l Eighteen conditions necessary for the receipt of funding are set out at 42 C.F.R. §§ 405.1120-1137 (1980).

² Town Court Nursing Center is located in Philadelphia, Pennsylvania.

³ Skilled nursing facilities provide patients with more extensive care than do other types of nursing facilities.

⁴ The survey, conducted on May 8-11, 1977, uncovered regulatory violations in the following areas: governing body and management, medical direction, physical services, nursing services, pharmaceutical services, medical records, and physical environment.

⁵ Although there were no Medicare recipients at Town Court at the time the Town Court patients filed suit, Town Court had a Medicare provider agreement with HEW. O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 777 n.5 (1980).

⁶ The State agency's letter to Town Court stated:

Id. at 776-77 n.4 (emphasis added).

⁷ This agreement also provided that the Department would assist in the placement or transfer of patients.

⁸ Brief for Respondent Emma Cooper at 7-8, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).

⁹ Complaint of Emma Cooper, Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa. July 21, 1977).

¹⁰ Town Court Nursing Center, Inc. v. Beal, No. 77–2474 (E.D. Pa. July 21, 1977).Google Scholar

¹¹ 45 C.F.R. § 205.10 (1977).

¹² Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa. July 21, 1977).

¹³ 586 F.2d 280 (3rd Cir. 1978), rev'd, 447 U.S. 773 (1980).

¹⁴ Id. at 283.

¹⁵ O'Bannon v. Town Court Nursing Center, 447 U.S. 773’ (1980).

¹⁶ Id. at 790.

¹⁷ O'Bannon v., Town Court Nursing Center, 447 U.S. 773 (1980).Google Scholar

¹⁸ For a discussion of the rights of a nursing facility to a pre-decertification hearing, see Jones, Termination of Skilled Nursing Facility Medicaid Provider Agreements: Procedural Due Process Requirements, 6 AM. J.L. & MED. 451 (1981).

¹⁹ The facility was certified in accord with 42 U.S.C. § 1396(i)(a) (Supp. III 1976).

²⁰ See 42 U.S.C. § 1395x(j) (Supp. Ill 1976); 42 C.F.R. § 405(k) (1980); 28 PA. CONS. STAT.§§ 201.1-217.1 (1981).

²¹ These complaints were issued by a special investigative grand jury which was studying nursing home abuses. Town Court Nursing Center, Inc. v. Beal, 586 F.2d 266, 271 (3d Cir. 1978).

²² Id.

²³ The survey team discovered deficiencies in medical and administrative areas. Id.

²⁴ Id

²⁵ Id. at 271-72.

²⁶ Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa. July 21, 1977).

²⁷ Town Court Nursing Center v. Beal, 586 F.2d 266 (3d Cir. 1978), rev'd, 447 U.S. 773 (1980) [hereinafter cited as Beal I ]; 586 F.2d 280 (3d Cir. 1978) [hereinafter cited as Beal II].

²⁸ The Court of Appeals opinion dealing with Town Court's claims will hereinafter be cited as Beal I, 586 F.2d 266 (3d Cir. 1978). The Court of Appeals opinion dealing with the patients’ claims will hereinafter be cited as Beal II, 586 F.2d 280 (3d Cir. 1978).

²⁹ Beal I, 586 F.2d 266, 277-78 (3d Cir. 1978).

³⁰ Beal II, 586 F.2d 280 (3d Cir. 1978), rev'd, 447 U.S. 773 (1980).

³¹ Id.

³² 586 F.2d 250 (3d Cir. 1978).

³³ Id. at 258.

³⁴ Id. at 257. 42 U.S.C. § 1396a(a)(23) reads in part: “[A]ny individual eligible for medi-cal assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required (including an organization which provides such services, or arranges for their availability, on a prepayment basis), who undertakes to provide him such services….” 42 U.S.C. § 1396a(a) (23) (Supp. II 1976) is cited by the Supreme Court in O'Bannon, 447 U.S. at 779-80 n.8.

³⁵ Klein v. Califan., 586 F.2d 250, 257 (3rd Cir. 1978). 45 C.F.R. § 249.12(a)(i)(ii)(B)(4) (1976) requires that “the facility [maintain] methods of administrative management which assure that there are written policies and procedures available to staff, residents, their families or legal representatives and the public which ensure that each resident admitted to the facility is transferred or discharged only for medical reasons or for his welfare or that of other patients, or for nonpayment for his stay…. ” 42 C.F.R. § 405.1121(k)(4) (1979) is the equivalent provision cited by the Supreme Court in O'Bannon, 447 U.S. at 780 n.9.

