OPINION
Before the Court are defendants’ motion to dismiss, plaintiffs opposition, and defendants’ reply. Also before the Court are plaintiffs and defendants’ cross-motions for summary judgment and the oppositions and replies thereto. Summary judgment may be granted only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In considering a summary judgment motion, all evidence and the inferences to be drawn from it must be considered in a light most favorablе to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
Background
Plaintiff, a nonprofit trade association of residential treatment centers (“RTCs”) providing care and treatment to emotionally ill youths, challenges several aspects of defendants’ management of the Civilian Health and Military Program of the Uniformed Services program (“CHAMPUS”).
Residential treatment is a specific level of care to be differentiated from acute, intermediate and long term hospital care, where the least restrictive environment is maintained to allow for normalization of the patient’s surroundings.
Id. § 199.6(b)(4)(vii). An RTC provides children and adolescents under the age of 21 “a total 24-hour therapeutically planned group living and learning situation where psycho-therapeutic interventions can take place.” Id.
Health Management Services International (“HMS”), an independent contractor, assists in the certification and coverage determinations. Specifically, OCHAMPUS contracted for HMS to: (1) review new RTC applications and conduct on-site surveys of both newly applying and previously authorized RTCs; (2) draft revised CHAMPUS RTC Standards for consideration by the Department of Defense; and (3) review the medical necessity and appropriateness of mental health care provided in individual cases.
HMS is required to apply the JCAHO CSM standards, the CHAMPUS RTC Standards, and state licensing requirements in its surveys. Based on the surveys, HMS submits its findings and recommendation regarding certification to the Mental Health Program Branch of OCHAMPUS, which evaluates the findings and recommendation to ensure they conform to regulatory requirements. OCHAMPUS retains all final decisionmaking authority, and determines what action should be taken. Before terminating a previously authorized RTC’s certification, OCHAMPUS sends out a notice of proposed termination. The RTC may meet with OCHAMPUS officials and submit a plan of correctivе action, after which the facility is resurveyed. A denial of certification or termination of certification is appealable under the administrative appeal process set forth in 32 C.F.R. § 199.10.
Certified RTCs may receive reimbursement for the cost-shared amount of covered benefits. The care must be medically or psychologically necessary. Id. § 199.-4(b)(4)(vii). The RTC must obtain preadmission authorization and continuing periodic approval (“concurrent review”) of the medical or psychological necessity of the care at least every 30 days. Preadmission authorization and concurrent review are performed by HMS, another CHAMPUS mental health contractor, or a fixed price contractor. Under the current administrative appeal procedures, an RTC or beneficiary may request reconsideration of the initial coverage determination within 90 days’ notice thereof. Id. § 199.10(b)(1). The reconsideration is performed by the same contractor who made the initial determination, but by a member who was not involved in making the initial determination in order to ensure an independent review of the case.
In cases in which hearings are held, the hearing is a nonadversarial administrative proceeding conducted before a hearing officer.
At any level of appeal, the reviewer may address any issues presented by the record and is not limited to addressing the specific issues raised by the appealing party. Id. § 199.10(a)(9). This may result in the denial of coverage for previously authorized care. Additionally, the burden of proof is on the appealing party to establish affirmatively by substantial evidence the appealing party’s entitlement to coverage. Id. § 199.10(a)(3).
Plaintiff challenges several aspects of the certification and coverage processes. With respect to the certification process, plaintiff contends that OCHAMPUS improperly has delegated standard-setting authority to HMS, or in the alternative, that HMS nonetheless has created аnd applied new standards, in violation of the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. (“APA”), and the Due Process Clause of the Fifth Amendment. With respect to the coverage process, plaintiff contends that the regulation permits the retroactive denial of coverage in violation of due process. Plaintiff also challenges the limitations on the ability of RTCs to cross-examine peer reviewers, the allocation of the burden of proof, and the curtailment of the appeal procedure. Finally, plaintiff seeks relief from delays in the processing of appeals for both certificаtion and coverage determinations.
Standing
Defendants contend that plaintiff lacks standing to challenge the certification and coverage processes on the grounds that plaintiff has failed to establish that its members have suffered any concrete injury. An association has standing to bring suit on behalf of its members if:
(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.
