Court Opinion

ID: 2995528
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:20:50.138013+00
Date Added: 2024-06-11T11:45:25.718707
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 00-2518

American Society of Cataract and
Refractive Surgery; American Academy
of Orthopedic Surgeons; American
Academy of Ophthalmology, et al.,

Plaintiffs-Appellants,

v.

Tommy Thompson, Secretary of the
United States Department of Health and
Human Services and Thomas A. Scully,
Administrator of the Centers for Medicare
and Medicaid Services/1,

Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 7061--Ann Claire Williams, Judge.

Argued November 2, 2000--Decided January 28, 2002

  Before Manion, Kanne, and Evans, Circuit
Judges.

  Kanne, Circuit Judge. Eleven national
medical societies and associations
representing physicians of different spe
cialties (collectively "petitioners")
appeal the district court’s dismissal of
their statutory and constitutional
challenge to a regulation promulgated by
the Secretary of the Department of Health
and Human Services ("Secretary")
implementing a new system for calculating
a component of the Medicare physician fee
schedule for lack of subject matter
jurisdiction. Petitioners contend that
their claim is not precluded from
judicial review, and that the Secretary’s
regulation is directly contrary to the
transition formula Congress established
for calculating the relevant component.
Because 42 U.S.C. sec. 1395w-4(i)(1)(B)
bars judicial review of petitioners’
claim, we affirm the district court.

I.   History

  Medicare, the federal health insurance
program for the aged and disabled has
three parts: Part A--Hospital Insurance
Benefits; Part B--Supplemental Medical
Insurance Benefits; and, Part C--
Miscellaneous Provisions. See 42 U.S.C.
sec. 1395 et seq. This case deals with
Part B, which is a voluntary supplemental
insurance program that covers payment for
physicians’ services and other healthcare
services to aged and disabled individuals
who enroll in the program. See 42 U.S.C.
sec. 1395j-1395w-4. Physicians who
participate in the Medicare program are
reimbursed at a rate outlined in a
physicians’ fee schedule. Payment amounts
under the fee schedule are calculated by
multiplying (1) the relative value of a
service; (2) the conversion factor for
the particular year; and (3) the
geographic adjustment factor applicable
to the locality in which the service was
provided. See 42 U.S.C. sec. 1395w-
4(b)(1). The first component, the
relative value of a service, is
calculated by combining three
subcomponents each of which is measured
in terms of relative value units
("RVUs"). The three subcomponents are (1)
the work component ("Work RVUs"); (2) the
practice expense component ("PE-RVUs");
and (3) the malpractice component
("Malpractice RVUs"). See 42 U.S.C.
sec.sec. 1395w-4(c)(2)(A)(i) &
(c)(2)(C)(i)-(iii).

  This case focuses specifically on the
determination of PE-RVUs. In 1994,
Congress directed the Secretary to
develop a resource-based system for
calculating PE-RVUs. See Social Security
Act Amendments of 1994, Pub. L. No. 103-
432, sec. 121(a)(1), 108 Stat. 4398, 4408
(1994) (codified at 42 U.S.C. sec. 1395w-
4(c)(2)). Historically, PE-RVUs were
"charged-based," meaning that they were
predominately based upon "historical
pattern[s] of charges billed by
[physicians]." H. R. Rep. No. 101-247, at
338 (1989), reprinted in 1989
U.S.C.C.A.N. 1906, 2064. A "resource-
based" system would be based on "the
relative practice expense resources
involved in furnishing the service." See
42 U.S.C. sec. 1395w-4(c)(2)(C)(ii).

