Petition — Matanky v. United States

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Supreme Court, U.S,

82-1217 FILED

No. MAN £0 \992

IN THE ALEXANDER L. STEVAS

SUPREME COUR+———

OF THE UNITED STATES

October Term, 1983

SEYMOUR R. MATANKY, M.D. and

CORBIN MEDICAL CLINIC,

Petitioners,

vs.

UNITED STATES OF AMERICA,

SECRETARY OF HEALTH, EDUCATION

AND WELFARE, AND BLUE SHIELD OF

CALIFORNIA, a corporation,

Respondents.

Judicial Review Pursuant to Article ill,

U.S. Constitution and Title 28 U.S.C., Section 1491, and

Fifth Amendment, U.S. Constitution of Medicare Act, Part B

Claims Administrative Review

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF CLAIMS

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT, AND TO THE

UNITED STATES DISTRICT COURT FOR THE

CENTRAL DISTRICT OF CALIFORNIA

JOAN CELIA LAVINE

Attorney at Law

123 North Hobart Boulevard

Los Angeles, California 90004

(213) 627-3241

Attorney for Petitioners

Seymour R. Matanky M.D., and

VOLUME I of Il Corbin Medical Clinic

QUESTIONS PRESENTED

1. Whether the Medicare Act, Title 42

U.S.C., Section 1395j, et seq., and particuiarly

Title 42 U.S.C., Section 1395ff, inherently and

as construed and applied, denies due process

of law as guaranteed by Article III, United

States Constitution and the Due Process Ciause

of the Fifth Amendment, U.S. Constitution where

it is applied so as to deny to your petitioners

Seymour R. Matanky, M.D. and Corbin Medical

Clinic his medical business as assignees of

Medicare Act, Part B claims, absolutely all

federal judicial review by Judges duly appointed

and sitting under Article III, U.S. Constitution

of Medicare Act Part B constitutional claims

alleged by your petitioners to arise under

the Fifth Amendment, U.S. Constitution.

2. Whether the United States Congress

is without authority to pass legislation as

contained in Title 42 U.S.C., Section 1395ff(b)

totally precluding federal judicial review by

Article III Judges of constitutional claims arising

under the United States Constitution.

3. Whether claimants under Part B,

Medicare Act, Title 42 U.S.C., Sections 1395j,

et seq., are entitled to be heard under Article

Ill of the United States Constitution to the same

degree and extent as litigants in bankruptcy

matters.

4. Whether the failure to permit the peti-

tioner access to the Federal Courts, either in

the United States District Court for the Central

District of California or in the United States

Court of Claims for review of his suit and claim

on constitutional bases that his claims had been

improperly reduced, constitutes a substantial,

material, prejudicial violation of due process

of law and the right to an Article III federal

Judge under Article III and the Fifth Amendment

of the United States Constitution, and was a

denial of the equal protection and equal ap-

plication of the laws.

5. Whether the failure to permit the ap-

plication of the Tucker Act, Title 28 U.S.C.,

Section 1491, providing for hearing and deter-

mination in the United States Couit of Claims

concerning Medicare Act, Part B payments and

claims, so that physicans and patients may

seek determinations and consideration of their

respective positions by at least one federal

judicial review of Article III judges under

Article III, U.S. Constitution and the Fifth,

Sixth and Seventh Amendments, U.S. Constitution,

constitutes violations of said constitutional

previsions and is a denial of the equal ap-

plication of Title 28 U.S.C., Section 1491.

6. Whether permitting the Government to

recoup and setoff later payments after the

apparently applicable three-years statute of limita-

tions and further reduce recovery by a physician

who has accepted Medicare Act, Part B assignments

iii

that have been reviewed, reduced and paid on

previously, constitutes a substantial deprivation of

property without due process of law in violation

of the Fifth Amendment, U.S. Constitution.

7. Whether totally foreclosing the right

of Medicare Act, Part B payment recipients

and/or beneficiaries (doctors and their patients)

from seeking independent federal judicial review

by Judges who are duly authorized Judges pur-

suant to Article III, U.S. Constitution, after

administrative determinations by hearing officers

assigned by and paid by private parties who

are insurance carriers is a substantial, mater-

ial, harmful, prejudicial, per se violation of

the rights of litigants involved to have access

to the federal Courts and federal judgements

under Article III and the Fifth Amendments,

U.S. Constitution, when the applicable statute

of limitations was expanded for the apparent

purpose of this petitioner's claims and review.

8. Whether the constitutional issues in-

volving the allegations of denials of due pro-

cess of law were of the nature that petitioner

was entitled to have evidentiary hearings and

determinations on same by a duly authorized

United States District Judge, and whether the

United States Court of Claims had no jurisdiction

to review or consider same or dismiss same and

was required, on the motion of the petitioner,

to have transferred the above entitled matter

back to the United States District Court for the

Central District of California. (Schweiker v.

McClure, 72 L.Ed.2d 1 101 S.Ct.___) ~Whether

the failure to transfer the above matter back

to the United States District Court for review

and consideration constituted acts in excess of

the jurisdiction of the U.S. Court of Claims and

was a violation of due process of law and the

equal protection of the laws as guaranteed by

Article 111 and the Fifth Amendment, U.S.

Constitution.

9. Whether the dismissal of your peti-

tioners’' claims as part of the wholesale dismissal

of all suits pending in the Court of Claims,

involving applications for federal court judicial

review of administrative determinations by the

Social Security Administration, as made pursuant

to Part B of the Medicare Act, Title 42 U.S.C.,,

Section 1495, et seq., on the ground that the

federal courts lack jurisdiction to consider

same pursuant to Erica, and without remanding

the action to the appropriate U.S. District Court

for litigation of the due process of law issues

raised under the Fifth Amendment, U.S. Con-

stitution, is arbitrary and capricious and

whether same was plain error on the face of

the record, and harmful, prejudicial, material,

and substantial.

10. Whether the U.S. Court of Claims' dis-

missal of this action is contrary to the law

as contained in Schweiker v. McClure, 72 L.Ed.

2d 1, 101 S.Ct.__—s_— providing for determination

of due process inssues by the approopriate

federal district courts.

11. Whether the plaintiff was entitled as

a matter of law to a hearing on the merits of

his allegations of denials of due process of

law, and whether it was material, substantial,

prejudical, harmful, reversible, per se, plain

error and violations of due process of law as

guaranteed by the Fifth Amendment, U.S.

Constitution for the due process issues to be

litigated on a non-evidentiary proceeding on

a motion to dismiss in the U.S. Court of Claims.

(First National Bank of Arizona v. Cities Service

Co., Inc., 391 US 253, 288, 20 L.ed.2d 569 (1968);

Leone v. Aetna Casualty & Surety Co., 599 F.2d

566; Conley v. Gibson, 355 US 41, 45, 2 L.ed.2d

80 (1957); Cruz v. Beto, 405 US 319, 31 L.ed.2d

263 (1972))

vii

12. Whether Matanky v. U.S. is distin-

guishable from U.S. v. Erika, Inc., 72 L.ed.2d 12.

13. Whether Matanky Vv. U.S. could be

dismissed by the United States Court of Claims

on a motion to dismiss, without an evidentiary

adjudication on the merits pursuant to U.S. v.

Erika, Inc., 72 L.ed.2d 12 and Schweiker v.

McClure, 72 L.Ed. 1, 101 S.Ct...

14. Whether the U.S. Court of Claims,

pursuant to other decisions in its court could

dismiss the due process claims of the petitioners

herein although these petitioners were not parties

to those actions and they were therefore not

binding on petitioners. Whether there was a

failure to accord these petitioners notice and

the opportunity to be heard in regard to the

facts of other matters pending in the U.S. Court

of Claims, and the concepts of collateral estoppel

and res judicata could not be applied to these

non-parties.

viii

15. Whether the failure of the Medicare

Administration to notify the parients whose

claims were being adjusted for a second time

and not paid on at all as a result thereof,

or to notify subsequent claimants whose payments

were being allotted to recoupment from the

petitioner constituted and constitutes a denial

of due process of law both to them as patients

and to the physician, and particularly a de-

privation of property without due process of

law.

16. Whether the activation of a recoupment

procedure wel! after the applicable statute of

limitations constitutes a deprivation of proeprty

without due process of law in violation of the

Fifth Amendment, U.s. Constitution.

17. Whether U.S. District Court within the

Ninth Circuit transferred the above entitled

Medicare Act, Part B litigation to the U.S.

Court of Claims on the basis that it had ex-

clusive jurisdiction to consider the factual

metits of due process claims of plaintiffs-

petitioners, and whether the U.S. Court of

Claims committed substantial, material, pre-

judicial, harmful, per se, plain error in failing

to transfer the due process portion of the above

entitled matter back to the U.S. Dictrict Court

for its adjudication when it held that it did

not have jurisdiction to consider sare.

(Drennan v. Califano, 606 F.2d 850 (9th Cir.)

Whether this denied the petitioners the right

to be heard by an Article II1 federal judge,

and denied the petitioners access to the

federal Courts in violation of Article III, U.S.

Constitution and the Fifth, Sixth, and Seventh

Amendments, U.S. Constitution.

18. Whether the failure to provide the

petitioners with a pre-recoupment administrative

hearing procedure, where recoupment occurred in

June, 1971 and audit started in 1974. Along with

the withholding of funds amounting to $51,000 as

of 1971, but the “audit"’ was not concluded until

1976 and there was no administrative hearing until

1978 on said recoupments, constituted a substantial,

material, harmful, prejudicial, per se denial of due

process of law in violation of the Fifth Amend-

ment, U.S. Constitution. (Fusari_ v. Steinberg,

419 US 379, 42 L.ed.2d 521) Whether the ad-

ministrative hearing was so lacking in speed

and rapidness due to the fact that it could

not occur until after an “audit'’ which was not

concluded until about five years by the Medicare

Administration that any prehearing recoupment

was tantamount to no effective hearing or re-

view by the massive delay and therefore

amount to confiscation of property without due

process of law and was arbitrary and capricious

in violation of the Fifth Amendmant, U.S.

Constitution.

TOPICAL INDEX

Page

Table of Authorities xV

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

CLAIMS AND TO THE UNITED STATES

DISTRICT COURT FOR THE CENTRAL

DISTRICT OF CALIFORNIA l

JURISDICTION 6

CONSTITUTIONAL PROVISIONS, STATUTES

AND RULES AND REGULATIONS INVOLVED 7

STATEMENT OF FACTS 12

ARGUMENT 19

I A CONSTRUCTION AND APPLICATION OF

TITLE 42 U.S.C., SECTION 1395ff(b)

(MEDICARE ACT) TOTALLY PRECLUDING

ANY JUDICIAL REVIEW BY JUDGES

DULY APPOINTED AND SITTING UNDER

ARTICLE III, U.S. CONSTITUTION OF

SUBSTANTIAL CONSTITUTIONAL CLAIMS

CONCERNING PAYMENTS MADE PURSUANT

TO THE MEDICARE ACT, PART B,

INHERENTLY AND AS CONSTRUED AND

APPLIED UNCONSTITUTIONAL AND A

VIOLATION OF ARTICLE III, U.S.

CONSTITUTION AND DUE PROCESS OF

LAW AS PROVIDED FOR BY THE FIFTH,

SIXTH AND SEVENTH AMENDMENTS,

U.S. CONSTITUTION. (WEINBERGER V.

SALFI, 422 U.S. 749;

SANDERS, 430 U.S. 109, 95 §.Ct. 2457,

Z5 L.ed.2d 522; JOHNSON V. ROBISON,

415 U.S. 361, 94 S.Ct. ; -ed.

2d 389.

xii

III

WHERE THE MEDICARE ADMINISTRATION

INSTITUTED A PREHEARING RECOUPMENT

PROCEDURE IN JUNE, 1971, DID NOT

BEGIN ITS REVIEW AND AUDIT UNTIL

1974 WHICH WAS NOT COMPLETED UNTIL

1976 AND THEN DID NOT CONDUCT

HEARINGS UNTIL THE YEAR 1978, PRE-

HEARING RECOUPMENT WAS A VIOLATION

OF DUE PROCESS OF LAW GUARANTEED

BY THE FIFTH AMENDMENT, U.S.

