South Windsor Convalescent Home, Inc. v. David Mathews, Secretary of Health, Education and Welfare

where, provider for a adjustments of serv- Conn., Hartford, Aronson, for W. Arnold period, fiscal the aggregate for ices plaintiff-appellee. provider] produced reimbursement [to MANSFIELD, Circuit and Before HAYS methods by the Secre- [established BRIEANT, Judge.* District Judges, and determining proves costs tary to be for] inadequate excessive,” 1395x(v) either MANSFIELD, Judge: Circuit (l)(A)(ii). Department of Secretary The regulations defining The “reasonable (hereafter Health, and Welfare Education always have payment cost” included and sum- “HEW”) appeals from decision used in capital providing assets Medicare of the United order States mary judgment by permitting depreciation services allow- Connecticut, Court, T. District of District to August Prior providers ance. Clarie, July entered on Judge, Chief Emmet to compute entitled depreciation were that HEW charges by either the “straight-line” or the 405.415(d)(3), applied C.F.R. accelerated method. Plaintiff used the ac- the Medi- contravenes preceding years technique during participation celerated his seq. (hereaf- et 42 U.S.C. §§ care program July in the from to Octo- Act”), the Due Clause Process ter “the 1,1971, when he ber terminated his involve- we con- Because the Fifth point plaintiff At that fell within ment. available in jurisdiction was not clude regulation challenged ambit of the regula- test the HEW court to action, 405.415(d)(3). 20 C.F.R. § tion, exclusively in Court rested Claims, we reverse. regulation, The became effective 1, 1970, provides August pertinent “provider voluntary Plaintiff-appellee is part: program, the Medicare of services” 1395x(u).' the Act provider Under “When a has who used 42 U.S.C. § facility provides depreciation method of hospital or convalescent accelerated aged to individuals of its basic services assets terminates defined 1395c, 1395d, over, and receives or where participation §§ Hospital Insurance the Federal proportion from health insurance its al- ment that is controlled HEW and Fund Trust costs decreases so that cumula- lowable taxes, wage 1395cc by special substantially depreciation financed more tively ordinarily is payment 1395i. The (a)(1)(A), paid than would have been paid us- intermediary such through a fiscal routed straight-line method ing deprecia- Company Travelers Insurance as defendant tion, cost, excess of reimbursable de- designed to reimburse the by using accelerated deprecia- termined incurred him the “reasonable cost” paid program methods and under the furnishing treatment. the reimbursable cost which would been determined paid explicitly Act does not Medicare by using straight-line meth- Instead, program cost.” the term “reasonable define depreciation, will be recovered od charged Secretary of HEW is overpayment.” . as an establishing regulations mulgating * York, sitting by of New States District for the Southern District the United Of designation. jeet matter the court was with- plain- regulation, to this Acting pursuant power out to consider the merits. intermediary, termination fiscal provider, as a participation plaintiff’s Although complaint does not repay the differ- Windsor requested that haec verba the specify ground upon the total reimbursements between ence asserted, which federal it is 1967-71 utiliz- period for the received had readily apparent from the nature of the and the depreciation accelerated ing (recovery asserted due claim monies un received had it used it would have ment federal statute and der a withheld viola Fearing a cut-off calculation. straight-line plaintiff’s constitutional rights) tion Subchapter claimed under other funds complaint’s allegation jurisdictional the Act, known as § U.S.C. XIX of ($10,000) jurisdiction that amount is in plaintiff program, complied the Medicaid general to the pursuant federal ques voked $16,367.45. then the sum of It repaid grant of 28 juris tion U.S.C. 1331.1 § in the district court on Au- suit instituted avenue, however, dictional is foreclosed 1974, seeking of the repayment gust 1395Ü, which incorporates by § U.S.C. ille- recaptured to been money alleged have 405(h) reference U.S.C. of the § Social complaint alleged that The by HEW. gally Security Act. The provides: latter section plaintiff were owed to amounts in issue “The findings and decisions of the Sec depreciation for accelerated as allowances retary after a hearing shall be [of HEW] promulgated regulations under permitted binding all individuals who were the Medicare to pursuant hearing. to such parties No finding of 405.