overpayments after the passage of over three years and without any accommodation to whatever equities might have accrued to plaintiff's position during that span of time.
Plaintiff points out, for example, the fact that the informal administrative appeal procedures which ironically operated to its favor in early 1972 were subsequently found to be constitutionally defective in Coral Gables Convalescent Home, Inc. v. Richardson, 340 F. Supp. 646 (S.D. Fla. 1972). In that case, which involved a recoupment procedure identical to the one at bar, the Court held that the Secretary's "failure to afford plaintiff at least a post-reduction hearing constituted a denial of due process." Id. at 650. Not long after that decision, the Secretary promulgated new regulations instituting certain formal post-suspension review procedures, effective May 27, 1972.
These procedures were in turn then severely criticized in St. Jude Nursing Home, Inc. v. Richardson, Civil No. 72-686 (M.D. Fla., Oct. 3, 1972), as "not designed to afford a meaningful administrative determination of provider payment disputes." Id. at 4. See Americana Nursing Centers, Inc. v. Weinberger, 387 F. Supp. 1116, 1119 (S.D. Ill. 1975). Consequently, the Medicare Act itself was amended to include an entirely new appeal mechanism, the Provider Reimbursement Review Board ("PRRB"), which provides for a more timely and comprehensive appellate review hearing. 42 U.S.C. § 1395oo.
Under present circumstances, however, plaintiff has no right to avail itself of these constitutionally mandated review mechanisms. When enacting the PRRB amendment to the Act, Congress made that procedure expressly inapplicable to overpayments during any accounting period ending prior to June 30, 1973.
Although the Secretary then amended his regulations in 1974 to permit providers a new right to an intermediary appeal for accounting periods ending prior to June 30, 1973,
it appears that plaintiff is precluded from that remedy as well: the amended regulations, at 20 C.F.R. § 405.1811, require that this appeal must be made within 180 days after the provider receives its "notice of amount of program reimbursement." As defined elsewhere in the Secretary's regulations,
this notice date would appear to be fixed in plaintiff's case as the dates at which it received its original overpayment notices in July, 1971.
It is therefore not surprising that plaintiff contends that since it may not of right avail itself of the Secretary's existing appeal mechanisms, any sudden and seemingly arbitrary reversal of the outcome of the only administrative mechanism available as of 1971-1972 would deny it due process of law. The Court agrees that the Secretary's handling of this matter has indeed placed plaintiff at a most unfair disadvantage. Plaintiff purported to contract away the liability here in question; it participated in the only administrative procedure then in existence in an effort to disclaim that liability when first asserted; it received a favorable determination at the conclusion of that process; for over three years it was led to believe that the matter was settled and with no apparent evidence that the former owners were contesting their liability; and it presently faces a "Catch-22" type of administrative dilemma in which it cannot benefit from the Secretary's new, judicially-prompted appeal procedures partly because it has been distinctly disadvantaged by the Secretary's dilatory conduct. In its present posture, this case is therefore not so very different from those cases which have held the Secretary's recoupment procedures to be violative of due process of law. See Americana Nursing Centers, Inc. v. Weinberger, 387 F. Supp. 1116, 1119 (S.D. Ill. 1975), citing St. Jude Manor Nursing Home, Inc. v. Richardson, Civil No. 72-686 (M.D. Fla. 1972); Coral Gables Convalescent Home, Inc. v. Richardson, 340 F. Supp. 646, 650 (S.D. Fla. 1972); cf. Mount Sinai Hospital of Greater Miami, Inc. v. Weinberger, 517 F.2d 329, 341 (5th Cir. 1975); Columbia Heights Nursing Home and Hospital, Inc. v. Weinberger, 380 F. Supp. 1066, 1072 (M.D. La. 1974). The Court accordingly holds that the defendants' planned suspension would violate plaintiff's constitutional right to due process of law.
Defendants argue that plaintiff fails to make a sufficient showing of irreparable injury,
inasmuch as any wrongful harm suffered by plaintiff as a result of the Secretary's planned recoupment would assertedly be directly compensable by mere money damages. See, e.g., Graham v. Triangle Publications, Inc., 344 F.2d 775, 776 (3d Cir. 1965). The Court finds, however, that plaintiff would in fact be irreparably harmed if the Secretary were allowed to proceed with its suspension at this juncture. Even aside from the fact that this Court has found plaintiff's constitutional right to due process of law to be threatened by defendants' planned actions,
it is clear that plaintiff's ability to render effective medical services to those in need would be significantly hampered by the suspension of regular payments to which plaintiff would otherwise be entitled. No better indication of a provider's specific need for regular Medicare reimbursements could be found than that which is reflected in the statutory and regulatory scheme. Congress has purposely required that the providers of health care services be reimbursed by the Secretary "not less often than monthly." 42 U.S.C. § 1395g. Accordingly, the regulations promulgated by the Secretary to implement this requirement go to great lengths to ensure that "institutions shall not be disadvantaged, as they sometimes are under other arrangements . . . ." 20 C.F.R. § 405.402(b)(1); see also 20 C.F.R. § 405.454. Thus, both Congress and the Secretary have recognized the potential harm involved here and the compelling public interest in providing timely and uninterrupted health care funding.
Plaintiff is therefore entitled to a preliminary injunction preventing the defendants from suspending its regular Medicare disbursements until after defendants have voluntarily afforded plaintiff further administrative recourse and until such time as this Court has made a final determination as to the merits of plaintiff's claim.
OLIVER GASCH / Judge
[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 432 F. Supp.]
Upon consideration of plaintiff's motion for a preliminary injunction, the memorandum of points and authorities filed in support thereof, and defendants' opposition thereto, and upon consideration of the argument of counsel in open Court, the entire record herein, and for the reasons set forth in the Court's Memorandum issued this day, it is by the Court this 16th day of December, 1976,
ORDERED that plaintiff's motion for a preliminary injunction be, and hereby is, granted, and it is further
ORDERED that defendants and their agents be, and hereby are, enjoined from suspending any Medicare disbursements regularly made to plaintiff, until further Order of this Court.
OLIVER GASCH / Judge