Fairview Deaconess Hospital v. Heckler

749 F.2d 1256, 1984 U.S. App. LEXIS 16055, 8 Soc. Serv. Rev. 96
Court of Appeals for the Eighth Circuit·Decided December 10, 1984·No. No. 84-5014MN·Published·Cited by 3 cases

Opinions

DUMBAULD, Senior District Judge.

This case presents an interesting question of accommodating two statutory provisions which point in opposite directions. The issue involved is whether Medicare is obliged to pay for telephones in patients’ rooms in hospitals. Appellants (six hospitals) point to 42 U.S.C. § 1395x(b)(2), which authorizes payment for “such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such ... appliances and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients.” The Secretary, on the other hand, points to 42 U.S.C. § 1395y(a)(6), which prohibits payment for “any expenses incurred for items or services ... which constitute personal comfort items.”

The mechanism provided by the statute for payment of the reasonable cost incurred by hospitals (described as “providers” of health services) through a private sector “fiscal intermediary” (such as Blue Cross) permits such fiscal intermediary to audit providers’ reports and make payments [42 U.S.C. § 1395h], subject to review by a Provider Reimbursement Review Board established by the Secretary under 42 U.S.C. § 1395oo. Under 42 U.S.C. § 1395oo(f)(1) a provider is entitled to judicial review of the Board’s decisions (or those of the Secretary thereon) and also to obtain judicial review of “any action of the fiscal intermediary which involves a question of law or regulations relevant to the matter in controversy” if the Board determines that it is without authority to decide the question (or fails to make a timely determination with respect to its authority).1 However, 42 U.S.C. § 1395oo(g)(1) provides that “The finding of a fiscal intermediary that no payment may be made under this subchapter for any expenses incurred for items or services furnished to an individual because such items or services are listed in section 1395y of this title shall not be reviewed by the Board, or by any court pursuant to an action brought under subsection (f) of this section.”

The Secretary first contends that the District Court (and hence this Court) have no jurisdiction of the case at bar by virtue of the above-quoted exclusionary language of 42 U.S.C. § 1395oo(g)(1). We reject this contention.

In the first place, so to hold would be to beg the question as to the merits of appellants’ position. The jurisdictional bar speaks only of “items or services furnished to individuals.” [Italics supplied]. The issue presented by appellants on the merits is whether functioning telephones in patients’ hospital rooms constitute a service furnished to individual patients for their personal comfort or are “facilities” or “appliances and equipment” which are “ordinarily furnished by such hospital” as part of the normal and customary overhead operating expenses of the hospital such as windows that keep out rain, curtains and drapes that keep out excessive light, mattresses for the beds, tables for serving [1258]*1258meals, chairs for the patient or visitors to sit upon, lights for use when reading, cabinets for storing the patient’s street clothes, bedside tables for glasses or drinking water, and the like. In the absence of any proof that these customary items are not allowable in calculating reimbursement to providers, the question raised by appellants on the merits is whether telephones should be treated like such customary items, or as personal comfort items such as a heating pad or cashmere shawl not needed as therapeutic treatment but merely for the personal comfort of the patient.

In the second place, the wording of 42 U.S.C. § 1395oo(f)(1) grants judicial review of matters involving “a question of law or regulations relevant to the matter in controversy” when the Provider Reimbursement Review Board cannot afford relief. Appellants in the case at bar attack the validity of a relevant regulation, not the amount of reimbursement claimed.2 They raise a question of law. What we are called upon to review in the case at bar is “a question of law or regulations” relevant to the matter in controversy, and our review addresses the validity of a regulation. We are not reviewing the propriety of a payment made (or not made) pursuant to the terms of the regulation. We are not dealing with “issues of cost reasonableness and the amount of reimbursement due a provider for admittedly covered services.” Highland Dist. Hospital v. Secretary, 676 F.2d 230, 236 (6th Cir.1982).

As well summarized by the District Court, “Section 1395oo(g) precludes judicial inquiry into mere ministerial determinations resolving payment disputes. It does not insulate policy decisions of the Secretary from judicial scrutiny.” A contrary conclusion would give the Secretary “unbridled discretion to prevent reimbursement through regulations.” Memorial Hospital v. Heckler, 706 F.2d 1130, 1133 (11th Cir.1983). Similarly, in St. James Hospital v. Schweiker, 698 F.2d 1337, 1345-46 (7th Cir.1983), it was held that a court may review “the Secretary’s interpretation of what a personal comfort item-consists of.” We agree with the reasoning of the Seventh and Eleventh Circuits,3 which is in accord with the general presumption in favor of judicial review, where there is no clear and convincing evidence of a contrary legislative intent. Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967); Dunlop v. Bachowski, 421 U.S. 560, 567, 95 S.Ct. 1851, 1857, 44 L.Ed.2d 377 (1975).

Turning then to the merits, we note that appellants present both procedural and substantive objections to the challenged regulation. They contend that no hearing was held or record developed showing the desirability of the regulation; and that the Secretary did not consider all relevant factors in arriving at the determination made. Substantively, they argue that telephones should be deemed to fall within the category of customary equipment ordinarily supplied in hospitals; and, secondly, that “personal comfort” should be interpreted as referring to physical comfort, in a health-related sense, rather than to mere convenience unconnected with physiological conditions.

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Fairview Deaconess Hospital v. Heckler, 749 F.2d 1256, 1984 U.S. App. LEXIS 16055, 8 Soc. Serv. Rev. 96 (8th Cir. 1984).

749 F.2d 1256 (Fairview Deaconess Hospital v. Heckler) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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