CONSTITUTION. 25

BY IMPLEMENTATION OF RULES AND

REGULATIONS ON A RETROACTIVE

BASIS WHERE THE MEDICARE ADMIN-

ISTRATION HAD REVIEWED, REDUCED

AND PAID ON CLAIMS, IT INTERFERRED

WITH THE CONTRACTUAL OBLIGATIONS

BASED ON ACCORDS AND SATISFACTIONS

IN VIOLATION OF THE RIGHT TO DUE

PROCESS OF LAW AS GUARANTEED BY

THE FIFTH AMENDMENT, U.S.

CONSTITUTION. 29

ESTOPPEL AND THE VARIOUS OTHER

DUE PROCESS ISSUED INVOLVED

HEREIN WERE ISSUES OF FACT CON-

CERNING WHICH THE PETITIONERS

WERE ENTITLED TO HAVE EVIDENTIARY

HEARINGS BY ARTICLE III COURTS,

AND WHICH WERE CONSTITUTIONAL

FACTUAL ISSUES WHICH COULD NOT

BE RESOLVED ON AN AT LAW MOTION

TO DISMISS WITHOUT THE TAKING

EVIDENCE. 34

xili

THE INSTITUTIUON OF RECOUPMENT

PROCEDURES WELL AFTER ANY

APPLICABLE STATUTE OF LIMITA-

TIONS RESULTED IN A TAKING OF

PROPERTY WITHOUT DUE PROCESS

OF LAW IN VIOLATION OF THE

FIFTH AMENDMENT, U.S.

CONSTITUTION

EXHIBITS A THROUGH H

xiv

TABLE OF AUTHORITIES

Cases Page

Califano v. Sanders,

430 U.S. 109, 95 S.Ct. 2457,

45 L.Ed.2d 522 19

Campbell v. Holt,

115 U.S. 620, 29 L.Ed. 483 39

Chase Sec. Corp. v. Doraldson,

325 U.S. 304, 89 L.Ed. 1628 39

Chelsea Community Hospital v.

Michigan Blue Cross,

630 F.2d 1130 24

Cooper v. Bell,

628 F.2d 1208 36

Drennan v. Harris,

606 F.2d 850 16, 20, 21

Fusari v. Steinberg,

419 U.S. 379, 42 L.Ed.2d 521,

95 S.Ct. 533 26

Goldberg v. Kelley,

397 U.S. 254, 25 L.Ed.2d 2287,

90 S.Ct. 1101 (1970) 26

Johnson v. Robison,

415 U.S. 361, 94 S.Ct. 1160,

30 L.Ed.2d 389 19

Leone v. Aetna Cas & Surety Co.,

599 F.2d 566 (3d Cir. 1979) 35

Lynch v. United States,

292 U.S. 571 30

Schweiker v. McClure,

72 L.Ed.2d 1 18

Union Pacific R. Co. v. United States,

99 U.S. 700, 25 L.Ed. 496 30

United States v. Erika, Inc.,

72 L.Ed.2d 12, 101 S.Ct. 4. 17, 6, ®

United States v. James Stewart Co.,

336 F.2d 777 (9th Cir. 1964) 35

Weinberger v. Salfi,

422 U.S. 759 19

Constitutions

United States Constitution,

Article III BL. Bs Be Gs Fe Ws We

20, 21, 34, 40

United States Constitution,

Fifth Amendment BR. Gs- Fe tte Sa es

25, 29, 30, 38

United States Constitution,

Sixth Amendment 2, 4, 7, 19

United States Constitutiuon,

Seventh Amendment 2, 4, 7, 19

Statutes

California Civil Code,

Section 1521 32

California Civil Code,

Section 1523 32

xvi

20 C.F.R. Part 405

28 U.S.C. §1255

28 U.S.C. §2101(c)

28 U.S.C. §1491

42 U.S.C. §1395 et seq

(Medicare Act)

42 U.S.C. §1395ff

42 U.S.C. 1395ff(b)

Miscellaneous

86 Stats. 1464 (1972)

xvii

1, 7

1, 13, 20, 21

Fe 8

9, ly, 21

NO.

IN THE

UNITED STATES SUPREME COURT

OCTOBER TERM, 1983

SEYMOUR R. MATANKY, M.D. and

CORBIN MEDICAL CLINIC,

Petitioners,

vs.

UNITED STATES OF AMERICA,

SECRETARY OF HEALTH, EDUCATION

AND WELFARE, AND BLUE SHIELD OF

CALIFORNIA, a corporation,

Respondent.

Judicial Review Pursuant to Article III,

U.S. Constitution and Title 28 U.S.C.,

Section 1491, and Fifth Amendment,

U.S. Constitution of Medicare Act,

Part B Claims Administrative Review

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF CLAIMS

AND TO THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

Come now the petitioners Seymour R.

Matanky, M.D. and Corbin Medical Clinic and

petition this Honorable Court for a writ of

certiorari directed to the United States Court

of Claims, the United States Court of Appeals

for the Federal Circuit and the United States

District Court for the Central District of

California to review and reverse and thereafter

remand same for full evidentiary hearings in

accordance with Article III, U.S. Constitution

and the Fifth, Sixth and Seventh Amendments,

U.S. Constitution after an order and notification

dated October 22, 1982, the United States Court

of Appeals for the Federal Circuit denying their

petition for rehearing.

Your petitioners, a physician, Seymour R.

Matanky, M.D., and a clinic, Corbin Medical

Clinic, sought administrative review and in-

dependent federal judicial review of federal

constitutional claims under the Fifth, Sixth

and Seventh Amendments, U.S. Constitution

and Article III, U.S. Constitution, concerning

about 2414 claims under the Medicare Act,

Part B, made to the Medicare Administration be-

tween the years 1967 and 1973, pursuant to

Title 42, U.S.C., Sections 1395 et seq. (known

as the Medicare Act) for medical services to

the elderly and otherwise qualified persons.

These 2414 claims, involving about 305 pa-

tients of your petitioners, had been previously

reviewed, adjusted and reduced and thereafter paid

on by the Medicare Administration, in about the sum

of $50,899.00. On a second, further review by the

Medicare Administration, with recoupment commencing

in about June, 1971 and an audit starting in 1974,

a prehearing recoupment procedure was initiated

by the withholding of about $51,000.00 in later

payments as setoff funds. These are the funds

and procedures in dispute and in question.

Your petitioners have been unable to obtain

an independent federal jucicial review of their

constitutional claims pursuant to Article III,

U.S. Constitution or the Fifth, Sixth and Seventh

Amendments, U.S. Constitution. After the action

of your petitioners was transferred from the

U.S. District Court for the Central District of

California to the U.S. Court of Claims on the

grounds that it was the federal court having

jurisdiction, the U.S. Court of Claims dismissed

your petitioners’ action on the ground that it

had no jurisdiction either, citing U.S. v. Erika,

Inc., 72 L.Ed.2d 12, 101 S.Ct.

Your Petitioners raised an extensive number

of federal constitutional issues, including the

lack of right of the Medicare Administration

to "recoup" funds after what appear to be the

applicable statutes of limitations as being a

denial of due process of law; the right of the

patients on whose behalf recoupment procedures

were initiated and whose funds were being used

as setoff funds to notice and the opportunity

to be heard; the lack of any fair, reasonable

notice to your petitioners of which claims were

disputed or on what grounds; the application

of guidelines not in existence during most, if

not all of the time periods involved; the use

of prehearing recoupment procedures commencing

in about June, 1971 when any "audit" was not

started until 1974 or completed until the year

1976, and a hearing did not take place until

the year 1978; the medical necessity of the care

and the right to be reasonably compensated for

same in the absence of guidelines for same, to

mention some of the constitutional claims involved.

JURISDICTION

Jurisdiction is conferred on this Court by

Title 28, U.S.C., Sections 1255 and 2101(c), Article

111, United States Constitution, and the Fifth,

Sixth and Seventh Amendments, U.S. Constitution.

A copy of the opinion as issued by the

United States Court of Claims on September 17,

1982 is attached hereto at Appendix "D" and

the letter of the denying the application of the

petitioners for rehearing dated October 22,

1982 is attached hereto and made a part hereof

as contained in Appendix "D".

A copy of the complaint originally filled

in the United States District Court for the

Central District of California containing the

various constitutional claims of your petitioners

Seymour R. Matanky, M.D. and Corbin Medical

Clinic is attached hereto and made a part

hereto and made a part hereof as contained

in Appendix "A".

CONSTITUTIONAL PROVISIONS, STATUTES

AND RULES AND REGULATIONS INVOLVED

Article III, United States Constitution, Title

42, U.S.C., Section 1395ff, Fifth, Sixth and Seventh

Amendments, Title 28, Section 1491, 20 CFR, Part

405 as published in the Federal Register, Volume

37, No. 2, January 5, 1972, pages 89-91, as set

forth below and in the appendices attached hereto

are the involved provisions, to wit:

Article III of the United States Constitution

provides:

"Article III, U.S. Constitution"

"Section 2, Clause ]}. Subjects of jurisdiction."

"The judicial Power shall extend to all

cases, in Law and Equity, arising under this

Constitution, the Laws of the United States,

and Treaties made, or which shall be made,

under their Authority, --to all Cases affecting

Ambassadors, other public Ministers and Consuls;

--to all Cases of admiralty and maritime

Jurisdiction;--to Controversies to which the United

States shall be a Party;--to Controversies be-

tween two or more States;--between a State and

and Citizens of another State;--between citizens

of different States;--between citizens of the same

State claiming Lands under Grants of different

States, and between a State, or the Citizens

thereof, and foreign States, Citizens or Subjects."

Until 1972 Title 42 U.S.C., Section 1395ff(b)

read as follows:

“Any individual dissatisfied with any

determination under subsection (a) of this

section as to entitlement under Part A or

Part B, or as to amount of benefits under

Part A where the matter in controversy

is $100.00 or more, shall be entitled to

a hearing thereon by the Secretary to the

same extent as is provided in section 405(b)

of this title, and, in the case of a deter-

mination as to entitlement or as to amount

of benefits where the amount in controversy

is $1,000 or more, to judicial review of

the Secretary's final decision after such

hearing as provided in section 405(g) of

this title.”

Section 1395ff(b), however, was amended

by the Social Security Amendments of 1972, Pub.

L.No.92-603, Sec. 299(O)(a), 86 Stat. 1464 (1972)

Section 1395ff(b) now provides:

Title 42 U.S.C., Section

"Section 1395ff. Determinations; appeals

(a) The determination of whether

an individual is entitled to benefits

under Part A or part B of this sub-

chapter, and the determination of the

amount of benefits under part A of

this subchapter, shall be made by

the Secretary in accordance with

regulations prescribed by him.

(b)(1) Any individual dissatis-

fied with any determination under

subsection (a) of this section as to--

(A) whether he meets the

conditions of section 426 or 426a

of this title, or

(B) whether he is eligible

to enroll and has enrolled pur-

suant to the provisions of part

B of this subchapter, or section

1395i-2 of this title or section

1819, or

under part A of this subchapter

(including a determination where

such amount is determined to

be zero)

shall be entitled to a hearing thereon

by the Secretary to the same extent

as is provided in section 405(b) of

this title and to judicial review of

the Secretary's final decision after

such hearing as is provided in

section 405(g) of this title.

(2) Notwithstanding the provi-

sions of subparagraph (C) of para-

graph (1) of this subsection, a

hearing shall not be available to

an individual by reason of such

subparagraph (C) if the amount in

controversy is less than $100; nor

shall judicial review be available

to an individual by reason of such

subparagraph (C) if the amount in

controversy is less than $1,000.

dissatisfied with any determination

by the Secretary that it is not a

provider of services, or with any

determination described in section

1395cc(b)(2) of this title, shall be

entitled to a hearing thereon by the

Secretary (after reasonable notice

and opportunity for hearing) to the

same extent as is provided in

section 405(b) of this title, and to

judicial review of the Secretary's

final decision after such hearing as

is provided in section 405(g) of this

title.

