Opposition — Group Health Inc. v. Heckler

GrRoUP HEALTH INCORPORATED, PETITIONER

Vv.

MARGARET M. HECKLER, SECRETARY OF A

HEALTH AND HUMAN SERVICES, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI 1 oN

ag TO THE UNITED STATES COURT OF APPEALS 2

¢ is FOR THE SECOND CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

J i

ites it eRe

py vs Pipes

tO i?

A OOM ete

tioner, a provider of health services under the Medicare

statute, 42 U.S.C. (& Supp. V) 1395 et seg., was not :

: entitled to reimbursement of certain “interest” ex-

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TABLE OF CONTENTS

TABLE OF AUTHORITIES

Cases:

American Hospital Management Corp. v.

Batterton v. Francis, 482 U.S. 416........

Committee for Public Education v.

Nyquist, 413 U.S. T66 ......-..ee eens

Community Health Services of Crawford

County, Inc. v. Califano, 698 F.2d 615,

cert. granted, No, 8-56 (Oct. 3,

BEND sci sinc cdehwaa teccwtateesess Ny key ae

Dandridge v. Williams, 397 U.S. 471'.....

FCIC v. Merrill, 382 U.S. 380.........5..

Goleta Valley Community Hospital v.

Schweiker, 647 F.2d 894.........0000005

Hillside Community Hospital of Ukiah v.

Mathews, 423 F. Supp. 1168 ............

INS v. Hibi, 414.U.8. 6...66.ccececeeeeee:

INS v. Miranda, No. 82-29 (Nov. 8, 1982) .

lowa-Des motiee.: Vational Bank v.—

cos ron Saas iad HIS ay

tee

13 €

Rly

13 4

|

10

x

s

IV

Cases—Continued: Page

Lindsley v. Natural Carbonic Gas Co., 220

RIRAEL, ia baer Mphdacdhidnr boss Verncmene 11

Marina Mercy Hospital v. Harris, 633 F.2d

PEGS ¢ eeR tak veks cuhhsty 6apabaiwess 13

Medical Center of Independence v. Harris,

Wee SABE Koes 20s ceccd vcs cocceyes 13

Montana v. Kennedy, 366 U.S. 908 ....... 15

Mourning v. Family Publications Service,

$000.5 SUE Rick CO -¥4a 00 a 08 vi 0c ved cvece 13

Northwest Hospital, Inc. v. Hospital Serv-

ice Corp., 687 F.2d 985.............. 9, 11, 12

Pasadena Hospital Ass’n vy. United States,

OB A, a) 7 eee ee 13

Schweiker v. Hansen, 460 U.S. 785 .... 8, 14, 15

Shaker Medical Center Hospital v. Secre-

tary of Health and Human Services, 686

PO OU vn 5 hs TREC sak ik cpl 11, 13

Skinner v. Oklahoma ex rel. Williamson,

SAU GEBK s. odibess ates s ae 11

South Boston General Hospital v. Blue

Cross of Virginia, 409 F. Supp. 1380 .... 6, 13

Stevens Park eee ae Vv.

United States, TOD cncdbeccrde’ 13

Indiana co v. United

whim ds le 6, 9, 12

u no” afer ee

8 me ee eee ~ ‘

: : 3 2 Ae:

F Constitution, statutes and regulations

| U.S. Const.:

Amend. I ....... SI Pita Sh bs SuRates

RNG Voix Fo tenk ota tenn ahd ewtaccrs

Social Security Act, 42 U.S.C. (& Supp. V)

101 et seq.:

Title XVIII, 42 U.S.C. (& Supp. V) 1395

Oh... MO OTe eee er press 1 7 if

42 U.S.C. (& Supp. V) a

1We-1SMIAG oii os i von cases ee 2

; 42 U.S.C. (€ Supp. V) 1396f........ 2 .

; 42 U.S.C. (Supp. V) 1396f(b)........ 2 ;

, 42 U.S.C. (& Supp. V) 1395g ....... 2 ;

ea 42 U.S.C. 1895g(a)........0ceeeeees 3 5

42 U.S.C. (& Supp. V) 1895h ....... 8 3

42 U.S.C. (Supp. V) 1396h(aX2XA).. 8 %

42 U.S.C. 1895x(vX1MA) ........... 2, 18 a

42 U.S.C. 1395x(VXIMAMH) ......., BO

42 U.S.C. (Supp. V) 1395y(aX1)..... 2 ia

‘ 42 U.S.C. 1806HN .........-sqreeeee 2 /

. 42 U.S.C. (& Supp. V) 189600 ...... 4 i

& 42 C.F.R. Pt. 406 6 809. ..secesesevereene Bo

z Section 406.419 «....+++.+0+++004 6, 7,6,13° a

Section 406.419(ox2X) Owe eee eeeeeee ee 4°

Pa, oud rere.

