Petition for Writ of Certiorari — Warder v. Shalala

Supreme Court, vU.s.

i fy

#8113831 JANS 199

No.

In The

Supreme Court of the United States

October Term 1998

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PETITION FOR A

WRIT OF CERTIORARI

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Counsel OL Kecora

QUESTIONS PRESENTED FOR REVIEW

Is it clear that Congress

intended the Medicare “braces”

benefit to be restricted by an

administrative interpretation

which deprives residents of

nursing homes from a personal

Medicare entitlement to braces

which are used in conjunction

with other medical or non-

medical equipment (such as an

arm, leg, back or neck brace

attached to a wheeled base or

to a wheelchair) ?

Is HCFA Ruling 96-1's (“HCFAR

96-1) limitation of the

Medicare “braces” benefit under

42 U.S.C. § 1395x(s) (9) to only

those braces “which are used

independently rather than in

conjunction with, or as

components of, other medical or

non-medical equipment” a

substantive change in the law

which requires prior notice and

comment under the Social

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Security Act (“SSA”) and the

Administrative Procedure Act

( “APA” ) ?

If HCFAR 96-1 is an

interpretative ruling published

without prior notice and

comment, is it entitled to

judicial deference?

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PARTIES

A. Petitioners

Anne Warder

As

2. Dorothy Bouchoux

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Massachusetts

Technologies,

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Inc.

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4. Florida Therapeutic

Technologies,

5. The Orthotics

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Center,

d/b/a OrthoConcepts

OrthoConcepts, MATT

other-sister corporatio

areholders of each.

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Respondents

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Donna E. Shala

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III. TABLE OF CONTENTS

page:

Questions Presented for Review....... i-ii

A Pe oer eee ree Te eee ee ee iii

pe ek ee ee eae iv

Table of Cited Authorities......... v-viil

Opinions and Orders Below.............. 1

Statement of Jurisdiction............... 2

U.S. Constitutional Provisions,

Treaties, Statutes, Rules, and

Regulations Involved................ 3-10

Statement Of Che Gas... c cece eearuss 11-13

PES 6 6. KAS AOR AS ORE Oe wee ee 14-24

iV

oe eas

IV. TABLE OF CITED AUTHORITIES

Cases:

Anne Warder, et al. v. Donna

E. Shalala et al.,

(a> Cis., Gee. 7,

F.3d

1998)

Pages:

Order denying rehearing)................ 1

Donna

149 F.3d

Anne Warder et al. v.

E. Shalala,

73, 57 Soc.Sec.Rep. Serv.

(1* Cir.1996)....

et al.,

Anne Warder, et al. v.

E. Shalala, et al., No.

97-10424-MEL,

65 USLW 2799,

Medicaid Guide

Transfer Binder,

Donn

Medicare &

(CCH) 1997-1

q 45,268

(D. Mass., May 7,

Topeka & Santa Fe

44 F.3d 437

Atchison,

Ry. Co. v. Pena,

(7™ Cir.

Chevron U.S.A., Inc.

847

1997 WL 263733,

BOOT) 8 iwswen

v. NRDC,

467 U.S. 9838 (1984)...15,

16,

1994) (en banc) ...........e06c.. a2

Elizabeth Blackwell Health Ctr.

For Women v. Knoll, 61 £.3d 170

6) A 5 Ae: | rrr err eer 22

Garcia v. Secretary of Health

& Human Serv., 46 F.3d 552

fan Cae. SO os cas case eeee esas 22

La Casa del Convalenciente v.

Sullivan, 965 F.2d 1175

oo? ae. a ww 6 64 le a eee ee eee 18, 19

Shalala v. Guernsey Memorial

Hospital, 514 U.S. 87, 115

S.CE. TASB CLGOR) < sincs wee eeu an sanee 22-23

Trans Union Corp. v. FTC, 81

P.28 266 . i3.C.. Cae. Bie as os oak eee 22

Statutes:

5 U.B.C.A. § SSS(B) 0. vce vcccataveses 19-20

28 U.8.C Gidea (8) oc eck sew ntaseener 2

42 U.8.C. | TISSRUR) . ce cescesscess 3-4, 17

42 U.S.C. § 139Sx (8) (6). 6 cc ewscswesees 4

42 U.S.C. § TESERIS) (9) «6.25045. 4, a3: Be

rs AC oe Sa nA we Mad HI Cate we

A ‘heaeh pilin nt pitin nL idns

OS UB.C. § LIST. . 0. cc cccccccccaccnn. 19

SS U-B. CO. GLSGSEE . oon ccc cc cc ccccecvcceunn. 2

42 U.S.C.§1395x(e) (1) .... . 7 8 17

42 U.S.C.§1395i-3(a) (1)... . — me

P.L. 101-508, §4152(c) (4)

