                              In the

    United States Court of Appeals
                For the Seventh Circuit
No. 12-3678

BRYN MAWR CARE, INC.,
                                                 Plaintiff-Appellant,

                                 v.


KATHLEEN SEBELIUS, in her official
capacity as Secretary of Health and
Human Services, et al.,
                                              Defendants-Appellees.

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
        No. 11-CV-00734 — Harry D. Leinenweber, Judge.


    ARGUED NOVEMBER 7, 2013 — DECIDED APRIL 8, 2014


   Before BAUER, MANION, and SYKES, Circuit Judges.
   MANION, Circuit Judge. Bryn Mawr Care, Inc., is a nursing
home company that maintains a facility in Chicago, Illinois,
occupied exclusively by patients on Medicaid. Without a
hearing, state Medicaid regulators noted three deficiencies at
Bryn Mawr’s facility. Federal regulators publicized the
deficiencies, which negatively impacted the facility’s reputa-
2                                                    No. 12-3678

tion. The regulators also maintained the deficiencies on their
internal records, which exposes Bryn Mawr to a risk of harsher
penalties and less desirable procedural routes should the
facility be found deficient in the future. Bryn Mawr contends
that it was entitled to a hearing to challenge the deficiencies
under state and federal Medicaid regulations, or alternatively,
under the Due Process Clauses of the Fifth and Fourteenth
Amendments to the United States Constitution. The district
court disagreed and granted summary judgment to the
defendants. We affirm.
                      I. Factual Background
   Bryn Mawr is a Medicaid provider, but not a Medicare
provider. The Department of Health and Human Services
(“HHS” or “the Secretary”) has delegated administration of the
Medicare and Medicaid programs to the Centers for Medicare
and Medicaid Services (“CMS” or, for convenience, also “the
Secretary”). CMS, in turn, has contracted with the Illinois
Department of Public Health (“IDPH”) to inspect Medicaid
providers in Illinois.
    On February 11, 2010, IDPH surveyed (inspected) Bryn
Mawr’s facility in response to allegations that a resident had
been sexually assaulted. Bryn Mawr was not cited with any
deficiencies immediately following that survey, but IDPH
surveyed the facility again on March 23, 2010, and that time
cited the facility for three deficiencies related to the care and
supervision of residents and staff (which IDPH believed to be
the cause of the sexual abuse). A deficiency is a “failure to meet
a participation requirement specified in the [Social Security]
Act or” regulations. 42 C.F.R. § 488.301. Deficiencies are
No. 12-3678                                                                             3

categorized alphabetically from “A” to “L” (minor to major) by
scope (isolated, pattern, or widespread) and severity. Severity
is broken up into four different categories based on whether
there has been any actual harm, whether there is any potential
for minimal or more than minimal harm, and whether there is
“immediate jeopardy.” Immediate jeopardy is a situation
where a deficiency “has caused, or is likely to cause, serious
injury, harm, impairment, or death to a resident.” 42 C.F.R. §
488.301 (emphasis added). This chart summarizes the defi-
ciency categorization system:

                                                                Scope of Deficiency

                                                         Isolated    Pattern   Wide-
                                                                               spread

                           Immediate jeopardy to
                                                            J          K          L
                           health and safety
  Severity of Deficiency




                           Actual harm that is not im-
                                                            G          H          I
                           mediate jeopardy

                           No actual harm with poten-
                           tial for more than minimal
                           harm that is not immediate       D          E          F
                           jeopardy

                           No actual harm with poten-
                           tial for minimal harm            A          B          C


See Center for Medicare and Medicaid Services, State Operations
Manual, 7400.5.1 (Rev. 63 2010) (hereinafter, “State Operations
4                                                             No. 12-3678

Manual”).1 The regulations provide for required and optional
remedies that are more drastic the further right or up a
deficiency is on the chart (with termination from the Medicaid
program reserved for the top tier, J–L). See 42 C.F.R. §§ 488.406
(listing remedies); 488.408 (categorizing remedies). Bryn Mawr
was cited with two “G” deficiencies (“isolated” incident of
“actual harm that is not immediate jeopardy” based on
violations of the resident’s rights to freedom from sexual abuse
and to adequate supervision) and one “E” deficiency (a
“pattern” of “no actual harm with potential for more than
minimal harm that is not immediate jeopardy” based on failure
to sufficiently monitor the resident upon her admission to the
facility).2 This deficiency determination meant that the facility
was out of compliance with Medicaid program requirements,
so IDPH notified Bryn Mawr of the proposed
remedies—in-service training and a $200 a day fine—and its
opportunities to challenge the deficiency findings through

1
  Available at http://www.cms.gov/Regulations-and-Guidance/Guidance
/Manuals/Downloads/som107c07.pdf on page 93 (this link is to the current
Manual, but there are no relevant differences between the Manual in effect
at the time and the current Manual).

