U.S. v. Sanet, 81-5192

• Decision Date: 01 February 1982
• Docket Number: No. 81-5192,81-5192
• Citation: 666 F.2d 1370
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Morton SANET, M.D., Defendant-Appellant. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1370

666 F.2d 1370

UNITED STATES of America, Plaintiff-Appellee, v. Morton SANET, M.D., Defendant-Appellant.

No. 81-5192

Non-Argument Calendar.

United States Court of Appeals Eleventh Circuit.

Feb. 1, 1982.

Mandina & Lipsky, Michael A. Lipsky, Miami, Fla., for defendant-appellant.

Patricia D. Kenny, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.

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

Before RONEY, KRAVITCH and CLARK, Circuit Judges.

CLARK, Circuit Judge:

The United States filed this action under 28 U.S.C. § 1345 to recover $23,497.23 in Medicare, Part B, payments made to appellant Morton Sanet, M.D. during the years 1972, 1973, 1974 and 1975. The district court denied appellant's motion to dismiss which asserted, inter alia, that a statistical sampling procedure utilized by the carrier violated his right to due process. The court held that it was without jurisdiction to review determinations of the Secretary with respect to benefits payable under the Medicare Act. Thereafter, the court granted the government's motion for partial summary judgment with respect to the overpayment of $6,518.78 calculated for the years 1974 and 1975. ¹

Dr. Sanet appeals. He attacks the district court's refusal to hear his claims and the use of a statistical sampling technique as violative of his due process rights. We affirm.

Statement of Facts

Title XVIII of the Social Security Act (the "Medicare" program) ² provides reimbursement for medical care to the aged and to certain disabled persons under age 65. ³ Part B provides supplementary medical insurance benefits available on a voluntary basis to those eligible for Part A benefits upon payment of monthly premiums. ⁴ These premiums, together with contributions from the federal government go into the Federal Supplementary Medical Insurance Trust Funds ⁵ from which benefits are paid under Part B. Coverage includes physicians' services and various other medical and health services generally not covered by Part A.

Part B is administered through fiscal intermediaries (carriers), ⁶ private entities, like Blue Shield of Florida, Inc. Beneficiaries are reimbursed, or doctors holding assignments from them are paid, on the basis of the amounts charged, subject to the carriers' responsibility to establish appropriate reasonable amounts. ⁷ The carrier is a fiscal conduit of the Supplementary Medical Insurance Trust Fund without vested interest in the reimbursement of submitted claims, but contractually obligated to the Secretary to make a determination of "coverage" and to make payment thereon. ⁸ Because it would not be administratively feasible to routinely require, in advance of payment, full medical documentation of the services, claims are paid based on the physician's certification that the services he performed were medically necessary. ⁹ The physician is on notice that the assignment he takes from the patient is valid only where the services provided are medically necessary. ¹⁰ To insure that Medicare funds are expended only for services that are reasonable and necessary, ¹¹ the carriers have developed the capacity for detecting deviations in a physicians' practice from norms established by his peers. Blue Shield of Florida maintains physician "profiles" for each practitioner who treats Medicare beneficiaries. These profiles can alert the carrier to a physician who is providing services more frequently than his contemporaries. When an unusual pattern of practice is detected, the carrier conducts an in-depth post-payment review.

The Act provides an opportunity for a fair hearing to a beneficiary (or an assignee) if the amount in controversy is $100 or more, the requested reimbursement is denied, or the amount of reimbursement is in controversy or is not acted upon with reasonable promptness. ¹²

From 1971 through 1975, Blue Shield of Florida made payments to Dr. Sanet on claims assigned to him by Medicare beneficiaries. The carrier reviewed a sample of claims which Dr. Sanet had submitted during 1974 and 1975. After consultation with the Florida Medical Association and the Dade County Medical Association Peer Review Committee, the carrier concluded that Dr. Sanet was overpaid in the amount of $4,009.66 during 1974 and $2,509.12 during 1975, because certain treatments were not medically reasonable and necessary. By letter dated January 15, 1979, the carrier advised Dr. Sanet of the overpayment determination for the years 1974 and 1975. Although Dr. Sanet was advised in the letter of his right to an administrative hearing, he did not request a hearing and the six-month deadline for making such a request passed.