2™° Sess., 1990 USCCAN at 2270...5-7, 17

Rules of the Supreme Court . . 2, 18, 21

Miscellaneous:

Crouse, Benten v. Kesser: The

Time for Uniformity in the

Application of Section 553 of

the Administrative Procedure _

Act Has Come, 7 ADMIN L.J.

[SOP +45 hE eee ee EUS eri oO eee 20

H.R. No. 101-881. 1015 a eee 8-10, 17

Health Care Financing

Administration Ruling

mie PE EET Ore Be 24, 33, 12, 13, 14,

15, 16, 17, 18, 19, 29, 22, 23

Herz, Deference Running Riot:

Separating Interpretation and

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2 oe A a, . } ) ere ee 19

236 £.4,..8.. 3467 (3906). « «2 2 &-« 39-20

Scalia, Judical ren fe)

Administrative Intrepretation of Law,

1989 DUKE L.J. 511 a to ee ee 15, 16, 20

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V. OPINIONS AND ORDERS BELOW

a. Anne Warder, et al. v. Donna E.

Shalala et al., F.3d

(1% Cir., Oct. 7, 1998) (Order

denying rehearing)

b. Anne Warder et al. v. Donna E.

Shalala, et al., 149 F.3d 73,

57 Soc.Sec.Rep. Serv. 847 (1%

Cir. 1998)

e. Anne Warder, et al. v. Donna BE.

Shalala, et al., No. 97-10424-

MEL, 1997 WL 263733, 65 USLW

2799, Medicare & Medicaid Guide

(CCH) 1997-1 Transfer Binder,

{ 45,268 (D. Mass., May 7,

1997)

VI. STATEMENT OF JURISDICTION

Subject matter jurisdiction exists

over this Medicare reimbursement dispute

pursuant to 42 U.S.C. §i395ff and other

applicable law. This Court has appellate

jurisdiction, pursuant to 28 U.S.C.

1254(1), to review the decision of the

Court of Appeals for the First Circuit.

The Court of Appeals entered Judgment for

the Secretary on July 27, 1998, the

petition for rehearing was denied on

October 7, 1998, and the Appellants filed

a timely Petition Writ of Certiorari on

19

January 5, 99. Rules of the Supreme

VII. U.S. CONSTITUTIONAL PROVISIONS

SS Ye OF te ED

TREATIES, STATUTES, RULES, AND

REGULATIONS INVOLVED

42 U.S.C. § 1395x. Definitions

(n) Durable medical equipment

The term "durable medical equipment"

includes iron lungs, oxygen tents,

hospital beds, and wheelchairs (which may

include a power-operated vehicle that may

be appropriately used as a wheelchair,

but only where the use of such a vehicle

1s determined to be necessary on the

basis of the individual's medical and

physical condition and the vehicle meets

such safety requirements as the Secretary

may prescribe) used in the patient's home

(including an institution used as his

home other than an institution that meets

the requirements of subsection (e) (1) of

this section or section 13951-3(a) (1) of

this title), whether furnished on a

rental basis or purchased, and includes

blood-testing strips and blood glucose

monitors for individuals with diabetes

without regard to whether the individual

has Type I or Type II diabetes or to the

individual's use of insulin (as

determined under standards established by

the Secretary in consultation with the

appropriate organizations); except that

such term does not include such equipment

furnished by a supplier who has used, for

the demonstration and use of specific

equipment, an individual who has not met

such minimum training standards as the

Secretary may establish with respect to

the demonstration and use of such

specific equipment. With respect toa

seat-lift chair, such term includes only

the seat-lift mechanism and does not

include the chair.

42 U.S.C. § 1395x. Definitions

(s) Medical and other health

services

The term "medical and other

health services" means any of the

following items or services:

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(6) durable medical equipmen

9) leg, arm, back, anc Nn

braces, and artificial legs, arms

and eyes, including replacements

required because of a change 1

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P.L. 101-508, § 4152(c) (4)

(3) TREATMENT OF POWER-DRIVEN

WHEELCHAIRS AS MISCELLANE

OF DURABLE MEDICAL EQUIPMENT

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(i) ain clause (i), by

inserting “or” at the end;

(ii) in clause (ii), by

striking "or" at the end;

and

(iii) by striking clause (111).

