Court Opinion

ID: 184919
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:25:41+00
Date Added: 2024-06-11T17:26:11.882072
License: Public Domain

182 F.3d 965 (D.C. Cir. 1999)
United Seniors Association, Inc., et al.,Appellantsv.Donna E. Shalala, Secretary, United States Department of Health and Human Services, Appellee
No. 98-5142
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 23, 1998Decided July 16, 1999

Appeal from the United States District Court for the District of Columbia(No. 97cv03109)
Kent Masterson Brown argued the cause for appellants. With him on the briefs was Frank M. Northam.  Jerome P.  Friedlander, II, entered an appearance.
Thomas M. Bondy, Attorney, U.S. Department of Justice,  argued the cause for appellee.  With him on the brief were
Frank W. Hunger, Assistant Attorney General, Wilma A.  Lewis, U.S. Attorney, and Barbara C. Biddle, Attorney, U.S.  Department of Justice.
John S. Hoff, Arthur B. Spitzer and Jeffrey P. Altman  were on the brief for amici Citizens Against Government  Waste, et al.
Before:  Williams, Sentelle and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Garland.
Garland, Circuit Judge:

1
Section 4507 of the Balanced  Budget Act of 1997 provides that, for certain medical services,  a doctor may not contract with a Medicare beneficiary outside  of Medicare unless the doctor agrees to abstain from participating in the Medicare program for two years.  Plaintiffs, a  senior citizens' organization and four individual Medicare  beneficiaries, contend that section 4507 is unconstitutional on  a number of grounds.  The district court found the statute  constitutional and granted summary judgment for the Secretary of Health and Human Services.  We affirm the grant of  summary judgment without reaching the constitutional questions because the Secretary's recently-clarified interpretation  of section 4507, to which we must defer, eliminates the injury  that is the basis of plaintiffs' constitutional attack.

2
* Medicare is a comprehensive insurance program designed  to provide health insurance benefits for individuals 65 and  over, as well as for certain others who come within its terms. See 42 U.S.C. §§ 1395c, 1395j.  The program is administered  by the Health Care Financing Administration (HCFA), a part  of the U.S. Department of Health and Human Services  (HHS).  In broad terms, Medicare Part A, which is not at  issue in this case, covers care provided by institutional health  care providers including hospitals.  See id. §§ 1395c-1395i.Medicare Part B, which is the focus here, covers medical  services including those provided by physicians.  See id.  §§ 1395j to 1395w-4.  Part B is financed by a combination of  government funding and premiums paid by beneficiaries.  See id. § 1395j.  Doctors who provide medical services to Part B  beneficiaries must submit claim forms identifying the services  provided.  See id. § 1395w-4(g)(4)(A)(i).  They receive compensation in accordance with fee schedules that limit the  amount they may charge and be paid.  See id. § 1395w4(g)(2)(C), (D).1

3
Certain kinds of medical services, such as routine physical  checkups, are categorically excluded from Medicare coverage.See id. § 1395y(a)(7).  Those that are not categorically excluded may only be reimbursed when medically "reasonable  and necessary."  Id. § 1395y(a)(1)(A).  If a service is deemed  not to have been reasonable and necessary, Medicare will not  make payment and the doctor generally is prohibited from  charging the patient.  See id. § 1395u(b)(3)(B)(ii), (l)(1)(A).2

4
Because at the time a physician provides a service it may  not be certain whether Medicare will regard it as reasonable  and necessary, the Medicare program includes a provision for  an "Advance Beneficiary Notice" ("ABN").  Under this provision, in advance of providing a service the doctor may give  the patient an ABN, which advises that Medicare may not  pay for the service.  See id. § 1395u(l)(1)(C)(ii).  If the patient agrees to pay from his or her own funds if Medicare  does not, and if Medicare subsequently denies payment, the  doctor may bill the patient directly.  See id.

