Source: https://supreme.justia.com/cases/federal/us/456/188/case.html
Timestamp: 2017-06-27 22:47:05
Document Index: 306254010

Matched Legal Cases: ['§ 1395', '§ 1396', '§ 1395', '§ 1395', '§ 1395', '§ 1395', '§ 421', 'art 405', '§ 1395', '§ 405', '§ 1395', '§ 405', '§ 405', '§ 1395', '§ 421']

Schweiker v. McClure (full text) :: 456 U.S. 188 (1982) :: Justia US Supreme Court Center Log In
U.S. Supreme CourtSchweiker v. McClure, 456 U.S. 188 (1982)Schweiker v. McClureNo. 81-212Argued March 1, 1982Decided April 20, 1982456 U.S. 188APPEAL FROM THE UNITED STATES DISTRICT COURT FOR
Title XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U.S.C. § 1395 et seq. (1976 ed. and Supp. IV), commonly known as the Medicare program, is administered by the Secretary of Health and Human Services. It consists of two parts. Part A, which is not at issue in this case, provides insurance against the cost of institutional health services, such as hospital and nursing home fees. §§ 1396c-1395i-2 (1976 ed. and Supp. IV). Part B is entitled "Supplementary Page 456 U. S. 190 Medical Insurance Benefits for the Aged and Disabled." It covers a portion (typically 80%) of the cost of certain physician services, outpatient physical therapy, X-rays, laboratory tests, and other medical and health care. See §§ 1395k, 13951, and 1395x(s) (1976 ed. and Supp. IV). Only persons 65 or older or disabled may enroll, and eligibility does not depend on financial need. Part B is financed by the Federal Supplementary Medical Insurance Trust Fund. See § 1395t (1976 ed. and Supp. IV). This Trust Fund, in turn, is funded by appropriations from the Treasury, together with monthly premiums paid by the individuals who choose voluntarily to enroll in the Part B program. See §§ 1395j, 1395r, and 1395w (1976 ed. and Supp. IV). Part B consequently resembles a private medical insurance program that is subsidized in major part by the Federal Government.
The Secretary pays the participating carriers' costs of claims administration. See 42 U.S.C. § 1395u(c). In return, the carriers act as the Secretary's agents. See 42 CFR § 421.5(b) (1980). They review and pay Part B claims for the Page 456 U. S. 191 Secretary according to a precisely specified process. See 42 CFR part 405, subpart H (1980). Once the carrier has been billed for a particular service, it decides initially whether the services were medically necessary, whether the charges are reasonable, and whether the claim is otherwise covered by Part B. See 42 U.S.C. § 1395y(a) (1976 ed. and Supp. IV); 42 CFR § 405.803(b) (1980). If it determines that the claim meets all these criteria, the carrier pays the claim out of the Government's Trust Fund -- not out of its own pocket. See 42 U.S.C. §§ 1395u(a)(1), 1395u(b)(3), and 1395u(c) (1976 ed. and Supp. IV).
Hearing officers receive evidence and hear arguments pertinent to the matters at issue. § 405.830. As soon as practicable thereafter, they must render written decisions based on the record. § 405.834. Neither the statute nor the regulations make provision for further review of the hearing officer's decision. [Footnote 1] See United States v. Erika, Inc., post, p. 456 U. S. 201. Page 456 U. S. 192
Id. at 415. Respecting "prior involvement," the Page 456 U. S. 193 court acknowledged that hearing officers personally had not been previously involved in the cases they decided. But it noted that hearing officers
"First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, Page 456 U. S. 194 including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail."
On the final Mathews factor involving the Government's interest, the District Court noted that carriers processed 124 million Part B claims in 1978. 503 F.Supp. at 416. The court stated that "[o]nly a fraction of those claimants pursue their currently available appeal remedies," and that "there is no indication that anything but an even smaller group of claimants will actually pursue [an] additional remedy" of appeal Page 456 U. S. 195 to the Secretary. Ibid. Moreover, the court said, the Secretary already maintained an appeal procedure using administrative law judges for appeals by Part A claimants. Increasing the number of claimants who could use this Part A administrative appeal "would not be a cost-free change from the status quo, but neither should it be a costly one." Ibid.
