Procedures adopted by Tennessee to remedy violations of the Medicaid Act's bed certification provisions are adequately predicated on the district court's finding.
Mildred Lea Linton, a nursing home resident, represented a class of plaintiffs who alleged that Tennessee''s nursing home bed certification policy violated the Medicaid Act. Tennessee allowed nursing facilities to "spot" certify beds for Medicaid participation. Thus, fewer than all beds within a particular wing or floor could be available for Medicaid recipients. Ms. Linton''s nursing home apportioned only 40 of its 87 intermediate care facility beds as Medicaid beds. When Medicaid officials reduced Ms. Linton''s care eligibility from skilled to intermediate in 1986, Ms. Linton''s nursing home informed her that it was decertifying her Medicaid bed and would not likely have available any Medicaid beds. The district court found that Tennessee''s "limited bed policy" violated the Medicaid Act, and the state was instructed to submit a remedial plan. The court subsequently approved a plan that Tennessee had negotiated with plaintiffs. Among other provisions, the plan required Medicaid providers to certify all available, licensed nursing home beds within their facilities and to admit residents on a first-come, first serve basis. Providers who chose to withdraw from the Medicaid system were required to retain current Medicaid patients and comply with Medicaid requirements regarding such patients (this mandatory provision was later made optional), and providers who withdrew would be excluded from Medicaid participation for two years after withdrawal (the state later agreed to waive this provision when doing so would serve the provisions of the remedial plan).
On July 30, 1990, five licensed nursing homes in Tennessee intervened, arguing that in adopting the above provisions, the district court abused its discretion and exceeded its authority by imposing an overbroad remedy. They also argued that the plan''s provisions substantially impaired their contractual relationship with Tennessee.
The court rules that all the plan remedies are appropriate. Without the "first come, first-serve" requirement, the court writes, "providers could provide even fewer beds for Medicaid patients than they did under the limited bed policy." The court finds that the continued service provision "is an appropriate interim measure to mitigate the harmful effect" of providers withdrawing from the Medicaid system, and that without the two-year "lock out" provision, "contractors could engage in a de facto limited bed policy, albeit through a revolving door system." The court also finds that the nursing homes failed to show that their contractual relationship with the state had been substantially impaired.
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