Appendix — National Ass'n of Home Health Agencies v. Schweiker
Supreme Court brief1983
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APPENDIX A
United States Court of Appeals
For THE DISTRICT OF COLUMBIA CIRCUIT
No, 82-1293
NATIONAL ASSOCIATION OF HOME
HEALTH AGENCIES, et al.
Vv.
RICHARD S, SCHWEIKER, et al., Appellants
Appeal From The United States District Court
for the District of Columbia
(D.C, Civil Action No. 81-03160)
Argued 27 May 1982
Decided 14 September 1982
Margaret E. Clark, Attorney, Department of Justice with
whom Stanley S. Harris, United States Attorney and
Anthony J. Steinmeyer, Attorney, Department of Justice
were on the brief, for appellants.
James C. Pyles for appellees.
Before: WILKEY, Circuit Judge, and Ross and FAIRCHILD,"
Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKEY.
“Senior Judge, U.S. Court of Appeals for the Seventh Circuit,
sitting by designation pursuant to 28 U.S.C. § 294(d) (Supp. IV
1980).
2a
WILKEY, Circuit Judge: Appellants, the Secretary of Health
and Human Services and the Administrator of the Health Care
Financing Administration (hereinafter referred to collectively
as the Secretary), appeal from a district court decision in-
validating a regulation requiring Home Health Agencies to
seek Medicare reimbursement determinations and payments
from government-designated regional intermediaries. The
Secretary maintains that the district court did not have
jurisdiction to decide the issues involved. He also challenges
the lower court’s holdings that the Secretary lacked the
statutory authority to promulgate the regulation and that he
failed to comply with the notice and comment requirements of
the Administrative Procedure Act (APA).'
We hold that the district court properly exercised its
jurisdiction and that it correctly concluded that the Secretary
was required to comply with the APA’s notice and comment
provisions. However, we reverse its holding that the Secreta-
ry lacked the authority to promulgate the regulation in ques-
tion.
I. BACKGROUND
A. Statutory Scheme
The Medicare Act,’ enacted in 1965, created two distinct,
but interrelated, types of health insurance coverage for the
aged and disabled. Part B of the Act covers the cost of physi-
cian and non-hospital services.’ Part A provides coverage for
inpatient hospital services, post-hospital extended care serv-
ices and home health services.‘ Home health agencies (HHAs)
provide Part A services to a patient in his home, as a lower cost
‘5 U.S.C. § 553 (1976).
*42 U.S.C. §§ 1895-1895tt (1976 & Supp. IV 1980).
‘7d. §§ 1395j-1395w (1976 & Supp. IV 1980).
‘Id. §§ 1395¢-1395i (1976 & Supp. 1980).
3a
alternative to instititutional care.’ The present litigation in-
voles the mechanism for making reimbursement determina-
tions and payments to HHAs under Part A of the Act.
Under the Act qualified providers of Part A health services
are entitled to be reimbursed for the reasonable cost of provid-
ing services to Medicare beneficiaries.’ At the inception of the
Medicare program in 1965, HHAs, like other qualified provid-
ers, had the option of nominating an intermediary to determine
the proper amount of reimbursement and make those
payments.’ When an HHA chose to use an intermediary, the
Secretary would enter into a cost-reimbursement contract
with the nominated intermediary.* Alternatively, if the HHA
chose not to use an intermediary, it submitted its claims direct-
ly to the Secretary.® Under the Act, the Secretary was empow-
ered to perform any of these functions directly or by contract."°
Payment of claims submitted directly to the Secretary was
made by the Office of Direct Reimbursement (ODR) of the
Health Care Financing Administration (HCFA).
In 1977 section 1395h, the provision giving providers the
right to nominate intermediaries, was amended by the addition
of provisions authorizing the Secretary to assign or reassign
providers to certain intermediaries if he determined, after
applying specified criteria, that the assignment or reassign-
ment would result in the more effective and efficient adminis-
tration of the Medicare program." In 1980 Congress, respond-
57d. §§ 1395x(m) (1976 & Supp. IV 1980).
® Id. §§ 1895f(a) & (b), (1895x(m), (0) & (u) (1976 & Supp. TV 1980).
"Id. § 1895h(a) (Supp. IV 1980).
‘Td.
*Jd. § 1395g (1976 & Supp. IV 1980).
Jd. § 1895kk(a) (1976).
'! Medicare-Medicaid Anti-Fraud and Abuse Amendments,
Pub.L.No. 95-142, 91 Stat. 1175, 1198-99 (1977) (codified at 42
U.S.C. §§ 1395h(e)(1), (2), (3) & 1395h(f) (Supp. IV 1980).
da
ing to concerns over the “wide variation in administrative and
reimbursement practices among intermediaries with respect
to home health providers,” further amended section 1395h.
The 1980 amendment required the Secretary to designate re-
gional intermediaries for freestanding"® HHAs electing to use
an intermediary." Shortly after the 1980 amendment, the Sec-
retary promulgated the regulation that is the cause of the
present controversy.
B. The Contested Regulation
On 8 December 1981 the Secretary, without following the
notice and comment requirements of the APA, issued an ad-
ministrative instruction directing freestanding HHAs to begin
using forty-nine government-designated, state-wide interme-
diaries for all Medicare reimbursement determinations and
payments."* Under the proposed plan, 864 HHAs were reas-
signed to new intermediaries."* Approximately fifty-four per-
"H.R. Rep. No. 1167, 96th Cong., 2d Sess. 368, reprinted in 1980
U.S. Code Cong. & Ad. News 5526, 5731-32.
'S HHAs may either be affiliated with another provider (such as
hospital or rehabilitation center), in which case they are referred to
as “provider-based”, or they may be “freestanding,” in which case
they operate without such an affiliation.
“Omnibus Budget Reconciliation Act of 1980, Pub. L. No. 96-499,
§ 930(0), 94 Stat. 2599, 2632 (1980) (codified at 42 U.S.C.
§ 1395h(e)(4) (Supp. IV 1980).
‘ The instruction was included in a letter sent directly to all inter-
mediaries, with directions to furnish copies to the HHAs they
served,
©The other approximately 2,000 HHAs were to deal with their
current intermediaries, since those intermediaries had been desig-
nated as regional intermediaries.
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cent of these 864 were providers who had previously been
dealing directly with the Secretary. At the time the instruction
issued the Secretary planned to phase-in the proposed
reassignments over a period beginning 1 January 1982 and
ending 1 October 1982, with transfers becoming effective at
the start of the individual HHA’s fiscal year. Subsequently,
however, the Secretary accelerated the proposed implementa-
tion, by requiring that all transfers be effective by 15 March
1982. Soon after the December 1981 instruction issued, the
present litigation ensued.
C. The Present Litigation
On 24 December 1981 Appellees, two national associations of
HHAs, a corporation which owns and operates forty-eight
HHAs, and thirty-seven individual HHAs, filed this action in
the district court. Appellees sought to enjoin the Secretary
from implementing the reassignment outlined in the December
1981 instruction on the grounds that the instruction violated
the Medicare Act, the APA, and the Due Process Clause of the
Fifth Amendment. On cross-motions for summary judgment,
the district court ruled in Appellees’ favor on most of the issues
involved.
The court rejected the Secretary's argument that jurisdic-
tion over all but the Appellees’ APA claim was precluded by 42
U.S.C. § 405(h), concluding that section 405(h) did not pre-
clude federal question jurisdiction over statutory claims for
which no alternative form of judicial review was available.
The court also held in Appellees’ favor on the merits, con-
cluding that under the Medicare Act, HHAs which had not
previously nominated intermediaries had the right to have
Medicare reimbursement determinations and payments made
directly by the Secretary. The court further held that the
December 1981 instruction did not apply to those HHAs which
had elected to deal with an intermediary because it was a rule
subject to the notice and comment requirements of the APA,
requirements the Secretary failed to follow. Accordingly, the
6a
court enjoined the Secretary from requiring freestanding
HHAs to deal with regional intermediaries if they had chosen
not to, and ordered that any effort to reassign freestanding
HHAs that had elected to use intermediaries be preceeded by
the agency’s compliance with the notice and comment provi-
sions of the APA." This appeal followed.
II. JURISDICTION
Appellees maintain that the district court had jurisdiction to
hear all their claims under 28 U.S.C. § 1331, the general grant
of federal question jurisdiction. The Secretary counters by
arguing that 42 U.S.C. § 405(h), incorporated by reference
into the Medicare Act," precludes the district court from ex-
ercising section 1331 jurisdiction. Alternatively, the Secretary
for the first time argues that if jurisdiction is not precluded by
section 405(h), it has been impliedly precluded by Congress’
failure expressly to provide for judicial review of claims like
the present ones. Because we agree with the district court’s
interpretation of section 405(h), we hold that jurisdiction over
the present action is not barred by this much-litigated preclu-
sion section." We also hold that Congress did not impliedly
The district court dismissed Appellees’ Due Process claim be-
cause it was an attack on the Secretary's future determination of
“reasonable costs” and not on the administrative instruction being
challenged and because it was based on the “speculative” possibility
that Appellees would not be totally compensated for the costs attri-
butable to the transition. National Association of Home Health
Agencies v. Schweiker, No. 81-3160, slip op. at 8. (D.D.C. 10 March
1982). The parties have not appealed that ruling.
42 U.S.C. § 1395ii (1976).
' This court has decided two cases involving section 405(h). Huma-
na of South Carolina, Inc. v. Califano, 590 F.2d 1070 (D.C. Cir.
1978); Association of American Medical Colleges v. Califano, 569
F.2d 101 (D.C. Cir. 1977). The section has also spawned numerous
litigation in other circuits. United States v. Sanet, 666 F.2d 1370
(11th Cir. 1982); Hopewell Nursing Home v. Schweiker, 666 F.2d 34
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preclude jurisdiction over claims like the present ones by fail-
ing expressly to provide for their review.
A. Jurisdiction Over the Procedural Claims
Although the Secretary did not object to the exercise of
jurisdiction over Appellees’ APA claim at the district court
level, he has apparently changed his position on appeal, con-
tending that the district court was mistaken in concluding that
it had jurisdiction over “any of [Appellees’) claims.”” How-
ever, we can easily dispose of the jurisdictional issue with
respect to the APA claim by relying on a prior decision of this
court.
Section 405(h) of the Social Security Act provides:
The findings and decisions of the Secretary after a hear-
ing shall be binding upon all individuals who are parties to
such hearing. No cng of fact or decision of the Secreta-
ry shall be reviewed by any person, tribunal, or gov-
ernmental agency except as herein provided. No action
against the United States, the Secretary, or an officer or
ore thereof shall be brought under sections 1331 or
1346 of title 28 to recover any claim arising under this
subchapter.”
(4th Cir. 1981); Daniel Freeman Memorial Hospital v. Schweiker,
656 F.2d 473 (9th Cir, 1981); Chelsea Community Hospital, SNF v.
Schweiker, 630 F.2d 1131 (6th Cir. 1980); Kechijian v. Califano, 621
F.2d 1 (1st Cir. 1980); Bussey v. Harris, 611 F.2d 1001 (5th Cir.
1980); Trinity Memorial Hospital of Cudahy, Inc. v. Associated
Hospital Service, Inc., 570 F.2d 660 (7th Cir. 1977); South Windsor
Convalescent Home, Inc. v. Mathews, 541 F.2d 910 (2d Cir. 1976); St.
Louis University v. Blue Cross Hospital Service, 537 F.2d 283 (8th
Cir.), cert. denied sub nom. Faith Hospital Association v. Blue
Cross Hospital Service, Inc., 429 U.S. 977 (1976). As noted later, the
courts of appeals have been less than consistent in their interpreta-
tion of the scope of section 405(h). See text at notes 47-49 infra.
*” Appellants’ Brief at 13 (emphasis added).
#1 42 U.S.C. § 405(h) (1976).
8a
This section was incorporated into the Medicare Act “to the
same extent as [it is] applicable.”” The Secretary contends that
section 405(h) precludes the district court from exercising
jurisdiction over the APA claim raised by Appellees. How-
ever, the law in this circuit is to the contrary.
In Humana of South Carolina, Inc. v. Califano,” this court
held that section 405(h) does not bar a claim brought under the
APA. The court noted that “in terms [section 405(h)] bars only
actions brought to ‘recover on any claim’ arising under the
Medicare Act.” Thus, the court concluded, when a suit is
brought “simply to vindicate an interest in procedural regular-
ity, Section [405(h)] is not summoned into play.” Finding that
holding eminently logical, and discovering that at least one
other court of appeals has followed it,” we see no reason to
override it.
The Secretary argues that since Humana was decided, Con-
gress has amended the Medicare Act to require that all chal-
lenges to reimbursement regulations, whether substantive or
procedural, be brought under 42 U.S.C. § 139500 rather than
under 28 U.S.C. § 1331, and that accordingly, section 405(h)
now precludes federal question jurisdiction over such claims.
However, as we explain later,” the 1980 amendment referred
to did not expand the scope of issues reviewable under section
139500, it merely provided expedited review for certain issues
arising in reimbursement disputes that are otherwise review-
% Id. § 1395ii (1976).
% 590 F.2d 1070 (D.C. Cir. 1978).
* Id. at 1080 (footnote omitted).
% Id. (footnote omitted).
% Daniel Freeman Memorial Hospital v. Schweiker, 656 F.2d 473,
476 (9th Cir. 1981).
27 See text at notes 39-40, infra.
9a
able under the statute. Accordingly, we hold that section
405(h) does not preclude claims challenging the Secretary’s
compliance with the APA.
B. Jurisdiction Over the Substantive Claim
Jurisdiction over Appellees’ challenge to the Secretary’s
substantive authority to issue the regulation in question is not
as easily decided. The Secretary argues that jurisdiction over
this claim is precluded by section 405(h). Alternatively, he
maintains that Congress has impliedly precluded all judicial
review of such claims by expressly providing for judicial re-
view of some Medicare Act claims without expressly authoriz-
ing judicial review of claims such as the present one. However,
we find both these arguments unpersuasive and hold that the
district court had jurisdiction over Appellees’ substantive
claim.
1. Preclusion of Jurisdiction Under Section 405(h)
The Secretary’s first argument is based on the premise that
section 405(h) precludes federal question jurisdiction over
claims for which the Medicare Act provides alternative routes
of review. The Secretary then maintains that Appellees could
have brought the present action under the provisions of 42
U.S.C. § 139500 and concludes that jurisdiction under section
1331 is precluded.” Although we accept the Secretary’s first
% If jurisdiction did exist under section 139500, requiring Appel-
lees to utilize that section would not merely change the basis under
which the district court exercised its jurisdiction. It would require
Appellees to refrain from attacking the disputed regulation until they
filed a cost report with their intermediaries on or before 31 March
1983. Appellees would then be required to file a claim with the
Provider Reimbursement Review Board, which would decide the
issue. Following a final decision by the Review Board, or a reversal,
affirmance, or modification thereof by the Secretary, Appellees could
finally press their claim in federal court. Thus, the Secretary’s argu-
ment is of more than academic interest.
10a
premise, we are unable to agree with his second. Accordingly,
we must reject his conclusion.
a. Theavailability of judicial review under section 139500.
Section 139500 was enacted in 1972 to provide for review of an
intermediary’s decision “as to the amount of total program
reimbursement due to the provider.”” Under section 139500
initial review of the intermediary’s decision is made by the
Provider Reimbursement Review Board (PRRB).” A provid-
er dissatisfied with the PRRB’s decision then has the right to
obtain judicial review of that decision, or of any reversal,
affirmance, or modification thereof by the Secretary, by filing
a civil action in federal district court.*' We conclude, however,
that this route to judicial review is unavailable to Appellees in
the present case.
In Humana this court noted that ‘[clonsideration by the
Provider Reimbursement Review Board . . . is [confined] to
disputes over the amount properly reimbursable.”” Appellees’
substantive claim does not involve a dispute over the amount
payable under the Act, nor does it involve Appellees’ eligibility
for reimbursement. Indeed, Appellees seek no money at all.
They merely challenge the method of reimbursement, a con-
cern that is not cognizable under section 139500.
The Secretary maintains that Appellees’ claims are similar
to those which we held were precluded by section 405(h) in
Humana and in American Association of Medical Colleges v.
29 42 U.S.C. § 139500(a)(1)(A) (1976). Section 139500 review is also
available when the intermediary fails to make a final decision in a
timely manner, id. § 139500(a)(1)(B) & (C), a situation clearly not
involved here.
% Td. § 189500(a) (1976).