  In 1997, the Secretary proposed a new
system for determining PE-RVUs. She
qualified her proposal, however, by
acknowledging that the new system
warranted a transition period that should
be gradually implemented. See 62 Fed.
Reg. 33158, 33194 (June 18, 1997) (to be
codified at 42 C.F.R. pts. 400, 405, 410,
414). Shortly thereafter, Congress passed
the Balanced Budget Act of 1997, Pub. L.
No. 105-33, 111 Stat. 251 (1997)
(codified at 42 U.S.C. sec. 1395w-4). In
this legislation, Congress provided that
the new system for calculating PE-RVUs
would be phased in over a four-year
period beginning in 1999:

The Secretary shall determine a number of
practice expense relative value units for
the service for years before 1999 equal
to the product of--

  (I) the base allowed charges (as defined
in subparagraph (D)) for the service, and

  (II) the practice expense percentage for
the service . . . . For 1999, such number
of units shall be determined based 75
percent on such product and based 25
percent on the relative practice expense
resources involved in furnishing the
service. For 2000, such number of units
shall be determined based 50 percent on
such product and based 50 percent on such
relative practice expense resources. For
2001, such number of units shall be
determined based 25 percent on such
product and based 75 percent on such
relative practice expense resources. For
a subsequent year, such number of units
shall be determined based entirely on
such relative practice expense resources.

42 U.S.C. sec. 1395w-4(c)(2)(C)(ii). The
above-cited language is the formula
prescribed by Congress to be used during
the four-year transition period to
resource-based PE-RVUs.
  In June 1998, the Secretary published
her proposed rule for implementing the
new resource-based system pursuant to
Congress’s directive in the Balanced
Budget Act of 1997. See 63 Fed. Reg.
30818 (June 5, 1998). The Secretary indi
cated that she would use the 1998 PE-
RVUs, as adjusted, in implementing
Congress’s four-year transition. See id.
at 30839. Thus, "the final rule"
published in November 1998 explained:

For services furnished beginning January
1, 1999, the practice expense RVUs are
based on 75 percent of the practice
expense RVUs applicable to services
furnished in 1998 and 25 percent of the
relative practice expense resources
involved in furnishing the service. For
services furnished in 2000, the practice
expense RVUs are based on 50 percent of
the practice expense RVUs applicable to
services furnished in 1998 and 50 percent
of the relative practice expense
resources involved in furnishing the
service. For services furnished in 2001,
the practice expense RVUs are based on 25
percent of the practice expense RVUs
applicable to services furnished in 1998
and 75 percent of the relative practice
expense resources involved in furnishing
the service. For services furnished in
2002 and subsequent years, the practice
expense RVUs are based entirely on
relative practice expense resources.

63 Fed. Reg. 58814, 58910-11 (Nov. 2,
1998) (codified at 42 C.F.R. sec.
414.22(b)(5)) (emphasis added). In
implementing the transition formula, the
Secretary determined that the language
"such product" in sec. 1395w-
4(c)(2)(C)(ii) referred to the PE-RVUs
for 1998. See 42 sec. C.F.R.
414.22(b)(5).

  Two days after the final rule was
promulgated, the petitioners filed a
complaint in the United States District
Court for the Northern District of
Illinois, alleging that the final rule
was arbitrary, capricious, and contrary
to law in violation of the Medicare Act,
the Administrative Procedure Act, and the
Due Process Clause of the Fifth
Amendment. Petitioners sought expedited
relief that included: a declaratory
judgment finding that the Secretary’s
transition formula as described in the
final rule was improper; an injunction
enjoining respondents from implementing
the transition formula as described in
the final rule; and an order requiring
the implementation of the transition
formula as petitioners contend Congress
mandated by statute./2 The respondents
moved to dismiss petitioners’ complaint,
contending that 42 U.S.C. sec. 1395w-
4(i)(1) barred petitioners’ claim.

  Title 42 of the United States Code
section 1395w-4(i)(1) provides that:

There shall be no administrative or
judicial review under section 1395ff of
this title or otherwise of--

  (A) the determination of the adjusted
historical payment basis (as defined in
subsection (a)(2)(D)(i) of this section),

  (B) the determination of relative values
and relative value units under subsection
(c) of this section, including
adjustments under subsection (c)(2)(F) of
this section and section 13515(b) of the
Omnibus Budget Reconciliation Act of
1993,

  (C) the determination of conversion
factors under subsection (d) of this
section,

  (D) the establishment of geographic
adjustment factors under subsection (e)
of this section, and

  (E) the establishment of the system for
the coding of physicians’ services under
this section.

