Dr. John T. MacDonald Foundation Inc. v. Mathews, 75-2966

• Decision Date: 23 June 1977
• Docket Number: No. 75-2966,75-2966
• Citation: 554 F.2d 714
• Parties: DR. JOHN T. MacDONALD FOUNDATION, INC., d/b/a Doctors' Hospital, etc., Plaintiff-Appellant, v. F. David MATHEWS, Secretary of Health, Education and Welfare, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 714

554 F.2d 714

DR. JOHN T. MacDONALD FOUNDATION, INC., d/b/a Doctors'

Hospital, etc., Plaintiff-Appellant, v. F. David MATHEWS, Secretary of Health, Education and Welfare, et al., Defendants-Appellees.

No. 75-2966.

United States Court of Appeals,

Fifth Circuit.

June 23, 1977.

Clark, Circuit Judge, dissented and filed an opinion.

Aubrey V. Kendall, Charles C. Kline, Miami, Fla., for plaintiff-appellant.

Robert W. Rust, U. S. Atty., John S. Berk, Asst. U. S. Atty., Miami, Fla., Robert E. Kopp, Richard A. Olderman, John M. Rogers, Appellate Sec., Civil Div., Dept. of Justice, Washington, D. C., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Florida.

ON PETITION FOR REHEARING

Before DYER, CLARK and GEE, Circuit Judges.

GEE, Circuit Judge:

In our opinion herein, 534 F.2d 633 (5th Cir. 1976), we concluded that the district court was granted jurisdiction of this case by Section 10 of the Administrative Procedure Act. We have withheld action on motion for rehearing pending decision by the Supreme Court of Califano v. Sanders, --- U.S. ----, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). In it the Court has now decided that the APA does not constitute an implied grant of subject-matter jurisdiction permitting federal judicial review of agency action. Thus, our original opinion erred as to this supposed head of jurisdiction. In consequence, we must now decide whether, despite Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), general federal-question jurisdiction obtains here an issue which we expressly reserved in our earlier opinion. ¹ The question is close. Sustained, however, in no small measure by the reflection that the issue is both discrete and so purely legal as to permit of a summary reversal without extensive factual research if we have miscarried, we find jurisdiction exists and deny rehearing.

Beyond peradventure, the Court's decision in Sanders, supra, has overruled the Social Security Act cases in our circuit on which we relied in our opinion herein. ² And as Lejeune v. Matthews notes, Salfi v. Weinberger uprooted general federal-question jurisdiction in such Social Security cases. ³ None of these authorities, however ours or the Court's, disposes of the question we now confront in this Medicare case.

For when the Congress confected the Medicare Act review provisions, it picked up the Social Security Act review-preclusion provision, 42 U.S.C. § 405(h), and incorporated it therein, complete with its reference to statutory judicial review "as herein provided." It omitted, however, to incorporate 42 U.S.C. § 405(g), the section which "(t)herein provided" statutory review. ⁴ Did Congress, by the omission of this provision for statutory review though maintaining the original reference to it in the preclusion statute intend that during the time-window from 1968 to 1973 there should be no review of such Medicare matters as this? The words of § 405(h) are "sweeping and direct"; ⁵ it cannot be gainsaid that read literally they preclude all review. None is to be had except "as herein provided," and no review is herein provided for the Secretary's refusal to reopen and recompute the amount of reimbursement to this provider of medicare services. ⁶ It may be that this is the intent and mandate of Congress; Salfi determined that it is as to the Social Security Act cases, though as to them the statutory scheme and language is clear, round and cohesive. If so, of course, that mandate must be obeyed.

Yet the spotty review of Medicare matters resulting from Congress' failure to incorporate § 405(g), coupled with § 405(h)'s specific assumption that some review has been provided, leaves the mind unsatisfied when confronted with a futile statutory attempt to review the Secretary's refusal to reopen and recalculate the amount of this provider's reimbursement. And dissatisfaction grows as we contemplate an apparently wayward preclusion of statutory review during a limited time frame, an hiatus remedied when Congress got around to the matter again. Several courts have labored mightily to avoid the irrational result which a mechanical construction of this peculiar statutory collage produces.

Our own now-overruled decision in Ortego v. Weinberger, 516 F.2d 1005 (5 Cir. 1975), was driven to ascertain APA jurisdiction even in a Social Security Act case, where the claimant was barred from statutory review by his failure to apply for the required hearing. In Lejeune we refused to interpret Salfi as denominating § 405(g) an exclusive source of jurisdiction in those situations where § 405(g) review was unavailable:

The claims over which review was sought in Salfi were ones which could be reviewed judicially, after proper procedures were followed within the agency, under § 405(g). Decisions of the Secretary which can be reviewed judicially under § 405(g) can be reviewed judicially only under § 405(g). § 405(g) affords no jurisdiction over the Secretary's refusal, without a hearing, to reopen on the basis of new evidence a determination of ineligibility. Salfi did not discuss decisions of this type . . . .

