In Blum v. Yaretsky, 457 U. S. 991 (1982), the Court held that private nursing home patients receiving Medicaid had failed to show that the nursing homes decisions regarding discharges and transfers rose to the level of state action for purposes of 14th amendment due process protection. The first prong of the Blum test requires a showing of "sufficiently close nexus" between the State and the challenged action of the regulated entity. Blum, 457 U.S. at 1004. The second prong of Blum requires a showing that the State has exercised such coercive power or provided such significant encouragement that the decision by the private entity must "in law be deemed to be that of the State." Id. Mere approval of or acquiescence in the private party's actions is sufficient to meet this prong. Id. The third part of the test provides that the "required nexus may be present if the private entity has exercised powers that are 'traditionally the exclusive prerogative of the State.'" Id. In Blum the Court focused on the standards underlying the decisions and found no state action when the determination turned on judgments "made by private parties according to professional standards that are not established by the State." Blum, 457 U.S. at 1008.