Brief Prepared by Tom McLean, MD, JD
Public Citizen v. DHHS, 2003 U.S. App. LEXIS 12719, examines the Peer Review Improvement Act, (PRIA), 42 U.S.C. § 1320c-3(a)(14). In brief, when a Medicare beneficiary files a complaint with a Peer Review Organization (PRO) concerning the quality of medical services received, the PRIA requires the PRO to "inform the individual [of] the organization's final disposition of the complaint." Id. According to CMS, however, the PRO can satisfy this requirement by “sending the complainant a form letter that merely states that the PRO has examined the complainant's concerns and that it will take appropriate action if warranted.” Additionally, if the health care practitioner who is the subject of the complaint objects “to the PRO providing information that explicitly or implicitly identifies the practitioner, [CMS] bars the PRO from saying anything more.”
The immediate controversy arose after the Ms. Doris Shipp was admitted to a Louisville hospital complaining of abdominal pain. The opinion in this case suggests that Ms. Shipp was misdiagnosed; and within the year died of colon cancer. Her husband filed a complaint with the PRO concerning the quality of care and, consistent with CMS policy, received a reply letter that stated "no quality of care concerns were identified.” Additionally, the PRO advised Mr. Shipp that because two of the physicians involved would not consent to there release of the PRO’s review, the PRO could not release specific information. The PRO then further qualified their review:
Our inability to provide this information does not mean that we found any problem with the care she received. However, please be assured that if we did find a problem, we will take all necessary action when our review findings warrant it.
Unfortunately for the providers involved, Mr. Shipp who is a member of Public Citizen, a nonprofit consumer advocacy organization, this reply was unsatisfactory. Public Citizen, accordingly brought suit, under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), contending, “that the PRO Manual's instructions violate § 1320c-3(a)(14)'s requirement that PROs inform complainants of the ‘final disposition’" of the complaint.” On cross-motions for summary judgment, the trial court held that
'the history, structure, and underlying policy purpose of the statute' ... that § 1320c-3(a)(14) requires a PRO to inform beneficiary complainants of the substantive disposition of the complaint.
Public Citizen v. DHHS, 151 F. Supp. 2d 64, 71 (D.D.C. 2001) (quoting Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1048 (D.C. Cir. 1997)). The trial court, in finding for Public Citizen added "the provisions in [CMS's] PRO Manual prohibiting disclosure of the results of § 1320c-3(a)(14) investigations are contrary to law." Id. at 77.
I. The appeals court began its analysis by observing that its “indisputably clear about the statute at issue here is that it does not unambiguously mandate the government's interpretation, and the government does not contend otherwise.” Accordingly, the rules of statutory construction dictate that “the agency's interpretation as long as it is based on a permissible construction of the statute’" would control the case. Chevron U.S.A. v. Natural Resources Def. Council, 467 U.S. 837, 843 (1984). However, “not all statutory interpretations by agencies qualify for the level of deference afforded by that step.” United States v. Mead Corp., 533 U.S. 218, 227-31 (2001)(deference to the agency’s interpretation is appropriate only where Congress has ‘delegated authority to the agency generally to make rules carrying the force of law, and ... the agency interpretation claiming deference was promulgated in the exercise of that authority’"); Christensen v.
Harris County, 529 U.S. 576, 587 (2000).
Here the only relevant agency pronouncement is found in CMS’ PRO Manual. Unfortunately, the Supreme Court “has twice cited ‘agency manuals’ as an archetype of the kind of document that is not entitled to such deference.” Mead, 533 U.S. at 234; Christensen, 529 U.S. at 587; see also Washington State Dep't of Soc. & Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 123 S. Ct. 1017, 1026 (2003); Skidmore v. Swift & Co., 323 U.S. 134 (1944). In fact, “this court has previously held that similar sections of [CMS’s] PRO Manual do not involve ‘substantive rights;’" because "[a] peer review organization is essentially an enforcement agent of the federal government." American Hosp. Ass'n v. Bowen, 834 F.2d 1037, 1045, 1049-51 (D.C. Cir. 1987). In Bowen the court had found that PROs are “essentially an enforcement agent of the federal government." Id. at 1048. Accordingly, the PRO’s manual merely "maps out an enforcement strategy for the PROs with whom HHS contracts." Id. at 1049. More generally, this means that an agency’s manual constitute neither legislative interpretive rules. Id; Mead, 533 U.S. at 234 (“declaring that interpretations contained in agency "enforcement guidelines" fail to qualify for Chevron deference”). So while the court acknowledge that the “PRO statute expressly authorizes the Secretary to promulgate "regulations" to carry out its provisions, 42 U.S.C. § 1320c-3(a)(8), it contains no mention of agency manuals.”
Accordingly, a Chevron defense is
particularly inappropriate in this case because the complaining Medicare recipient--for whose benefit § 1320c-3(a)(14) was enacted--is a stranger to the contract upon which the government seeks to rely.
there is no place in the manual where the agency explains why it believes that a PRO satisfies the statutory injunction to inform a complainant of the "final disposition" of the complaint simply by telling him that it has investigated the matter and will take action if appropriate. Because the manual thus contains no reasoning that we can evaluate for its reasonableness, the high level of deference contemplated in Chevron's second step is simply inapplicable.