3 Td. § 139500(f)(1) (Supp. I) 1980).
® Humana, 590 F.2d at 1081 (footnote omitted).
lla
Califano (AAMC).* However, the claims we found precluded
in those cases were fundamentally different from that pressed
by Appellees in the present litigation. In Humana the plaintiff
challenged regulations limiting the amount of reimbursement,
a challenge “unmistakenly directed at upsetting on the merits
the Secretary’s determination on an element of cost-
reimbursement.”™ We held that such a substantive challenge
was precluded by section 405(h) because “Humana’s fun-
damental grievance ... centers on the amount of cost-
reimbursement ... a subject amenable to Review Board
adjudication.”” In AAMC a group of Medicare providers chal-
lenged a regulation fixing “limits on hospital in-patient general
routine service costs.”” We held that the district court did not
have federal question jurisdiction because section 405(h) pre-
cluded jurisdiction over “swits seeking eventual realization of
provider-cost reimbursement under the Medicare Act.”
Thus, in both Humana and AAMC the regulations attacked
imposed limits on the amount of reimbursement. The issues
raised in those cases were directly related to a claim for
reimbursement. Appellees’ claim, on the other hand, does not
directly concern the amount of reimbursement they will re-
ceive. As noted above, it concerns the mode of reimbursement.
The Secretary further argues that the only reason Appellees
are challenging the instruction is that they fear they will incur
compliance costs that will not be fully reimbursed, and that
therefore, the substantive claim is one seeking eventual
realization of provider-cost reimbursement. However, regard-
less of the Appellee’s motivation for bringing this suit, reim-
bursement is not its ultimate goal. Appellees seek to enjoin the
569 F.2d 101 (D.C. Cir. 1977).
4 Humana, 590 F.2d at 1079 (emphasis added).
% Td. (emphasis added).
% AAMC, 569 F.2d at 104.
7 Id. at 107 (emphasis added).
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Secretary from changing the method of processing payment
claims. Granting the requested relief will not enable Appellees
to receive larger reimbursements. As the district court recog-
nized, Appellees “do not seek any type of eventual monetary
recovery on a reimbursement claim by this action.”™
Finally, the Secretary argues that if claims such as the
Appellees’ were not previously encompassed by the section
139500 review provisions, they were brought under that sec-
tion by a 1980 amendment to the Medicare Act. The 1980
amendment allows a provider “to obtain judicial review of any
action of the fiscal intermediary which involves a question of
law or regulations relevant to the matters in controversy
whenever the [PRRB] determines . . . that it is without au-
thority to decide the question.”” The Secretary contends that
the amendment evidences Congress’ intent that claims related
in any way to reimbursement disputes be challenged pursuant
to section 139500 rather than under section 1331. However, the
legislative history behind the amendment reveals that it was
not intended to broaden the scope of issues judicially review-
able under section 139500.” The 1980 amendment merely per-
mits expedited judicial review of certain issues arising in reim-
bursement disputes otherwise reviewable under the statute. As
explained above, the present claim cannot be characterized as
a reimbursement dispute. Therefore, the 1980 amendment
does not alter the justiciability of this claim under section
139500.
Because there is no alternative form of judicial review avail-
able to Appellees under the Medicare Act, the Secretary’s first
% Schweiker, slip op. at 10.
81980 Omnibus Budget Reconciliation Act, Pub. L. No. 96-499,
§ 955, 94 Stat. 2599, 2647 (1980).
See H.R. Rep. No. 1167, 96th Cong., 2d Sess. 394, reprinted in
1980 U.S. Code Cong. & Ad. News 5526, 5757.
13a
argument would appear to fail. However, because that argu-
ment is premised on the assumption that section 405(h) pre-
cludes only those claims for which the Medicare Act provides
an alternative form of judicial review, the Secretary’s con-
clusion would still be correct if section 405(h) barred claims
arising under the Medicare Act for which no alternative form of
judicial review is available. Thus, we must next determine the
scope of section 405(h)’s preclusion."
b. The scope of section 405(h). In Weinberger v. Salfi® the
Supreme Court held that section 405(h) precluded the exercise
of federal question jurisdiction over a constitutional challenge
to various provisions of the Social Security Act. However, the
Court found that the challenge could be brought under a sepa-
rate provision of the Social Security Act,” thereby implying
that the result might have been different had no alternative
form of judicial review been available.“ Since Sal/fi the various
courts of appeals have grappled with the issue of whether
section 405(h) precludes federal question jurisdiction when no
alternative form of judicial review is available.” Every court
that has considered the issue has agreed that section 405(h)
should be read so as to permit some avenue of judicial review
for constitutional claims.” However, the result has not been so
4! On appeal the Secretary addressed this issue only in a footnote,
Appellants’ Brief at 24 n.22, despite the district court’s observation
that its resolution was “far from clear.” Schweiker, slip op. at 5.
#2 422 U.S. 749 (1975).
* 42 U.S.C. § 405(g) (Supp. IV 1980). This provision, unlike section
405(h), was not incorporated into the Medicare Act. See 42 U.S.C.
§ 1395ii (1976). ;
“ Salfi, 422 U.S. at 762.
See cases cited in note 19, supra.
“ Bussey v. Harris, 611 F.2d 1001, 1005 (5th Cir. 1980); Hospital
San Jorge, Inc. v. U.S. Secretary of HE W, 598 F.2d 684, 686 (1st Cir.
1979); Dr. John T. MacDonald Foundation, Inc. v. Califano, 571
F.2d 328, 331-32 (5th Cir.), cert. denied, 439 U.S. 893 (1978); Trinity
l4a
harmonious when the same courts have considered the effect of
section 405(h) on otherwise non-reviewable statutory claims.
Three circuit courts have held that section 405(h) precludes
all federal courts from exercising jurisdiction over claims aris-
ing under the Medicare Act even when no alternative form of
judicial review is available.” Two conrts of appeals have held
that section 405(h) precludes the exercise of federal question
jurisdiction over claims for which no alternative form of judi-
cial review is available, but only after concluding that the
Court of Claims had jurisdiction over such claims.” Finally,
two circuit courts, the Sixth and the Second, along with the
Court of Claims, have held that section 405(h) is not a bar to
claims arising under the Medicare Act when there is no alter-
Memorial Hospital of Cudahy, Inc. v. Associated Hospital Service,
Inc., 570 F.2d 660, 667 (7th Cir. 1977); South Windsor Convalescent
Home, Inc. v. Mathews, 541 F.2d 910, 913-14 (2d Cir. 1976); St. Lowis
University v. Blue Cross Hospital Service, 537 F.2d 283, 291-93 (8th
Cir.), cert. denied sub nom. Faith Hospital Association v. Blue
Cross Hospital Service, Inc., 429 U.S. 977 (1976).
" Kechijian v. Califano, 621 F.2d 1 (1st Cir. 1980); Hospital San
Jorge, Inc. v. U.S. Secretary of HEW, 598 F.2d 684, 686 (1st Cir.
1979); Trinity Memorial Hospital of Cudahy, Inc. v. Associated
Hospital Service, Inc., 570 F.2d 660, 666 (7th Cir. 1977); St. Louis
University v. Blue Cross Hospital Service, 537 F.2d 283, 287-89 (8th
Cir. 1976). The Seventh Circuit noted that a federal court might have
jurisdiction to review a decision by the Secretary if it were “in direct
conflict with an express mandate of the Medicare Act.” Trinity
Memorial, 570 F.2d at 666 n.9.
#% Drennan v. Harris, 606 F.2d 846, 850 (9th Cir. 1979); Dr. John T.
MacDonald Foundation, Inc. v. Califano, 571 F.2d 328, 332 (5th
Cir.), cert. denied, 439 U.S. 893 (1978).
15a
native form of judicial review available.” We agree with the
district court that the view espoused by the Sixth and Second
Circuits and the Court of Claims is the correct one.
We start with the well established principle that an agency
bears a “heavy burden of overcoming the strong presumption
that Congress did not mean to prohibit all judicial review” of an
agency decision.” Thus, “only upon a showing of ‘clear and
convincing evidence’ of a contrary legislative intent should the
courts restrict access to judicial review.” We conclude that
the Secretary has failed to meet this heavy burden.
First, the Secretary has cited no legislative history which
indicates that Congress intended to preclude jurisdiction over
claims which there was no alternative form of judicial review.
Indeed, section 405(h) was incorporated into the Medicare Act
only to the extent it was applicable.” “(T]he entire thrust of the
section is to prevent claimants who seek judicial review of their
claims for benefits from bypassing the specific procedural
requirements provided by Congress in the various acts.”™
Thus, “(t]he subsection does not have a meaningful application
in a case where no statutory review mechanism is available.”™
Second, precluding review of claims like the present one
does not further the policy which led Congress to incorporate
Chelsea Community Hospital, SNF v. Michigan Blue Cross
Association, 630 F.2d 1131, 1134-36 (6th Cir. 1980); United States v.
Aquavella, 615 F.2d 12, 20-21 (2d Cir. 1979); Whitecliff, Inc. v.
United States, 536 F.2d 347, 351 (Ct. Cl. 1976), cert. denied, 430 U.S.
960 (1977).
® Dunlop v. Bachowski, 421 U.S. 560, 567 (1975).
5! Abbott Laboratories v. Gardner, 387 U.S. 136, 140 (1967). See
also Rusk v. Court, 369 U.S. 367, 379-80 (1962).
88 42 U.S.C. § 1395ii (1976).
8 Aquavella, 615 F.2d at 19.
4 Chelsea Community Hospital, 630 F.2d at 1135.
16a
section 405(h) into the Medicare Act. As the Eighth Circuit
noted, Congress adopted section 405(h) because permitting
[jJudicial review of the amount of all Medicare payments
would bring the courts into the complex interplay between
physician and hospital in ascertaining the appropriate
medical charges for technical services . . . These charges
are subject to extensive and complicated statutory guide-
lines and regulations. . . Determining the proper amount
of these charges is a matter peculiarly suited to
determination by a specialized agency.”
These concerns are not present when actions like the present
one are brought to challenge secretarial action unrelated to
reimbursement disputes.” Finding no clear and convincing
evidence to the contrary, we conclude that Congress, by in-
corporating section 405(h) into the Medicare Act to the extent
applicable, did not intend to preclude judicial review of claims
for which no alternative form of judicial review was available.
Accordingly, we reject the Secretary’s argument that section
405(h) precludes jurisdiction in the present case.
2. Implied Preclusion of Jurisdiction
In his reply brief the Secretary argues that even if jurisdic-
tion is not precluded by section 405(h), it is nevertheless
barred in view of Congress’ express delineation of the kinds of
5 St. Louis University, 537 F.2d at 289.
5% We do not mean to imply that a federal court may disregard
section 405(h) anytime the concerns expressed above are not present.
To do so would be to disregard the Supreme Court’s statement that
“the third sentence of § 405(h) is more than a codified requirement of
administrative exhaustion.” Weinberger v. Salfi, 422 U.S. 749, 757
(1975). We note that the articulated concerns are not implicated by
allowing courts to decide cases such as the present one only to show
that our reading of the statute is reasonable. When section 405(h)
does apply, its effect cannot be avoided by resort to exceptions to the
administrative exhaustion requirement. See id.
17a
claims which may be reviewed under the Medicare Act. Rely-
ing on United States v. Erika, Inc.,” the Secretary maintains
that since Congress expressly made certain types of cases
reviewable under the Medicare Act, issues not reviewable
under the Medicare Act, issues not reviewable under section
139500 are not reviewable at all. A review of the Supreme
Court’s decision in Erika, however, indicates that the case
does not support the Secretary’s point of view.
In Erika a physician brought a claim for reimbursement
under Part B of the Medicare Act. That part of the Act pro-
vides for judicial review of the Agency’s determination con-
cerning the physician’s eligibility for payments, but does not
contain a provision permitting review of the Agency’s
determination of the amount of reimbursement. The Supreme
Court noted that Congress had provided judicial review for
both eligibility and amount determination under Part A of the
Medicare Act, but had provided for judicial review of only
eligibility determinations under Part B.® The Court also ex-
amined statements from the legislative history of the Medicare
Act and subsequent amendments which clearly indicated an
intent to restrict the appealibility of amount dete/minations
under Part B.” In the face of these “expressions of legislative
intent [which] unambiguously support our reading of the
statutory language,” the Court concluded that judicial review
of amount determinations under Part B of the Act was
precluded.”
The reasoning utilized by the Supreme Court in Erika does
not apply to the present claim which was brought under Part A
of the Medicare Act. As noted earlier, the general presumption
5750 U.S.L.W. 4399 (U.S. 20 April 1982).
58 Jd. at 4401.
9 Td. at 4401-02 & nn.11-13.
Td. at 4402.
18a
is in favor of judicial review.” In Erika the government over-
came this presumption by presenting clear and convincing
evidence that Congress intended to preclude judical review.
The Secretary argues that the precisely drawn review provi-
sions of Part A,™ coupled with the omission of an express
provision of judicial review for claims like the present one,
provides the requisite clear and convincing evidence of Con-
gressional intent to preclude judicial review. However, “(t]he
mere fact that some acts are made reviewable should not
suffice to support an implication of exclusion as to others. The
right to review is too important to be excluded on such slender
and indeterminate evidence of legislative intent.’ Where, as
here, the statutory language and legislative history is devoid of
even the slightest intimation that Congress intended to pre-
clude judicial review over the issues raised by Appellees, the
mere fact that other types of issues are expressly reviewable
under the Medicare Act does not constitute the clear and
convincing evidence needed to overcome the presumption in
favor of judicial review. Therefore, we reject the Secretary’s
second argument, and hold that the district court properly
exercised its jurisdiction in the present case.
| Dunlop v. Bachowski, 421 U.S. 560, 567 (1975); Abbott Labor-
atories v. Gardner, 387 U «3. 136, 140 (1967); Rusk v. Court, 369 U.S.
367, 379-80 (1962).
* At the inception of the Medicare Act in 1965, part A providers
were entitled to judicial review only on issues relating to their eligi-
bility as qualified providers. 42 U.S.C. § 1395ff(c) (1976). See S. Rep.
No. 404, 89th Cong., Ist Sess. 54-55, reprinted in 1965 U.S. Code
Cong. & Ad. News 1948, 1995. In 1972 and again in 1974, the Act was
amended to permit providers to obtain judicial review of amount
determinations as well. See 42 U.S.C. § 139500(a)-(e) (1976).
* Abbott Laboratories, 387 U.S. at 141 (quoting L. Jaffe, Judicial
Control of Administrative Action 357 (1965).
19a
III. THE SECRETARY'S AUTHORITY TO REQUIRE
THAT HHAs DEAL WITH REGIONAL IN-
TERMEDIARIES
The central issue in this case concerns the Secretary’s au-
thority to require freestanding HHAs to submit their claims to
designated regional intermediaries for processing and pay-
ment. The resolution of this issue requires us to determine the
relationship among three provisions of the original Medicare
Act, sections 1395g, 1395h, and 1395kk.
Section 1395g of the Medicare Act provides:
The Secretary shall periodically determine the amount
which should be paid under this part to each provider of
services with respect to the services furnished by it, and
the provider of services shall be paid at such time or times
as the Secretary believes appropriate (but not less than
monthly) . . . the amounts so determined. . .*
Appellees argue, and the district court held that this section
gives HHAs the right to have their reimbursement determina-
tions and payments made directly by the Secretary. Appellees
maintain that the Secretary is authorized to delegate this
responsibility to an intermediary only if the HHA elects to
have payments made through an intermediary under section
1395(a).” The Secretary, on the other hand, contends that
% 42 U.S.C. § 1395g(a) (1976).
% Jd. § 1395h(a) (Supp. IV 1980). In pertinent part the statute
provides:
If any group or association of providers of services wishes to
have payments under this part to such providers made through a
national, State, or other public or private agency or organization
and nominates such agency or organization for this purpose, the
Secretary is authorized to enter into an agreement with such
agency or organization providing for the determination by such
agency or organization . . . of the amount of the payments re-
cred a to this ete to be made to such providers. . .
and for the making of such payments by such agency or organiza-
tion to such providers. . .
20a
whatever right is conferred on an HHA by section 1395g is
limited by his authority under section 1395kk to “perform any
of his functions under this subchapter directly, or by contract
providing for payment in advance or by way of reimbursement
. . . as the Secretary may deem necessary.”” Thus, under the
Secretary’s view, section 1395g merely requires the Secretary
periodically to determine the amount due a provider and to pay
that amount at least monthly. Section 1395kk then gives him
the authority to contract out those reimbursements functions
as he deems necessary.
The Secretary’s interpretation of the statute appears to be
the correct one. Since McCulloch v. Maryland" it has been a
general rule of construction that a government entity empow-
ered to perform a function has the authority to use any reason-
able tools and means to carry out that function. Thus, that
Congress would authorize the secretary to perform any of his
Medicare functions, including his reimbursement functions,
either directly or indirectly is not at all surprising. The need for
such flexibility is obvious when one considers the numerous
responsibilities assigned to the Secretary under the Medicare
Act.
Moreover, the Secretary’s contention that section 1395kk
empowers him to contract out his reimbursement responsibili-
% Id. § 1395kk(a) (1976). In full the statute provides:
Except as otherwise provided in this subchapter and in the
i Retirement Act of 1974, the insurance programs estab-
lished by this subchapter shall be administered by the Secreta-
ry. The Secretary may perform any of his functions under this
subchapter directly, or by contract providing for payment in
advance or by way of reimbursement, and in such installments,
as the Secretary may deem necessary.
