The MARYLAND PSYCHIATIC SOCIETY, INCORPORATED, a District Branch of the American Psychiatric Association, Plaintiff-Appellee, v. Martin P. WASSERMAN, M.D., J.D., Secretary, Department of Health and Mental Hygiene of the State of Maryland, Defendant-Appellant, and Donna E. Shalala, Secretary of Health and Human Services, Defendant.
The MARYLAND PSYCHIATRIC SOCIETY, INCORPORATED, a District Branch of the American Psychiatric Association, Plaintiff-Appellee, v. Donna E. SHALALA, Secretary of Health and Human Services, Defendant-Appellant, and Martin P. Wasserman, M.D., J.D., Secretary, Department of Health and Mental Hygiene of the State of Maryland, Defendant.
Nos. 95-2767, 95-2970
United States Court of Appeals, Fourth Circuit
Decided Dec. 16, 1996
102 F.3d 717
Before WILKINSON, Chief Judge, LUTTIG, Circuit Judge, and BUTZNER, Senior Circuit Judge.
Reversed by published opinion. Chief Judge WILKINSON wrote the opinion, in which Judge LUTTIG and Senior Judge BUTZNER joined.
OPINION
WILKINSON, Chief Judge:
The Maryland Psychiatric Society, a professional association of psychiatrists, seeks injunctive and declaratory relief against Donna Shalala, Secretаry of Health and Human Services, and Martin Wasserman, Secretary
I.
The QMB program, thoroughly described in Rehabilitation Ass‘n of Va., Inc. v. Kozlowski, 42 F.3d 1444 (4th Cir.1994), is a hybrid of the Medicare and Medicaid programs. Individuals eligible for the program (“QMBs“) have a certain percentage of their medical costs paid by Medicare (usually 80%). The rеmaining 20%, plus their annual premiums and annual deductibles, are paid by the state Medicaid program. The Medicaid statute forbids charges to the QMBs themselves over a nominal amount.
Unlike most services where Medicare pays 80% of the full fee schedule amount, outpatient psychiatric services are only partially covered. Medicare coverage for these services is calculated by first excluding 37.5% from the fee schedule amount, and then paying 80% of the remaining 62.5%.
At issue in this case is who pays the excluded 37.5% for patients сovered by the QMB program. The state of Maryland has paid the 20% of the 62.5% for QMBs under the state Medicaid program. The question of who pays the 37.5% exclusion, however, is not addressed in either the Medicaid or the Medicare statutes. Maryland‘s Secretary of Health and Mental Hygiene has taken the position that Maryland is not responsible for covering it. The United States supports this view. The Society argues on the other hand that the QMB statute requires the states to pay for the exclusion.
The District Court granted the Society‘s motion for summary judgment, ruling that the Society had the better view of the applicable statutory provisions. Secretaries Wasserman* and Shalala both appealed.
II.
A state must agree to pay for “medicare cost-sharing” for QMBs in order to receive federal funds for its Medicaid program.
A.
By virtue of its spending power, Congress is permitted to condition receipt of
If Congress intended states to pay the 37.5% exclusion for outpatient psychiаtric services for QMBs, it certainly did not say so explicitly, clearly, and unambiguously. The QMB provisions do not mention the exclusion at all. See
The Society argues that states must cover the 37.5% exclusion because it is included in the QMB provision requiring states to pay “[c]oinsurance under subchapter XVIII [the Medicare Act] (including coinsurance dеscribed in section 1395e of this title.)”
The problem with adopting the district court‘s dictionary definition of coinsurance is that it sweeps in too much and renders other provisions of section 1396d(p)(3) superfluous. If the term coinsurance in sectiоn 1396d(p)(3)(B) were intended to include every payment obligation shared by the federal government and a state Medicaid program, then it would certainly encompass the 20% copayment required of states under the QMB program. If that were true, Congress would not have needed to include section 1396d(p)(3)(D), which requires the states to pay the 20% copayment for QMBs. Rules of statutory construction forbid us to construe one provision in a way that renders another provision of the same enactment superfluous. Freytag v. Commissioner of Internal Revenue, 501 U.S. 868, 877, 111 S.Ct. 2631, 2638, 115 L.Ed.2d 764 (1991).