Absent a Chevron defense “an agency's statutory interpretation remains ‘eligible to claim respect according to its persuasiveness.”" Mead, 533 U.S. at 221; Christensen, 529 U.S. at 587.
III. The court next turned to the language of the statue. § 1320c-3(a)(14) states that the PRO "shall inform the individual (or representative) of the organization's final disposition of the complaint." The most persuasive argument as to the meaning of “final disposition" is that the complainant should be informed of the PRO’s “substantive result or conclusion.” See BLACK'S LAW DICTIONARY 484 (7th ed. 1999); William C. Burton, BURTON'S LEGAL THESAURUS 187 (3d ed. 1998); William Statsky, WEST'S LEGAL THESAURUS/DICTIONARY 247 (1985); Daniel J. Oran, ORAN'S DICTIONARY OF THE LAW 134 (1983); MERRIAM WEBSTER'S COLLEGIATE DICTIONARY at 335. This view is “reinforced by the fact that the statute commands the PRO to inform the complainant ‘of’ the final disposition, not simply ‘when’ that disposition has taken place.” In this context, the
information that is to be imparted to the Medicare beneficiary--after the PRO investigates the complaint and affords the practitioner due process--should contain the PRO's determination as to whether the quality of services received met "professionally recognized standards of health care."
Accordingly, the court was persuaded that Congress had intended to
require a PRO to inform a complainant of the results of its review of his complaint, and specifically of whether the "quality of the services" that the recipient received met "professionally recognized standards of health care."
42 U.S.C. § 1320c-3(a)(14).
The court then dismissed all of government’s arguments in favor of provider confidentiality. One argument that was of particular interest was that the government indicated that it “would make no sense for Congress to require disclosure to a beneficiary complainant of a document that may not be disclosed in discovery to a civil litigant.” Additionally the Freedom of Information Act, 5 U.S.C. § 552, exempts PRO documents. The court recognized the value of this argument, but would not buy into it because while the government would like to keep disclosures to third parties to a minimum, Congress would not have an interest in preventing the person with the most direct interest the information (i.e., the patient-beneficiary) from receiving information. Moreover,
although "discovery limitations" may generally bar the production of certain documents in civil or criminal litigation, such limitations "do not apply when FOIA requests are presented in a discrete" FOIA action.
North v. Walsh, 881 F.2d 1088, 1096 (D.C. Cir. 1989).
IV. The court next examined the legislative history. The government had pointed out that “the original House version of § 1320c-3(a)(14) would have required a PRO to ‘inform the [complainant] of the organization's conclusions [and] final disposition of the complaint.’" H.R. 5300, 99th Cong. § 10241(e)(1) (1986). Public Citizen, however, noted that “the original Senate bill contemplated a purely procedural notification similar to that propounded by [CMS], requiring the PRO merely to ‘inform the individual [that] the organization has received the complaint and will take appropriate action.’" S. 2706, 99th Cong. § 633(b)(1) (1986). While it is true that there could be many reasonable interpretations for these verbiage changes, Congress had fortunately explained that if
a PRO makes a final determination with respect to whether the services which are the subject of a complaint did or did not meet professionally recognized standards of care, the PRO would be required to inform the beneficiary ... of any final action taken.
H.R. CONF. REP. NO. 99-1012, at 361 (1986).
The court was also aware that CMS had previously espoused Private Citizens’ position. In 1989, CMS proposed a regulation that would have required PROs to
inform the beneficiary or the beneficiary's representative whether the quality of care meets professionally recognized standards of health care, and, if not, the corrective action to be taken.
Medicare and Medicaid Programs; Denial of Payment for Substandard Quality Care and Review of Beneficiary Complaints, 54 Fed. Reg. 1956, 1964 (Jan. 18, 1989). Although this
proposed rule was never promulgated, it remained pending at least through 1993, and a similar rule remained under consideration through 2001; the latter was not withdrawn until after the institution of this lawsuit. (Footnote citations omitted.)
Later in the opinion the court added that it is
hard to see how § 1320c-3(a)(14), if interpreted as the government suggests, would improve peer review responsiveness to beneficiary complaints. HHS's own Office of Inspector General (OIG) has concluded that HCFA's confidentiality policy "hinders the PROs' ability to be responsive to beneficiaries who complain."
HHS, OIG, The Beneficiary Complaint Process of the Medicare Peer Review Organizations, at 6 (Nov. 1995); see also HHS, OIG, The Medicare Beneficiary Complaint Process: A Rusty Safety Valve, at ii, 16 (Aug. 2001). Thus, under CMS’s interpretation of the statute, all that is required of the PRO is that it must
advise a complaining beneficiary of three things: that the complaint was received, that it was investigated, and that corrective action will be taken if appropriate. But the beneficiary could learn the first of these simply by including a Certified Mail Return Receipt along with his complaint, and the latter two promise nothing more than that the agency will do what the law requires. As both Public Citizen and HHS's Inspector General suggest, this seems little more than an empty gesture.
V. The therefore held that,
to "inform" a Medicare beneficiary of the organization's "final disposition" [a] PRO must notify the [beneficiary at a minimum] whether the quality of the services that the recipient received met "professionally recognized standards of health care."
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