5
In August 1997, Congress enacted section 4507 of the  Balanced Budget Act of 1997, Pub. L. 105-33, § 4507, 111  Stat. 251, 439 (codified at 42 U.S.C. § 1395a).  The section  establishes rules for what it describes as "the use of private  contracts by medicare beneficiaries."  Id.  Section 4507(b)(1)  permits doctors and patients to contract for certain services  outside of Medicare and without its fee limitations:

6
Subject to the provisions of this subsection, nothing inthis title shall prohibit a physician or practitioner fromentering into a private contract with a medicare benefi-ciary for any item or service --

7
(A) for which no claim for payment is to be submittedunder this title, and(B) for which the physician or practitioner receives... no reimbursement under this title....42 U.S.C. § 1395a(b)(1);  see id. § 1395a(b)(4).  Section  4507(b)(2), entitled "[b]eneficiary protections," lists certain  provisions that private contracts authorized by (b)(1) must  include:

8
Any contract to provide items and services to whichparagraph (1) applies shall clearly indicate ... that bysigning such contract the Beneficiary --

9
(i) agrees not to submit a claim (or to request that the physician or practitioner submit a claim) under this title for such items or services even if such items or services are otherwise covered by this subchapter;(ii) agrees to be responsible, whether through insurance or otherwise, for payment of such items or ser-vices and understands that no reimbursement will be provided under this title for such items or services;(iii) acknowledges that no limits under this title ...apply to amounts that may be charged for such items or services;

10
... ;  and

11
(v) acknowledges that the medicare beneficiary  has the right to have such items or services provided  by other physicians or practitioners for whom payment would be made under this title .

12
Id. § 1395a(b)(2)(B).

13
Finally, section 4507(b)(3) further provides that such private contracts are authorized only if the physician signs an  affidavit which states that he or she

14
will not submit any claim under this title for any item or service provided to any medicare beneficiary (and will not receive any [Medicare] reimbursement ... for anysuch items or service) during the 2-year period beginning on the date the affidavit is signed....

15
Id. § 1395a(b)(3)(B)(ii).  This means that a doctor who enters  into a section 4507 private contract with even a single patient  is barred from submitting a claim to Medicare on behalf of  any patient for a two-year period.

II

16
Plaintiffs contend that section 4507 effectively makes it  impossible for them to contract for medical services outside of  the Medicare system--particularly for services Medicare will  not cover, either because they are categorically excluded or  because Medicare deems them unreasonable or unnecessary  in a particular case.  As plaintiffs read the section, it governs  almost any agreement between a doctor and patient to provide medical services outside of Medicare, without regard to  whether Medicare would pay for the service if a claim were  submitted.  Plaintiffs argue that it will be virtually impossible  to find a doctor willing to enter into such an agreement, given  the importance of Medicare to doctors' practices and the two year bar the statute imposes for entering into even a single  private contract.3  The Secretary concedes that very few doctors will be willing to opt out of Medicare, Oral Arg. Tr. at  22, and generally agrees that the two-year restriction "represents a substantial barrier to the receipt of contracted services."  United Seniors Ass'n., Inc. v. Shalala, 2 F. Supp. 2d  39, 41 (D.D.C. 1998).

17
Plaintiffs also reject the suggestion that the ABN procedure provides a way to relieve the constraints imposed by  section 4507.  They recognize that an agreement under an  ABN is not a "private contract" under section 4507, and  hence is not subject to its two-year bar.  See 63 Fed. Reg.  58,814, 58,851 (1998).  In theory this should mean that patients can obtain services they and their doctors consider  reasonable or necessary, even if Medicare ultimately does not,  by executing ABNs.  But plaintiffs regard the ABN option as  unworkable.  First, it does not apply to services categorically  excluded from Medicare.  Second, plaintiffs contend that  under HCFA rules, doctors who routinely use ABNs to obtain  reimbursement for services Medicare deems unreasonable or  unnecessary are subject to penalties and sanctions.  Thus,  plaintiffs do not view ABNs as a practical solution to the  problem created by section 4507.

18
Nor, plaintiffs contend, is it realistic to suggest that senior  citizens can avoid the restrictions of section 4507 by simply  opting out of Medicare Part B altogether.  Notwithstanding  the government's repeated suggestion that "plaintiffs may  disenroll at any time" from Part B, see, e.g., HHS Br. at 3, 27,  28, 29, at oral argument it conceded there is no "meaningful  equivalent to Medicare" in the private market.  Oral Arg. Tr.  at 18-19.4  Accordingly, opting out is hardly a viable way for  patients to bypass section 4507.