The dark gray deficiencies (F, H, I, J, K, or L) apply when a facility is
providing substandard quality of care and is out of compliance; the light
gray deficiencies (G, D, or E) apply when a facility is out of compliance but
not providing substandard quality of care; and the white deficiencies (A, B,
or C) apply when the facility is still in substantial compliance with Medicaid
requirements. See 42 C.F.R. § 488.301 (definitions for “substandard quality
of care” and “substantial compliance”).

2
 The deficiencies were violations of 42 C.F.R. §§ 483.13(b), 483.25(h), and
483.75.
No. 12-3678                                                          5

Informal Dispute Resolution or submit a plan of correction to
avoid the remedies (or both). Bryn Mawr chose both.
     Bryn Mawr thought that the deficiency findings were
erroneous, so it challenged them via Informal Dispute Resolu-
tion (the “informal process”). See 42 C.F.R. § 488.331 (requiring
state agencies to offer an informal process to challenge defi-
ciency findings). The informal process was just an exchange of
written information between Bryn Mawr and IDPH before an
outside party, the Michigan Peer Review Organization
(“MPRO”). No live hearing was held and therefore no cross-
examination or other credibility determinations were con-
ducted regarding the allegations of sexual assault of a resident.
IDPH simultaneously conducted an internal review and, on
May 6, 2010, found that two of the deficiencies based on the
allegations of sexual abuse were not sufficiently supported by
credible evidence as required by Illinois regulations. However,
the MPRO upheld the deficiency findings. Faced with an
internal review holding the findings unsupported under
Illinois regulations and an outside review upholding the
findings, IDPH decided to maintain the deficiency findings
under federal regulations.3 Had the process stopped here, Bryn
Mawr would have been entitled to a hearing because the
proposed remedies were still on the table. See 42 C.F.R.
§ 431.151 (requiring a hearing when a state imposes “a civil
money penalty”). But the process did not stop here.



3
 Bryn Mawr emphasizes this apparent inconsistency, but does not tell us
why this should affect the legal analysis of whether due process was
required.
6                                                      No. 12-3678

    Bryn Mawr also took advantage of the parallel process to
“correct” the “deficiencies” and submitted a “plan of correc-
tion.” At the follow-up inspection, IDPH determined that the
deficiencies had been corrected, so it notified Bryn Mawr that
it was no longer out of compliance and the proposed remedies
would not be imposed. But although they had been “cor-
rected,” the fact that there had been deficiency findings
remained in the record. Bryn Mawr could have opted not to
submit a plan of correction and force a hearing to challenge the
deficiencies, but that would have been an unnecessary risk . 42
C.F.R. § 488.408 provides that “each facility that has a defi-
ciency … must submit a plan of correction.” If a facility does
not think it has a deficiency, it may take the risk of not submit-
ting a plan. Then the regulators would proceed to impose the
remedies, which would entitle the facility to a hearing. See 42
C.F.R. § 431.151. At that hearing, the facility would have the
opportunity to persuade an Administrative Law Judge (“ALJ”)
that it was not deficient and thereby escape the deficiency
findings (and therefore the need to submit a plan of correction)
as well as any related remedies. Had all of this occurred, Bryn
Mawr might have persuaded an ALJ that the deficiencies were
unfounded and emerged a total victor. But had it failed, the
proposed remedies would have been imposed with no oppor-
tunity to correct the deficiencies. Further, this protracted
approach could exacerbate the problem because § 488.456
provides that “CMS and the State may terminate a facility’s
provider agreement if a facility … [f]ails to submit an accept-
able plan of correction within the timeframe specified by CMS
or the State.” 42 C.F.R. § 488.456(b)(1), (b)(1)(ii). Faced with this
dilemma, Bryn Mawr chose to forego the risk of losing the “no
No. 12-3678                                                    7