(Emphasis added). The district court
referred the case to a magistrate judge
to conduct necessary proceedings and
enter a Report and Recommendation on
respondents’ motion to dismiss and
petitioners’ motion for expedited
declaratory judgment. The magistrate
judge first considered whether 42 U.S.C.
sec. 1395w-4(i)(1)(B) precluded judicial
review of the petitioners’ challenge. The
magistrate judge found that although this
subsection "clearly bars administrative
and judicial review of the determination
of relative value units . . . this type
of bar on judicial and administrative
review does not preclude a collateral
challenge on statutory or constitutional
grounds." Thus, the magistrate reasoned
that because "[w]hat petitioners [were]
really seeking [was] a ruling on whether
the Secretary violated the Constitution
or federal statutes while interpreting
the statutory requirements for the
transition to resource-based PE-RVUs,"
they were not precluded from seeking
judicial review.

  The magistrate judge then considered the
merits of petitioners’ claims. In light
of the "unclear text of sec. 1395w-
4(c)(2)(C)(ii), the context of the
statute, the related sections of the
Medicare Act, the history of PE-RVUs, and
the real-world situation to which the
statute pertains," the magistrate found
that the language of sec. 1395w-
4(c)(2)(C)(ii) was not plain and
unambiguous. Furthermore, for many of the
reasons articulated as to why the statute
was ambiguous, as well as the deference
due to the Secretary’s interpretation,
the magistrate judge determined that the
Secretary’s integration of the 1998
adjusted PE-RVUs into the such product
language of the transition formula was a
reasonable interpretation of the statute.
Thus, the magistrate concluded that the
respondents did not violate the Medicare
Act, the APA, or petitioners’ due process
rights.

  Both parties filed objections to the
magistrate judge’s Report and
Recommendation with the district court.
The district court considered the
magistrate judge’s Report and
Recommendation; however, the court
decided to grant the respondents’ motion
to dismiss petitioners’ complaint for
lack of jurisdiction pursuant to sec.
1395w-4(i)(1)(B). The court explained
that "[b]ecause the express language of
the statute bars judicial review, and the
overall structure of the Medicare Part B
payment scheme supports this conclusion,"
it found sufficient "congressional intent
to foreclose judicial review of the
Secretary’s instructions and
regulations." Additionally, the district
court found that petitioners’ "challenge
to the process used to determine relative
values and relative value units [was] not
procedural or collateral but [was] in
fact substantive," and therefore subject
to preclusion by sec. 1395w-4(i)(1)(B).
Furthermore, with respect to the merits
of petitioners’ complaint, the court
noted that even if the Medicare Act
permitted judicial review of petitioners’
challenge, it would still have found in
favor of respondents, the court then
adopted the magistrate judge’s report
with respect to this issue. Petitioners
now appeal.

II.   Analysis

  On appeal, this court first must
determine whether 42 U.S.C. sec. 1395w-
4(i)(1)(B) precludes judicial review of
petitioners’ claim. If review is
precluded, we must consider whether this
bar violates petitioners’ constitutional
rights and the doctrine of separation of
powers. However, if this court does have
jurisdiction to review petitioners’
claim, the issue becomes whether the
Secretary’s regulation violated the
Medicare Act, the APA, or the
petitioners’ due process rights.

  We review a district court’s dismissal
for lack of subject matter jurisdiction
de novo. See Neuma, Inc. v. AMP, Inc.,
259 F.3d 864, 871 (7th Cir. 2001). We
conduct this review mindful of the strong
presumption that Congress intends
judicial review of administrative action.
See Bowen v. Mich. Acad. of Family
Physicians, 476 U.S. 667, 672, 106 S. Ct.
2133, 90 L. Ed. 2d 623 (1986). "[O]nly
upon a showing of ’clear and convincing
evidence’ of a contrary legislative
intent should the courts restrict access
to judicial review." Abbott Labs. v.
Gardner, 387 U.S. 136, 141, 87 S. Ct.
1507, 18 L. Ed. 2d 681 (1967). While we
acknowledge that respondents bear a heavy
burden to overcome "the strong
presumption that Congress did not mean to
prohibit all judicial review of"
administrative action, Bowen, 476 U.S. at
672 (quotation omitted), we also
recognize that "all presumptions used in
interpreting statutes, may be overcome
by, inter alia, specific language or
specific legislative history that is a
reliable indicator of congressional
intent, or a specific congressional
intent to preclude judicial review that
is fairly discernible in the detail of
the legislative scheme." Bowen, 476 U.S.
at 673 (quotations omitted).