(B) CRITERIA FOR TREATMENT OF

WHEELCHAIR AS CUSTOMIZED ITEM. -

(i) Section 1834(a) (4) (42

U.S.C. 1395m(a) (4)) 1s

amended by adding at the

end the following: "In the

case of a wheelchair

furnished on or after

January 1, 1992, the

wheelchair shall be

treated as a customized

item for. purposes of this

paragraph if the

wheelchair has been

measured, fitted, or

adapted in consideration

of the patient's body

size, disability, period

of need, or intended use,

6

and has been assembled by

a supplier or ordered from

a manufacturer who makes

available customized

a

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Cures, modifications

nstructions from the

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The amendment made by

Ciause (1) shall apply tc

items furnished on or

after January 1, 1992

unless the Secretary

develops specific criteria

before that date fo

r

Creatment of wheelchairs

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H.R. No. 101-881,101°%* Cong. 2™° Sess.,

1990 USCCAN at 2270

Non-custormized motorized

wheelchairs would be recategorized back

into the rental cap category of

equipment. The option for treating

wheelchairs as customized would not be

changed.

If the Secretary does not issue

regulations defining "customized"

wheelchairs by January 1, 1992, a

statutory definition would become

effective. Under this definition, a

customized power driven or manual

wheelchair would be defined as a

wheelchair which has been: (1) measured,

fitted, or adapted in consideration of a

patient's body size, disability, length

of need or intended use; and (2) has been

assembled by the supplier or ordered

through a manufacturer who make available

customized features, modifications or

components that are intended for a

specific patient's use in accordance with

a physician's order.

eee

In applying this definition, the

Committee intends that examples of

features that are only available in

customized equipment may include, but are

not limited to: (1) semi or full

reclining backs, (2) Special heights for

arms, seats or backs, (3) special width

or depth of seat, (4) attachments to

convert wheelchairs to one-armed drive,

(S) postural contro] devices, (6) custom

molded cushions and inserts, or lateral

Supports.

This definition would become

effective on January 1, 1992, unless the

Secretary provides for an alternative

definition of customized wheelchairs

prior to January 1, 1992, in which case

the provision would not be effective.

The Secretary would establish a

reasonable useful lifetime of rental

equipment, including frequently serviced

items. The useful lifetime would be 5

years, unless the Secretary finds, based

On program experience, that a longer or

shorter period is appropriate for an

item. After an item's useful lifetime is

reached during a continuous period of

medical necessity, the Secretary would

provide for a new cycle of rental

payments.

Carriers would be permitted to make

exceptions, and begin a new cycle of

rental payments, for equipment that is

lost or irreparably damaged. Such

exceptions would only be authorized after

special consideration and scrutiny of the

circumstances by the carrier.

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VIII. STATEMENT OF THE CASE

Section 1861(s) (9) of the Social

Security Act (42 U.S.c. §1395x(s) (9))

bluntly states that Medicare

beneficiaries are entitled to “leg, arm,

back and neck braces.” No court has been

asked to define what constitutes a

“brace” under the Social Security Act.

In Health Care Finance

Administration Ruling 96-1 (“HCFAR 96-1")

and without explicit congressional

direction to do So, the Secretary limited

the meaning of “leg, arm, back, and neck

braces” to only those braces which “are

used independently rather than in

conjunction with, or as compcnents of,

other medical or non-medical equipment. ”

HCFAR 96-1 further Simply deemed

“braces” which are used in conjunction

with other medical or non-medical

equipment to be “durable medical

equipment” (“DME”). By such deeming,

HCFAR 96-1 transforms, for example, an

arm brace mounted on an exoskeletal base

Or on a wheelchair from a “brace” to

1]

“ DME “ :

Certain residents of nursing homes

suffer such complete musculo-skeletal

failure that their braces must be

fabricated for use in conjunction with,

or as components of, other medical or

non-medical equipment. For example,

braces for such catastrophically disabled

patients often must be anchored to or

mounted on medical or non-medical

equipment (such as an exoskeletal base or

a wheelchair) in order for their braces

to properly perform their bracing

function.

