II. Threshold Jurisdictional Issues
Defendants have raised two jurisdictional challenges to plaintiffs' claim. Defendants contend both that plaintiffs lack standing to challenge the rule, and that they have failed to exhaust their administrative remedies. Both contentions must be rejected.
This Court's jurisdiction is founded on the Administrative Procedure Act, 5 U.S.C. §§ 551-706 (the "APA"). The APA provides that "[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." Id. at § 702. To establish standing to challenge an agency decision under the APA, a plaintiff must demonstrate that "the challenged action has caused him [or will cause him] injury in fact, economic or otherwise." Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970). Although the injury cannot be merely ideological, see United States v. Richardson, 418 U.S. 166, 41 L. Ed. 2d 678, 94 S. Ct. 2940 (1974), it need not be an outright deprivation of property or liberty. See Sierra Club v. Morton, 405 U.S. 727, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972) (users of a national park have standing to challenge an agency's decision to permit development of the park).
Both ASCRS and Dr. Donaldson have demonstrated the requisite injury in fact. Dr. Donaldson's medical practice would be affected by the challenged rule, and ASCRS has standing on behalf of its members, whose practices will be similarly affected. See Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1977) (organizations have standing to challenge actions injurious to members). The rule would limit physicians' ability to prescribe for their patients the best available course of treatment. In cases where an investigational IOL is, in the professional judgment of a treating physician, the preferred device, economics would nonetheless dictate use of an inferior IOL. Patients would be able to obtain state-of-the-art treatment only if they are able and willing to pay for the new device themselves.
In an analogous case, American Medical Association v. Mathews, 429 F. Supp. 1179 (N.D. Ill. 1977), the United States District Court for the Northern District of Illinois held that plaintiff physicians had standing to challenge a decision not to provide Medicare reimbursement for certain types of prescription medication. The Court in American Medical Association found that the defendant, through its reimbursement policy, exercised "'supervision or control' over plaintiffs' medical practice by effectively requiring them to prescribe only [approved] drugs," thereby inflicting "a distinctive and recognizable harm to an intangible interest." Id. at 1189, 1191. Similarly, plaintiffs in this case will be hampered in their exercise of professional judgment as to how best to treat their cataract patients. This injury in fact confers on plaintiffs standing to challenge the HCFA rule.
Defendants also contend that judicial review of the rule is barred by plaintiffs' failure to exhaust available administrative remedies. The Medicare statute provides a procedure for individual Medicare claimants to contest HCFA's reimbursement determinations. It is defendants' position that Medicare policies can be challenged only through these procedures.
This position is unsustainable. Defendants rely primarily on language in the Medicare statute which, they argue, makes the administrative review of individual reimbursement disputes the exclusive avenue for challenges to HCFA's Medicare rules:
No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1311 or 1346 of Title 28 to recover on any claim arising under this chapter.