O'Bannon v. Town Court Nursing Center

447 U.S. 773, 100 S. Ct. 2467, 65 L. Ed. 2d 506, 1980 U.S. LEXIS 17

• Court: Supreme Court of the United States
• Decided: June 23, 1980
• Docket: 78-1318
• Status: Published

Opinions

Mr. Justice Stevens

delivered the opinion of the Court.

The question presented is whether approximately 180 elderly residents of a nursing home operated by Town Court Nursing Center, Inc., have a constitutional right to a hearing before a state or federal agency may revoke the home’s authority to provide them with nursing care at government expense. Although we recognize that such a revocation may be harmful to some patients, we hold that they have no constitutional right to participate in the revocation proceedings.

Town Court Nursing Center, Inc. (Town Court), operates a 198-bed nursing home in Philadelphia, Pa. In April 1976 it was certified by the Department of Health, Education, and Welfare (HEW) as a “skilled nursing facility,” thereby becoming eligible to receive payments from HEW and from the Pennsylvania Department of Public Welfare (DPW), for providing nursing care services to aged, disabled, and poor persons in need of medical care. After receiving its certification,¹ Town Court entered into formal “provider agreements” with both HEW and DPW. In those agreements HEW and DPW agreed to reimburse Town Court for a period of one year for care provided to persons eligible for Medicare or Medicaid benefits under the Social Security Act,² on the condition that Town Court continue to qualify as a skilled nursing facility.

On May 17, 1977, HEW notified Town Court that it no longer met the statutory and regulatory standards for skilled nursing facilities and that, consequently, its Medicare provider agreement would not be renewed.³ The HEW notice stated that no payments would be made for services rendered after July 17, 1977, explained how Town Court might request reconsideration of the decertification decision, and directed it to notify Medicare beneficiaries that payments were being discontinued. Three days later DPW notified Town Court that its Medicaid provider agreement would also not be renewed.⁴

Town Court requested HEW to reconsider its termination decision. While the request was pending, Town Court and six of its Medicaid patients⁵ filed a complaint in the United States District Court for the Eastern District of Pennsylvania alleging that both the nursing home and the patients were entitled to an evidentiary hearing on the merits of the decer-tification decision before the Medicaid payments were discontinued. The complaint alleged that termination of the payments would require Town Court to close and would cause the individual plaintiffs to suffer both a loss of benefits and “immediate and irreparable psychological and physical harm.” App. 11a.

The District Court granted a preliminary injunction against DPW and HEW, requiring payments to be continued for new patients as well as for patients already in the home and prohibiting any patient transfers until HEW acted on Town Court’s petition for reconsideration. After HEW denied that petition, the District Court dissolved the injunction and denied the plaintiffs any further relief, except that it required HEW and DPW to pay for services actually provided to patients.

Town Court and the six patients filed separate appeals from the denial of the preliminary injunction, as well as a motion, which was subsequently granted, for reinstatement of the injunction pending appeal. The Secretary of HEW cross-appealed from the portion of the District Court’s order requiring payment for services rendered after the effective date of the termination. The Secretary of DPW took no appeal and, though named as an appellee, took no position on the merits.

The United States Court of Appeals for the Third Circuit, sitting en banc, unanimously held that there was no constitutional defect in the HEW procedures that denied Town Court an evidentiary hearing until after the termination had become effective and the agency had ceased paying benefits.⁶ The Court of Appeals came to a different conclusion, however, with respect to the patients’ claim to a constitutional right to a pretermination hearing. Town Court Nursing Center, Inc. v. Beal, 586 F. 2d 280 (1978).⁷

Relying on the reasoning of Klein v. Califano, 586 F. 2d 250 (CA3 1978) (en banc), decided the same day, a majority of the court concluded that the patients had a constitutionally protected property interest in continued residence at Town Court that gave them a right to a pretermination hearing. In Klein the court identified three Medicaid provisions — a statute giving Medicaid recipients the right to obtain services from any qualified facility,⁸ a regulation prohibiting certified facilities from transferring or discharging a patient except for certain specified reasons,⁹ and a regulation prohibiting the reduction or termination of financial assistance without a hearing ¹⁰ — which, in its view, created a “legitimate entitlement to continued residency at the home of one’s choice absent specific cause for transfer.” Id., at 258. It then cited the general due process maxim that, whenever a governmental benefit may be withdrawn only for cause, the recipient is entitled to a hearing as to the existence of such cause. See Memphis Light, Gas & Water Division v. Craft, 436 U. S. 1, 11. Finally, it held that, since the inevitable consequence of decertifying a facility is the transfer of all its residents receiving Medicaid benefits, a decision to decertify should be treated as a decision to transfer, thus triggering the patients’ right to a hearing on the issue of whether there is adequate cause for the transfer.¹¹

