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September 21, 1982

RICHARD S. SCHWEIKER, et al., Defendants

The opinion of the court was delivered by: OBERDORFER

 This matter is before the Court on Plaintiffs' Motion for a Preliminary Injunction, which has been the subject of extensive briefing and several hearings since it was filed on February 19, 1982. *fn1" Plaintiffs seek injunctive and declaratory relief, and also apparently seek relief in the form of a mandamus against defendant Schweiker. See Nat'l. Wildlife Federation v. United States, 200 U.S. App. D.C. 53, 626 F.2d 917, 918 n. 1 (D.C.Cir. 1980). Plaintiffs, who are recipients of outpatient medical rehabilitation services, providers of those services and professional associations of providers, specifically seek an Order directing defendants to comply with terms of Part B of the Medicare Act of 1965 (as amended), 42 U.S.C. § 1395j-w. See 42 U.S.C.A. § 1395k(a) (2) (E) (West Supp. 1982). At a final hearing on the motion held July 27, 1982, the parties were given an opportunity to examine witnesses in court, and elected to proceed instead by affidavit evidence. See Order of July 8, 1982 para. 2. *fn2" Plaintiffs subsequently filed proposed findings of fact and conclusions of law, together with several proposed orders, and defendants filed responses to plaintiffs' submissions. Based upon the entire record in this action the Court makes the following findings of fact and draws the following conclusions of law. *fn3"


 1. In December 1980, the Ninety-Sixth Congress passed and the President signed amendments to Part B of the Medicare Act of 1965 ("the Act"). Pub. L. No. 96-499, § 933 ("section 933"), 94 Stat. 2609 et seq. (1980). Section 933 amended the Act in a number of respects to include comprehensive outpatient rehabilitation facilities ("CORFs") as "providers of services" under the Act and to permit reimbursement of qualified CORFs for comprehensive outpatient rehabilitation services provided to qualified Medicare subscribers. See 42 U.S.C.A. § 1395k(a) (2) (E) (West Supp. 1982). Subsection (h) of section 933 established a starting date for CORF benefits in the following terms:

(h) The amendments made by this section shall become effective with respect to a comprehensive outpatient facility's first accounting period which begins on or after July 1, 1981.

 Pub. L. No. 96-499, § 933 (h), 94 Stat. at 2637 (1980). Defendants have not yet published final regulations designed to implement section 933, although they assert that such regulations are necessary before section 933 benefits can be provided.

 2. Plaintiffs are associations that represent rehabilitation facilities and professionals who work in such facilities, individual rehabilitation facilities that claim to meet definitional requirements for eligibility as CORF providers under the Act, and individuals eligible to receive benefits under Part B of the Act. Defendants are the Secretary of the Department of Health and Human Services ("the Secretary") and the Administrator of the Health Care Financing Administration ("HCFA"), who is responsible to the Secretary for administration of benefit programs under the CORF amendments to the Act.

 3. Part B of the Medicare program is administered in part by commercial insurance companies, Blue Shield Plans and other carriers (Part B carriers), that act as agents for HCFA. Part B carriers normally process bills from providers and make payments thereof pursuant to section 1842 of the Social Security Act (42 U.S.C. § 1395u).

 4. Various rehabilitation facilities claiming to meet the definition of a "comprehensive outpatient rehabilitation facility" in section 933 have sought certification as Medicare providers of services under the authority of section 933 and payment for CORF services rendered to Part B beneficiaries. These requests for reimbursement for provision of CORF services have been denied by Part B carriers because defendants have not issued final regulations or other directives to implement section 933. Other rehabilitation facilities have refrained from seeking certification as CORFs due to the absence of such regulations.

 5. Affidavits submitted by plaintiffs indicate that some individuals eligible for Medicare reimbursement and in need of CORF services are foregoing such services because they or their rehabilitation facilities cannot receive payment for such services due to defendants' failure to implement section 933. Other individuals are paying for CORF services out of their own pockets.

 6. Plaintiffs' affidavits also indicate that some rehabilitative facilities have suffered severe financial burdens due to, inter alia, expenses undertaken (such as the hiring of staff, expansion of facilities, and design of new programs) to prepare to provide CORF services in anticipation of a July 1, 1981, effective date for section 933, and provision of CORF services to eligible Medicare subscribers for which no reimbursement has been forthcoming. As the date for implementation of section 933 has been pushed further and further back, some facilities have had to let go members of their professional staff, take out loans at high interest rates, and deny services to eligible individuals unless the individuals can pay for such services themselves.

 7. Defendants have reported that if section 933 were being implemented at this time, about 500 facilities would qualify as CORFs and payments to them on behalf of Part B beneficiaries in the fiscal year ending September 30, 1982 would be $13,000,000. Notice of Proposed Rulemaking, 47 Fed. Reg. 20092, 20097 (1982). This figure may be taken as a rough estimate of the cost to CORFs of the failure to implement section 933 during that period.

 8. In excess of 28 million people are eligible to receive services under Part B of the Medicare Act (Budget of the United States Government, Fiscal Year 1982, Appendix 1-42). While presumably less than this number would seek or qualify for CORF services, this figure demonstrates the large number of persons potentially affected by the failure to implement section 933.

 9. Some hospitals provide outpatient rehabilitative services that are currently reimbursable by Medicare. Such hospitals, however, are few in number and are generally located only in urban areas.

 10. Section 933 of the Medicare Act authorizes but does not require the Secretary to issue regulations as a means of discharging his responsibility to provide the program of benefits prescribed by the Act. Defendants have chosen in their discretion to issue regulations in order to implement section 933.

 11. In its proposed budgets for fiscal years 1982 and 1983, issued in February of each preceding year, the Executive Branch has sought repeal of section 933. See Office of Management and Budget, Budget of the United States Government, Fiscal Year 1982 (Appendix, p. I-K51); OMB, Budget of the United States Government, Fiscal ...

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