Montgomery County, Md. v. Califano

• Decision Date: 30 March 1978
• Docket Number: Civ. No. K-77-166.
• Citation: 449 F. Supp. 1230
• Parties: MONTGOMERY COUNTY, MARYLAND, Plaintiff, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Defendant, and American Association for Comprehensive Health Planning, Inc., Intervenor.
• Court: U.S. District Court — District of Maryland

449 F. Supp. 1230

MONTGOMERY COUNTY, MARYLAND, Plaintiff, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Defendant and American Association for Comprehensive Health Planning, Inc., Intervenor.

Civ. No. K-77-166.

United States District Court, D. Maryland.

March 30, 1978.

Richard S. McKernon, County Atty., Richard E. Frederick, Deputy County Atty., and Nathan J. Greenbaum, Asst. County Atty. for Montgomery County, Maryland, Rockville, Md., for plaintiff.

Barbara Allen Babcock, Asst. Atty. Gen., and David J. Anderson and Steven I. Frank, Attys., Dept. of Justice, Washington, D. C., for defendant.

Steven B. Epstein and William G. Kopit, Washington, D. C. and Russell H. Gardner, Baltimore, Md., for intervenor.

FRANK A. KAUFMAN, District Judge.

Montgomery County, Maryland, contends that the National Health Planning and Resources Development Act of 1974 unconstitutionally offends both the Guaranty Clause of and the Tenth Amendment to the United States Constitution. In addition, the County asserts that certain regulations promulgated by the Secretary of Health, Education and Welfare (HEW) under that Act offend the Tenth Amendment and also are beyond the authority of the 1974 statute. Defendant has moved alternatively to dismiss and for summary judgment. Plaintiff has also moved for summary judgment. The American Association for Comprehensive Health Planning, Inc. has been permitted to intervene as a defendant. Jurisdiction exists under 28 U.S.C. § 1331.

I. FACTS

The facts are undisputed. In 1974, the Congress amended the Public Health Service Act (42 U.S.C. § 201 et seq.) by passing the National Health Planning and Resources Development Act of 1974, Pub.L. No.93-641, 88 Stat. 2225 (42 U.S.C. § 300k, et seq.) ("Act"). Section 2 of that Act (42 U.S.C. § 300k) states that its "purpose" is "to facilitate the development of recommendations for a national health planning policy, to augment areawide and State planning for health services, manpower, and facilities, and to authorize financial assistance for the development of resources to further that policy." In enacting the Act the Congress cited the inflationary effects upon the cost of health care and the maldistribution of health care facilities. See S.Rep.No.93-1285, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin. News, pp. 7842, 7878-79, 7892-96. Plaintiff apparently attacks only sections of Title XV which the 1974 Act added to the Public Health Service Act. That Title (42 U.S.C § 300k-1 et seq.) establishes federal support, through HEW grants, for a nationwide system of health planning and development organizations comprising essentially three tiers: (1) Health Systems Agencies, responsible for the development and implementation of health planning at the local level; (2) State Health Planning and Development Agencies, responsible in general for conducting the health planning activities of the states; and (3) Statewide Health Coordinating Councils, responsible for preparing final state health plans and for advising the state health planning and development agencies in the performance of their functions.

Section 1501 of the Act (42 U.S.C. § 300k-1) delegates to the Secretary of HEW the authority to develop regulations on national health policy, including standards respecting supply, distribution and organization of health resources and development of a statement of national health planning goals.

Section 1511 of the Act (42 U.S.C. § 300l) requires the Governor of each state to establish Health Service Areas and their respective boundaries in accordance with geographic, demographic, and other criteria set forth in section 1511 and to submit the same to the Secretary of HEW. The Secretary has final authority to determine whether such areas comply with section 1511 standards. The Secretary himself, if he finds any area inappropriate or if the Governor does not designate an area, may define an area. The Secretary is also required to review on a continuing basis the appropriateness of the areas. Before the Secretary may act on his own to revise any area boundaries, he must first consult with the Governor of the state involved and with certain state and local authorities. The designations of 202 health service areas for substantially the entire country was made through publication of a Notice in the Federal Register of September 2, 1975 (40 Fed. Reg. 40306).

