Fla. Med. Ass'n, Inc. v. Dep't of Health

• Decision Date: 31 May 2013
• Docket Number: Case No. 3:78–CV–178–J–34MCR.
• Court: U.S. District Court — Middle District of Florida
• Parties: FLORIDA MEDICAL ASSOCIATION, INC., et al., Plaintiffs, v. DEPARTMENT OF HEALTH, EDUCATION, & WELFARE, et al., Defendants, Dow Jones & Company, Inc., et al., Intervening Defendants.

947 F.Supp.2d 1325

FLORIDA MEDICAL ASSOCIATION, INC., et al., Plaintiffs,

v. DEPARTMENT OF HEALTH, EDUCATION, & WELFARE, et al., Defendants,Dow Jones & Company, Inc., et al., Intervening Defendants.

Case No. 3:78–CV–178–J–34MCR.

United States District Court,

M.D. Florida,

Jacksonville Division.

May 31, 2013.

Jack R. Bierig, Sidley Austin LLP, Tacy F. Flint, Chicago, IL, James Arthur Bolling, Stephen D. Busey, Smith, Hulsey & Busey, Jacksonville, FL, for Plaintiffs.

James C. Luh, U.S. Department of Justice—Civil Division, Washington, DC, Roberto H. Rodriguez, Jr., U.S. Attorney's Office, Jacksonville, FL, for Defendants.

ORDER

MARCIA MORALES HOWARD, District Judge.

The issue presented in this case is whether an injunction, entered some 33 years ago, which permanently enjoins the United States Department of Health and Human Services (“HHS”) “from disclosing any list of annual Medicare reimbursements amounts, for any years” that identifies providers of services under Medicare, should be vacated or modified because continued prospective application “is no longer equitable.” Rule 60(b)(5), Federal Rules of Civil Procedure (Rule(s)); see Alley v. U.S. Dep't of Health and Human Servs., 590 F.3d 1195, 1209–10 (11th Cir.2009). The issue is brought to the Court by Intervenors Jennifer D. Alley and Real Time Medical Data Inc.'s Motion to Vacate Permanent Injunction (Doc. 55; RTMD Motion), and Intervenor Dow Jones & Company, Inc.'s Motion to Vacate Permanent Injunction. (Doc. 56; Dow Jones Motion). The issues have been extensively briefed,¹ and the parties have submitted evidence in support of their respective positions. ² The Court heard oral argument on June 20, 2012, (Doc. 65; 06/20/12 Clerk's Minutes), the transcript of which is incorporated herein. (Doc. 66; Tr.). Additionally, on August 20, 2012, the parties filed post-hearing briefs.

I. BackgroundA. District Court Proceedings Leading to the Entry of the Permanent Injunction³

In March 1977, the Secretary of the United States Department of Health, Education and Welfare,⁴ the agency responsible for administering Medicare, released a list identifying physicians or groups of physicians who received $100,000.00 in Medicare reimbursements in 1975. See Fla. Medical Ass'n., Inc. v. Dep't of Health, Education, and Welfare, 479 F.Supp. 1291, 1297 (M.D.Fla.1979); see also Alley, 590 F.3d at 1198. The disclosure, which was widely publicized, also correlated the gross reimbursements for 1977 Medicare claims with the name of each physician identified. 479 F.Supp. at 1297. The information published was later found to be “inaccurate in many ways.” Id.

Also in March, 1977, the Secretary published in the Federal Register (42 Fed.Reg. 14703) an interim amendment to the rules for disclosure of Social Security records, contained in 20 C.F.R. s 401.1 Et seq., in order to conform the current regulations to the most recent requirements of the Freedom of Information Act. The effect of the amendment to 20 C.F.R. s 401.1 Et seq. was to adopt the principles of the Freedom of Information Act as guiding rules for the disclosure of information by [HHS], 42 Fed.Reg. at 14704. See 20 C.F.R. s 401.3(a).

Id. Then, in November 1977, the Secretary directed its carriers to publish another list, this time identifying all physicians and providers who received medicare reimbursements in 1977. Id.

The list was to include full names of the physicians and their providers, their addresses, the net total amount of Medicare reimbursement paid [directly] ... to each physician or provider, and the net total amount of Medicare reimbursements paid to beneficiaries for ... services furnished by each physician or provider.

Id. On March 24, 1978, Plaintiff Florida Medical Association (the “FMA”) and six individual physicians, on behalf of all Florida physicians whose patients were Medicare beneficiaries, filed suit to enjoin the scheduled disclosures. Alley, 590 F.3d. at 1198–99; Doc. 59 at 94–100 (FMA Complaint). The FMA described the contested information as follows:

Detailed information on the amount of “assigned” Medicare payments made directly to individual physicians and “unassigned” payments made to individual Medicare beneficiaries on account of physician services are contained in a system of records maintained by defendants Blue Shield and Group Health, Inc., under the control and direction of HEW and the Secretary. The information contained in this system of records is retrievable by the names of individual physicians or groups or physicians, or by some identifying number or symbol particularly assigned to individual physicians or groups of physicians.

