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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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Notice: This opinion is subject to formal revision before publication in the

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the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 4, 2002 Decided June 20, 2003

No. 01-5294

PUBLIC CITIZEN, INC.,

APPELLEE

v.

U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AND

CENTERS FOR MEDICARE AND MEDICAID SERVICES, F/K/A

HEALTH CARE FINANCING ADMINISTRATION,

APPELLANTS

Consolidated with

01–5298

Appeals from the United States District Court

for the District of Columbia

(No. 00cv00731)

G. Michael Harvey, Assistant U.S. Attorney, argued the

cause for appellants. With him on the briefs were Roscoe C.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #01-5294 Document #755607 Filed: 06/20/2003 Page 1 of 30
2

Howard, Jr., U.S. Attorney, R. Craig Lawrence, Assistant

U.S. Attorney, Alex M. Azar II, General Counsel, U.S. Department of Health & Human Services, and Henry R.

Goldberg, Deputy Associate General Counsel.

Darrel J. Grinstead and Jeffrey D. Pariser were on the

brief for amici curiae The American Hospital Association, et

al., in support of appellants and reversal.

Amanda Frost argued the cause for appellee. With her on

the brief was Allison Zieve. Brian Wolfman entered an

appearance.

Sarah Lenz Lock, Dorothy Siemon, Michael Schuster,

Vicki Gottlich, and Gill Deford were on the brief for amici

curiae The Center for Medicare Advocacy, Inc., and AARP in

support of appellee urging affirmance.

Before: EDWARDS, ROGERS, and GARLAND, Circuit Judges.

Opinion for the Court filed by GARLAND, Circuit Judge.

GARLAND, Circuit Judge: When a Medicare beneficiary files

a complaint with a Peer Review Organization (PRO) about

the quality of medical services that he or she has received,

the Peer Review Improvement Act requires the PRO to

‘‘inform the individual TTT of the organization’s final disposition of the complaint.’’ 42 U.S.C. § 1320c–3(a)(14). According to the Health Care Financing Administration (HCFA) of

the Department of Health and Human Services (HHS), a

PRO can comply with this requirement by sending the complainant a form letter that merely states that the PRO has

examined the complainant’s concerns and that it will take

appropriate action if warranted.1

 Indeed, if the complainant’s

health care practitioner objects to the PRO providing infor1 HHS has recently renamed PROs as Quality Improvement

Organizations, and has changed the name of HCFA to the Centers

for Medicare & Medicaid Services. See 67 Fed. Reg. 36,539 (May

24, 2002); 66 Fed. Reg. 35,437 (July 5, 2001). For convenience, this

opinion will continue to use the PRO/HCFA terminology, following

the practice of the parties and of the district court.

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mation that explicitly or implicitly identifies the practitioner,

HCFA bars the PRO from saying anything more.

We conclude that the statutory command to inform a

complainant of the ‘‘final disposition’’ of the complaint requires more than what HCFA currently permits. At a

minimum, it requires the organization to notify the complainant of the results of its review. We therefore affirm the

district court’s order invalidating those provisions of the

Department’s Peer Review Organization Manual that bar

PROs from providing such information to complaining beneficiaries.

I

A

In 1982, Congress amended the Social Security Act by

enacting the Peer Review Improvement Act of 1982, Pub. L.

No. 97–248 §§ 141–150, 96 Stat. 324 (1982) (codified as

amended at 42 U.S.C. § 1320c et seq.). The 1982 Act called

for HHS to contract with PROs to perform a range of quality

improvement and professional review activities. PROs are

private, geographically based organizations composed of licensed doctors ‘‘engaged in the practice of medicine or surgery in the area.’’ 42 U.S.C. § 1320c–1. HCFA contracts

with PROs to review the quality, reasonableness, and efficiency of medical services provided under Medicare, as well as to

determine whether the services provided are within Medicare’s statutory coverage. Id. § 1320c–3(a)(1); see also id.

§ 1395y(g).

Section 1320c–3(a)(1) of the statute requires each PRO to

‘‘review some or all of the professional activities’’ of physicians and other providers of services for which payment may

be made under Medicare. Id. § 1320c–3(a)(1). The statute

also contains a number of confidentiality provisions, including

§ 1320c–9(a), which states:

Any data or information acquired by any such organization in the exercise of its duties and functions shall be

held in confidence and shall not be disclosed to any

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person except—(1) to the extent TTT necessary to carry

out the purposes of this part, (2) in such cases and under

such circumstances as the Secretary shall by regulations

provide to assure adequate protection of the rights and

interests of patients, health care practitioners, or providers of health care, or (3) in accordance with [provisions

permitting specified disclosures to federal and state

agencies].

42 U.S.C. § 1320c–9(a).

On April 17, 1985, pursuant to the delegation of authority

contained in § 1320c-(9)(a)(2), HCFA issued regulations defining ‘‘confidential information’’ to include: ‘‘(1) Information

that explicitly or implicitly identifies an individual patient,

practitioner or reviewer[;] (2) Sanction reports and recommendations[;] (3) Quality review studies which identify patients, practitioners or institutions[; and] (4) PRO deliberations.’’ 42 C.F.R. § 480.101(b). The regulations, however,

also incorporate the statutory exceptions for disclosure of

confidential information enumerated in § 1320c–9(a)(1) & (3)

and set out above. 42 C.F.R. § 480.103. They further

provide that a PRO ‘‘may disclose to any person, agency or

organization, information on a particular practitioner or reviewer with the consent of that practitioner or reviewer

provided that the information does not identify other individuals.’’ Id. § 480.133(a)(2)(iii). The regulations became effective on May 17, 1985, and have not changed in relevant part

since that time. Compare 42 C.F.R. §§ 476.101(b), 476.103,

476.133 (1985), with 42 C.F.R. §§ 480.101(b), 480.103, 480.133

(2002).

In October 1986, approximately a year and a half after

HCFA promulgated its confidentiality regulations, Congress

amended § 1320c–3 to impose upon PROs the further duty

that is specifically at issue in this case. The new section,

§ 1320c–3(a)(14), provides as follows:

The organization shall conduct an appropriate review of

all written complaints about the quality of services TTT

not meeting professionally recognized standards of

health care, if the complaint is filed with the organization

by an individual entitled to benefits for such services TTT

(or a person acting on the individual’s behalf). The

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organization shall inform the individual (or representative) of the organization’s final disposition of the complaint. Before the organization concludes that the quality of services does not meet professionally recognized

standards of health care, the organization must provide

the practitioner or person concerned with reasonable

notice and opportunity for discussion.

42 U.S.C. § 1320c–3(a)(14) (emphasis added). HHS has not

promulgated any regulation that implements or addresses

§ 1320c–3(a)(14).

B

On December 15, 1998, Doris Shipp went to Baptist East

Hospital in Louisville, Kentucky, complaining of abdominal

pain. Over the next few months, Mrs. Shipp was seen by

Drs. Peter Thurman, Thomas C. Dedman, and David Jolgren.

Mrs. Shipp died of cancer in June 1999. On December 6,

1999, her husband, David Shipp, wrote to Health Care Excel

(Excel), the PRO responsible for monitoring the delivery of

Medicare services in Kentucky, and asked Excel to investigate and respond to his concerns about the quality of care

that his wife had received.

