Cassim v. Bowen

• Decision Date: 12 August 1987
• Docket Number: No. 86-3982,86-3982
• Citation: 824 F.2d 791
• Parties: , Medicare&Medicaid Gu 36,440 M.M. CASSIM, M.D., dba M.M. Cassim, M.D., P.C., Plaintiff-Appellant, v. Otis BOWEN, Secretary, United States Department of Health and Human Services, and Oregon Medical Professional Review Organization and their employees and agents, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 791

824 F.2d 791

18 Soc.Sec.Rep.Ser. 519, Medicare&Medicaid Gu 36,440

M.M. CASSIM, M.D., dba M.M. Cassim, M.D., P.C., Plaintiff-Appellant, v. Otis BOWEN, Secretary, United States Department of Health and Human Services, and Oregon Medical Professional Review Organization and their employees and agents Defendants-Appellees.

No. 86-3982.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 3, 1986.

Decided Aug. 12, 1987.

James N. Westwood, Steven O. Rosen, and Paul Blaylock, Portland, Or., for plaintiff-appellant.

James M. Miles, Seattle, Wash., for the Federal defendant-appellee.

George S. Cooper III, Portland, Or., for defendant-appellee Oregon Medical Professional Review Organization.

Appeal from the Order of the United States District Court for the District of Oregon.

Before HUG, SKOPIL and FLETCHER, Circuit Judges.

SKOPIL, Circuit Judge:

M.M. Cassim is a Medicare participating physician. He argues that as a matter of due process he is entitled to a full evidentiary hearing before the Secretary of Health and Human Services can suspend him from Medicare and publish notice of his suspension in a local newspaper. The district court denied Cassim's motion for a preliminary injunction. We affirm.

FACTS AND PROCEEDINGS BELOW

Cassim is a licensed and practicing surgeon in Dallas, Oregon. Forty percent of the income from his practice comes from Medicare patients. In early 1985 the Oregon Medical Professional Review Organization (OMPRO) initiated a routine review of the quality of Cassim's surgical care. OMPRO has a contract with the Department of Health and Human Services (HHS) to operate as the Medicare peer review organization for the State of Oregon.

After its initial review OMPRO decided to examine all surgery performed by Cassim during a prior six-month period. In April 1985 OMPRO informed Cassim and the hospital where he practiced of its review. OMPRO checked the medical records of eighty of Cassim's patients and identified thirteen "gross and flagrant" violations of Cassim's obligation under the Social Security Act to adhere to professionally recognized standards.

In making its investigation, OMPRO did not discuss the cases with Cassim. Nor did it contact any of the patients, the attending nurses, the other physicians involved in the care of the patients, or the hospital's quality assurance committee. Finally, OMPRO did not seek a complete copy of all medical records related to the care of the patients. It lacked some x-rays, scans, and other lab data.

On October 30, 1985 OMPRO informed Cassim of its findings. It listed the patient records it had examined and provided Cassim with its analysis and conclusions. OMPRO gave Cassim thirty days to submit information to "rebut or mitigate" its findings and allowed him to make a "written request to meet with representatives of OMPRO to discuss case specifics." OMPRO warned him that its preliminary recommendation was exclusion from the Medicare program.

Cassim then met with OMPRO's surgical review panel and medical director. OMPRO did not allow Cassim to present witnesses or to confront adverse witnesses. Cassim was, however, represented by counsel. A transcript was made of the meeting. Cassim presented his side of the story and OMPRO recommended to the Office of Inspector General (OIG) of HHS that Cassim be suspended from the Medicare program for a minimum of one year and informed Cassim of its recommendation. It told him that he had thirty days to submit to OIG "any additional material which affects the recommendation to exclude you from participation in the Medicare program." Cassim, through his attorney, took advantage of this opportunity to defend himself and submitted additional material.

introduced exculpatory documentation, including lab data missing from OMPRO's records. The OMPRO panel questioned him on the techniques he had used in caring for his patients. After the meeting, "based on the additional information ... [Cassim] provided," OMPRO dropped five of the thirteen alleged violations.

Notwithstanding Cassim's efforts, OIG affirmed OMPRO's findings. It ruled that Cassim had performed unnecessary surgery on eight patients, who ranged in age from 66 to 86. The surgery constituted gross and flagrant violations of his duty under the Social Security Act. It placed his patients in "high risk" situations or in "imminent danger," with the "potential for patient harm." OIG specifically noted that it had reviewed and rejected the material submitted by Cassim. It excluded Cassim from Medicare for one year and informed him it would publish "a notice in a local newspaper to advise the community of the effective date, the duration, and the reason for this exclusion." See 42 U.S.C. Sec. 1320c-5(b)(2) (1982); 42 C.F.R. Sec. 1004.100 (1986). Finally, OIG told Cassim of his right to appeal the ruling to an administrative law judge (ALJ). See 42 U.S.C. Sec. 1320c-5(b)(4) (1982); 42 C.F.R. Sec. 1004.130 (1986). Neither the Social Security Act nor its regulations guarantee the timeliness of the hearing on appeal.