Hunt v. Washington State Apple Advertising Comm’n,
As with all plaintiffs, a member has standing to sue in his or her own right by demonstrating: (1) particularized and concrete injury; (2) a causal relationship between the injury and the defendant’s actions; and (3) a likelihood that the injury can be redressed by judicial relief. Albuquerque Indian Rights v. Lujan,
Summary Judgment
The Certification Process
First, plaintiff claims that OCHAMPUS improperly has delegated standard-setting authority to HMS. Defendants’ unrebutted affidavits establish, however, that OCHAM-PUS has not delegated such authority. OCHAMPUS awarded a contract to HMS to conduct on-sitе surveys of RTCs, draft revised CHAMPUS RTC Standards for consideration by the Department of Defense, and review the medical necessity and appropriateness of mental health care provided in individual cases. Declaration of Terri Kat-souranis ¶ 11. In its survey evaluations, HMS is obliged to apply the standards required by the regulations. Id. ¶¶ 12, 13; First Declaration of William E. Stone, M.D. ¶ 11. HMS makes recommendations to OCHAMPUS, which makes all final decisions regarding certification. Katsouranis Declaration ¶ 20; First Stone Declaration ¶¶ 12-13.
To the extent that plaintiff challenges this narrower delegation of authority, plaintiffs challenge fails. Exprеss statutory authority is not required for delegation of authority by an agency; delegation generally is permitted where it is not inconsistent with the statute. See Tabor v. Joint Bd. for the Enrollment of Actuaries,
In the alternative, plaintiff claims that, regardless of whether OCHAMPUS has
RTCs occasionally use “restraint” and “seclusion” in managing patients, both of which require a qualified physician’s order. Plaintiff claims that HMS has based its certification recommendations on expanded definitions of “restraint” and “seclusion.” Specifically, plaintiff alleges that HMS has expanded “restraint” to include physical holding, and “seclusion” to include confinement in an unlocked room, neither of which requires a physician’s order under the CHAMPUS RTC Standards. In determining an RTC’s compliance with the JCAHO CSM, CHAM-PUS RTC Standards, and state licensing requirements, however, OCHAMPUS requires that, where the criteria differ, the RTC must comply with the most stringent one. With respect to “restraint” and “seclusion,” the CSM standard is the most stringent. The CSM defines “restraint” as “the use of a physical or mechanical device to involuntarily restrain the movement of the whole or a portion of a patient’s body as a means of controlling his/her physical activities in order to protect him/her or others from injury.” Second Stone Declaration ¶ 6. It defines “seclusion” as “the involuntary confinement of a patient alone in a room which the patient is physically prevented from leaving, for any period of time.” Second Stone Declaration ¶ 5. These definitions of “restraint” and “seclusion” clearly encompass physical holding and confinement in an unlocked room, the standards applied by HMS. Therefore, assuming HMS requires a physician’s order for all of these situations, HMS has not “expanded” these definitions.
Next, plaintiff claims that HMS im-permissibly has expanded two other requirements, in violation of the CHAMPUS regulations: the requirement for use of licensed personnel and the frequency of review of treatment plans. With respect to licensed personnel, plaintiff contends that the regulations do not require that marriage, family, pastoral, and mental health counselors be licensed. Plaintiff misinterprets the regulations. CHAMPUS regulations require that “all services shall be provided by or under the supervision of a qualified mental health provider (refer to paragraph (c)(3)(ix) of section 199.4).” 32 C.F.R. § 199.-6(b)(4)(vii)(C)(5). ■ The referenced sections states that a qualified mental health provider must “practic[e] within the scope of his or her license.” It further states that “[qjuali-
With respect to treatment plans, plaintiff alleges that HMS has created a 30-day review requirement. The relevant CHAMPUS regulation requires that RTC care be provided under an “individualized treatment plan that provides for ... timely reviews and updates as appropriate ... that reflects alterations in the treatment regimen, the measurable goals/objectives, and the level of care required for each of the patient’s problems_” Id. § 199.4(b)(4)(vii)(C)(iv). The CHAMPUS RTC Standards state that “this [treatment] plan shall be reviewed and revised not less than every 90 days.” CHAMPUS RTC Standards, at D-13. OCHAMPUS has deemed 30-day review the appropriate period, which HMS thus applies. Katsouranis Declaration ¶ 18; First Stone Declaration ¶ 19. Courts must defer to an agency’s interpretation of its own regulation unless that interpretation is plainly inconsistent with the language of the regulation. San Luis Obispo Mothers for Peacе v. United States Nuclear Regulatory Comm’n,
Plaintiff also claims that HMS, on its own initiative, has imposed staffing ratio requirements, beyond those imposed by state licensing requirements. The CHAMPUS RTC Standards do not impose any specific level or ratio of RTC staffing, but do state that “the [RTC] shall provide the staff necessary to insure the proper care, treatment, and safety of all patients.” CHAMPUS RTC Standards, at D-5. As previously mentioned, OCHAMPUS requires that the most stringent of the three sets of criteria be applied. As all RTCs at least must be licensed, state staffing requirements act as a floor. Katsouranis Declaration ¶ 17. OCHAMPUS’s policy, applied by HMS, of considering several factors, such as the number of patients, their ages, and types of illnesses treated, in determining whether an RTC is sufficiently staffed is consistent with, and not an expansion of, the CHAMPUS RTC Standards.