deficiency” argument and submitted the plan of correction.
IDPH re-surveyed the facility after Bryn Mawr submitted the
plan of correction and found that the facility had returned to
substantial compliance, but IDPH still kept a record of the
deficiencies.
    Thereafter, IDPH passed the deficiency findings on to CMS,
which made them available on its website and factored them
into the CMS 5-Star Rating System (the “Rating System”). The
Rating System is a feature on the medicare.gov website that
contains assembled data about nursing facilities’ administra-
tive information, compliance history, and anything else that
would be of interest to a prospective resident. In addition to
making the details available, the website summarizes the data
by rating facilities from one to five stars (and just like the
dining and hotel industries, a rating with more stars is better).
The system also allows prospective residents to compare
facilities. However, when IDPH’s deficiency findings were
factored into the Rating System, they were initially factored in
incorrectly. Bryn Mawr’s rating was supposed to fall from five
to four stars because of the deficiencies, but CMS mistakenly
reduced it to two stars. But that error was later corrected when
discovered during this litigation. See Nursing Home Compare,
Medicare.gov, http://www.medicare.gov/nursinghomecompa-
re/profile.html#profTab=0&ID=14E148 (last visited Mar. 6,
2014) (profile of Bryn Mawr Care). Regardless of the tardy
partial correction, Bryn Mawr was displeased that its star
rating had fallen even one star (from five to four) based on
deficiency findings that it had not had the opportunity to
challenge at a hearing. So Bryn Mawr sought hearings before
both a state and a federal ALJ, but both requests were denied.
8                                                     No. 12-3678

The federal hearing request was denied because there is only
a limited right for a Medicaid (as opposed to a Medicare)
provider to obtain a federal hearing, and Bryn Mawr didn’t
qualify. The state hearing request was dismissed because the
ALJ believed that no remedies had been imposed against Bryn
Mawr. Accordingly, on February 1, 2011, Bryn Mawr filed suit
in the district court against the Secretary of HHS and the
Director of IDPH seeking to compel a hearing. Bryn Mawr’s
theory was that the regulations entitled it to a hearing and that,
even if the regulations did not, the Due Process Clauses of the
Fifth and Fourteenth Amendments did. The district court
granted summary judgment to defendants on September 26,
2012, ruling that Bryn Mawr was not entitled to a hearing
before either a federal or state ALJ under the regulations or the
Constitution. Bryn Mawr appeals.
                           II. Discussion
    On appeal, Bryn Mawr argues that it should have been
afforded a hearing to challenge the deficiency findings made
by IDPH either because of Medicaid regulations or the
constitutional guarantee of due process. We review de novo the
district court’s grant of summary judgment and examine the
evidence in the light most favorable to Bryn Mawr to deter-
mine whether there is any “genuine dispute as to any material
fact.” Fed. R. Civ. P. 56(c); Lees v. Carthage Coll., 714 F.3d 516,
520 (7th Cir. 2013). We begin with Bryn Mawr’s regulatory
argument.
                  A. Regulatory Right to a Hearing
   On appeal, Byrn Mawr has abandoned the argument that
the regulations entitle it to a hearing before a federal ALJ, and
No. 12-3678                                                     9

instead focuses on its argument that it is entitled to a hearing
before a state ALJ. The applicable regulations provide, in
pertinent part, that:
     [If] a nursing facility … is dissatisfied with a State’s
     finding of noncompliance [deficiency] that has
     resulted in one of the following adverse actions: (i)
     Denial or termination of its provider agreement[; or]
     (ii) Imposition of a civil money penalty or other
     alternative remedy. … the State must give the
     facility a full evidentiary hearing … .
42 C.F.R. §§ 431.151; 431.153. Bryn Mawr latches onto the
phrase “other alternative remedy” and argues that the plain
meaning of those words includes the recording of the deficien-
cies in its compliance history and the public shaming of Bryn
Mawr by the publication of the deficiencies on the CMS
website and the Rating System. Bryn Mawr insists that public
shaming is a kind of “remedy” that would be “other” and
“alternative.” See, e.g., Dan M. Kahan & Eric A. Posner,
Shaming White-Collar Criminals: A Proposal for Reform of the
Federal Sentencing Guidelines, 42 J.L. & Econ. 365, 366–67 (1999).
    However, because this particular hearing requirement
comes from the “Secretary’s own regulations, [her] interpreta-
tion of it is, under our jurisprudence, controlling unless plainly
erroneous or inconsistent with the regulation.” Auer v. Robbins,
519 U.S. 452, 461 (1997) (quotations omitted). The Secretary
explains that the term “other alternative remedy” carries
special meaning from the context of the regulatory regime.
Specifically, the Secretary interprets that term to mean the
remedies listed in, or made possible by, 42 C.F.R. § 488.406.
10                                                     No. 12-3678