  We agree with the district court’s
determination that the Medicare Act, by
its express terms, precludes judicial re
view of the determination of relative
values and relative value units,
including review of the regulation
promulgated by the Secretary implementing
a statutory transition formula for the
determination of PE-RVUs. Title 42 of the
United States Code section 1395w-4(i)(1)
expressly provides that: "there shall be
no administrative or judicial review
under section 1395ff of this title or
otherwise of-- . . . (B) the
determination of relative values and
relative value units under subsection (c)
of this section . . . ." (emphasis added)
("paragraph (B)"). We find this provision
to be a clear and explicit indication of
Congress’s intent to prohibit
administrative and judicial review of the
Secretary’s decision now challenged by
petitioners. While petitioners
acknowledge that paragraph (B) precludes
administrative and judicial review of the
Secretary’s determination of specific
RVUs assigned to specific services (e.g.,
the Secretary’s decision to assign a
specific number of RVUs for gallbladder
surgery), they assert that this provision
does not foreclose review of a systemic
challenge to the Secretary’s
interpretation of Congress’s
nondiscretionary instructions for
establishing components of the physician
fee schedule.

  In support of their argument,
petitioners rely on language from Furlong
v. Shalala, 1996 WL 393526, at *8
(S.D.N.Y. July 12, 1996), aff’d in part
and rev’d in part on other grounds, 156
F.3d 384 (2d Cir. 1998). In Furlong, the
district court found that paragraph (B)
did not bar judicial review of a
challenge to the application of the "one-
and-one- half rule"/3 to reimbursement
payments under the physician fee
schedule. Id. In so finding, the Furlong
court explained that paragraph (B) "does
not foreclose judicial review of all
issues which may implicate subsection
(c)." Id. In the case at bar, petitioners
assert that, similar to Furlong, their
challenge involves an issue that
implicates subsection (c) and to which
judicial review is not foreclosed.
However, petitioners ignore the balance
of the Furlong court’s reasoning. The
rule challenged in Furlong was an
ancillary policy applied only after
relative values had been determined. See
id. The Furlong court explicitly
recognized that "relative values first
must be determined and that only after
this determination does a value exist
which the [ancillary policy] may reduce
by one-half." Id. Far from being
ancillary to the determination of
relative values, the regulation
challenged by petitioners in this case is
an integral part of the relative value
determination.

  Petitioners also seek support for their
position from the Supreme Court’s
decision in McNary v. Haitian Refugee
Center, 498 U.S. 479, 111 S. Ct. 888, 112
L. Ed. 2d 1005 (1991). In McNary, the
Court held that sec. 210(e) of the
Immigration and Nationality Act (INA),
which barred judicial review "of a
determination respecting an application"
for special agricultural worker ("SAW")
status, did not bar judicial review of
collateral challenges to unconstitutional
practices and policies used in processing
the application. 498 U.S. at 492
(quotation omitted). Petitioners rely on
the similar use of the word
"determination" in paragraph (B) to
support their claim that the scope of
that prohibition should be interpreted so
as to permit their challenge. We do not
agree.