Applying this reasoning in Town Court, six judges held that the patients were entitled to a pretermination hearing on the issue of whether Town Court’s Medicare and Medicaid provider agreements should be renewed.¹² The court thus reinstated that portion of the preliminary injunction that prohibited patient transfers until after the patients had been granted a hearing and affirmed that portion that required HEW and DPW to continue paying benefits on behalf of Town Court residents. It then remanded, leaving the nature of the hearing to be accorded the patients to be determined, in the first instance, by the District Court. Three judges dissented, concluding that neither the statutes nor the regulations granted the patients any substantive interest in decertification proceedings and that they had no constitutionally protected property right in uninterrupted occupancy.¹³

The Secretary of DPW filed a petition for certiorari, which we granted.¹⁴ 441 U. S. 904. We now reverse, essentially for the reasons stated by Chief Judge Seitz in his dissent.

At the outset, it is important to remember that this case does not involve the question whether HEW or DPW should, as a matter of administrative efficiency, consult the residents of a nursing home before making a final decision to decertify it.¹⁵ Rather, the question is whether the patients have an interest in receiving benefits for care in a particular facility that entitles them, as a matter of constitutional law, to a hearing before the Government can decertify that facility. The patients have identified two possible sources of such a right. First, they contend that the Medicaid provisions relied upon by the Court of Appeals give them a property right to remain in the home of their choice absent good cause for transfer and therefore entitle them to a hearing on whether such cause exists. Second, they argue that a transfer may have such severe physical or emotional side effects that it is tantamount to a deprivation of life or liberty, which must be preceded by a due process hearing.¹⁶ We find both arguments unpersuasive.¹⁷

Whether viewed singly or in combination, the Medicaid provisions relied upon by the Court of Appeals do not confer a right to continued residence in the home of one’s choice. Title 42 U. S. C. § 1396a (a) (23) (1976 ed., Supp. II) gives recipients the right to choose among a range of qualified providers, without government interference. By implication, it also confers an absolute right to be free from government interference with the choice to remain in a home that continues to be qualified. But it clearly does not confer a right on a recipient to enter an unqualified home and demand a hearing to certify it, nor does it confer a right on a recipient to continue to receive benefits for care in a home that has been decertified. Second, although the regulations do protect patients by limiting the circumstances under which a home may transfer or discharge a Medicaid recipient, they do not purport to limit the Government’s right to make a transfer necessary by decertifying a facility.¹⁸ Finally, since decerti-fication does not reduce or terminate a patient's financial assistance, but merely requires him to use it for care at a different facility, regulations granting recipients the right to a hearing prior to a reduction in financial benefits are irrelevant.

In holding that these provisions create a substantive right to remain in the home of one's choice absent specific cause for transfer, the Court of Appeals failed to give proper weight to the contours of the right conferred by the statutes and regulations. As indicated above, while a patient has a right to continued benefits to pay for care in the qualified institution of his choice, he has no enforceable expectation of continued benefits to pay for care in an institution that has been determined to be unqualified.

The Court of Appeals also erred in treating the Government’s decision to decertify Town Court as if it were equivalent in every respect to a decision to transfer an individual patient. Although decertification will inevitably necessitate the transfer of all those patients who remain dependent on Medicaid benefits, it is not the same for purposes of due process analysis as a decision to transfer a particular patient or to deny him financial benefits, based on his individual needs or financial situation.

In the Medicare and the Medicaid Programs the Government has provided needy patients with both direct benefits and indirect benefits. The direct benefits are essentially financial in character; the Government pays for certain medical services and provides procedures to determine whether and how much money should be paid for patient care. The net effect of these direct benefits is to give the patients an opportunity to obtain medical services from providers of their choice that is comparable, if not exactly equal, to the opportunity available to persons who are financially independent. The Government cannot withdraw these direct benefits without giving the patients notice and an opportunity for a hearing on the issue of their eligibility for benefits.¹⁹

This case does not involve the withdrawal of direct benefits. Rather, it involves the Government’s attempt to confer an indirect benefit on Medicaid patients by imposing and enforcing minimum standards of care on facilities like Town Court. When enforcement of those standards requires decertification of a facility, there may be an immediate, adverse impact on some residents. But surely that impact, which is an indirect and incidental result of the Government’s enforcement action, does not amount to a deprivation of any interest in life, liberty, or property.