Finally, plaintiff claims that HMS impermissibly has imposed the requirements of a psychiatric hospital on RTCs by requiring RTCs to have a “professionally managed milieu” at all times. That is, OCHAMPUS, and thus HMS, require that a licensed professional be on duty and available for supervision and support at all times. Again, the Court finds that this requirement is a reasonable interpretation of CHAMPUS regulations. While the regulations clearly distinguish between hospital care and residential care, the regulations are equally clear that residential care must provide “a total 24-hour therapeutically planned group living and learning situation.” 32 C.F.R. § 199.-6(b)(4)(vii). OCHAMPUS’s interpretation that a 24-hour therapeutic environment requires that a licensed professional be on duty and available for supervision and support at all times is reasonable and consistent with the regulation. See San Luis Obispo Mothers for Peace,
The Coverage Process
Plaintiff alleges numerous due process violations throughout the appeal process for сoverage determinations. As a threshold matter, before claiming entitlement to due process safeguards, plaintiff must show that RTCs have a constitutionally protected property interest in reimbursement for services provided. Mathews v. Eldridge,
First, plaintiff challenges OCHAMPUS’s authority to review an entire episode of care on appeal rather than the specific issue appealed by the RTC. The regulation providing for this authority states:
An appeal decision at any level may address all pertinent issues which arise under the appeal or are otherwise presented by the information in the case record (for example, the entire episode of carе in the appeal), and shall not be limited to addressing the specific issue appealed by a party.
32 C.F.R. § 1991.10(a)(9). Plaintiff contends that this policy violates due process because it has a chilling effect on an RTC’s right to appeal by permitting retroactive denial of previously authorized coverage. It is well-settled that an agency is not required to limit its review to the issues appealed, and may review the entire record on appeal provided it gives adequate notice to the parties that an appeal will put the entire decision at issue. E.g., Williams v. Sullivan,
Next, plaintiff challenges the validity of two aspects of the hearing procedures: limitation of the right of RTCs to cross-examine peer reviewers, insofar as OCHAMPUS refuses to bear the financial cost of producing them as witnesses, and the allocation of the burden of proof on RTCs.
Plaintiff also claims that due process requires such hearing rights. Due process requires that a person be given notice
Plaintiffs final claim is that OCHAMPUS impermissibly has curtailed the administrative appeal process for RTCs. Under the current appeal procedure, RTCs are entitled to only one level of appeal, a reconsideration, which is before the same contractor which made the initial determination, but before a different reviewer. Plaintiff contends that this procedure, which eliminated the right to a formal hearing before OCHAMPUS, violates the due process rights of RTCs. A governmental agency may provide that the appeal on disputed coverage claims may be reviewed by a private contractor, without a further right of appeal, consistent with due process. Schweiker v. McClure,
Conclusion
For the foregoing reasons, the Court denies defendants’ motion to dismiss and motion for a more definite statement, and grants defendants’ motion for summary judgment. The Court denies plaintiffs motion for summary judgment.
Notes
. The CHAMPUS regulations are published at 32 C.F.R. part 199. Since the filing of dispositive motions, revisions have been published. CHAM-PUS; Partial Hospitalization, 58 Fed.Reg. 35400 (1993) (codified at 32 C.F.R. part 199 (1993)). These revisions deal largely with the establishment of a CHAMPUS benefit for partial hospitalization, and do not affect the instant litigation. To avoid confusion, this opinion cites to the regulations printed in the 1992 version of the Code of Federal Regulations.