17 U.S. (4 Wheat.) 316 (1819).
2la
ties is bolstered by the Senate Finance Commitee’s Report on
the Medicare Act, which states:
Under the [proposed bill], nominated organizations hav-
ing experience with cost reimbursement could determine
the amount of payments and make such payments
whether under part A or part B. In the absence of a
suitable nominated organization, the Secretary could
contract out all or part of this service or handle the func-
tion directly.”
The House also recognized the broad scope of section 1395kk,
noting in its report:
Section [1395kk]provides that, except as otherwise
stated, the programs established by title XVIII are to be
administered by the Secretary, who may perform any of
his functions directly or by contract.”
Therefore, the clear and reasonable language of the Act,
reinforced by appropriate statements from its legislative histo-
ry, appears to give the Secretary the unequivocal right to
designate intermediaries to perform his reimbursement func-
tions and to require that HHAs deal with those intermediaries.
The district court gave three reasons for not adopting this
seemingly reasonable interpretation. First, the court found
that Congress had repeatedly expressed its understanding
that providers had the unqualified option of dealing directly
with the Secretary. Second, the structure of subsequent
amendments to the original Medicare Act indicated to the
% S. Rep. No. 404, 89th Cong., Ist Sess. 53, reprinted in 1965 U.S.
Code Cong. & Ad. News 1943, 1994 (emphasis added). Appellees
argue that the quoted language refers only to the situation in which a
provider elects to use an intermediary, but fails to nominate a suit-
able one. However, nothing in the report suggests that the language
should be read so narrowly.
® H.R. Rep. No. 213, 89th Cong., Ist Sess. 174 (1965) (emphasis
added).
22a
court that Congress did not believe that the Secretary was
empowered to appoint intermediaries for HHAs wishing to
deal directly with the Secretary. Finally, the court was per-
suaded by the Secretary’s apparent acquiescence in a 1966
Assistant General Counsel opinion stating that the Secretary
did not have the right to designate an intermediary for a
provider who did not elect to be served by one. Appellees urge
us to adopt the district court’s reasoning.” However, after
examining that reasoning carefully, we remain convinced that
there is no need to deviate from the reasonable interpretation
advanced by the Secretary.
A. Congressional Expressions Concerning a Provider's Right
to Deal Directly With the Secretary
The district court was influenced by what it described as
“continuing expressions of Congressional understanding that
Medicare providers have the option to receive payment from
the government directly.” However, a close examination of
the context in which these expressions were made reveals that
Congress was not addressing the issue presently being con-
sidered. The statements at most indicate that providers may at
times elect to deal with the Secretary. They in no way evidence
an intent to abrogate the Secretary’s right to conduct his
business through an intermediary if he so chooses.
” Appellees also argue that the lower court’s ruling was correct
because as a matter of statutory construction the specific features of
section 1395g override the more general provisions of section 1395kk.
Rather than quibble over which section is more specific, we merely
note that the interpretation we adopt is reasonable and supported by
the relevant legislative history. It also gives effect to both provisions
in question. In such circumstances, the rule of statutory construction
cited by Appellees is not particularly useful. .
" Schweiker, slip op. at 15.
23a
The first statement relied upon by the district court is ex-
cerpted from both the Senate and House reports on the original
Medicare Act.
A member of an association whose nominated organiza-
tion or agency had been selected as a fiscal intermediary
could elect to receive payment from another intermedi
which had been selected (provided that the other organi-
zation or agency agrees) or could elect to deal directly with
the Secretary.
It is clear from the context of this statement” that the part of
the Medicare Act being discussed is section 1395h(d).™ Section
1395h(d) gives a provider who is a member of an association the
right to refuse to use an intermediary chosen by the associa-
7% §S. Rep. No. 404, 89th Cong., lst Sess. 52, reprinted in 1965 U.S.
Code Cong. & Ad News 1943, 1993; H.R. Rep. No. 213, 89th Cong.,
Ist Sess. 45 (1965).
% The statement is in a portion of the report discussing “General
provisions relating to the basic and voluntary supplemental plans,”
so it does not expressly refer to a particular section. Nevertheless,
the entire statement refers to providers who belong to an association
which has elected an intermediary to which a member of the associa-
tion objects. The similarity between the quoted language and the
statements used to describe the effect of section 1395h(d) further
indicate that the quoted language refers to that section. See text at
note 75, infra.
% 42 U.S.C. § 1395h(d) (1976). In full the section provides:
If the nomination of an agency or organization as provided in
this section is made by a group or association of providers of
services, it shall not be binding on members of the group or
association which notify the Secretary of their election to that
effect. Any provider may, upon such notice as may be specified
in the agreement under this section with an agency or organiza-
tion, withdraw its nomination to receive payments through such
agency or organization. Any provider which has withdrawn its
nomination, and any provider which has not made a nomination,
may elect to receive payments from any agency or organization
which has entered into an agreement with the Secretary under
this section if the Secretary and such organization agree to it.
24a
tion. Thus, the quoted language merely indicates that a mem-
ber of an association cannot be bound by the “association's
choice of an intermediary. It in no way intimates that the
Secretary cannot make such a choice.
The next reference relied upon by the district court is like-
wise an explanation of section 1395h(d). Explicity referring to
that section, both Committees noted:
Section [1395h(d)] provides that if the nomination of an
[intermediary] is made by a group or association of provid-
ers of services, it will not be binding on members of such
group or association which notify the Secretary of their
election to that effect. . . . Any provider which has with-
drawn its nomination (and any provider which has not
made a nomination) may elect to receive payments either
directly from the Secretary or from any agency or organi-
zation which has entered into an agreement with the Sec-
retary... .”
Again, the statement merely indicates that the association’s
choice of an intermediary is not binding on its members. It does
not negate the Secretary’s authority to designate intermedi-
aries if in his judgment that would be the best way to adminis-
ter his responsibilities.
The final expressions of Congressional intent which the dis-
trict court found persuasive were made in 1977 and 1980, when
Congress amended section 1395h.” These expressions, like the
previous ones, do not cast any doubt on the Secretary’s right to
conduct his business through an intermediary.
In 1977 several provisions were added to section 1395h. The
House Committee on Interstate and Foreign Commerce set
%S. Rep. No. 404, 89th Cong., Ist Sess. 164-65, reprinted in U.S.
Code Cong. & Ad. News 1943, 2104; H.R. Rep. No. 213, 89th Cong.,
lst Sess. 147-48 (1965).
% The substance and effect of these amendments is discussed later.
See text at notes 80-85, infra.
25a
forth their understanding of the pre-amendment law as fol-
lows:
Under part A of medicare, groups or associations of
providers of services, i.e.,. . . home health agencies, can
nominate an organization to act as a fiscal intermediary
between the providers and the Secretary. An individual
member of an association or group of providers which has
nominated one organization as intermediary may select
some other organization as its intermediary if this is
satisfactory to the organization and the Secretary, or
alternatively, it may elect to deal with the Secretary.”
This again appears to be an explanation of section 1395h(d).
It therefore does not justify imposing any limits on the lan-
guage of section 1395kk.
In 1980 when section 1395h was again amended, this time by
adding a provision requiring the Secretary to designate region-
al intermediaries for freestanding HHAs electing to use an
intermediary, the Conference Committee Report contained
the following language, which Appellees assert clearly evi-
dences Congress’ understanding that HHAs had the unlimited
right to deal directly with the Secretary. “In requiring the
designation of regional intermediaries for home health agen-
cies, it is not the intent of the conferees that home health
agencies would be precluded from contracting directly with the
Health Care Financing Administration.”” As discussed in the
next section,” this language merely indicated that the 1980
amendment did not require the Secretary to designate regional
intermediaries for all freestanding HHAs, thereby preserving
the Secretary’s discretion to permit HHAs to deal directly
with him. Nothing in the amendment or the quoted language
H.R. Rep. No. 393, Part I, 95th Cong., Ist Sess. 68 (1977); H.R.
Rep. No. 393, Part II, 95th Cong., 1st Sess. 76 (1977).
®H. Rep. No. 1479, 96th Cong., 2d Sess. 129 (1980).
% See text notes 84-85, infra.
26a
indicates that the Secretary’s power under setion 1395kk was
to be limited by some overriding right of the provider to deal
directly with the Secretary.
Thus, nothing in the Congressional expressions relied upon
by the district court indicates that section 1395kk is to be read
as anything less than an authorization for the Secretary to
perform his reimbursement functions through an intermedi-
ary. Nor do these expressions contain anything indicating that
a provider has an unqualified right under section 1395g to deal
directly with the Secretary. Therefore, these expressions do
not persuade us to alter our view that section 1395kk autho-
rizes the Secretary to issue the regulation in question.
B. The Effect and Implication of the 1977 and 1980 Amend-
ments
Both parties point to the structure and language of the 1977
and 1980 amendments as support for their divergent con-
clusions. However, we find the two amendments largely
irrelevant to the question at hand because they neither in-
crease nor limit the Secretary’s power under section 1395kk.
The 1977 amendment authorized the Secretary to “assign or
reassign any provider of services” to an intermediary if he
determined, after applying certain standards, criteria and pro-
cedures, “that such designation would result in more effective
and efficient administratioin” of the Medicare program.” Con-
trary to the Secretary’s argument that this amendment con-
firmed or increased his authority to contract out his provider
reimbursement functions, we conclude that the amendment
merely authorized the Secretary to appoint new intermedi-
aries for providers who had previously elected to use one.
* Medicare-Medicaid and Anti-Fraud and Abuse Amendments of
1977, Pub. L. No. 95-142, 91 Stat. 1175, 1199 (1977) (codified at 42
U.S.C. §§ 1395h(e)(1), (2), (3), & 1395h(f) (Supp. IV 1980)).
27a
The 1977 amendment, entitled “The Medicare-Medicaid
Antifraud and Abuse Amendment,” was designed to give the
Secretary power to deal with the potential problems caused by
allowing a provider to chose his own intermediary. The provid-
ers’ power to nominate or dismiss an intermediary, it was
feared, had caused some intermediaries to be overly generous
in determining the amounts due a provider under the Act.”
The amendment therefore required the Secretary to develop
precise and uniform standards and criteria for evaluating an
intermediary’s performance, so that the Secretary would know
when an intermediary’s performance was unsatisfactory.” In
such situations the Secretary was authorized to assign the
provider to a new intermediary. The inclusion of the term
“assign or reassign” seems to refer to providers who nominate
an intermediary whose performance has already been judged
unsuitable, and not to providers who are dealing with the
Secretary. This interpretation is consistent with the structure
of the amendment since the new provisions were tacked onto
sectioin 1395h, the section giving providers the right to nomin-
ate an intermediary.*
The 1977 amendment did not, therefore, increase the Secre-
tary’s authority to require an HHA to deal with an intermedi-
ary against his will, a power the Secretary already possessed
under section 1395kk. But neither did is limit that power. The
amendment simply provided the Secretary with an additional
tool for dealing with potential intermediary provider collusion.
Similarly, the 1980 amendment did not affect the Secretary's
section 1395kk power one way or the other. That legislation
provided: “(T]he Secretary shall designate regional agencies or
5! See H.R. Rep. No. 393, Part I, 95th Cong., 1st Sess. 68-69 (1977);
H.R. Rep. No. 393, Part II, 95th Cong., Ist Sess. 76-77 (1977).
* H.R. Rep. No. 393, Part I, 95th Cong., Ist Sess. 69 (1977); H.R.
Rep. No. 393, Part II, 95th Cong., Ist Sess. 77 (1977).
42 U.S.C. § 1395h(a) (Supp. IV 1980).
28a
organizations which have entered into an ageeement with him
under this section to perform functions under such agreement
with respect to [freestanding] home health agencies. . . in the
region.”™ Despite this seemingly mandatory language, it is
clear that the amendment did not require the Secretary to
assign all freestanding HHAs to regional intermediaries.
Rather, the amendment only required the Secretary to desig-
nate which intermediary an HHA would use if the HHA
elected to use one at all. As noted previously, the House
conferees were careful to point out that “[iJn requiring the
designation of regional intermediaries for home health agen-
cies, it is not the intent of the conferees that home health
agencies would be precluded from contracting dealing with the
Health Care Financing Administration.”” At the same time,
however, the amendment did nothing to limit the Secretary’s
already existing power to require that HHAs deal with an
intermediary if he felt it was proper. Thus, neither the 1977 nor
the 1980 amendment affected the Secretary’s section 1395kk
power to perform his reimbursement tasks through intermedi-
aries, a power that the Secretary can use to issue regulations
like the present one.
C. The Effect of the 1966 Assistant General Counsel Opinion
The district court determined that until the issuance of the
December 1981 instruction, the Secretary had consistently
interpreted the Medicare Act as legally requiring him to deal
directly with providers electing to do so. In reaching this
conclusion, the court relied on a 1966 opinion of the Depart-
4 Omnibus Budget Reconciliation Act of 1980, Pub. L. No. 96-499,
§ 930(0), 94 Stat. 2599, 2632 (1980) (codified at 42 U.S.C. § 1395h(e)
(4) (Supp. 1980)). Provider-based HHAs are to be reassigned only if
the Secretary determines, after applying specified criteria, that such
assignment will result “in the more effective and efficient administra-
tion” of the Medicare program. /d.
%H. Conf. Rep. No. 1479, 96th Cong., 2d Sess. 129 (1980).
29a
ment of Health, Education and Welfare’s (now Health and
Human Services) Assistant General Counsel stating that the
Secretary did not have the right to designate an intermediary
for a provider who did not want to be served by an inter-
mediary” and by the Secretary’s failure to use this power until
almost sixteen years later.” While recognizing that the Gener-
al Counsel’s opinion was not binding on the parties, the district
court found that, coupled with the Secretary’s acquiescence, it
was strong evidence that the Secretary’s present interpreta-
tion of section 1395kk was incorrect.
However, we find that the court erred in placing such great
reliance on the actions of the General Counsel and the Secreta-
ry. First, when an agency expresses doubts as to its statutory
authority to act, such expressions are not binding on a court,
* Memorandum from Melvin Blumenthal, Assistant General Coun-
sel, Health Insurance Division, Department of Health, Education
and Welfare (23 Feb. 1966).
* Appellees seek to bolster the district court’s conclusion by point-
ing to the Secretary’s own regulations which recognize that provid-
ers have the option of dealing directly with the Secretary. 42 C.F.R.
§ 421.103 (1981); 42 C.F.R. § 421.104 (b)(2) (1981). They argue thot
the December 1981 instruction was invalid because it violated these
regulations, which have the force and effect of law.
However, the regulations cited do not address the Secretary's
authority under section 1395kk, they merely recognize that normally
under section 1395h a provider can elect to deal with an intermediary
or with the Secretary. Even if the regulations did conflict with the
December 1981 instruction, Appellees argument would still not be
persuasive. This court has recognized that an agency’s departure
from its regulations or past practice is sanctioned as long as it pro-
vides a rational explanation for its actions. Greater Boston Television
Corp. v. Federal Communications Commission, 444 F.2d 841, 852
(D.C. Cir. 1970), cert. denied, 403 U.S. 923 (1971). If, as we hold,
section 1395kk authorizes the Secretary to issue the instruction in
question, the Secretary cannot destroy that authority by promulgat-
ing regulations.
30a
nor are they due the same deference given to agency
determinations requiring special agency competence.” As this
Court observed in a similar situation, “[when] the question is
simply one of statutory interpretation. . . [calling] largely for
the exercise of historical analysis and logical and analogical
reasoning, it is the everyday staple of judges as well as
agencies.”” Moreover, the 1966 Assistant General Counsel’s
opinion did nt take into account the legislative history which
supports the Secretary’s present position.” Further, sub-
sequent opinions issued by the same office expressly recog-
nized the Secretary’s power to require HHAs to deal with
intermediaries.” Thus, this isolated opinion questioning the
Secretary’s statutory authority is not enough to persuade us
that we should ignore the otherwise clear language of section
1395kk.
Nor is the Secretary’s fifteen-year failure to utilize his sec-
tion 1395kk power determinative. As the Supreme Court ex-
plained in a similar situation:
The fact that powers long have been unexercised well
may call for close scrutiny as to whether they exist; but if
granted, they are not lost by being allowed to lie dormant,
any more than nonexistent powers can be prescripted by
% National Petroleum Refiners Association v. Federal Trade
Commission, 482 F.2d 672, 694 (D.C. Cir. 1973), cert. denied, 415
U.S. 951 (1974).
Id.
”S,. Rep. No. 404, 89th Cong., lst Sess. 53, reprinted in, 1965 U.S.
Code Cong. & Ad. News 1994; H.R. Rep. No. 213, 89th Cong., Ist
Sess. 174 (1965) (discussed in text accompanying notes 68-69, supra).