³⁶ Klein v. Califan., 586 F.2d at 257. 45 C.F.R. § 205.10(a)(5) (1976) provides that “an opportunity for a hearing shall be granted to any applicant who requests a hearing be- cause his claim for financial or medical assistance is denied, … and to any recipient who is aggrieved by any agency action resulting in suspension, reduction, discontinuance or termination of assistance.” 45 C.F.R. § 205.10(a)(5) (1979) is cited by the Supreme Court in O'Bannon, 447 U.S. at 780 n.10.

³⁷ Adams used the two-step due process analysis described later in this Note. See infra note 50 and accompanying text.

³⁸ Beal II, 586 F.2d 280, 295–96 (3d Cir. 1978), rev'd, 447 U.S.773 (1980).

³⁹ 447 U.S. 773 (1980).

⁴⁰ See notes 34-36 supra.

⁴¹ O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 785 (1980).

⁴² The Court substantiated these findings by extensively drawing from Chief Judge Seitz’ dissent in Beal II:

Finally, the majority relies upon 45 C.F.R. § 249.12(a)(l)(ii)(B)(4), which establishes as one requirement for an institution's certification that each resident admitted to that institution be “transferred or discharged only for medical reasons or for his welfare or that of other patients, or for nonpayment for his stay.” The majority reads this provision as a limitation on the Secretary's power to interrupt a recipient's residence at a particular institution. Clearly, however, this provision is a standard of conduct imposed by the Secretary upon the provider. Violation of this standard is one of many grounds for decertifying the offending institution.See 45 C.F.R. §§ 249.33(a)(2), 249.10(b)(15). The provision creates no ‘substantive interest’ in the resident vis-a-vis the Secretary.

O'Bannon,447 U.S. 773, 782 n.13 (quoting Beal II,586 F.2d at 295-96) (Seitz, J.( dissenting).

⁴³ O'Bannon, ., 447 U.S. 773, 786–87(1980).Google Scholar

⁴⁴ Id. at 787.

⁴⁵ Id. at 790 (Blackmun, J., concurring).

⁴⁶ See supra note 34.

⁴⁷ O'Bannon, 447 U.S. at 791 (Blackmun, J., concurring).

⁴⁸ Id. at 797.

⁴⁹ U.S. CONST, amend. V, XIV. The fifth amendment of the United States Constitution applies to federal governmental action, and the fourteenth amendment applies to state governmental action.

⁵⁰ See Board of Roth, Regents v.408 U.S. 564 (1972).Google Scholar See also Eldridge, Mathews v., 424 U.S. 319 (1976);Google Scholar Sindermann, Perry v., 408 U.S. 593 (1972).Google Scholar

⁵¹ E.g., actual ownership of real estate, chattels, or money. Roth, 408 U.S. at 571-72.

⁵² A legitimate claim of entitlement is more than “an abstract need or desire.” It is more than a “unilateral expectation.” A person has a legitimate claim of entitlement if he has an expectation of benefits based on an independent source such as state law. Such an expectation will be protected, because “[i]t is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined.” Id. at 577.

⁵³ Brewer, Morrissey v., 408 U.S. 471, 481 (1972).Google Scholar

⁵⁴ See Beal II, 586 F.2d 280, 283 (3d Cir. 1978), rev'd, 447 U.S. 773 (1980).

⁶⁵ Id.

⁵⁶ The residents also argued that they had a property interest based on their status as third party beneficiaries of the provider agreement between Town Court and the Pennsylvania Department of Public Welfare. Brief for Respondents at 26-30, v., O'Bannon Town Court Nursing Center, 447 U.S. 773 (1980).Google Scholar As this issue was not raised in the courts below, the Supreme Court held that it could not be made the basis of the O'Bannon decision.O'Bannon, 447 U.S. at 785 n.17.See infra notes 153-155 and accompanying text.

⁵⁷ 42 U.S.C. § 139a(a)(23) (Supp. II 1976). See supra note 34.

⁵⁸ 45 C.F.R. § 249.12(a)(l)(ii)(B)(4) (1976). See supra note 35.

⁵⁹ 45 C.F.R. § 205.10(a)(5) (1976). See supra note 36.