Aug 14, 1935, c. 531, Title XVIII,

section 1869, as added July 30, 1965,

Pub.L. 89-97, Title 1, section 107(a),

79 Stat. 330 and amended Oct. 30,

1972, Pub.L. 92-603, Title Il, sec-

tion 2990(a), 86 Stat. 1464.

The Fifth Amendment of the United States

Constitution provides in relevant part, to-wit:

"No person shall... be de-

prived of life, liberty, or property,

without due process of law; .. .

STATEMENT OF FACTS

Your petitioners Seymour R. Matanky, M.D.

and Corbin Medical Clinic engaged in an extensive

geriatric practice providing medical care and

treatment to many persons covered by the Medi-

care Act, Title 42, United States Code, Sections

1395 et seq., during the involved and disputed

periods of 1967 through 1973 for which claims

assigned to them were filed with the Medicare

Administration.

For the performance of the involved medi-

cal services your petitioners accepted assignments

of Medicare benefits and applied to Medicare

for payment, pursuant to Part B of the Medicare

Act. That portion pays for 80 percent of the

approved amounts.

During approximately June, 1971 a letter

was sent to Dr. Matanky and Corbin Medical

Clinic purporting to be notice of review. It

read as follows:

"Dear Doctor Matanky, we have

been requested by the Social Security

Administration to withhold Medicare

reimbursement to you pending the

completion of an investigation of your

claims to determine whether or not an

irregularity exists. We will notify you

when a decision is reached by Social

Security Administration."

Between the year 1967 and June, 1971 many

claims were paid on after having been reviewed,

adjusted and reduced before approval of the

amount payable, and your petitioners accepted

the adjusted and reduced amounts in the approxi-

mate sum of $51,000.00.

During June, 1971, the Medicare Adminis-

tration commenced a prehearing recoupment of

$51,000.00. Much later, during 1974, it com-

menced a second, further review and reduction

or eliminaticn of payment on claims previously

reviewed and paid on as described above.

The second review and audit of the involved

claims did not terminate until the year of 1976.

No hearing whatsoever on the claims

being subjected to the recoupment ovrocedure

occurred until the year i978 within the Medicare

Administration. (See transcript of hearing,

October 25, 1978 as set forth in Appendix "G"

attached hereto and incorporated herein as

though fully set forth.

The funds later withheld for setoff were

payments on different claims and many patients

were not the same ones involved in the original

payments out. No notice was given to the patients

whose claims the Medicare Administration sought

recoupment and refunds concerning, nor was

notice given to the patients whose payments

were being used as the setoff funds, as best

as can be determined from the records herein

that their bills were effectively unpaid. The

patients were also not given the opportunity to

apply for review themselves independently of

your petitioners.

Your petitioners raised numerous consitu-

tional level claims in both the adminstrative

hearing on October 25, 1978 and in the paperwork

and briefing involved therewith, and they there-

after raised substantial, federal consitutional

claims on applying for hearing and review of

the administrative determinations confirming

the recoupment when they filed their complaint

in the U.S. District Court for the Central

District of California (See Appendix "A", consti-

tuting the complaint, filed on December 21, 1978.

The above action was transferred to the

U.S. Court of Claims by the U.S. District Court,

pursuant to a determination in the Ninth Circuit

entitled Drennan v. Harris, 606 F.2d 850 which

provided for no further hearing in the U.S.

District Court under the assumption that the

U.S. Court of Claims had the jurisdiction to

review constitutional claims.

After this matter was transferred to the

U.S. Court of Claims the U.S. Government an-

swered the complaint. (See Appendix 'B", being

the answer of the Government herein.)

Your petitioners had also sued Blue Shield

of California in the U.S. District Court.

The above entitled matter was stayed by

the U.S. Court of Claims pending the outcome

of the determination in U.S. v.Erika, Inc., 72

L.Ed.2d 12. The action of your petitioners was

dismissed by the U.S. Court of Claims on the

U.S. Government's application, on September 17,

1982, and their petition for rehearing denied

on October 22, 1982, by the U.S. Court of

Appeals for the Federal Circuit, pursuant to

the determination of U.S. V. Erika, Inc. (See

Opinion of the U.S. Court of Claims opinion and

the letter denying rehearing, dated October 22,

1982, attached hereto in Appendices "D" and

“FY,

Your peitioners continuously raised various

constitutional issues including their right to

be heard by an independent, duly appointed

federal judiciary and pursuant to Article III

of the U.S. Constitution and concerning substan-

tial federal constitutional issues not addressed

in either U.S. v. Erika, Inc., 72 L.Ed.2d 12

or Schweiker v. McClure, 72 L.Ed. 2d 1. (See

your petitioner's complaint and opposition to

vacating a magistrate referral, set forth in

Appendices "A" and "C" attached hereto)

None of the federal constitutional issues

raised by your petitioners, as far as they can

discern, were determined by either U.S. v.

Erika, Inc., 72 L.Ed. 2d 12, 101 S.Ct. ’

or by Schweiker v. McClure, 72 L.ed.2d 1, 101

S.Ct. °

Your petitioners are now squarely faced

with and squarely present to this Court the

issue of whether they may be entirely precluded

from seeking federal judicial review of federal

constitutional claims concerning federal adminis-

trative determinations by the U.S. Congress or

by a federal administrative procedure delegated

to private insurance carriers and their employees,

or whether such a system clearly denies them

due process of law and access to the federal

courts.

ARGUMENT

A CONSTRUCTION AND APPLICATION OF

TITLE 42 U.S.C., SECTION 1395ff(b)

(MEDICARE ACT) TOTALLY PRECLUDING

ANY JUDICIAL REVIEW BY JUDGES

DULY APPOINTED AND SITTING UNDER

ARTICLE III, U.S. CONSTITUTION OF

SUBSTANTIAL CONSTITUTIONAL CLAIMS

CONCERNING PAYMENTS MADE PURSUANT

TO THE MEDICARE ACT, PART B, IS

INHERENTLY AND AS CONSTRUED AND

APPLIED UNCONSTITUTIONAL AND A

VIOLATION OF ARTICLE III, U.S.

CONSTITUTION AND DUE PROCESS OF

LAW AS PROVIDED FOR BY THE FIFTH,

SIXTH AND SEVENTH AMENDMENTS,

U.S. CONSTITUTION. (WEINBERGER V.

SALFI, 422 U.S. 749; TALTFANO V.

SANDERS, 430 U.S. 109, 05 S.Ct. 2457,

75 L.ed.2d 522; JOHNSON V. ROBISON,

415 U.S. 361, -Ct. 1160, 30 L.-

ed.2d 389.

Your petitioners Seymour R. Matanky and

Corbin Medical Clinic have been completely

precluded from obtaining any judicial review

of their various constitutional claims concerning

Medicare Act, Part B claims.

The United States Court of Claims dis-

missed their action and complaint based on

U.S. V. Erika, Inc., 72 L.ed.2d 12, 101

S.Ct. » holding that it did not have juris-

diction to consider any claim, whether the

claim was constitutional in nature or not. It

declined to transfer your petitioners’ action

back to the United States District Court for the

Central District of California for hearing of the

constitutional level claims, which is the trans-

ferring District Court. The transferring United

States District Court had originally transferred

the above entitled matter to the U.S. Court of

Claims pursuant to a Ninth Circuit decision,

Drennan v. Harris, 606 F.2d 850, which pro-

vided for the transfer on the basis that consti-

tutional level claims could be adjudicated by

U.S. Court of Claims as the Article III Court

having jurisdiction of same.

This Court is now squarely faced with

the issue of whether the U.S. Congress may

completely preclude adjudication of constitutional

claims concerning Medicare Act, Part B by

Article II11 Judges and Courts on the one hand,

and whether Title 42 U.S.C., Section 1395ff(b)

is inherently and as construed and applied un-

constitutional and in violation of Article III,

U.S. Constitution and the due process clause

of the Fifth Amendment, U.S. Constitution where

it is applied so that no adjudication by a

federal judge can be obtained in any federal

court in this country, Of Medicare Act, Part B

claims.

The U.S. Court of Appeals stated in

Drennan v. Harris, 606 F.2d 850:

"We must therefore consider

whether Salfi would preclude the

district court from hearing Drennan's

constitutional claims based upon

section 1331. The Supreme Court has

recognized that a statute precluding

all review of constitutional claims

would raise a serious question of

the validity of the statute. Sanders,

430 U.S. at 109, 97 S.Ct. 980; Salfi,

422 U.S. at 762, 95 S.Ct. 2457;

Johnson v. Robinson, 415 U.S. 361,

266-67, 94 S.Ct. 1160, 39 L.Ed.2d

389 (1974) South Windsor Convalescent

Home, Inc., 541 F.2d at 913; Gallo

v. Mathews, 538 F.2d at 1150;

Hazelwood Chronic and Convalescent

Hospital, 543 F.2d at 707.

“This question was raised in a

case similar to the present case in

the Fifth Circuit, Dr. John T. MacDonald

Foundation v. Califano, 571 F.2d 328

(5th Cir. 1978). There the court,

sitting en banc, held that section

405(h) which is incorporated into

section 1395ii of the Medicare Act,

does preclude all review of the

Secretary's decisions by the federal

district courts brought under section

1331, including constitutional claims.

However, the Court there held that

the difficult question of whether all

judicial review of constitutional

claims may be foreclosed is avoided,

since jurisdiction has been held by

the Court of Claims to exist in that

court. Whitecliff, Inc. v. United States,

536 F.2d 347, 210 Ct.Cl. 53 (1976).

The Fifth Circuit in MacDonald, thus

remanded the case to the district

court to dismiss with directions to

transfer the cause to the United States

Court of Claims. 571 F.2d at 332.

This procedure has been approved

and followed by our court. Sierra

Vista Hospital, Inc. v. Califano, 597

F.2d 200 (9th Cir. 1979).

We find that the disposition

suggested by MACDonald is the proper

one. Accordingly, we remand this case

to the district court with instruc-

tions to dismiss and transfer the

cause to the court of claims."

The U.S. Court of Appeals for the Sixth

Circuit concluded in Chelsea Community Hospital

v. Michigan Blue Cross, 630 F.2d 1131 at 1135

(1980):

"We adopt the view of the Court

of Claims, for it is a ‘cardinal

principle’ that we should seek statu-

tory constructions which avoid con-

stitutional doubts, Johnson v. Robison,

supra, 415 U.S. at 366-67, 94 S.Ct.

1165; St. Louis Univ., supra, 537

F.2d at 291. It would raise grave

constitutional doubts if we held that

the Secretary had unreviewable

discretion in reimbursing Medicare

providers, particularly if this dis-

cretionary authority was delegable

to private parties. See United States

v. Aquavella, 615 F.2d 12, 18 (2d

Cir. 1979); South Windsor, supra, 541

F.2d at 913."

WHERE THE MEDICARE ADMINISTRATION

INSTITUTED A PREHEARING RECOUPMENT

PROCEDURE IN JUNE, 1971, DID NOT

BEGIN ITS REVIEW AND AUDIT UNTIL

1974 WHICH WAS NOT COMPLETED UNTIL

1976 AND THEN DID NOT CONDUCT

HEARINGS UNTIL THE YEAR 1978, PRE-

HEARING RECOUPMENT WAS A VIOLATION

OF DUE PROCESS OF LAW GUARANTEED

BY THE FIFTH AMENDMENT, U.S.

CONSTITUTION.

The rapidity of administration review is

a significant factor in assessing the constitu-

tional sufficiency of the entire process. It can

hardly be said that a recoupment of $51,000.00

in June, 1971 concerning which a review by the

Medicare Administration is not commenced at all

until 1974, completed in 1976 and not scheduled

for even administrative hearings in any way until

1978 is rapid. (Goldberg v. Kelley, 397 U.S. 254,

25 L.Ed.2d 2287, 90 S.Ct. 1011 (1970))

This Court stated in Fusari v. Steinberg,

419 U.S. 379 at 389, 42L.ed.2d 521 at 529, 95 S.Ct. 533:

"Identification of the precise

dictates of due process requires con-

sideration of both the governmental

function involved and the private

interests affected by official action.