* Memorandum from Juan A. del Real, General Counsel, Depart-
ment of Health and Human Services 4, 6-7 (11 Jan. 1982); Memoran-
dum from Hank Eigles, Office of General Counsel, Health Care
Financing Division, Department of Health and Human Services 5-6
(Dec. 10, 1980).
8la
an unchallenged exercise. We know that unquestioned
powers are sometimes unexercised from lack of funds,
motives of expediency, or the competition of more impor-
tant concerns.”
The Secretary’s authority to contract out his reimbursement
responsibilities did not dwindle away over time as he chose not
to use it. Congress conferred that authority upon the Secreta-
ry and only Congress could withdraw it. Neither the Office of
General Counsel by its opinions, nor the Secretary by his
inaction could diminish that authority in the least.
Because we find that Congress in 1965 chose to give the
Secretary the power to contract out his reimbursement re-
sponsibilities, we hold that the Secretary may now use that
power to require freestanding HHAs to seek reimbursement
determinations and payments through an intermediary. How-
ever, when utilizing that power the Secretary must comply
with the procedural requirements imposed by law. It is to
those requirements that we now turn our attention.
IV. THE SECRETARY’S COMPLIANCE WITH THE APA
Section 553 of the APA outlines the procedures an agency
must follow when promulgating rules. Most notably, the agen-
cy is required to provide the public with general notice of its
intent to act and to afford all interested parties an opportunity
to comment on the proposed action.” The Secretary in the
* United States v. Morton Salt Co., 338 U.S. 632, 647-48 (1950).
See also Warner-Lambert Co. v. Federal Trade Commission, 562
F.2d 749, 759 (D.C. Cir. 1977), cert. denied, 485 U.S. 950 (1978).
In pertinent part, the section provides:
(b) General notice of proposed rule making shall be published in
the Federal Register, unless persons subject thereto are named and
either personally served or otherwise have actual notice thereof in
accordance with law. The notice shall include—
(1) astatement of the time, place, and nature of public rule
making proceedings;
32a
present litigation does not contest the district court’s ruling
that the December 1981 instruction was a rule within the
meaning of the APA.™ Nor does he dispute the court’s finding
that he failed to comply with the notice and comment provi-
sions of section 553. However, the Secretary maintains that his
actions were proper because the December 1981 instruction
was a rule of agency procedure exempt from section 553’s
(2) reference to the legal authority under which the rule is
proposed; and
(3) either the terms or substance of the proposed rule or a
description of the subjects and issues involved.
Except when notice or hearing is required by statute, this subsec-
tion does not apply—
(A) to interpretative rules, general statements of policy, or
rules of agency organization, procedure, or practice; or
(B) when the agency for good cause finds (and incorporates
the finding and a brief statement of reasons therefor in the rules
issued) that notice and public procedure thereon are impractic-
able, unnecessary, or contrary to the public interest.
(c) After notice required by this section, the agency shall give
interested persons an opportunity to participate in the rule making
through submission of written data, views, or arguments with or
without opportunity for oral presentation. After consideration of the
relevant matter presented, the agency shall incorporate in the rules
adopted a concise general statement of their basis and purpose.
When rules are required by statute to be made on the record after
opportunity for an agency hearing, sections 556 and 557 of this title
apply instead of this subsection.
5 U.S.C. § 553(b) & (c) (1976).
“The APA defines a rule as
the whole or a part of an agency statement of general or particu-
lar applicability and future effect designed to implement, in-
terpret, or prescribe law or policy or describing the organiza-
tion, proc , or practice a of an agency and in-
cludes the approval or prescription for the future of rates,
33a
notice and comment requirements.” Thus, the procedural
validity of the Secretary’s actions depends on whether the
December 1981 instruction can be brought within this “lim-
ited” exception.” We hold that it cannot.
Exceptions to the notice and comment provisions of section
553 are to be recognized “only reluctantly.”” Otherwise, the
salutory purposes behind the provisioins would be defeated.
The notice and comment requirements were -included in the
APA for two main reasons. First, “to reintroduce public partic-
ipation and fairness to affected parties after governmental
authority has been delegated to unrepresentative agencies.”™
And second, to “assure[] that the agency will have before it the
facts and information relevant to a particular administrative
problem, as well as suggestions for alternative solutions.””
This dual purpose of fairness and agency self-education is
advanced if “[e]xceptions [are] recognized only where the need
wages, corporate or financial structures or reorganization there-
of, prices, facilities, appliances, services or allowances therefor
or of valuations, costs, or accounting, or practices bearing on any
of the foregoing.
5 U.S.C. § 551(4) (1976).
% Section 553(b) (A) provides: “Except when a notice or hearing is
required by statute, this subsection does not apply—to interpreta-
tive rules, general statements of policy or rules of agency organiza-
tion, procedure, or practice. . .”5 U.S.C. § 553(b)(A) (1970) (empha-
sis added).
% Batterton v. Marshall, 648 F.2d 694, 701 (D.C. Cir. 1980).
" Humana, 590 F.2d at 1082.
% Batterton, 648 F.2d at 703 (footnote omitted). See also Pickus v.
United States Board of Parole, 507 F.2d 1107, 1112 (D.C. Cir. 1974).
* Guardian Federal Savings & Loan Association v. Federal Sav-
ings & Loan Insurance Corp., 589 F.2d 658, 662 (D.C. Cir. 1978). See
also Brown Express, Inc. v. United States, 607 F.2d 695, 701 (5th
Cir. 1979); Pickus v. United States Board of Parole, 507 F.2d 1107,
1112 (D.C. Cir. 1974); Texaco, Inc. v. Federal Power Commission,
412 F.2d 740, 744 (3d Cir. 1969).
34a
for public participation is overcome by good cause to suspend
it, or where the need is too small to warrant it.” Therefore,
the “exception of section 553(b)(A) . . . does not extend to
those procedural rules that depart from existing practice and
have a substantial impact on those regulated.” Or, to use the
words of this court, “(t]he exemption [for rules of agency
procedure] cannot apply . . . where the agency action trenches
on substantive rights and interests.”"”
The December 1981 instruction does substantially affect the
rights and interests of freestanding HHAs. Although we have
held that these HHAs do not have an unlimited statutory right
to deal directly with the Secretary, it is undisputed that for
sixteen years freestanding HHAs had the option of choosing to
deal with the Secretary or with an intermediary. Thus, free-
standing HHAs had at least a qualified right to choose with
whom they dealt. The December 1981 instruction foreclosed
that option, eliminating the qualified right. Furthermore, the
elimination of this right will cause freestanding HHAs great
expense and inconvenience. Appellees presented uncontra-
dicted evidence that the transfer will cost an estimated $10
million to $30 million. Many HHAs will be required to change
or scrap electronic billing systems which have been designed to
interface with equipment used by the Secretary. Numerous
HHAs will be required to train and re-educate employees to
implement the new system and operate within the guidelines of
the new intermediary. This potential inconvenience was ex-
acerbated by the Secretary’s decision to speed up implementa-
tion of the transfer to 10 March 1982. The disruption caused by
the transfer may not be great enough to persuade the Secreta-
ry to rescind the instruction, but the potential impact is such
that the fairness element of section 553 requires that the
10° Batterton, 648 F.2d at 704 (footnote omitted).
1! Brown Express, Inc. v. United States, 607 F.2d 695, 702 (5th
Cir. 1979).
102 Batterton, 648 F.2d at 708 (footnote omitted).
35a
HHAs involved be given a chance to present their case to the
Secretary before he acts.
In addition, other decisions made by the Secretary in the
December 1981 instruction were such that he could have bene-
fited from the HHA’s viewpoint. The December 1981 instruc-
tion not only foreclosed freestanding HHAs from dealing
directly with the Secretary, it also delineated the regioins to be
served by each intermediary and designated which intermedi-
ary would be chosen as the intermediary for each region. It is
hard to image that HHAs, which had been dealing with the
various intermediaries and working with the various interme-
diaries and working with Medicare system for years, would not
be able to provide the Secretary with valuable information
concerning the most efficacious manner in which the regions
could be organized and insights about the various organiza-
tions which might be chosen as regional intermediaries.
Thus, compliance with the notice and comment require-
ments of section 553 would not only result in increased fairness
to freestanding HHAs, it would also enable the Secretary to
receive valuable information concerning the various issues
involved before he chose his course of direction. In such cir-
cumstances, the procedural exception to section 553 cannot
apply.’” As this court has previously observed:
ee was alert to the possibility that these exceptions
might, if broadly defined and indiscriminately used, de-
feat the section’s purpose. Thus, the legislative history of
18 The Secretary argues that our decision is controlled by our prior
decision in Guardian Federal Savings & Loan Association v. Feder-
al Savings & Loan Insurance Corp., 589 F.2d 658 (D.C. Cir. 1978).
In Guardian this court held that a rule requiring that the audit of
federal savings and loan institutions be performed by private au-
ditors rather than by FSLIC was exempt from the notice and com-
ment provisions of section 553. However, that case is dis-
tinguishable. First, unlike HHAs, the Savings and Loans involved in
Guardian never had the freedom to choose who audited them. Thus,
no right was eliminated by the Secretary’s action. Second, as pointed
out above, the December 1981 instruction did more than foreclose
36a
the section is scattered with warnings that various of the
exceptions are not to be used to escape the requirements
of section 553. (Citations omitted]. Further, the Senate
Committee responsible for considering the APA con-
cluded its report by investing courts with a a rk
prevent avoidance of the requirements of the bill by any
manner or form of indirection... .”"”
We would not be true to that duty if we allowed the Secretary
to ignore the requirements of section 553 when promulgating
rules which, like the present one, substantially affect private
parties and resolve important issues without the beneficial
input that those parties could provide.
Vv. CONCLUSION
Wishing to provide the Secretary with the tools he needs to
perform his Medicare responsibilities, Congress empowered
him to perform those functions either directly or by contract.
The Secretary is free to use that power to require HHAs to
deal with intermediaries whenever he deems necessary. How-
ever, when he chooses to utilize his authority in that manner he
must comply with the procedural requirements imposed by the
APA.’
HHAs from dealing directly with the Secretary, it created regions
and designated regional intermediaries, actions that further affected
HHAs, and which involved issues on which HHA input would have
been valuable. The rule in Guardian merely stated that the Secreta-
ry would not perform the required audit, it did not designate who
would perform it. Finally, the potential impact on the Savings and
Loan was not clearly outlined in Guardian, where as here Appellees
have presented uncontradicted evidence of the potential disruption
caused by the December 1981 instruction.
14 American Bus Association v. United States, 627 F.2d 525, 528
(D.C. Cir. 1980).
The district court ordered the Secretary to comply with the
notice and comment provisions of section 553 before attempting to
reassign freestanding HHAs who had elected to use an intermediary.
That order should be expanded to require compliance with section
553 before a rule assigning any freestanding HHA to an intermedi-
ary.
37a
The district court correctly held that it had jurisdiction to
decide this case and that the Secretary’s actions are subject to
the notice and comment requirements of the APA. We affirm
_those holdings.’ However, the court erred in the disposition of
Appellees’ substantive claim and, to that extent, we must
reverse.
It is so ordered.
38a
APPENDIX B
Anited States Court of Appeals
For THE District oF COLUMBIA CIRCUIT
No. 82-1293
NATIONAL ASSOCIATION OF HOME
HEALTH AGENCIES, et al.
Vv.
RICHARD S. SCHWEIKER, et al., Appellants
September Term, 1982
CA 81-03160
United States Court of Appeals
for the District of Columbia Circuit
FILED October 27, 1982
GEORGE A. FISHER
CLERK
Before: Wilkey, Circuit Judge; Robb, Senior Circuit Judye
and Thomas E. Fairchild,* Senior Circuit Judge for
the Seventh Circuit.
ORDER
Upon consideration of appellees’ motion for stay of mandate
pending application for certiorari, of appellants’ opposition and
of appellees’ reply to appellants’ opposition, it is
ORDERED, by the Court, that appellees’ aforesaid motion
for stay of mandate is granted and the Clerk is directed not to
39a
issue the mandate herein for a period of thirty (30) days{ m
the date of this order.
Per Curiam
For the Court:
George A. Fisher
GEORGE A. FISHER
Clerk
RECEIVED
October 28, 1982
WEISSBURG & ARONSON INC.
*Sitting by designation pursuant to Title 28 U.S.C. § 294(d).
40a
APPENDIX C
Gnited States District Court
For THE District oF COLUMBIA
Civil Action No. 81-3160
NATIONAL ASSOCIATION OF HOME
HEALTH AGENCIES, et al. Plaintiffs,
V.
RICHARD S. SCHWEIKER, et al., Defendants.
FILED
March 10, 1982
JAMES F. DAVEY, Clerk
MEMORANDUM OPINION
Plaintiffs in this action are two national associations of home
health agencies (HHAs) who bring the cause on behalf of their
member agencies which participate in the Medicare program, a
corporation which owns and operates 48 home health agencies,
and 37 individual home health agencies which participate in the
Medicare program. HHAs provide nursing and other ther-
apeutic services as well as certain medical supplies to home-
bound individuals, most of whom are covered by the Medicare
program by virture of the fact that they are aged or disabled.
The Medicare Act entitles plaintiffs to be reimbursed for the
“reasonable cost” of covered home health services provided to
Medicare beneficiaries. 42 U.S.C. § 1395f, et seq.
On December 8, 1981, defendants issued an administrative
instruction (Pltfs.’ Ex. 2) which compels plaintiffs to seek
Medicare reasonable cost determinations and reimbursement
from government-designated regional intermediaries. Private
organizations, often health insurance companies such as Blue
4la
Cross, serve as intermediaries. Previously, plaintiffs had the
option, which most of them selected, to have determinations
made by and receive payment directly from the federal govern-
ment through its Office of Direct Reimbursement (ODR). They
seek to enjoin implementation of the instruction on the grounds
that it abrogates their statutory and regulatory rights to re-
ceive payment directly from the government; that the interme-
diaries were designated without application of the proper
statutory and regulatory standards, criteria and procedures to
assure the effective and efficient administration of Medicare
payments; and that the new policy is a substantive rule which
was not promulgated in accordance with the rulemaking
requirements of the Administrative Procedures Act (APA).
Plaintiffs also seek an order requiring defendants to make
ODR available to health care providers who do not wish to
receive Medicare reimbursement determinations and payment
through an intermediary, and to enjoin the instruction as it
applies to HHAs who previously received reimbursement
through intermediaries of their choice and are now required to
transfer to the designated regional intermediaries. Although
plaintiffs admit that defendants have the statutory authority
to designate the intermediaries for those HHAs who choose to
be served by an intermediary rather than ODR, they contend
that the designation of intermediaries here did not comply with
statutory and regulatory requirements, and should have been
promulgated in accordance with APA rulemaking procedures.
Plaintiffs originally sought a preliminary injunctioa, claim-
ing irreparable harm because of increased costs. Costs alleged
are based on the necessity to abandon billing systems in which
considerable investment has been made and develop different
systems to meet the specifications of the new designated inter-
mediaries; retrain and re-educate employees to implement and
operate the new billing systems and function within the guide-
lines of the regional intermediary; change the types of forms
used by intermediaries for bill processing; and for agencies
that serve patients in more than one state, the necessity to
implement different systems for the regional intermediaries in
42a
each state. Although defendants have represented that pro-
viders like the plaintiffs can seek adjustments in their reim-
bursements to compensate for any reasonable costs incurred
due to the transition, they were unable to reach a stipulation
that could allay plaintiffs’ fear that all of their actual costs will
not be reimbursed. Plaintiffs contend that the government’s
plan to reimburse costs of the transition only proportionally to
the percentage of Medicare patients in the facility’s clientele
unfairly fails to compensate expenses which are 100% attribut-
able to the Medicare program. They further assert that since
HHAs typically operate with few assets or cash reserves,
non-reimbursed costs or an interruption in cash flow during the
transition could threaten their very existence. Interruptions in
cash flow are likely to occur, they allege, and in fact are
occurring to some of the agencies which made the transition as
of January 1 of this year, because the new intermediaries are
not now equipped to take over the services of ODR or other
intermediaries and perform efficiently and effectively.
The parties reached an agreement whereby plaintiffs would
abandon their request for a preliminary injunction, incorporat-
ing the arguments from that motion into a motion for summary
judgment, recognizing that to accommodate the exigencies the
case would be decided on cross motions for summary judgment
no later than March 10, 1982.
Although the transition to the new regional intermediaries
was originally scheduled to be phased in over a year, effective
for each HHA at the commencement of its cost reporting year,
the transition was subsequently accelerated such that all
HHAs would be transferred by March 15. When plaintiffs now
dealing with ODR were instructed to begin submitting their
bills to the new intermediaries on March 1, they sought a
temporary restraining order. On March 1, 1982 defendants
were enjoined from requiring plaintiffs to submit their bills
other than to ODR for a period of 10 days.
