In Talevski v. Health and Hospital Corporation of Marion County, et al, the Seventh Circuit Court of Appeals unanimously ruled that nursing home residents in publicly-owned facilities enjoy a private right of action to enforce residents’ rights identified in the 1987 Nursing Home Reform Law. The case is significant. Most nursing facilities are privately-owned and operated and case law holds that residents in such facilities do not have a private-right of action to sue the facilities. However, many nursing facilities in Indiana, and possibly other states as well, have transferred their legal ownership to public entities, while they continue to be operated by private companies. The facility in Talevski is such a facility.
In December 2020, the Indianapolis Star reported that 22 county hospitals in Indiana have bought more than 90% of the state’s nursing homes, with private managers operating them. The ownership structure allows “gaming” of the Medicaid system. As described by the Star, the transfers of legal ownership result in higher Medicaid reimbursement rates for the nursing facilities, which the public hospital owners and private managers share. Hospitals in Indiana use much of the Medicaid funding for their own purposes and the former private operators receive “lucrative management fees.” Importantly for residents, these transfers of ownership of nursing facilities also make the facilities “public” and subject to litigation by residents and families to enforce residents’ rights.
Talevski tells the story of Gorgi Talevski, who moved into the nursing facility in January 2016. When his cognitive and physical abilities dramatically declined, his daughter requested a list of his medications. Talevski had been given six psychotropic medications. The family had the medications discontinued and the facility took steps to discharge Talevski. He won an involuntary discharge appeal before an administrative law judge, but never returned to the facility. Talevski sued the facility for violating his rights.
Reversing the district court’s dismissal of the complaint, the Seventh Circuit held that Talevski met all three standards for finding an implied private right of action, as set out by the U.S. Supreme Court in Blessing v. Freestone, 520 U.S. 329 (1997), and Gonzaga University v. Doe, 536 U.S. 273 (2002). The appellate panel first found that Congress intended to create a private right of action in the explicit “rights” language of the federal Reform Law. Second, it found that the specific rights that plaintiffs asserted were protected by the law – rights governing chemical restraints and involuntary transfers – are not vague and amorphous and can be enforced by courts. Finally, the panel found that the survey and enforcement systems set out in the Reform Law are “not incompatible” with private enforcement. Surveys and enforcement “are designed only to ensure facilities’ compliance” with the Reform Law; they neither address nor protect “individual entitlements to be free from chemical restraints or involuntary transfer or discharge.” The panel also noted that the Reform Law explicitly provides “The remedies provided under this subsection are in addition to those otherwise available to an individual at common law.”
Residents, their families, and advocates should determine the legal owners of their nursing facilities. If the legal owners are counties or public hospitals, they may be able to sue for violation of specific rights guaranteed by the Reform Law. Some states, such as New York, give residents a private right of action as a matter of state law.
The Center for Medicare Advocacy joined an amici curiae brief in the Seventh Circuit in support of the Talevskis, along with AARP, California Advocates for Nursing Home Reform, Long Term Care Community Coalition, and the National Consumer Voice for Quality Long-Term Care (Consumer Voice).
August 26, 2021 – T. Edelman
 Talevski v. Health and Hospital Corporation of Marion County, et al. No. 20-1664 (7th Cir. Jul. 27, 2021), http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2021/D07-27/C:20-1664:J:Wood:aut:T:fnOp:N:2739343:S:0
 See, e.g., Schwerdtfeger v. Alden Grove Rehabilitation and Health Care Center, Inc., No. 13 C 8316 (N.D. Ill., May 12, 2014), https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2013cv08316/290111/41/0.pdf?ts=1399975795
 About one-fifth of Texas nursing facilities transferred legal ownership to local counties or hospital districts under a short lived-program that ended in 2016. Private companies managed the facilities and shared the additional Medicaid reimbursement. Edgar Walters, “Funding Program Shields Nursing Homes From Lawsuits,” The Texas Tribune (May 24, 2015), https://www.texastribune.org/2015/05/24/funding-arrangement-shields-nursing-homes-lawsuits/. Critics in Texas complained that the facilities would be shielded from liability as public entities. Oklahoma was considering such a program of public ownership of nursing facilities.
 As reported on the federal website Care Compare, Valparaiso Care & Rehabilitation is owned by the Health and Hospital Corporation of Marion County. https://www.medicare.gov/care-compare/details/nursing-home/155166?city=Valparaiso&state=IN&zipcode=46383&measure=nursing-home-ownership
 Tim Evans, Emily Hopkins and Tony Cook, “Careless: Poor staffing, missed reforms, 3,100 COVID deaths: How Indiana failed nursing home residents,” Indianapolis Star (Dec. 21, 2020), https://www.indystar.com/in-depth/news/investigations/2020/12/17/covid-indiana-how-indiana-failed-nursing-home-residents/5673575002/.
 42 U.S.C. §1396r(h)(8)
 New York Public Health Law §2801-d, https://codes.findlaw.com/ny/public-health-law/pbh-sect-2801-d.html