Cafeteria Workers v. McElroy, 367

US 886, 895, 6 L Ed 2d 1230, 81 S

Ct 1743 (1961); Goldberg v. Kelly,

397 US at 263-266, 25 L Ed 2d 287,

90 S Ct 1011. As the Court recognized

in Boddie v Connecticut, 401 US 371,

378, 28 L Ed 2d 113, 91 S Ct 780

(1971): ‘The formality and procedural

requisites for [a due process] hearing

can vary, depending upon the im-

portance of the interests involved

and the nature of the subsequent

proceedings.’ In this context, the

possible length of wrongful depriva-

tion of unemployment benefits is an

important factor in assessing the

impact of official action on the

private interests. Cf. Arnett v

Kennedy, 416 US 134, 168-169, 40

L Ed 2d 15, 94 S Ct 1633 (opinion

of Powell, J.); id., at 190, 192,

40 L Ed 2d 15 (White, J., concurring

in part and dissenting in part).

Prompt and adequate administrative

review provides an opportunity for

consideration and correction of errors

made in initial eligibility determina-

tions. Thus, the rapidity of adminis-

trative review is a significant factor

in assessing the sufficiency of the

entire process."

It is clear that there was an extreme de-

lay and withholding of funds during the

administrative audit which was delayed and

did not even begin for about three years after

the June, 1971 letter.

Your petitioners were entitled to a prompt

review of any claims by the Government that

funds should be reimbursed to the Medicare

Administration. Because the claims involved

people who were ill and elderly, rapidness of

review was essential. Many of the patients had

little time left in this world. The need for con-

tinuous medical attention was essential to their

survival and there was likely to be an even

greater impact on the quality of due process

substantial if time lapses occurred in the

hearing and determination processes.

In California there is a five-year statute

requiring that a matter be brought to trial

within five years of the time that it is filed.

Criminal cases now have much shorter time

periods within which they must be brought to

trial.

Yet, here there was a seven-year delay

before a hearing was held. Such a delay hardly

comports with due process of law when $51,000

in earnings is withheld from a person. This

is a substantial amount of money by anyone's

standards.

Ill

BY IMPLEMENTATION OF RULES AND REGU-

LATIONS ON A RETROACTIVE BASIS WHERE

THE MEDICARE ADMINISTRATION HAD RE-

VIEWED, REDUCED AND PAID ON CLAIMS,

IT INTERFERRED WITH THE CONTRACTUAL

OBLIGATIONS BASED ON ACCORDS AND

SATISFACTIONS IN VIOLATION OF THE RIGHT

TO DUE PROCESS OF LAW AS GUARANTEED BY

THE FIFTH AMENDMENT, U.S. CONSTITUTION

Legislation which impairs the obligation of

contract is unconstitutional and a violation of

the provisions of the Fifth Amendment, U.S.

Constitution (Lynch v. United States, 292 U.S.

571)

The Medicare Administration sought to

apply rules and regulations which it propounded

in 1971 to prior courses of conduct of your pe-

titioners in doing work where there had been

no rules or regulations outlining medical ser-

vices it would provide for payment on. It had

previously entered into accords and satisfactions

of the claims by adjudicating, disputing and

paying on them. (Union Pacific R. Co. v.

United States, 99 U.S. 700, 25 L.ed. 496, 501

(1879)) The funds involved were and are pro-

perty owned by your petitioners which the

Medicare Administration took without adequate

compensation.

Rights arising out of contracts with the

United States are protected against action by

it under the due process clause of the Fifth

Amendment. Thus, in 1934 the Supreme Court

through Justice Brandeis stated in Lynch v.

United States (1934) 392 U.S. 571, 781 L.3d 1434,

1440, 54 S.Ct. 840:

"The Fifth Amendment commands that

property be not taken without making

just compensation. Valid contracts

are property, whether the obligor

be a private individual, a munici-

pality, a State or the United States.

Rights against the United States aris-

ing out of a contract with it are

protected by the Fifth Amendment."

Congress is completely without power to

abrogate contractual obligations of the United

States. In 1879 the Supreme Court stated in

Union Pacific R. Co. v. United States, 99 U.S.

700, 256 L.ed. 496, 501 (1879):

"The United States are as much bound

by their contracts as are individuals.

If they repudiate their obligations,

it is as much repudiation, with all

the wrong and reproach that term

implies, as it would be if the re-

pudiator had been a State or a

municipality or a citizen."

California law on accords and satisfaction

is as follows:

California Civil Code defines an accord

as follows:

"An accord is an agreement to

accept, in extinction of an obligation,

something different from or less than

that to which the person agreeing

to accept is entitled.’ (C.C. 1521.)

California Civil Code defines a satisfaction

as follows:

“Acceptance, by the creditor,

of the consdieration of an accord ex-

tinguishes the obligation, and is

called satisfaction." (C.C. 1523.)

In other words, an accord

substitutes a new executory contract

for a previously existing contract

or debt, the usual purpose being to

settle a claim at a lesser amount.

(B. & W. Engineering Co. v. Beam

(1913) 23 C.A. 164, 137 P. 624.)

And, since an accord is an executory

contract, it must be based upon a

valid consideration. (Shortell v.

Evans-Ferguson Corp. (1929) 98 C.A.

650, 277 P. 519; see Rest., Contracts

section 417; 1945 A.S. 685; 1946 A.S.

630; 24 A.L.R. 1474; 62 A.L.R. 751.)

ESTOPPEL AND THE VARIOUS OTHER

DUE PROCESS ISSUES INVOLVED HERE-

IN WERE ISSUES OF FACT CONCERNING

WHICH THE PETITIONERS WERE ENTITLED

TO HAVE EVIDENTIARY HEARINGS BY

ARTICLE I11 COURTS, AND WHICH

WERE CONSTITUTIONAL FACTUAL ISSUES

WHICH COULD NOT BE RESOLVED ON AN

AT LAW MOTION TO DISMISS WITHOUT

THE TAKING EVIDENCE.

The U.S. Court of Claims dismissed all of

the constitutional factual claims of your peti-

tioners, without any taking of evidence on them

at all, by way of a non-evidentiary proceeding.

Your petitioners respectfully submit that

such an approach to constitutional claims re-

duces the involved constitutional issues to a

mere series of utterances which have no sub-

stantial meaning or enforceable validity in our

legal system.

Your petitioners respectfully submit that

issues of estoppel and the application of a

statute of limitations barring recoupment by

the Medicare Administration are constitutional,

factual issues to which they are entitled to be

accorded evidentiary proceedings. (U.S. v.

James Stewart Company, 336 F.2d 777, 779 (9th

Cir., 1964)

But estoppel and the application of a

statute of limitations were not the only factual

issues raised to which your petitioners were

entitled to evidentiary hearings. They asserted

that the Government had entered into accords

and satisfactions with them. They asserted pro-

tracted delay in providing for a hearing after

recoupment occurred.

In Leone v. Aetna Cas. & Sur. Co., 599

F.2d 566, 567 (3rd Cir., 1979), the Court stated,

citing this U.S. Supreme Court:

"It is essential to em-

phasize at the outset that we are

dealing with a judgment entered on

the face of the complaint without

affidavits and without discovery.

It is the settled rule that ‘a complaint

should not be dismissed for failure

to state a claim unless it appears

beyond doubt that the plaintiff can

prove no set of facts in support of

his claim which would entitle him

to relief.' Conley v. Gibson, 355

U.S. 41, 45-46, 78 S.Ct. 99, 102, 2

L.Ed.2d 80 (1957). See also Cruz v.

Beto, 405 U.S. 319, 322, 92 S.Ct.

1079, 31 L.Ed.2d 263 (1972).! The

question to be answered thus be-

comes whether the assertions of the

complaint, given the required broad

sweep, would permit adduction of

proofs that would provide a recov-

nized legal basis for avoiding the

Statutory bar."

In Cooper v. Bell, 628 F.2d 1208, 1214,

in talking of non-evidentiary dismissal concern-

ing a bar to the complaint based on a statute

of limitations, the Court held that the plaintiff

was entitled to be heard in evidentiary pro-

ceedings as to whether he was barred, and

stated as follows:

"We now turn to Cooper's

specific allegation that the govern-

ment should be estopped--by Holder's

misrepresentation and by Cooper's

reliance on Holder's advice--from

raising Cooper's failure to file a

timely charge. We appreciate the

trial judge's astonishment at Cooper's

allegation that he had relied on

another's interpretation of EEO

regulations with which Cooper's

duties as an EEO officer should have

made him quite familiar. Neverthe-

less, we cannot say that, as a matter

of law, Cooper would not prevail

were he able to adduce sufficient

evidence to substantiate the allegation

Accordingly, it was improper to

dismiss at this stage, because dis-

missal foreclosed Cooper from any

opportunity to prove his case. See

Jablon v. Dean Witter & Co., 614

F.2d 677, 682 (9th Cir. 1980)."

It is respectfully submitted that it was

equally improper for the U.S. Court of Claims

to have dismissed your petitioner's complaint

and action.

THE INSTITUTION OF RECOUPMENT

PROCEDURES WELL AFTER ANY APPLIC-

ABLE STATUTE OF LIMITATIONS RE-

SULTED IN A TAKING OF PROPERTY

WITHOUT DUE PROCESS OF LAW IN

VIOLATION OF THE FIFTH AMENDMENT,

U.S. CONSTITUTION.

Where a statute of limitations is expanded

in such a way as to result in the deprivation

of substantial property rights, a violation of

due process of law as guaranteed by the Fifth

Amendment, U.S. Constitution results. (Campbell

v. Holt, 115 U.S. 620, 29 L.Ed. 483; Chase

Sec. Corp. v. Donaldson, 325 U.S. 304, 89

L.Ed. 1628)

Here both a lapse of time vested your

petitioners with a settled property right and

prejudiced them by the ability of the U.S.

Government to recoup.

Your petitioners incorporate herein by

reference as part of their argument their

questions presented at the beginning of this

petition and their complaint attached herein

as Appendix "A".

WHEREFORE, your petitioners Seymour R.

Matanky, M.D. and Corbin Medical Clinic pray

that this Honorable Court grant their petition

for writ of certiorari, granting them a hearing

on this petition for writ of certiorari, and

thereafter reverse and remand the above entitled

action for hearing and determination at eviden-

tiary proceedings before a federal judge duly

appointed pursuant to Article III, U.S. Consti-

tution, and award your petitioners reasonable

attorneys fees and costs herein.

Dated: January 18, 1983

Respectfully submitted,

JOAN CELIA LAVINE

Attorney for Petitioners

MORRIS LAVINE

617 South Olive St., Suite 510 FILED

Los Angeles, California 90014

Telephone: (213) 627-3241 Dec. 21, 1978

' U.S. District Court

Attorney for Plaintiffs

Seymour R. Matanky and rect ta —— of

Corbin Medical Clinic allfornia

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SEYMOUR R. MATANKY

and CORBIN MEDICAL

CLINIC,

Plaintiffs,

CASE NO. 78 4887 WPG (K)

COMPLAINT AND PETITION

FOR REVIEW OF FINAL

DECISION OF SECRETARY

OF HEALTH, EDUCATION

AND WELFARE RE WITHHELD

FUNDS BY BLUE SHIELD OF

CALIFORNIA

vs.

JOSEPH A. CALIFANO,

JR., SECRETARY OF

HEALTH, EDUCATION

AND WELFARE; and

BLUE SHIELD OF

CALIFORNIA, a

corporation,

Defendants.

me me eee ee ee ee ee ee ee ee ee

Come now plaintiffs Seymour R. Matanky and

Corbin Medical Clinic and for their complaint and

petition for review of final decision of Secretary

of Health, Education and Welfare concerning funds

withheld by Blue Shield of California allege as

A-1

follows:

This is an action to review a final decision

of the Secretary of Health, Education and Welfare

of the United States of America. This Court has

jurisdiction of the action under Sec. 205 (g) of the

Social Security Act, as amended (Title 42 U.S.C.

Sec. 405 (g)).