That section lists multiple remedies which may be used. Id. at
§ 488.406(a). As part of the state enforcement plan, state
regulators are required to establish protocols at least for the
subsection (a) remedies of “(1) Temporary management[;] (2)
Denial of payment for new admissions[;] (3) Civil money
penalties[;] (4) Transfer of residents[;] (5) Closure of the facility
and transfer of residents[; and] (6) State monitoring.” Id. at
§ 488.406(b). States may also establish any of the other reme-
dies from subsection (a) or “alternative or additional State
remedies approved by CMS.” Id. at § 488.406(a)(9) (emphasis
added). But to create its own alternatives, the state has to
“[s]pecify those remedies in the State plan; and …
[d]emonstrate to CMS’s satisfaction that those remedies are as
effective as the remedies listed in paragraph (a) of this section,
for deterring noncompliance and correcting deficiencies.” Id.
at § 488.406(c)(1)–(2).
    Accordingly, the Secretary asserts that, because maintaining
a compliance history and publishing deficiencies through the
Rating System are not part of the remedial framework of
§ 488.406, those actions are not “other alternative remedies.”
While the regulation could have explicitly cross-referenced
§ 488.406 (as its Medicare cousin does, see 42 C.F.R.
§ 498.3(b)(13)), we do not think the Secretary’s interpretation
is plainly erroneous or inconsistent with the regulation. Thus,
as none of the remedies listed in, or made possible by, §
488.406 has been imposed on Bryn Mawr, it is not entitled to a
state hearing under § 431.151.
No. 12-3678                                                        11

                 B. Constitutional Right to a Hearing
    Alternatively, Bryn Mawr argues on appeal that it is
entitled to challenge the deficiency findings in a hearing before
a federal or state ALJ—regardless of any regulatory failure to
provide such an opportunity—because of the Due Process
Clauses of the Fifth and Fourteenth Amendments, respectively.
U.S. Const. amend. V (“No person shall … be deprived of life,
liberty, or property, without due process of law … .”); amend.
XIV, § 1 (“No state shall … deprive any person of life, liberty,
or property, without due process of law … .”). Bryn Mawr’s
claim that it is entitled to a hearing is a procedural due process
claim—an unfortunate but necessary redundancy. See Gosnell
v. City of Troy, Ill., 59 F.3d 654, 657 (7th Cir. 1995). A procedural
due process claim requires a two-fold analysis. “First, we must
determine whether [Bryn Mawr] was deprived of a protected
interest [and, if so]; second, we must determine what process
is due.” Pugel v. Bd. of Trs. of Univ. of Ill., 378 F.3d 659, 662 (7th
Cir. 2004). The district court ruled that Bryn Mawr failed to
establish a protected interest, and that has been the parties’
focus on appeal.
     [T]he range of interests protected by procedural due
     process is not infinite … and … with respect to
     property interests they are, of course, … not created
     by the Constitution. Rather, they are created and
     their dimensions are defined by existing rules or
     understandings that stem from an independent
     source such as state law rules or understandings
     that secure certain benefits and that support claims
     of entitlement to those benefits.
12                                                            No. 12-3678

Paul v. Davis, 424 U.S. 693, 709 (1976) (citing Bd. of Regents of
State Colls. v. Roth, 408 U.S. 564, 570, 577 (1972)). But “defama-
tory publications,” like the publishing of deficiencies, “how-
ever seriously they may … harm[] [Bryn Mawr’s] reputation,
d[o] not deprive [it] of any ‘liberty’ or ‘property’ interests
protected by the Due Process Clause.” Id. at 712. Stigma is not
enough. Id. at 709. Rather, “[t]o avoid constitutionalizing state
defamation law, defamation by a government actor does not
implicate the Due Process Clause unless ‘a right or status
previously recognized by state law was distinctly altered or
extinguished’ as a result.” Abcarian v. McDonald, 617 F.3d 931,
941 (7th Cir. 2010) (citing Paul v. Davis, 424 U.S. at 711).
Accordingly, we apply a “stigma plus” analysis where “an
injury to reputation along with a change in legal status consti-
tutes the deprivation of a property right.” Somerset House, Inc.
v. Turnock, 900 F.2d 1012, 1015 (7th Cir. 1990).4
    Bryn Mawr acknowledges this standard and asserts
that—in addition to the stigmatization of the deficiency
findings—its rights were altered in three distinct ways: (1) it is
now exposed to the potential of enhanced penalties based on


