This case requires us to determine whether a health care provider may bring an action under 42 U. S. C. § 1983 (1982 ed.)
Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals. § 1396. Although participation in the program is voluntary, participating States must comply with certain requirements imposed by the Act and regulations promulgated by the Secretary of Health and Human Services (Secretary). To qualify for federal assistance, a State must submit to the Secretary and have approved a "plan for medical assistance," § 1396a(a), that contains a comprehensive statement describing the nature and scope of the State's Medicaid program. 42 CFR § 430.10 (1989). The state plan is required to establish, among other things, a scheme for reimbursing health care providers for the medical services provided to needy individuals.
Section 1902(a)(13) of the Act sets out the requirements for reimbursement of health care providers. As amended in 1980 (Boren Amendment),
The Commonwealth of Virginia's State Plan for Medical Assistance was approved by the Secretary in 1982 and again in 1986 after an amendment was made. Complaint, ¶ 11, App. 11. Under the plan, health care providers are reimbursed for services according to a prospective formula — that is, reimbursement rates for various types of medical services and procedures are fixed in advance. Specifically, providers are divided into "peer groups" based on their size and location and reimbursed according to a formula based on the median cost of medical care for that peer group.
In 1986, respondent Virginia Hospital Association (VHA), a nonprofit corporation composed of both public and private hospitals operating in Virginia, id., at ¶ 3, App. 4-5, filed suit in the United States District Court for the Eastern District of Virginia against several state officials including the Governor, the Secretary of Human Resources, and the members of the State Department of Medical Assistance Services (the state agency that administers the Virginia Medicaid system). Respondent contends that Virginia's plan for reimbursement violates the Act because the "rates are not reasonable and adequate to meet the economically and efficiently incurred cost of providing care to Medicaid patients in hospitals and do not assure access to inpatient care." Id., at ¶ 1, App. 4; see also
Petitioners filed a motion to dismiss or in the alternative a motion for summary judgment on the ground that 42 U. S. C. § 1983 (1982 ed.) does not afford respondent a cause of action to challenge the Commonwealth's compliance with the Medicaid Act. 2 Record, Exh. 36, p. 1.
In order to determine whether the Boren Amendment is enforceable under § 1983, it is useful first to consider the history of the reimbursement provision. When enacted in 1965, the Act required States to provide reimbursement for the "reasonable cost" of hospital services actually provided, measured according to standards adopted by the Secretary. Pub. L. 89-97, § 1902(13)(B), 79 Stat. 346. Congress became concerned, however, that the Secretary wielded too much control over reimbursement rates. See H. R. Rep. No. 92-231, p. 100 (1971). Congress therefore amended the Act in 1972 to give States more flexibility to develop methods and standards for reimbursement, but Congress retained the ultimate requirement that the rates reimburse the "reasonable cost" of the services provided. The new law required States to pay "the reasonable cost of inpatient hospital services . . . as determined in accordance with methods and standards
In response to rapidly rising Medicaid costs, Congress in 1981 extended the Boren Amendment to hospitals, as part of the Omnibus Budget Reconciliation Act of 1981, Pub. L. 97-35, 95 Stat. 808.
The Act does not define these terms, and the Secretary has declined to adopt a national definition, concluding that States should determine the factors to be considered in determining what rates are "reasonable and adequate" to meet the costs of "efficiently and economically operated facilit[ies]." See 48 Fed. Reg. 56049 (1983). The regulations require a State to make a finding at least annually that its rates are "reasonable and adequate," see 42 CFR § 447.253(b)(1) (1989), though the State is required to submit assurances to that effect to the Secretary only when it makes a change in its reimbursement rates. See § 447.253(a); 48 Fed. Reg. 56047 (1983). According to the Secretary, the Boren Amendment "places the responsibility for the development of reasonable and adequate payment rates with the States." Id., at 56050. Thus, he reviews only the reasonableness of the assurances provided by a State and not the State's findings themselves.
Section 1983 provides a cause of action for "the deprivation of any rights, privileges, or immunities secured by the Constitution and laws" of the United States. In Maine v. Thiboutot, 448 U.S. 1, 4 (1980), we held that § 1983 provides a cause of action for violations of federal statutes as well as the Constitution. We have recognized two exceptions to this rule. A plaintiff alleging a violation of a federal statutes as well as be permitted to sue under § 1983 unless (1) "the statute [does] not create enforceable rights, privileges, or immunities within the meaning of § 1983," or (2) "Congress has foreclosed such enforcement of the statute in the enactment itself." Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418, 423 (1987).