The hearing officers involved in this case serve in a quasi-judicial capacity, similar in many respects to that of administrative law judges. As this Court repeatedly has recognized, due process demands impartiality on the part of those who function in judicial or quasi-judicial capacities. E.g., Marshall v. Jerrico, Inc., 446 U. S. 238, 446 U. S. 242-243, and n. 2 (1980). We must start, however, from the presumption that the hearing officers who decide Part B claims are unbiased. See Withrow v. Larkin, 421 U. S. 35, 421 U. S. 47 (1975); United States v. Morgan, 313 U. S. 409, 313 U. S. 421 (1941). This presumption can be rebutted by a showing of conflict of interest or some other specific reason for disqualification. [Footnote 8] See Gibson Page 456 U. S. 196 v. Berryhill, 411 U. S. 564, 411 U. S. 578-579 (1973); Ward v. Village of Monroeville, 409 U. S. 57, 409 U. S. 60 (1972). See also In re Murchison, 349 U. S. 133, 349 U. S. 136 (1955) ("to perform its high function in the best way, justice must satisfy the appearance of justice'") (quoting Offutt v. United States, 348 U. S. 11, 348 U. S. 14 (1954)). But the burden of establishing a disqualifying interest rests on the party making the assertion.
Fairly interpreted, the factual findings made in this case do not reveal any disqualifying interest under the standard of our cases. The District Court relied almost exclusively on generalized assumptions of possible interest, placing special weight on the various connections of the hearing officers with the private insurance carriers. [Footnote 9] The difficulty with this reasoning is that these connections would be relevant only if the carriers themselves are biased or interested. We find no basis in the record for reaching such a conclusion. [Footnote 10] As previously noted, the carriers pay all Part B claims from federal, and not their own, funds. Similarly, the salaries of the hearing officers are paid by the Federal Government. Cf. Marshall Page 456 U. S. 197 v. Jerrico, Inc., supra, at 446 U. S. 245, 446 U. S. 251. Further, the carriers operate under contracts that require compliance with standards prescribed by the statute and the Secretary. See 42 U.S.C. §§ 1395u(a)(1)(A(B), 1395u(b)(3), and 1395u(b)(4) (1976) ed. and Supp. IV); 42 CFR §§ 421.200, 421.202, and 421.205(a) (1980). In the absence of proof of financial interest on the part of the carriers, there is no basis for assuming a derivative bias among their hearing officers. [Footnote 11] Page 456 U. S. 198
"In light of [appellees'] undisputed showing that carrier-appointed hearing officers receive little or no formal training, and are not required to satisfy any threshold criteria Page 456 U. S. 199 such as having a law degree, it must be assumed that additional safeguards would reduce the risk of erroneous deprivation of Part B benefits."
The District Court did not identify any specific deficiencies in the Secretary's selection criteria. By definition, a "qualified" individual already possessing "ability" and "thorough knowledge" would not require further training. The court's further general concern that hearing officers "are not required to satisfy any threshold criteria" overlooks the Secretary's quoted regulation. [Footnote 14] Moreover, the District Court apparently gave no weight to the qualifications of hearing officers about whom there is information in the record. Their qualifications tend to undermine, rather than to support, Page 456 U. S. 200 the contention that accuracy of Part B decisionmaking may suffer by reason of carrier appointment of unqualified hearing officers. [Footnote 15]
"* * * *" "The [hearing officer] must be cognizant of the informal nature of a Part B hearing. . . . The hearing is nonadversary in nature, in that neither the carrier nor the Medicare Bureau is in opposition to the party, but is interested only in seeing that a proper decision is made."