Sections 1515 and 1516 of the Act, 42 U.S.C. § 300l-4, 5, direct the Secretary to enter into an agreement with an eligible entity to act as the Health Systems Agency (HSA) for a given area and to make a grant to such entity for the performance of its functions as an HSA. The Secretary may not enter into such an agreement unless and until an entity has submitted an application to him for designation as an HSA and the Governor of the state in question has been consulted about the designation of the entity. Section 1515(c)(2) (42 U.S.C. § 300l-4(c)(2)).

Requirements as to the organization and operation of the HSAs are set forth in section 1512 (42 U.S.C. § 300l-1). Section 1512(b)(1) provides that an HSA may be (a) a nonprofit, private corporation not controlled by any other legal entity and engaged only in health planning and development functions; or (b) a public regional planning body composed of a majority of elected officials of its constituent units of government or authorized by state law to perform health planning functions, and having a planning area identical to the Health Service Area; or (c) a single unit of general local government which has a jurisdiction identical to the Health Service Area.

The HSAs are supported primarily through federal health planning grants pursuant to section 1516 (42 U.S.C. § 300l-5). HSAs for about half of the health service areas in the nation have been conditionally designated and awarded planning grants by the Secretary. Under section 1512(b)(3), and HSA, which is a public regional planning body or a unit of general government, is to have a governing body for health planning. The membership of the governing body must be drawn from various categories of health care consumers and providers. Section 1512(b)(3)(C) (42 U.S.C. § 300l-1(b)(3)(C)). The governing body is responsible for the internal affairs of the HSA and has "exclusive authority" to perform for the agency the functions delegated to the HSA by the Act.

The functions of the HSAs are described in section 1513 (42 U.S.C. § 300l-2) and include:

(1) assembly and analysis of health-related data leading to the formulation of both long-term Health Systems Plans (HSPs) and short-term Annual Implementation Plans (AIPs). The latter are required to state local goals and priorities in health planning. In devising its plans, each HSA must take "appropriate consideration of the recommended national guidelines for health planning policy issued by the Secretary." Section 1513(b)(2); (2) implementation of the HSPs and AIPs including the provision of technical assistance and grants emanating from the Area Health Services Development Fund to various individuals and public and private entities. Section 1513(c);

(3) coordination of activities with other local health service agencies. "The agency shall . . . enter into agreements with them which will assure that actions taken by such entities which alter the area's health system will be taken in a manner which is consistent with the HSP and the AIP in effect for the area . . .." Section 1513(d);

(4) review and approval of proposed use of federal funds

(i) appropriated under this Act, the Community Mental Health Centers Act, or the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment, and Rehabilitation Act of 1970 for grants, contracts, loans, or loan guarantees for the development, expansion, or support of health resources; or

(ii) made available by the State in which the health service area is located (from an allotment to the State under an Act referred to in clause (i)) for grants or contracts for the development, expansion, or support of health resources.

Section 1513(e). The Secretary may fund projects disapproved by an HSA only after extensive review of the HSA's decision and only if he submits to the HSA a detailed statement of the reasons for his decision. Id.;

(5) assistance to State Health Planning and Development Agencies with regard to the need for new institutional health services. Section 1513(f). Section 1513(f) requires each HSA to assist the state agencies in reviewing and making recommendations on applications for certificates of need. Those certificates, pursuant to section 1523(a)(4)(A) (42 U.S.C. § 300m-2(a)(4)(A)), are conditions precedent to federal funding and support;

(6) review on a continuing basis of existing and proposed local institutional health services with recommendations as to the appropriateness of such services to the State Health Planning and Development Agency. Section 1513(f), (g);

(7) recommendation of projects to each State Health Planning and Development Agency for modernization and construction of medical services to achieve the goals of the HSPs and AIPs. Section 1513(h).

State Health Planning and Development Agencies are established as statewide counterparts to the HSAs. Sections 1521-26 (42 U.S.C. § 300m et seq.). The Governor of each state selects the state agency to apply to the Secretary for designation as the State Health Planning and Development Agency ("State Agency"). If he agrees, the Secretary may make either a conditional or final designation of an agency as the State Agency.¹ The Secretary is not authorized to enter into a designation agreement with the Governor of a state unless (1) the state has submitted a State Administrative Program in accordance with the requirements of section 1522 of the Act, (2) there are adequate assurances that the State Agency will have the authority and resources to administer the State Administrative Program and conduct the state...