19
Plaintiffs' complaint charges that the restrictions imposed  by section 4507 violate the First, Fourth, Fifth, Ninth, Tenth and Fourteenth Amendments to the Constitution, as well as  the Spending Clause of Article I, section 8.  Plaintiffs contend  those restrictions violate their liberty to contract privately for  health care services, violate their ability to maintain the  privacy of their medical information by requiring them to file  claims for all medical services, and violate their equal protection and due process rights by denying them the same liberty  to contract enjoyed by other citizens.  They also contend that  section 4507 exceeds Congress' powers under the Spending  Clause, and invades the reserved powers of the States and  the people under the Tenth Amendment, by regulating health  care for which the federal government does not pay.

20
Critical to our analysis is that the injury plaintiffs assert is  to their ability to purchase services for which Medicare will  not itself pay, thus rendering them unable to obtain those  services on any terms.  Oral Arg. Tr. at 4-6.  The right they  assert is to contract for services they and their doctors  regard as necessary or even merely salutary, regardless  whether Medicare agrees.  Section 4507 abridges this right,  they contend, by making it virtually impossible to find a  doctor willing to enter into a private contract with a Medicare  beneficiary.  Plaintiffs made clear at oral argument, however,  that they disavow any claim to a constitutional right to pay  their doctors more than the Medicare fee limits for services  they can obtain through Medicare.  Id.

III

21
The district court examined plaintiffs' constitutional claims,  rejected them on the merits, and granted summary judgment  for the Secretary.  See United Seniors, 2 F. Supp. 2d at  42.  We review the grant of summary judgment de novo.  Hunter-Boykin v. George Washington Univ., 132 F.3d 77, 79  (D.C. Cir. 1998).  When we do so, we find we have no need to  reach the merits of plaintiffs' constitutional claims.  After  careful examination and clarification of the Secretary's interpretation of section 4507, we find that interpretation effectively eliminates the injury--whether of constitutional magnitude or not--that plaintiffs fear, and provides them with all the  relief they seek.

22
The Secretary contends that plaintiffs have simply misunderstood section 4507.  The purpose of the section, she  argues, is to prevent doctors from coercing elderly patients  into paying more for Medicare-covered services than Medicare's fee schedules permit.  HHS Br. at 10, 12.  Consistent  with that purpose, the section--including its two-year bar-applies only to services that Medicare would reimburse but  for the private contract.  Id.;  Oral Arg. Tr. at 51-52.  If a  patient and doctor want to enter into a private contract for  such services, the doctor must wholly opt out of the system  for two years.  HHS Br. at 14.

23
The Secretary stresses, however, that section 4507 does not  do what plaintiffs assert--that is, it does not impose restrictions on agreements to provide services for which Medicare  would not pay.  Hence, if a doctor and patient agree with  respect to a service that would not be reimbursed by Medicare--either because it is categorically excluded or because it  is deemed unreasonable or unnecessary in the particular  case--then the agreement does not fall within section 4507  and the doctor is not subject to the two-year bar.  HHS Br.  at 9-10, 18, 23;  Oral Arg. Tr. at 48-49.  The Secretary also  contends that plaintiffs have misunderstood the ABN procedure which, she says, provides a workable way to handle  those charges as to which Medicare payment is uncertain.HHS Br. at 23.

24
At oral argument, plaintiffs made clear that if section 4507  really says what the Secretary says it says, then their case is  at an end.  Oral Arg. Tr. at 4-5, 59.  Plaintiffs have no  interest, they aver, in obtaining the right to enter into  agreements to pay more for services they can obtain for less  under Medicare.  Id.  Rather, their interest--and the constitutional right they assert--is in obtaining services they cannot get under Medicare at any price.  Id. at 6.  The plaintiffs  are skeptical, however, that section 4507 really means what the Secretary says it means--and equally skeptical that the  Secretary actually reads and applies it that way.