- Subpart D of Part C.F.R. or decision-of the Secretary fact shall be 401-.454, to the Fed.Reg. prior tribunal, any person, reviewed gov or 405.415(d)(3), the C.F.R. § addition agency except pro ernmental as herein depreciation allow- of accelerated recapture action vided. No United date, effective periods prior for to its ances States, Secretary, officer or statutory lack of authori- void for employee brought thereof shall be under to its effective periods prior for wances of Title 28 section to § 1331] [now date, statutory for lack of authori- was void arising recover under this of the Due Process and as violative ty (Emphasis added). subchapter." Amendment. of the Fifth Clause Ordinarily party challenges when a HEW the dis- discussing Act, action Social Without regulation simply 405.- 405(h) jurisdiction ruled serves to route trict court § through for the 415(d)(3) legally 405(g), cannot be enforced U.S.C. which autho- § a civil action to be January begin- commenced in the preceding rizes years court within 60 promulgation. days mailing of the year of The ning of the However, notice of judgment HEW’s decision. thereupon entered court expressly the Medicare Act $15,655. incorpo- while Defend- in the amount plaintiff 405(h), incorporate rates does not § appeal. ants 405(g) as basis for review with § disputes respect reimburse- DISCUSSION 1395ff(c). ment. See U.S.C. Conse- threshold, appellant argues, Congress we must consider quently, explic- At court’s federal courts of Secretary’s challenge itly deprived jurisdiction the district 405(h). since, last sentence of grant without a of sub- jurisdiction involving penalties, jurisdic- claims clear-cut fines and Although plaintiff’s argues that brief 1. Griekspoor States, may cf. be based on Title 28 United 511 F.2d 137 also fine, (5th 1975), ordinary (actions recovery penalty rather than of a Cir. contractu- recovery for the of monies that tradi- the Act of Con- al claims forfeiture incurred seriously, Claims, pressed tionally ground gress), is not have rested in the Court of cf. Testan, understandable, the statute was States since United designed provide jurisdiction with ordinarily provide a general basis for accepted not past we have In the federal serves to Su- close argument preme Court construed the third sentence judicial challenges ground- forum 405(h), quoted supra, at page Instead, Medicare we ed on barring jurisdiction. such provide statute to construed the repeatedly (cid:127) the Medicare Act establishes “[wjhere applicability Secretary’s for review of the procedures present case is readily apparent and deci- decision, may a court not be escaped in view cannot of the parallelism However, where means. any other sion Here, the two between cases. as in procedures, provide does Act seeks recover payments al preclude does not review” due section legedly under the claiming that a Kingsbrook Jewish retroactively 28 U.S.C. § disallowing these Richardson, payments Center violates Fifth Medical Yet, despite the Aquavella Rich- 1973); underpinning claims, Salfi 1971); plaintiffs’ of 397, (2d made clear ardson, 437 402 Cir. F.2d 405(h) as bars 1331 1, § basis for Celebreeze, federal § 356 v. F.2d Cappadora review. judicial 1966) (Social Security insurance (2d Cir. however, cases, claim). preceded These In its context the Salfi pro in Wein- Court’s recent decision Supreme a result great of no duced since, moment 2457, 749, 422 95 v. S.Ct. berger U.S. jurisdiction of despite the absence reasoning of 522 L.Ed.2d 45 1331, 405(g) was found to § § authorize outcome,2 which, though not the is not easi- review. note 2 supra. See judicial How interpreta- reconcilable with our earlier ly ever, when Salfi’s conclusion is applied to a 405(h). plaintiffs, In Salfi §of tion jurisdictional where no alternative case ba jurisdiction invoking 28 U.S.C. exists, interpretation restrictive sis of allegedly 1331, for insurance benefits sued might3 § lead to 1331 ques constitutional § Act, 42 them the Social order, due the first one that has arisen 402(d) but on (g)(1), withheld rarely and tangentially in our constitu requirements basis certain history, e., i. whether Congress tional plaintiffs claimed to violate Act close federal can courts entirely to con Despite the plaintiffs’ challenges Fifth stitutional against directed fed claim, the constitutional statutes assertion eral action.4 We doubt that the (3d Cir.), denied, jurisdictional 911, 326 cert. 2. The outcome of Salfi’s discus- 399 U.S. 90 2200, easily prior squared our since (1970); sion is cases S.Ct. 26 L.Ed.2d 565 Twin Cities 405(g) applicable Chippewa found § the Court Chippe- Tribal Council v. Minnesota accordingly jurisdiction Tribe, was available thereun- (8th 370 F.2d 1967). wa 529 Cir. In an appel- to the at least named opinion der earlier we assumed that the APA is a 763, 422 95 S.Ct. 2457. lees. See U.S. legitimate Cappadora source of v. Celebreeze, (2d 356 1 1966). F.2d Cir. How- escape any majority preclu can A circuits 3. ever, elaborating we have since avoided on this problem raised Saifi's limitation sion Kingsbrook question, see Jewish Medical Cen- jurisdic 1331 since have found § use of most Richardson, supra, 9; ter v. 486 F.2d at 667 n. be available tion to Administrative Richardson, supra, Aquavella v. 437 F.2d at 400 See, g., e. Sanders v. Weinber Procedure 10; Gardner, n. Toilet Goods Association v. 