fails this test.

In addition, a private right of action is not
necessary to ensure that states meet the requirements of §
1396r-4. The federal government still has oversight authority
to make sure that states comply with federal law, and HCFA
could take measures against any state that violated the
provisions of § 1396r-4, including withholding payments. See
42 C.F.R. §§ 430.32, 430.33 and 430.35.

In sum, the "social and financial" considerations
raised by petitioner do not warrant review of this matter by
this Court, especially since the matter was correctly decided
by the court below.

IV. There is no Need for this Court to Examine this
Matter on an Interlocutory Basis

This matter is currently pending in the district
court following the remand by the Third Circuit.
Consequently, this appeal is of an interlocutory order.

Ordinarily, this Court will not issue a writ of
certiorari to review an interlocutory order of the circuit court
of appeals "unless it is necessary to prevent extraordinary
inconvenience and embarrassment in the conduct of the
cause." American Construction Co. v. Jacksonville, T. & K.
R. Co., 148 U.S. 372, 384 (1893). "[E)}xcept in
extraordinary cases, the writ is not issued until final decree."

27

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S.
251, 258 (1916).

The remand of this matter back to the district
court by the circuit court is sufficient grounds for denial of
this petition. Ibid. See Brotherhood of Locomotive Firemen
v. Bangor & Aroostook R. Co., 389 U.S. 327, 328
(1967)(denying certiorari because the Court of Appeals
remanded the case, making it unripe for review). .

As there is no final order in this matter and no
unusual circumstances present in the case at bar, the petition
for a Writ of Certiorari should be denied.

CONCLUSION

For the foregoing reasons, the petition for a writ of
certiorari should be denied.

Respectfully submitted,

John J. Farmer, Jr.
Attorney General of New Jersey
Attorney for Respondents

Nancy Kaplen
Assistant Attorney General

Rhonda S. Berliner-Gold
Deputy Attorney General
Counsel of Record and On the Brief

R.J. Hughes Justice Complex
PO BOX 112

Trenton, New Jersey 08625
(609) 633-1972

Dated: May 31, 2000

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0960%3A2. Public record. Not legal advice.