Cassim then sought a preliminary injunction in district court. He argued that the Act and its regulations violated due process (1) in not providing for a full-blown pre-exclusion and pre-publication (predeprivation) ALJ hearing, and (2) in not guaranteeing the promptness of a post-exclusion and post-publication (post-deprivation) hearing. The district court held that it had jurisdiction over Cassim's action but denied the preliminary injunction. Cassim timely appealed. We granted a stay pending the appeal.

DISCUSSION

I. Subject Matter Jurisdiction

42 U.S.C. Sec. 405(g) (1982) provides a claimant who has exhausted an agency's administrative process with the right to obtain judicial review. In relevant part, it states that "[a]ny individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision." The "final decision" of the Secretary contains two elements: (1) the "jurisdictional" non-waivable requirement of presentment of the claim for benefits (presentment); and (2) the "waivable" requirement of exhaustion of administrative remedies (exhaustion). Hironymous v. Bowen, 800 F.2d 888, 894 (9th Cir.1986) (citing Mathews v. Eldridge, 424 U.S. 319, 328-30, 96 S.Ct. 893, 899-900, 47 L.Ed.2d 18 (1976)). The Secretary argues that Cassim has not complied with those requirements. We disagree.

Cassim meets the presentment requirement. Presentment can be fulfilled by contesting tentative agency determinations. Eldridge, 424 U.S. at 329, 96 S.Ct. at 900 (presentment found where claimant answered a state agency questionnaire and wrote a letter in response to the state's initial determination that his disability had ceased). Cassim repeatedly challenged the Secretary, both during the review process and after OIG's determination. He requested a meeting with OMPRO and met with its review panel. He later submitted materials to OIG to contest OMPRO's findings. Finally, after being sanctioned by OIG, Cassim sent a letter to both OMPRO and the Secretary, "stating that if we were not able to reverse the exclusion before we had a due process hearing, it was [not] our intent to pursue our administrative remedy but to seek judicial relief."

The exhaustion requirement is also satisfied. Exhaustion may be waived, either by the Secretary, Weinberger v. Salfi, 422 U.S. 749, 766-67, 95 S.Ct. 2457, 2467, 45 L.Ed.2d 522 (1975), or by the courts, Eldridge, 424 U.S. at 330-32, 96 S.Ct. at 900-01. The Secretary has not waived exhaustion; we must determine whether waiver is appropriate. Courts may waive exhaustion because "cases may arise where a claimant's interest in having a particular issue resolved promptly is so great that deference to the agency's judgment is inappropriate." Id. at 330, 96 S.Ct. at 900. The claimant must satisfy a three-part test. The claim at issue must be (1) collateral to a substantive claim of entitlement (collaterality), (2) colorable in its showing that refusal of the relief sought will cause an injury which retroactive payments cannot remedy (irreparability), and (3) one whose resolution would not serve the purposes of exhaustion (futility). Id. at 330-32, 96 S.Ct. at 900-01; see also Bowen v. City of New York 477 U.S. 467, 106 S.Ct. 2022, 2031-32, 90 L.Ed.2d 462 (1986) (alternatively describing test as composed of two parts, exhaustion and irreparability, with an examination of futility).

Cassim has shown collaterality. The Secretary concedes that Cassim's due process claim is collateral to his request for benefits. See Ram v. Heckler, 792 F.2d 444, 446 (4th Cir.1986); accord Koerpel v. Heckler, 797 F.2d 858, 862 (10th Cir.1986). The Secretary argues, however, that Cassim's due process claim is not colorable. A claim is colorable if it is not "wholly insubstantial, immaterial, or frivolous." Boettcher v. Secretary of Health and Human Services, 759 F.2d 719, 722 (9th Cir.1985). Cassim raises a serious constitutional challenge. It is not insubstantial, immaterial, or frivolous.

Moreover, Cassim has demonstrated irreparability. The Secretary all but concedes that expulsion and publication would irreparably injure Cassim. See Koerpel, 797 F.2d at 862 (doctor's "reputation could be irreparably damaged in a way that could not be remedied by subsequent administrative appeals"). Finally, Cassim has established futility. Requiring him to exhaust administrative remedies would not serve the policies underlying exhaustion. Given the constitutional nature of his challenge, "there was nothing to be gained from permitting the compilation of a detailed factual record, or from agency expertise." City of New York, 106 S.Ct. at 2032. We conclude that Cassim fulfilled the jurisdictional requirements of section 405(g).

II. Preliminary Injunction

A party seeking a preliminary injunction must fulfill one of two standards,...