4
 We do not decide whether defamation “in a manner that makes it virtually
impossible for [Bryn Mawr] to” operate “in [its] chosen field” is sufficient
to amount to a deprivation of a constitutionally protected right because
Bryn Mawr has neither argued nor alleged that the deficiency publication
had that effect. Abcarian v. McDonald, 617 F.3d 931, 941 (7th Cir. 2010) (“To
plead a constitutionally relevant tangible loss of his employment opportuni-
ties, Abcarian must allege that his ‘good name, reputation, honor or
integrity [was] called into question in a manner that makes it virtually
impossible for [him] to find new employment in his chosen field.’”
(citations omitted)).
No. 12-3678                                                    13

past noncompliance; (2) it no longer has the opportunity to
correct “actual harm” deficiencies before remedies are im-
posed; and (3) that “past non-compliance” will be factored into
the Rating System by “points associated with a ‘G’ level
deficiency” if Bryn Mawr is found deficient again.
    Bryn Mawr’s third contention is quickly dispatched. Bryn
Mawr cites CMS’s Design for Nursing Home Compare Five-Star
Quality Raing System: Technical Users’ Guide (July 2012)
(“Technical User’s Guide”)5 for the fact that past non-compli-
ance is factored into its rating with the addition of points
associated with a “G” level deficiency if the past non-compli-
ance is followed by a “J,” “K,” or “L” deficiency. See Technical
User’s Guide at 4 (describing how facts of compliance history
are assigned point values to factor them into the Rating
System). But this guide has nothing to do with determining
deficiencies or penalties, it merely explains how deficiencies
are factored into the Rating System. See Technical User’s Guide
at 2 (“This document provides a comprehensive description of
the design for the Nursing Home Compare Five-Star Rating
System.”). Even if there could be a similar future defamation
that is more defamatory because of this prior defamation, that
is only a risk of greater stigma. That is not enough. The prior
defamation does not amount to a “stigma plus” unless it
causes a change in legal status. Therefore, this effect of Bryn
Mawr’s having a deficiency on its record is not enough to
trigger a right to due process. The remaining two contentions
require more consideration.


5
 Available at http://www.cms.gov/Medicare/Provider-Enrollment-and-
Certification/CertificationandComplianc/Downloads/usersguide.pdf.
14                                                               No. 12-3678

                  1. Loss of the Opportunity to Correct
    When Bryn Mawr was cited with the deficiencies at issue in
this case, it was given the opportunity to correct them before
any remedies were imposed. The regulations gave IDPH the
discretion to afford Bryn Mawr this opportunity. See State
Operations Manual § 7304.1 (Rev. 63 2010). However, after
Bryn Mawr was cited with deficiencies involving actual harm
(“G” level deficiencies”), had it been found deficient on the
next survey, there would have been no opportunity to correct
the deficiencies before remedies were imposed (though it
would be afforded a hearing).6 See State Operations Manual
§ 7304.2.1 (Rev. 63 2010) (mandating that facilities with “G”
deficiencies on the last survey not being given a pre-remedy
opportunity to correct); see also 42 C.F.R. §§ 431.151; 431.153
(providing a hearing when remedies are imposed). Bryn Mawr