360 (7th 1975); ger, F.2d 1167 Cir. Parole, Pickus v. 522 677, (2d 1966), aff’d, 679 F.2d n. 1 Cir. 387 U.S. U.S.App. States Board of 165 United 158, 1520, 87 S.Ct. 18 L.Ed.2d 697 284, (1974); Bradley v. 507 F.2d 1107 D.C. warrants no case further consideration of (1st Weinberger, 1973); 483 F.2d 410 Cir. Bren jurisdiction since issue we find to rest exclu- (10th Udall, Cir.), 803 F.2d cert. nan 379 v. sively in the Court of Claims. denied, 975, 477, S.Ct. 389 U.S. 88 19 L.Ed.2d Johnston, (1967); Deering Inc. Milliken 468 See, g., Sill, 1961); Davis, 4. (4th (8 e. How.) Sheldon 49 856 Cir. Adminis U.S. 295 F.2d 441, (1850); (1970 Supp.). parte McCardle, L.Ed. 1147 Ex 23.02 12 Law Treatise § trative See, (7 Wall.) disagree. g., (1869); 19 e. U.S. L.Ed. circuits Bramblett Other denied, Klein, Cir.), (6th Desobry, (13 Wall.) 128, 490 F.2d 405 cert. United States v. 80 U.S. (1872); Joseph 42 L.Ed.2d 111 95 S.Ct. 20 L.Ed. 519 St. 419 U.S. Stock Yards States, (1974); States, F.2d Zimmerman v. United Co. v. United 298 U.S. 56 S.Ct. regulation of executive gress, reading of intended its Supreme Court . .” department . . 28 U.S.C. pre- have the effect of constitu- cluding would be questions,5 since result tional the claim involved this case is Since principle States, with the well established at odds the United seeks directed judgment, solely money will not construe a statute and exceeds the a court $10,000, jurisdiction sum of lies review unless Con- threshold access restrict exclusively with the Court Claims. See “clear its intent do so manifests gress States, 432 Corp. Mills v. United Putnam Salfi, supra, convincing evidence.” See 1970). plain- Cir. fact F.2d 2457; 765, 95 Johnson v. grounded claim is on a constitutional 361, 373-74, Robison, U.S. since, challenge consequence is as the of no (1974); Abbott Laboratories 39 L.Ed.2d 389 clear, 1491 makes the Court language Gardner, 141, 87 S.Ct. Claims, court, fully III an Article Cort, (1967); Rusk v. is- empowered decide 367, 379-80, 7 L.Ed.2d bar And does serve to sue. reason, at least (1962). Perhaps for since, of Claims al- narrowly construed two other circuits though the suit here is under the Medicare considering the reach of language Salfi's 28 U.S.C. not included Mathews, 405(h). Lejeune v. See 41 of 28.” “section (5th 1976); Sanders v. Wein- Cir. Accordingly, we reverse the decision of 1975). (7th berger, 522 F.2d prejudice plain- court without the district case, that in need not face issue We proceeding with its suit in the however, juris- since an alternative basis of of Claims. apart 405(g) diction from is available and preclusion-of-review consequently prob- a BRIEANT, Judge (dissenting): District arise. lem does not Twist, speaking in Oliver behalf of him- 1491, Under 28 1346 and U.S.C. §§ situated, similarly all and others asked self when a claim the United States more almoners at the workhouse for his $10,000, exceeds sum He gruel. reprimanded by was the Beadle jurisdic- Court of Claims shall have punished.1 severely “[t]he security The social judgment to upon render country, stripped in this system of its rheto- against the United States founded either ric, almsgiving, recognized so by is Constitution, upon prevent or Act of Supreme Con- To the latter Court.2 on was cribe such reached constitutional limitations, gress ring). Johnson “was only would dence would eration of congressional on the necessary case of Johnson v. ordinary, Rev. 1362 S.Ct. 720, Courts: An Exercise In the fact found 80 L.Ed. 1033 particular, 1160, to Limit See ground forum. such that ‘clear and intent the issue (1953). generally such a then be avert a expressly enactment to bar that required Justice absolutely if (1936) restriction have been extra- Robison, Congress, would [the Hart, judicial distinguished Jurisdiction in possible closing challenges to based, Rehnquist Johnson Dialectic, (Brandeis, J., before statute in similar The Power of no be review, 415 U.S. 415 convincing’ evi- judicial consid- at least in available. Not we would as- U.S., of Federal wrote that 66 Harv.L. the earlier expressly question] statutory where a 361, concur- of the at 373 part, Con- 94 2. See 1. This Thus the validity for constitutional lenges.” poor rate was then an ecclesiastical ens). in a S.Ct. present raised a ish Social [94 parish orders, constables. Boy’s Progress” by S.Ct. magazine 904, Helvering A fictional [94 of the case, officer chosen beadle, serious plain do not 422 ^[1160] 81 attend S.Ct. L.Ed. 1307 as serial “Oliver U.S. at statute character words of the Act itself v. Collecting constitutional ^[1160] will be at preclude challenges English Davis, 1169], as so 762, inquests “Boz” first discussed 301 U.S. (1937); provides jurisdiction ecclesiastical 1165-1166], Twist; 95 construed. third to vestry appeared question (Charles it would have S.Ct. at 2465. disbursing its and to assist Flemming 619, sentence of provisions. below, to execute function. the Par- in 640, law, of the In the Id., Dick- chal- 1837 57 at