Plaintiff, Seymour R. Matanky, is and has been

at all times metioned herin, a resident and citizen

of the State of California, residing at 19701 Arundel

Place, Woodland Hills, California in the County of

Los Angeles. He was duly licensed to practice med-

cine at all times pertinent herein in California.

The plaintiff Corbin Medical Clinic is a med-

icial clinic owned and operated by Seymour R.

Matanky at all times pertinent herein and located

at 19625 Ventura Blvd., Tarzana, California in the

County of Los Angeles, and duly licensed in

California

A-2

The defendants are Joseph A. Califano, Jr.,

Secretary of Health, Education and Welfare and Blue

Shield of California, a corporation.

Plantiffs contend that the defendants have

wrongfully withheld $51,316.14 since June 15, 1971

in violation of plainitts’ constitutional rights to

due process of law and equal protection of the laws,

and these sums are presently due and owing to

him plus interest at the rate of seven percent per

annum.

III

The plaintiff CORBIN MEDICAL CLINIC is located

at 19625 Ventura Boulevard, Tarzana, California.

Dr. Matanky was admitted tc practice medicine

in the State of Illinois in 1950, and subsequently

joined the Medical Corps of the U.S. Army as a lst

Lieutenant and practiced for two years in Korea

and Japan, and was subsequently discharged.

He was licensed to practice medicine in the

State of California in 1954, and in 1957 he became

A-3

an assistant at the County General Hospital to

Roger Egeberg, M.D., who was the Medical Admini-

strator for Health, Education & Welfare. Dr. Matanky

attended a large number of elderly patients at the

County General Hospital for a period of nine years,

becoming highly experienced and knowledgeable

about their necessary needs for medical attention

and an expert in that field.

Commencing in 1965, Dr. Matanky became en-

gaged in attending the sick and the elderly in

hospitals, skilled nursing homes, and rest homes

located in the San Fernando Valley, consisting of

various towns and cities in that area, to-wit:

Encino, Tarzana, Sherman Oaks, Woodland Hills,

Canoga Park, Reseda, etc., and made himself

available at all times for all medically necessary

needs of the area.

At the time of Dr. Matanky's commencement of his

medical services, and for a period of years until

1972, there were no guidelines set up under the

A-4

Medicare program that informed the Doctor when

he should render his services, nor limit to how

many visits he could make to the facilities, and

under what conditions these patients were entitled

to treatment by Dr. Matanky as a medical neces-

Sity. The doctor, as a physician, was required

to see and attend each patient in accordance

with his best medical judgment.

Each patient seen and given medical treat~-

ment and attention by the doctor was required to

fill out and sign a contract in the form of a claim

provided by Blue Shield and the Social Security Ad-

ministration, and its Medicare section, and each

claim form was separate contract and separately

assigned to Dr. Matanky only on a place on the form

provided for the assignment of the contract in the

claim, "to the party who accepts assignment below."

The party below named was Seymour R. Matanky,

M.D., 19625 Ventura Boulevard, Tarzana, California

91356; no other provision was contained in the con-

tract of assignment.

A-5

VII

As Dr. Matanky received these assignments from

the patients who he saw and served, he turned them

into Bule Shield, who processed them and reduced

the amount claimed according to their determination

that the services had deen duly rendered, and the

charges were fair and reasonable and proper.

Thereafter, they issued their check to Dr. Matanky,

and Dr. Matanky received the same and accepted

the reduced amount. This constituted an Accord and

Satisfaction. (1 C.J.S. Sec. 34, 528; C.C.P. Sec.

1523; Williston on Contracts, revised, vol. 6, Sec.

1856, p. 5220; Silver v. Grossman, 183 Cal. 696;

Grayhill Drilling Co. v. Superior Oil Co., 39 Cal.2d

751.)

VIII

In 1971, Medicare, for the first time, adopted

guidelines and regulations limiting the number of

visits which doctors could make to these facilities,

effective in 1972. On June 15, 1971, Dr. Matanky

received a letter from the supervisor of the program

A-6

integrity Medicare liaison stating that they had

been requested by the Social Security Administration

to withhold Medicare reimbursement pending com-

pletion of investigation ot determine whether or not

any irregularity exists. They further stated that,

"... We wil notify you when a decision is reached

by S.S.A."

No notice was given, nor hearing called, as

required by due process of law guaranteed by the

Fifth Amendment to the Constitutionn of the United

States (Goldberg v. Kelly, 397 U.S. 254, 25 L.ed.2d

287), to determine any rights or any cause for

withholding the funds.

On demand of Dr. Matanky for a Fair Hearing

before an Administrative Judge, a hearing date was

granted on August 7, 1978, at Los Angeles,

California, before the Honorable Nahman Schochet,

Medicare Hearing Officer, selected and employed by

Blue Shield.

A-7

On August 7, 1978, a hearing was held by the

Blue Shield Hearing Officer, the Honorable Nahman

Schochet, at which time Dr. Matanky was present

with his counsel, and Blue Shield and the Secretary

were representec by the law firm of Hazzard,

Bonnington, Rogers & Huber, and John I. Jefsen;

and Blue Shield by Claude Molaison, and by

Di. Julius Sherr, medical advisor.

X11

The so.e issue presented by Blue Shield was

the lack of medical necessity for the various visits.

The Fair Hearing case number was 78268, ori-

ginally 77042.

XIII

The claimants, Dr. Matanky and Corbin Medical

Clinic, raised several constitutional violations of

due process of law under the Fifth and Fourteenth

Amendments to the Constitution of the United States.

Plaintiffs contended that Dr. Matanky entered

into a good faith contract through the insurance

carrier Blue Shield, and Joseph A. Califano, Jr.,

Secretary of Health, Education & Welfare, to render

A-8

all services medically necessary that were required,

and submit the claims signed by the Beneficiaries

for payment. That the rights were contractual and

protected by the Due Process Clause of the Fifth

Amendment to the Constitution of the United States.

They contended further it's a violation of due pro-

cess of law to deprive an individual of previously

vested contractual rights.

Claimants further contend that Blue Shield and

its peer reviewers examined all claims and reduced

them from a total of $81,901.48 to $51,316.14 as a

settlement and an Accord and Satisfaction of the

amount due to the doctor and his patients for their

medical services, and that Dr. Matanky had for-

given approximately $30,000.00 as consideration for

the Accord and Satisfaction, and the amount that

Blue Shield did pay was accepted at the time and

waived any possible irregularities in the form of

the claims, or the data supplied on them.

XIV

Claimants also raised the denial of due process

A-9

of law in failure to give Dr. Matanky or Corbin

Medical Clinic fair notice, or any notice, or hear-

ing regarding the withholding of funds.

They also raised the question of the bar of

the statute of limitations, which was limited to a

three-year period of time. Provider appealed Decision

00-76-12, also 20 C.F.R. Sec. 405, 1885.

XVI

Claimants further raised the points that the

first decision rendered was res judicata.

XVI

Claimants maintain that the monies withheld

are monies that were being paid for the care of

other patients than those for services for patients

already cared for and paid, and that neither Blue

Shield nor the government had a right to convert

those payments to pay previously considered claims,

and that it was conversion by Blue Shield.

XVII

Dr. Matanky testified that he made the visit

A-10

and rendered the services and that they were med-

ically necessary. There was no contradiction or

rebuttal at the hearing. No good cause was shown

for any redetermination. See 20 C.F.R. Sec. 1481.

Dr. Sherr was called by Blue Shield to testify.

He said that he did not practice in the same area

as Dr. Matanky. He further admitted that he had

not talked to any of the patients Personally or

diagnosed any of them. The doctor testified that

the basis for payment generally for more than one

visit per month was adequate documentation (Blue

Shield had waived any defect in documentation by

an accord and satisfaction). He further testified

that he did not start looking at the claims involved

until 1974, and the claims that he looked at were

current claims. He was not qualified and his opinion

should be disregarded. Moore v. Belt, 34 Cal.2d

525; Bennett v. Los Angeles Tumor Institute, 102

Cal. App.2d 293; Huffman v. Lindquist, 37 Cal.2d

465.

A-11

XVIII

Other icsues raised by claimant are:

(1) Whether Blue Shield could withhold pay-

ment due to Dr. Matanky for service rendered on

new and different individual contracts as recoup-

ment of money paid to him for other patients.

(2) The failure to notify the original claimants,

the new claimants, and the doctor, Specifically

what was claimed and what specific facts are relied

on to reopen theclaims, and whether such failure

constituted a denial of due process of law as

guaranteed by the Fifth Amendment to the Constitu-

tion of the United States,

(3) Whether the withholding of payment from

Dr. Matanky constituted impairment of contract,

protected by the Fifth Amendment to the Constitution

of the United States, and constituted a bill of at-

tainder and ex post facto law in violation of the

Constitution of the United States.

(4) No notice was given to Dr. Matanky or to

the patients whose subsequent or past claims were

A-12

involved that Blue Shield was seeking a read-

justment of the claims allowed and/or paid con-

cerning the fact that the Blue Shield was claiming

the right to withhold funds claims for other services

as reimbursement to itself for monies paid years

past. (Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306, 94 L.Ed. 865; Armstrong v. Manzo,

380 U.S. 545, 94 L.Ed.2d 62.)

XIX

The hearing on August 7,1978, resulted in a

decision by the Hearing Officer as follows:

"Accordingly, it is the decision that of the

$50,889.82 now withheld by the car-

rier:

"$50,518.22 is to be applied to satis-

faction of the refund due the govern-

ment on the reviewed claims; and

"$371.60 overwithholding is to be

refunded to the claimant;

all pursuant to Title XVIII of the Social

Security Act, as amended, and regulations

A-13

and rules duly adopted thereunder.”

The Hearing Officer advised that his de-

cision was final and the final judgment of

Health, Education & Welfare. Nevertheless, we

filled a petition for rehearing which the Hearing

Officer informed us he would consider. Nevertheless,

we are filing this petition to review within the

60 days allowed by Section 205 (g), Title 18

of the Social Security Act, as amended. We attach

a copy herewith of the Decision of the Hearing

Officer and we ask the Court to request the

Secretary of Health, Education & Welfare and

the Medicare Hearing Officer and Blue Shield of

California to furnish the Court and counsel with

a certified copy of the decision of the Hearing

Officer of the Petition for Rehearing and any

decision on the Petition for Rehearing. We also

ask the Court to order the Secretary of Health,

Education & Welfare and the Hearing Officer

and Blue Shield of California to furnish the Court

A-14

with a certified copy of the tape recording verified

by the Hearing Officer as a true and correct copy

of the proceedings conducted before him on

August 7, 1978.

WHEREFORE, Plaintiffs-Claimants respectfully

petition this Court to review and reverse the

judgment of the Hearing Officer denying the claims

of the Plaintiffs-Appellants, and order judgment

entered against Joseph A. Califano, Jr., Secretary

of Health, Education & Welfare, the United States

of America, and Blue Shield of California for

the amount of $51,316.14, plus interest at 7% per

annum since June 15, 1971.

DATED: December 19, 1978.

Respectfully submitted,

~~ MORRIS CAVINE

Attorney for Planitiffs-Claimants

SEYMOUR R. MATANKY and

CORBIN MEDICAL CLINIC

A-14

NAHMAN SCHOCHET

MEDICARE HEARING OFFICER

Two North Point

San Francisco, CA 94133

October 25, 1978

Joan Celia Lavine, Attorney

617 South Olive Street, Suite 510

Los Angeles, CA 90014

Re: Seymour R, Matanky, M.D.

Payment Review (PARE) on multiple ben-

eficiaries services May 1969 through June 1973,

with beneficiaries’ names, HIC numbers, and

claim control numbers in the record exhibits and

accounts.

Amount in controersy at hearing request: net

Medicare refunds due of $50,889.82 (the net 80%

paid on the total reviewed overallowances).