  The fact that the regulation in McNary
and the regulation at issue in the case
at bar both contain the word
"determination" does not further
petitioners’ argument. Petitioners’
mechanical comparison fails to
acknowledge important differences between
the claims asserted in McNary and the
claim in the case at bar, and how these
claims relate to the respective
regulations being challenged. In McNary,
the Court found that the language of sec.
210(e) prohibited the judicial review of
an individual’s challenge to the
determination of his or her application
for SAW status. See id. at 492. Thus, the
Court concluded that the plaintiff’s
claim was outside the scope of sec.
210(e)’s prohibition because it merely
challenged the policies and practices
employed by the INS in processing
applications. See id. Conversely, in this
case, the language in paragraph (B)
explicitly includes petitioners’
challenge. Petitioners’ claim consists of
a challenge to a regulation implementing
a formula for determining PE-RVUs. It
would be difficult for Congress to have
written paragraph (B) in clearer terms
prohibiting such a challenge. See Painter
v. Shalala, 97 F.3d 1351, 1356 (10th Cir.
1996) (finding that "the ’no review’
provision clearly indicates Congress’
intent to preclude administrative and
judicial review of the manner in which
the conversion factor is calculated by
the Secretary"); Am. Soc’y of Dermatology
v. Shalala, 962 F. Supp. 141, 146 (D.D.C.
1996) (finding that "Congress plainly
intended to give the Secretary the
authority to develop and implement the
[resource-based relative value scale]
system without being subjected to
judicial scrutiny), aff’d, 116 F.3d 941
(D.C. Cir. 1997). Paragraph (B) bars the
review of the "determination of relative
values and relative value units." 42
U.S.C. sec. 1395w-4(i)(1). The regulation
at issue sets out the formula for
calculating PE-RVUs, practice expense
relative value units. Petitioners’
challenge is precisely what Congress
sought to prohibit.

  We find Heckler v. Ringer, 466 U.S. 602,
104 S. Ct. 2013, 80 L. Ed. 2d 622 (1984),
a case which involved the Medicare Act,
to be more analogous than McNary. In
Heckler, the Court addressed a challenge
to the Secretary’s policy of refusing
reimbursement for a particular type of
surgery. See id. at 605. Without
exhausting the administrative remedies,
the plaintiffs sought relief in district
court. See id. They attempted to
distinguish their claim on the ground
that it was procedural and not
substantive, and therefore, not within
the scope of the administrative review
channeling provision. See id. at 614.
However, the Court concluded that "the
claims of . . . respondents [were
nothing] more than, at bottom, a claim
that they should be paid for their
[particular] surgery." Id. The Court
explained that the procedural claim was
inextricably intertwined with the
plaintiffs’ claim for benefits, and
therefore, must be channeled through the
administrative review that was provided
for in the statute. Id. Unlike McNary,
but similar to the plaintiffs in Heckler,
the "relief that [petitioners] seek to
redress their supposed ’procedural’
objections is the invalidation of the
Secretary’s current policy" for
determining PE-RVUs. Id. We agree with
the district court and conclude that such
a challenge is not a procedural
challenge, but rather a substantive
challenge. We find that such a challenge
falls within the scope of paragraph (B)’s
clear bar on administrative and judicial
review.

  Additionally, the payment scheme in Part
B of the Medicare Act supports our
determination that Congress intended to
bar judicial review of petitioners’
challenge. RVUs are used to calculate the
physician’s fee schedule. The fee
schedule is updated yearly and each
year’s schedule is established by
November 1 of the preceding year. See 42
U.S.C. sec. 1395w-4(b)(1). As respondents
highlight, this tight time frame demands
that the Secretary’s decisions regarding
the RVUs be made quickly and efficiently.
Further, Congress directed that
adjustments in the RVU component of the
fee schedule be made in a budget neutral
fashion, see 42 U.S.C. sec.sec. 1395w-
4(c)(2)(B)(ii), (c)(2)(F), 1395w-4 note,
requiring increases for some services to
be offset by decreases in others. While
petitioners acknowledge that a favorable
decision would be disruptive, we believe,
as respondents persuade us to, that to
ensure finality so that the Secretary can
make any necessary budget neutrality
adjustments, claims such as petitioners’
claim must be precluded from judicial
review.

