U.S. Supreme Court to weigh private lawsuits over federal nursing home rules

(Reuters) - The U.S. Supreme Court has agreed to hear a case over whether state-owned nursing homes can face private lawsuits accusing them of violating Medicare and Medicaid rules on patient care.

The court on Monday granted a petition to hear the case from the Health and Hospital Corp of Marion County, Indiana and a nursing home it operates, Valparaiso Care and Rehabilitation. They are asking the court to overturn an appeals court ruling that allowed a lawsuit on behalf of a nursing home resident.

A lawyer for the petitioners could not immediately be reached for comment. Nor could a lawyer for Ivanka Talevski, who brought the lawsuit on behalf of her husband Gorgi Talevski, who was a patient at Valparaiso.

In her 2019 lawsuit, Ivanka Talevski said her husband was subjected to harmful psychotropic drugs and inappropriately transferred to an all-male facility in violation of the Federal Nursing Home Reform Act (FHNRA), a 1987 law that established a "bill of rights" for residents of nursing homes receiving Medicare and Medicaid funding.

She said that, because HHC was publicly owned, she could sue for damages under Section 1983 of the U.S. Code, which allows individuals to sue government entities that violate their legal rights.

HHC has maintained that Talevski's treatment was related to his violent behavior toward staff and other residents. It moved to dismiss the case, arguing that the FHNRA did not allow individuals to sue for violations under the law.

U.S. District Judge James Moody in Hammond, Indiana agreed, finding that the federal rules for Medicare and Medicaid recipients stemmed from the government's spending power, and should be understood as contracts between the government and providers that do not allow for third-party claims.

The 7th U.S. Circuit Court of Appeals revived the case, however, finding that FHNRA's language did support such claims. It noted that the Supreme Court had allowed private lawsuits stemming from the government's spending power before, most recently in a 1990 decision, Wilder v. Virginia Hospital Association, allowing hospitals to sue states over Medicaid reimbursement rates.

HHC and Valparaiso argued to the Supreme Court that by allowing the lawsuit to go forward the 7th Circuit had effectively "federalized" malpractice law for public nursing homes, overriding state malpractice laws that often cap damages and attorneys' fees.

Indiana and 16 other states submitted a brief supporting the petitioners, as did long-term care industry group American Health Care Association and its Indiana affiliate

The case is Health and Hospital Corp of Marion County, Indiana v. Talevski, U.S. Supreme Court, No. 21-806.

For petitioners: Larry Robbins of Kramer Levin Robbins Russell

For the Talevskis: Andrew Tutt of Arnold & Porter Kaye Scholer

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