6
 The follow-up survey where Bryn Mawr was found in compliance did not
alleviate this risk because regulators look to the “previous standard survey.”
State Operations Manual § 7304.2.1 (Rev. 63 2010). Now, while this case has
been pending, Bryn Mawr has performed well on subsequent standard
surveys, so it is no longer at risk of this predicament. Regardless, we must
decide whether this risk was a change in legal status that required a hearing
because a finding of a “G” level deficiency could occur again, but the one-
year reset after standard surveys could result in the issue always evading
review. See, e.g., United States v. Peters, 754 F.2d 753, 757–58 (7th Cir. 1985)
(“A case is not moot, however, where even though the factual controversy
is over, the case involves an order ‘capable of repetition, yet evading
review.’ Two conditions must be met to avoid mootness: ‘the challenged
action was in its duration too short to be fully litigated prior to its cessation
or expiration, and there was a reasonable expectation that the same
complaining party would be subjected to the same action again.’” (citations
omitted)).
No. 12-3678                                                       15

contends that this was an alteration of its right. But what right
was altered? Bryn Mawr never had a right to an opportunity to
correct; such an opportunity was always a matter of IDPH’s
discretion. “A property interest of constitutional magnitude
exists only when the state’s discretion is ‘clearly limited’ such
that the plaintiff cannot be denied the interest ‘unless specific
conditions are met.’” Brown v. City of Mich. City, Ind., 462 F.3d
720, 729 (7th Cir. 2006) (citing Colburn v. Trs. of Ind. Univ., 973
F.2d 581, 589 (7th Cir. 1992)). IDPH’s discretion was subject to
no such limitations. See State Operations Manual § 7304.1 (Rev.
63 2010). Bryn Mawr “cannot point to a state law, or another
independent source, that guarantees [it]” an opportunity to
correct. Brown, 462 F.3d at 729. So, “[b]ecause the right to” an
opportunity to correct deficiencies “is not ‘securely’ [Bryn
Mawr’s], it cannot be claimed as a valid property interest.” Id.
If Bryn Mawr had held a secure right to an opportunity to
correct that was lost—or even altered, e.g., narrowed in
scope—that might have been enough. See Somerset House, Inc.
v. Turnock, 900 F.2d 1012, 1015 (7th Cir. 1990) (“[T]he combina-
tion of the Conditional License with the loss of eligibility for
QUIP funding was sufficient because the loss of eligibility for
funding was a change in legal status.” (emphasis added)); Cameo
Convalescent Ctr., Inc. v. Senn, 738 F.2d 836, 843 (7th Cir. 1984)
(“Cameo’s placement upon the SOR list, like the individual
placed on the list of known drunks in Davis, deprived Cameo
of a right under state law: the right to receive referrals from state
social service departments and agencies.” (emphasis added)). But
because the opportunity to correct is not a right that is securely
Bryn Mawr’s, deprivation or alteration of the opportunity does
not give rise to a right to due process.
16                                                    No. 12-3678

                2. Exposure to Enhanced Penalties
    When IDPH finds deficiencies at a nursing facility and sets
about selecting which remedy (or remedies) to impose, it is
required to look at a number of factors to determine the
seriousness of the deficiency (the “initial assessment”). The
mandatory factors pertain to the scope and severity of the
particular deficiency found—those factors are summarized in
the table infra at 3. However, IDPH and CMS are not limited to
considering the mandatory factors.
     Following the initial assessment, CMS and the State
     may consider other factors, which may include, but
     are not limited to the following: (1) The relationship
     of the one deficiency to other deficiencies resulting
     in noncompliance[ and] (2) The facility’s prior
     history of noncompliance in general and specifically
     with reference to the cited deficiencies.
42 C.F.R. § 488.404(c). Bryn Mawr argues that, the moment it
had the deficiencies at issue in this case on its record, its legal
status was altered because there was the potential that future
deficiencies would be punished with a harsher remedy based
on the past deficiencies. The Secretary responds that Bryn
Mawr’s argument is too contingent and too speculative to
amount to an alteration of a right—if Bryn Mawr is found
deficient in the future IDPH may select a harsher remedy based
on past deficiencies. In return, Bryn Mawr points to Humphries
v. Cnty. of L.A., 554 F.3d 1170, 1187–88 (9th Cir. 2009) rev'd and
remanded on other grounds sub nom. L.A. Cnty., Cal. v. Humphries,
131 S. Ct. 447 (2010).
No. 12-3678                                                                  17