  Petitioners argue that preclusion of
their claim would be unconstitutional.
Petitioners contend that without an
opportunity for judicial review both
their due process rights and the doctrine
of separation of powers are violated. We
do not find petitioners’ arguments
persuasive.

  Petitioners assert that they "clearly
have a property interest in reimbursement
for their Medicare services in the
amounts mandated by Congress through the
transition formula set out in BBA’97." By
enacting a regulation that they claim is
contrary to Congress’s transition
formula, petitioners claim that the
Secretary violated their due process
rights. In order to trigger the
procedural protections available under
the Due Process Clause of the
Constitution, petitioners must have a
"legitimate claim of entitlement." Bd. of
Regents of State Colls. v. Roth, 408 U.S.
564, 577, 92 S. Ct. 2701, 33 L. Ed. 2d
548 (1972). In Roth, the Court explained
that "[t]o have a property interest in a
benefit, a person clearly must have more
than an abstract need or desire for it.
He must have more than a unilateral
expectation of it . . . . Property
interests . . . are created and their
dimensions are defined by existing rules
or understandings that stem from an
independent source such as state law . .
. ." Id. Petitioners rely on Furlong v.
Shalala, 156 F.3d 384, 393 (2d Cir. 1998)
("Furlong II") for their proposition that
physicians have a property interest in
reimbursement for their Medicare services
in the amounts mandated by Congress
through the transition formula. We find
that petitioners’ reliance is misplaced.
In Furlong II, the issue addressed was
whether non-assigned physicians’ due
process rights were violated by the
Secretary’s decision to deny them appeals
rights. See id. The petitioner-physicians
argued that they had a protected property
interest in having the Medicare-approved
charge for their services be based upon a
rate equal to the amount promulgated in
the statutory fee schedule, without being
subject to reduction by the operation of
the "one-and-one-half rule." Id. The
court explained that "professionals who
provide services under a federal program
such as . . . Medicare have a property
interest in reimbursement for their
services at that the ’duly promulgated
reimbursement rate.’" Id. at 393
(quotation omitted). Further, the court
explained that "[t]he fee schedule
provides the Medicare-approved rates for
services and thus would typically
constitute the duly promulgated
reimbursement rate." Id. The petitioner-
physicians argued that the application of
the rule deprived them of this interest
without due process of law because they
have no recourse under the Act and its
implementing regulations to appeal the
allegedly improper determinations. See
id. The court determined that a series of
ALJ decisions that reversed the
application of the rule to assigned-
physicians, who had appeals rights,
established a cognizable property
interest in the reimbursement rate set
out in the fee schedule, without a
subsequent reduction, for non-assigned
physicians, who did not have appeals
rights. See id. at 395.

  We agree with petitioners’ assertion to
the extent that they claim that they have
a property interest in being reimbursed
at the duly promulgated reimbursement
rate as set out in the fee schedule.
Petitioners, however, have not
established that they have a property
interest in the transition formula used
to determine PE-RVUs. Petitioners argue
that their property interest is greater
than the property interest established by
the ALJ decisions in Furlong II because
their interest is found in a statutory
mandate. We do not agree. Title 42 of the
United States Code section 1395w-
4(c)(2)(C)(ii) provides, in pertinent
part: "The Secretary shall determine a
number of practice expense relative value
units for the service . . . ." (emphasis
added). The language of the statute
plainly authorizes the Secretary to
determine PE-RVUs.

  In Painter, the Tenth Circuit found that
there was no legitimate property interest
in having reimbursements calculated in a
particular manner. See 97 F.3d at 1357-
58. Petitioners highlight that court’s
statement that there is "nothing in the
Medicare Act that would lead a reasonable
physician to believe he might be entitled
to a greater payment amount for a
particular service than was outlined in
the Secretary’s fee schedule." Id. at
1358. Petitioners contend that, unlike in
Painter, in this case there is something
in the Medicare Act that leads a
reasonable physician to believe he is
entitled to a greater payment. We find
petitioners’ reliance on this single
sentence in the Painter court’s analysis
to be unpersuasive. The Painter court
emphasized the structure of the Part B
payment scheme in reaching its
conclusion. See id. at 1357. That court
stressed that the Secretary was charged
with establishing the conversion factor,
the component at issue in Painter. See
id. Similarly, in this case, the
Secretary was charged with establishing
PE-RVUs. Additionally, the Painter court
stressed that physicians knew prior to
providing services the amount according
to the fee schedule that they would be
reimbursed during a particular year. See
id. Similar to the conclusion reached by
the Tenth Circuit, we find that
petitioners are not "entitled to a
greater payment amount for a particular
service than was outlined in the
Secretary’s fee schedule." Id. at 1358.

