Nature of the Case
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Facts
Respondents Yaretsky and Cuevas (Ps) were patients in the American Nursing Home located in New York City. Both were recipients of assistance under the Medicaid program. The nursing home's URC decided that respondents did not need the care they were receiving, and should be transferred to a lower level of care in an HRF. Following administrative hearings, state social service officials affirmed the decision to discontinue benefits unless respondents accepted a transfer to an HRF providing a reduced level of care. Respondents then commenced this suit, acting individually and on behalf of a class of Medicaid-eligible residents of New York nursing homes. They alleged that they had not afforded adequate notice either of URC decisions and the reasons supporting them or of their right to an administrative hearing to challenge those decisions. They contend this violated their rights under state and federal law and under the Due Process Clause of the Fourteenth Amendment. They sought injunctive relief and damages. The District Court certified a class and issued a preliminary injunction, restraining the defendants from reducing or terminating Medicaid benefits without timely written notice to the patients, provided by state or local officials, of the reasons for the URC decision, the defendants' proposed action, and the patients' right to an evidentiary hearing and continued benefits pending administrative resolution of the claim. Ps eventually added a new claim and asserted that all of these transfers deprived patients of interests protected by the Fourteenth Amendment, and were the product of 'state action.' The court permanently enjoined petitioners, as well as all SNF's and HRF's in the State, from permitting or ordering the discharge of class members, or their transfer to a different level of care, without providing advance written notice and an evidentiary hearing on 'the validity and appropriateness of the proposed action.' The Court of Appeals affirmed and held that URC-initiated transfers from a lower level of care to a higher one, and all discharges and transfers initiated by the nursing homes or attending physicians 'involve state action affecting constitutionally protected property and liberty interests.'
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