New York State Ophthalmological Soc. v. Bowen, s. 87-5057 and 87-5065

• Citation: 854 F.2d 1379
• Decision Date: 19 August 1988
• Docket Number: Nos. 87-5057 and 87-5065,s. 87-5057 and 87-5065
• Parties: , 22 Soc.Sec.Rep.Ser. 632, Medicare&Medicaid Gu 37,238 NEW YORK STATE OPHTHALMOLOGICAL SOCIETY, et al., Appellants, v. Otis R. BOWEN, Secretary, Health and Human Services.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1379

854 F.2d 1379

272 U.S.App.D.C. 170, 22 Soc.Sec.Rep.Ser. 632,

Medicare&Medicaid Gu 37,238

NEW YORK STATE OPHTHALMOLOGICAL SOCIETY, et al., Appellants, v. Otis R. BOWEN, Secretary, Health and Human Services.

Nos. 87-5057 and 87-5065.

United States Court of Appeals, District of Columbia Circuit.

Argued Nov. 19, 1987.

Decided Aug. 19, 1988.

Opinion for the Court filed by Circuit Judge MIKVA.

Concurring Opinion filed by Circuit Judge STEPHEN F. WILLIAMS.

MIKVA, Circuit Judge:

This is a consolidated appeal from a district court judgment for appellee, the Secretary of the Department of Health and Human Services ("HHS"), in a class action brought by individual ophthalmologists, their patients, and two professional associations in New York and California suing on behalf of all ophthalmologists and cataract patients in those states ("appellants"). Appellants challenge the constitutionality of Sec. 9307(c) of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), which adds subsections (k)(1) and (2) to Sec. 1842 of the Social Security Act, 42 U.S.C. Sec. 1395u. These amendments prohibit physicians from billing individuals enrolled in Medicare Part B for services of an assistant cataract surgeon ("CAS") unless those services have been approved by an insurance carrier or designated state Peer Review Organization ("PRO").

The district court denied appellants' motion for a preliminary injunction and granted HHS' motion to dismiss. Appellants seek a permanent injunction to restrain enforcement of these amendments and a declaratory judgment that these provisions interfere with patients' and physicians' constitutional rights. On review, we reject appellants' contention that the statute facially violates patients' and physicians' constitutional right to privacy, and affirm the district court's grant of HHS' motion to dismiss with respect to this challenge. We dismiss appellants' remaining constitutional claims as not presently ripe for review.

I. BACKGROUND

Cataract surgery involves the removal of a clouded lens from the eye and its replacement with a prosthetic lens. An estimated one million cataract removals are performed annually, most on elderly patients enrolled in Medicare. Consequently, reimbursement for cataract surgery constitutes a substantial expense to the Medicare Part B Program, which reimburses for physicians' services. According to a 1985 audit report conducted by the HHS Inspector General, 1983 expenditures for ophthalmology services by surgeons and assistant surgeons in cataract operations amounted to $822 million and $42 million respectively. About 90 percent of Medicare reimbursement costs for eye surgery were related to cataract surgery. See Office of Inspector General, Office of Audit, Department of Health and Human Services, Review of Medicare Payments for Assistant Surgeon Services During Cataract Surgery 6 (1985) ("Report"), Joint Appendix ("J.A.") at 43.

In an effort to reduce these costs, the Inspector General reviewed the Medicare reimbursement policies for these services and investigated the use of cataract assistant surgeons nationwide. Before 1987, Medicare reimbursed patients for the use of an assistant surgeon if such use was the "generally accepted procedure among ophthalmologists in the local community." Report at 5, J.A. at 42. The determination of allowability of these services was the r sponsibility of the carrier in each state, based on the "prevailing practice that exists in that locality." Id. The Medicare regulations "[did] not comment upon the issue of the medical necessity for assistant surgeons for these services." Id. In his review of cataract surgery in 29 states, the Inspector General found that carriers acting for HHS in at least nine states restricted reimbursement for the services of assistant surgeons in cataract operations. The Report disclosed that the states with "lower ratios of paid assistant surgeon services * * * were states that also had restrictions regarding * * * payment." Id. at 6, J.A. at 43. In those locales, trained technicians, resident physicians, and paramedical personnel provided assistance at surgery. Ophthalmologists from those states generally agreed with the carriers that two physicians were unnecessary.