Prior to any decision on the merits, jurisdiction over the
subject matter must be determined. Although it is undisputed
43a
that jurisdiction lies regarding the claim under the APA,
jurisdiction over the remaining matters is challenged by de-
fendants.
Defendants claim that jurisdiction over all but the APA
claims is precluded by section 205(h) of the Social Security Act,
42 U.S.C. § 405(h), incorporated into the Medicare Act by
section 1872, 42 U.S.C. § 1395ii.' Section 405(h) provides:
The findings and decisions of the Secretary after a hearing
shall be binding upon all individuals who were parties to
such hearing. No findings of fact or decisions of the Secre-
tary shall be reviewed by any person, tribunal or govern-
ment agency except as herein provided. No action against
the United States, the Secretary, or any officer or a.
ee thereof shall be brought under § 1331 and 1346 of title
28 to recover on any claim arising under this subchapter.
In Weinberger v. Salfi, 422 U.S. 749 (1975), a class action
challenging the constitutionality of sections of the Social Secu-
rity Act prohibiting a wage earner’s widow or stepchild from
receiving insurance benefits unless their relationships to the
wage earner existed at least nine months prior to his death, the
Supreme Court interpreted § 405(h) to bar federal question
jurisdiction (under 28 U.S.C. § 1831). It rejected the district
court’s conclusion that § 405(h) amounted to no more than a
codification of the doctrine of exhaustion of administrative
remedies, and that exhaustion could be excused upon a judicial
finding of futility. The third sentence of § 405(h), the Court
stated, “is sweeping and direct and. . . states that no action
shall be brought under § 1331, not merely that only those
actions shall be brought in which administrative remedies have
been exhausted.” Salfi, at 757. The Court went on to decide
that the claim arose under Title II of the Social Security Act
‘The Medicare Act was enacted as amendment to the Social Secu-
rity Act. It is Title XVIII of the Social Security Act, 42 U.S.C. § 1395
et seq. § 405(h) was originally applicable to Title II of the Social
Security Act, which contains old-age, survivors, and disability in-
surance programs codified at 42 U.S.C. § 401 et seq.
44a
(thereby barring federal question jurisdiction) and not under
the Constitution, since it was Social Security benefits that
plaintiffs sought to recover, and the Social Security Act pro-
vided both the standing and the substantive basis for the
presentation of the constitutional contentions. However,
jurisdiction under 42 U.S.C. § 405(g) of the Social Security
Act, providing for district court review of the final decision of
the Secretary after a hearing, was found over the claims of the
named appellees, but not of the unnamed members of the class,
for whom a final decision of the Secretary after a hearing was
not alleged. Essentially the Court held that § 405(h) did not
permit an alternative to § 405(g) jurisdiction, even where the
administrative process mandated there could not resolve the
constitutional question in issue.
The Salfi Court distinguished Johnson v. Robison, 415 U.S.
361 (1974), which found federal question jurisdiction over a
constitutional attack on a statutory provision of the Veterans’
Readjustment Benefits Act of 1966 despite a similar preclusion
of review provision. In Robinson, there was no alternative
avenue for review. Statutory preclusion of all review of a
constitutional question would be “not only. . . extraordinary,
such that ‘clear and convincing’ evidence would be required
before we would ascribe such intent to Congress, but it would
. . » [raise] a serious constitutional question of the validity of
the statute so construed.” Salfi, at 762. (Citations omitted).
The scheme in the Social Security Act, on the other hand, was
found not only constitutional but “manifestly reasonable,” in
that it “assures the Secretary the opportunity prior to con-
stitutional litigation to ascertain, for example, that the particu-
lar claims involved are neither invalid for other reasons nor
allowable under other provisions of the Social Security Act.”
Id.
Contrary to defendant’s argument, the application of
§ 405(h) and Salfi to claims under the Medicare Act for which
there is no alternative route to judicial review, as is the case
here, is far from clear. As we have seen, the Salfi Court
strongly suggested that it might have reached a different
45a
result had there been no alternative basis for jurisdiction. The
Courts of Appeals have come to varying conclusions when
confronted with the issue. The First, Second, Fifth, Seventh
and Eleventh Circuits have found that § 405(h) precludes judi-
cial review over all Medicare cost reimbursement disputes,
except as provided in the statute, save when they present
constitutional claims. Kechijian v. Califano, 621 F.2d 1 (1st
Cir. 1980); Hospital San Jorge, Inc. v. United States Secretary
of Health, Education and Welfare, 598 F.2d 684 (1st Cir.
1979); South Windsor Convalescent Home, Inc. v. Mathews,
541 F.2d 910 (2d Cir. 1976);Bussey v. Harris, 611 F.2d 1001
(5th Cir. 1980); Alabama Hospital Association v. Califano,
587 F.2d 762 (5th Cir.), cert. denied, 444 U.S. 826 (1979); Dr.
John T. MacDonald Foundation, Inc. v. Mathews, 554 F.2d
714 (5th Cir. 1977), vacated, Dr. John T. MacDonald Founda-
tion v. Califano, 571 F.2d 328 (1978) (en banc), cert. denied,
439 U.S. 893 (1978); Trinty Memarial Hospital of Cudahy,
Inc. v. Associated Hospital Service, Inc., 570 F.2d 660 (7th
Cir. 1977); United States v. Sanet, No. 81-5192 (11th Cir.
decided February 1, 1982). Of these, the First Circuit has
stated that jurisdiction under § 1331 might be available in the
case of a colorable constitutional claim, Kechijian; Hospital
San Jorge, and the Second Circuit, while generally referring
such Medicare claims to the Court of Claims, e.g. South Wind-
sor, in at least one case has assumed juris iction under § 1331,
in part because no alternative remedy, including the Court of
Claims, was available. United States v. Aquevella, 615 F.2d 12
(2d Cir. 1979).
The Fifth, Seventh, and Eleventh Circuits have not reached
the question of whether § 1331 jurisdiction would ever be
available in a Medicare case, because in the cases presented,
jurisdiction was found in the Court of Claims. E.g. Bussey;
Trinity Memorial Hospital of Cudahy; Sanet. (The instant
case, in which declaratory and injunctive relief, rather than
money damages, is sought, could not be brought in the Court of
Claims, 28 U.S.C. § 1491, and neither could it be reframed as a
claim for money damages. See American Association of Coun-
46a
cils of Medical Staffs of Private Hospitals v. Califano, 575
F.2d 1367 (5th Cir. 1978)). “he Ninth Circuit has held that
§ 1331 jurisdiction is generally unavailable, even over non-
procedural constitutional claims, but also found jurisdiction in
the Court of Claims, Drennan v. Harris, 606 F.2d 846 (9th Cir.
1979), and.the Court of Claims has affirmed its own jurisdic-
tion. Whitecliff, Inc. v. United States, 536 F.2d 347 (Ct. Cl.
1976), cert. denied, 430 U.S. 969 (1977).
The District of Columbia, Eighth, and Ninth Circuits have
held that purely procedural claims are not barred from federal
question jurisdiction by § 405(h), because they are not actions
“to recover on any claim” arising under the Medicare Act.
Humana of South Carolina, Inc. v. Califano, 590 F.2d 1070
(D.C. Cir. 1978); St. Lowis University v. Blue Cross Hospital
Service, 587 F.2d 283 (8th Cir. 1976), cert. denied sub nom.
Faith Hospital Association v. Blue Cross Hospital Service,
Inc., 429 U.S. 977 (1976) (It appears from the language of this
case that § 1331 jurisdiction might be found for all con-
stitutional questions); Daniel Freeman Memorial Hospital v.
Schweiker, 656 F.2d 473 (9th Cir. 1981).
The Sixth Circuit and the Court of Claims have found federal
court jurisdiction more broadly available. In Chelsea Commu-
nity Hospital, SNF v. Michigan Blue Cross Association, 630
F.2d 1131 (6th Cir. 1980), the Sixth Circuit ruled that § 1331
jurisdiction lies where no specific statutory avenue to judicial
review is open. The Court of Claims has held that review is
available where no administrative channels leading to review
have been provided, at least so far as to ensure compliance with
statutory and constitutional provisions. Whitecliff.
The Fourth Circuit has so far left open the question of
jurisdiction over claims for which no alternative method of
review is available, Hopewell Nursing Home v. Bechtman,
No. 80-1846 (4th Cir., decided November 30, 1981), and our
own Circuit, while implying agreement with courts holding
that some avenue of review must be available where no admin-
istrative procedure is provided, Humana at 1076-77, has not
47a
directly decided the issue. In Humana, some of the related
claims were subject to administrative review, and the Court
held that those procedures should be exhausted before court
review of any of the claims. The district court there was
ordered to retain jurisdiction over the claims not subject to
administrative review, and decide, if necessary, its authority
over those claims after administrative exhaustion concerning
the other claims. /d. at 1085.
To draw at least one strand of agreement from this con-
fusion, every court which has considered the issue, including
the Supreme Court and our own Circuit Court of Appeals has
stated, at least in dicta, that some avenue of judicial review
must be available for constitutional claims. There is no hesita-
tion in deciding that in this case, where review is not provided
for in the Medicare Act and is not available in the Court of
Claims, jurisdiction would lie in this court over constitutional
claims. The more difficult question, and the one on which we
must focus, is whether the plaintiffs’ non-APA claims are in
fact constitutional claims, and if not, should § 405(h) be in-
terpreted in a manner which precludes review of statutory
claims altogether.
Plaintiffs do not allege that they have a property interest in
continuing to receive payments directly from the federal
government. Rather, they assert a property interest in the
unreimbursed expenses expected to be incurred due to the
forced transition to designated intermediaries. (Plaintiffs’
Opposition to Defendants’ Motion for Summary Judgment and
Plaintiffs’ Motion for Summary Judgment at 51.) Accordingly,
plaintiffs’ claim of deprivation of property without just com-
pensation in violation of the Fifth Amendment rests not on
their claim of statutory entitlement to direct reimbursement or
of statutory and procedural violations in the selection of inter-
mediaries, but on a possible future uncompensated loss due to
defendants’ expected failure to reimburse what plaintiffs con-
sider to be 100% of the costs attributable to the transition. If
alleged, this claim, clearly speculative at this juncture, would
be an attack on the Secretary's determination of “reasonable
48a
costs” related to the transition, and not on the administrative
instruction which is the subject of this case. Plaintiffs’ asserted
constitutional claim is in fact not part of this case. Their claimed
rights to direct reimbursement, and to application of certain
procedures in selecting intermediaries, do not have a con-
stitutional basis. We are required to decide then whether
§ 405(h) bars nonconstitutional statutory claims in this case.
Although some courts have clearly held that only con-
stitutional claims escape the jurisdictional bar of § 405(h), see
pp. 5-6, supra, neither the Supreme Court nor the D.C, Cireuit
has reached this issue, and the Sixth Circuit and the Court of
Claims have determined that federal jurisdiction is available
over otherwise non-reviewable statutory claims. /d, Without
binding precedent to guide us, we examine now both the
rationale behind decisions holding that there is, or is not,
jurisdiction, and any indications our own Circuit Court has
given as to which way it would rule if faced with this issue.
Courts which have held review of Medicare claims to be
precluded have relied primarily upon the Supreme Court’s
language in Saifi to the effect that § 405(h) is more than a
codification of the doctrine of exhaustion of administrative
remedies, and precludes all actions under § 1331, even claims
embracing constitutional issues which cannot be reached in the
administrative process. However, the context in which that
language appeared in Salfi was in refutation of the district
court’s conclusion that exhaustion was not required because it
appeared futile. The practical result in Salfi was to require
administrative exhaustion, not to foreclose relief altogether.
The doubts which the Supreme Court expressed as to the
constitutionality of § 405(h) if interpreted to preclude all judi-
cial review of constitutional questions have been echoed, as we
have seen, by all the Circuit Courts which have encountered
the issue under the Medicare Act, which unlike Title II of the
Social Security Act, does not have an all-encompassing provi-
sion for administrative procedures leading to judicial review.
Interpretations which avoid constitutional doubts have varied.
Section 405(h) has been interpreted to preclude all review
49a
under § 1331, but because by its terms it is not applicable to
review in the Court of Claims, a forum for judicial review has
been provided. Or, the phrase applying § 405(h) to the Medi-
care Act “as applicable” has been interpreted to mean that it
does not apply to constitutional claims for which there is no
other avenue of relief. Or, the particular cause of action is not
seen as an action to “recover on any claim arising under the
Act” because it does not seek to reverse the Secretary's deci-
sion concerning an actual claim for payment, but rather to
attack the procedures employed in reaching a determination,
The same reasoning can apply to statutory claims. Although
the language of Salfi referred to constitutional claims, the
issue in that case being clearly of a constitutional nature, “the
problem presented by a preclusion of review of a regulation for
compliance with the authorizing statute is obviously quite simi-
lar.” Humana of South Carolina, Inc. v. Mathews, 419 F.
Supp. 253, 258 n.2 (D.D.C. 1976), rev'd in part on other
grounds sub nom. Humana of South Carolina, Inc. v. Califa-
no, 590 F.2d 1070 (1979). While the Circuit Court in Humana
reversed in part the district court, holding that it should not
have decided certain matters where related matters were sub-
ject to administrative review, it did not contradict the district
court’s statement that “[iJf... the Medicare Act does not
provide . . . a mechanism [for review], nonstatutory judicial
review continues to be available,” Humana, 419 F. Supp. at
258, but rather left that question for later determination if
necessary. Humana, 590 F.2d at 1085. In view of the general
presumption in favor of judicial review of administrative ac-
tion, see e.g. Abbott Laboratories v. Gardner, 387 U.S. 145
(1967), and the reasoning in the Humana cases, we conclude
that § 405(h) should not be interpreted to preclude our jurisdic-
tion over statutory claims under the Medicare Act where no
alternative route to review is available. In addition to the total
preclusion of review which could result, this case is also distin-
guished from Salfi and other cases which declined jurisdiction
in not being a case “to recover on any claim” arising under the
Medicare Act. Plaintiffs do not seek any type of eventual
50a
monetary recovery on a reimbursement claim by this action.
This case does not fit the language of § 405(h), nor the rationale
of some courts which have denied review of provider reim-
bursement claims not previously subject to administrative re-
view because they would “bring the courts into the complex
interplay between physician and hospital in ascertaining the
appropriate medical charges for technical services .... a
matter peculiarly suited to determination by a specialized
agency.” St. Louis University v. Blue Cross Hospital Service.
The issues in this case are purely legal, and perfectly suited to
judiciai resolution.
Accordingly, jurisdiction under 28 U.S.C. § 1331 lies for all
of plaintiffs’ claims in this action.
Plaintiffs assert that their right to be paid directly by the
federal government stems from the original Medicare Act of
1965, at 42 U.S.C. § 1395g, stating:
The Secretary shall periodically determine the amount
which should be paid under this part to each provider of
services with respect to the services furnished by it, and
the provider of services shall be paid, at such time or times
as the Secretary believes appropriate (but not less than
monthly) . . . the amounts so determined. . .
The Act also provides that when any group or association of
providers of services “wishes” to have payments made through
a national, State, or other public or private agency or organiza-
tion and nominates such agency or organization for this pur-
pose, the Secretary is authorized to enter into an agreement
whereby that entity determines the amount, and makes pay-
ments to providers. 42 U.S.C. § 1395(h).
Based on these statutory provisions, and language from the
legislative history, plaintiffs argue that providers have a right
to have the Secretary determine the amount to be paid and
make payments, and the option, if they so choose, to have this
function performed by an intermediary. There is no doubt but
that both the House and Senate Reports on the 1965 Medicare
Act demonstrate an understanding that providers had the
5la
option of dealing directly with the Secretary. S. Rep. No. 404,
89th Cong., lst Sess., reprinted in 1965 U.S. Code Cong. and
Admin. News 1993; H.R. Rep. No. 213, 89th Cong. 147-148
(1965). The legislative history to the 1977 amendments also
reflects this view. H.R. Rep. 393, 95th Cong., Ist Sess. 68
(1977).
Defendants do not deny that this was the original under-
standing of Congress, and their own past practice.’ They
assert, however, that they always had the authority to reas-
sign direct dealing HHAs to intermediaries pursuant to § 1395-
kk, giving the Secretary the authority to perform his functions
under the Act by contract. They also rely on the 1977 amend-
ment to § 1395h of the Act which allows the Secretary to
“assign or reassign any provider of services” to an intermedi-
ary if he determines, after applying certain standards, criteria
and procedures, “that such designation would result in more
effective and efficient administration” of the program, 42
U.S.C. § 1395h(e)(1)-(3); and on the 1980 amendment which
states: “(T]he Secretary shall designate regional agencies or
organizations which have entered into agreements with him
under this section to perform such functions with respect to
home health agencies. . . in the region.” § 930(s)(1), Omnibus
Reconciliation Act of 1980, P.L. 96-499, Title I, 94 Stat. 2599
(December 5, 1980), 42 U.S.C. § 1395(h)(e)(4).