Medicaid patients who are forced to move because their nursing home has been decertified are in no different position for purposes of due process analysis than financially independent residents of a nursing home who are forced to move because the home’s state license has been revoked. Both groups of patients are indirect beneficiaries of government programs designed to guarantee a minimum standard of care for patients as a class. Both may be injured by the closing of a home due to revocation of its state license or its decertification as a Medicaid provider. Thus, whether they are private patients or Medicaid patients, some may have difficulty locating other homes they consider suitable or may suffer both emotional and physical harm as a result of the disruption associated with their move. Yet none of these patients would lose the ability to finance his or her continued care in a properly licensed or certified institution-. And, while they might have a claim against the nursing home for damages,²⁰ none would have any claim against the responsible governmental authorities for the deprivation of an interest in life, liberty, or property. Their position under these circumstances would be comparable to that of members of a family who have been dependent on an errant father; they may suffer serious trauma if he is deprived of his liberty or property as a consequence of criminal proceedings, but surely they have no constitutional right to participate in his trial or sentencing procedures.

The simple distinction between government action that directly affects a citizen’s legal rights, or imposes a direct restraint on his liberty, and action that is directed against a third party and affects the citizen only indirectly or incidentally, provides a sufficient answer to all of the cases on which the patients rely in this Court. Thus, Memphis Light, Gas & Water Division v. Craft, 436 U. S. 1, involved the direct relationship between a publicly owned utility and its customers; the utility had provided its customers with a legal right to receive continued service as long as they paid their bills. We held that under these circumstances the utility’s customers had a constitutional right to a hearing on a disputed bill before their service could be discontinued. But nothing in that case implies that if a public utility found it necessary to cut off service to a nursing home because of delinquent payments, it would be required to offer patients in thé home an opportunity to be heard on the merits of the credit dispute. This would be true even if the termination of utility service required the nursing home to close and caused serious inconvenience or harm to patients who would therefore have to move. As in this case, such patients might have rights against the home, and might also have direct relationships with the utility concerning their own domestic service, but they would have no constitutional right to interject themselves into the dispute between the public utility and the home.²¹

Over a century ago this Court recognized the principle that the due process provision of the Fifth Amendment does not apply to the indirect adverse effects of governmental action. Thus, in the Legal Tender Cases, 12 Wall. 457, 551, the Court stated:

“That provision has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power. It has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals.”

More recently, in Martinez v. California, 444 U. S. 277, we rejected the argument made by the parents of a girl murdered by a parolee that a California statute granting absolute immunity to the parole board for its release decisions deprived their daughter of her life without due process of law:

“A legislative decision that has an incremental impact on the probability that death will result in any given situation — such as setting the speed limit at 55-miles-per-hour instead of 45 — cannot be characterized as state action depriving a person of life just because it may set in motion a chain of events that ultimately leads to the random death of an innocent bystander.” Id., at 281.

Similarly, the fact that the decertification of a home may lead to severe hardship for some of its elderly residents does not turn the decertification into a governmental decision to impose that harm.²²

Whatever legal rights these patients may have against Town Court for failing to maintain its status as a qualified skilled nursing home — and we express no opinion on that subject — we hold 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.

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Marshall took no part in the consideration or decision of this case.

1 The certification in 1976 was Town Court’s second; it had first been certified in 1967. It was decertified in 1974 as a result of substantial noncompliance with both state and federal requirements.

2 The Medicare Program, see 42 U. S. C. § 1395 et seq., which is primarily for the benefit of the aged and the disabled, is financed and administered entirely by the Federal Government (HEW); the Medicaid Program, see 42 U. S. C. § 1396 et seq., which is primarily designed for the poor, is a cooperative federal-state program.

3 HEW based its determination on a survey conducted by DPW, which recommended that the home be decertified. In its notice to Town Court HEW stated in part:

“In order to participate in the Medicare Program, a skilled nursing facility must meet the statutory requirements contained in section 1861 (j) of the Act, 42 USC 1395 x (j), as well as all other health and safety requirements established by the Secretary in subpart J, part 405, title 20 of the Code of Federal Regulations. A participating skilled nursing facility is required to be in compliance with all of the eighteen conditions of participation for such facilities contained in subpart J.