"Section 1983 speaks in terms of `rights, privileges, or immunities,' not violations of federal law." Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 106 (1989) (emphasis added). We must therefore determine whether the Boren Amendment creates a "federal right" that is enforceable under § 1983. Such an inquiry turns on whether "the provision in question was intend[ed] to benefit the putative plaintiff." Ibid. (citations and internal quotations omitted). If so, the provision creates an enforceable right unless it reflects merely a "congressional preference" for a certain kind of conduct rather than a binding obligation on the governmental unit, Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 19 (1981), or unless the interest the plaintiff asserts is " `too vague and amorphous' " such that it is " `beyond the competence of the judiciary to enforce.' " Golden State, supra, at 106 (quoting Wright, supra, at 431-432). Under this test, we conclude that the Act creates a right enforceable by health care providers under § 1983 to
There can be little doubt that health care providers are the intended beneficiaries of the Boren Amendment. The provision establishes a system for reimbursement of providers and is phrased in terms benefiting health care providers: It requires a state plan to provide for "payment . . . of the hospital services, nursing facility services, and services in an intermediate care facility for the mentally retarded provided under the plan." 42 U. S. C. § 1396a(a)(13)(A) (1982 ed., Supp. V) (emphasis added). See Wright, supra, at 430. The question in this case is whether the Boren Amendment imposes a "binding obligation" on the States that gives rise to enforceable rights.
In Pennhurst, supra, the Court held that § 111 of the Developmentally Disabled Assistance and Bill of Rights Act, 42 U. S. C. § 6010 (1976 ed. and Supp. III), did not create rights enforceable under § 1983. Section 6010, the "bill of rights" provision, declared that Congress had made certain "findings respecting the rights of persons with developmental disabilities," namely, that such persons have a right to "appropriate treatment' " in the least restrictive environment and that federal and state governments have an obligation to ensure that institutions failing to provide "appropriate treatment" do not receive federal funds. 451 U. S., at 13. The Court concluded that the context of the entire statute and its legislative history revealed that Congress intended neither to create new substantive rights nor to require States to recognize such rights; instead, Congress intended only to indicate a preference for "appropriate treatment." Id., at 22-24. The Court examined the language of the provision and determined
More recently, in Wright, however, we found that the Brooke Amendment to the Housing Act of 1937, 42 U. S. C. § 1437a (1982 ed. and Supp. III), and its implementing regulations did create rights enforceable under § 1983. The Brooke Amendment limits the amount of rent a public housing tenant can be charged, and the regulations adopted pursuant to the statute require inclusion of a "reasonable" allowance for utilities in the rent. 479 U. S., at 420. We reasoned that both the statute and the regulations were "mandatory limitation[s] focusing on the individual family and its income." Id., at 430. In addition, we rejected the argument that the provision for a reasonable utility allotment was too vague to create an enforceable right. Because the regulations set out guidelines for the housing authorities to follow in determining the utility allowance, the right was "sufficiently specific and definite
In light of Pennhurst and Wright, we conclude that the Boren Amendment imposes a binding obligation on States participating in the Medicaid program to adopt reasonable and adequate rates and that this obligation is enforceable under § 1983 by health care providers. The Boren Amendment is cast in mandatory rather than predatory terms: The state plan "must" "provide for payment . . . of hospital[s]" according to rates the State finds are reasonable and adequate. 42 U. S. C. § 1396a(a)(13)(A) (1982 ed., Supp. V) (emphasis added). Moreover, provision of federal funds is expressly conditioned on compliance with the amendment and the Secretary is authorized to withhold funds for noncompliance with this provision. 42 U. S. C. § 1396c (1982 ed.). The Secretary has expressed his intention to withhold funds if the state plan does not comply with the statute or if there is "noncompliance in practice." See 42 CFR § 430.35 (1989) ("A question of noncompliance in practice may arise from the State's failure to actually comply with a Federal requirement, regardless of whether the plan itself complies with that requirement"). "The [Boren Amendment's] language succinctly sets forth a congressional command, which is wholly uncharacteristic of a mere suggestion or `nudge.' " West Virginia University Hospitals, Inc. v. Casey, 885 F.2d 11, 20 (CA3 1989) (quoting Pennhurst, 451 U. S., at 19), cert. granted, 494 U.S. 1003 (1990).
