Public Citizen, Inc. v. U.S. Dept. of H.H.S.

• Decision Date: 20 June 2003
• Docket Number: No. 01-5294.,No. 01-5298.,01-5294.,01-5298.
• Citation: 332 F.3d 654
• Parties: PUBLIC CITIZEN, INC., Appellee, v. U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES and Centers for Medicare and Medicaid Services, <I>f/k/a</I> Health Care Financing Administration, Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 654

332 F.3d 654

PUBLIC CITIZEN, INC., Appellee, v. U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES and Centers for Medicare and Medicaid Services, f/k/a Health Care Financing Administration, Appellants.

No. 01-5294.

No. 01-5298.

United States Court of Appeals, District of Columbia Circuit.

Argued October 4, 2002.

Decided June 20, 2003.

Appeals from the United States District Court for the District of Columbia (No. 00cv00731).

G. Michael Harvey, Assistant U.S. Attorney, argued the cause for appellants. With him on the briefs were Roscoe C. Howard, Jr., U.S. Attorney, R. Craig Lawrence, Assistant U.S. Attorney, Alex M. Azar II, General Counsel, U.S. Department of Health & Human Services, and Henry R. Goldberg, Deputy Associate General Counsel.

Darrel J. Grinstead and Jeffrey D. Pariser were on the brief for amici curiae The American Hospital Association, et al., in support of appellants and reversal.

Amanda Frost argued the cause for appellee. With her on the brief was Allison Zieve. Brian Wolfman entered an appearance.

Sarah Lenz Lock, Dorothy Siemon, Michael Schuster, Vicki Gottlich, and Gill Deford were on the brief for amici curiae The Center for Medicare Advocacy, Inc., and AARP in support of appellee urging affirmance.

Before: EDWARDS, ROGERS, and GARLAND, Circuit Judges.

Opinion for the Court filed by GARLAND, Circuit Judge.

GARLAND, Circuit Judge:

When a Medicare beneficiary files a complaint with a Peer Review Organization (PRO) about the quality of medical services that he or she has received, the Peer Review Improvement Act requires the PRO to "inform the individual ... of the organization's final disposition of the complaint." 42 U.S.C. § 1320c-3(a)(14). According to the Health Care Financing Administration (HCFA) of the Department of Health and Human Services (HHS), a PRO can comply with 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.¹ Indeed, if the complainant's health care practitioner objects to the PRO providing information that explicitly or implicitly identifies the practitioner HCFA bars the PRO from saying anything more.

We conclude that the statutory command to inform a complainant of the "final disposition" of the complaint requires more than what HCFA currently permits. At a minimum, it requires the organization to notify the complainant of the results of its review. We therefore affirm the district court's order invalidating those provisions of the Department's Peer Review Organization Manual that bar PROs from providing such information to complaining beneficiaries.

I

A

In 1982, Congress amended the Social Security Act by enacting the Peer Review Improvement Act of 1982, Pub.L. No. 97-248 §§ 141-150, 96 Stat. 324 (1982) (codified as amended at 42 U.S.C. § 1320c et seq.). The 1982 Act called for HHS to contract with PROs to perform a range of quality improvement and professional review activities. PROs are private, geographically based organizations composed of licensed doctors "engaged in the practice of medicine or surgery in the area." 42 U.S.C. § 1320c-1. HCFA contracts with PROs to review the quality, reasonableness, and efficiency of medical services provided under Medicare, as well as to determine whether the services provided are within Medicare's statutory coverage. Id. § 1320c-3(a)(1); see also id. § 1395y(g).

Section 1320c-3(a)(1) of the statute requires each PRO to "review some or all of the professional activities" of physicians and other providers of services for which payment may be made under Medicare. Id. § 1320c-3(a)(1). The statute also contains a number of confidentiality provisions, including § 1320c-9(a), which states:

Any data or information acquired by any such organization in the exercise of its duties and functions shall be held in confidence and shall not be disclosed to any person except — (1) to the extent ... necessary to carry out the purposes of this part, (2) in such cases and under such circumstances as the Secretary shall by regulations provide to assure adequate protection of the rights and interests of patients, health care practitioners, or providers of health care, or (3) in accordance with [provisions permitting specified disclosures to federal and state agencies].

