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November 26, 1975


The opinion of the court was delivered by: GASCH


 GASCH, District Judge

 Plaintiffs in this action challenge various aspects of the District of Columbia Medicaid Plan relating to podiatric services. The matter is before the Court at this juncture on the litigants' cross-motions for summary judgment.

 The plaintiffs include the District of Columbia Podiatry Society, a professional association of Doctors of Podiatric Medicine (hereinafter, podiatrists), all licensed to practice podiatric medicine in the District of Columbia, and eleven individual podiatrists. Defendants include the District of Columbia, Walter E. Washington, the Mayor-Commissioner of the District of Columbia, and Joseph P. Yeldell, the Director of the Department of Human Resources of the District of Columbia, and the administrator of the District of Columbia Medicaid Program.

 Title XIX of the Social Security Act (Medicaid) *fn1" provides for a federal program of medical assistance to individuals whose economic resources are insufficient to meet the cost of necessary medical services. It is a grant-in-aid project providing matching federal monies to participating states. The funds are channeled through an appropriate state agency to providers of medical services. Participation by a state is voluntary, but in order to receive federal funds, the state's program must meet certain federal requirements.

 The District of Columbia elected to participate and commenced its Medicaid Program as of July 1, 1968. From time to time the District of Columbia Medicaid Plan (D.C. Plan) was amended. All D.C. Plans have been approved by the Secretary of Health, Education, and Welfare (HEW) pursuant to the requirements of Title XIX. *fn2" In relevant part, the most recent D.C. Plan (effective January 1, 1974) contains a "Schedule of Authorized Procedures and Relative Value Scale for Participating Podiatrists." This schedule specifies the podiatric services which are compensable under the D.C. Plan and the amount of such compensation.

 The plaintiffs present three challenges to these provisions of the D.C. Plan. *fn3" First, they allege that the podiatrists participating in the District of Columbia Medicaid Program are entitled by federal statute and regulations to be compensated under Medicaid for all services they may legally perform as licensed podiatrists, rather than just those services specified in the D.C. Plan. Second, they argue that the defendants in setting fees for podiatrists under the D.C. Plan have failed to comply with the requirements of the Medicaid statute and regulations. *fn4" Third, plaintiffs in their motion for summary judgment have challenged the constitutionality of the Medicaid statute and have requested the Court to convene a three-judge court pursuant to 28 U.S.C. §§ 2282 and 2284. *fn5"

 Plaintiffs have sought declaratory and injunctive relief against the defendants' enforcement of the complained of provisions of the D.C. Plan. *fn6" Having considered the pleadings and oral argument of the parties, the Court has determined that the actions of the defendants do not violate the provisions of the Medicaid statute or regulations. Furthermore, the Court has determined that plaintiffs' constitutional challenge is inappropriate and without merit.


 Plaintiffs contend that, by limiting the podiatric services that podiatrists may provide under the D.C. Medicaid Plan while permitting physicians to furnish a full range of podiatric care, the defendants have violated the Medicaid provisions of the Social Security Act and its regulations. The statute and regulations require that any State Plan must include, at the least, the following five health services listed in the statute (the mandatory services): *fn7" (1) inpatient hospital services; (2) outpatient hospital services; (3) other laboratory and X-ray services; (4) skilled nursing facility services, screening and diagnostic services, and family planning services; and (5) physicians' services. *fn8" The statute also includes optional health services which may be included in a State Plan if the state so elects. *fn9" One of these optional health services is:


6) medical care, or any other type of remedial care recognized under State law, furnished by licensed practitioners within the scope of their practice as defined by State law.10

 The D.C. Plan includes this class of health services; it is undisputed that podiatric care falls within this classification. Podiatric care as defined by District of Columbia law is:


the surgical, medical, or mechanical treatment of any ailment of the human foot, except the amputation of the foot or any of the toes; and, also, except the use of an anesthetic other than a local one. *fn11"

 Plaintiffs contend that once defendants elected to include the optional services in the D.C. Plan, they were required to do so to the full extent that such services are defined by District of Columbia law. This, it is conceded by defendants, has not been done. Plaintiffs' position is that any valid limitation on the broad language of the statute must be express. They point to the provision of § 1396d(g)(2) which restricts the scope of chiropractic services compensable under Medicaid. They contend that since there is no comparable provision in the statute or regulations permitting or requiring a limitation on podiatric services, defendants' actions are unlawful.