526 F.2d at 953 n.2 (emphasis supplied). In South Windsor Convalescent Home, Inc. v. Mathews, 541 F.2d 910 (2d Cir. 1976), the Second Circuit concluded that Salfi precluded federal-question jurisdiction in Medicare cases like this one but found jurisdiction to review existed in the Court of Claims. This it did on reasoning that although the last sentence of § 405(h) forbade review under "section 41 of Title 28," ⁷ it did not speak to 28 U.S.C. § 1491, the Court of Claims provision. This analysis fails, however, to deal with what seems to us the equally preclusive language of the second sentence of § 405(h): "No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal or governmental agency except as herein provided." (Emphasis added). And the Eighth Circuit, in St. Louis University v. Blue Cross Hospital Service, 537 F.2d 283 (8 Cir. 1976), a post-Salfi Medicare case, refused to find complete preclusion of federal question jurisdiction by § 405(h), reasoning that constitutional claims must be reviewable despite § 405(h) language to the contrary. With respect, we think the reasoning of our Brothers' careful opinion supports a more expansive result than they reached:

Thus, we must now return to § 405(h) to determine if it precludes our jurisdiction to entertain a due process challenge to the procedures adopted by the Secretary to determine Medicare reimbursements. Section 405(h) forbids any action under § 1331 "to recover on any claim arising under this subchapter." Appellees in Salfi argued that this did not bar their constitutional claims since they "arose under" the Constitution and not under the Social Security Act. The Supreme Court recognized that this argument had substance. 422 U.S. at 760, 95 S.Ct. at 2464, 45 L.Ed.2d at 536. However, it rejected the argument because

not only is it Social Security benefits which appellees seek to recover, but it is the Social Security Act which provides both the standing and the substantive basis for the presentation of their constitutional contentions. (Id. at 760-61, 95 S.Ct. at 2464, 45 L.Ed.2d at 536.)

The Court also indicated that its decision was influenced by the availability of fully adequate judicial review under § 405(g). The Court said:

In the present case . . . the Social Security Act itself provides jurisdiction for constitutional challenges to its provisions. Thus the plain words of § 405(h) do not preclude constitutional challenges. (Id. at 762, 95 S.Ct. at 2465, 45 L.Ed.2d at 537 (emphasis added).)

In the present case, the due process claim has as its primary goal obtaining a constitutionally adequate hearing. Allowing such a hearing will not necessarily affect the University's entitlement to reimbursement or the amount allowed. Secondly, and more importantly, the Medicare Act does not provide the University an adequate alternative means of obtaining judicial review of its due process claim.

We believe that on these two grounds alone, this case is distinguishable from Salfi, and thus § 405(h) does not preclude our jurisdiction of count II. However, there is a third basis for distinction. Section 405(h) is incorporated into the Medicare Act only "as . . . applicable." § 1395ii. The general rule is that a statute incorporated into another "as applicable" will be read in such a manner "as will give form and effect to the statute into which it is incorporated." Penrose v. Whiteacre, 62 Nev. 239, 147 P.2d 887, 889 (1944), and authority cited therein. If § 405(h) were read to wholly preclude adjudication of the University's due process claim it would raise serious constitutional problems which might impair the force and effect of the Medicare Act. Therefore, we find that Congress did not intend for § 405(h) to apply to the Medicare Act in such a manner as to completely bar judicial consideration of a claim of denial of due process.

537 F.2d at 291-92 (footnote omitted).

We agree that Salfi, a Social Security Act case, is distinguishable from and does not rule Medicare appeals. We also agree that § 405(h), incorporated into the Medicare context, should be there read in such a manner as to give rational form and effect to the workings of the Medicare scheme. We therefore hold that during the period before it provided adequate statutory review within the Medicare Act, and during that period only, Congress did not intend § 405(h) to preclude federal-question jurisdiction over such matters as this. We do so realizing that our construction is strained, but mindful as well that our duty is to seek legislative intent and not a barren form of words and in the belief that it is proper to consider the changing context of § 405(h) in ascertaining its true meaning, albeit its own words remain constant.

The motion for rehearing is DENIED.

CLARK, Circuit Judge, dissenting:...