Defendants argue that since the 1977 amendment gave the
Secretary the authority to both assign and reassign providers
to intermediaries, he had the authority to assign intermedi-
aries to direct-dealing HHAs, i.e. to make initial assignments
to intermediaries. However, neither the legislative history nor
the Secretary’s own past practice support this interpretation.
The 1977 amendments are entitled the Medicare-Medicaid
Antifraud and Abuse Amendments,” and the House Commit-
2 The Secretary’s own regulations clearly state that providers may
elect to receive payment “[dlirectly from the Administrator.” 42
C.F.R. § 421.103 (1980).
52a
tee Report makes clear that the purpose of the amendment in
question was to authorize and require the Secretary to ex-
ercise more quality control over intermediaries, who were in a
position of potential conflicts of interest in that their continued
employment depended on the choice of the providers, and who
had on occasion been found to be lax in performing their func-
tions. The Secretary is permitted to override the provider’s
choice of intermediary, and required to develop standards,
criteria and procedures to enable him to evaluate intermedi-
aries’ performance. H.R. Rep. No. 393, 95th Cong., 2d Sess.
68-70 (1977). None of this has any relevance to direct reim-
bursement. The Report states that the Secretary is not bound
by a provider’s choice in nominating an intermediary, Jd. at 69,
but never refers to providers who deal with ODR, or expresses
any dissatisfaction with the quality of ODR’s performance, or
mandates any procedures to evaluate ODR’s performance and
compare it to that of intermediaries in order to make a decision
on assignment or reassignment. It seems more probable that
the reference to initial assignment in the statutory language
refers to providers who have nominated an intermediary for
the first time, and not to providers who are dealing with ODR
and do not wish to nominate an intermediary. Either the de-
fendants have themselves interpreted the language in this
fashion until recently, or, at the very least, considered the
wiser course of action to not disturb the choice of providers to
deal with ODR. Their consistent policy until last year, as
reflected in their own regulations, has been to afford providers
an option to receive payment from ODR.
Defendants’ interpretation of the 1977 amendment is also
inconsistent with their position that § 1395-kk authorized them
from the beginning to assign direct-dealing providers to inter-
mediaries. The authority to assign providers to intermediaries
not of their own choice given in the 1977 amendment was
carefully circumscribed by requiring the Secretary to develop
and utilize standards, criteria and procedures to determine
whether the designation would result in more effective and
efficient administration of the program, to furnish to the pro-
53a
vider and the existing intermediary a full explanation of his
reasons for that determination, and to afford the intermediary
an opportunity for a hearing. 42 U.S.C. § 1395h(e)(1)-(3). An
amendment which purportedly allows, under strictly defined
procedures, the Secretary to do something he could always do
anyway without those strictures defies reason. Either the 1977
amendment did not permit the reassignment of direct dealing
HHAs, or the Secretary did not previously have the authority
to do so under § 1395-kk.
As we have concluded, the 1977 amendment did not autho-
rize the Secretary to reassign direct dealing HHAs. It remains
to decide whether the 1980 amendment or§ 1395-kk did so. The
legislative histor7y of the 1980 amendment is sparse. The House
report reveals that the motive for the amendment was to
standardize administrative and reimbursement practices of
intermediaries, which were found to vary widely with respect
to home health providers. In the words of the Committee,
[t]his is largely attributable to the small proportion of an
intermediary’s medicare business that is devoted to this
particular type of provider. As a consequence, little ex-
pertise is developed in this area and there is no way of
making meaningful comparisons of the utilization and cost
of various agencies. Consolidation of the medicare home
health business among a smaller number of intermediaries
will enable intermediaries to focus more resources on the
administration of the benefit and develop uniform cost and
performance criteria.
H.R. Rep. 1167, 96th Cong. 2d Sess. 368, reprinted in 1980
U.S. Code Cong. and Admin. News 5732. Nowhere is direct
reimbursement mentioned, and the concerns expressed clearly
do not apply to ODR, which currently serves approximately
469 HHAs. (Defendants’ Statement of Material Facts Not in
Dispute { 4.) The only reference to ODR is the statement of the
Conference Committee to the effect that:
In requiring the designation of regional intermediaries for
home health agencies, it is not the intent of the conferees
that home health agencies would be precluded from con-
tracting directly with the Health Care Financing Admin-
istration.
54a
House Conference Report No. 1479, 96th Cong., 2d Sess.
(1980). (ODR is under the umbrella of the Health Care Financ-
ing Administration (HCFA)).
Section § 1395h(e)(4), contrary to defendants’ contention,
does not so unambiguously require the Secretary to assign all
HHAs, including those now dealing with ODR, to regional
intermediaries as to justify overlooking such undeniably clear
statements in the legislative history. The language of the
amendment, (see p. 12, supra) does not refer to all HHAs. The
ambiguity is clarified by consistent indications in the legisla-
tive history as well as the administrative practice over the past
15 years, which lead incontrovertibly to the conclusion that not
only did the 1980 amendment not require the Secretary to
assign direct-dealing HHAs to regional intermediaries,’ but it
also did not authorize him to do so. The language of the Confer-
ence Report unmistakably gives the election to the HHAs, who
are not “precluded from contracting directly” with ODR.
In the face of continuing expressions of Congressional un-
derstanding that Medicare providers have the option to re-
ceive payment from the government directly, and the con-
sistent 15 year practice on the part of the Secretary, defend-
ants’ argument that they always had the authority, under
§ 1395-kk, to contract out all of the services performed by ODR
rings hollow. Defendants cannot point to any specific con-
gressional expression of this interpretation, nor any indication
that they themselves made this interpretation before 1980. See
Pifts.’ Ex. 32. In 1966, defendants requested a legal opinion
from their Office of General Counsel, as to whether the Secre-
—
* Although defendants have contended in their pleadings that they
are required by the 1980 amendment to reassign direct-dealing
HHAs, defendants’ own General Counsel in a memorandum dated
January 11, 1982, stated in reference to the 1980 Conference Report,
“. .. the better reading of this language is that it merely indicated
that the Secretary is not required to assign a direct dealing home
health agency to a regional intermediary.” Pltfs.’ Ex. 36 at 5.
55a
tary was “legally required to deal directly with providers elect-
ing to do so.” The answer given by the Assistant General
Counsel was that the Secretary did not have the right to
designate an intermediary for a provider who did not elect to be
served by an intermediary. Providers had the prerogative to
have no intermediary. Certain ODR functions, for example,
audit functions, however, could be performed by contract pur-
suant to § 1395-kk. Pitfs.’ Ex. 33. While not an official declara-
tion of agency policy, this statement, combined with the sub-
sequent one and one-half decades’ policy of allowing providers
an election to deal with ODR, repromulgated in agency regula-
tions as late as 1980, is strong evidence that the agency in-
terpretation to which defendants now request the Court to
afford deference is of recent vintage.
Under these circumstances, defendants’ interpretation is
not deserving of great deference, and we find, despite the
general language of § 1395-kk appearing .o permit the Secreta-
ry to contract out any of his functions under the Act, that he is
not authorized to assign providers who have not elected to be
so served to intermediaries. The more specific features of the
statutory scheme, as we have seen, give providers who “wish”
to do so the right to nominate an intermediary subject to the
Secretary’s approval, while retaining the option of dealing
directly with the Secretary for others. The 1977 and 1980
amendments, while constricting the provider's right to select
its own intermediary, were not intended to alter the status of
direct-dealing providers. Congress has repeatedly expressed
its understanding that providers have the option of dealing
directly with the Secretary. Section 1395-kk cannot, suddenly,
and contrary to Congressional understanding, be brought into
service to allow defendants to abolish that option.
We express no opinion as to the desirability of requiring all
home health agencies to deal with regional intermediaries,
eliminating ODR’s function in relation to them. Defendants are
certainly free to attempt to persuade Congress to authorize
such a policy. Congress may accept or reject that attempt.
However, defendants may not implement this plan absent
Congressional approval.
56a
Having determined that defendants may not reassign direct
dealing HHAs, plaintiffs’ contention that the Secretary failed
to apply the statutorily-mandated standards, criteria and pro-
cedures (42 U.S.C. § 1395h(f)) to the selection of the regional
intermediaries remains relevant only to those HHAs who were
previously served by intermediaries and are now required to
transfer to the newly designated intermediaries. Although
plaintiffs admit that the language of § 1395h(e)(4) (the 1980
amendment) excuses the Secretary from making a determina-
tion under the regulatory standards, criteria and procedures
as to whether designating a regional intermediary will result in
“... the more effective and efficient administration” of the
Medicare program,* plaintiffs nonetheless maintain that de-
fendants are still bound by § 1395h(b) to apply the standards,
criteria and procedures developed under § 1395h(f) to deter-
mine that the designation of the regional intermediaries is
“consistent” with the effective and efficient administration of
the program. However, § 1395h(b) applies by its terms to
entering or renewing agreements with intermediaries, while
the 1980 amendment requires the Secretary to designate re-
gional intermediaries who already have agreements with the
Secretary, (i.e., existing intermediaries). Accordingly, plain-
tiffs’ claim under § 1395(b) fails. The Secretary has not violated
this provision or its regulatory implementation in selecting the
regional intermediaries for those HHAs who choose to be
served by intermediaries.
*§ 1395(e)(4) provides that regional intermediaries shall be desig-
nated “(njotwithstanding subsections (a) and (d) and paragraphs (1),
(2) and (3) of this subsection,” which include the provisions requiring
a determination by the Secretary, using the mandated standards,
criteria and procedures to determine that an assignment or reassign-
ment to an intermediary would result in the more effective and
efficient administration of the program, and requiring the Secretary
to provide an explanation of his determination to the provider and the
existing intermediary and to afford the intermediary a hearing. 42
U.S.C. § 1395h(e) (1), (2) and (3).
57a
Plaintiffs’ final contention is that defendants failed to follow
the procedures mandated by the APA for rulemaking in
promulgating their policy. Again, as defendants may not reas-
sign direct-dealing HHAs at all under the current statutory
scheme, this claim only has relevance to HHAs previously
dealing with intermediaries. There is no dispute but that de-
fendants were required by the 1980 Amendment to designate
regional intermediaries for HHAs who choose to deal with
intermediaries. The regional intermediaries were selected
from among existing intermediaries, thus sume HHAs re-
mained with the same intermediaries, while others have been
or will be transferred. Some members of plaintiff National
Association of Home Health Agencies are in the latter cate-
gory. Plaintiffs allege that this group (along with those
trasferring from ODR) is seriously affected by the timing of the
transition and by the designation of particular intermediaries,
in that the speed of the transition and the lack of capacity of
some of the designated intermediaries have already or may
later result in delays in payment and other inefficiencies. Ac-
cording to affidavits submitted by some of the plaintiffs, these
conditions impact the plaintiffs economically, and could result
in forcing them to reciuce staff, eliminate services, or go out of
business entirely. Pltfs.’ Exs. 14 at 3, 21, 23, 24, 28, and 40.
They contend that the administrative instruction here fits the
APA definition of a “rule,”® and is a “substantive rule” subject
to the notice and comment procedures of 5 U.S.C. § 553 be-
cause it has a substantial impact upon them. See Brown Ex-
press, Inc. v. United States, 607 F.2d 695 (5th Cir. 1979).
5“(Rjule means the whole or a part of an agency statement of
general or particular applicability and future effect designed to
implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of an agency and
includes the approval or prescription for the future of rates, wages,
corporate or financial structures or reorganizations thereof, prices,
facilities, appliances, services or allowances therefor or of valuations,
costs, or accounting, or practices bearing on any of the foregoing” 5
U.S.C. § 551(4).
58a
Defendants, while not claiming to have followed the APA
procedures of Federal Register notice of proposed rules,
opportunity for interested persons to comment, consideration
of the comments, and publication of the final rules with a
concise general statement of their basis and purpose 30 days
before their effective date, contend that the December 1981
instruction is not a rule, and that even if it were it would be
exempt from notice and comment procedures. It is not a rule,
they assert, because they have a mandatory duty to designate
intermediaries, and there are no policy options on which to
comment. The Secretary has not engaged in rulemaking, but
has acted to carry out a nondiscretionary duty. This statement
does not withstand scrutiny. As plaintiffs have pointed out,
defendants were given the discretion to delineate the regions
(they chose statewide regions), select the regional intermedi-
aries from among existing intermediaries, and schedule the
implementation of the transition. Defendants also perceived
policy options in their implementation of the assignment of
regional intermediaries. In their September 1980 intermedi-
ary letter,’ opinions and recommendations were sought from
intermediaries as to what defendants considered “major
issues” relevant to the proposed policy. “1. Should there be any
exceptions to the proposal for one intermediary per State?. . .
2. Should there be a separate treatment for multi-provider
chains? . . . 3. Should the Office of Direct Reimbursement be
available for servicing local Government operated home health
agencies? . . . 4. What is the most effective way for making the
transition to a Statewide intermediary?” Exhibit A to the
January 12, 1982 Affidavit of Tera S. Younger. Any number of
® This letter is dated prior to the enactment of the 1980 amend-
ment. Defendants were then considering the designation of regional
intermediaries pursuant to their purported authority under the 1977
amendment. The 1980 amendment, although requiring the Secretary
to implement the option of designating regional intermediaries, did
not cireumscribe the Secretary’s discretion in the areas discussed in
the letter.
59a
policy issues could have been subject to comment. For ex-
ample, plaintiffs’ concern that Medicare will not fully compen-
sate the cost of the transition could have been formally ex-
amined and addressed before the transition began. (Plaintiffs
were obviously uncertain about Medicare’s policy on this mat-
ter at the commencement of this lawsuit). Doubts related to
the regional intermediaries’ ability to timely process claims
during the transition and the HHAs’ resulting cashflow prob-
lems could have been addressed. Plaintiffs as affected parties
undoubtedly had opinions as to the most effective, and least
costly way to accomplish the transition. This is not to say that
some input on these issues was not received and considered by
defendants. But it was not done in accordance with APA proce-
dures.
The December, 1981 instruction is an agency statement of
general applicability and future effect designed to implement
law, and therefore a rule under the APA. It is not an interpre-
tive or procedural rule excepted from notice and comment
requirements. It is a substantive rule because it substantially
impacts the rights and obligations of affected parties. Chrysler
Corp. v. Brown, 441 U.S. 281, 301-302 (1979); Batterton v.
Marshall, 648 F.2d 694 (D.C. Cir. 1980).
Defendants next argue that notice and comment procedures
were not required in this case because plaintiffs, as demon-
strated by their own exhibits (Pltfs.’ Ex. 7, 12, and 27) had
actual notice of the policy throughout the course of its develop-
ment, and did submit comments. However, the fact that some
plaintiffs had learned of the proposed policy and submitted
unsolicited comments does not prove that all of the plaintiffs
had actual notice, or that the notice they had adequately de-
scribed the proposed rule for APA purposes.
In fact, defendants impermissibly relied on word of mouth
and third parties to afford plaintiffs notice. The August 1980
intermediary letter proposing the policy was circulated to in-
termediaries and HCFA components, not HHAs, for com-
ment. January 12, 1982 Affidavit of Tera S. Younger at 4 6.
60a
Defendants subsequently did meet with plaintiff National As-
sociation of Home Health Agencies (NAHHA) to discuss the
proposal and request its help in soliciting individual HHA
comments. /d. News of the proposed policy appeared in NAH-
HA’s August, 1980 Newsletter, and defendants did receive
comments from HHAs on the proposed policy. However, there
was no guarantee, and there is no proof now, thet all affected
HHAs received actual notice. In fact, some representatives of
HHAs have averred in affidavits in this case that they did not
receive notice. Pitfs.’ Ex. 16, 19, 29. Constructive notice
through national associations and trade journals is not ade-
quate. The Federal Register is the only acceptable form of
constructive notice under the APA. Rodway v. United States
Department of Agriculture, 514 F.2d 809, 815 (D.C, Cir. 1975).
In any case, the August, 1980 letter did not contain a fully-
formulated proposal.
In August of 1981, HCFA provided a more detailed account
of its policy to national HHA associations, and to intermedi-
aries, who were asked to forward copies to the HHAs they
served. Younger affidavit at { 9 and Exhibit E to the affidavit.
Again, a request to a third party to provide notice does not
meet the requirement of actual notice. Furthermore, this let-
ter announced an already formulated policy, not a proposed
policy concerning which comments would be considered. The
December 1981 instruction, which also only reached HHAs by
way of their intermediaries, merely described the action
taken, and solicited no comments.
Whether or not defendants were excused from publication of
the proposed rule in the Federal Register, they were still
obligated to consider the comments and publish a final rule
with a concise general statement of its basis and purpose 30
days before its effective date. Although defendants claim to
have considered the comments received, they did not formally
address them and provide the statement of basis and propose
required in the Federal Register.
