# Petition — Matanky v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1983
- **Citation:** 462 U.S. 1118

## Text

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

ii

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.

iv

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.

vi

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

ix

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

x

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.

xi

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

19

Il

III

lV

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

38

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

XV

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

7
6
6
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

2

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,

3

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

4

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

7

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

8

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

(C) the amount of benefits
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.

10

(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.

(c) Any institution or agency
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

11

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

12

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

13

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

14

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

15

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.)

16

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

17

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,

18

or whether such a system clearly denies them
due process of law and access to the federal

courts.

ARGUMENT

l

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
19

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

20

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

21

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
22

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

23

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

24

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."

Il

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

25

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

26

ee

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

27

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

28

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.

29

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.

30

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

31

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

32

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.)

33

lV

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

34

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.

35

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

36

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

37

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.

V

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

38

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

39

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

40

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:
I

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)).

Il

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.
lV

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.

V
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.
VI

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."
IX

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.

X

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

XI
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.
XV
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.”
XX

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

and CORBIN MEDICAL es ©

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0319%3A1. Public record. Not legal advice.