In response, Excel sent Mr. Shipp three letters—one for

each of the three physicians—entitled ‘‘Notice: Quality of

Care Determination.’’ The first letter, concerning Dr. Thurman, informed Shipp that ‘‘[n]o quality of care concerns were

identified with the services provided by Dr. Thurman,’’ and

that ‘‘[i]t has been determined that the examination your wife

received on March 24, 1999, was appropriate and not expected

to reveal the cecal cancer diagnosis that was discovered

later.’’ J.A. 58. This language approximates the model

response provided in HCFA’s Medicare Peer Review Organization Manual for use in situations ‘‘[w]hen the involved

practitioner consents to disclosure of information that identifies him/her.’’ HCFA, Medicare Peer Review Organization

Manual Transmittal 84, Ex. 5–17 (Dec. 21, 2000) [hereinafter

PRO Manual].

The letters concerning Drs. Dedman and Jolgren, by contrast, advised Mr. Shipp that, because those doctors did not

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consent to the release of information about the care they

provided, Excel could not provide specific information about

the results of its review. Each letter contained the following

paragraph:

We have carefully examined all the issues raised in your

correspondence and conducted a thorough review of the

care your wife received. Federal laws and regulations

prohibit us from releasing information about your care

without the consent of your physician. Your wife’s physician did not give consent; therefore, we are unable to

provide any specific information about the results of our

review. Our inability to provide this information does

not mean that we found any problem with the care she

received. However, please be assured that if we did find

a problem, we will take all necessary action when our

review findings warrant it.

J.A. 54, 56 (emphasis added). This response approximates

the model provided in the PRO Manual for use ‘‘[w]hen the

involved practitioner does not consent to disclosure of information that explicitly or implicitly identifies him/her,’’ PRO

Manual, Ex. 5–17,2

 and follows the instructions contained in

the manual’s narrative sections.3

 PRO manuals since 1990

2 HCFA’s model letter states:

We have carefully examined your concern(s) and conducted a

thorough review of the medical records pertaining to the

services that (you or name of beneficiary) received. Federal

regulations prohibit us from releasing information that identifies the involved practitioner without his or her consent. Because the involved practitioner did not give (his or her) consent,

we are unable to release information that would explicitly or

implicitly identify him/her. This does not necessarily mean

that we found a problem with the services (you or name of

beneficiary) received. However, we will take appropriate action if warranted by our review findings.

PRO Manual, Ex. 5–17 (italics added; underlining in original).

3 The manual instructs the PRO to write the complainant and: (i)

‘‘Assure that you conducted a complete review of the medical

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have expressed a similar nondisclosure policy.4

C

Mr. Shipp is a member of Public Citizen, Inc., a nonprofit

consumer advocacy organization. On behalf of Mr. Shipp and

other similarly situated members, Public Citizen sued HHS

and HCFA under the Administrative Procedure Act, 5 U.S.C.

§ 706(2)(A), contending, inter alia, that the PRO Manual’s

instructions violate § 1320c–3(a)(14)’s requirement that PROs

inform complainants of the ‘‘final disposition’’ of the complaint. Public Citizen asked the district court: (i) to declare

invalid the regulations and policies that prohibit PROs from

disclosing the results of PRO investigations when to do so

would identify a nonconsenting practitioner; and (ii) to direct

the defendants to retract those manual provisions and inform

PROs that they must disclose the results of their investigations. First Am. Compl. at 4–5 (J.A. 35–36).

On cross-motions for summary judgment, the district court

found it clear from ‘‘ ‘the history, structure, and underlying

policy purpose of the statute’ TTT that § 1320c–3(a)(14) requires a PRO to inform beneficiary complainants of the

substantive disposition of the complaint.’’ Public Citizen,

Inc. v. Department of Health & Human Servs., 151 F. Supp.

records and thoroughly examined all issues raised by the complainant’’; (ii) ‘‘Explain that you are unable to provide any information

that explicitly or implicitly identifies the involved practitioner because applicable regulations prohibit the release of such information

without the practitioner’s consent’’; (iii) ‘‘Explain that your inability

to disclose information that explicitly or implicitly identifies the

involved practitioner does not mean that you found any problem

with the care furnished’’; and (iv) ‘‘Assure that even though you are

unable to disclose information that TTT identifies the involved

practitioner, you are taking necessary action if your review warrants it.’’ PRO Manual § 5030(C).

4 See HCFA, Medicare Peer Review Organization Manual Transmittal 76 § 5030(C) (Sept. 1999) (J.A. 99–100); HCFA, Medicare

Peer Review Organization Manual Transmittal 41 § 5250(B) (Oct.

1994) (J.A. 116); HCFA, Medicare Peer Review Organization Manual Transmittal 27 § 5045(B) (1990) (J.A. 127).

USCA Case #01-5294 Document #755607 Filed: 06/20/2003 Page 7 of 30
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2d 64, 71 (D.D.C. 2001) (quoting Bell Atl. Tel. Cos. v. FCC,

131 F.3d 1044, 1048 (D.C. Cir. 1997)). The court granted

Public Citizen’s motion for summary judgment and, inter alia,

held that ‘‘the provisions in HCFA’s PRO Manual prohibiting

disclosure of the results of § 1320c–3(a)(14) investigations are

contrary to law.’’ Id. at 77.

II

We review the district court’s grant of summary judgment

de novo. Arizona v. Thompson, 281 F.3d 248, 253 (D.C. Cir.

2002). The government contends that our analysis is governed by the standard of review articulated by the Supreme

Court in Chevron U.S.A. Inc. v. Natural Resources Defense

Council, 467 U.S. 837 (1984). Under that decision, when

reviewing an agency’s construction of a statute that it administers, we first ask ‘‘whether Congress has directly spoken to

the precise question at issue.’’ Chevron, 467 U.S. at 842. If

so, ‘‘that is the end of the matter’’ and we ‘‘must give effect to

the unambiguously expressed intent of Congress.’’ Id. at

842–43. If, however, ‘‘the statute is silent or ambiguous with

respect to the specific issue,’’ we move to the second step and

must defer to the agency’s interpretation as long as it is

‘‘based on a permissible construction of the statute.’’ Id. at

843.

The one thing that is indisputably clear about the statute at

issue here is that it does not unambiguously mandate the

government’s interpretation, and the government does not

contend otherwise. See Appellants’ Br. at 14, 40–41. The

district court concluded that § 1320c–3(a)(14) unambiguously

supports the plaintiff’s interpretation and requires PROs to

advise complainants of the results of the peer review investigation. It therefore held, under step one of Chevron, that the

government’s interpretation—which construes the section as

requiring PROs to do nothing more than inform beneficiaries

that their complaint has been disposed of, without describing

the content of that disposition—cannot stand. We find considerable merit in the district court’s view of congressional

USCA Case #01-5294 Document #755607 Filed: 06/20/2003 Page 8 of 30
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intent. For the reasons discussed below, however, we need

not (and therefore do not) rest our decision on Chevron’s first

step.

Nor do we rely on the second step of Chevron. As the

Supreme Court has recently held, not all statutory interpretations by agencies qualify for the level of deference afforded

by that step. See United States v. Mead Corp., 533 U.S. 218,

227–31 (2001); Christensen v. Harris County, 529 U.S. 576,

587 (2000). In Mead, the Court declared Chevron deference

appropriate only where Congress has ‘‘delegated authority to

the agency generally to make rules carrying the force of law,

and TTT the agency interpretation claiming deference was

promulgated in the exercise of that authority.’’ 533 U.S. at

226–27.