. HMS has been responsible for the RTC surveys since January 1, 1990, the start-work date of its contract.
. If the initial determination and reconsideration were conducted by a fixed price contractor, a provider or beneficiary may request a second reconsideration by an indepеndent contractor because of the potential financial incentives for fixed price contractors to make strict utilization decisions.
.A hearing officer is not an employee of the federal government; rather, OCHAMPUS [obtains] hearing officers through contract. With respect to the requirement that the hearing be nonadversarial, there is an exception for appeals involving a provider sanction. § 199.10(d)(2).
. The Court finds that plaintiff has met the second and third requirements as well. Plaintiff clearly satisfies the germaneness requirement: its purpose is to promote excellence in the сare, delivery, accountability, and cost-effectiveness of psychiatric services to children, and the CHAM-PUS program partially reimburses RTCs for providing such services. Albuquerque Indian Rights v. Lujan,
. At this stage of the litigation, both parties have filed cross-motions for summary judgment. Therefore, plaintiff also must set forth specific facts by affidavit or other evidence supporting particularized injury. Defenders of Wildlife, - U.S. at -,
. Defendants also move to dismiss on thе ground that plaintiff has failed to exhaust administrative remedies. Where Congress has not required exhaustion, whether to require exhaustion is within the discretion of the district court. McCarthy v. Madigan, - U.S. -, -,
Finally, defendants move to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Although the allegations in the cоmplaint are general in nature, the Court finds that the complaint satisfies the notice pleading requirements of Fed.R.Civ.P. 8(a)(2). Accordingly, the motion to dismiss for failure to state a claim is denied.
Because defendants have withdrawn their motion for a more definite statement, that motion is denied as moot.
.Plaintiff's speculation about possible ways in which an improper delegation could have taken place is insufficient to create a genuine issue of material fact on the issue of the scope of delegation. See Fed.R.Civ.P. 56(e). ("When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings ... ”); Posey v. Skyline Corp.,
. Plaintiff also claims that the alleged use of unpublished standards and the extensive delays in obtaining a certification decision violate the due process rights of RTCs. In order to show a due process violation, plaintiff must first show that RTCs have a constitutionally protected property interest in certification. Mathews v. Eldridge,
. Plaintiff’s unsupported allegation that the draft set of recommended CHAMPUS RTC standards — prepared hy HMS pursuant to its contract with OCHAMPUS — has been circulated to HMS surveyors is not sufficient to rebut defendants’ sworn statements that the draft standards have not been distributed to surveyors or used in any surveys conducted to date. See Fed.R.Civ.P. 56(e); Posey,
. Alternatively, the Court finds that where a regulation authorizes review of an entire case, as section 199.19(a)(9) does, due process does not require notice. See DeLong v. Heckler, 111 F.2d 266, 268 (7th Cir.1985) (upholding authority of Appeals Council of the Social Security Administration pursuant to regulation to review sua sponte an award of benefits without providing individual notice).
. Plaintiff also contends that, by refusing to assume the burden of producing the peer reviewers as witnesses at the hearing, defendants are violating CHAMPUS regulations. Section 199.-10(a)(ll)(ii) states, in relevant part:
Right to examine parties to the hearing and their witnesses. Each party to the hearing shall have the right to produce and examine witnesses, ... [and] to question opposing witnesses on any matter relevant to the issue even though the matter was not covered in the direct examination....
By the terms of the regulation, the right to cross-examine is limited to cross-examination of witnesses who are present at the hearing. Therefore, defendants have not violated this regulation.
. Assuming that veracity and credibility may arise as significant issues in some individual cases, the current procedures contain adequate safeguards. Plaintiff does not dispute that the peer reviews are available upon request in advance of the appeal, аnd that RTCs themselves may call the peer reviewers as witnesses.
. Plaintiff also raises a due process claim based on the delays in the processing of appeals. The coverage appeal process was revised in November 1991, which includes limiting appeals as of right to one level, that is, reconsideration, and eliminating a right to a formal hearing for most providers. Therefore, the Court finds that this issue is moot. Natural Resources Defense Council v. United States Nuclear Regulatory Comm’n,
.The Supreme Court expressly rejected the proposition that a claimant is entitled to additional administrative review by a government rather than a contractor-appointed hearing officer. McClure,