“On May 8-11, 1977, the Pennsylvania Department of Health performed a survey of your facility. That survey found that your facility does not comply with seven of the eighteen conditions of participation. The seven conditions not being complied with are:

“II. Governing Body and Management (405.1121)

“HI. Medical Direction (405.1122)

“IV. Physical Services (405.1123)

“V. Nursing Services (405.1124)

“VIII. Pharmaceutical Services (405.1127)

“XIII. Medical Records (405.1132)

“XV. Physical Environment (405.1134)

“Your facility’s failure to comply with these conditions of participation precludes renewal of your agreement. Renewal is also precluded by the fact that your facility has failed to maintain compliance with numerous standards which had previously been determined to be met. Please refer to 20 CFR 405.1908 (d).” App. 295a-296a.

4 The state agency’s letter read in part:

“Because the Medicare Program has terminated your participation, the Department of Public Welfare has no alternative but to likewise ter-mínate your participation under the Medical Assistance Program. The Federal regulations, 45 C. F. R. § 249.33 (a) (9), require that a State medical assistance plan must:

“ ‘Provide that in the case of skilled nursing facilities certified under the provisions of title XVIII of the Social Security Act, the term of a provider agreement shall be subject to the same terms and conditions and coterminous with the period of approval of eligibility specified by the Secretary pursuant to that title, and upon notification that an agreement with a facility under title XVIII of the Act has been terminated or cancelled, the single State agency will take appropriate action to terminate the facility’s participation under the plan. A facility whose agreement has been can-

celled or otherwise terminated may not be issued another agreement until the reasons which cause the cancellation or termination have been removed and reasonable assurance provided the survey agency that they will not recur.’ (emphasis supplied)

“Because of the requirements of HEW, your facility must be terminated from participation in the Medical Assistance Program effective June 18, 1977.” Id., at 291ar-292a.

5 At the time the suit was filed, no Town Court residents were Medicare recipients. However, Town Court did have a Medicare provider agreement with HEW, the nonrenewal of which automatically triggered the nonrenewal of its Medicaid agreement. See n. 4, supra.

Although the plaintiffs filed their action on behalf of a class of all Medicaid recipients in the home, the District Court never certified the class. Thus, the action has proceeded throughout the Court of Appeals and in this Court as an individual action on behalf of the six named plaintiffs.

6 Relying on this Court’s decision in Mathews v. Eldridge, 424 U. S. 319, the Court of Appeals held that Town Court’s property interests were sufficiently protected by informal pretermination procedures and by the opportunity for an administrative hearing and federal-court review after benefits had been terminated:

“As was true in Eldridge, the decision not to renew a provider agreement is an easily documented, sharply focused decision in which issues of credibility and veracity play little role. It is based in most cases upon routine, standard, unbiased reports by health care professionals. Those professionals evaluate the provider in light of well-defined criteria that were developed in the administrative rule-making process. Written submissions are adequate to allow the provider to present his case. Given the extensive documentation that the provider is able to submit in response to the findings of the survey teams, the provider is unlikely to need an eviden-tiary hearing in order to present his position more effectively. In any event, there is ample opportunity to expand orally upon written submissions during the exit interview or in discussions during the survey itself. There is opportunity to submit additional evidence after notice of deficiencies is given, and the evidence upon which the recommendation of the survey team is based is disclosed fully to the provider. Moreover, the criteria used to evaluate the provider are well known in advance to the provider, and compliance is readily proved or disproved by written submission. Finally, review by an administrative law judge, by the Appeals Council of HEW, and ultimately by the federal courts; insures that the decision of the Secretary will be thoroughly examined before becoming final.

“As stated in Eldridge, the public interest in preserving scarce financial and administrative resources is strong. Given the large number of providers participating in Medicare and the frequent surveys that are required, we believe that the costs of providing pre-termination hearings would be substantial. Further, the public has a strong interest in insuring that elderly and infirm nursing home patients are not required to stay in noncomplying homes longer than is necessary to assure that the provider had adequate notice and opportunity to respond to charges of deficiencies.” Town Court Nursing Center, Inc. v. Beal, 586 F. 2d 266, 277-278 (1978). Town Court did not seek further review of this determination.

7 At the time the litigation began Frank S. Beal was the Pennsylvania Secretary of Public Welfare. He has since been replaced in that position by Helen B. O’Bannon, the petitioner in this Court.

8 Title 42 U. S. C. § 1396a (a) (23) (1976 ed., Supp. II) provides, in relevant part:

“[A]ny individual eligible for medical 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. . . .”

The same “free choice of providers” is also guaranteed by 42 CFR § 431.51 (1979).

