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Blum v. Yaretsky

Supreme Court of the United States · 1982 · Constitutional Law

Constitutional LawState ActionFourteenth Amendmentstate actionFourteenth AmendmentMedicaidnursing homesprivate conduct

Facts

Respondents challenged decisions by privately owned nursing homes to discharge or transfer Medicaid patients to lower levels of care. They argued that state and federal regulations, possible penalties for noncompliance, required assessment forms, state review of those assessments, Medicaid funding, and state licensing made those transfer decisions attributable to the State. The State, however, did not authorize officials to approve or disapprove particular discharge or retention decisions, and petitioners specifically disclaimed any such responsibility. State officials were required only to approve or disapprove continued Medicaid payment after a patient's need for services changed.

Issue

Whether privately owned nursing homes' decisions to discharge or transfer Medicaid patients to lower levels of care constitute state action because the homes are heavily regulated, heavily funded, licensed by the State, and subject to state review of patient assessments and Medicaid benefit adjustments.

Rule

A private party's decision is not state action unless the State is responsible for the specific conduct challenged. Extensive regulation, public subsidization, licensing, or state adjustment of benefits in response to a private decision does not by itself make that decision attributable to the State. Nor is private conduct state action unless the private entity performs a function traditionally and exclusively reserved to the State or the State is a joint participant in the challenged decision itself.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cleveland, a privately owned rehabilitation center called Lakeview Recovery House receives 88% of its revenue from a state medical-assistance program. After its staff concludes that Nina Porter no longer needs intensive therapy, the center moves her to a less costly wing; state officials later reduce the reimbursement rate to match the new placement.

If Porter sues under the Fourteenth Amendment claiming the transfer was state action, which is the strongest answer?

Explanation. State action requires that the State be responsible for the specific challenged decision itself. Under the majority's rule, heavy public funding and a later adjustment of benefit levels in response to a private transfer do not amount to state approval or enforcement of that transfer. The center's decision therefore remains private conduct.