Defendants must address the discretionary aspects of the
transition to regional intermediaries in a proposed rule, pub-
6la
lished in the Federal Register, solicit comments, consider the
comments, and publish the final rule with the required state-
ment.
Although it is regrettable that the transition process must
be interrupted in mid-course, we have no choice but to require
compliance with the law.
An appropriate judgment accompanies this Memorandum
Opinion. '
/s/ Joyce HENS GREEN
Joyce Hens Green
United States District Judge
March 10, 1982
62a
United States District Court
For THE District oF COLUMBIA
Civil Action No, 81-3160
NATIONAL ASSOCIATION OF HOME
HEALTH AGENCIES, et al. Plaintiffs,
Vv.
RICHARD 8S. SCHWEIKER, et al., Defendants.
FILED
March 10, 1982
JAMES F. DAVEY, Clerk
JUDGMENT
It is this 10th day of March, 1982, hereby
ORDERED, that declaratory judgment is entered in favor
of plaintiffs National Association of Home Health Agencies;
Home Health Services and Staffing Association; Upjohn
Healthcare Services, Inc.; Alabama Department of Public
Health; Barber County Community Home Health Agency;
Chataugua County Home Health Agency; Comprehensive
Home Health Services; Elk County Home Health Agency;
Franklin County Nursing Service; Golden Belt Home Health
Services; Harvey County Home Health Agency; Home Health
Services of Lake County; Home Health Services of Tarrant
County, Inc.; Hub City Home Health Services, Inc.; Kiowa
Comanche Home Health Agency; Koochiching County Nurs-
ing Service; Lake of the Woods Nursing Service; Lincoln,
Lyon, Murray & Pipestone Community Health Services; Medi-
cal Home Care Services; Mediserv Home Health Agency; Mid-
Peninsula Health Services, Inc.; Mitchell County Home
Health Agency; Mountain and Valley In-Home Services, Inc.;
Nassau County Department of Health; Pottawatomie City
Home Health Agency; Roseau County Nursing Service; San
68a
Diego Hospice Corporation; San Francisco Home Health Ser-
vices; Santa Barbara Visiting Nurse Association; South Mis-
sissippi Home Health & Rehabilitation Agency, Inc.; Trend
Home Health Agency; Trico Home Health Services, Inc.; Tri-
County’ Home Health Care; Visiting Nurse Association of
Alameda County; Visting Nurses Association of Greater
Chesterfield; Visiting Nurse Association of Northern Virginia;
VNA of San Diego; VNA of San Francisco; VNA of Southwest
Louisiana, Inc.; VNA of Ware County; and VNS of Verdugo
Hills, and against defendants Richard S. Schweiker, Secreta-
ry, United States Department of Health and Human Services
and Carolyne K. Davis, Administrator of the Health Care
Financing Administration, United States Department of
Health and Human Services, to the effect that defendants’
December 8, 1981 instruction to intermediaries violates the
Medicare Act insofar as it assigns plaintiffs who choose to deal
with defendants’ Office of Direct Reimbursement to regional
intermediaries for the purpose of Medicare reimbursement
determinations and payment, and it is
FURTHER ORDERED, that defendants are permanently
enjoined, absent new statutory authorization, from requiring
plaintiffs, absent their election to do so, to seek Medicare
reimbursement determinations and payment from other than
defendants’ Office of Direct Reimbursement, and it is
FURTHER ORDERED, that judgment is entered in favor
of defendants Richard S. Schweiker, Secretary, United States
Department of Health and Human Services and Carolyne K.
Davis, Administrator of the Health Care Financing Admini-
stration, United States Department of Health and Human
Services and against plaintiffs National Association of Home
Health Agencies; Home Health Services and Staffing Asso-
ciation; Upjohn Healthcare Services, Inc.; Alabama Depart-
ment of Public Health; Barber County Community Home
Health Agency; Chataugua County Home Health Agency;
Comprehensive Home Health Services; Elk County Home
Health Agency; Franklin County Nursing Service; Golden
Belt Home Health Services; Harvey County Home Health
64a
Agency; Home Health Services of Lake County; Home Health
Services of Tarrant County, Inc.; Hub City Home Health
Services, Inc.; Kiowa Comanche Home Health Agency; Koo-
chiching County Nursing Service; Lake of the Woods Nursing
Service; Lincoln, Lyon, Murray & Pipestone Community
Health Services; Medical Home Care Services; Mediserv
Home Health Agency; Mid-Peninsula Health Services, Inc.;
Mitchell County Home Health Agency; Mountain and Valley
In-Home Services, Inc.,; Nassau County Department of
Health; Pottawatomie City Home Health Agency; Roseau
County Nursing Service; San Diego Hospice Corporation; San
Francisco Home Health Services; Santa Barbara Visiting
Nurse Association; South Mississippi Home Health & Rehabil-
itation Agency, Inc.; Trend Home Health Agency; Trico Home
Health Services, Inc.; Tri-County Home Health Care; Visiting
Nurse Association of Alameda County; Visiting Nurses
Association of Greater Chesterfield; Visiting Nurse Associa-
tion of Northern Virginia; VNA of San Diego; VNA of San
Francisco; VNA of Southwest Louisiana, Inc.; VNA of Ware
County; and VNS of Verdugo Hills, on plaintiffs’ claim that the
Secretary failed to comply with 28 U.S.C. § 1395(b) in the
designation of regional intermediaries, and it is
FURTHER ORDERED, that judgment is entered in favor
of plaintiffs National Association of Home Health Agencies,
Home Health Services and Staffing Association; Upjohn Heai-
theare Services, Inc.; Alabama Department of Public Health;
Barber County Community Home Health Agency; Chatauqua
County Home Health Agency; Comprehensive Home Health
Services; Elk County Home Health Agency; Franklin County
Nursing Service; Golden Belt Home Health Services; Harvey
County Home Health Agency; Home Health Services of Lake
County; Home Health Services of Tarrant County, Inc.; Hub
City Home Health Services, Inc.; Kiowa Comanche Home
Health Agency; Koochiching County Nursing Service; Lake of
the Woods Nursing Service: Lincoln, Lyon, Murray & Pipes-
tone Community Health Services; Medical Home Care Ser-
vices; Mediserv Home Health Agency; Mid-Peninsula Health
65a
Services, Inc.; Mitchell County Home Health Agency; Moun-
tain and Valley In-Home Services, Inc.; Nassau County
Department of Health; Pottawatomie City Home Health
Agency; Roseau County Nursing Service; San Diego Hospice
Corporation; San Francisco Home Health Services; Santa Bar-
bara Visiting Nurse Association; South Mississippi Home
Health & Rehabilitation Agency, Inc.; Trend Home Health
Agency; Trico Home Health Services, Inc.; Tri-County Home
Health Care; Visiting Nurse Association of Alameda County;
Visiting Nurses Association of Greater Chesterfield; Visiting
Nurse Association of Northern Virginia; VNA of San Diego;
VNA of San Francisco; VNA of Southwest Louisiana, Inc.;
VNA of Ware County; and VNS of Verdugo Hills, and against |
defendants Richard S. Schweiker, Secretary, United States
Department of Health and Human Services and Carolyne K.
Davis, Administrator of the Health Care Financing Admini-
stration, United States Department of Health and Human
Services on plaintiffs’ claim that defendants’ promulgation of
the policy requiring Home Health agencies to be served by
designated regional intermediaries is subject to the notice and
comment procedures mandated at 5 U.S.C. § 553, and it is
FURTHER ORDERED, that within 30 days of this date,
defendants shall publish in the Federal Register a proposed
rule, in accordance with the Memorandum Opinion of this date,
and solicit comments thereon from interested parties. Until
the procedures mandated in 5 U.S.C. § 553 are completed,
Home Health Agencies shall have the option of obtaining Medi-
care cost reimbursement determinations and payment from
the organizations or agencies which served as their intermedi-
aries prior to the designation of regional intermediaries.
/s/ JoYcE HENS GREEN
Joyce Hens Green
United States District Judge
66a
APPENDIX D
Gnited States District Court
For THE DISTRICT OF COLUMBIA
Civil Action No. 81-3160
NATIONAL ASSOCIATION OF HOME
HEALTH AGENCIES, et al. Plaintiffs,
Vv.
RICHARD S. SCHWEIKER, et al., Defendants.
FILED
March 1, 1982
JAMES F. DAVEY, Clerk
TEMPORARY RESTRAINING ORDER
This matter, having come before this Court upon the com-
plaint filed by plaintiffs, plaintiffs’ motion for a temporary
restraining order pursuant to Rule 65(b) of the Federal Rules
of Civil Procedure, plaintiffs’ memorandum in support of that
motion, the written declaration submitted by the defendants,
and oral argument by both parties, for the reasons stated
orally on the record this date, it is this lst day of March, 1982,
hereby
ORDERED, that defendants and their officers, agents, ser-
vants, employees, attorneys, and those persons in active con-
cert with them shall not, for a period of 10 days or until this
Court can render a final determination in this action if sooner,
require plaintiffs to submit requests for Medicare reimburse-
ment to other than the defendants’ Office of Direct Reimburse-
ment; and said Office shall continue to process those claims in
the usual manner during that time period.
67a
This Order is issued at 2:22 p.m. March 1, 1982 and shall
expire, unless extended, at 2:22 p.m. March 10, 1982.
Security will be required of the plaintiffs in the amount of
$100.00 cash or surety.
/s/ JoYCE HENS GREEN
Joyce Hens Green
U.S. District Judge
68a
APPENDIX E
42 U.S.C. § 1395g. Payments to providers of services; con-
ditions; amount; payments under assignment or power of
attorney
(a) The Secretary shall periodically determine the amount
which should be paid under this part to each provider of serv-
ices with respect to the services furnished by it, and the provid-
er of services shall be paid, at such time or times as the
Secretary believes appropriate (but not less often than month-
ly) and prior to audit or settlement by the General Accounting
Office, from the Federal Hospital Insurance Trust Fund, the
amounts so determined, with necessary adjustments on
account of previously made overpayments or underpayments;
42 U.S.C. § 1395h. Use of public or private agencies or
organizations to facilitate payment to providers of
services—Authorization for agreement by Secretary for im-
plementation; scope of agreement
(a) If any group or association of providers of services
wishes to have payments under this part to such providers
made through a national, State, or other public or private
agency or organization and nominates such agency or organiza-
tion for this purpose, the Secretary is authorized to enter into
an agreement with such agency or organization providing for
the determination by such agency or organization (subject to
the provisions of section 139500 of this title and to such review
by the Secretary as may be provided for by the agreement) of
the amount of the payments required pursuant to this part to
be made to such providers (and to providers assigned to such
agency or organization under subsection (e) of this section),
and for the making of such payments by such agency or organi-
zation to such providers (and to providers assigned to such
agency or organization under subsection (e) of this section).
69a
42 U.S.C. § 1395kk. Administration
(a) Except as otherwise provided in this subchapter and in
the Railroad Retirement Act of 1974, the insurance programs
established by this subchapter shall be administered by the
Secretary. The Secretary may perform any of his functions
under this subchapter directly, or by contract providing for
payment in advance or by way of reimbursement, and in such
installments, as the Secretary may deem necessary.
70a
APPENDIX F
42 C.F.R. § 421.103 Option available to providers.
A provider may elect to receive payment for covered serv-
ices furnished to Medicare beneficiaries:
(a) Directly from the Administrator;
or
(b) Through an intermediary, when both the Administra-
tor and the intermediary consent.
42 C.F.R. § 421.104 Nominations for Intermediary.
(b) Nomination by nonmembers or nonconcurring mem-
bers. Providers that nonconcur in their association’s nomina-
tion, or are not members of an association, may:
(1) Form a group of 2 or more providers for the specific
purpose of nominating an intermediary, in accordance with
provisions of paragraph (a) of this section; or
(2) Exercise their right to receive payment directly from
the Administrator in accordance with § 421.103.
33 Fed. Reg. 11277-78 (August 8, 1968)
20 C.F.R. § 405.651 Nomination of agency or organization
as “intermediary”: contractual undertakings with interme-
diaries.
(a) Under section 1816 of the Act, groups of providers or
associations of providers, may nominate on behalf of the mem-
bers of such group of association, a national, State, or other
public or private agency or organization for the purpose of
entering into an agreement with the Secretary providing for
the determination of amounts payable under title XVIII, and
the making of such payments, by such agency or organization
to providers of services. A member of a group or association
may, however, deal directly with the Secretary rather than
through an intermediary. The nomination of an agency or
Tla
organization by a group or association of providers of services
(see § 405.653); shall not be binding on any member of such
group or association if such member notifies the Secretary of
its desire not to be bound by such nomination.
20 C.F.R. § 405.654 Election to deal through a nominated
agency or organization or to deal directly with the Secreta-
ry.
A provider which is not a member of a group or association
which has nominated an intermediary or a nonconcurring
member of a group or association of providers of services, may
with the consent of the Secretary and an agency or organiza-
tion which has entered into an agreement with the Secretary,
elect such agency or organization to determine the amount of
and make payment to such provider under the provisions,
described in Subpart A of this part or, elect to receive payment
directly from the Secretary. This procedure is also available to
any provider of services which has forwarded notice of intent
to withdraw its concurrence in the nomination or its election of
a particular agency or organization (see § 405.656).
72a
APPENDIX G
medicare
Part A Intermediary Letter
Department of Health
and Human Services
Health Care Financing
Administration
Transmittal No. A-81-32 Date December 1981
BPO-P13
SUBJECT: Designation of Regional Intermediaries to Serve
‘Freestanding Home Health Agencies—
ACTION
Intermediaries have now been selected to serve freestand-
ing home health agencies (HHAs) as required by the Omnibus
Reconciliation Act of 1980. As you recall, I.L. A-81-21 trans-
mitted a briefing paper which outlined the Health Care Financ-
ing Administration’s (HCFA) final plan for implementing this
legislation.
Attachment 1 identifies designated intermediaries for each
State and discusses some implementation issues. Please for-
ward one copy of this paper to each of the HHAs you now serve
(both freestanding and provider-based) using the draft lan-
guage in Attachment 2 as appropriate.
Attachment 3 provides guidelines on change of intermediary
activities connected with the implementation of HHA interme-
diaries. Your HCFA Regional Offices will contact you to set up
a meeting with affected HHAs and intermediaries to go over
these plans.
Questions concerning this letter should be referred to your
servicing HCFA regional office.
3 Attachments
73a
Designation Of Regional Medicare Intermediaries To Serve
Freestanding Home Health Agencies
The Health Care Financing Administration (HCFA) has
now selected intermediaries to serve freestanding home health
agencies (HHAs) as required by the Omnibus Reconciliation
Act of 1980. Exhibit 1 lists the organizations which have been
designated for each State.
BACKGROUND
P.L. 96-499 directed the Department of Health and Human
Services (DHHS) to designate regional intermediaries to serve
freestanding HHAs. This legislation was an outgrowth of con-
cern about fraud and abuse resulting in overpayments to
HHAs, as well as more general interest in improving con-
tractual arrangements with the private sector for administer-
ing the Medicare program. The purpose of the legislative pro-
vision was to assure that each intermediary would have a
sufficient number of HHAs to develop expertise in claims
adjudication and audit activities and give sufficient priority
attention to their HHA workload.
In August of 1981, HCFA notified home health agencies,
intermediaries, and other interested parties of its plans to
designate one intermediary to serve freestanding HHAs in
each state. After announcement of its plans for implementing
this legislation, HCFA used a structured process to select an
HHA intermediary for each State. Selection criteria included
past performance, current volume of HHA workload, and abil-
ity to assume the additional workload. Input solicited from
HHAs was considered in those States where a more than one
intermediary currently serves a significant volume of HHAs.
IMPACT
We believe the designation of the regional HHA intermedi-
aries listed in Exhibit 1 will achieve the goal of both Congress
and HCFA to improve the administration of the home health
benefit under the Medicare program. Consolidating the work-
load of freestanding HHAs under a single intermediary in each
74a
State should improve management and control of coverage and
reimbursement determinations for HHAs. The use of State
intermediaries will also facilitate intermediary onsite review of
HHAs which has proven to be a significant tool for assuring
improved reimbursement determinations and controlling
overutilization and overpayments which have been of concern
to HCFA and the Congress in the past. Consistent application
of Medicare policies with respect to HHAs within each State
will enhance delivery of necessary services by providing pre-
dictability for providers, beneficiaries and the health care com-
munity.
Approximately 29 percent of HHAs participating in the
Medicare program will be reassigned to another intermediary
as a result of implementation of this legislation. The number of
intermediaries serving freestanding HHAs will be reduced
from 72 to 49 as a result of this action. Freestanding HHAs in
17 States are already served by the designated organization,
thus no reassignments will occur in these States. (No HHA
intermediary will be designated for Puerto Rico and the Virgin
Islands because of the proposed competitive procurement to
select a single organization to serve their entire Medicare
workload.) In many additional States, only a minimal number
of agencies will be affected since the designated intermediary
already serves the majority of HHAs in the State. In only 12
States will there be a major shift of HHAs to a new intermedi-
ary (Alabama, Arizona, Arkansas, California, Florida, Ohio,
Pennsylvania, South Carolina, Texas, Virginia, Washington,
West Virginia). The following implementation procedures are
designed to assure a smooth transition to the new intermedi-
aries.