9 Title 42 CFR §405.1121 (k) (4) (1979) requires skilled nursing facilities that are licensed either as Medicaid or Medicare providers to establish written policies and procedures to ensure that each patient admitted to the facility “[i]s transferred or discharged only for medical reasons, or for his welfare or that of other patients, or for nonpayment of his stay (except as prohibited by titles XVIII or XIX of the Social Security Act), and is given reasonable advance notice to ensure orderly transfer or discharge. . . .”

10 Title 45 CFR § 205.10 (a)(5) (1979) provides, in relevant part, that an “opportunity for a hearing shall be granted to any applicant who requests a hearing because his or her claim for financial assistance . . . 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.”

11 “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 on the existence of the condition or cause for transfer — whether the home is a qualified provider and whether decertification is for the patients’ welfare.” 586 F. 2d, at 258.

12 Three judges joined a brief opinion announcing the judgment of the court authored by Judge Aldisert, which disposed of the case in a summary fashion based on the reasoning of Klein v. Calijano. Judge Adams wrote a concurring opinion, which was also joined by three judges (two of whom also joined Judge Aldisert), in which he attempted to explain more fully the reasoning in Klein. Referring to the three provisions relied upon in Klein, Judge Adams stated that they

“. . . paint three distinct points in the landscape of a ‘legitimate claim of entitlement’ that Medicaid beneficiaries can assert. Taken alone, the interest created by each of these clauses might be dismissed as not rising to the level of a cognizable property interest. However, when viewed together, they compel the conclusion that they identify three aspects of an ‘underlying substantive interest’ that enjoys the stature of ‘property.’ ” (Footnote omitted.) 586 F. 2d, at 287.

Judge Adams also relied, to some extent, on the hardship that nursing home residents might suffer if forced to transfer to another home, stating that the “health” and “home” interests the residents possess in remaining in a particular nursing home are “among those that most persons would regard as being encompassed by the protections of the due process clause.” Id., at 289. Finally, unlike Judge Aldisert, Judge Adams went on to suggest what types of procedures would be necessary before Medicaid patients could be transferred.

13 Chief Judge Seitz summarized his response to the three parts of the majority’s analysis as follows:

“The majority finds that continued residency in the nursing home of one’s choice absent specific cause for transfer is an underlying substantive interest created by three Medicaid provisions. Under the first, 42 U. S. C. § 1396a (a) (23), a Medicaid recipient may obtain medical care ‘from any institution . . . qualified to perform the service or services required.’ Clearly, what the majority characterizes as a recipient’s right to obtain medical care from a ‘freely selected provider’ is limited to a choice among institutions which have been determined by the Secretary to be ‘qualified.’ Next, the majority’s reliance on 45 C. F. R. § 205.10 (a) (5), ensuring a notice and hearing to a recipient whose benefits are suspended, reduced, discontinued or terminated, is obviously misplaced. As ^he majority itself notes, the decertification of these facilities did not reduce or suspend the residents’ rights to continued benefits.

“Finally, the majority relies upon 45 C. F. R. §249.12 (a) (1) (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 residents vis-a-vis the Secretary.

“Moving to its minor premise, the majority postulates that a decision to decertify is tantamount to a decision to transfer individual residents. Practically, of course, this may be a consequence in most cases, at least where an institution fails to remedy its insufficiencies. Analytically, however, the two decisions are different. Decertification focuses on the institution’s noncompliance with HEW's standards. The majority does not and cannot contend that recipients have a right to remain in an institution that the Secretary has found, by appropriate procedures, to be in substantial noncompliance with the standards. ‘Transfer trauma,’ although a legitimate concern for some residents, is necessarily subordinate to the threat posed to all residents by substandard conditions.” Id., at 295-296.

14 The patients urge us to dismiss the petition without reaching the merits on the ground that there is no one before the Court who may properly argue the petitioner’s position. Thus, they contend that DPW is foreclosed from arguing here because, although its Secretary was formally an appellee in the Court of Appeals, it deliberately took a neutral position on the merits in that court. And they argue that HEW, which did argue the merits below, is foreclosed from arguing them here because its Secretary did not petition for certiorari. While we accept the patients’ argument with respect to the portion of the injunction requiring continued payments for Medicaid patients, we reject it insofar as the main issue presented bv the petition — the right of the patients to a pretermination hearing — is concerned.

