447 U.S. 773 (1980)
Town Court Nursing Center, Inc. operated a 198-bed nursing home in Philadelphia, Pennsylvania.1 In April 1976 the Department of Health, Education, and Welfare certified it as a skilled nursing facility, making it eligible to receive Medicare and Medicaid payments.2 Town Court then entered into one-year provider agreements with HEW and the Pennsylvania Department of Public Welfare.3 Under those agreements the agencies agreed to reimburse the home for care furnished to eligible beneficiaries so long as it continued to qualify as a skilled nursing facility.4
On May 17, 1977 HEW notified Town Court that it no longer met the statutory and regulatory standards for skilled nursing facilities.5 Its Medicare provider agreement would not be renewed, and no payments would be made for services rendered after July 17, 1977.6 Three days later DPW notified Town Court that its Medicaid provider agreement would likewise not be renewed.7 Town Court requested HEW to reconsider the termination decision.8
While the reconsideration request remained pending, Town Court and six of its Medicaid patients filed a complaint in the United States District Court for the Eastern District of Pennsylvania.9 The complaint alleged that both the home and the patients were entitled to an evidentiary hearing on the merits of the decertification decision before payments were discontinued. It asserted that termination of payments would force Town Court to close and would cause the individual plaintiffs immediate and irreparable psychological and physical harm.10
The District Court granted a preliminary injunction requiring continued payments for existing and new patients and prohibiting transfers until HEW acted on the reconsideration petition.11 After HEW denied the petition the District Court dissolved the injunction and denied further relief except an order requiring HEW and DPW to pay for services actually rendered.12 Town Court and the six patients appealed the denial of the preliminary injunction.13 HEW cross-appealed the payment order.14
The United States Court of Appeals for the Third Circuit sitting en banc held that Town Court had no constitutional right to a pretermination evidentiary hearing.15 A majority of the court nevertheless concluded that the patients possessed a constitutionally protected property interest in continued residence at the home that entitled them to a pretermination hearing on whether the provider agreements should be renewed.16 The court reinstated portions of the preliminary injunction and remanded for determination of appropriate hearing procedures.17 The Secretary of DPW petitioned for certiorari, which the Supreme Court granted.18
Whether approximately 180 elderly Medicaid patients have a constitutional right to a hearing before HEW or DPW may revoke a nursing home's authority to provide them with care at government expense?19
The Due Process Clause protects against governmental deprivation of life, liberty, or property without an opportunity to be heard.20 A protected property interest exists only when statutes or regulations create a legitimate claim of entitlement.21 Life or liberty interests arise only from direct governmental action imposing severe harm rather than indirect effects of enforcement against a third party.22
No. The Medicaid statute and regulations confer on patients a right to choose among qualified providers.23 Patients receive continued benefits only while a facility remains qualified.24 Therefore, the decertification of Town Court Nursing Center affects patients only indirectly by requiring them to select another qualified home.25 The government's enforcement action against the facility does not directly withdraw financial benefits from patients.26 It does not impose transfer trauma as a deliberate deprivation of life or liberty.27
The patients have no constitutionally protected interest that entitles them to participate in or receive a hearing on the decertification decision.28
Related opinions on this issue
Justice Blackmun concurred in the judgment.29 He treated the patients' property claim and their life-or-liberty claim separately.30 He recognized that section 1396a(a)(23) creates a justifiable expectation of continued residence that can be disrupted only upon a showing of noncompliance.31
He concluded that the patients' expectancy remains conditioned on the facility's qualified status.32 The home had already received extensive procedural protections.33 It served as the source of the benefit.34
It shared an interest with the patients in maintaining certification.35 He further noted that the nondiscriminatory impact on 180 patients and the lack of any allegation of patient fault supported limiting the dimensions of the interest so that constitutional procedures were not required.36
Justice Brennan dissented. He concluded that the statutory scheme gives patients a legitimate entitlement to continued residency at the home of their choice absent specific cause for transfer.37 Once patients select a qualified facility the regulations protect against undesired transfers.38
The government's withdrawal of certification deprives them of that expectation.39 This deprivation triggers the right to appropriate procedures.40 The home's interests largely coincide with the patients' interests.41
Nevertheless the patients possess some separate interests and could contribute relevant information if given an opportunity to be heard.42