In all events, the general dictiоnary definition of coinsurance is too loose to support the imposition of substantial financial burdens on state governments. Instead, we read the word “coinsurance” to refer specifically to those expenses which Congress identified as “coinsurance” in the statutory sections that 1396d(p)(3)(B) references. Such a reading of the word “coinsurance” is consistent with the text and structure of the statute. Section 1396d(p)(3)(B) requires states to pay QMBs’ “[c]oinsurance under subchapter XVIII[the Medicare Act] (including coinsurance describеd in section 1395e of this title.)” Section 1395e, describing cost-splitting for inpatient hospital services, explicitly uses the label “coinsurance” for certain identified costs not covered by Medicare. Similarly, when Congress added new provisions to the Medicare Act to cover prescription drugs in 1988, it expressly called certain of the noncovered amounts “coinsurance.” See Medicare Catastrophic Coverage Act of 1988, Pub.L. No. 100-360, Title III, § 202, 102 Stat. 683, 702 (since repealed).
The 37.5% exclusion for outpatient psychiatric servicеs, however, is not labelled as “coinsurance” anywhere in the Medicare or Medicaid statutes. Unlike the 1988 prescription drug obligations, the 37.5% amount is not called coinsurance in the provision that excludes that amount from Medicare reimbursement,
Because no provision in either the Medicare or Medicaid statutes explicitly and unambiguously requires states to cover the 37.5% exclusion, reading the QMB statute to mandate state covеrage imposes a burden in
The case for inferring intent is at its weakest where, as here, the rights asserted impose affirmative obligations on the States to fund certain services, since we may assume that Congress will not implicitly attempt to impose massive financial obligаtions on the States.
Pennhurst, 451 U.S. at 16-17, 101 S.Ct. at 1539. The states signed up to pay narrowly-defined categories of premiums, coinsurance, deductibles, and 20% of the incurred expenses for specific services. Nowhere did their contract with the federal government say that states would be required to cover amounts that were totally excluded from the Medicare calculation. Nowhere did their contract even suggest that the states must pick up 50% of the tab for any medical service (the 37.5% exclusion plus 20% of the remaining 62.5% equals 50% of total cost). Pennhurst does nоt permit the federal courts to connive in this sort of ambush of state treasuries. Redrafting the terms of understandings between the state and federal governments is little different from renegotiating contracts between private parties. Both are impermissible.
B.
The impropriety of imposing the 37.5% exclusion on states is underscored by several other factors. Among them is the fact that the federal Secretary of Health and Human Services, who is responsible for administering the QMB program, agrees that the states are not responsible for pаying the 37.5%. It would take an extraordinary view of Pennhurst and Chevron v. Natural Resources, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), to fasten large financial obligations on the states in violation of the statutory interpretation of the federal implementing agency.
It is true that the Secretary espoused a contrary interpretation prior to 1992, аnd that her current interpretation of the statute may thus be entitled to less deference. See INS v. Cardoza-Fonseca, 480 U.S. 421, 446 n. 30, 107 S.Ct. 1207, 1221 n. 30, 94 L.Ed.2d 434 (1987). Even so, we find it to be significant that the federal Secretary and the state Secretary are in accord. If the state and federal governments both believe they agreed to the same terms in their QMB contract, courts should not casually change those terms and require the states to spend millions of additional dollars on psychiatric services.
The state‘s interpretation of the statute is also bolstered by the fact that the Sociеty‘s arguments rest on a faulty assumption. The Society asserts that its member psychiatrists possess a statutory right to recover 100% of their reasonable charges in all circumstances, and that therefore some government entity, either state or federal, must pay the exсlusion. See New York City Health & Hosps. Corp. v. Perales, 954 F.2d 854, 858 (2d Cir.1992) (finding that Part B providers have an “express statutory right to recover their full reasonable costs or charges“).
The Society‘s assumption has no basis in the statute. While
Finally, the state‘s interpretation of the statute complies with Congress’ judgment that mental health services have a lesser claim than physical health services on scarce governmental resources. For most outpatient physical health services, Congrеss has provided that Medicare will cover 80% of the reasonable cost.
Title XIX [Medicaid] was designed as a cooperative program of shared financial responsibility, not as a deviсe for the Federal Government to compel a State to provide services that Congress itself is unwilling to fund.
Harris v. McRae, 448 U.S. 297, 309, 100 S.Ct. 2671, 2684, 65 L.Ed.2d 784 (1980). Congress could not have intended to leave the states holding the bag on every congressional exclusion. We certainly find no such obligation in the instant casе.
III.
For the foregoing reasons, we reverse the judgment of the district court and remand this case with directions that it be dismissed.
REVERSED.