25
Plaintiffs' skepticism is not unjustified.  The meaning of  section 4507 is hardly plain on its face.  Moreover, because  HCFA did not promulgate formal regulations regarding the  section until ten days after the oral argument in this case, its  own interpretation could only be gleaned from memoranda  issued to Medicare carriers and testimony delivered to Congress, of which Medicare beneficiaries may well have been  unaware.  Nonetheless, as we discuss below, the Secretary's  interpretation is a reasonable interpretation of the less-thanplain language of section 4507.  In addition, the Secretary's  current interpretation, as foreshadowed in the briefs filed in  this case and expressed in the subsequent regulations, is  consistent with the position HCFA has taken since the section  was enacted.  Under Chevron U.S.A. Inc. v. National Resources Defense Council, Inc., if a statute is ambiguous we  must defer to an agency's reasonable interpretation of its  terms.  467 U.S. 837, 842-45 (1984);  see United States v.  Haggar Apparel Co., 119 S. Ct. 1392, 1395 (1999).  This is so  regardless whether there may be other reasonable, or even  more reasonable interpretations.  See Serono Labs., Inc. v.  Shalala, 158 F.3d 1313, 1321 (D.C. Cir. 1998).  Following the  injunction of the Supreme Court, we are required to accord  such deference here.

26
* Section 4507 of the Balanced Budget Act does not clearly  indicate the kinds of services to which it applies.  Paragraph  (1) of subsection (b) states that "[s]ubject to the provisions of  this subsection, nothing in this title shall prohibit a physician  or practitioner from entering into a private contract with a  Medicare beneficiary for any item or service ... for which no  claim for payment is to be submitted under this title...."  42  U.S.C. § 1395a(b)(1).  This provision is the source of plaintiffs' apprehension, since it appears to apply to any service-Medicare-reimbursable or not--for which no claim for payment is submitted.

27
But the introductory clause of paragraph (1) makes it  "[s]ubject to the provisions of this subsection."  To understand the scope of paragraph (1), therefore, we must examine  the balance of subsection (b).  The key language is in paragraph (2), which states that "[a]ny contract to provide items  and services to which paragraph (1) applies shall clearly  indicate ... that the medicare beneficiary has the right to  have such items or services provided by other physicians or  practitioners for whom payment would be made under this  title."  42 U.S.C. § 1395a(b)(2)(B) (emphasis added).  The  Secretary argues that since "any" private contract under  section 4507 must indicate that the beneficiary has "the right"  to have the same services paid for by Medicare, section 4507  should be read as applying only to services that Medicare  would reimburse but for the parties' private contract.  Although we find the relationship between paragraphs (1) and  (2) less than plain, the Secretary's interpretation of section  4507 is at least a reasonable one.

B

28
Our parsing of the language of section 4507 leads us to  conclude that it is reasonable to read section 4507 as applying  only to private contracts for services that are reimbursable  under Medicare.  Plaintiffs question, however, whether that  truly is the way HCFA reads section 4507.  Although it is  unquestionably the view expressed in the Secretary's briefs in  this case, plaintiffs contend it has not previously been the  position of HCFA.

29
Even if the legal briefs contained the first expression of the  agency's views, under the appropriate circumstances we  would still accord them deference so long as they represented  the agency's "fair and considered judgment on the matter."Auer v. Robbins, 117 S. Ct. 905, 912 (1997);  see Association  of Bituminous Contractors, Inc. v. Apfel, 156 F.3d 1246,  1251-52 (D.C. Cir. 1998);  Tax Analysts v. IRS, 117 F.3d 607, 613 (D.C. Cir. 1997).  In this case, however, HCFA has  expressed similar views since Congress first enacted section  4507.  Although until recently those views were expressed  only in the form of memoranda and congressional testimony,  "an agency need not promulgate a legislative rule setting  forth its interpretation of a statutory term for that interpretation to be entitled to deference."  Association of Bituminous  Contractors, 156 F.3d at 1252.  Moreover, although HHS'  past pronouncements have not been perfectly clear, an agency's interpretation of its own rules is "controlling unless  'plainly erroneous or inconsistent' " with them.  Auer v. Robbins, 117 S. Ct. at 911;  see United States v. Stinson, 508 U.S.  36, 45 (1993).  In this case, the agency's past and current  views are not inconsistent.