⁶⁰ 586 F.2d 280, 287 (3d Cir. 1978). Adams, concurring in the judgment, stated:

⁶¹ Section 1902(a)(23) of the Social Security Act, 42 U.S.C. § 1396a(a)(23) (Supp. II 1976). See supra note 34.

⁶² See Bannon, O', 447 U.S. 773, 786 (1980).Google Scholar

⁶³ Id.

⁶⁴ Id.

⁶⁵ See Comment, Skilled Nursing Facility Decertification: The Medicare-Medicaid Beneficiary's Entitlement to a Prior Hearing, 74 Nw. L. REV. 440, 450 (1979); O'Bannon, 447 U.S. at 805-806 (Brennan, J., dissenting); Beat II, 586 F.2d at 287 (Adams, J., concurring); Klein v. Califano, 586 F.2d 250, 258 (3d Cir. 1978).

⁶⁶ O'Bannon, 447 U.S. at 805 (Brennan, J., dissenting).

⁶⁷ Qualification is the only issue in a decertification hearing.

⁶⁸ 42 C.F.R. § 405.1121(k)(4) (1980). See supra note 35.

⁶⁹ In his dissent in Beat II.Chief Judge Seitz stated that the decision to decertify and the decision to transfer are analytically different. However, he conceded that transfer may be the practical result of decertification in some cases. Beat II, 586 F.2d at 296.

⁷⁰ Id. at 290 (Adams, J., concurring).

⁷¹ “Because a decision to decertify a nursing home as an unqualified provider is tantamount to an order to transfer a patient for his welfare, Medicaid residents threatened with transfer are entitled to some form of hearing….” Klein v. Califano, 586 F.2d 250, 258 (3d Cir. 1978); Beal II, 586 F.2d 280, 282 (3d Cir. 1978).

⁷² See Memphis Light, Gas and Water Div. v. Craft, 436 U.S. 1 (1978); Arnett v. Kennedy, 416 U.S. 134 (1974); Board of Regents v. Roth, 408 U.S. 564 (1972). See also Perry v. Sindermann, 408 U.S. 593 (1972). In this case, the plaintiff asserted that he had “legitimately relied” on a provision in the Odessa Junior College official Faculty Guide which stated that the “Administration of the College wishes the faculty member to feel that he has a permanent tenure as long as his teaching services are satisfactory … as long as he displays a co-operative attitude towards his co-workers and his supervisors, and as long as he is happy in his work.” Id. at 600. The guidelines from the Coordinating Board of the Texas College and University System further provided that a teacher who was employed for seven years or more had some form of job tenure. The Supreme Court found that these provisions might have created a property interest in continued employment and so affirmed the appellate court's reversal of the district court's summary judgment for the University.

⁷³ 408 U.S. 564, 576-78 (1972). Roth, hired to teach at a state university for one academic year, was told that he would not be rehired for the next year, but no explanation was given for this decision. Roth brought an action claiming that his fourteenth amendment due process rights had been violated by the university's failure to explain the reasons for its decision. However, the terms of Roth's employment did not include guaranteed renewal of his contract absent “sufficient cause” for termination. Thus, on the facts of this case, the Court found no property interest in continued employment, and denied summary judgment in Roth's favor.

⁷⁴ 416 U.S. 134 (1974). Kennedy, a nonprobationary government employee, was dismissed from his position based on charges that he had made false and defamatory statements about other employees. Instead of answering these charges, he brought suit, claiming that the procedures for dismissal (under the Lloyd-La Follett Act) violated due process. The Court recognized that there was some form of property interest in continued employment but found that it was “conditioned by the procedural limitations which had accompanied the grant of that interest.” Id. at 155. Thus, the Court did not require due process procedural protections beyond what was mandated by the relevant statutes and regulations.

⁷⁵ 436 U.S. 2, 9-12, 22 (1978). For approximately one year, respondents were being billed double for the utility services they received. The bills included a “final notice” which stated that service would be terminated if the bill was not paid by a certain date; however, there was no information regarding a procedure for disputed bills. During this time, respondents’ service was cut off five times due to nonpayment of bills. Respondents brought an action in the Federal District Court claiming that their utility service had been terminated without due process of law. Tennessee case law provides for termination “only for cause.” Based on this, the Court found that the respondents had been deprived of a property interest in the continued receipt of utility services in violation of their due process rights.