There is no dispute that the first part of this requirement is

met by Congress’ delegation to the Secretary of the authority

to promulgate ‘‘regulations’’ governing PROs in general, 42

U.S.C. § 1320c–3(a)(8), and the disclosure of PRO information

in particular, id. § 1320c–9(a) (forbidding disclosure of PRO

data except in accordance with the statute, or ‘‘in such cases

and under such circumstances as the Secretary shall by

regulations provide to assure adequate protection of the

rights and interests of patients, health care practitioners, or

providers of health care’’ (emphasis added)). But the Secretary has not promulgated any regulation that interprets or

even mentions § 1320c–3(a)(14). The only potentially relevant regulations, the confidentiality regulations of 42 C.F.R.

pt. 480 described above, were promulgated before § 1320c–

3(a)(14) was enacted in 1986. See Medicare Program; Acquisition, Protection, and Disclosure of Utilization and Quality

Control Peer Review Organization (PRO) Information, 50

Fed. Reg. 15,347 (Apr. 17, 1985). Accordingly, as counsel for

the government conceded at oral argument, those regulations

cannot provide a basis for deferring to the defendants’ interpretation of the meaning of the subsequently enacted phrase,

‘‘final disposition of the complaint.’’ See Christensen, 529

U.S. at 587 (declining to apply Chevron deference to regulation that did not address statutory issue).

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The only agency pronouncement upon which the defendants’ claim for deference relies is HCFA’s PRO Manual. It

is true, as defendants note, that Chevron deference is not

necessarily limited to regulations that are the product of

notice-and-comment rulemaking. See Barnhart v. Walton,

535 U.S. 212, 221 (2002); Mead, 533 U.S. at 231. But the

Supreme Court has twice cited ‘‘agency manuals’’ as an

archetype of the kind of document that is not entitled to such

deference. Mead, 533 U.S. at 234 (declaring that interpretations such as those ‘‘in policy statements, agency manuals,

and enforcement guidelines’’ are ‘‘beyond the Chevron pale’’

(internal quotation marks omitted)); Christensen, 529 U.S. at

587 (‘‘[I]nterpretations contained in policy statements, agency

manuals, and enforcement guidelines, all of which lack the

force of law—do not warrant Chevron-style deference.’’); see

also Washington State Dep’t of Soc. & Health Servs. v.

Guardianship Estate of Keffeler, 123 S.Ct. 1017, 1026 (2003)

(applying Skidmore v. Swift & Co., 323 U.S. 134 (1944), rather

than Chevron, to statutory interpretations contained in the

Social Security Administration’s Program Operations Manual

System).5

Whether or not some agency manuals might still be worthy

of Chevron deference, there is nothing to distinguish the one

at issue here from those disfavored by the Supreme Court.

Indeed, this court has previously held that similar sections of

HCFA’s PRO Manual do not involve ‘‘substantive rights.’’

American Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1045, 1049–

51 (D.C. Cir. 1987). To the contrary, we said that ‘‘[a] peer

review organization is essentially an enforcement agent of the

federal government,’’ id. at 1048, and that the manual merely

5 See also Power v. Barnhart, 292 F.3d 781, 785–86 (D.C. Cir.

2002) (noting the government’s concession that Chevron did not

apply to the Social Security Administration’s Hearings, Appeals and

Litigation Law Manual); American Fed’n of Gov’t Employees v.

Veneman, 284 F.3d 125, 129 (D.C. Cir. 2002) (holding that the

model meat inspection program at issue there had ‘‘no more status

than opinion letters, policy statements, agency manuals, and enforcement guidelines, all of which are undeserving of Chevron

deference’’).

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‘‘maps out an enforcement strategy for the PROs with whom

HHS contracts,’’ id. at 1049; see id. at 1050–51 (holding that

the manual’s commands are neither legislative nor interpretive rules); see also Mead, 533 U.S. at 234 (declaring that

interpretations contained in agency ‘‘enforcement guidelines’’

fail to qualify for Chevron deference). And while the PRO

statute expressly authorizes the Secretary to promulgate

‘‘regulations’’ to carry out its provisions, 42 U.S.C. § 1320c–

3(a)(8), it contains no mention of agency manuals.

In a short passage in its opening brief, the government

argues that the manual has the force of law because the

contracts between HCFA and the PROs require PROs to

adhere to the confidentiality provisions of the manual. Appellants’ Br. at 43 (referring to sample contract, at J.A. 131).

But the contracts with the PROs are not materially different

from a myriad of contracts entered into by a myriad of

agencies. See Bowen, 834 F.2d at 1048 (‘‘Like an independent contractor hired to construct a government building, the

PRO carries out a task for pay at the behest of the government.’’).6

 No court has read Mead as extending Chevron

deference to a contract entered into between an agency and

a private party, and we are loathe to permit agencies to

bootstrap documents that otherwise would not warrant Chevron deference into a more exalted status merely by mentioning them in such a contract. Cf. J.A. 131 (sample PRO

contract, requiring PRO to adhere to ‘‘the Code of Federal

Regulations, TTT the PRO Manual, and other administrative

directives’’ (emphasis added)). Indeed, according Chevron

deference would be particularly inappropriate in this case because the complaining Medicare recipient—for whose benefit

§ 1320c–3(a)(14) was enacted—is a stranger to the contract

upon which the government seeks to rely.

Finally, even if we were prepared to accord Chevron deference to the PRO Manual, that document contains no interpre6 We further held in Bowen that ‘‘any contract provisions that are

legislative are subject to [5 U.S.C.] § 553’s notice and comment

requirements.’’ Id. at 1054. To our knowledge, none of the manual

provisions at issue here has been subjected to notice and comment.

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tation of § 1320c–3(a)(14) to which we might defer. In an

introductory paragraph, the manual does contain a reference

to § 1320c–3(a)(14)’s requirement that the PRO ‘‘inform beneficiaries or their designated representatives of the final disposition of the complaint,’’ PRO Manual § 5000, but this does

little more than repeat the statutory language. As authority

for its nondisclosure policy, the manual cites only the confidentiality regulations promulgated before § 1320c–3(a)(14)

appeared on the scene.7

 And the part of the manual that

contains the model response letters and instructions does not

reference § 1320c–3(a)(14) at all, relying instead on those

preexisting confidentiality regulations.8

 Most important,

there is no place in the manual where the agency explains

why it believes that a PRO satisfies the statutory injunction

to inform a complainant of the ‘‘final disposition’’ of the

complaint simply by telling him that it has investigated the

matter and will take action if appropriate. Because the

manual thus contains no reasoning that we can evaluate for

its reasonableness, the high level of deference contemplated

in Chevron’s second step is simply inapplicable.9

7 See PRO Manual § 5000 (stating that ‘‘42 CFR 480.32 addresses

disclosure of information about practitioners, reviewers, and institutions,’’ and that ‘‘[t]he regulations also limit your ability to give

specifying details about a complaint review’’); id. § 5035 (‘‘[D]isclosure of PRO quality review information is governed by federal

confidentiality regulations at 42 CFR Part 480.’’).