 Plaintiffs' argument fails because of the invalidity of its basic premise that the broad language of the statute was meant to curtail the discretion of the states in devising their Medicaid Plans. Rather, the provisions of Title XIX provide for a "scheme of cooperative federalism." *fn12" A reading of Title XIX clearly indicates the intent of Congress to give the states considerable discretion and latitude in devising their Medicaid Plans. Thus, federal funds are appropriated under Title XIX "[for] the purpose of enabling each State, as far as practicable under the conditions in such State," to furnish medical assistance and services. *fn13" States can choose whether to participate at all; a participating state can choose to include in its plan only the "categorically needy," *fn14" or it can also include the "medically needy"; *fn15" a participating state is free to choose which, if any, of the optional services it will include in its Plan. *fn16" Such options, amongst others in the statute, are designed to afford each state the opportunity to design a Medicaid Plan tailored to the needs and conditions in that state.

 Moreover, this need for flexibility is mandated by financial considerations. Title XIX is a welfare assistance program with limited funding. It is not an insurance program such as Medicare. Even an insurance program (let alone an assistance program) cannot provide coverage for all possible health services. Therefore, it is necessary for Medicaid funds to be used in the most economical manner possible, *fn17" and it has been left to the States, operating within the Federal guidelines, to make such economic determinations.

 The defendants, in exercising this discretion, have determined which services performed by podiatrists are sufficiently essential to maintaining the general health of Medicaid recipients so as to warrant coverage under Medicaid. It is clear that podiatrists are not compensated under the D.C. Plan for all services they may legally perform. But for that matter, neither is any other provider of medical services compensated for all such services. *fn18" A similar argument was recently raised in the Third Circuit case of Doe v. Beal.19 Plaintiffs there attacked the Pennsylvania Medicaid Plan for failing to compensate Medicaid recipients for the costs of elective abortions. The challengers argued that since Roe v. Wade20 and Doe v. Bolton21 required the states to legalize the practice of elective abortion during the first two trimesters of pregnancy, elective abortion was included in the statutory definition of "physicians services," *fn22" and was therefore required to be furnished to Medicaid recipients by § 1396a(a) (13) (B) and (C). The Third Circuit, sitting en banc, rejected this argument, pointing out, for example, that since elective cosmetic surgery is within the licensed practice of medicine, the state, under plaintiffs' argument, would be required to pay for such medical services at the expense, perhaps, of the more urgent medical needs of the poor. As the Court indicated:


The states are given broad discretion to tailor their programs to their particular needs, and are required to economize and to fund only necessary medical expenses. *fn23"

 In addition, the Medicaid regulations promulgated by the Department of Health, Education, and Welfare indicate that the language "within the scope of their practice as defined by State law" *fn24" does not require that podiatrists or any other medical care provider be compensated for every procedure or service they may legally perform. In relevant part these regulations provide that a State Medicaid Plan must:


Specify the amount and/or duration of each item of medical and remedial care and services that will be provided to the categorically needy and to the medically needy, if the plan includes this latter group. Such items must be sufficient in amount, duration and scope to reasonably achieve their purpose. . . . Appropriate limits may be placed on services based on such criteria as medical necessity or those contained in utilization or medical review procedures. *fn25"

 Although this passage, as plaintiffs contend, is intended to broaden the scope of medical care and services to insure that the recipients receive comprehensive medical care, it is also intended to give the states the discretion to "specify the amount and duration of each item of medical care and services that will be provided." This position is supported by the response of the HEW regional attorney to the inquiry of plaintiffs' counsel regarding limitations on scope of service: *fn26"


2. Podiatrist's services are an optional item of service under a State's Medicaid program. As such, a State may impose limitations on the scope of this service. 45 CFR 249.10(b)(6).