⁷⁶ 45 C.F.R. § 249.12(a)(l)(ii)(8)(4)(1976) has been recodified at 42 C.F.R. § 405.1121 (k)(4)(1980).

⁷⁷ 45 C.F.R. § 205.10(a)(5)(1980).See supra note 36.

⁷⁸ The Medicaid statute should be so construed. See Comment,supra note 65, at 453-54.

⁷⁹ 424 U.S. 319,332(1976). However, the Court concluded that in this case no hearing was necessary prior to the discontinuation of benefits. This decision was based on the second part of the due process inquiry.

⁸⁰ 397 U.S. 254 (1970).

⁸¹ The issue in this case was not whether a property right existed. The Court stated that welfare benefits “are a matter of statutory entitlement for persons qualified to receive them.” Id. at 261-63. Rather, the issue involved a consideration of whether a pretermination hearing was necessary before benefits could be cut off. The Court found that due process requires such a hearing.

⁸² The services needed by certain plaintiffs were not available in other facilities in Pennsylvania at that time. Complaint, Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa. 1977).

⁸³ But cf. Caton Ridge Nursing Home, Inc. v. Califano, 447 F. Supp. 1222 (D. Md. 1978), aff'd per curiam, 596 F.2d 608 (4th Cir. 1979) (pre-termination hearing was not necessary in a nursing home decertification case where the resident was transferred to a safer home without a diminution in medical benefits).

⁸⁴ An argument that the residents of Town Court had a cognizable liberty interest in continued residence was made in the Brief for the Respondents. The respondents argued that a liberty interest stemmed from the associational interest which residents had with their families, who had easy access to Town Court, and with the Town Court staff. Transfer, it was urged, would cut patients off from these familiar faces. Brief for Respondent Emma Cooper, at 36-40, O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 784 n.6 (1980).

⁸⁵ O'Banno., 447 U.S. at 784 n.16.

⁸⁶ Id. at 787.

⁸⁷ See infra notes 100-112 and accompanying text.

⁸⁸ Blackmun concluded, however, that transfer trauma is an unproven phenomenon, and thus cannot be the basis for the finding of a life interest. O'Bannon, 447 U.S. at 803-04 (Blackmun, J., concurring).

⁸⁹ “Transfer trauma” is the physical and/or psychological deterioration which nursing home patients often suffer upon transfer. See Annas, “Transfer Trauma” if the Right to a Hearing, 10 HASTINGS CENTER REP. 23, 23 (1980).

⁹⁰ See, e.g., Blenkner, Environmental Change and the Aging Individual, 7 THE GERONTOLOGIST 101, 105 (1967) (“There is not a single conclusion [regarding the occurrence of transfer trauma] in any of the reports cited that could not be rather thoroughly discredited if one got tough-minded about it ….“); Borup, Gallego, & Hefferman, Relocation and its Effect on Morality, 19 THE GERONTOLOGIST 135, 136, 138 (1979) (six studies found increased mortality rates, 12 studies did not; new study indicates that “relocation does not increase the probability of mortality“).

⁹¹ See, e.g., The HEW Technical Assistance Memorandum AoA-TA-75-1 (Feb. 19, 1975) at 2, that recognizes the existence of a “genuine hazard in the relocation of infirm aging persons.” (Technical Assistance Memorandum from HEW to State and Area Agencies Administering Plans Under Titles III and VII of the Older Americans Act of 1965, as amended Feb. 19, 1975 (269-73a). See also Killian, Effect of Geriatric Transfers on Mortality Rates, 15 Soc. WORK 19 (1970); Markus, Blenkner, Bloom, & Downs, Relocation Stress and the Aged, 7 INTERDISCIPLINARY TOPICS IN GERONTOLOGY 60 (1970); Aldrich & Mendkoff, Relocation of the Aged and Disabled: A Mortality Study, 11 J. AM. GERIATRICS SOG'Y 185 (1963); Pablo, Intra-Institutional Relocation: Its Impact on Long-term Care Patients, 17 GERONTOLOGIST 426 (1977) (negative effect on patients even though transfer was only from one ward to another); Yawney & Slover, Relocation of the Elderly, 18 Soc. Work 86 (1973).