8 See PRO Manual § 5030(C) (‘‘Explain that you are unable to

provide any information that explicitly or implicitly identifies the

involved practitioner because applicable regulations prohibit the

release of such information without the involved practitioner’s consent.’’ (emphasis added)); id. Ex. 5–17 (model letter, noting that

‘‘[f]ederal regulations’’ bar release of the information).

9 Cf. Adamo Wrecking Co. v. United States, 434 U.S. 275, 287 n.5

(1978) (stating that ‘‘the mere promulgation of a regulation, without

a concomitant exegesis of the statutory authority for doing so,

obviously lacks ‘power to persuade’ as to the existence of such

authority’’); SEC v. Sloan, 436 U.S. 103, 118 (1978) (reaching the

same conclusion ‘‘where this Court can only speculate as to the

Commission’s reasons for reaching the conclusion that it did’’

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Although Chevron deference is unwarranted, HCFA’s interpretation of § 1320c–3(a)(14) is nevertheless due a degree

of deference under the rule of Skidmore v. Swift & Co., 323

U.S. 134 (1944). As Mead explained, under Skidmore an

agency’s statutory interpretation remains ‘‘eligible to claim

respect according to its persuasiveness.’’ Mead, 533 U.S. at

221; see Christensen, 529 U.S. at 587 (holding that where

‘‘Chevron-style deference’’ is unwarranted, agency interpretations are ‘‘ ‘entitled to respect’ TTT, but only to the extent that

those interpretations have the ‘power to persuade’ ’’ (quoting

Skidmore, 323 U.S. at 140)).

III

In determining the proper construction of § 1320c–3(a)(14),

both parties urge us to examine the statute’s text, structure,

legislative history, and purpose. See Bell Atl. Tel. Cos., 131

F.3d at 1047. We proceed to that task in the following

sections.

A

‘‘We turn first, as we must, to the language of the statute,

‘the most important manifestation of Congressional intent.’ ’’

California ex rel. Brown v. Watt, 668 F.2d 1290, 1304 (D.C.

Cir. 1981). Section 1320c–3(a)(14) states that the PRO ‘‘shall

inform the individual (or representative) of the organization’s

final disposition of the complaint.’’ HCFA contends that the

term ‘‘final disposition’’ has merely a procedural meaning—

that the PRO must inform the complainant that the matter

has been finally disposed of, but that it need include nothing

about the substance of that disposition. As the agency points

out, there are dictionary definitions that are somewhat supportive of that view, although even these are ambiguous. See

MERRIAM WEBSTER’S COLLEGIATE DICTIONARY 335 (10th ed. 1996)

(defining ‘‘disposition’’ as ‘‘the act or the power of disposing’’);

because the agency’s orders did not ‘‘address[ ] in any detail the

statutory authorization under which it took [the] action’’).

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BLACK’S LAW DICTIONARY 423 (5th ed. 1979) (defining ‘‘disposition’’ as the ‘‘[a]ct of disposing’’).

We note at the outset that even if this were the appropriate

definition of ‘‘final disposition,’’ the PRO Manual’s instructions and model letter would still be invalid. The manual’s

provisions do not require the PRO to advise the complainant

that the matter has been disposed of, but only that the PRO

has reviewed the matter and ‘‘will take appropriate action if

warranted by our review findings.’’ PRO Manual, Ex. 5–17

(emphasis added); see also Letter from Excel to David Shipp

(Aug. 7, 2000) (J.A. 56) (advising that ‘‘if we did find a

problem, we will take all necessary action when our review

findings warrant it’’ (emphasis added)). In short, because

they speak of the possibility of future action and not of a final

disposition that has already occurred, the manual’s provisions

do not even comply with the defendants’ own construction of

§ 1320c–3(a)(14).10

But we are not, in any event, persuaded by HCFA’s

construction. To the contrary, the far more persuasive reading is that to inform someone of the ‘‘final disposition’’ of a

matter means to inform him of its substantive result or

conclusion. See, e.g., DANIEL J. ORAN, ORAN’S DICTIONARY OF

THE LAW 134 (1983) (defining ‘‘disposition’’ as final ‘‘settlement

or result’’); WILLIAM C. BURTON, BURTON’S LEGAL THESAURUS

187 (3d ed. 1998) (including as synonyms ‘‘conclusion, decision, TTT final settlement of a matter, finding, order, pronouncement, TTT resolution, settlement, [and] solution’’);

BLACK’S LAW DICTIONARY 484 (7th ed. 1999) (‘‘[a] final settlement or determination’’).11 The context that comes quickest

10 Compare Appellants’ Br. at 16 (arguing that the statute should

be ‘‘read as permitting a PRO TTT to inform the complainant TTT

that the complaint was received, that it was investigated, and that

corrective action was taken if appropriate’’ (emphasis added)).

11 See also Administrative Procedure Act § 1(6), 5 U.S.C. § 551(6)

(defining ‘‘order’’ as ‘‘the whole or a part of a final disposition’’); 42

U.S.C. § 405(j)(6) (requiring the Social Security Commissioner to

report to Congress on the ‘‘final disposition,’’ ‘‘including any criminal penalties imposed,’’ of certain restitution cases); 42 U.S.C.

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to the judicial mind, of course, is the disposition of a case.

See, e.g., MERRIAM WEBSTER’S COLLEGIATE DICTIONARY, at 335

(defining ‘‘disposition’’ as the ‘‘final arrangement’’ of a case);

WILLIAM STATSKY, WEST’S LEGAL THESAURUS/DICTIONARY 247

(1985) (defining ‘‘disposition’’ as ‘‘[t]he final arrangement or

decision (we awaited the court’s disposition)’’); ORAN’S DICTIONARY OF THE LAW, at 134 (‘‘A court’s disposition of a case may

be to give a judgment, dismiss the case, pass sentence on a

criminal, etc.’’ (emphasis omitted)). After hearing argument,

judges frequently tell the parties that they will advise them of

the disposition of the matter.12 We expect that litigants,

including the parties to this appeal, would be both surprised

and puzzled if all we told them at the end of the day was that

‘‘the case has been decided’’—without telling them what that

decision was. This view is, if anything, reinforced by the fact

that the statute commands the PRO to inform the complainant ‘‘of’’ the final disposition, not simply ‘‘when’’ that disposition has taken place.

This view is further reinforced by considering the context

in which the information command that is contained in

§ 1320c–3(a)(14)’s second sentence appears. The preceding

sentence defines the types of complaints that PROs must

investigate: ‘‘complaints about the quality of services TTT not

meeting professionally recognized standards of health care.’’

42 U.S.C. § 1320c–3(a)(14) (emphasis added). The following

sentence (the section’s third) imposes an administrative due

process requirement before the PRO may make a certain

§ 3759(b)(1) (requiring the improvement of criminal justice records

by ‘‘complet[ing] TTT criminal histories to include the final dispositions of all arrests for felony offenses’’); 29 U.S.C. § 794a (describing remedies for an employee ‘‘aggrieved by the final disposition of

[a Rehabilitation Act] complaint’’); 42 U.S.C. § 2000e–16(c) (same

for federal employee ‘‘aggrieved by the final disposition of his

[EEOC] complaint’’).

12 Cf. FED. R. APP. P. 21(b)(7) (directing the appeals court’s clerk

to ‘‘send a copy of the final disposition’’ to the trial court judge

when the appellate court decides a petition for mandamus); FED. R.