42 U.S.C. § 1320c-9(a).

On April 17, 1985, pursuant to the delegation of authority contained in § 1320c(9)(a)(2), HCFA issued regulations defining "confidential information" to include: "(1) Information that explicitly or implicitly identifies an individual patient, practitioner or reviewer[;] (2) Sanction reports and recommendations[;] (3) Quality review studies which identify patients, practitioners or institutions[; and] (4) PRO deliberations." 42 C.F.R. § 480.101(b). The regulations, however, also incorporate the statutory exceptions for disclosure of confidential information enumerated in § 1320c-9(a)(1) & (3) and set out above. 42 C.F.R. § 480.103. They further provide that a PRO "may disclose to any person, agency or organization, information on a particular practitioner or reviewer with the consent of that practitioner or reviewer provided that the information does not identify other individuals." Id. § 480.133(a)(2)(iii). The regulations became effective on May 17, 1985, and have not changed in relevant part since that time. Compare 42 C.F.R. §§ 476.101(b), 476.103, 476.133 (1985), with 42 C.F.R. §§ 480.101(b), 480.103, 480.133 (2002).

In October 1986, approximately a year and a half after HCFA promulgated its confidentiality regulations, Congress amended § 1320c-3 to impose upon PROs the further duty that is specifically at issue in this case. The new section, § 1320c-3(a)(14), provides as follows:

The organization shall conduct an appropriate review of all written complaints about the quality of services ... not meeting professionally recognized standards of health care, if the complaint is filed with the organization by an individual entitled to benefits for such services... (or a person acting on the individual's behalf). The organization shall inform the individual (or representative) of the organization's final disposition of the complaint. Before the organization concludes that the quality of services does not meet professionally recognized standards of health care, the organization must provide the practitioner or person concerned with reasonable notice and opportunity for discussion.

42 U.S.C. § 1320c-3(a)(14) (emphasis added). HHS has not promulgated any regulation that implements or addresses § 1320c-3(a)(14).

B

On December 15, 1998, Doris Shipp went to Baptist East Hospital in Louisville, Kentucky, complaining of abdominal pain. Over the next few months, Mrs. Shipp was seen by Drs. Peter Thurman, Thomas C. Dedman, and David Jolgren. Mrs. Shipp died of cancer in June 1999. On December 6, 1999, her husband, David Shipp, wrote to Health Care Excel (Excel), the PRO responsible for monitoring the delivery of Medicare services in Kentucky, and asked Excel to investigate and respond to his concerns about the quality of care that his wife had received.

In response, Excel sent Mr. Shipp three letters — one for each of the three physicians — entitled "Notice: Quality of Care Determination." The first letter, concerning Dr. Thurman, informed Shipp that "[n]o quality of care concerns were identified with the services provided by Dr. Thurman," and that "[i]t has been determined that the examination your wife received on March 24, 1999, was appropriate and not expected to reveal the cecal cancer diagnosis that was discovered later." J.A. 58. This language approximates the model response provided in HCFA's Medicare Peer Review Organization Manual for use in situations "[w]hen the involved practitioner consents to disclosure of information that identifies him/her." HCFA, Medicare Peer Review Organization Manual Transmittal 84, Ex. 5-17 (Dec. 21, 2000) [hereinafter PRO Manual].

The letters concerning Drs. Dedman and Jolgren, by contrast, advised Mr. Shipp that, because those doctors did not consent to the release of information about the care they provided, Excel could not provide specific information about the results of its review. Each letter contained the following paragraph:

We have carefully examined all the issues raised in your correspondence and conducted a thorough review of the care your wife received. Federal laws and regulations prohibit us from releasing information about your care without the consent of your physician. Your wife's physician did not give consent; therefore, we are unable to provide any specific information about the results of our 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.

J.A. 54, 56 (emphasis added). This response approximates the model provided in the PRO Manual for use "[w]hen the involved practitioner does not consent to disclosure of information that explicitly or implicitly identifies him/her," PRO Manual, Ex. 5-17,² and follows the instructions contained in the manual's narrative sections.³ PRO manuals since 1990 have expressed a similar nondisclosure policy.⁴

C

Mr. Shipp is a member of Public Citizen, Inc., a nonprofit consumer advocacy organization. On behalf of Mr. Shipp and other similarly situated members, Public Citizen sued HHS and HCFA under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), contending, inter alia, that the PRO Manual's instructions violate § 1320c-3(a)(14)'s requirement that PROs inform complainants of the "final disposition" of the complaint. Public Citizen asked the district court: (i) to declare invalid the regulations and policies that prohibit PROs from disclosing the results of PRO investigations when to do so would identify a...