⁹² Killian, , Effect of Geriatric Transfers on Mortality Rates, 15 Soc. WORK 19, 25 (1970).Google Scholar

⁹³ Hitev, , Transfer Trauma: Its Impact on the Elderly, 8 CLEARINGHOUSE REV. 846, 846–47 (Apr. 1975).Google Scholar Cf. Gutman & Herbert, Mortality Rates Among Relocated Extended-Care Patients, 31 OF GERONTOLOGY 352 (1976) (no detrimental effect in this study where a moderate change in environment was involved).

⁹⁴ See, e.g., Hathaway v. Mathews, 546 F.2d 227, 231 (7th Cir. 1976), which involved a nursing home's right to a pre-termination hearing. The court stated that “to compel the residents of the Home to move to a new facility (or a number of new facilities) would create a major disruption in their lives“; Bracco v. Lackner, 462 F. Supp. 436 (N.D. Cal. 1978). The description in Bracco v. Lackner illustrates the detrimental effects of transfer trauma on some of the patients:

Id. at 444-46. His death and that of another patient were thought to be “causally related” to the trauma of relocation activities in the nursing home according to the “professional opinion of their treating physician.” See also Klein v. Mathews, 430 F. Supp. 1005, 1009 (D.N.J. 1977), affd in part and remanded sub nom. Klein v. Califano, 586 F.2d 250 (3rd Cir. 1978); Burchette v. Dumpson, 387 F. Supp. 812, 819 (E.D.N.Y. 1974) (“The damage which may result from such transfers is irreparable in the true sense of the word. Changes in surroundings and movement of long distances of senior citizens who are suffering from physical and psychological infirmities are likely to aggravate their condition and increase the likelihood of death.“).

⁹⁵ Lackner Bracco v., 462 F. Supp. 436, 446 (N.D. Cal. 1978).

⁹⁶ O'Bannon, 447 U.S. 773, 784-85 n.16.

⁹⁷ Id.

⁹⁸ Id. at 787.

⁹⁹ See supra notes 85-87 and accompanying text.

¹⁰⁰ See supra notes 17, 43-44, 86 and accompanying text.

¹⁰¹ 447 U.S. 787.

¹⁰² The Court stated that financial benefits include the payment for certain medical services. The Government provides procedures for determinations of whether and how much money should be paid for patient care. 447 U.S. at 786.

¹⁰³ Id. at 787.

¹⁰⁴ Id. at 786-87.

¹⁰⁵ Id.

¹⁰⁶ Id. at 788.

¹⁰⁷ Id. at 794. See also Beal II, 586 F.2d 280, 288 (Adams, J., concurring)

Amicus brief of the Legal Aid Society of New York City, Legal Services for the Elderly Poor, Coalition of Institutionalized Aged and Disabled, Inc., and Friends and Relatives of Institutionalized Aged, Inc. at 34, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980) (“That the governmental action threatening a property interest does not come from the same source as the property itself hardly renders the property beyond the protection of due process. See, e.g., North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (1976); Sniadach v. Family Finance Corp., 397 U.S. 337 (1969)“).

¹⁰⁸ O'Bannon, 447 U.S. at 793 n.3 (Blackmun, J., concurring).

¹⁰⁹ Id.

¹¹⁰ Indeed, in their complaint Town Court's patients argued that the services that they were receiving were not available elsewhere.“The individual plaintiffs are in chronic need of the services provided by Town Court which services are not presently available at other skilled care facilities in Pennsylvania.” Plaintiffs’ Complaint, Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa. 1977).

¹¹¹ It is clear that the indirect nature of the patients’ interest was a controlling factor in this case. The Court held that “the enforcement by HEW and DPW of their valid regulations did not directly affect [the patients’] legal rights or deprive them of any constitutionally protected interest in life, liberty or property.” O'Bannon, 447 U.S. at 790 (emphasis added).

¹¹² As Justice Blackmun pointed out, the indirect nature of a governmental action is to be balanced against other relevant factors in determining whether a protectable interest exists. The weight given the indirect nature will depend on the specific facts of each case. Id. at 794 n.4 (Blackmun, J., concurring).

¹¹³ 424 U.S. 319 (1976).

¹¹⁴ Id. at 334-35. For an extensive discussion of the Eldridge analysis applied to the decertification situation, see Comment, supra note 65, at 756-67.

