Court Opinion

ID: 9466541
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:19:02.667937+00
Date Added: 2024-06-11T17:39:47.391819
License: Public Domain

LEVIN H. CAMPBELL, Circuit Judge
(concurring).
I fully concur in the court’s comprehensive and excellent analysis, and would only emphasize the following.
First, I find it particularly significant that the Secretary nowhere justifies offsetting the hospital’s leasing profit against its general costs as being a necessary or proper way to determine the hospital’s “reasonable cost” of caring for Medicare A patients. See 42 U.S.C. § 1395x. Rather the Secretary justifies the offset in terms of its being a kind of windfall profits tax related to presumed excessive Medicare reimbursement of radiologists under Part B. Had the Secretary offered rational justification for the offset in terms of his authority to determine “reasonable cost” under Part A, I would have gone a considerable distance to accept his justification. Matters of accounting, unless they “be the expression of a whim rather than an exercise of judgment,” are for the agency. American Telephone & Telegraph Co. v. United States, 299 U.S. 232, 237, 57 S.Ct. 170, 172, 81 L.Ed. 142 (1936). But no principle is here articulated that one factor in a rational formula for arriving at the cost of caring for Medicare A patients would be to deduct radiology department profits.
Second, I do not read this court’s opinion as necessarily precluding some rational method for recapturing that portion of the leasing profits as is attributable to the Medicare B patients of treating radiologists, cf., at page 481, Faith Hospital Association v. United States, 585 F.2d 474 (Ct.Cl.1978). In the present situation, however, there are simply too many disparities to justify the mechanism in use. The Secretary’s formula recaptures profits on the basis of the hospital’s Medicare population, which may or may not be proportionately the same as the radiologists’ Medicare population. Furthermore, as Judge Wyzanski demonstrates, under the Secretary’s procedure the offset benefits the wrong fund; excessive Medicare B reimbursement to radiologists should be returned to the fund being held for Part B of the program, a fund deriving from *590sources different from the Medicare A fund.
Still, I would not read our opinion as preventing the Secretary from using practical means to control overcharges. The Medicare legislation gives the Secretary broad powers to determine the reasonableness of charges. The Secretary is not at the mercy of hospitals and physicians who seek unwarranted reimbursement, and retains a large reservoir of express and implied power to adopt rational requirements that guard against waste and fraud. Such regulations may include reasonably based presumptions and policy determinations reflecting the Secretary’s judgment as to what is required to make the program work. Here one can understand the difficulty that led to the present attempted solution. Even in an era of computers, it is probably impractical for the Part B intermediary to screen the radiologists’ bills in terms of the leasing hospital’s actual costs. The Medicare B intermediary is unlikely to have ready access to the hospital’s books, and, even if it does, the practicalities disfavor effective utilization of this information in reviewing myriad individual bills which come from the physician, not the hospital. Such considerations led the Secretary into the present system, which catches the real villain (if there is one) — the hospital — at a time when its defenses are down and its books on the table. The problem is, the link between the assumed Medicare B overpayments and the Medicare A exaction is too tenuous — not to mention that the benefit of the offset will accrue to the wrong account. These fatal flaws do not signal, however, that a more finely tuned system aimed at accomplishing a similar end will be doomed ■to failure.