The Inspector General did not cite data demonstrating the relative complication rates or comparative safety of the use of personnel with different levels of training as assistants. The Report nevertheless concluded that

in view of the numerous cataract surgeries successfully performed nationwide without the use of assistant surgeons * * * the payment of an assistant surgeon for routine cataract surgery results in unnecessary and ineffective use of Medicare program funds. Individual surgeons' preferences with respect to the use of assistant surgeons notwithstanding, other qualified medical personnel are normally available and routinely used during surgery.

Id. at 10, J.A. at 47. The Report recommended that the Health Care Financing Administration ("HCFA") promulgate a national policy for eliminating Medicare coverage for second surgeons in routine cataract operations. It also suggested that HCFA establish a mechanism of prior approval for those cases in which the use of a second surgeon is medically indicated.

Influenced by this report, Congress in 1986 amended the legislation governing the Medicare funding program to regulate the use of assistant surgeons for cataract operations by adding sections 1395y(a)(15) and 1395u(k) to Title 42. Section 1395y(a)(15) provides that Medicare will only reimburse for the services of a CAS if a designated state PRO finds that the patient has a "complicating medical condition." The PROs are charged with the responsibility of formulating procedures to determine which patients shall be approved. See 42 U.S.C. Sec. 1320c-3(a)(8). Sections 1395u(k)(1) and (2) provide that any physician who "knowingly and willfully" bills patients enrolled in Medicare Part B for services of an assistant at cataract surgery without prior PRO approval will incur civil sanctions as provided in Sec. 1395u(j)(2), including a fine or disqualification for up to 5 years from participation as a Medicare Part B provider. Congress' decision to penalize physicians charging patients for second surgeons was motivated by the concern that Medicare beneficiaries would be forced to bear the cost of the services that Medicare would no longer reimburse. See H.R.Rep. No. 241, 99th Cong., 2d Sess. 42 (1986) U.S.Code Cong. & Admin.News 1986, pp. 42, 620 (bill authorizes sanctions to "ensure that beneficiaries are protected from additional out-of-pocket costs"); see also 131 Cong.Rec. 29,831 (1985) (remarks of Rep. Waxman) (describing a bill to "reduce Medicare and Medicaid outlays without harming program beneficiaries").

Enforcement of these amendments was temporarily delayed at the request of Congress to allow the PROs and insurance carriers the opportunity to set up pre-approval programs in accordance with HCFA guidelines. In January 1987, HCFA formulated pre-procedure review guidelines that were to apply to operations performed after March 1, 1987. Designated PROs in both New York and California established criteria for granting approval for assistant surgeons based on "complicating medical conditions."

Appellants sued in district court for a preliminary injunction to prevent the agency from putting the penalty provisions into effect. Appellants' objection was confined to sections 1395u(k)(1) and (2), which they interpreted--without contradiction by HHS--as prohibiting the physician from receiving any payment directly from Medicare patients intended as recompense for a CAS' services. Appellants did not challenge the reimbursement disallowance provision, Sec. 1395y(a)(15). The complaint was framed as a class action, although the class was not certified by the district court prior to granting HHS' motion to dismiss. The district court denied the motion for preliminary injunction and rejected appellants' contention that the statutory scheme violated patients' and physicians' constitutional rights. The court stated that Sec. 9307(c) "does not interfere with plaintiff physicians' right to practice their profession or with plaintiff patients' rights to make decisions regarding their own health care." District Court Order, Mar. 10, 1987, at 1 (citation omitted). The court found the statute rationally related to the legitimate government purpose of "the prohibition of the expenditure of federal funds determined to be medically unnecessary while protecting medicare beneficiaries." Id. at 2. The court granted HHS' motion to dismiss and ordered that Sec. 9307 go into effect as scheduled.

II. APPELLANTS' ARGUMENTS ON APPEAL

In their appeal to this court, appellants argue that the statutory scheme penalizing physicians for charging patients enrolled in Medicare for CAS services violates patients' and physicians' constitutional rights of privacy, due process, and association. They assert that the challenged amendments enforce an unconstitutional interference in patient privacy, independence, and autonomy by imposing a penalty on the choice to lessen the dangers of surgery by arranging for and paying an assistant surgeon.

Appellants advance the comprehensive thesis that medical decisions are "core" private decisions. A fundamental tenet of privacy jurisprudence, as it has been applied to other types of personal matters, is that the individual most directly concerned is entitled to make and implement the protected decision autonomously and free from paternalistic government intrusion. See, e.g., Zablocki v. Redhail, 434 U.S. 374, 98 S.Ct. 673, 54 L.Ed.2d 618 (1978) (decision to marry); Moore v. East Cleveland, 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977) (decision to live with extended family members); Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965) (reproductive choice). Appellants argue that...