¹¹⁵ O'Bannon, 447 U.S. at 792 n.2 (Blackmun, J., concurring). See also U.S. CONST. amends. III, IV; Payton v. New York, 445 U.S. 573 (1980); Coolidge v. New Hampshire, 403 U.S. 443, 474-75, 477-78 (1971) (distinction between searches and seizures taking place on a man's property and those taking place elsewhere); Silverman v. United States, 365 U.S. 505, 511 (1961) (“[a]t the very core [of the fourteenth amendment] stands the right of a man to retreat into his own home and there be free from unreasonable Government intrusion“); Dorman v. United States, 435 F.2d 385, 389 (1970); Semayne's Case, 77 Eng. Rep. 194, 195 (K.B. 1603) (“that the house of every one is to him as his castle and fortress, as well for his defence against injury and violence, as for his repose….“).

¹¹⁶ Life interests have been viewed as outweighing property interests. See e.g., Furman v. Georgia, 408 U.S. 238, 287 n.34 (1972) (Brennan, J., concurring); Reid v. Covert, 354 U.S. 1, 77 (1957) (Harlan, J., concurring). See also Comment supra note 65, at 455.

¹¹⁷ 397 U.S. 254 (1970).

¹¹⁸ Id. at 304. The Court also noted that benefits were being terminated completely. Id. In Beat II, Judge Adams stated that this consideration was absent in the Town Court case because patients would receive care in other facilities. However, as noted earlier, there was no consideration of the availability of beds in other nursing facilities. See supra notes 80-83 and accompanying text.

¹¹⁹ Goldberg v. Kelly, 397 U.S. at 264.

¹²⁰ See Rockhill Care Center, Inc. v. Harris, 502 F. Supp. 1227, 1233 (W.D. Mo. 1980) (“It may be argued that the massive dislocation resulting from closing a nursing home [closely] resembles the Goldberg deprivation.“) The court also noted that the possibility of error in the absence of a hearing in the nursing home context was similar to the possibility of error in the Goldberg situation. Id.

¹²¹ See supra notes 91-93 and accompanying text.

¹²² See Brief for Respondent Emma Cooper at A1-A3, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).

¹²³ In five of these cases, the appeal was abandoned or withdrawn; while in two others the appeal was dismissed.

¹²⁴ See Beat II, 586 F.2d 280, 295 (3d Cir. 1978) (Adams, J., concurring).

¹²⁵ E.g., some of the eighteen conditions set out at 42 C.F.R. § 405.1120-1137 (1980) are beyond residents’ knowledge.

¹²⁶ See Comment, supra note 65, at 462.

¹²⁷ This factor was recognized by the Federal District Court for the District of New Jersey in Klein v. Mathews, 430 F. Supp. 1105 (D.N.J. 1977). The court noted that:

Id at 1101.

¹²⁸ Beal II, 586 F.2d at 293 (Adams, J., concurring).

¹²⁹ Id.

¹³⁰ Decertification is only one of the sanctions used by HEW and the states to assure a certain quality of care. When transfer will violate the best interests of the patients, alternative means of bringing the nursing home into compliance with regulations should be used. In such cases, it is appropriate to consider whether the existing problems at the nursing home can be remedied easily, and what remedies aside from decertification are available. In the O'Bannon case, there were violations of seven conditions of participation: governing body and management, medical direction, physical services, nursing services, pharmaceutical services, medical records and physical environment. Except for the noncompliance regarding governing body and physical environment, the problems could probably have been remedied by increasing the medical and clerical staff, and by exercising stringency in the supervision of the quality of services. Heavy fines or regulatory orders also might have been sufficient to bring Town Court into compliance in these areas. Changing the governing body might have been more difficult but not impossible. The outlay of funds required to correct problems in the physical environment may have been prohibited by the nursing home's financial situation. However, remedies in the nature of heavy fines, regulatory orders, injunctions, or even receivership might have been successful in pressuring Town Court into compliance in this area. See E. Horowitz, Legal Responsibility For Medicaid Patients Upon Nursing Home Closure or Termination of Participation in the Medicaid Program 5-7 (1980) (Boston University Center for Law and Health Sciences).

¹³¹ Brief for the Secretary of Health, Education and Welfare at 6 n.17, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).

¹³² Brief for Respondent Emma Cooper at 9 n.14, 41, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).

¹³³ See Beal II, 586 F.2d at 293 (Adams, J., concurring).

¹³⁴ In his concurring opinion in O'Bannon, Justice Blackmun noted that: “[S]ince the home had the opportunity and incentive to make the very arguments the patients might make, their due process interest in accurate and informed decision-making already, in large measure, was satisfied.” O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 797 (1980) (Blackmun, J., concurring).