FMA Complaint ¶ 11.

In the FMA Complaint, the FMA invoked the Court's jurisdiction stating that its claims arose “under the Freedom of Information Act, 5 U.S.C. § 552 [“FOIA”], the Privacy Act of 1974, 5 U.S.C. § 552a, 18 U.S.C. § 1905 [the Trade Secrets Act], and the First, Fourth, Fifth and Fourteenth Amendments to the Constitution of the United States.” Id. ¶ 1. It asserted that in 1977, HHS made public the names of physicians or physician groups whose billing exceeded $100,000 or more in Medicare payments in 1975, id. ¶ 12, and that HHS had announced an intention to make additional similar disclosures on April 30, 1978. Id. ¶¶ 13–18. Alleging that further release of such information would violate FOIA, the Privacy Act, the Trade Secrets Act, and the United States Constitution, the FMA Plaintiffs requested that the Court declare “that the threatened disclosure of Medicare payments made on account of billings by members of the class” would be unlawful, and asked the Court to preliminarily and permanently enjoin HHS from disclosing this information. See FMA Complaint at 7; see also Alley, 590 F.3d at 1199.

On April 28, 1978, the Court entered a Temporary Restraining Order, which the parties agreed would remain in place until the Court resolved the case, or June 6, 1978, whichever occurred first. See479 F.Supp. at 1295.⁵ The Court referred the Motion for Preliminary Injunction to the Magistrate Judge who issued findings and recommendations, and the parties filed written objections. Id. On May 16, 1978, the Court heard argument concerning those objections. See id. Having filed cross motions for summary judgment, the parties stipulated that the Court should “consolidate its ruling on the merits in this case with its consideration of Plaintiff's Preliminary Injunction Motion.” Id. Subsequent to that hearing, on June 12, 1978, the Court permitted the American Medical Association (“AMA”) to intervene on behalf of its more than 200 licensed physician members nationwide. Id. As such, the Court recertified the class to include all physicians licensed to practice in Florida and all members of the AMA, if they were providers of Medicare services and would be individually identified by the disclosure of annual medicare reimbursement amounts. Id. at 1295–96.

After giving the parties additional time to submit memoranda, the Court was faced with the possibility that its subject matter jurisdiction might be extinguished if the Temporary Restraining Order expired, and HHS disclosed the information at issue, before the entry of an order resolving the matter. See id. at 1296. As such, the Court issued “what it termed ‘an Ancillary Writ of Injunction,’ ” which the Fifth Circuit Court of Appeals vacated, after concluding that neither the Court's ancillary jurisdiction, nor the All Writs Act, authorized a district court to disregard the requirements of Rule 65 of the Federal Rules of Civil Procedure. Fla. Medical Ass'n., Inc. v. U.S. Dep't of Health, Education & Welfare, 601 F.2d 199, 202–203 (5th Cir.1979). ⁶ Nevertheless, HHS agreed not to publish the contested data for a period of time. Id. at 203, n. 4.

On October 22, 1979, the late Senior District Judge Charles R. Scott granted Plaintiffs' request for injunctive relief. See generally479 F.Supp. 1291 (“FMA Injunction Order”). Examining competing public and private interests, Judge Scott determined that the proposed disclosure, “at least in the individually identifying manner,” was covered by FOIA Exemption 6, and thus, the disclosure would violate the Privacy Act. Id. at 1311. That same day, the Court issued a Final Declaratory Judgment and Permanent Injunction which:

1. ... permanently enjoined [HHS] from disclosing any list of annual Medicare reimbursement amounts, for any years, which would personally and individually identify those providers of services under the Medicare program who are members of the recertified class in this case.

2. Any such disclosure of annual Medicare reimbursement amounts, for any years, in a manner that would personally and individually identify the providers of services under the Medicare program who are members of the recertified class in this case is declared to be contrary to federal law.

Fla. Medical Ass'n., Inc. v. Dep't of Health, Education & Welfare, No. 78–178 (M.D.Fla. Oct. 22, 1979) ( see Doc. 59 at 25–26)(“1979 FMA Injunction”).

B. Post–Injunction Developments

1. 1980: HHS Policy Modification

On November 28, 1980, HHS published in the Federal Register a modification of its policy on disclosure of amounts paid to individual physicians under the Medicare program following, and in light of, “federal court decisions.” 45 Fed. R. 79172 (Nov. 28, 1980)(“1980 HHS Notice”). Referring to the 1977 policy statement found at 42 Fed.Reg. 14703, (“preamble to the interim rules of the Social Security Administration for disclosure of information”), which stated that disclosure would not constitute an unwarranted invasion of the individual physician's privacy, the 1980 HHS Notice announced that two federal courts, “have concluded that the disclosures do constitute an unwarranted invasion of personal privacy of the individual physicians and the Secretary has been enjoined from disclosing the amounts of payment to individual physicians.” Id. (citing “Fla. Medical Ass'n., Inc. v. Dep't of...