Legal Document

456 U.S. 188 102 Supreme Court Reporter 1665 72 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 1 Richard S. SCHWEIKER, Secretary of Health and Human Services, Appellant,v.William McCLURE et al. Number 81-212. Argued March 1, 1982. Decided April 20, Syllabus Part B the Medicare program under Social Security Act provides federally subsidized insurance against cost certain physician services, outpatient physical therapy, X-rays, laboratory tests, other medical health care. The Services is authorized to contract with private carriers administer payment claims. If carrier refuses on Secretary's behalf pay a portion claim, claimant entitled "review determination," based submission written evidence arguments, and, if amount in dispute $100 or more, still-dissatisfied then has right an oral hearing, at which officer chosen by presides. statute regulations make no further provision for review hearing officer's decision. After decisions officers were rendered them, appellee claimants sued Federal District challenge constitutional adequacy hearings afforded them. court held that procedures violated appellees' rights due process insofar as final, unappealable decision regarding their claims was made appointees, required additional safeguards reduce risk erroneous deprivation benefits, appellees de novo conducted administrative law judge Administration. Held : question do not violate requirements. Pp. 195-200. (a) While demands impartiality part those who function quasi-judicial capacity, such involved this case, there presumption these are unbiased. This can be rebutted showing conflict interest some specific reason disqualification. But factual findings here disclose disqualifying interest. officers' connection would relevant only themselves biased interested, basis record conclusion. from federal, own, funds, salaries paid Government, operate contracts requiring compliance standards prescribed Secretary. In absence proof financial carriers' part, assuming derivative bias among officers. 195-197. (b) Nor does support contention accuracy decisionmaking may suffer because appoint unqualified thus decisions. 1671-1672. 503 F.Supp. 409, reversed remanded. Kenneth Geller, Washington, D. C., appellant. Harvey Sohnen, Oakland, Cal., appellees. Justice POWELL, delivered opinion Court. whether Congress, consistently requirements process, provide disputed payments carriers, without appeal. 2 * Title XVIII Act, 79 Statutes-at-Large 291, amended, 42 Code KF62 § 1395 seq. (1976 ed. Supp.IV), commonly known program, administered Services. It consists two parts. A, issue institutional hospital nursing home fees. §§ 1395c-1395i-2 Supp.IV). "Supplementary Medical Insurance Benefits Aged Disabled." covers (typically 80%) See 1395k, 1395l, 1395x(s) Only persons 65 older disabled enroll, eligibility depend need. financed Supplementary Trust Fund. 1395t Fund turn funded appropriations Treasury, together monthly premiums individuals choose voluntarily enroll program. 1395j, 1395r, 1395w consequently resembles major Government. 3 social substantial dimensions. More than 27 million presently participate, pays out more $10 billion benefits annually. Brief Appellant 9. 1980, 158 processed. Ibid. order administration sweeping efficient, Congress his qualifying 1395u (In instance, performed tasks California Blue Shield Occidental Co.) congressional design take advantage "great experience reimbursing physicians." H.R.Rep.No.213, 89th Cong., 1st Sess., 46 (1965). also 1395u(a); S.Rep.No.404, 53 4 participating costs administration. 1395u(c). return, act agents. Regulations 421.5(b) (1980). They according precisely specified process. 405, subpart H Once been billed particular service, it decides initially services medically necessary, charges reasonable, claim otherwise covered baron 1395y(a) Supp.IV); 405.803(b) determines meets all criteria, Government's Fund—not its own pocket. 1395u(a)(1), 1395u(b)(3), 1395u(c) 5 Should refuse one opportunities First, they submit arguments fact law. A employee, initial decisionmaker, will affirm adjust original determination. 405.807-405.812 (1980); McClure versus Harris, 411 (ND Cal.1980). hearing. 