30
The Secretary first calls our attention to a program memorandum and fact sheet HCFA issued to all Medicare carriers  in November 1997.  See HCFA, Program Memorandum,  Transmittal No. B-97-9 (Nov. 1997) (Joint Appendix ("J.A")  207-08).  Consistent with the Secretary's position here, the  fact sheet describes section 4507 as applying to "private  contracts with Medicare beneficiaries to provide covered services."  Id.  The document then expressly states that "[w]ith  respect to non-covered services, a private contract is unnecessary and section 4507 does not apply."  Id. at 208.  This  means, the fact sheet says, that "beneficiaries continue to be  able to pay for any services that Medicare does not cover out  of their own pockets ... without having to enter into a  private contract subject to the provisions of section 4507."

31
The HCFA fact sheet lists cosmetic surgery, hearing aids  and routine physical examinations as examples of "non covered" services.  Although these services are all of the  categorically-excluded variety, the next paragraph of the fact  sheet states that a physician may also "furnish a service that  Medicare covers under some circumstances but which the  physician anticipates would not be deemed 'reasonable and  necessary' by Medicare in the particular case."  Id.;  see also Oral Arg. Tr. at 53 (HHS counsel's explanation of "noncovered" as including services not necessary in particular  case).  If the beneficiary receives an ABN for such a service,  the fact sheet continues, "a private contract [under § 4507] is  not necessary to bill the beneficiary if the claim is denied."J.A. 208.

32
The fact sheet concludes that when a physician and beneficiary enter into a private contract to provide services "that  would otherwise be covered by Medicare," the physician must  " 'opt out' of Medicare for a two-year period."  Id.  The  phrase, "would otherwise be covered by Medicare," is not free  from ambiguity.  Plaintiffs suggest, and worry, that it refers  to services that would be covered but for Medicare's conclusion that they are not reasonable and necessary in the  particular case.  Under that reading, services the doctor  believes are necessary but Medicare does not could only be  provided under section 4507 (with its two-year bar).  But  such a reading would be inconsistent with the language  discussed in the preceding paragraph, which makes clear that  payment for a claim denied on the ground that the service  was not necessary does not require a section 4507 contract. The Secretary, by contrast, interprets "would otherwise be  covered by Medicare" as meaning "covered but for the fact  that the parties have entered into a private contract."  This  reading is consistent both with the rest of the fact sheet, and  with the Secretary's position that physicians must opt out of  Medicare only if they enter into contracts for services that  Medicare would reimburse but for those contracts themselves.5

33
On February 26, 1998, the Administrator of HCFA submitted a statement to the Senate Finance Committee intended to  "clarify" "substantial misunderstanding about what section  4507 of the Balanced Budget Act does."  J.A. 254.  Consistent with the HCFA fact sheet just discussed, the Administrator stated that a private contract under section 4507 is one  for which the service "would be covered if a claim were  submitted" to Medicare, id. at 252, and that such a contract is  the only kind to which the opt-out rule applies, id. at 254.  "A  physician does not have to opt out of Medicare for two years,"  she said, "in order to provide a non-covered service to a  Medicare beneficiary."  Id. at 255.  Nor does a physician  have to opt out when, employing the ABN procedure, the  doctor provides a service Medicare later determines was not  reasonable and necessary.  Id. at 256.6

34
At oral argument, counsel for the Secretary advised that  HCFA was planning to issue formal regulations incorporating  the above-stated views.  Those regulations were published on  November 2, 1998.  See 63 Fed. Reg. at 58,901.  Consistent  with the position recounted above, the explanatory preamble states that "[t]he private contracting rules do not apply to ...  services that Medicare does not cover."  Id. at 58,850.  It  further states that when a physician "furnishes a service that  does not meet Medicare's criteria for being reasonable and  necessary, and the [physician] has furnished the beneficiary  with an ABN ... , there are no limits on what the [physician]  may charge the beneficiary.... [and] [t]he act of providing  an ABN does not then require that the [physician] opt-out of  Medicare...."  Id. at 58,851.

35
On the basis of our examination of HCFA's announced  views, we conclude that the agency has consistently interpreted section 4507 and its opt-out rules as applying only to  contracts for services that Medicare itself would reimburse.