APP. P. 28 (requiring that appellant’s brief contain ‘‘a statement of

the case briefly indicating TTT the disposition below’’).

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16

kind of finding: ‘‘Before the organization concludes that the

quality of services does not meet professionally recognized

standards of health care, the organization must provide the

practitioner TTT with reasonable notice and opportunity for

discussion.’’ Id. (emphasis added). This context confirms

that the information that is to be imparted to the Medicare

beneficiary—after the PRO investigates the complaint and

affords the practitioner due process—should contain the

PRO’s determination as to whether the quality of services

received met ‘‘professionally recognized standards of health

care.’’

At oral argument, the government contended that the

procedural protections of the third sentence of § 1320c–

3(a)(14) were designed not to afford practitioners due process

before sharing adverse findings with complainants, as one

would conclude from the two preceding sentences, but rather

to protect practitioners from unwarranted notification to state

licensing boards. It is true that another section, § 1320c–

3(a)(9)(B), requires a PRO to notify a state licensing board if

it finds that a physician has furnished services not meeting

professionally recognized standards of health care. 42 U.S.C.

§ 1320c–3(a)(9)(B). Section 1320c–3(a)(9)(B), however, contains its own due process provision, permitting such notification only ‘‘after notice and hearing.’’ Id. It would be illogical

to conclude that the procedural protections of § 1320c–

3(a)(14) were intended not to precede the beneficiary notification required by that section, but merely to duplicate protections that § 1320c–3(a)(9)(B) already provides as prerequisites to its state board notification requirement. Moreover,

there is an even more fundamental flaw in the government’s

argument: because § 1320c–3(a)(9)(B) was not enacted until

1990, four years after § 1320c–3(a)(14) became law,13 it simply

is not possible that the third sentence of § 1320c–3(a)(14) was

intended to provide due process protections for the not-yetenacted notification requirement of § 1320c–3(a)(9)(B).

13 See Pub. L. No. 101–508 § 4205(d)(1)(A), 104 Stat. 1388 (1990).

No similar provision existed in 1986, when § 1320c–3(a)(14) was

enacted. See 42 U.S.C. § 1320c–3 et. seq. (1982 & Supp. IV 1986).

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17

In sum, both the text and the context of the second

sentence of § 1320c–3(a)(14) persuade us that it was intended

to require a PRO to inform a complainant of the results of its

review of his complaint, and specifically of whether the ‘‘quality of the services’’ that the recipient received met ‘‘professionally recognized standards of health care.’’ 42 U.S.C.

§ 1320c–3(a)(14).

B

HCFA next urges us to look beyond the words of § 1320c–

3(a)(14), both to other provisions of the PRO statute and to its

overall structure, arguing that the district court’s interpretation of the section is inconsistent with the statutory scheme.

We find no such inconsistency.

The government’s first contention is that requiring PROs

to notify beneficiary complainants of the results of their

reviews would abrogate the confidentiality provisions of the

PRO statute. The principal confidentiality provision is

§ 1320c–9(a), which, as noted above, states:

Any data or information acquired by any such organization in the exercise of its duties and functions shall be

held in confidence and shall not be disclosed to any

person except—(1) to the extent TTT necessary to carry

out the purposes of this part, (2) in such cases and under

such circumstances as the Secretary shall by regulations

provide to assure adequate protection of the rights and

interests of patients, health care practitioners, or providers of health care, or (3) in accordance with [provisions

permitting specified disclosures to federal and state

agencies].

42 U.S.C. § 1320c–9(a) (emphasis added).

HCFA contends that requiring disclosure of the results of

the PRO review is contrary to § 1320c–9(a)(2) because such

disclosure is not affirmatively authorized by the Secretary’s

regulations. But § 1320c–9(a)(2) does not permit the Secretary to impose his own nondisclosure requirements; rather, it

authorizes the Secretary to promulgate regulatory exceptions

to the general nondisclosure requirement. Other exceptions

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18

are contained in the statute itself, including the exception for

disclosures ‘‘necessary to carry out the purposes of this part.’’

Id. § 1320c–9(a)(1). Since one of those ‘‘purposes’’ is specified in § 1320c–3(a)(14), a disclosure made pursuant to that

section cannot fairly be said to abrogate the statutory

scheme.

The government’s second argument invokes the canon that,

where ‘‘Congress includes particular language in one section

of a statute but omits it in another section of the same Act, it

is generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.’’ Russello

v. United States, 464 U.S. 16, 23 (1983) (internal quotation

marks omitted). According to the government, ‘‘Congress

has demonstrated time and again throughout the PRO statute

that it knows how to require, in plain language, the disclosure

of otherwise confidential PRO peer review results or findings,’’ by using either of those two words rather than ‘‘disposition.’’ Appellants’ Br. at 19 (emphasis added).14

The problem with this argument is that neither of those

two words, ‘‘results’’ or ‘‘findings,’’ is materially plainer—or

more substantive—in meaning than the word ‘‘disposition.’’

Indeed, each is a synonym for the latter. See, e.g., ORAN’S

DICTIONARY OF THE LAW, at 134 (defining ‘‘disposition’’ as

‘‘[f]inal settlement or result’’); BURTON’S LEGAL THESAURUS, at

187 (listing ‘‘finding’’ as a synonym for ‘‘disposition’’).15 And

14 See, e.g., 42 U.S.C. § 1320c–3(e)(3)(A)(ii) (1982 & Supp. IV

1986) (requiring a PRO that has reviewed a hospital’s denial of

inpatient care to provide the patient with ‘‘notice’’ of the ‘‘results of

the review’’), repealed by Pub. L. No. 106–554 § 521(c), 114 Stat.

2763 (2000); 42 U.S.C. § 1320c–3(a)(9)(B) (requiring a PRO that

finds a care deficiency to notify the appropriate state licensing

boards of its ‘‘finding and of any action taken as a result of the

finding’’); id. § 1320c–3(a)(6)(B)(ii) (directing each PRO to ‘‘publish’’ and ‘‘distribute’’ a report that includes its ‘‘findings with

respect to the types of cases in which [it] has frequently determined’’ that services did not meet professionally recognized standards or were otherwise improper).

15 See also Tyler v. Cain, 533 U.S. 656, 663 n.4 (2001) (describing

‘‘holdings’’ as including ‘‘the final disposition of a case as well as

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19

because we could just as readily conclude that more detail is

required to reveal the ‘‘disposition’’ of an investigation than

merely to disclose its ‘‘results,’’ application of the Russello

canon to this statute is simply indeterminate.16 Accordingly,

we agree with the district court that, in this case, Congress’

use of slightly different words to describe various reporting

requirements shows little more than that the legislature

employed a modestly varied vocabulary to express similar

meanings. Public Citizen, 151 F. Supp. 2d at 74. Moreover,

‘‘[e]ven if Congress can be presumed to have intended that

different amounts of information be provided’’ by the use of

the different words, ‘‘there is no basis to infer that TTT the

term ‘final disposition’ should be limited to nothing more than

a procedural fact.’’ Id.