FAIR HEARING CASE NUMBER 78268 (originally 77042)

On August 7, 1978, hearing was duly held

at Los Angeles, California pursuant to Part B,

Title XVIII of the Social Security Act, as amended,

and regulations, policy and guidelines duly

adopted thereunder. The participants were:

A-15

claimant in person; his attorney/representative,

Ms. Joan Celia Lavine, of the Morris Lavine

and Joan Celia Lavine Law Office; Mr. Claude

Malaison, representative of the carrier, Blue

Shield of California; Mr. John I. Jefsen of the

Law Office of Hassard, Bonnington, Rogers &

Huber, the carrier's attorney; and Doctor Julius

Sherr, M.D., a medical advisor who reviewed the

claims and files herein for the carrier.

The record herein consists of:

Exhibit A, the original file and claim

accounts, previously furnished claimant

and his attorneys. Included are the

claims from May 1967 through June

1973 (in 65 different months) which

were questioned. Also included herein

is an additional August 7,1978 letter

with 15 pagers of Committee Case

Computations attached to the Admini-

Strative Review Decision of September 30,

1976 mailed to Doctor Matanky (the claimant),

A-16

and to be associated with pages 16-18

of the file (Exhibit A).

Exhibit B: Carrier's 4 page June l,

1970 Medicare Bulletin; Part B Inter-

mediary Letter Number 70-32, Number 70,

pages B5 through B9; and carrier's

January 1971 Medicare Bulletin pages

10 and ff.

Exhibit C: 2 page May 1974 letter from

Roy F. Nilsson, Program Evaluation

Branch, to the carrier's director of

Medicare Liaison and Hospital Review.

Exhibit D: Copy of December 4, 1969

letter, carrier's medical advisor to

claimant regarding patient Edward

Kurakowski.

Also subsequent pertinent correspondence,

and attorney's briefs, with the hearing

transcript.

The record herein was not closed as ready

for decision until October 13, 1978, when

A-17

Morris Lavine's Repy Brief was received by

the undersigned.

The hearing, unduly delayed for varied

causes, was to furnish claimant his requested

opportunity to explain his position herein with

such additional evidence as was pertinent and

not already on file to support his claim. It

should be noted that the claims reviewed are

not only in claimant's name alone, but may

also be in his name d.b.a. or as successor

to the Corbin Medical Clinic.

Claimant alleges that monies withheld by

the carrier for Medicare services are due him

without any further adjustment for alleged over-

allowances resulting in the alleged overpayments.

HISTORY/BACKGROUND

Medicare reimbursements to claimant were

withheld since June 1971 at direction of the

Social Security Administration, Bureau of Health

Insurance (now: Health Care Financing Admini-

A-18

stration, Medicare Bureau). The carrier was also

directed to perform a post payment review of

all claimant's services between 1967 and 1973

rendered in Skilled Nursing Facilities etc. The

resulting determination was that claimant had

been overpaid (net) $51,316.14, following review

of 2,412 claims for 305 Medicare beneficiaries

in Skilled Nursing Facilities, Nursing Homes,

and Guest Homes; $1,634.72 withheld over that

amount was paid claimant with an August 25,

1975 letter (Exhibit A, page 12). Since then

the files have been rereviewed and reevaluated.

An Administrative Review was the next step,

which reported net Medicare overpayment of

$50,889.82, which is the amount in controversy

herein, being the net anount of payments already

withheld and required to properly adjust the

Medicare payments made to claimant on the claims

reviewed in this proceeding. $425.32 was refunded

to claimant to keep the amount withheld to

$50,889.82. (Exihibit A, pages 16-17-18).

A-19

The purpose of this proceeding is not to

check on claimant's medical or professional

ability. The object is to see that Medicare pay-

ments were not made in violation of Medicare

rules and regulations. Such overallowances,

followed by erroneous overpayments, resulted

mainly from causes as:

Using the wrong RVS procedure number

indicating a greater allowance due

than is proper.

Insufficient or no documentation (which

must accompany each claim) to justify

larger than normal allowances either

for certain medical or surgical procedures

or for more than the normal limit of one

visit a calendar month to a patient with

a chronic fairly stabilized condition in

a nursing home or such institution. Or "Only

patient seen" omitted when required to be

stated if billed for any procedure greater

than #90341/#90441; otherwise allowable as

#90341/#90441. A-20

In case of multiple routine calls made

in an exteded care facility, nursing

home or guest home, the physician

may charge as for a home visit for

the first patient seen, and procedure

#9018 (#90341) for for each additional

patient; but the claimant must state

thereon which one was the "First

Patient Seen."

Claimant was advised at least as early

as June 15, 1971 that, pursuant to request of

the Social Security Administration, Medicare

reimbursements were being withheld pending

audit investigation (Exhibit A, page 1).

Claimant's attorneys have been involved

herein at least since their May 3, 1974 inquiry

found at page 2 of Exhibit A. (See also, in

Exhibit A, pages 3-4; 20-21-22; and August 7,1978

letter with attachments. )

(Number of Claims Involved.) The original

review was of 2,412 claims for 305 beneficiaries,

A-21

and the remaining reviewed claims then excluded

from further consideration. During the admini-

strative review and additional 29 claims were

excluded from consideration. There thus remained

1,137 claims for 167 beneficiaries.

(Amount in Controversy Summary.) The original

net overpayment reported was $51,316.14 and

$1,634.72 overwithheld refunded on August 29,

1975. Then the administrative review reported

the net overpayment due as being $50,889.82

and an additional $425.32 refund in October 1976.

(With the hearing request claimant supplied

some additional papers causing another recal-

culation, reducing the amount in controversy

to $50,518.22, leaving an apparent $371.60 stil!

due claimant as of the hearing date.)

Exhibit C, a May 1974 letter, reports that

certain civil claims of the United States against

claimant had been settled, precluding recoupment

of money for the 46 claims included in the in-

dictment. It was stated that this did not preclude

A-22

“recouping any overpayments made on other claims

for Skilled Nursing Facility visits submitted

by Doctor Matanky from 1966 ..."" "We have

notified Mr. Lavine (Doctor Matanky's attorney)

and Doctor Matanky that the monies being held

cannot be released until the Medicare overpayment

on assigned claims is computed . . . The 46

claims included in the indictment should not

be considered in arriving at the overpayment."

FINDINGS

Based upon careful review and consideration

of the record herein, it is found as follows:

1. The hearing request herein was in the alter-

native: (a) for honoring an alleged "accord

and satifaction" of refunds due from claimant

in the amount $51,316.14, allegedly paid by

claimant to carrier for the government; or (b) for

the over $81,000.00 originally billed in the

reviewed claims.

A-23

2. This entire proceeding follows the admini-

Strative review determination that claimant owed

the government a refund of Medicare net over-

payments amounting to $51,316.14 (which claimant

alleges he agreed to).

3. There is no proof that claimant refunded

this $51,316.14; this amount was withheld pending

the government directed audit; and most of it

is still withheld by the carrier.

4. The $51,316.14 originally claimed due from

claimant (and alleged by him as subject to

“accord and satisfaction") was upon rereview

and reevaluation reduced to $50,889.82, but

is stil withheld.

5. Upon additional documentation furnished

later, another rereview and reevaluation reports

the net refund due as being $50,518.22.

6. Claimant has furnished general information

and opinion regarding some details of his pratice,

but no additional information referring to

specific claims as required by Medicare ground

A-24

rules, policies and regulations.

7. Upon this set of facts and state of the record,

it appears that claimant has in reality been

contesting the additional reductions of the amount

he owed on the reviewed claims, and which he

owed on the reviewed claims, and which he agreed

was due therfor by adjustment.

8. In view of the above, and the proceedings

being based upon the alleged accord and satis-

faction which was the withholding or repayment

of the first refund amount of $51,316.14, this

decision is not discussing the other arguments

presented by claimant and counsel.

9. $50,518.22 is the refund amount now due

the government from withheld moneys.

10. $371.60 overwithholding is to be refunded

to the claimant.

A-25

DECISION

Accordingly, it is the decision that of the

$50,889.82 now withheld by the carrier:

$50,518.22 is to be applied to satisfaction

of the refund due the government on

the reveiwed calims; and

$371.60 overwithholding is to be refunded

to the claimant;

all pursuant to Title XVIII of the Social Security

Act, as amended, and regulations and rules

duly adopted thereunder.

Nahman Schochet

Medical Hearing Officer

(415) 445-5662

NS:dm

cc: Blue Shieid of California

Attorney John Il Jefsen

Doctor Seymour R. Matanky

A-26

VERIFICATION

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES ) $s.

1, the undersigned, say:

| have read the foregoing _ PETITION FOR

REVIEW OF FINAL DECISION OF SECRETARY OF

HEW RE WITHHELD FUNDS BY BLUE SHIELD OF

CALIF. and know its contents.

/X/ CHECK APPLICABLE PARAGRAPH

/X/ 1 am a party to this action. The matters

stated in it are true of my own knowledge

except as to those matters which are stated

on information and belief, and as to those

matters | believe them to be true.

// 1 am / / an officer / / a partner

i of

a party to this action, and am authorized to

make this verification for and on its bdhalf,

and | make this verification for the reason.

1 am informed and believe and on that ground

allege that the matters stated in it are true.

/ / 1 am on of the attorneys for

A-27

a party to this action. Such party is absent

from the county of aforesaid where such attorneys

have their offices, and I make this verification

for and on behalf of the party for the reason.

1 am informed and believe and on that ground

allege that the matters stated in it are true.

Executed on December 19 , 1978 at Los

Angeles California.

1 declare under penalty of perjury that the

foregoing is true and correct.

SEYMOUR R. MATANKY

A-28

IN THE UNITED STATES COURT OF CLAIMS

SEYMOUR R. MATANKY

CLINIC, Dec. 10, 1980

Plaintiffs, Court of Claims

_ No. 67-80C

)

‘

THE UNITED STATES, )

)

Defendant.

DEFENDANT'S ANSWER

For its answer to plaintiff's petition, defen-

dant admits, denies and avers as follows:

1. The allegations contained in sentence

one of Paragraph | constitute plaintiff's char-

acterization of the suit requiring no response.

The allegations contained in sentence two con-

stitute conclusions of law requiring no response;

however, to the extent that they may be deemed

allegations of material fact, they are denied.

2. Denies the allegations contained in

sentences one through three of Paragraph II for

lack of knowledge or information sufficient to

form a belief as to the truth thereof, except

B-1

that, pursuant to Rule 33, defendant avers that

plaintiff lacks capacity to sue. Denies the al-

legations contained in sentence four and states

that the defeendant herein is the United States

of America. Denies the allegations contained in

sentence five.

3-4. Denies the allegations contained in

Paragraphs III through IV for lack of knowledge

or information sufficient to form a belief as to the

truth thereof.

5. Denies the allegations contained in sen-

tence one of Paragraph V. Denies the allegations

contained in sentence two for lack of knowledge

or information sufficient to form a belief as to

the truth thereof.

6. Denies the allegations contained in

Paragraph VI for lack of knowledge or information

sufficient to form a belief as to the truth thereof,

except admits that medicare beneficiaries must

file a claim or a doctor may file such a claim

pursuant to an assignment from the beneficiary.

B-2

7. Denies the allegations contained in

sentences one and two of Paragraph VII for lack

of knowledge or information sufficient to form a

belief as to the truth thereof, except admits that

Dr. Matanky received assignments and Medicare

payments on some of these assignments. The

allegations contained in sentence three constitute

conclusions of law requiring no response; however,

to the extent that they may be deemed allegations

of material fact, they are denied.

8. Denies the allegations contained in

sentence one, except admits that by 1970 Medicare

had adopted guidelines concerning doctors’ visita-

tions. With respect to the allegations contained

in sentences two and three, defendant admits that

the referenced letter dated June 15, 1971, was

sent to Dr. Matanky. Defendant states that such

letter is the best evidence of its contents and

denies any of plainiiffs' references thereto which

do not conform to the contents of that letter.

B-3

9. Denies the allegations contained in

Paragraph IX and states that notice and hearing

were given in accordance with 42 CFR Section

405.801 et seq.

10. Admits the allegations contained in

Paragraph X.

11. Admits the allegations contained in

Paragraph XI, except denies that the Secretary

was a party or represented by counsel.

12. Admits the allegations contained in

Paragraph XIl.