C

36
Finally, we briefly address plaintiffs' contention that the  ABN procedure is not a realistic way to ensure patients'  access to services they or their doctors regard as necessary  but Medicare does not.  Under the ABN procedure, before  providing a service the physician informs the patient that  Medicare may not pay, and obtains the patient's agreement to  pay on his or her own if Medicare denies the claim.  See 42  U.S.C. § 1395u(l)(1)(C)(ii).  As noted above, because an ABN  is not considered a private contract under section 4507, if  Medicare does not pay the doctor may receive payment from  the patient without being subject to the opt-out rule.  See 63  Fed. Reg. at 58,851.7

37
Plaintiffs contend that the ABN option is illusory because  HCFA has a policy of sanctioning doctors who repeatedly use  ABNs for services they believe warranted but Medicare  regards as unnecessary and will not reimburse.8  The Secretary vehemently denies having such a policy.  HHS Br. at 24.At least on their face, HCFA's pronouncements support the  Secretary since they expressly advise doctors to employ  ABNs in precisely those circumstances.  Standard ABN  forms, for example, require a statement that the patient has  "been informed by my physician that he or she believes that,  in my case, Medicare is likely to deny payment."  J.A. 94;  see  also 42 C.F.R. § 411.408(f) ("[T]he physician must inform the  beneficiary ... that the physician believes Medicare is likely  to deny payment.").  Similarly, a 1998 HCFA program memorandum explains that where a service is not covered by  Medicare because it is "never found to be medically necessary," the physician may charge the patient without opting  out "only if he or she gives the beneficiary" an ABN.  J.A.  225.9  These pronouncements would make no sense if HCFA  did not intend doctors to use ABNs for services they believe  Medicare would regard as unnecessary.

38
The preamble to HCFA's new regulations should also give  plaintiffs some comfort.  It notes that ABNs may state that the physician "believes that the service will not be covered by  Medicare" and that the "act of providing an ABN does not  then require that the physician or practitioner opt-out of  Medicare so that he or she avoids being at risk of having a  penalty assessed...."  63 Fed. Reg. 58,851.  And it closes  with an effort to assuage precisely the concern plaintiff  expresses here:  "[P]hysicians and practitioners should not  hesitate to furnish services to Medicare beneficiaries when  the physician or practitioner believes that those services are  in accordance with accepted standards of medical care, even  when those services do not meet Medicare's particular and  often unique coverage requirements."  Id.

39
It should not be missed, of course, that HCFA exempts  from this note of encouragement those services not "in accordance with accepted standards of medical care."  Id.  This  qualifier may well explain some of the confusion.  Although a  HCFA regulation does state that ABNs are not acceptable if  the "physician routinely gives this notice to all beneficiaries  for whom he or she furnishes services," 42 C.F.R.  § 411.408(f)(2)(i), the Secretary makes clear that this rule is  aimed at a doctor who "require[s] all his patients to sign  ABNs on a blanket basis in order to bill them for unwarranted procedures."  HHS Br. at 24 (citing § 411.408) (emphasis  added).  Needless to say, billing patients for unwarranted  procedures may well be subject to sanction, see generally 42  U.S.C. § 1320a-7(b)(6)(B), and plaintiffs do not urge otherwise.

40
In sum, the evidence before us does not support the  assertion that HCFA interprets the ABN procedures in a  manner that denies plaintiffs access to services they regard  as reasonable or necessary.  We have briefly addressed this  question because of plaintiffs' contention that it is linked to  the section 4507 issue.  We should note, however, that the  ABN issue is analytically distinct from plaintiffs' facial challenge to the constitutionality of section 4507, since ABNs are  not private contracts under that section and are not governed  by it.  To the extent plaintiffs feel HCFA enforces the ABN  statute and regulations in a manner inconsistent with the agency's own pronouncements, they are of course free to  challenge such enforcement in a particular case.

IV

41
Because the Secretary's reading of section 4507 eliminates  the constitutional injury plaintiffs allege, and because we are  bound under Chevron to defer to that interpretation, the  order of the district court is affirmed.

Notes:

1
  Under Medicare, "participating physicians" generally do not  bill their patients, but instead take an assignment of their patients'  rights and receive payment directly from Medicare.  "Nonparticipating physicians" may accept assignments on a case-by-case basis  or bill their patients directly.  In the latter circumstance, it is the  patient who obtains reimbursement from Medicare.  In all cases,  however, the fee schedules effectively limit the doctor's compensation.  See 42 U.S.C. §§ 1395u(b), (h), (i);  id. §§ 1395w-4(a), (b), (g);42 C.F.R. §§ 402.1, 402.105, 405.504.