The government’s third contention is that requiring disclosure of the results of PRO reviews would ‘‘effectively nullif[y]

Congress’ prohibition on the discovery’’ of sensitive PRO

information. Appellants’ Br. at 22. That prohibition is contained in § 1320c–9(d), which was enacted four years after

§ 1320c–3(a)(14) and reads as follows:

No document or other information produced by such an

organization in connection with its deliberations in making determinations under section 1320c–3(a)(1)(B) or

1320c–5(a)(2) TTT shall be subject to subpoena or discovery in any administrative or civil proceedingTTTT

the preceding determinations necessary to that result’’ (internal

quotation marks and emphasis omitted; emphasis added)); Green v.

Bock Laundry Mach. Co., 490 U.S. 504, 527 (1989) (Scalia, J.,

concurring) (describing a particular statutory interpretation both as

‘‘an absurd, and perhaps unconstitutional result’’ and as ‘‘an unthinkable disposition’’).

16 Application of the canon to the use of the word ‘‘findings’’ is

further problematic because the sections that contain it were not

enacted until after § 1320c–3(a)(14) became part of the PRO statute

in 1986. See Pub. L. No. 101–508 § 4205(d)(1), 104 Stat. 1388 (1990)

(enacting 42 U.S.C. § 1320c–3(a)(9)(B)); Pub. L. No. 100–203

§ 4094(c), 101 Stat. 1330 (1987) (enacting 42 U.S.C. § 1320c–

3(a)(6)(B)(ii)).

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42 U.S.C. § 1320c–9(d).17 The government argues that

§ 1320c–9(d) bars disclosure of any document produced by a

PRO ‘‘in connection with its deliberations,’’ and further argues that the complaint response contemplated by the district

court constitutes just such a document.

It is plain on the face of this section, however, that the

district court’s interpretation of § 1320c–3(a)(14) cannot ‘‘nullify’’ § 1320c–9(d), because the latter has no application to a

document that is disclosed pursuant to § 1320c–3(a)(14).18

Section 1320c–9(d) expressly protects the described documents against being subject to ‘‘subpoena or discovery.’’ It

does not insulate them from compliance with the statutory

command of § 1320c–3(a)(14).

Indeed, if the government’s construction of § 1320c–9(d)

were correct, then it would not only bar a PRO from issuing

the kind of letter contemplated by the district court, but

would also bar it from issuing the letters that Excel actually

sent to Mr. Shipp. See supra Part I.B. If the letter contemplated by the district court must be viewed as being produced

‘‘in connection with’’ a PRO’s deliberations, then surely the

actual letters must be as well. Section 1320c–9(d) mentions

neither the degree of substantive detail revealed by a document nor the consent of the practitioner as a factor in its

vulnerability to subpoena. It simply states that ‘‘no’’ document ‘‘produced by such an organization in connection with its

deliberations’’ is subject to discovery. 42 U.S.C. § 1320c–9(d)

(emphasis added).

17 The referenced sections, § 1320c–3(a)(1)(B) and § 1320c–

5(a)(2), contain general delegations of authority to PROs to conduct

quality of care reviews.

18 It is also questionable whether a section like § 1320c–9(d),

which was enacted four years after § 1320c–3(a)(14), can be used to

constrain the meaning of the earlier provision. There is certainly

no ground for believing that § 1320c–9(d) repealed § 1320c–

3(a)(14), even partially. See County of Yakima v. Confederated

Tribes & Bands of the Yakima Indian Nation, 502 U.S. 251, 262

(1992) (‘‘[I]t is a cardinal rule that repeals by implication are not

favored.’’ (internal quotation marks omitted)).

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Nor is the logical difficulty of the government’s construction limited to the disclosure required by § 1320c–3(a)(14).

That section is just one of several mandating specific disclosures. See, e.g., id. § 1320c–3(a)(9)(B) (requiring disclosure

to state boards); see also PRO Manual § 5035(A) (requiring

PROs to inform the complainant of ‘‘findings’’ relating to

institutional providers). Because § 1320c–9(d) provides exceptions for none of these, it is not reasonable to read it as

governing the disclosure of documents in any context other

than that expressly covered by its terms: namely, disclosure

in response to subpoena or other administrative or civil

discovery mechanism.

Finally, the government argues more generally that it

would make no sense for Congress to require disclosure to a

beneficiary complainant of a document that may not be

disclosed in discovery to a civil litigant. They make a similar

argument based on another provision of § 1320c–9(a), which

exempts PRO documents from the requirements of the Freedom of Information Act (FOIA), 5 U.S.C. § 552. But it is

hardly surprising that Congress would permit disclosure to

the party with the most direct interest in the information—

the person who received the medical services at issue and

whose complaint initiated the investigation—while barring

disclosure to others, or even to the same recipient in a

litigation context. Indeed, FOIA itself provides an example

of such a statutory scheme. Although certain files regarding

individuals are generally unavailable to FOIA requesters, the

Privacy Act, 5 U.S.C. § 552a, permits requesters to obtain

such information pertaining to themselves.19 Moreover, al19 Compare 5 U.S.C. § 552(b)(6) (FOIA exemption for ‘‘personnel

and medical files and similar files the disclosure of which would

constitute a clearly unwarranted invasion of personal privacy’’), with

id. § 552a(d)(1) (Privacy Act requirement that an agency permit an

individual access ‘‘to his record or to any information pertaining to

him’’). See Wren v. Harris, 675 F.2d 1144, 1146 (10th Cir. 1982)

(‘‘[T]he [Privacy Act] provides rights to the individual with respect

to his own records greater than the rights of the public generally.’’).

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though ‘‘[d]iscovery limitations’’ may generally bar the production of certain documents in civil or criminal litigation,

such limitations ‘‘do not apply when FOIA requests are

presented in a discrete’’ FOIA action. North v. Walsh, 881

F.2d 1088, 1096 (D.C. Cir. 1989).20

In sum, we find no inconsistency between the requirement

that a PRO advise a complainant of the results of his complaint and the remainder of the PRO statute. To the contrary, such a requirement is very much in keeping with the

legislative scheme.

C

We turn next to an examination of the legislative history.

Each side points to a different precursor bill as evidence that

its interpretation of the final statute is correct. Although we

do not find this exercise in legislative tracking to be particularly productive, there is another element of the legislative

history that is helpful.

As the government points out, the original House version of

§ 1320c–3(a)(14) would have required a PRO to ‘‘inform the

[complainant] of the organization’s conclusions TTT and final

disposition of the complaint.’’ H.R. 5300, 99th Cong.

§ 10241(e)(1) (1986). Because the section as enacted speaks

only of the complaint’s ‘‘final disposition,’’ the government

contends that Congress must have rejected the House’s requirement that the complainant be advised of the PRO’s

conclusions. It further insists that the only meaning left for

‘‘disposition’’ is a procedural one. Public Citizen, on the other

hand, points out that the original Senate bill contemplated a

purely procedural notification similar to that propounded by

HCFA, requiring the PRO merely to ‘‘inform the individual

TTT that the organization has received the complaint and will

take appropriate action.’’ S. 2706, 99th Cong. § 633(b)(1)

20 While we have no occasion to decide the issue here, we note

that the fact that the results of a PRO’s reviews must be disclosed

to a beneficiary pursuant to § 1320c–3(a)(14) does not necessarily

mean that they are admissible against a practitioner in civil litigation.

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23

(1986). Public Citizen contends that the absence of this

language from the enacted version indicates Congress’ rejection of purely procedural notice.