¹³⁵ Beal II, 586 F.2d at 293 (Adams, J., concurring).

Id. at 294 (Adams, J., concurring).

¹³⁷ “Where a rule of conduct applies to more than a few people it is impracticable that every one should have a direct voice in its adoption.” Bi-Metallic Inv. Co. v. State Bd. of Equalization, 239 U.S. 441, 445 (1915).

¹³⁸ Brief for Respondent Emma Cooper at 40-41, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980). Judge Adams has suggested a procedure for patient participation which can be fit into the existing survey procedure, and would thus minimize the additional burden on Government resources. This procedure would require the surveyor to assemble the patients, to explain to them the reasons for the proposed decertification, and to discuss the consequences that decertification would have on them. The forum would then be opened to residents’ comments, and patients’ views would be specifically solicited. The surveyor would further be required to contact all residents who had not attended the meeting to solicit further comment and to ascertain the reasons for their absence. If absence was due to illness, the surveyor would be required to note this fact, as transfer might adversely affect such seriously ill patients. Beal II, 586 F.2d at 294 (Adams, J., concurring).

¹³⁹ See Mathews v.Eldridg., 424 U.S. 319, 334-35 (1976).

¹⁴⁰ See cases cited, supra note 116.

¹⁴¹ For a detailed analysis of what process is due in the decertification situation, see Comment, supra note 65, at 463-67.

¹⁴² See supra note 77 and accompanying text.

¹⁴³ Similar arguments have met with some success in the past. See Klein v. Mathews, 430 F. Supp. 1005, 1009 (D.N.J. 1977) (an involuntary transfer is a reduction of benefits). But see Caton Ridge Nursing Home, Inc. v. Califano, 447 F. Supp. 1222 (D.Md. 1978), aff'd per curiam, 596 F.2d 608 (4th Cir. 1979) (a pre-termination hearing was held to'be unnecessary in a nursing home decertification case.) The case can be distinguished by the fact that the resident was transferred to a safer home without a diminution in medical benefits.

¹⁴⁴ Telephone conversation with Mark Coven, Greater Boston Elderly Legal Services (November 1980).

¹⁴⁵ 42 U.S.C. § 1396a(a)(19) (1976).

¹⁴⁶ See Annas, ‘Transfer Trauma & if the Right to a Hearing, 10 HASTINGS CENTER REP. 23, 24.

¹⁴⁷ Indeed, such a balance is required in decertification hearings. See, e.g., Schwartzberg v. Califano, [1978] MEDICARE & MEDICAID GUIDE (CCH) *[ 29,153.

¹⁴⁸ See Amici Curiae Brief for Jill Harris and the Residents of Edgefield Manor In Support of Respondents at 25-26, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980). The brief suggested that residents should have the opportunity to provide the decision-maker with information regarding the consequences of transfer to each individual, so that the decision-maker can decide whether decertification is the best alternative in that particular case.

¹⁴⁹ 42 U.S.C. § 3001 (Supp. III 1976).

¹⁵⁰ 42 U.S.C. § 3027(a)(12)(A)(i) (Supp. III 1976).

¹⁵¹ Id.

¹⁵² 42 U.S.C. § 3030d(10) (Supp. III 1976).

¹⁵³ “One for whose benefit a promise is made in a contract but who is not a party to the contract.” BLACK's LAW DICTIONARY 1327 (rev. 5th ed. 1979). See also CORBIN, CONTRACTS § 772-8 (1 vol. ed. 1952).

¹⁵⁴ See Brief for Respondent at 26-30, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980). A concise statement of the argument appears in Brief Amicus Curiae of the Legal Aid Society of New York City, Legal Services for the Elderly Poor, Coalition of Institutionalized Aged, Inc. at 54-55, O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).

¹⁵⁵ 447 U.S. at 785 n.17. In dictum, the Supreme Court also alluded to the fact that a third party beneficiary would not be entitled to a pre-termination hearing if the nursing home, which was actually a party to the contract, was not entitled to one. See id. at 788.

¹⁵⁶ See O'Bannon, 447 U.S. at 787 n.20 (the Supreme Court expresses no definitive opinion regarding patients’ legal rights against the nursing home). See generally CORBIN, CONTRACTS § 948 (1 vol. ed. 1952).