Whitecliff, Inc. v. United States

536 F.2d 347, 210 Ct. Cl. 53, 1976 U.S. Ct. Cl. LEXIS 6
United States Court of Claims·Decided May 12, 1976·No. No. 407-74·Published·Cited by 118 cases

Opinion

Davis, Judge,

delivered the opinion of the conrt:

This controversy between a provider of services under the Medicare program and the Government presents primarily a dispute over 42 U.S.C. § 1395x(v) (1) (1970) ,1 relating to the reimbursement to be made to a Medicare provider. Both parties have moved for summary judgment but we find that we cannot dispose of the case finally.

By contract accepted by the Government in 1966, plaintiff Whitecliff, Inc., operating an extended care facility, became a Medicare provider and thus entitled to reimbursement by the Government for reasonable costs incurred in giving services to Medicare beneficiaries. Whitecliff designated the Blue Cross Association (BCA) and Blue Cross of Northern Ohio (BCNO) as its fiscal intermediaries.2

In 1970 Whitecliff instituted a work measurement program which purportedly revealed that its actual Medicare costs for 1967-1970 exceeded the reimbursement received from the Government. Whitecliff submitted a request for a retroactive adjustment under 42 U.S.C. § 1395x(v)(l) to correct the alleged inadequate reimbursement. BCNO and BCA each denied the request, and Whitecliff appealed to the BCA Medicare Provider Appeals Committee, in accordance with a disputes procedure established by the BCA in 1968. After a hearing, the Appeals Committee upheld BCA’s denial of the claim. Whitecliff then filed suit in this court for $213,755, the [56] amount of the alleged underpayment, asserting that it is entitled to a retroactive adjustment and that it was denied due process because the BCA Medicare Provider Appeals Committee was not an impartial decision-maker. The Government defends on the grounds, first, that the social security statute precludes any judicial review of the intermediaries’ reimbursement determinations, and, second, that plaintiS’s arguments have no merit.

A number of courts have considered the permissibility and scope of judicial review of Medicare provider reimbursement disputes. No consensus has emerged on whether courts may review the merits of reasonable cost determinations (see, e.g., Schroeder Nursing Care, Inc. v. Mutual of Omaha Ins. Co., 311 F. Supp. 405, 408-09 (E.D. Wis. 1970) (court may not review amount determined to be reasonable cost); Temple Univ. v. Associated Hosp. Serv., 361 F. Supp. 263, 267-70 (E.D. Pa. 1973) (court had jurisdiction to review merits of determination that a certain transfer of funds was restricted and therefore deductible from Medicare reimbursement); Coral Gables Convalescent Home, Inc. v. Richardson, 340 F. Supp. 646, 650 (S.D. Fla. 1972) (court could not make de novo reasonable cost determination, but court suggested that it might review for substantial evidence after an administrative hearing was held)), but the courts have uniformly sustained judicial review at least for compliance with the Constitution and the governing statute. See, e.g., Aquavella v. Richardson, 437 F. 2d 397, 400-02 (2d Cir. 1971); Kingsbrook Jewish Medical Center v. Richardson, 486 F. 2d 663, 666-68 (2d Cir. 1973); Rothman v. Hospital Serv., 510 F. 2d 956, 958-60 (9th Cir. 1975); Schroeder Nursing Care, Inc. v. Mutual of Omaha Ins. Co., supra at 409; Americana Nursing Centers, Inc. v. Weinberger, 387 F. Supp. 1116, 1118-19 (S.D. Ill. 1975); South Boston Gen. Hosp. v. Weinberger, 397 F. Supp. 360 (W.D. Va. 1975). We accepted this scope of review in our order in Goldstein v. United States, 201 Ct. Cl. 888, cert. denied, 414 U.S. 974 (1973).

The Government contends, however, that the Supreme Court’s recent decision in a social security benefits case, Weinberger v. Salfi, 422 U.S. 749 (1975), implicitly overruled these prior decisions and endorsed the Government’s posi[57] tion that there is no review at all of Medicare provider determinations such as the one now before us. In Salfi the Supreme Court ruled that 42 U.S.C. § 405 (h) 3 precludes district court review of social security benefit decisions, except insofar as review is authorized elsewhex-e in the Social Security Act. Id. at 156-63. Because Section 1395ii of 42 United States Code makes Section 405(h) applicable to the Medicare program, the Government argues that Section 405(h), as interpreted in Salfi, prohibits judicial review of all Medicare determinations other than those few for which the act expressly provides review. For the years in question, the act explicitly treats judicial scrutiny of specified Medicare determinations only in 42 U.S.C. § 1395ff, which does not authorize review of the type of decision appealed by plaintiff.4

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Whitecliff, Inc. v. United States, 536 F.2d 347, 210 Ct. Cl. 53, 1976 U.S. Ct. Cl. LEXIS 6 (cc 1976).

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