13-18. The allegations contained in

Paragraph XIII through XVIII contain plaintiffs’

characterization of their postition at the admini-

strative level and as such, require no response.

However, to the extent that any response may be

required, defendant states that the administrative

record to which plaintiffs refer is the best

evidence of its contents and to that extent,

defendant denies any of plaintiffs' references

thereto which do not conform to such record.

B-4

19. The allegations contained in Paragraph

XV1V constitute plaintiffs’ characterization of

the administrative decision and as such, require

no response. However, to the extent that any

response may be required, defendant states that

the administrative record to which plaintiffs refer

is the best evidence of its contents and to that

extent, defendant denies any nonconforming

reference thereto.

20. The allegations contained in sentences

one and two of Paragrpah XX constitute plaintiffs’

characterization of portions of the administrative

record and as such, require no response. However,

to the extent that any response is required,

defendant states that the administrative record

is the best evidence of its contents and defendant

denies any nonconforming reference thereto.

Denies the allegations contained in sentence three.

Sentences four and five of plaintiffs' petition

require no response.

21. Denies that plaintiffs are entitled to

the relief sought in the final paragraph of their

petition or any other relief arising from allega-

tions contained in plaintiffs’ petition.

22. Defendant denies each and every allega-

tion in the petition not heretofore admitted,

denied, or otherwise qualified.

FIRST AFFIRMATIVE DEFENSE

23. This Court lacks subject matter jurisdic-

tion over plaintiffs’ claim.

SECOND AFFIRMATIVE DEFENSE

24. Plaintiffs' petition fails to state a

claim upon which relief can be granted.

THIRD AFFIRMATIVE DEFENSE

25. In Fair Hearing Case No. 78268, the

Medicare Hearing Officer upheld the action of

the Social Security Administration in directing

the withholding of certain Medicare reimbursements

to plaintiff Matanky since June 1971. Such

withholdings, in the amount of $50,518.22, were

held to have been properly offset against Dr.

B-6

Matanky's obligation to the United States

arising out of his receipt of erroneous overpayments

under the program. A copy of the decision is

attached to the petition. Such decision is final

and binding upon plaintiff Matanky in this action

(and upon plaintiff Corbin Medical Clinic to the

extent such clinic is a proper party having an

identity of interest with plaintiff Matanky) since

the decision is not arbitrary or capricious and

is supported by substantial evidence. (42 CFR

Section 405.835.) Accordingly, defendant is

entitled to judgment that plaintiffs' claims are

barred by offset in the amount of $50,518.22.

FOURTH AFFIRMATIVE DEFENSE

26. To the extent plaintiffs seek to recover

more than the $50,518.22 determined by the

Hearing Officer to be due the United States, such

claim is barred by the fact that such express

amounts have been paid to plaintiffs.

FIFTH AFFIRMATIVE DEFENSE

27. Plaintiff Corbin Medical Clinic is not a

proper party to this action.

WHEREFORE, defendant prays that plaintiffs'

petition be dismissed and that defendant be

granted such other and further relief as may be

just and proper.

ALICE DANIEL

Assistant Attorney General

Civil Division

LYNN J. BUSH

Attorney, Civil Division

Department of Justice

Washington, D.C. 20530

Of Counsel:

HENRY R. GOLDBERG

Department of Health and

Human Services

MORRIS LAVINE

Attorney at Law

617 South Olive Street, Suite 510

Los Angeles, California 90014

Telephone: (213) 627-3241 FILED

Attorney for Plaintiffs Feb.8, 1979

Clerk, U.S. District

Court, Central

District of Calif.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SEYMOUR R. MATANKY

and CORBIN MEDICAL

CLINIC,

No. CV 78-4887-WPG(K)

OPPOSITION TO MOTION

TO VACATE REFERRAL,

AND INSTEAD TO MAKE

A RECOMMENDATION TO

THE DISTRICT JUDGE

FOR A HEARING BY THE

DISTRICT JUDGE, OR

THE COURT OF CLAIMS

Plaintiffs,

vs.

JOSEPH A. CALIFANO,

JR., SECRETARY OF

HEALTH, EDUCATION &

WELFARE; and BLUE

SHIELD OF CALIFORNIA,) Hearing: February 16,

et i ti i i el

a Corporation, 1979

Time: 10:00 A.M.

Defendants. Before: Magistrate

Kronenberg

TO ALL PARTIES OF THIS ACTiON:

COME NOW the plaintiffs, and in response to

the motion of the defendants to vacate the referral

to the Honorable John R. Kronenberg, U.S.

C-1

Magistrate, move the Honorable Magistrate not to

vacate the order of reference, but instead to

recommend to the District Judge that he take

jurisdiction to rule on the due process claims of

the plaintiffs, and to hear the same; and, in

his discretion, either rule on the same or refer

the matter to the United States Court of Claims

and transfer the etire matter to the Court of

Claims in Washington, D.C., for further considera-

tion and determination; and, in respect thereto,

plaintiffs set forth as follows:

1. Plaintiff, SEYMOUR R. MATANKY, M.D.,

commenced his medical services for the Welfare

program in 1967. There were no guidelines set

up and the doctor, along with others, was left

to use his best judgment as to the medical care

and treatment of patients in the various expert

nursing care homes and medical centers to which

patients were transferred from hospitals, where

they were attended daily by their doctors.

C-2

2. Medicare was billed regularly for the

treatments, and nayments were adjusted and

reviewed by BLUE SHIELD and their peer reviewers

and advisors, and each claim, after adjustment

by BLUE SHIELD, was paid; and as readjusted

and accepted by the plaintiffs as the checks were

issued, there were 2,412 claims for 305 benefici-

aries, reviewed, considered, adjusted, and paid.

There was no evidence of overpayment or irregu-

larity. Guidelines were first set up by the

Department of Health, Education & Welfare in

1972, limiting the number of visits a doctor could

make to patients outside of regular hospitals.

In the reviews of the claims, the plaintiff

allowed the cutting off of approximately

$30,000.00 in their acceptance of the amount

paid.

3. The doctor continued his treatment of

Medicare patients inside and outside of the

hospitals and in special nursing homes and

nursing centers, and continued to bill Medicare

C-3

and BLUE SHIELD for services to new and different,

additional patients.

4. Without notice, or hearing, or grounds

therefore to DR. MATANKY, CORBIN MEDICAL

CLINIC, or the patients, it was at this point

that BLUE SHIELD began to withhold the monies

due for the services rendered to the new patients.

This was as a result of a letter dated June 15,

1971, that Medicare reimbursement to DR. MATANKY

and CORBIN MEDICAL CLINIC be withheld pending

an investigation.

5. No wrong doing was specified in the

letter, and no hearing was held or called prior

to the requirements of due process requiring a

notice and a hearing. (Sniadach v. Family

Financial Corp., 395 U.S. 337, 23 L.ed.2d 349;

Wisconsin v. Constantineau, 400 U.S. 433, 27

L.ed.2d 515; Goldberg v. Kelly, 397 U.S. 254,

25 L.ed.2d 287.)

6. No evidentiary hearing was held at that

time, and no review or any proceeding taken to

C-4

examine the claims until 1974; and no further

notice and no payments were made of the claims

by BLUE SHIELD, which continued to withhold the

monies which were assigned to DR. MATANKY for

services.

7. On demand of DR. MATANKY and CORBIN

MEDICAL “LINIC, a Fair hearing was set up,

which hearing was held on August 7, 1978,

before a Hearing Officer selected by BLUE SHIELD;

and a decision rendered on October 25, 1978, by

the Medicare hearing Officer, selected, appointed,

and paid by BLUE SHIELD.

8. The sole issue which the Hearing Officer

considered set up in his opinion was:

"The purpose of this proceeding

is not to check on claimant's medical

or professional ability, the object is

to see that Medicare payments were

not made in violation of Medicare

ruies and regulations."

C-5

9. The opinion does not state any substantial

showing of evidence of any violation of any

statute, rule, or regulation, nor what rules and

regulations were in effect between 1966 and 1971,

for there were none. Doctors were left to their

required duties as physicians to determine

necessary medical care. The Hearing Officer

sought to decide the case on rules and regulations

set up subsequent to that date, all of which were

rot involved in any of the cases in which the

funds were being withheld. The Hearing Officer,

in violation of the plaintiffs' due process rights,

failed to decide that there was no evidence of

any regulations which covered the doctor's and

clinic's duties, or services thereof for which he

was paid during the years that were being

adjudicated, all of which was a violation of

due process of law guaranteed by the Fifth and

Fourteenth Amendments to the United States

Constitution.

C-6

10. The Hearing Officer also failed to

adjudicate that the Medicare Act and regulations

limited the right of BLUE SHIELD and the govern-

ment to proceed after three years. (Provider

Reimbursement Manual, Section 2408.4 (7346);

also see Sections 13,510.33 and 13,510.64.)

11. More than three years elapsed before

any determination was made te $51,316.14,

which had been withheld without evidence or

explanation. The sum had been received by

DR. MATANKY as an Accord and Satisfaction

under both California and National laws.

(C.C.P. Sections 1521, 1523, 1 C.J.S. Section

34528; Williston on Contracts, Vol. 6, Section

1856, p. 5230; Silver v. Grossman, 183 Cal. 694;

Grayhill Drilling Co. v. Superior Oil Co., 39

Cal.2d 751, 753; Potter v. Pacific Coast Lbr. Co.,

37 Cal.2d 592.

12. None of the previous payments were

appealed from the reviews, and the government

and BLUE SHIELD, having had one fair and full

C-7

opportunity on the merits of the claims, should

not be permitted a second time, but should be

bound by the principles of estoppel. (Bernard

v. Bank of America, 19 Cal.2d 807.)

13. There was no evidence that any of the

regulations or requirements which the Hearing

Officer considered were ever published in the

Federal Register.

14. There were several violations of due

process of law guaranteed by the Fifth Amendment

to the United States Constitution which required,

and requires, access to the court as guaranteed

by 42 U.S.C. Section 405(g).

15. The government moves to vacate reference

to the Magistrate, pursuant to General Order No.

104-D, and in violation of Weber v. Secretary of

Health, Education, and Welfare (9th Circuit),

503 F.2d 1049, and in the Supreme Court of the

United States in Mathews v. Weber, 423 U.S. 261,

46 L.ed.2d 483.

C-8

16. In Weber v. Secretary of Health,

Education, and Welfare, 503 F.2d 1049, the

Court said:

"General Order No. 104-D adopted

by the district court provides, inter

alia, for reference to a full-time U.S.

magistrate of all ' actions to review

administrative determinations re (sic)

entitlement to benefits under the Social

Security Act and related statutes, in-

cluding but not limited to actions filed

under 42 U.S.C. Section 405(g)."

",.. Appellant conceded at

argument that the procedure followed

under the rule objected to is for the

magistrate to examine the wirtten

administrative record and make a

recommendation to the judge. The

parties are advised of the magistrate's

initial opinion and are afforded time

to present objections. If objection be

C-9

made, an opportunity is given to present

briefs and argument in support thereof.

The magistrate may then revise his original

recommendation or adhere to it. Under either

contingency he then forwards his recom-

comendation and the administration record

together with a report or proceedings before

him, if any, to the judge fer final action.

"[2] As so applied, we hold that the

delegated authority is well within the in-

tent of Congress in adopting the Magistrate

Act; that the judicial review contemplated

by the Social Security Act is adequatley

provided and that the procedure comports

with the requirement of exercise of judicial

power under Article III of the United States

Constitution. Were the broad provisions

of General Order No. 104-D to be resorted

to in the type of judicial review before

us, the Secretary might have grounds to

complain. As applied, the rule is not

C-10

vulnerable to the attack here mounted."

(Weber v. Secretary of Health, Education,

and Welfare, 503 F.2d 1049 at 1051.)

17. In Mathews v. Weber, 423, U.S. 261,

46 L.ed.2d 483, the Court said, on page 491,

as follows:

"[1b] We need not define the full

reach of a magistrate's authority under

the Act, or reach the broad provisions

of General Order No. 104-D, in order to

decide this case. Under the part of the

order at issue the magistrates perform a

limited function which falls well within

the range of duties Congress empowered

the district courts to assign to them.