1395u(b)(3)(C); 405.820-405.860 An presides over 405.823. "do participate personally, prior [stage], any case [that] adjudicate." F.Supp., 414. 405.824 6 Hearing receive hear pertinent matters issue. 405.830. As soon practicable thereafter, must render record. 405.834. Neither nor decision.1 Erika, Inc., 201, 1650, 12. II 7 arose result three claimants.2 claimants, appellees, Northern certified representatives nationwide class whose had denied carrier-appointed 412-414. On cross-motions summary judgment, concluded "insofar disputes appointees. . ." Id., 418. 8 reached conclusion unconstitutionality alternative lines argument. first rested upon principle tribunals impartial. thought carrier's compromised "prior involvement pecuniary interest." "Pecuniary interest" shown, said, "their incomes entirely dependent whether, how often, call services."3 415. Respecting involvement," acknowledged personally previously cases decided. noted "are appointed by, serve of, participated stages each but twice subject hearing," five seven Shield's past present former current employees."4 (Emphasis original.) links between sufficient create constitutionally intolerable claimants. 9 Court's reasoning assessed affording before judges, "either subsequent substituting appointee." Mathews Eldridge, 424 319, 335, 96 893, 903, 47 478 (1976), makes factors inquiry: 10 "First, affected official action; second, through used, probable value, any, substitute procedural safeguards; finally, interest, including fiscal burdens requirement entail." 11 Considering factor, listed considerations tending show stake overwhelming.5 stated, however, "it cannot gainsaid" denial beneficiary's reimbursement impose "considerable hardship." 416. 12 second factor value added found "inconclusive." cited statistics available appeal frequently reversal disposition.6 criticized failing distinguish partial total reversals. stated neither training satisfy "threshold criteria having degree." assumed benefits." 13 final involving processed 124 1978. "[o]nly fraction pursue currently-available remedies," "there indication anything even smaller group actually [an] remedy" Moreover, already maintained procedure using judges appeals Increasing number could use "would cost-free change status quo, should costly one." 14 Weighing factors, protection procedure. ordered Administration.7 App. Juris. Statement 36a. We jurisdiction, 454 890, 384, 70 204 (1981), now reverse. III Atlantic 15 similar many respects judges. repeatedly recognized, judicial capacities. E.g., Marshall Jerrico, 446 238, 242-243, n. 2, 100 1610, 1613, 64 182 start, decide Withrow Larkin, 421 35, 47, 95 1456, 1464, 43 712 (1975); Morgan, 313 421, 61 999, 1004, 85 L.Ed. 1429 (1941). disqualification.8 Gibson- Berryhill, 564, 578-579, 93 1689, 1697-98, 36 488 (1973); Ward Village Monroeville, 409 57, 60, 80, 83, 34 267 (1972). re Murchison, 349 133, 136, 75 623, 625, 99 942 (1955) ("to perform high best way 'justice appearance justice' ") (quoting Offutt States, 348 11, 14, 13, (1954)). burden establishing rests party making assertion. 16 Fairly interpreted, reveal standard our cases. relied almost exclusively generalized assumptions possible placing special weight various connections carriers.9 difficulty interested. find reaching conclusion.10 noted, funds. Similarly, Cf. Mar- shall supra, 245, 251, S.Ct., 1614, 1617. Further, require 1395u(a)(1)(A)-(B), 1395u(b)(4) 421.200, 421.202, 421.205(a) officers.11 17 Appellees argued, agreed, requires Government rather officer. Specifically, ruled "[e]xisting might remain intact so long aggrieved beneficiaries appointees' judges."12 417. conclusion, applied familiar test U.S., 903. 193-195. assume correct viewing "considerable," though "not quite precious welfare security likewise assume, considering third inconvenience providing unduly burdensome.13 18 focus narrowly considers point consisted sentence: 19 "In light [appellees'] undisputed little formal threshold degree, 416 (footnote omitted). 