    In Humphries, the Ninth Circuit held that parents had been
deprived of a liberty interest by being erroneously listed on a
child abuse registry, when California “law effectively
require[d] agencies to check [that] stigmatizing list and
investigate any adverse information prior to conferring a legal
right or benefit” (such as licensure, child custody, or employ-
ment).7 Id. at 1188. The Ninth Circuit reasoned that being on
the list was “an added burden on entities wishing to confer
legal rights or benefits, mak[ing] the chances of receiving a
benefit conferred under California law less likely, and practi-
cally guarantee[ing] that conferral of that benefit will be
delayed.” Id. at 1192. Therefore, the legally imposed burden on
those entities was a “tangible burden” on the parents’ ability
to obtain any of the rights meted out by those entities which
was tantamount to an alteration of the parents’ rights. Id. at
1191–92.8

7
 The Ninth Circuit used the phrase “effectively required” because only some
agencies were actually required to check the list, but the court reasoned that
the fact an entity “may” check the list “in conjunction with a rule or custom
of ‘must’ can equally deprive a citizen of a liberty interest giving rise to a
procedural due process claim.” Id. at 1191 (emphasis added).

8
  The Second Circuit has reached a similar result where the legal impedi-
ment was even more onerous. See Valmonte v. Bane, 18 F.3d 992, 1001 (2d
Cir. 1994) (“Valmonte has alleged that because of her inclusion on the
Central Register, and because all child care providers must consult that list,
she will not be able to get a job in the child-care field. In other words, by
operation of law, her potential employers will be informed specifically
about her inclusion on the Central Register and will therefore choose not to
hire her. Moreover, if they do wish to hire her, those employers are required by
law to explain the reasons why in writing.” (Emphasis added)). But see Smith v.
                                                                (continued...)
18                                                             No. 12-3678

    IDPH and CMS are required to look at Bryn Mawr’s
compliance history in the event of future noncompliance to see
whether the agency may allow Bryn Mawr an opportunity to
correct. See, e.g., State Operations Manual § 7304.2.1 (Rev. 63
2010) (necessitating a check of compliance history). But that
check does not alter Bryn Mawr’s rights, see infra 12–13, nor
does it burden IDPH or CMS’s determinations of whether to
confer (or rather maintain) Bryn Mawr’s “rights or benefits”
(participation in the Medicaid program without any remedies).
IDPH or CMS will impose a remedy if there is a new deficiency
and may look to Bryn Mawr’s compliance history as a factor in
selecting a remedy. But the lack of a requirement that IDPH
consider the prior deficiencies in selecting a remedy is only one
thing that distinguishes this case from Humphries. The agencies
that found Bryn Mawr deficient are the same agencies that
would later determine whether to consider those deficiencies
in crafting a remedial plan. And if they decide to base the
remedial plan on that past deficiency as well, Bryn Mawr is
entitled to challenge the past deficiency at the same hearing
that it challenges the new deficiency. See 42 C.F.R.
§ 488.408(g)(1); Fort Tyron Nursing Home v. HCFA, DAB CR425
(H.H.S. 1996).9 Accordingly, any burden the deficiency finding
has on Bryn Mawr’s rights is entirely speculative up until the


(...continued)
Siegelman, 322 F.3d 1290, 1297 (11th Cir. 2003) (rejecting the claim that being
placed on a child abuse index was a deprivation of a liberty interest when
the system contained no similar legal strictures).

9
 Available at http://www.hhs.gov/dab/decisions/civildecisions/1996/cr425.
pdf.
No. 12-3678                                                     19

time that Bryn Mawr would be entitled to a hearing to chal-
lenge it. This is a far cry from the state law in Humphries that
required potential employers, licensing agencies, and family
courts to look at a list and investigate the accusations of child
abuse before bestowing any number of rights. The parents
were constantly at risk of being denied rights because of the
burden the law put on the agencies. And, after each denial,
they are left at risk of rejection as they proceed, with the stigma
still attached, to the next agency that must follow the law. The
legal burdens on these agencies was a tangible burden on the
parents. Bryn Mawr is in no such dilemma. Should its specula-
tive harm of enhanced penalties manifest itself, it would
immediately be afforded the opportunity to clear its
name—once and for all.
    The Ninth Circuit concluded that legally burdening
numerous agencies and entities by “effectively” requiring them
to check a defamatory list is a tangible burden on an individ-
ual’s obtaining rights that is tantamount to altering that
individual’s rights. We need not decide whether we agree with
the Ninth Circuit. Bryn Mawr lost an opportunity to correct,
and that is not a right. What is a right is Bryn Mawr’s ability to
continue operating as a Medicaid facility without remedies
imposed. That right is not burdened by the deficiency finding
until (or unless) the finding is used to justify a remedy, at which
time a hearing is afforded to challenge the deficiency finding.
    One final possibility merits consideration. IDPH and CMS
could decide to select a more serious remedy for a new
deficiency because of the past deficiencies, see 42 C.F.R.
§ 488.404 (permitting consideration of prior noncompliance in
selecting a remedy), but without explicitly stating that the
20                                                          No. 12-3678