HCFAR 96-1 removes such braces from

the personal Medicare benefits (namely,

those under Medicare Part B) of such

catastrophically disabled patients in

nursing homes. There is no other benefit

under Medicare which could reliably

provide an alternative source of such

braces to catastrophically disabled

patients in nursing homes. This

deprivation caused by HCFAR 96-1 occurs

because DME is not a covered personal

benefit under Medicare to residents of

12

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nursing homes.

If not an outright abrogation of the

Medicare “braces” benefit for

catastrophically disabled residents of

nursing homes who need braces, then,

Petitioners contend, HCFAR 96-1 is a

substantive change in the law and

required prior notice and comment.

The District Court ruled, inter

alia, that HCFAR 96-1 effected a

substantive change in Medicare law, which

required prior notice and comment under

the Administrative Procedure Act and the

Social Security Act. The District Court

enjoined the Secretary from enforcing

HCFAR 96-1. The Court of Appeals

reversed the District Court. Petitioners

here appeal the decision of the First

Circuit Court of Appeals.

—

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IX. ARGUMENT

he Is it clear that Congress

intended the Medicare “braces”

benefit to be restricted by an

administrative interpretation

which depriv residen f

nursing hom rom a rsonal

Medicare entitlement to aces

which are used in conjunction

with other medical or non-

medical equipment (such as an

arm, leg, back or neck brace

attached to a wheeled base or

to a wheelchair) ?

Petitioners submit that it is clear

that Congress did not intend for

braces to be denied to

catastrophically disabled Medicare

beneficiaries who are residents of

nursing homes. Yet, such denial is

precisely the effect of HCFAR 96-1.

Because of its impact on the weakest

members of society, the validity of

HCFAR 96-1 raises an important

question of federal law that has not

been, but should be, settled by the

14

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TO SS CR wer St 2D ean

Supreme Court. Rules of Supreme

Court (*RSC”) 10.

The above question and Petitioners’

submitted answer above provide a

departure point for analysis of the

validity of HCFAR 96-1 under Chevron

U.S.A., Inc. v. NRDC, 467 U.S. 8737

(1984).

As Justice Scalia has noted in

discussing Chevron, where

Congress intended a particular

result, but was not clear about

it . . . what we have is

genuinely a question of law,

properly to be resolved by the

courts.

Scalia, Judicial Deference to

Administrative Interpretation of Law,

1989 DUKE L.J. Sal, Sis.

As Justice Scalia noted further in

the same article,

Here [referring to the question

of how to determine whether the

Congressional intent is clear

Or ambiguous] .. . is the

chink in Chevron’s armor -- the

ambiguity that prevents it from

being an absolutely clear guide

to future judicial decisions

How clear is clear?

Id. at 520.

Petitioners’ case provides an

opportunity for the Court to “fill the

chink in Chevron’s armor” by providing

guidance to answer Justice Scalia’s

question of “How clear is clear?” in

assessing whether Congress has spoken

clearly enough, so as to preclude an

administrative rule (such as HCFAR 96-1)

which frustrates Congress’ intent to

provide braces to patients in nursing

homes. The question of “How clear is

clear?” is an important question of

federal law which has not been, but

should be, decided by the Supreme Court.

When Congress intends not to provide

a benefit to patients in a nursing home,

16

it does so plainly. It did so in denying

DME benefits to patients in nursing homes

by defining coverage for DME to be

limited to use in a patient’s “home”

(which is defined as other than a

hospital under 42 U.S.c. §1395x(e) (1) or

a skilled nursing facility under 42

U.S.C. 1395i-3(a)(1)). 42 U.S.C. §

1395x(n). Congress has also shown that

it 1S capable of expressing its intent

that the Secretary further define DME, as

it did when it required the Secretary to

promulgate regulations defining a

customized wheelchair. P.L. 101-508, §

4152(c) (4); H.R. No. 101-881, 101%* Cong.

2™° Sess., 1990 USCCAN at 2770. Congress

has shown no intent to limit the brace

benefit by constrictive interpretations

issued without notice and comment.

Is HCFA Ruling 96-1's (“HCFAR

96-1") limitation of the

Medicare “brace” benefit under

42 U.S.C. § 1395x(s) (9) to only

those braces "which are used

N

independently rather than in

conjunction with, or as

components of, other medical or

non-medical ipment” a

ubstantive chan in the law

which requires prior notice and

comment under the Social

Security Act (“SSA”) and the

Administrative Procedure Act

(“APA”)?

