Wilmington United Neighborhoods v. United States Deptartment of Health, Education & Welfare

615 F.2d 112, 1980 U.S. App. LEXIS 20754
CourtCourt of Appeals for the Third Circuit
DecidedFebruary 6, 1980
DocketNos. 78-2633, 78-2634
StatusPublished
Cited by1 cases

This text of 615 F.2d 112 (Wilmington United Neighborhoods v. United States Deptartment of Health, Education & Welfare) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wilmington United Neighborhoods v. United States Deptartment of Health, Education & Welfare, 615 F.2d 112, 1980 U.S. App. LEXIS 20754 (3d Cir. 1980).

Opinions

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

This appeal represents the latest chapter in a long battle by consumers of medical services to prevent the removal and relocation of hospital services from the inner-city to suburban Wilmington. The plaintiffs have appealed from orders granting various motions dismissing their case against the U. S. Department of Health, Education and Welfare (HEW), the Bureau of Comprehensive Health Planning of Delaware (BCHP) and the Wilmington Medical Center, Inc. (WMC). The court below held that it was precluded by Section 1122(f) of the Social Security Act, 42 U.S.C. § 1320a-l(f), from considering the appellants’ challenges to certain administrative determinations made by the Secretary of HEW and the BCHP. It also held that the appellants, as consumers of medical services and not proponents of capital expenditures, were not entitled to a hearing under Section 1122 and therefore were not denied equal protection under the fifth and fourteenth amendments. We will affirm.

I.

The Wilmington Medical Center, Inc. (WMC) is a private, nonprofit hospital and the primary provider of hospital services in New Castle County, Delaware. For several years, WMC has engaged in extensive planning to determine how best to restructure the hospital system in order to improve health care delivery. The product of this planning was Plan Omega, an $88 million capital expenditure program that would relocate major components of WMC’s medical system to an outlying suburban location. The capacity of a remaining inner city facility would be reduced to approximately 250 beds.

WMC and its controversial Plan Omega are not strangers to this court. In NAACP v. Medical Center, Inc., 584 F.2d 619 (3d Cir. 1978), the plaintiffs — individuals and organizations representing the poor, the elderly, the handicapped, and several racial and ethnic minorities of Wilmington — argued unsuccessfully that HEW’s approval of the Medical Center’s capital expenditure plan constituted major federal action requiring the preparation of an environmental impact statement under the National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4347. In NAACP v. Medical Center, Inc., 599 F.2d 1247 (3d Cir. 1979), the same plaintiffs subsequently asserted that they had a private right of action to challenge the proposed health facility relocation for its alleged discriminatory impact. Finding that Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, created private rights of action for plaintiffs who seek relief other than funding termination, this court reversed the dismissal of the district court and remanded the cases to the district court for a trial on the merits.

The attack on Plan Omega in this case is directed at the approval of the Plan by [115]*115HEW and various state agencies under a system established by Section 1122 of the Social Security Act, 42 U.S.C. § 1320a-1. a. Statutory Background

Section 1122 is a program designed to curb unnecessary capital expenditures by hospitals and other health care facilities. In general, this goal is accomplished by requiring hospitals to secure advance approval of their capital projects from state health care planning agencies. Health facilities that submit plans of proposed capital expenditures to the State and subsequently have them approved are reimbursed with federal funds for that portion of a patient’s bill constituting capital costs, that is, depreciation, interest or return on equity capital.

The State of Delaware has entered into such an agreement with HEW and designated the BCHP as the State’s designated planning agency (DPA) to carry out its responsibility under Section 1122. Under the statute, the DPA is charged with reviewing proposed capital expenditures to determine whether they are consistent with the standards or plans developed to meet the need for adequate health care facilities in the area of the state affected. 42 U.S.C. § 1320a-l(b). The DPA is required to consult with local health planning agencies interested in a particular proposal and to submit to the Secretary of HEW the findings of those agencies on the proposed expenditure and the DPA’s own findings and recommendations, along with any supporting materials deemed necessary by the Secretary. Id. The DPA is also required to establish procedures for affording proponents of a capital expenditure found to be unnecessary “an opportunity for a fair hearing.” 42 U.S.C. § 1320a-l(b)(3).

Following its approval by the DPA, the Secretary then performs the ministerial act of assuring that the proper procedure has been followed. If, however, the expenditures have been found by the DPA to be inconsistent with the state or local health care facility needs or plans, the Secretary may, in certain limited instances, override the State’s recommendation. 42 U.S.C. § 1320a-l(d)(2). Finally, Section 1122(f) provides:

Any person dissatisfied with a determination by the Secretary under this section may within six months following notification of such determination request the Secretary to reconsider such determination. A determination by the Secretary under this section shall not be subject to administrative or judicial review.

42 U.S.C. § 1320a-1(f). This provision and its meaning are at the heart of this appeal.

b. Facts

On March 19, 1976, WMC sought Section 1122 approval for Plan Omega. As required by the statute, WMC made an application to the Delaware BCHP and to a local health planning group for review of the relocation plan. Following a substantive review of Plan Omega, the state and local agencies certified it as necessary.1 The DPA forwarded its finding to the Secretary who then issued a Section 1122 approval of Plan Omega in August of 1976. As a result of this approval, WMC was assured that the Secretary would not withhold payment of the capital component of WMC’s charges to patients under Medicare, Medicaid, and child health programs on the ground that the component charge was the product of an unnecessary capital expenditure.

On September 10, 1976, the complaint, challenging Plan Omega under Title VI of the Civil Rights Act, was filed in the district court. On January 19, 1977, the district court ordered HEW to investigate the [116]*116charges of those plaintiffs that Plan Omega was in violation of Title VI and Section 504 and to report its findings back to the court. 426 F.Supp. 919 (D.Del.1977).

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615 F.2d 112, 1980 U.S. App. LEXIS 20754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilmington-united-neighborhoods-v-united-states-deptartment-of-health-ca3-1980.