™™MPLEMENTATION
HCFA will work closely with intermediaries and HHAs
throughout the implementation process to assure a smooth
transition and no interruption in cash flow. In the States witha
significant volume of HHA transfers, committees consisting of
HCFA RO, intermediary and State HHA association repre-
75a
sentatives will be established to coordinate transition activi-
ties. In other affected States, ROs will keep in touch with
intermediaries and reassigned }-roviders to discuss implemen-
tation issues.
Freestanding HHAs not currently dealing with the desig-
nated intermediary in their State will be transferred to that
organization beginning on January 1, 1982, based on provider
cost reporting year ending dates. (For example, a freestanding
HHA with an accounting year ending December 31, i981, will
be transferred to the new intermediary on January 1, 1982.)
Our data indicates that the majority of HHA reassignments
will occur on January 1, 1982 (38 percent), July 1, 1982 (31
percent), and October 1, 1982 (15 percent).
The designated intermediary will assume responsibility for
bill processing on the effective date of the transfer, as well as
audit and cost ~port settlement of the cost report which be-
gins on that date. The current intermediary will continue to be
responsible for auditing and settling the cost report for the
period ended just before the transfer. The transition commit-
tee will assure that there is no interruption in cash flow to
providers. PIP rates and reimbursement rates will be con-
tinued “as is” for the initial cutover period until the designated
intermediary becomes familiar with new HHAs’ accounting
systems. HCFA ROs will closely monitor transition activities
and operation of designated intermediaries to assure the
establishment of effective intermediary/HHA relationships.
Because of the short time before implementation, the trans-
fer of bill processing for HHAs reassigned effective January 1,
1982, may be delayed if deemed necessary by the transition
committee to promote a smooth transfer. However, responsi-
bility for cost report settlement would still be transferred
effective January 1, 1982.
The transfer of HHAs billing the Office of Direct Reimburse-
ment on an automated basis will be timed on an individual basis
to assure that the designated State intermediary can handle
the HHAs’ billing needs. Designated intermediaries will be
76a
asked to contact any automated billing HHAs in their service
area to work on a mutually agreeable billing syste n (whether
telecommunications oar magnetic tape) which meets HCFA’s
data requirements. This flexibility should be able to serve the
needs of both HHAs and HCFA.
HCFA will evaluate requests from multi-State HHA chains
to have all their audit and settlement work done by a single
intermediary on a case-by-case basis. Approval will be based
on whether the degree of centralization of the chain organiza-
tion would make such a deviation efficient and effective.
PROBLEM RESOLUTION PROCEDURE FOR HHAS
We believe that the vast majority of reassigned HHAs will
be able to establish good working relationships with desig-
nated intermediaries. However, we recognize that there may
be a limited number of cases in which a given HHA has a
problem which they are unable to resolve with their designated
intermediary. HCFA ROs will investigate such cases and re-
solve problems. Such problems and their resolution will be
used to evaluate intermediary performance and make deci-
sions about continuing designations.
77a
APPENDIX H
Parties To This Proceeding And Their Member Organizations
And Parent Companies
National Association of
Home Health Agencies
Home Health Services and
Staffing Association
Upjohn Healthcare Services
The Upjohn Company
Alabama Department of
Public Health
Barber County Community
Home Health Agency
Chataugua County Home
Health Agency
Comprehensive Home
_ Health Services
Elk County Home Health
Agency
Franklin Covnty Nursing
Service
Golden Belt Home Health
Services
Harvey County Home
Health Agency
Home Health Services of
Lake County
Home Health Services of
Tarrant County, Inc.
Hub City Home Health
Services, Inc.
Kiowa Comanche Home
Health Agency
Koochiching County Nursing
Service
Lake of the Woods Nursing
Service
Lincoln, Lyon, Murray, &
Pipestone Community
Health Services
Medical Home Care Services
Mediserv Home Health
Agency
Mid-Peninsula Health '
Services, Inc.
Mitchell County Home
Health Agency
Mountain and Valley
In-Home Services, Inc.
Nassau County Department
of Health
- Pottawatomie City Home
Health Agency
Roseau County Nursing
Service —
San Diego Hospice
Corporation
San Francisco Home Health
Services
Santa Barbara Visiting
Nurse Association
South Mississippi Home
Health & Rehabilitation
Agency, Inc.
Trend Home Health Agency
Trico Home Health
Services, Inc.
Tri-County Home Health
Care.
Visiting Nurse Association
of Alameda County
Visiting Nurses Association
of Greater Chesterfield
Visiting Nurse Association
of Northern Virginia
VNA of San Diego
VNA of San Francisco
VNA of Southwest
Louisiana, Inc.
VNA of Ware County
VNS of Verdugo Hills
Visiting Nurse Association
of Springfieid, MA
International Homemakers
78a
Community Nurse
Association
District Nursing Association
Westport Home Health
Agency
Lakes Region Community
Health
Androscoggin Home Health
Service
Salisbury Public Health
Nursing
Family Services - Woodfield
St. Luke’s Home Care
Program
Condado Home Care
Program, Inc.
Hospital Sin Paredes, Inc.
Bayonne Visiting Nurse
Ass’n.
Patient Care Medical
Services
MCOSS Nursing Services,
Ine.
Gloucester County Visiting
Nursing Association, Inc.
Visiting Nurse Service of
New York
Long Island College
Hospital
The Brooklyn Hospital
79a
The Methodist Hospital
Home Care
Visiting Nurse Association
of Brooklyn
Maimonides Medical Center
Metropolitan Jewish
Geriatric
Jewish Hospital and Medical
Center Home Health
Agency
Visiting Homemaker
Services
Visiting Nurse Association
of Buffalo
Visiting Nurse Association
of Rochester & Monroe
Counties
South Hills Health Systems
Northwest Allegheny Home
Health Care Agency
Butler Home Health Care
Agency of Erie County
North Penn Home Health
Agency
Visiting Nurse Associaton of
Carlisle Hospital
Visiting Nurse Association
of Mechanicsburg, PA
Home Care Services Agency
Visiting Nurse Association
of Hanover, PA
Visiting Nurse Association
of Spring Grove, PA
Columbia Montour Home
Health Service
Home Health Care of Beth-
lehem, PA
Visiting Nurse Association
of Bethlehem, PA
Chester Medical Center
Holy Redeemer Visiting
Nurse Association
Adventist Home Health
Service
Hely Cross Hospital Home
Health Care Service
Staff Builders Home Health
Care
West Baltimore Community
Health Care Corporation
Good Samaritar. Hospital
HomeCall, Inc.
Bur Home Health Services
Department of Nursing, Old
Dominion University
Maryview Hospital
Toledo District Nurse Ass’n.
Deaconess Home Health
Agency
Visiting Nurse Service, Inc.
80a
Carroll County Visiting
Nurse Association
Cinciannati Health Dept.
Visiting Nurse Association
of Dayton, OH
United Health Program -
Calumet Huntington County
Home Health Agency
Visiting Nurse Association
of Southwest Indiana
Visiting Nurse Association
of St. Clair County
Monroe County Health
Dept.
Michigan Cancer Foundation
Sve.
Visiting Nurse Association
of Metropolitan Detroit
Lapeer County Health
Dept.
Central Michigan District of
Health
Shiawassee County Health
Dept.
In-Home Health Care
Service
St. Joseph District of Health
Jackson County Health
Dept.
Trinity Memorial Hospital
We Care Nursing Service
Outreach Home Health
Service
Grant County Nurses
Green Bay Visiting Nurse
Association
Wausau Visiting Nurse
Association
Community Health & Social
Services
Metro Home Health Care,
Inc.
Ebenezer Society
North Memorial Medical
Center
Dept. of Community
Services
Alexian Brothers Medical
Center
Lake Forest Hospital Home
Care
In Home Health Care
Service of Suburban Chicago
North, I
In Home Health Care
Service of Suburban Chicago
West
Country Care, Inc.
Home Health Service
United Homecare, Ltd.
Bodimetric Health Services,
Ine.
Chicago Center Memorial
Hospital
Rogers Park Home Health
Care
Visiting Nurses Association
of Rockford, IL
Rock Island County Health
Dept.
Peoria City/County Health
Dept.
Home Health Services of
Mercy
Lincolnland Visiting Nurse
Ass’n.
St. Francis Hospital
Visting Nurse Association of
St. Clair County
Home Health Service of St.
Joseph’s Hospital
Lawrence County Health
Dept.
Good Samaritan Hospital
Tip of Illinois Health Sve.
Metropolitan Health
Services
Lee County Cooperative
Clinic
CMH Home Health Agency
8la
Home Health Care Agency,
Inc.
Valley View Hospital |
Visiting Nurse Associaton of
Dallas
Red River Valley Home
Health Agency
Mobile Nurses, Inc.
East Texas Home Health
Agency
Home Health-Home Care,
Inc.
North Central Texas Home
Health Agency, Ine.
Wichita Home Health
Service
West Texas Home Health
Agency
Home Health Agency of
Texas, Inc.
Waco-McLennan County
Health Center
Nurses PRN, Inc.
Visiting Nurse Association
of Houston
Logos Nursing Personnel
Service
Visiting Nurse Association
of Montgomery County, TX
Home Health-Home Care,
Inc.
Visiting Nurse Association
of Brazoria County, TX
Home Health-Home Care,
Inc.
Upjohn Health Care
Services, Inc.
Home Health-Home Care,
Inc.
Port Arthur Home Health
Service
Texas Home Health, Inc.
Upjohn Health Care
Services, Inc. of Beaumont,
TX
Beaumont Home Health
Service
Home Health-Home Care,
Inc. of Brenham, TX
Victoria Home Health
Agency
Hill Country Home Health
Agency
Home Health-Home Care,
Inc. of San Antonio, TX
Valley Horne Health Agency
Homemakers East Texas -
DBA Upjohn Healthcare
Girling Health Care, Inc.
82a
West Texas Home Health
Agency
Good Samaritan Health
Care, Inc.
West Central Texas Home
Health
Hospital Home Health Care
Albuquerque Visiting Nurse
Service
Ames Visiting Nurse
Service
Cass County Memorial
Hospital
Dubuque Visiting Nurse
Ass’n.
Community and Home
Health Services Agency
Public Health Nursing
Ass’n.
Visiting Nurse and
Homemaker Service
Home Care Program of
Greater St. Louis
Visiting Nurse Association
of Greater St. Louis
Northeast Missouri Home
Health Agency
Independence Home Health
Agency
John Knox Home Health
Agency
Spelman Memorial Hospital
Johnson County Community
Health Service
Catholic Charities of Kansas
City
Methodist Care Center
Home Care
Visiting Nurse Association
of Greater Kansas City
St. Francis Hospital Home
Health Agency
Sac Osage Home Health
Agency
Nevada City Hospital Home
Health Agency
St. John’s Medical Center
McDonald County Home
Health Agency
Missouri River Home
Health Agency
Columbia Visiting Nurse
Association
Meramec Home Health
Agency
Lake Ozard Area Home
Health Agency
Riverways Home Health
Agency
Visiting Nurse Association
OACAC
83a
Home Health Agency of
Catholic
VNA of Kansas &
Wyandotte Counties
Topeka-Shawnee County
Health Department
Harper County Home
Health Agency
Susan B. Allen Memorial
Hospital
Harvey County Home
Health Agency
Dept. of Community Health
Trinity Home Health
Agency
Burt-Washington Home
Health Care
Home Health Agency of
Omaha
Lutheran Medica! Center
Archbishop Bergen Mercy
Hospital
State Health Department
(NE)
Tabitha Home Health Care
St. Francis Home Health
Good Samaritan Hospital
Home Health Agency of
Mary Lan
Phelps Memorial Health
Center
Sacred Heart Hospital
Richland County Health
Dept.
Missoula Home Health
Agency
Ravalli County Public
Health
St. Joseph Home Health
Care Agency
Flathead City-County Home
Health
Visiting Nurse Association
of the Denver Area, Inc.
Dominican Sisters of the
Sick and Poor
Jefferson County Health
Dept.
Visiting Nurse Association
ot FSoulder County, Inc.
Lurimer County Visiting
Nurse Association
Rehabilitation and Visiting
Nurse Association
Colorado Springs Visiting
Nurse Association
DePaul Hospital Home Care
Service
Community Home Health
Care Agency
84a
Visiting Nurse Service, Inc.
Good Samaritan Hospital
Home Health Care Service
Scottsdale-St. Luke’s Home
Health Agency
Coordinated Home Health
Service
Payson Home Health
Agency
Home Health Agency of
Pima County
Yavapai County Home
Health Agency
Sunrise Home Health Care
Program
Nevada Home Health
Services, Inc.
Kaiser Permanent Medical
Care
Visiting Nurse Association
of Los Angeles, Inc.
Hospital Home Health Care
Agency
City of Hope Home Health
Agency
Verdugo Hills Visiting
Nurses Association
National In-Home Health
Services
Visiting Nurses Association
of San Gabriel Valley
85a
Continuity of Care Home
Health
Total Care, Inc.
Visiting Nurse Association
of San Diego County
Allied Home Health Agency
Allied Home Health
Association
Home Care Department
Town & Country Home
Nursing Service
Visiting Nurse Association
of Orange County
Home Health Agency of San
Luis Obispo
Saint Agnes Home Care
Agency
Fresno Community Hospitai
and Center—Home Health
Service
Salinas Valley Visiting
Nurse Association
Monterey Peninsula Visiting
Nurse Association, Ltd.
Visiting Nurse Association
of San Francisco, Inc.
Mt. Zion Hospital & Medical
Center
San Francisco Home Health
Service
Vesper Home Care
Home Health and Counsel-
ing Service
Visiting Nurse Association
Serving Alameda County
Visiting Nurse Association
of Santa Cruz County
South Bay Home Health
Agency
Alexian Brothers Hospital
Home Health Care Service
Home Health Service/Visit-
ing Nurse Association of
San Joaquin
Humboldt County Home
Health Agency
Community Home Health
Services
Straub Clinic and Hospital,
Inc.
Southeastern District
Health Dept.
District 7 Health Dept.
Home Health Center/Mercy
Medical Center
Community Home Health,
Inc.
N. Idaho Home Health
Panhandle Health District
#1
The Dallas General Hospital
Clatsop County Home
Health Service
Yamhill County Home
Health Agency
Portland Visiting Nurse As-
sociation
Portland Adventist Home
Health Agency
Marion County Health Dept.
Home Health Agency of
Salem, OR
Bay Area Hospital Home
Health
Harney County Home
Health Agency
Seattle/King County Visit-
ing Nurse Service
Community Home Health
Care
Visiting Nurse Association
of Snohomish County
Community Homewell
Good Samaritan Hospital
and Rehabilitation Center
Hospice of Tacoma
Home Health Program of
Yakima, WA
N.E.W. Health Programs
86a
Spokane Visiting Nurse As-
sociation
St. Luke’s Home Health
Agency
Anchorage Home Health
Agency
Cabarrus County Home
Health Agency
Lincoln County Home
Health Agency
Cleveland Home Health
Agency
Total Care, Inc.
Scotland County Home
Health Agency
Caldwell County Home
Health Agency
Visiting Health
Professionals
Good Shepherd Home
Health Agency
South Carolina Department
of Health
Sea Island Comprehensive
Health Care Corporation
Floyd Home Health Agency
Visiting Nurse Association
of Metropolitan Atlanta
Ogeechee Home Health
Agency
87a
Mountain Home Health
Agency
St. Mary’s Home Health
Agency
CSRA Home Health
Agency, Inc.
Health Help Services, Inc.
District XV Home Health
Agency
Chattahoochee Valley Home
Health Agency
St. Vincent’s Medical Center
Florida Home Health
Services
Suncoast Home Health
Services
Complete Care, Inc.
Medi-Health, Inc.
American Home Health
Care
Visiting Nurse Association
of Hillsborough County
Mid-South Home Health
Agency
Alabama Department of
Health
West Alabama Home Health
Agency
Community Health Services,
Inc.
Professional Home Health
Care
Professional Home Health
Care of East Tennessee,
Inc.
Home Health Care
Mid-South Comprehensive
Home Health Service
Maury Home Health Agency
Delta Medical Center
North Mississippi Home
Health Agency
Tennessee Valley Health
Service
Home Health Service of
Mississippi
Central Mississippi Home
Health Agency
Covington County Hospital
Community Home Health
Care Association
Alexander’s Home Health
Agency
Whitley County Home
Health Agency
Knox County Home Health
Agency
Frontier Nursing Services,
Home Health Agency
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.