2
  HHS enters into contracts with insurance carriers which  receive and process claims for payment for medical services provided to Part B enrollees.  42 U.S.C. § 1395u(a).  Claims are submitted to a carrier, which makes an initial determination as to whether  the service is covered.  42 C.F.R. § 405.803;  id. § 421.200.  Medicare beneficiaries, or the physicians to whom they have assigned  their rights to payment, may require carriers to review their  determinations and are entitled to post-review hearings.  Id.  § 405.801.

3
 Plaintiffs note that over 96% of practicing physicians receive  Medicare Part B reimbursement.  Pl. Br. at 11-12.  They also note  that to date, only 300 doctors nationwide have filed section 4507 contracts with the Secretary of Health and Human Services.  Pl.  Reply Br. at 4 (citing 9 Medicare Rep.  (BNA) 18 (May 1, 1998)).

4
  See United Seniors, 2 F. Supp. 2d at 41 n.2 ("Medicare is, in  effect, the only primary health insurance available to people over  65.  No private health insurance companies offer 'first dollar'  insurance to this group;  they offer only supplemental insurance.").

5
  Another HCFA program memorandum, issued to all Medicare  carriers in January 1998 and specifically addressed to "the implementation of ... § 4507," is also consistent with this interpretation. See HCFA, Program Memorandum, Transmittal No. B-97-17 (Jan.  1998) (J.A. 225-26) (stating that private contracts with their attendant opt-out rules are not required for services:  (1) that are "categorically exclude[d]" from Medicare;  (2) that are "not covered  because, under Medicare rules, the service is never found to be  medically necessary to treat illness or injury";  or (3) for which "Medicare denies the claim on the basis that the service was not  medically necessary" in the particular beneficiary's case).

6
  The Administrator used prostate specific antigen tests (PSAs)  as an example to make her point.  J.A. 256.  Medicare currently  covers such tests only when used for diagnosis to evaluate a  symptom of a particular patient, and only when such use is reasonable and necessary.  Medicare will not pay for the tests when used  for screening patients across the board.  "Therefore," the Administrator said, "a private contract is not needed when a beneficiary  wants a PSA test for screening purposes because it is not now a  covered service."  Id.  Likewise, the Administrator explained, a  physician may believe "that Medicare is likely to deny payment for  a certain diagnostic PSA (for example, when the patient wants to  have the test more frequently than Medicare would likely pay for  [it])."  Id.  In such circumstances, although an ABN should be  used, section 4507 does not apply.  Id. at 256-57.  See also Balanced Budget Act of 1997, Pub. L. 105-33, § 4103, 111 Stat. 251, 362  (codified at 42 U.S.C. § 1395l(h)(1)(A)) (providing coverage for  screening PSA tests beginning in the year 2000).

7
  An ABN is neither utilized nor necessary for services categorically excluded from Medicare, and section 4507 has no application  to such services.  See J.A. 255-57 (statement of HCFA Administrator).

8
  Plaintiffs also contend that if their doctor is a "participating  physician" who bills Medicare directly, see supra note 1, or if the medical service they seek is one statutorily required to be provided  on an assignment basis, see, e.g., 42 U.S.C. § 1395l(h)(5)(C) (clinical  diagnostic laboratory tests), then the ABN procedure may not be  used.  Although the language of the statutory ABN provision  appears to support this contention, see id. § 1395u(l)(1)(A), the  Secretary interprets other statutory provisions and HCFA regulations to permit a doctor to obtain an ABN agreement in such  circumstances and to charge the patient if Medicare denies payment.  HHS Br. at 25 n.5 (citing 42 U.S.C. § 1395pp;  42 C.F.R.  §§ 411.402(a)(2), 411.404;  HCFA, Medicare Carriers Manual  §§ 7300.5, 7330.D).

9
  Where the service is one Medicare never finds medically  necessary, the memorandum states that "no claim need be submitted."  J.A. 225.  A claim "must be submitted," however, if the  service "is one which Medicare has determined is medically necessary where certain clinical criteria are met, but is not medically  necessary where these criteria are not met."  Id.  In both cases, "if  Medicare denies the claim on the basis that the service was not  medically necessary, the physician or practitioner who has given the  advance beneficiary notice may bill the beneficiary."  Id.