* * *


4. The legal basis for a State's authority to place administrative controls upon the services it provides can be found in 45 CFR 240.10(a) (5) . . . . This limitation-setting provision enables the States to have some degree of control over not only the amount, duration, and scope of services, but the cost of the Medicaid program to the State. As for the items being sufficient to achieve their purpose this provision has been placed in the regulations to assure that [if] a service is covered in the State Plan no unreasonable limitations are placed upon the covered service which would prevent it from achieving its purpose. For example, it would be unreasonable for a State to cover immunization against polio but limit the dosage of vaccine to one. (Emphasis added).

 It appears then that it is the position of HEW, the agency which issued the Medicaid regulations, that the "amount, duration, and scope" provision permits the District to limit the scope of podiatric (or other optional) services compensable under Medicaid. *fn27"

 Nor does the fact that Congress has chosen to limit the chiropractors' services compensable under Medicaid *fn28" indicate that Congress intended to prohibit the states from limiting the scope of other services. The chiropractic services provision is merely another indication of the congressional recognition that in any medical assistance program there must be some limitations. The Medicaid regulations, as discussed above, *fn29" indicate that the decisions on other limitations are to be made by the appropriate state agency. Where Congress has wanted to limit the power of the state agencies to restrict practitioners' services, it has explicitly done so. Thus, Congress has legislated a special provision defining optometrists as physicians (under appropriate circumstances) so that their services are now mandatory. *fn30" Furthermore, under Medicare, Congress has explicitly included podiatrists within the definition of physician. *fn31" Under Medicaid, Congress took a different position excluding podiatrists. The plaintiffs, then, cannot object to the D.C. Plan distinguishing between physicians and podiatrists when this distinction is built right into the statute. *fn32"


 The D.C. Medicaid Plan specifies the fees to be paid to participating podiatrists for those services compensable under the Plan. The plaintiffs allege that in establishing this fee schedule the defendants failed to comply with the requirements of the Medicaid statute and regulations. The thrust of this allegation is that if defendants are required to comply with the federal provisions, podiatrists will receive greater compensation on an overall basis for compensable Medicaid services, comparable to that received by physicians for the same services.

 The fee schedule for podiatrists is based on a relative value scale (RVS). The podiatrists' RVS was developed as part of the first D.C. Medicaid Plan. Likewise, a physicians' RVS was developed. Each service that a practitioner is compensated for is weighted on the RVS for his specialty. To compute the amount payable for a compensable service, the RVS factor for that service is multiplied by a conversion factor. The conversion factor for podiatrists is $0.80. For physicians the conversion factor is $1.65 for special diagnostic services, $1.92 for medical and special therapeutic services, $3.40 for surgical services, $4.00 for laboratory services, and $4.50 for radiological services. Since both the RVS and the conversion factor are different for physicians and podiatrists, the amounts paid to each group for performing identical procedures are often different. In some instances, the amounts paid to podiatrists are greater than those paid to physicians. For other procedures physicians are paid more than podiatrists. *fn33"

 Plaintiffs contend that the continued use of RVS fee schedules violates the Medicaid regulations. The regulations provide that a State plan must "[provide] that payments for care or service are not in excess of the upper limits described in paragraph (b) of this section." *fn34" Paragraph (b) provides, as to physicians and podiatrists, that:


. . . A payment structure will meet Federal requirements if . . .: (1) Payment to the individual practitioner is limited to the lowest of


(i) His actual charge for service;


(ii) The median of his charge for a given service . . .; or


(iii) His reasonable charge recognized under part B Title XVIII [Medicare]


(2) In no case may payment exceed the highest of


(i) . . . the 75th percentile of the range of weighted customary charges . . .;


(ii) The prevailing charge recognized under part B, title XVIII [Medicare] . . .; or


(iii) The prevailing reasonable charge recognized under part B, title XVIII [Medicare].

 45 C.F.R. § 250.30(b) (3) (i) (A) (1974).

 Defendants concede that none of the standards listed above has ever been determined for podiatrists or for any other practitioner. Therefore, plaintiffs contend the payment structures do not meet Federal requirements and are invalid.