Petitioners concede that the Boren Amendment requires a State to provide some level of reimbursement to health care providers and that a cause of action would lie under § 1983 if a State failed to adopt any reimbursement provision whatsoever. Tr. of Oral Arg. 12. Petitioners also concede, as they must, that a State is required to find that its rates are reasonable and adequate and to make assurances to that effect to
Petitioners acknowledge that a State may not make, or submit assurances based on, a patently false finding, see Tr. of Oral Arg. 7, but insist that Congress left it to the Secretary, and not the federal courts, to ensure that the State's rates are not based on such false findings.
Any doubt that Congress intended to require States to adopt rates that actually are reasonable and adequate is quickly dispelled by a review of the legislative history of the Boren Amendment. The primary objective of the amendment was to free States from reimbursement according to Medicare "reasonable cost" principles as had been required by prior regulation. The amendment "delete[d] the . . . provision requiring States to reimburse hospitals on a reasonable cost basis. It substitute[d] a provision requiring States to reimburse hospitals at rates . . . that are reasonable and adequate to meet the cost which must be incurred by efficiently and economically operated facilities in order to meet applicable laws and quality and safety standards." S. Rep. No. 97-139, at 478 (emphasis added). In passing the Boren Amendment, Congress sought to decentralize the method for determining rates, but not to eliminate a State's fundamental obligation to pay reasonable rates. See S. Rep. No. 96-471, at 29 (flexibility given to States "not intended to encourage arbitrary reductions in payment that would adversely affect the quality of care"). In other words, while Congress gave States leeway in adopting a method of computing rates — they can choose between retrospective and prospective rate-setting methodologies, for example — Congress retained the underlying requirement of "reasonable and adequate" rates.
Moreover, it is clear that prior to the passage of the Boren Amendment, Congress intended that health care providers be able to sue in federal court for injunctive relief to ensure that they were reimbursed according to reasonable rates. During the 1970's, provider suits in the federal courts were commonplace.
This experience demonstrates clearly that Congress and the States both understood the Act to grant health care providers enforceable rights both before and after repeal of the ill-fated waiver requirement.
Nevertheless, petitioners argue that because the Boren Amendment gives a State flexibility to adopt any rates it finds are reasonable and adequate, the obligation imposed by the amendment is too "vague and amorphous" to be judicially enforceable. We reject this argument. As in Wright, the statute and regulation set out factors which a State must consider in adopting its rates.
Petitioners also argue that Congress has foreclosed enforcement of the Medicaid Act under § 1983. We find little merit in this argument. " `We do not lightly conclude that Congress intended to preclude reliance on § 1983 as a remedy' for the deprivation of a federally secured right." Wright, 479 U. S., at 423-424 (quoting Smith v. Robinson, 468 U.S. 992, 1012 (1984)). The burden is on the State to show "by express provision or other specific evidence from the statute
On only two occasions have we found a remedial scheme established by Congress sufficient to displace the remedy provided in § 1983. In Sea Clammers, supra, we held that the comprehensive enforcement scheme found in the the Federal Water Pollution Control Act, 33 U. S. C. § 1251 et seq. — which granted the Environmental Protection Agency considerable enforcement power through the use of noncompliance orders, civil suits, and criminal penalties, and which included two citizen-suit provisions — evidenced a congressional intent to foreclose reliance on § 1983. See 453 U. S., at 13. Similarly in Smith v. Robinson, supra, at 1010-1011, we held that the elaborate administrative scheme set forth in the Education of the Handicapped Act (EHA), 20 U. S. C. § 1400 et seq., manifested Congress' desire to foreclose private reliance on § 1983 as a remedy. The EHA contained a "carefully tailored administrative and judicial mechanism," 468 U. S., at 1009, that included local administrative review and culminated in a right to judicial review. Id., at 1011 (citing 20 U. S. C. §§ 1412(4), 1414(a)(5), 1415).