remedy is being imposed for the past deficiencies. This does
not appear to be the practice, but neither CMS nor IDPH have
pointed us to a regulation that requires them to cite a past
deficiency as a basis for a remedy. If this were to occur, it
would be impossible for Bryn Mawr to challenge the past
deficiency collaterally. Compare 42 C.F.R. § 488.408(g)(1)
(permitting an “appeal [of] a certification of noncompliance
leading to an enforcement remedy”) with id. at § 488.408(g)(2)
(forbidding appeal of the “choice of remedy, including the
factors considered by CMS or the State in selecting the remedy,
specified in § 488.404.”) (emphasis added); see also 42 C.F.R.
§ 488.404(c)(2) (listing “[t]he facility’s prior history of noncom-
pliance in general and specifically with reference to the cited
deficiencies” among “factors which may be considered in
choosing a remedy”) (emphasis added). Accordingly, a remedy
could be enhanced because of (but not imposed based on) the
past deficiencies and the regulations would quite explicitly
forbid challenging that deficiency because it was merely a
“factor in selecting the remedy” instead of a “certification of
noncompliance leading to an enforcement remedy.”10
    At first glance, this appears problematic. For example, if
there had been a subsequent finding of noncompliance, IDPH
would have imposed remedies. See State Operations Manual
§ 7304.2.1 (Rev. 63 2010). These remedies could be based on the
new deficiency alone. However, instead of a $200 per day civil


10
 We cannot be sure the Secretary would interpret her regulations this way,
and we do not purport to definitively interpret them here because we have
not been called on to interpret them since this situation has not occurred.
We are merely weighing a harm that Bryn Mawr speculates could occur.
No. 12-3678                                                                  21

money penalty, it could have imposed a $300 per day civil
money penalty because, in its internal deliberations, it decided
to consider Bryn Mawr’s “prior history of noncompliance.” 42
C.F.R. § 488.404(c)(2). This internal deliberation, and the
deficiencies it considered, would be unchallengeable. 42 C.F.R.
§ 488.408(g)(2).
    However, any due process argument based on this fails for
the same reason that Bryn Mawr’s argument on the loss of the
opportunity to correct fails. It always lies within IDPH or
CMS’s discretion to pick a remedy within a category—that is,
it could impose a $300 civil money penalty regardless of
whether it considered the prior deficiency. The fact that state
and federal regulators may consider a defamatory statement
(in fact, their defamatory statement) in the later exercise of
their discretion is not an alteration of Bryn Mawr’s legal rights.
Brown, 462 F.3d at 72911. If, as a result of the prior defamatory
statement, new remedies not previously available to IDPH or
CMS became available, that might be an alteration of Bryn
Mawr’s rights, but there is no allegation that such is the case
here.
                                III. Conclusion
   Bryn Mawr has been stigmatized, and as a facility com-
pletely filled with Medicaid patients, it is at the mercy of
regulators entrusted by statute with enormous discretion.

11
   See also Siegert v. Gilley, 500 U.S. 226, 234 (1991) (“But so long as such
damage flows from injury caused by the defendant to a plaintiff’s reputa-
tion, it may be recoverable under state tort law but it is not recoverable in
a Bivens action.”) (discussing the holding in Paul v. Davis, 424 U.S. at 708–09,
that one does not have a liberty interest in his reputation).
22                                                No. 12-3678

However, Bryn Mawr has failed to show that any of its rights
have been altered. At worst, regulators may keep a stigmatiz-
ing record of noncompliance to guide the exercise of their
discretion, but without the alteration or extinguishment of a
right, Bryn Mawr has not been deprived of a “life, liberty, or
property” right. U.S. Const. amends. V and XIV, § 1. With no
deprivation of a protected right, Bryn Mawr was not entitled
to an opportunity to challenge the deficiency findings in a
hearing. Id. For the foregoing reasons, the judgment of the
district court is AFFIRMED.