Judicial Review of Medicare Findings

Dr. Sanet attacks the summary judgment. He asserts that the district court erred in determining that it was without jurisdiction to consider his claim that Blue Shield's sampling techniques violate due process.

The Medicare Act incorporates some procedural provisions of the Social Security Act. ¹³ A decision of the Secretary after a hearing is final.

(h) The findings and decisions of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.

42 U.S.C. § 405(h).

Judicial review of Social Security benefit decisions is provided for in 42 U.S.C. § 405(g), but this section was not incorporated into the health insurance subchapter. ¹⁴ 42 U.S.C. § 1395 limits review to determinations of entitlement under either Part A or Part B or determinations of amount of benefits under Part A. Congress intentionally provided for no judicial review of Part B reimbursement determinations. ¹⁵

Under the supplementary plan, carriers, not the Secretary, would review beneficiary complaints regarding the amount of benefits, and the bill does not provide for judicial review of a determination concerning the amount of benefits under Part B.... It is intended that the remedies provided by these review procedures shall be exclusive.

Report on the Senate Committee on Finance, S.Rep.No.404, Part I, 89th Cong., 1st Sess. 54-55 (1965) U.S.Code Congressional & Administrative News, pp. 1943, 1995.

Senator Bennett, a member of the Senate Finance Committee which drafted the 1972 amendments, explained the purpose of the bill "was to reconfirm the original intention of the law that the courts can determine only eligibility," adding:

The situations in which Medicare decisions are appealable to the courts were intended in the original law to be greatly restricted in order to avoid overloading the courts with quite minor matters. The law refers to "entitlement" as being an issue subject to court review and the word was intended to mean eligibility for any benefits of Medicare but not to decisions on a claim for payment for a given service.

118 Cong.Rec. 33992 (October 5, 1972).

This court, en banc, has considered the reimbursement scheme in Dr. John T. MacDonald Foundation, Inc. v. Califano, 571 F.2d 328 (5th Cir.), cert. denied, 439 U.S. 893, 99 S.Ct. 250, 58 L.Ed.2d 238 (1978). There we said:

The question can be framed quite simply: Does 42 U.S.C. § 405(h), incorporated by reference into the Medicare Act by 42 U.S.C. § 1395ii, preclude district court review of a decision by the Secretary?

Id. at 330. By a divided court sitting en banc, we answered the question in the affirmative, at least in an action with 28 U.S.C. § 1331 as the basis for jurisdiction. However, since appellant in that case urged a deprivation of substantive due process, a constitutional claim, our court referred the matter to the Court of Claims which had held that it had jurisdiction of such claims pursuant to 28 U.S.C. § 1491 in its decision Whitecliff, Inc. v. United States, 536 F.2d 347 (Ct.Cl.1976), cert. denied, 430 U.S. 969, 97 S.Ct. 1652, 52 L.Ed.2d 361 (1977). The appellant here asserts that MacDonald does not control since the government has sued under 28 U.S.C. § 1345 and that defendant would be denied procedural due process if he could not defend against the claim of the government once the court undertook jurisdiction of the case pursuant to § 1345. Thus, a second due process claim, denial of the opportunity to defend, is added to the sampling method claim. A district court in this circuit has distinguished § 1345 from § 1331:

The issue before this court is whether or not in an action brought by the Government for recoupment where the court has subject matter jurisdiction under 28 U.S.C. § 1345, the court is precluded by §§ 1395ii and 405(h), Title 42, United States Code, from reviewing the merits of the claim. If those statutes are construed to permit the Government to seek judicial relief on the one hand and on the other to deny the defendant the right to judicial hearing on the merits, their constitutionality is highly questionable. However, the court does not need to decide the constitutional issue because 42 U.S.C. § 405(h) is subject to a reasonable interpretation which would allow this court to avoid it. The last sentence of Section 405(h) addresses itself specifically to judicial proceedings brought under 28 U.S.C. § 1331. It is reasonable to infer from the specific nature of that language that it states the extent to which Congress intended to preclude judicial review of decisions by the Secretary. It is, therefore, the opinion of this court that where the court's jurisdiction is predicated on 28 U.S.C. § 1345, the court is not precluded by §§ 1395ii and 405(h), supra, from reviewing the merits of the claim.

United States v. Bragg, 493 F.Supp. 470, 473 (M.D.Fla.1980).

The government argues that Bragg was wrongly decided. 42 U.S.C. §...