The Medicaid Act contains no comparable provision for private judicial or administrative enforcement. Instead, the Act authorizes the Secretary to withhold approval of plans, 42 U. S. C. § 1316(a) (1982 ed. and Supp. V), or to curtail federal funds to States whose plans are not in compliance with the Act. 42 U. S. C. § 1396c (1982 ed.). In addition, the
This administrative scheme cannot be considered sufficiently comprehensive to demonstrate a congressional intent to withdraw the private remedy of § 1983. In Wright, we concluded that the "generalized powers" of the Department of Housing and Urban Development (HUD) to audit and cut off federal funds were insufficient to foreclose reliance on § 1983 to vindicate federal rights. 479 U. S., at 428. We noted that HUD did not exercise its auditing power frequently, and the statute did not require, nor did HUD provide, any mechanism for individuals to bring problems to the attention of HUD. Ibid.; see also Rosado, 397 U. S., at 420-423. Such a conclusion is even more appropriate in the context of the Medicaid Act, since as explained above, see supra, at 515-518, a primary purpose of the Boren Amendment was to reduce the role of the Secretary in determining methods for calculating payment rates. It follows that the Secretary's limited oversight is insufficient to demonstrate an intent to foreclose relief altogether in the courts under § 1983.
The Boren Amendment to the Act creates a right, enforceable in a private cause of action pursuant to § 1983, to have the State adopt rates that it finds are reasonable and adequate rates to meet the costs of an efficient and economical health care provider. The judgment of the Court of Appeals is accordingly
The relevant portion of the Boren Amendment requires States to reimburse Medicaid services providers using
The Court notes in its opinion, ante, at 504, that respondent seeks permanent relief under § 1983 in the form of court-ordered reimbursement at new rates. Respondent also seeks, as interim relief, reimbursement at rates commensurate with payments under the Medicare program. Complaint ¶¶ 34-39; see App. 22. And though respondent's prayer for relief is only one example of a good claim for relief under today's decision, every § 1983 action hereafter brought by providers to enforce § 1396a(a)(13)(A) will inevitably seek the substitution of a rate system preferred by the provider for the rate system chosen by the State. Thus, whenever a provider prevails in such an action, the defendant State will be enjoined to implement a system of rates other than the rates "determined in accordance with methods and standards
The Court reasons that the policy underlying the Boren Amendment would be thwarted if judicial review under § 1983 were unavailable to challenge the reasonableness and adequacy of rates established by States for reimbursing Medicaid services providers. This sort of reasoning, however, has not hitherto been thought an adequate basis for deciding that Congress conferred an enforceable right on a party.
Before Maine v. Thiboutot, 448 U.S. 1 (1980), a plaintiff seeking to judicially enforce a provision in a federal statute was required to demonstrate that the statute contained an implied cause of action. Satisfaction of the now familiar standards from, e. g., Cort v. Ash, 422 U.S. 66 (1975), was the means for making the requisite showing. The Court's general practice was "to imply a cause of action where the language of the statute explicitly conferred a right directly on a class of persons that included the plaintiff in the case." Cannon v. University of Chicago, 441 U.S. 677, 690, n. 13 (1979). It was thus crucial to a demonstration of the existence of an implied action for the statute to contain a right "in favor of" the particular plaintiff. See, Cort, 422 U. S., at 78 ("First, . . . does the statute create a federal right in favor of the plaintiff?"). The plaintiff then would have to satisfy three additional standards to establish that the statute contained an implied judicial remedy for vindicating that right. See ibid. In Maine v. Thiboutot, the Court essentially removed the burden of making the latter three showings by holding that § 1983 generally (with an exception subsequently
But while the Court's holding in Thiboutot rendered obsolete some of the case law pertaining to implied rights of action, a significant area of overlap remained. For relief to be had either under § 1983 or by implication under Cort v. Ash, supra, the language used by Congress must confer identifiable enforceable rights. See Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418, 432-433 (1987) (O'CONNOR, J., dissenting) ("Whether a federal statute confers substantive rights is not an issue unique to § 1983 actions. In implied right of action cases, the Court also has asked, since Cort v. Ash, 422 U.S. 66, 78 (1975), whether `the statute create[s] a federal right in favor of the plaintiff' "). In this regard, the Court in Wright said that a § 1983 action does not lie where Congress did not intend for the statutory provision "to rise to the level of an enforceable right." Id., at 423 (citing Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 19 (1981)).
In Cannon, supra, the Court said that "the right-or duty-creating language of the statute has generally been the most accurate indicator of the propriety of implication of a cause of action." Id., at 690, n. 13. This statement is suggestive of the traditional rule that the first step in our exposition of a statute always is to look to the statute's text and to stop there if the text fully reveals its meaning. See, e. g., American Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982) (" `[O]ur starting point must be the language employed by Congress,' and we assume `that the legislative purpose is expressed by the ordinary meaning of the words used' ") (internal citations omitted). There is no apparent reason to deviate from this sound rule when the question is whether a federal statute confers substantive rights on a § 1983 plaintiff.