915 plaint, and the district annoying opinion, Twists from the beadles court day K in dis- proliferating litigation with 517.3 F.Supp. HEW 403 more, they in which ask for courts trict Here, pleaded appellee sufficiency 405(h), incor- Congress enacted U.S.C. § Secretary tortiously extracted 1395Ü. by reference in 42 porated protest, it under money from claimed to statute, enlarged by the even as due under unconstitutional and Weinberger Salfi, 422 U.S. gloss applied it, invalid as and in so doing (1975), merely S.Ct. L.Ed.2d 522 money deprived it and contract rights “bene- access to district courts limits process. Subject juris- without due matter the system, the Twists. ficiaries” under 1331(a) diction exists 28 U.S.C. money given recover such majority in this case holds “[A]s test, and taken violation of the Fifth Salfi, recover seeks to I, of the Constitution Amendment and Art. allegedly ments due under Act.” Plain- thereof, Cl. federal official. factually this is ly, incorrect. South Wind- Hood, 678, 681-82, sor, here, Bell v. appellee beneficiary is no patients Its inmate L.Ed. are the beneficiar- ies, perhaps and to them the courthouse against a Actions federal officer as partially closed the rule of door money individual to recover property by majority. relied But South Wind- protest delivered over to such officer party having rights is a contract sor acting statutory powers, which are (Travelers party Insurance an intermediate applied particular unconstitutional Company) acting in turn for HEW. case, always permitted been XVIII, It is a not a Bowdoin, district court. Malone v. beneficiary. dispute There is no factual (1962); L.Ed.2d 168 that, disputed about nor is it Secre- Bank, Dugan 621 — tary, through applied his minions economic Cf., (1963); L.Ed.2d 15 Knight duress coercion South Windsor to in- York, of New State $15,655. repay protest.” duce “under 1971). duress, Secretary But for this opinion Judge I affirm on the would party plaintiff been a have below, modifying to strike Clarie out the Instead, he court. announced further party as a defendant. United States intransigence repay and refusal the dis- might sum That Court of Claims puted stop would lead him substan- entirely litigant, is cold comfort to payments tial unrelated con- cededly appellee owed subject upon for unrelated serv- which express and a I no Title XIX ices under opinion. Act. See Com- Nestor, 603, 610, politically unpopular' al to harm a U.S. desire 80 S.Ct. Moreno, (1960), Dept, Agriculture approval group,’ S. L.Ed.2d cited with U. Salfi, supra. Flemming, In Harlan [93 Justice engraft or on the 782] “To basis of crite- wrote: the Social L.Ed.2d legiti- bear system concept property rights’ no rational relation to a ria which of ‘accrued goal.” legislative deprive flexibility mate it of the and boldness adjustment changing conditions to ever Court found that 3. The District threat “[u]nder p. demands.” In complete cutoff of federal Government’s p. described the the Court participation financial [unrelated] benefits thereunder as XIX, back, paid noncontractual receive funds “[A] protest” amount determined the Secre- enjoys public treasury appropriate adjustment. from the no tary [which] to be the [Matter constitutionally status, protected Dandridge supplied]. The cash flow and credit brackets Williams, furnishing problems [397 those health services may 491], though Congress usually L.Ed.2d of course severe that cessation of the flow are so among invidiously discriminate in an immediate of cash cessation results congression- claimants the basis of a ‘bare services.

Case Details

Case Name: South Windsor Convalescent Home, Inc. v. David Mathews, Secretary of Health, Education and Welfare

Court Name: Court of Appeals for the Second Circuit

Date Published: Jul 27, 1976

Citation: 541 F.2d 910

Docket Number: 938, Docket 75-6136

Court Abbreviation: 2d Cir.