Health and Hospital Corp. seeks rehearing for 7th Circuit’s ruling allowing family to sue nursing home

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The Health and Hospital Corporation of Marion County is asking the 7th Circuit Court of Appeals to reexamine its recent ruling on the Federal Nursing Home Reform Act of 1987, saying the opinion conflicts with the court’s previous decision on the federal statute and “federalize(s) a large swath of state medical malpractice law.”

In July, a 7th Circuit panel issued an opinion holding that the family of Valparaiso nursing home resident Gorgi Talevski could enforce the rights articulated under the FNHRA and pursue remedies for violations of those rights. The case, Talevski v. Health and Hospital Corporation of Marion County, et al., 20-1664, originated in the U.S. District Court for the Northern District of Indiana.

The Health and Hospital Corporation filed a petition for a panel rehearing or rehearing en banc in Talevski with the 7th Circuit on Tuesday. Specifically, the corporation argues the ruling ignored the circuit’s precedent by reaching the opposition conclusion as set by another panel in Nasello v. Eagleson, 977 F.3d 599 (7th Cir. 2020).

“There is no reconciling these two views of the law,” HHC states in its petition. “Either potential beneficiaries have the ability to enforce the terms of the Medicaid bargain between states and the federal government through lawsuit (Talevski) or they do not (Nasello). Either the terms of the Medicaid Act can imply a private right of action (Talevski) or they cannot (Nasello). Resolving that conflict through en banc review ‘is necessary to secure or maintain uniformity of th[is] court’s decisions.’”

HHC’s petition does not point out the commonality between Nasello and Talevski at the 7th Circuit. Judge Michael Kanne sat on both panels, and while he did not write either opinion, he also did not write a dissenting opinion in either case.

Gorgi Talevski’s wife, Ivanka Talevski, filed a lawsuit accusing Valparaiso Care and Rehabilitation, owned by HHC, of violating his rights under the FNHRA. Namely, the complaint asserted the facility chemically restrained Gorgi him by overprescribing psychotropic drugs and then transferred him to another nursing home without notice.

In its petition, HHC argues the matter is a “simple state-court malpractice action.” The staff at Valparaiso Care administered “a variety of drugs” to manage Talevski’s dementia and his “sexually aggressive behavior,” it claims.

However, when Talevski’s family pushed, Valparaiso Care stopped the drug regime. Then the facility proposed transferring him to an all-male nursing home because of his “physically and sexually aggressive behavior toward women,” according to HHC.

HHC pointed out Talevski’s relatives successfully challenged the proposed transfer before an administrative law judge at the Indiana State Department of Health. Yet they still sought damages in a federal lawsuit.

The Northern District of Indiana Court dismissed the complaint on the grounds the FNHRA does not create private rights of action.

By reversing the district court, HHC described the 7th Circuit’s Talevski panel as giving Nasello the “shortest of shrifts.”

The HHC asserts the Nasello panel “flatly (and broadly) held, ‘Medicaid does not establish anyone’s entitlement to receive medical care (or particular payments),’ instead ‘requir[ing] only compliance with the terms of the bargain between the state and federal governments.’ Congress could have made the various terms of that bargain enforceable through private suit, but ‘it has not done so,’ choosing instead to establish ‘a system of administrative remedies.’”

Also, HHC contends the Talevski panel’s discovery of a private right “is just the beginning of the mischief” that will ensue.

“… (T)he consequences in this Circuit are severe: Indiana, for example, has enacted legislation capping damages and attorneys’ fees in medical malpractice cases,” HHC argues in its petition, citing Indiana Code § 34-18-14-3. “The panel has now gutted those laws; no rational Medicaid patient (and certainly no plaintiff’s lawyer working on a contingent-fee basis) would sue under Indiana state law if he or she could instead seek a jackpot recovery under (42 U.S.C.) Section 1983.”

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