We are not persuaded by either argument. The deletion of

the word ‘‘conclusions’’ from the House draft could simply

indicate that Congress regarded the use of both ‘‘conclusions’’

and ‘‘disposition’’ as redundant, or that the legislature contemplated a more bare-bones but still substantive notification:

just the bottom-line result (disposition), unencumbered by the

PRO’s reasoning (conclusions). On the other hand, the deletion of the Senate provision requiring notification that the

PRO ‘‘has received’’ the complaint would not by itself demonstrate that Congress would have disapproved of HCFA’s

procedural construction—which requires notification not only

that the complaint has been ‘‘received’’ but also that it has

been ‘‘disposed of.’’

Hence, if Congress had left us with these precursor bills

alone, without any explanation for its ultimate resolution of

the matter, our understanding would not be much advanced.

Fortunately, Congress provided one further piece of information. The Conference Committee explained the final conference agreement as follows: ‘‘If a PRO makes a final determination with respect to whether the services which are the

subject of a complaint did or did not meet professionally

recognized standards of care, the PRO would be required to

inform the beneficiary TTT of any final action taken.’’ H.R.

CONF. REP. NO. 99–1012, at 361 (1986) (emphasis added). It

would be a particularly cramped reading to construe the

italicized phrase as requiring nothing more than notification

that final action was taken, rather than notification of what

that action was.

The government poses one final variant on the argument

from legislative history: implicit congressional ratification.

In support, it cites Merrill Lynch, Pierce, Fenner & Smith,

Inc. v. Curran, 456 U.S. 353, 382 n.66 (1982), in which the

Supreme Court said: ‘‘Congress is presumed to be aware of

an administrative or judicial interpretation of a statute and to

adopt that interpretation when it re-enacts a statute without

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24

change.’’ The government contends that because the PRO

Act was amended numerous times after the 1986 addition of

§ 1320c–3(a)(14), during which period HCFA was interpreting that section to require nothing more than procedural

notification, Congress’ failure to statutorily reverse that interpretation demonstrates its implicit concurrence.

The Supreme Court, however, has added several caveats to

the ratification canon that render it of limited utility here.

See Solid Waste Agency v. United States Army Corps of

Eng’rs, 531 U.S. 159, 169 (2001) (‘‘Although we have recognized congressional acquiescence to administrative interpretations of a statute in some situations, we have done so with

extreme care.’’).21 First, the canon is of little assistance here

because, unlike Merrill Lynch, this is not a case in which

‘‘Congress re-enact[ed] a statute without change.’’ 456 U.S.

at 382 n.66. Congress has neither re-enacted the entire PRO

statute nor amended § 1320c–3(a)(14) at all. Rather, it has

simply enacted a series of isolated amendments to other

provisions. See Appellants’ Br. at 28 n.14 (collecting amendments). Compare Alexander v. Sandoval, 532 U.S. 275, 292

(2001) (‘‘[W]hen Congress has not comprehensively revised a

statutory scheme but has made only isolated amendments,

TTT [i]t is impossible to assert with any degree of assurance

that congressional failure to act represents affirmative congressional approval of the Court’s statutory interpretation.’’

(internal quotation marks omitted)), with Barnhart v. Walton,

535 U.S. 212, 220 (2002) (according weight where ‘‘Congress

has frequently amended or reenacted the relevant provisions

without change’’ (emphasis added)).

Moreover, because ‘‘the rationale of [this] canon must be,

either that those in charge of the amendment are familiar

with existing rulings, or that they mean to incorporate them,’’

21 See also Alexander v. Sandoval, 532 U.S. 275, 292 (2001)

(noting that ‘‘we recently criticized Curran’s reliance on congressional inaction, saying that ‘[a]s a general matter TTT [the] argumen[t] deserve[s] little weight in the interpretive process’ ’’ (quoting

Central Bank of Denver v. First Interstate Bank of Denver, 511

U.S. 164, 187 (1994))).

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Thompson v. Clifford, 408 F.2d 154, 164 (D.C. Cir. 1968)

(internal quotation marks omitted), the government’s argument has little weight absent some evidence of (or reason to

assume) congressional familiarity with the administrative interpretation at issue.22 The government points to no such

evidence here. Even if it could be assumed that Congress

was aware of HCFA’s more high-profile interpretations of the

Medicare statute, its interpretation of § 1320c–3(a)(14) would

hardly qualify. As we have noted above, no formal regulation

addressed the question; indeed, if any ‘‘interpretation’’ existed at all, it would have to have been teased out of the model

letter and instructions buried deep within the PRO Manual.

Finally, we note that HCFA’s most prominent presentation

of its position on the issue during much of the relevant period

was actually one in which the agency took the opposite view

from that which it maintains on this appeal, and precisely the

position that Public Citizen urges us to adopt. In 1989,

HCFA published a notice of proposed rulemaking (NPRM)

soliciting comments on a proposed regulation that would have

required PROs to ‘‘inform the beneficiary or the beneficiary’s

representative whether the quality of care meets professionally recognized standards of health care, and, if not, the corrective action to be taken.’’ Medicare and Medicaid Programs;

Denial of Payment for Substandard Quality Care and Review

of Beneficiary Complaints, 54 Fed. Reg. 1956, 1964 (Jan. 18,

1989). In that NPRM, HCFA stated that while it had

‘‘considered precluding PROs from providing any information

to the beneficiary that might identify the concerned physician

or practitioner,’’ the agency rejected that position because

‘‘we believe that section 1154(a)(14) of the Act [42 U.S.C.

§ 1320c–3(a)(14)] requires that the information discussed

above be provided to the beneficiary.’’ Id. at 1960 (emphasis

added). Although the proposed rule was never promulgated,

22 See Brown v. Gardner, 513 U.S. 115, 121 (1994) (holding that

where ‘‘there is no TTT evidence to suggest that Congress was even

aware of the [agency’s] interpretive position[,] TTT we consider TTT

re-enactment to be without significance’’ (quotation marks omitted)).

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26

it remained pending at least through 1993,23 and a similar rule

remained under consideration through 2001; the latter was

not withdrawn until after the institution of this lawsuit.24

The interpretation contained in the agency’s proposed rule

does not, of course, bind it here. See Commodity Futures

Trading Comm’n v. Schor, 478 U.S. 833, 845 (1986). But it

does effectively counter the government’s argument that Congress implicitly ratified the contrary interpretation by not

amending the statute. If there is any prospect that Congress

was aware of the agency’s views regarding the meaning of

§ 1320c–3(a)(14) during the relevant period, what it would

have known was that the agency was espousing views similar

to those of Public Citizen and was moving toward formalizing

those views in a regulation. If Congress shared those views,

it would have had no reason to amend the law.

D

Finally, the government urges us to consider the congressional purpose underlying the PRO statute. We conclude,

however, that the argument based on legislative purpose cuts

strongly against the government’s position.

The government points to the various confidentiality provisions of the statute, and argues that they were intended both

23 See Unified Agenda, 58 Fed. Reg. 56,355, 56,355 (Oct. 25, 1993)

(mentioning 1989 proposed rule).

24 See Unified Agenda, 63 Fed. Reg. 21,989, 21,996 (Apr. 27, 1998)

(announcing that HCFA was considering issuing a proposed rule

that ‘‘would permit the disclosure of PRO information about physicians TTT without their permission to the extent necessary to

comply with section 1154(a)(14) of the Social Security Act [42 U.S.C.