When the District Court ruled against the patients and Town Court on their right to a pretermination hearing, it nevertheless ordered HEW and DPW to continue making navments for services actually rendered, no doubt to ensure that there would be no break in care or benefits while the patients were being transferred. The patients appealed on the hearing issue, but the HEW Secretary alone cross-appealed on the issue of whether HEW should continue paying benefits assuming that there was no right to a pretermination hearing. The DPW Secretary did not file a cross-appeal, thus accepting the District Court’s order that DPW continue paying its share of benefits. Under these circumstances, the DPW Secretary’s petition for certiorari could not revive the issue of the propriety of that order. And, since the HEW Secretary did not file a petition for certiorari, we have no occasion to review it now.

However, the patients’ jurisdictional argument fails insofar as the hearing issue is concerned. Because it contributes funds to the Medicaid program and has joint supervisory responsibilities with the Federal Government over Medicaid providers, DPW clearly has a sufficient interest in this question to give it standing to argue the merits. And, since it was victorious in the District Court on this issue, there was no need for it to file an appeal in order to keep it alive. Finally, although we would not normally allow a party to make an argument it had not raised below, the fact that the same argument was vigorously asserted by HEW and fully addressed by the Court of Appeals removes any prudential barrier to review that might otherwise exist.

Because he was a party to the proceeding below, the HEW Secretary was automatically joined as a respondent when the DPW Secretary filed his petition in this Court. See this Court’s Rule 21 (4). In that capacity, he may seek reversal of the judgment of the Court of Appeals on any ground urged in that court.

15 As Judge Adams pointed out in his concurring opinion, HEW and DPW would no doubt benefit from patient input on the questions whether the facility meets the applicable standards and, if not, whether decertification should be postponed pending attempts to bring the home into compliance. 586 F. 2d, at 292-293. Indeed, HEW recognizes the value of patient input, requiring patient interviews to be conducted under some circumstances as a part of the periodic review of a facility’s qualifications. See 42 CFR §456.608 (1979). The fact that a person may be an important, or even critical, witness does not, however, give him a constitutional right to testify.

16 The patients cite a number of studies indicating that removal to another home may cause “transfer trauma,” increasing the possibility of death or serious illness for elderly, infirm patients. They also argue that associational interests, such as friendship among patients and staff and family ties, may be disrupted if the patients are scattered to other nursing homes, perhaps in other areas of the country. In denying the motion for a preliminary injunction, the District Court did not take evidence or make any findings on the harm that might result from a transfer. Nevertheless, we assume for purposes of this decision that there is a risk that some residents may encounter severe emotional and physical hardship as a result of a transfer.

17 The patients also argue that they are third-party beneficiaries of the provider agreement between DPW and Town Court and that this status somehow entitles them to more than Town Court itself is entitled to— namely, a pretermination hearing. They also argue that a legitimate entitlement to continued care in the home of their choice arises out of Pennsylvania’s long history of providing free medical care for those who are indigent. Nothing in the cited Pennsylvania statutes or court decisions, however, purports to create the kind of broad entitlement that the patients claim. In any event, neither of these state-law arguments was advanced in the courts below and therefore neither may provide the basis for an affirmance in this Court.

18 This regulation is clearly designed to prevent abuses by providers and not to define the Government’s obligations or limit its powers in any way. Although the regulation allows a home to transfer or discharge a patient for medical reasons, we may assume that the Government could not order a patient transferred out of a qualified facility simply because it believed such a transfer was medically indicated. In other words, we assume that the statute referred to above would prohibit any such interference with the patient’s free choice among qualified providers.

19 45 CFR § 205.10 (a) (5) (1979). See also Goldberg v. Kelly, 397 U. S. 254.

20 This would, of course, depend on the contract between the patients and the nursing home, if any, and the provisions of the applicable state law.

21 Similarly, in Perry v. Sindermann, 408 U. S. 593, and Arnett v. Kennedy, 416 U. S. 134, the Court was concerned with the direct relationship between a public employer and its employees. The character of that relationship determined whether the employee possessed an expectancy of continued employment that was legally enforceable against his employer— or at least could not be terminated by the employer without observing certain minimal safeguards. But those eases raised no question concerning the right of an employee who loses his job as a result of government action directed against a third party.

22 We, of course, need not and do not hold that a person may never have a right to a hearing before his interests may be indirectly affected by government action. Conceivably, for example, if the Government were acting against one person for the purpose of punishing or restraining another, the indirectly affected individual might have a constitutional right to some sort of hearing. But in this case the Government is enforcing its regulations against the home for the benefit of the patients as a whole and the home itself has a strong financial incentive to contest its enforcement decision; under these circumstances the parties suffering an indirect adverse effect clearly have no constitutional right to participate in the enforcement proceedings.