The Medicaid statute provides for appropriations of federal funds to States that submit, and have approved by the Secretary of Health and Human Services, "State plans for medical assistance." 42 U. S. C. § 1396 (1982 ed., Supp. V). The next provision in the statute specifies requirements for the contents of state medical assistance plans. § 1396a(a). The provision at issue here, § 1396a(a)(13)(A), is simply a part of the thirteenth listed requirement for such plans. In light of the placement of § 1396a(a)(13)(A) within the structure of the statute, see Pennhurst, supra, at 19 (emphasizing the statutory "context" of the provision under review), one most reasonably would conclude that § 1396a(a)(13)(A) is addressed to the States and merely establishes one of many conditions for receiving federal Medicaid funds; the text does not clearly confer any substantive rights on Medicaid services providers. This structural evidence is buttressed by the absence in the statute of any express "focus" on providers as a beneficiary class of the provision. See Wright, supra, at 430 (finding a provision in the statute "focusing" on the plaintiff class dispositive evidence of Congress' intent in the Brooke Amendment to create rights in favor of the plaintiff class).
Even if one were to assume that the terms of § 1396a(a) (13)(A) confer a substantive right on providers in the nature of a guarantee of "reasonable and adequate" rates, the statute places its own limitation on that right in very plain language. Section 1396a(a)(13)(A) establishes a procedure for establishing such rates of reimbursement. The first step requires the States to make certain findings. The second and only other step requires the States to make certain assurances to the Secretary and the Secretary — not the courts — to review those assurances. Under the logic of our case law, respondent arguably may bring a § 1983 action to require that rates be set according to that process. Indeed, establishment
The Court concludes, ante, at 519, that the contrary position equates with the proposition that the States are not obligated to adopt reasonable rates. Indeed, the theme of much of the Court's argument is that without judicial enforceability, the States cannot be trusted to implement § 1396a(a)(13) (A)'s command of creating rate systems that are reasonable and adequate. The Court states at one point that "[i]t would make little sense for Congress to require a State to make findings without requiring those findings to be correct. . . . We decline to adopt an interpretation of the Boren Amendment that would render it a dead letter." Ante, at 514.
The interpretation to which the Court refers, however, would scarcely render the Boren Amendment a "dead letter." It is, instead, the Court's own reading that nullifies the "letter" of the amendment. Apart from its displacement of the statutory ratesetting process noted previously, the Court's suggestion that the States would deliberately disregard the requirements of the statute ignores the Secretary's oversight incorporated into the statute and does less than justice to the States. The Court itself recognizes that the basic purpose of the Boren Amendment was to allow the States more latitude in establishing Medicaid reimbursement rates. In light of that fact, the Court's interpretation takes far more liberties
"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities, secured by the Constitution and laws shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
Respondent argues that this method of calculating the payment rates is not tied to the costs incurred by an efficient and economical hospital. More specifically, respondent challenges: (1) the method of computing the baseline median costs for 1982; (2) the use of the CPI rather than an index tied to medical care costs to adjust the rates in the years 1982-1986; and (3) the way in which the medical care cost index was used after 1986. Complaint, ¶¶ 20-26, App. 14-16. In addition, respondent contends that the appeals procedure established by the state plan is inadequate under the Act in part because it excludes challenges to the principles of reimbursement. Id., at ¶ 32, App. 19.
For the same reasons, we reject the argument that the availability of an action against the Secretary under the APA forecloses § 1983 as a remedy. Putting aside the question whether an APA remedy is available, see n. 12, supra, there is absolutely no indication that Congress intended such an action to be the sole method for health care providers to enforce the reimbursement provision. Moreover, given that Congress believed that a private cause of action existed prior to the passage of the Boren Amendment and that the amendment reduced the Secretary's oversight role, it is implausible to infer that Congress intended to replace the private judicial remedy under § 1983 with a proceeding for judicial review under the APA.
Finally, we reject petitioners' argument that the availability of judicial review under the Virginia Administrative Procedure Act is relevant to the question whether relief is available under § 1983. See Wright, 479 U. S., at 429. See generally Monroe v. Pape, 365 U.S. 167, 183 (1961).