Section ¢ see enne peeweee 8 i

: e+« + o

= ORIG RA : ' | "@) ;

t Pp . ) Lod *

Section ‘ 4. ’ . _ 4 a af had '

PALIN B | sees eer 10, : ey |

ena aie dae?

Section 406.1801 et seq.

Section 405.1808(b) ....

i

co & co rm m co ht m& SO

*

ys ee nae

In the Supreme Court of the Ginited States 2

OCTOBER TERM, 1983 -

No. 83-422

GRoUP HEALTH INCORPORATED, PETITIONER

v. s

MARGARET M. HECKLER, SECRETARY OF

HEALTH AND HUMAN SERVICES, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinions of the court of appeals (Pet. App. Sas

la-4a), the district court (Pet. App. 5a-13a), and the -

Provider Reimbursement Review Board (Pet. App. "4

14a-23a) are unreported. z

JURISDICTION ics

The judgment of the court of wasenteredon

May 9, 1983. On August 2, 1983, Justice Marshall

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IF that under this type of reimbursement system it was k

likely that health care providers would receive over- r

payments or underpayments at various times. There-

fore, it instructed the Secretary to “provide for the

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responded

ing 42 C.F.R. 405.1885, which provides for the reopen-

ing, within a three-year period, of any reimbursement

determination made by an intermediary, a hearing offi-

cer, the Provider Reimbursement Review Board

bree oe oe eae et a ‘ , aa

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istrative and judicial review. 42 U.S.C. (& Supp. V)

139500; 42 C.F.R. 405.1801 et seq.

lees Hosp rom s partnership of py

(ibid.). eat ie min tte: tax

retary of HHS provide that only proprietary (i.e., for-

profit) providers may receive a return on equity capital |

as part of their Medicare reimbursement. 42 C.F.R. a

405.429. In addition, the Secretary's regulations pro- mi

vide that interest expenses generally are not reimburs- ad

able if a transaction involves related parties. 42 C.F.R. we

405.41%¢X1). However, New York State agencies and

Blue Cross-Blue Shield of Greater New York, the fiscal

a ¥h : “yee Dress et Spee See ou wy

So ee Rey t speptipretwath ay dares eit,

ig <*pemaniae Sibiht* gaaaite cdaaiad Goreane be:

es ee ee ee goss e

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reimbursable in-

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Hillcrest Hospital division, it cannot be characterized as

a ‘loan’ under applicable regulations” (id. at 1la-2a). The

court concluded that even if the Hillcrest transaction

could be characterized as a loan (which the court

pe vonage tyrmaanayen tray Vaal yp Rigas

a loan from “donor-restricted” funds the mean-

th. a4 af:

raed. ted petitioner's esto

RYO ge tan: \ the gov.

ee ne A 3m<8 ‘elm Soult v “eas

The court of appeals’ holding is correct and does not

conflict with any decision of this Court or any other

court of appeals. Further review is not warranted.

1. Petitioner first contends (Pet. 13-18) that 42

C.F.R. 405.419—the regulation relied on by the PRRB

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attention to the fact that Section 405.41%cX1), which

States, 618 F.2d 736, 740 (1980), have questioned the

of 42 C.F.R. 405.41%c) on the basis

that it affords favored treatment to religious entities.

10

Fifth Amendment because it favors providers operated

by religious orders over secular providers,® such a con-

5 It seems clear that petitioner lacks standing to raise the

constitutional issue. This Court recently noted in Valley Forge

Christian College v. Americans United for Separation of

Church and State, Inc., 454 U.S. AOA, 418 SHR) (Cahatione,

omitted; footnote omitted):

{A}t an irreducible minimum, Art, III satuleed tis mate

whe kavolen hoa coatt’s auttecily to “show that he povesn

bre hapten see Bonne lane pnt ontnge ma as a re-

tule “hit arte maebia ak ” and

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would not aid petitioner in any event. The prop-

clusion

remedy

ception for

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since the rule clearly

reimbursement of interest payments between related

reasonable purpose.” A court presumably

the related

ption,

is more

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that

(Pet. 25-26

providers. The alternative—strik-

the broad prophylactic rule against

in such a case would be to eliminate the ex-

alisan

parties—would be inappropriate

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a3if

tant

nicety or because in

397 U.S. 471, 486 (1970) (quoting Lindsley v. Natural Carbonic

Gas Co., 220 U.S. 61, 78 (1911)). Accord, Weinberger v.

422 U.S. 749, 769-770 (1975).

practice it results in some inequality.'’” Dandridge v. Williams,

because it “‘is not made with

647 F.2d 894, 897

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4 ‘hc petition for a writ of certiorari should be denied.

| Alternatively, the Court may wish to hold the petition

i pending a decision in Heckler v. Community Health

Services of Crawford County, Inc., No. 88-56.

Respectfully submitted.

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