The magistrate is directed to conduct a

preliminary review of a closed admini-

strative record -- closed because under

Sec. 205 (g) of the Social Security Act,

42 USC Sec. 405 (g) [42 USCS & 405 (g)],

neither party may put an, additional

C-11

evidence before the district court. The

magistrate gives only a recommendation

to the judge, and only on the single,

narrow issue: is there in the record

substantial evidence to support the

Secretary's decision? The magistrare may

do no more than propose [423 US 271] a

recommendation, and neither the Sec.

636 (b) nor the General Order gives such

recommendation presumptive weight. The

district judge is free to follow it or

wholly to ignore it, or, if he is not

satisfied, he may conduct the review in

whole or in part anew. The authority --

and the responsibility -- to make an

informed, final determination, we

emphasize, remains with the judge."

(46 L.ed.2d at 491-492.)

18. Since there were no rules, regulations,

or guidelines covering the years 1967 to 1972,

the Hearing Officer attempted to decide the case

C-12

retroactively on statutes and guidelines which

covered subsequent transactions and which were

not in effect during the periods when the various

services were rendered; to change the conditions

and establish rules, and reopen the payments

of approved amounts constituted an expost facto

determination of previously allowed costs,

approved, and paid; and violated due process

of law and equal protection of law.

19. In South Windsor Convalescent Home,

Inc. v. Weinberger, 403 F. Supp. 515, the

Court held that the retroactive application did

not apply to recaptive reimbursements for ac-

celerated depreciation during dates prior to

the challenged regulations, and that such at-

tempted recapture was not lawful, (403 F. Suppl

522.)

20. The Court quoted Justice Oliver Wendall

Holmes in Blodgett v. Holden, 275 U.S. 142,

at 149:

"I think it tolerably plain that the

C-13

act should be read as referring only to

transactions taking place after it was

passed. When to disregard the rule would

be to impose an unexpected liability

that if known might have induced those

concerned to avoid it and to use their

money in other ways."

21. The failure to give notice of the

specific claims and the specific charges on

which BLUE SHIELD justified its retention of

the money, and the use thereof by it, was a

violation of due process of law. The plaintiffs

herein were entitled to full and adequate

notice, as were the beneficiaries who were

affected by the actions of BLUE SHIELD and

the government.

22. No notice was given, and no eviden-

tiary hearings were held, and neither the

plaintiffs or any beneficiaries wete advised

of the government's or BLUE SHIELD's objective

during the three-years period in which the

C-14

Statute and regulations required such notices

to be served. (In re Oliver, 333 U.S. 257, 286;

Cole v. Arkansas, 333 U.S. 196.)

23. It was a violation of due process of

law to find that the money could be transferred

on the basis of no evidence whatsoever in the

record to support such a right. The charge

that DR. MATANKY or CORBIN MEDICAL CLINIC

had been overpaid was not established by any

substantial evidence and was a sure denial

of due process of law. It is as much a viola-

tion of due process of law to take money away

from a person entitled to it, without any evi-

dence to support the right, as it is to convict

a man on charges not made and to punish him

without evidence of his guilt. (See cases in

Footnote in Thompson v. Louisville, 362 U.S.

199, 4 L.ed. 2d 654, 659.)

24. There is presumption that when Con-

Stitutional question are in issue, the availability

of judicial review is presumed. (Cervoni v.

C-15

Secretary of Health, Education, and Welfare,

581 F.2d 1010, 1017; Califano, Jr. v. Sanders,

430 U.S. 99, 51 L.ed.2d 192.)

25. The district court may itself determine

all issues or transfer the case to the Court

of Claims, pursuant to 28 U.S.C. Sec. 1406c.

(Dr. John T. MacDonald Foundation, Inc. v.

Califano, 571 F.2d 328 (5th Circuit, 1978):

South Windsor Convalescent Home, Inc. v. Mathews,

541 F.2d 1910 (2nd Circuit, 1976).) Jurisdiction

in the Court of Claims under 28 U.S.C. Sec.

1491.

26. The Hearing Officer also disregarded

the regulations providing for res judicata of

all matters previously determined after three

years. (Title 20, C.F.R. Sections 404.973 and

405.1855; Fifth Amendment to the Constitution

of the United States; Bernard v. Bank of

America, 19 Cal.2d 807.) The contract as accepted

by DR. MATANKY and BLUE SHIELD were property

protected by the Constitution of the United States,

C-16

and not even Congress has authority to repudiate

the obligation of these contracts. (Perry v.

United States, 294 U.S. 330, 79 L.ed. 912;

Union Pacific v. Coal, 99 U.S. 700, 25 L.ed.

496, 501.) This procedure ws also a violation

of due process of law and the equal protection

of the laws under the Fifth Amendment to the

Constitution of the United States.

WHEREFORE, plaintiffs pray that the

Magistrate overrule the objection of the govern-

ment and hold a hearing and make a recom-

mendation fovorable to the plaintiffs in the

District Court, or the transfer the matter to

the Court of Claims.

DATED: February 9, 1979.

~~~ MORRTS CAVINE

Attorney for Plaintiffs

SEYMOUR R. MATANKY and

CORBIN MEDICAL CLINIC

C-17

IN THE UNITED STATES COURT OF CLAIMS

NO, 67-80C

SEYMOUR R. MATANKY,

M.D., AND CORBIN

Jurisdiction; Medicare;

MEDICAL CLINIC

Part B,

Vv.

)

SEP 17 1982

)

THE UNITED STATES

e—_—_———

Morris Lavine, attorney of record, for

plaintiff,

Benjamin F, Wilson, with whom was

Assistant Attorney General J. Paul McGrath,

for defendant.

Before FRIEDMAN, Chief Judge, DAVIS and

BENNETT, Jugdes.

ORDER

PER CURIAM: Plaintiffs, a medical doctor

and a medical clinic he owns and operates,

Seek amounts they Say they were denied, under

Part B of Medicare, for services rendered to

D-1

patients covered by Part B. Defendant moves

to dismiss on the authority of United States

v. Erika, 456 U.S. (1982). All the points,

statutory and constitutional, raised by plaint-

iffs to sustain the jurisdiction of this court,

have been recently disposed of by this court

in several prior orc*rs granting defendant's

motions to dismiss in comparable cases. See

Regents of the University of Colorado v.

United States, Ct. Cl. No. 518-80C (order of

August 27, 1982); Drennan v. United States,

Ct. Cl. No. 88-80C (order of August 27, 1982);

Babcock Artificial Kidney Center, Inc. v. United

State, Ct. Cl. No. 467-80C (order of September 10,

1982); Wanda Williams, v. United States, Ct.

Cl. No. 696-80C (order of September 10, 1982)--

and the earlier decisions cited in those orders.

Plaintiffs raise no new issues warranting sep-

arate discussion.

Plaintiffs’ alterrnative request that the

case be re-transferred to the United States

D-2

District Court for the Central District of

California is governed by our recent decision

in Berton Siegel v. United States, Ct. Cl. No.

119-81C (order of August 20, 1982). See Wanda

Williams v. United States, supra.

Defendant's motion to dismiss is granted

and the petition is dismissed. IT IS SO ORDERED.

SEP 17 1982

IN THE UNITED STATES COURT OF CLAIMS

SEYMOUR R. MATANKY, M.D. ) CASE NO.67-80 C

and CORBIN MEDICAL CLINic, ) FILED

Plaintiffs, U.S. Court of

¥e Appeals for the

: ) Federal Circuit

UNITED STATES OF AMERICA, ) OCT 1 1982

Defendant. )George E. Hutchinson

Clerk

_— ~—

PETITION AND MOTION FOR RECONSIDERATION

OF ORDER AND JUDGMENT OF DISMISSAL IN

FAVOR OF THE DEFENDANT U.S.A. AND AGAINST

THE PLAINTIFFS

Come now the plaintiffs herein Seymour R.

Matanky, M.D. and Corbin Medical Clinic and

petition and move this Honorable Court for re-

consideration and rehearing of the order and

judgment, filed September 17, 1982, dismissing

the above entitled matter and entering judgment

in favor of the defendant the U.S.A. and against

these plaintiffs, on the following grounds and

for the following reasons, to-wit:

l. As plaintiffs have previously argued,

it is the position of these plaintiffs that they

E-1

are entitled to a trial by jury, a hearing and

determination by an Article II1 Judge duly

appointed within the federal judiciary. (Northern

Pipeline Construction Co. v. Marathon Pipe Line

Co., 50 L.W. 4892, 6-29-82; Article III, U.S.

Constitution and Fifth, Sixth and Seventh Amend-

ments, U.S. Constitution)

This Court, in its order, has not addressed

the issue posed by these plaintiffs as to the

right of the plaintiffs to be heard by Article

IIl Judges either in this Court of Claims or in

a U.S. District Court. It is respectfully sub-

mitted that this Court has overlooked this issue

in making its rulings and decision, and that

if considered, would compel this Court to grant

reconsideration and rehearing and thereafter

reverse its decision to dismiss this action.

2. This Court has referred to various

orders in its order and decision which are not

generally published to the best of this counsel's

knowledge, which were not attached to this

E-2

counsel's copy of the order and decision sent

to him and which have not been provided to

this counsel for his review and consideration

in making this petition for reconsideration and

rehearing.

It is respectfully objected that reference

to orders and citations not generally available

and to which the plaintiffs and their counsel

have not had access constitutes a denial of

due process, and particularly the right to

know the basis of this Court's decision in order

to be able to petition for rehearing and/or

thereafter petition for appellate review. (Fifth

Amendment, U.S. Constitution)

Plaintiffs' counsel has sent to this Court

a request for the copying of the involved orders,

but has not received a response or copies of

the orders referred to in the order of this

Court.

3. In Making its motion to dismiss, the

U.S. Government attached parts of various cases

E-3

concerning which these plaintiffs were not

involved and which were generally incoherent

and unidentifiable, and which further were

so difficult to make head or tail of that they

constituted no notice to these plaintiffs as to

the grounds or bases for a motion to dismiss.

This Court will remember that the plain-

tiffs and their counsei are located in Los Angeles,

California whereas this Court is located in

Washington, D.C.

It is respectfully submitted that a motion

to dismiss based on unidentifiable documents

concerning which some of the Judges in this

Court may have personal familiarity due to

having ruled on same constitutes a proceeding

which approaches being a Star Chamber one in

which the arguments are kept secret from these

plaintiffs so that they cannot respond to them.

These plaintiffs object that this style and

course of proceedings constitutes a flagrant

denial of due process of law under the Fifth,

E-4

Sixth and Seventh Amendments, U.S. Constitution

as well as Article III, U.S. Constitution. (Hovey

v. Elliott, 167 US 409)

4. These plaintiffs have raised what

constitute an extensive number of factual issues

as to whether violations of due process of law

have occurred, including whether recoupment pro-

cedures well after any applicable statutes of

limitations were commenced, whether there was

an extensive denial of notice to the claimants

and patients and whether the treatment involved

was medically necessary.

A motion to dismiss, being an at law or

law and motion procedure, does not deal with

or attempt to deal with factual issues which

should be tried before a Judge and jury, at an

evidentiary hearing.

Further, this U.S. Court of Claims does

not have jurisdiction of the due process claims,

which should have been heard by an Article III

Judge in a U.S. District Court. (Shuttlesworth

E-5

v. Birmingham, 358 US 101, 3 L.ed.2d 145;

Garner v. Louisiana, 368 US 157, 7 L.ed.2d 207)

WHEREFORE, the plaintiffs Seymour R.

Matanky, M.D. and Corbin Medical Clinic here-

by move for reconsideration and rehearing and

thereafter for reversal of this Honorable Court's

order and judgment of dismissal entered herein

on September 17, 1982, and that this matter be

transferred back to the U.S. District Court for

the Central District of California for further

hearing and trial on their complaint.

Dated: September 30, 1982

Respectfully submitted,

/s/___ Morris Lavine

MORRIS LAVINE, Attorney

for Plaintiffs

123 North Hobart Blvd.

Los Angeles, California 90004

(213) 627-3241

E-6

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.