  Petitioners assert that by foreclosing
judicial review, "the Secretary--rather
than the courts--would effectively be the
final arbiter of the meaning of an act of
Congress." In regard to this alleged
violation of the doctrine of separation
of powers, we remind petitioners that:

[O]ur conclusion that judicial review is
not available for [petitioners’] claim
follows from our interpretation of an act
of Congress, by which we and all federal
courts are bound. The judicial power of
the United States conferred by Article
III of the Constitution is upheld just as
surely by withholding judicial relief
where Congress has permissibly foreclosed
it, as it is by granting such relief
where authorized by the Constitution or
by statute.

Dalton v. Specter, 511 U.S. 462, 477, 114
S. Ct. 1719, 128 L. Ed. 2d 497 (1994).
Thus, we find no separation of powers
violation where we are merely adhering to
an explicit congressional prohibition of
judicial review. The Painter court found
that "[i]n enacting the ’no review’
provision and prohibiting review of the
Secretary’s calculation of the conversion
factor, we find no indication that
Congress intended to infringe upon the
powers of the judiciary and prohibit
review of substantial constitutional
issues." 97 F.3d at 1359. Likewise, we
find no such indication here. While we
recognize that in regard to the
conversion factor at issue in Painter,
Congress did not provide instructions for
calculating the conversion factor, we do
not believe that the guidance provided
with respect to the transition formula
for PE-RVUs alters the analysis.

  Finally, petitioners argue even if
paragraph (B) bars judicial review of
their claim, this court should find
jurisdiction because in enacting the
final rule, the Secretary violated a
clear statutory mandate and exceeded the
scope of her delegated authority. See
Leedom v. Kyne, 358 U.S. 184, 188, 79 S.
Ct. 180, 3 L. Ed. 2d 210 (1958); see also
Hanauer v. Reich, 82 F.3d 1304, 1307 (4th
Cir. 1996). This argument requires us to
take a cursory look at the merits of
petitioners’ claim to determine whether
the Secretary exceeded her authority. See
Hanauer, 82 F.3d at 1309. Because, on the
merits, we would find the Secretary’s
regulation to be a reasonable
interpretation of an unclear statutory
mandate, we do not find petitioners’
argument to be meritorious.

III.   Conclusion

  For the foregoing reasons, we AFFIRM the
district court’s decision granting
respondent’s motion to dismiss.

FOOTNOTES

/1 Tommy G. Thompson is substituted as defendant in
place of the former Secretary, Donna E. Shalala
and Thomas A. Scully is substituted as defendant
in place of the former administrator, Nancy Min
De Parle. See Fed. R. Civ. P. 25(d)(1). The
Health Care Financing Administration is now the
Centers for Medicare and Medicaid Services.

/2 Essentially, petitioners contend that the "such
product" language in Congress’s transition formu-
la refers to the PE-RVUs for 1991 and not for
1998, as the Secretary’s regulation provides.

/3 The "one-and-one-half rule" was a multiple proce-
dure reimbursement rule. Under this rule, the
total Medicare-approved charges were determined
by adding the Medicare-approved charges for one
of the procedures to one-half of the Medicare-
approved charges for the other procedure. The
"one-and-one-half rule" was being applied to
invasive monitoring procedures. The Furlong
plaintiffs asserted that their reimbursements
were insufficient because their monitoring proce-
dures were medical, not surgical procedures and
therefore should not be subject to the "one and
one half rule." See id.