 Again plaintiffs have misconstrued the regulations and the congressional intent in establishing the Medicaid program. Each state has been given the discretion to set fees for medical service providers at the level which will best meet the needs and resources of that state. The provisions of Section 250.30(b) (3) (i) (A) do not prescribe any particular methods for setting fees. Rather they specify the means for determining only the upper limit on Medicaid payments. Indeed, it is expressly stated in section 250.30(b):


The upper limits for payments for care and services under a medical assistance plan are as follows: The State agency may pay less than the upper limits. . . . (Emphasis added).

 The fact that defendants have failed to make the findings required by section 250.30(b)(3) (i) (A) is of no consequence to plaintiffs' claim. Such matters are of concern only between the state agency and the federal government. Since the state can pay less than the upper limits the only effect that the section 250.30(b)(3)(i)(A) determinations can have on the podiatrists' fee schedule would be to lower it, if it were found to be above the "upper limit." *fn35"

 In a recent case a similar challenge was advanced against the Pennsylvania Medicaid Plan's provision for payments to pharmacies for filling Medicaid prescriptions. In Ostrow Pharmacies, Inc. v. Beal,36 the state agency had not made the requisite cost analysis as required by the regulations. *fn37" Plaintiffs argued, therefore, that the state plan for drug payments was invalid. In rejecting plaintiffs' challenge, the court in Ostrow stated:


The defendants contend that the thrust of the Act and the federal regulations requires a state to make payments "that are not in excess of reasonable charges." The defendants also contend that the state is not bound by any particular formula in determining the amount it pays to providers under the Medicaid program, provided the state pays less than the upper limits. The defendants contend that § 250.30 provides various methods for establishing upper limits, but the regulation does not require the state to pay the upper limit. The Court agrees. Regulation 250.30 clearly states in subsection (b) that "The State agency may pay less than the upper limits." Regulation 250.30 does not establish a minimum fee for pharmaceutical services; it sets forth the upper limit or maximum fee to be paid pharmacists. The purpose of this regulation is to achieve the lowest cost for medical services consistent with efficiency, economy and quality of care. *fn38"

 This Court agrees.

 Of course, the fact that there is no prescribed lower limitation on the fee schedule does not mean that a fee schedule may be established which is so unreasonably low that no practitioners will agree to provide services. The regulations require that a State plan must:


Provide that fee structures will be established which are designed to enlist participation of a sufficient number of providers of services in the program so that eligible persons can receive the medical care and services included in the plan at least to the extent these are available to the general population. *fn39"

 Plaintiffs contend that the podiatrists' fee structure has not enlisted "participation of a sufficient number of providers of services." They look for a definition of this phrase to a publication of HEW, Handbook of Public Assistance Administration, Supplement D: Medical Assistance Programs (1966-67), which provides in para. D-5330.2: *fn40"


As a minimum, the participation ratio determined separately for each profession, and for specialties within a profession, should be approximately two-thirds of such practitioners in the State.

 Of the 120 podiatrists in the Washington Metropolitan area licensed to practice podiatry in the District of Columbia, only 57 (or about half) presently participate in the D.C. Medicaid Program. *fn41" The chart set out in the margin indicates that the number of participating podiatrists has steadily increased from 30 in 1968 to 57 in 1974. n42 Moreover, of the 120 podiatrists in the Washington Metropolitan area, only 40 are listed in the 1975 Yellow Page telephone directory as having District of Columbia office addresses. In each of the years 1968-1974, at least 24 of the participating podiatrists had D.C. office addresses. Therefore, the percentage of participation of podiatrists with D.C. office addresses (those podiatrists whom D.C. Medicaid recipients would most likely consult) was at the least 60 percent. It must also be remembered that the HEW Handbook provision was directed at the states in general, and does not address itself to the situation of an interstate metropolitan area such as Washington, D.C. The Court, therefore, cannot conclude from the data presented by the parties that the podiatrists' fee structure has not enlisted sufficient participation. *fn43" n42 Number of podiatrists participating in the D.C. Program: Year Number 1968 30 1969 34 1970 38 1971 43 1972 49 1973 56 1974 57


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