20 Again, conclusions. directed select 21 " 'an attorney qualified individual ability conduct general understanding terminology. [hearing officer] have thorough knowledge statutory authority based, well rulings, policy statements, instructions Bureau.' 22, quoting Dept. HEW, Carriers Manual, ch. VII, Page 12-21 (1980) (emphasis added). 22 did identify deficiencies selection criteria. By definition, "qualified" possessing "ability" "thorough knowledge" training. court's concern criteria" overlooks quoted regulation.14 apparently gave qualifications about whom information Their tend undermine appointment officers.15 23 "[D]ue Process flexible calls protections situation demands." Morrissey Brewer, 408 471, 481, 92 2593, 2600, 33 484 considered strong favor validity action recognition "congressional solicitude fair Califano Yamasaki, 442 682, 693, 2545, 2553, 176 (1979). simply shown different benefits. IV 24 judgment reversed, remanded entered 25 So ordered. reopen proceedings circumstances. 405.841-405.850 Appellee William air ambulance specially equipped hospital. determined taken closer home. Charles Shields allowed cholecystectomy accompanying appendectomy. reasoned appendectomy merely incidental cholecystectomy. "Ann Doe" entire sex-change operation. operation necessary. recognized federal fund resources. 415 connection, referred canon disqualify himself where 'lawyer he practiced served during association lawyer concerning matter.' 414-415, Judicial Conference Conduct, Canon 3C(1)(b). application lax applicable judiciary posed "a constitutionally-unacceptable tainted bias." Additionally, significant "no meaningful, govern[ed] officers" trained largely called review. "Eligibility supplementary primary services. Denial deprive other, covered, expenses." "[Appellant] establish[es] 1975 1978, wholly partially 'review determination,' determinations 51-57 percent considered. Of adverse determination brought officers, 42-51 whole part." Administrative Law Judge's decision." disqualification prejudice reasons. 23-25. sought actual bias. Tr. Oral Arg. (argument counsel appellees). Before Court, urge inadequate awards. attempt document assertion—not mentioned Court—by relying both helped providers allegedly bill necessary warned control overutilization 17-18. irrelevant. shows takes seriously duty ensure paid. establish discourage meet Such effort Congress' direction. Absent evidence, presumed. adduced assertion that, reasons psychology, loyalty, coercion, reluctant differ determinations. assertions substantiation foundation invalidating Congress. analogy canons, see 4, apt. employee partiality analogous possibly arising professional relationship partner associate. doubt obey instruction manual: 'The selected capacity advised given consultation request Since nonadversary nature, particularly responsive needs unrepresented parties protect claimant's rights, represented counsel. parties' interests safeguarded full extent rights; like manner, government's protected. dignity exercise order. independent impartial decisions, write clear concise statements facts law, secure causing unnecessary friction, objective free influence affect facts, while being patient mental impairments. cognizant informal nature Bureau opposition interested seeing proper made.' 31-32, XII, Pages 12-21, 12-29 Richardson Perales, 402 389, 403, 91 1420, 1428, 28 842 (1971) ("congressional plan" system essentially "as adjudicator advocate adversary"). differs generally G (1980), 45 Fed.Reg. 73932-73933 206-207, nn. 9, 1653-1654, No authoritative made, perhaps difficult prove. 1980 claims—up 1978—were filed. Even excess $100, small percentage large terms read always attorneys. Our cases, uniform requirement. Vitek Jones, 445 480, 499, 1254, 1266, 63 552 (POWELL, J., concurring part); Parham Judge R., 584, 607, 2493, 2506, 101 (1979); 486, 489, 2602, 2604, Goldberg Kelly, 397 254, 271, 90 1011, 1022, 287 (1970). us particularized degree context. contains nine Two retired years judging experience, extensive medicine insurance, practicing years, years' industry self-employed adjuster. Record, Defendants' Reply Plaintiffs' Memorandum Points Authorities Support Motion Summary Judgment 626, 661-662, 682-685.

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