O'bannon v. Town Court Nursing Center

447 U.S. 773 (1980)


Town Court (D) operated a 198-bed nursing home certified by HEW thus becoming eligible to receive payments from HEW and DPW for providing nursing care to aged, disabled, and poor persons in need of medical care. D entered into provider agreements with HEW and DPW under Medicare and Medicaid. On May 17, 1977, HEW informed D that it no longer met the statutory and regulatory standards for skilled nursing facilities and that its Medicare provider agreement would not be renewed. DPW then notified D that is Medicaid provider agreement would not be renewed. D requested reconsideration. D and six patients then filed a complaint in district court that both D and its patients were entitled to a hearing on the merits before decertification was finalized. A preliminary injunction was granted. HEW denied D's petitions, and the district court then lifted its injunction. D and the six patients appealed. The Court of Appeals upheld the HEW procedures that denied D an evidentiary hearing until after the termination has been effective and the agency has ceased paying benefits. However, the Appeals Court decided that the patients had a constitutionally protected property interest in continued residence at D and that gave them a right to a pretermination hearing on the issue of D's provider agreements being renewed. HEW filed for a petition of certiorari.