HCFAR 96-1 is a substantive (a/k/a

“legislative”) rule, rather than an

interpretive rule because it

imposes obligations, the basic

tenor or which is not already

outlined in the law itself

La Casa del Convaleciente v. Sullivan,

965 F.2d 1175, 1178 (1% Cir. 1992).

Among other burdens, an obligation

imposed by HCFAR 96-1 which is not

already outlined in the law is that HCFAR

96-1 deprives catastrophically disabled

Medicare beneficiaries who reside in

nursing homes of a right to braces,

simply because the fabrication of their

braces necessitates the use of such

braces in conjunction with other medical

18

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Sense oe) aie nme we oe

Or non-medical equipment.

Nowhere on the face of the Medicare

brace benefit, set forth in 42

U.S.C.§1395x(s) (9), did Congress hint at

Such a restriction. Because Congress did

not hint at such a restriction, HCFAR 96-

1 cannot be an interpretation of existing

law. Therefore HCFAR 96-1 should have

been published for notice and comment

pursuant to the SSA and the APA. 42

U.S.C. §1395hh and 5 U.S.C. §553(b).

Nevertheless, the above question

presents an important question of federal

law that has not been, but should be,

decided by the Supreme Court. As the

irst Circuit noted in Petitioner’s case

The line between a legislative or

substantive rule and an

interpretative one is, as many

courts have noted, far from clean.

Ann Warder, et al. v. Donna E. Shalala,

et al., 149 F.3d 73, 79 (1%* Cir. 1998),

citing e.g., Convaleciente, 965 F.2d at

1177. See also, What Constitutes

19

“Interpretative Rule” of Agency So As to

Exempt Such Action from Notice

Requirements of Administrative Procedure

Act (5 U.S.C.A. §553(B) (3) (A), 126 A.L.R.

347 (1995); Herz, Deference Running Riot:

Separating Interpretation and Law-marking

Under Chevron, 6 ADMIN. L.J. (1992);

Crouse, Benten v. Kesser: The Time for

Uniformity in the Application of Section

553 of the Administrative Procedure Act

Has Come, 7 ADMIN. L.J. (1993).

2 If HCFAR 96-1 is an

interpretative ruling published

without prior notice and

comment, is it entitled to

judicial deference?

This is an important question of

federal law that has not been, but should

be, settled by the Supreme Court.

Chevron involved a rule issued with prior

notice and comment. Such prior notice

and comment was calculated to involve

appropriate political participation. See

Scalia, Id. at 517. HCFAR 96-1's

promulgation without notice and comment

raises an important issue of whether

20

judicial deference should be given to an

agency interpretation made without prior

public, outside expert, or political

involvement and accountability as

contemplated by the notice and comment

provisions of APA and the SSA.

Moreover, the Supreme Court should

decide this question because

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entered a decision fon this

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decision of another Un

court of appeals on the same

important matter.

A threshold question is what

deference is owned to an

interpretative rule such as HCFAR

96-1. The Supreme Court has not

expressed a view on whether or to

what extent the Chevron framework

21

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applies to interpretive rather

than legislative rules, and other

circuits are split on the issue.”

(Emphasis supplied), citing at

footnote 8: Compare Trans Union

Corp, v, FIC, 61 F.3G@ gee, eee sc.

Cir 1996) (“[W]e have extended

Chevron deference to agency

interpretive rules .. . indeed, the

rule at issue in Chevron itself

appears to have been

interpretive.”), and, Elizabeth

Blackwell Health Ctr. For Women v.

Knoll, 61 F.3d 170 (3d Cae. 1995)

(equal deference), and, Garcia v.

Secretary of Health & Human Servs.,

46 F.3d 552, 556 (6 Cir.

1995) (same) with Atchison, Topeka &

Santa Fe Ry. Co. v. Pena, 44 F.3d

437, 442 (7 Cir. 1994) (en banc)

(concluding that interpretive rules

are “underserving of deference under

Chevron”).

The question of whether deference

should be extended to HCFAR 96-1 was not

answered by Shalala v. Guernsey Memorial

Hospital, 514 U.S. 87, 115 S. Ct. 1232

(1995). Guernsey involved a narrow gap

22

“unaddressed by the otherwise

to Guernsey’s gap,

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