§ 1320c–3(a)(14)],’’ and noting that ‘‘[t]his section requires PROs to

conduct reviews of beneficiary complaints about the quality of

services TTT and inform each beneficiary of the final disposition of

his or her complaint’’); 63 Fed. Reg. 61,735, 61,737 (Nov. 9, 1998)

(referencing same rule); 64 Fed. Reg. 64,411, 64,424 (Nov. 22, 1999)

(same); 65 Fed. Reg. 73,838, 73,844 (Nov. 30, 2000) (same); 66 Fed.

Reg. 25,466, 25,468 (May 14, 2001) (noting withdrawal of 1998

proposed rule as of February 13, 2001).

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to protect the privacy of health care practitioners and to

assure the confidentiality necessary to encourage practitioners to evaluate their peers honestly. We do not doubt that

these considerations were important to Congress and that

they underlie the confidentiality provisions of the statute.

See Armstrong v. Dwyer, 155 F.3d 211, 219 (3d Cir. 1998).

As we have discussed above, however, the confidentiality

provisions are not absolute; they contain both specific exceptions, see 42 U.S.C. § 1320c–9(a)(3), and the general exception

for disclosures ‘‘necessary to carry out the purposes of this

part,’’ id. § 1320c–9(a)(1). The fact that § 1320c–3(a)(14)

breaches absolute confidentiality by requiring a narrow disclosure to beneficiaries is no more remarkable than, for

example, the requirement of § 1320c–3(a)(9)(B) that disclosures be made to a physician’s state licensing board.

Moreover, although protecting confidentiality was undoubtedly the purpose of the PRO statute’s confidentiality provisions, that was hardly the only—or even the overriding—

purpose of the statute as a whole. See S. REP. NO. 97–494, at

41 (1982) (stating that PRO contracts are for ‘‘the purpose of

promoting the effective, efficient, and economical delivery of

quality health care services under Medicare’’). And when we

turn to the specific provision at issue here, § 1320c–3(a)(14),

the sole evidence we have of congressional purpose is the

Conference Committee’s statement that the section was intended to ‘‘[i]mprove peer review responsiveness to beneficiary complaints.’’ H.R. CONF. REP. NO. 99–1012, at 361 (1986).

Indeed, § 1320c–3(a)(14) is expressly phrased as a requirement that the PRO provide information; considerations of

confidentiality are not mentioned at all.

It is hard to see how § 1320c–3(a)(14), if interpreted as the

government suggests, would improve peer review responsiveness to beneficiary complaints. HHS’s own Office of Inspector General (OIG) has concluded that HCFA’s confidentiality

policy ‘‘hinder[s] the PROs’ ability to be responsive to beneficiaries who complain.’’ HHS, OIG, The Beneficiary Complaint Process of the Medicare Peer Review Organizations, at

6 (Nov. 1995); see HHS, OIG, The Medicare Beneficiary

Complaint Process: A Rusty Safety Valve, at ii, 16 (Aug.

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2001) (stating that ‘‘current procedures TTT continue to preclude the PROs from responding substantively,’’ resulting in a

deficiency in ‘‘responsiveness’’).25 The government contends

that, even under its limited interpretation, § 1320c–3(a)(14)

‘‘directly improve[s] PRO responsiveness to beneficiary complaints’’ because it makes the investigation of beneficiary

complaints mandatory—which was not the case prior to 1986.

Appellants’ Br. at 32. But the requirement to investigate

comes from the first sentence of § 1320c–3(a)(14), not the

second. See 42 U.S.C. § 1320c–3(a)(14) (first sentence) (‘‘The

organization shall conduct an appropriate review of all written

complaintsTTTT ’’). And we, of course, are required to ‘‘give

effect, if possible, to every clause and word of a statute.’’

Moskal v. United States, 498 U.S. 103, 109–10 (1990) (citations and internal quotation marks omitted).

Indeed, it is hard to see what purpose the second sentence

of § 1320c–3(a)(14) would serve at all under the government’s

construction. According to HCFA, that sentence merely

requires the PRO to advise a complaining beneficiary of three

things: that the complaint was received, that it was investigated, and that corrective action will be taken if appropriate.

But the beneficiary could learn the first of these simply by

including a Certified Mail Return Receipt along with his

complaint, and the latter two promise nothing more than that

the agency will do what the law requires. As both Public

Citizen and HHS’s Inspector General suggest, this seems

little more than an empty gesture. See OIG, The Medicare

Beneficiary Complaint Process, at ii (concluding that the PRO

complaint process ‘‘fails to provide a meaningful response to

complainants’’). Because ‘‘[w]hen Congress acts to amend a

statute, we presume it intends its amendment to have real

and substantial effect,’’ Stone v. INS, 514 U.S. 386, 397 (1995),

we reject the government’s interpretation of § 1320c–3(a)(14)

as wholly unpersuasive.

25 We agree with the government that the PRO Act delegated

policymaking authority to the Secretary and not to the OIG. We

cite the OIG’s views—supported, as they are, by that Office’s

experience and expertise—not because they legally command our

deference, but because we find them logically persuasive.

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IV

We conclude that, to ‘‘inform’’ a Medicare beneficiary of the

organization’s ‘‘final disposition’’ of the complaint as required

by § 1320c–3(a)(14), a PRO must notify the complainant of

the results of its review. At a minimum, this means that the

PRO must disclose its determination as to whether the quality of the services that the recipient received met ‘‘professionally recognized standards of health care.’’ 42 U.S.C.

§ 1320c–3(a)(14). We therefore affirm the judgment of the

district court, which held that the provisions of the PRO

Manual prohibiting disclosure of the results of § 1320c–

3(a)(14) investigations are invalid because they are contrary

to law. Public Citizen, 151 F. Supp. 2d at 77.26

At one place in its brief, Public Citizen suggests that the

term ‘‘final disposition’’ goes further than this, requiring the

PRO to advise the complainant not only of its final judgment

regarding the quality of care received, but also of the corrective action that it has taken. See Appellee’s Br. at 15. While

this suggestion certainly represents a reasonable elaboration

of the meaning of the term, it does not have—as does the

phrase ‘‘meet[s] professionally recognized standards of health

care’’—the virtue of coming verbatim out of the first and

third sentences of § 1320c–3(a)(14). We need not decide

today, however, whether this additional information is statutorily required. The district court’s order did not expressly

require it, and Public Citizen has not sought modification of

that order. Moreover, because even our more limited ‘‘disposition’’ will require HCFA to rethink the kind of notification

26 The district court also held invalid those of ‘‘HCFA’s regulations’’ that prohibit such disclosures. 151 F. Supp. 2d at 77. As

noted in Part I.A, however, the agency’s confidentiality regulations

incorporate the statutory exception for disclosures ‘‘necessary to

carry out the purposes’’ of the PRO statute. 42 U.S.C. § 1320c–

9(a); see 42 C.F.R. § 480.103(b)(1). Because the disclosures required by § 1320c–3(a)(14) fall within this exception, see supra Part

III.B, that portion of the district court’s decision is without effect.

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required of PROs, there remains ample room for an administrative resolution of this question.

The judgment of the district court is

Affirmed.

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