O'Bannon v. Town Court Nursing Center

1980-06-23

Headline: Elderly nursing‑home residents denied constitutional right to a pre‑decertification hearing; Court reversed lower court and allows health agencies to withdraw facility funding without a patient hearing, likely enabling transfers.

Holding: The Court held that Medicaid and Medicare patients do not have a constitutional right to a hearing before federal or state agencies decertify a nursing home and end facility payments, so no pretermination hearing is required.

Real World Impact:

Allows agencies to decertify facilities without holding pretermination hearings for residents.
Can lead to resident transfers without constitutional right to participate in enforcement proceedings.
Residents may still sue the nursing home or seek administrative input but not a federal hearing right.

Topics: nursing home rules, Medicare and Medicaid, patient due process, patient transfers

Summary

Background

A private nursing home in Philadelphia and about 180 elderly residents challenged federal and state agencies after the home was found out of compliance and its Medicare certification was not renewed. HEW notified the home it failed several federal participation standards; the state then ended the home’s Medicaid agreement. The home and six Medicaid patients sued, seeking a hearing before payments stopped and an injunction to prevent resident transfers while reconsideration proceeded.

Reasoning

The main question was whether Medicaid or Medicare patients have a constitutional right to a hearing before an agency decertifies a facility and ends government payments for care there. The Court held they do not. It said the statutes guarantee choice among qualified providers but do not give patients a right to keep benefits for care in a facility that has been found unqualified. Decertification, the Court explained, is an enforcement action aimed at the facility; any harm to residents is indirect and does not create a constitutional right to participate in the agency’s proceedings.

Real world impact

The ruling allows federal and state agencies to proceed with decertification of a nursing home without providing residents a constitutionally required pretermination hearing. Some residents may be transferred and suffer disruption, but the Court said constitutional due process does not demand that residents be given a hearing in those enforcement proceedings. The decision does not mean agencies cannot solicit patient views or that residents lack other legal remedies against a facility.

Dissents or concurrances

Justice Blackmun concurred in the judgment but criticized the Court’s analysis and argued a broader test should apply. Justice Brennan dissented, asserting the statutes and regulations create a protected interest and that residents were denied procedural protection.