fiscal 1984. If the figures were "recognized as reasonable" for the purpose of determining the costs in fiscal year 1984, they must also be recognized as reasonable for subsequent years. Such figures can not be redetermined at a later date so that there are two different "base-year" amounts being used. Congress could not have intended that the Secretary interpret "recognized as reasonable" to mean two amounts for fiscal 1984: one derived from the standard cost reporting and review process following the close of the fiscal year; and a lower figure recalculated once the Secretary realized that the year would become the base-year for subsequent determinations. Had it wanted a reaudit, Congress was well aware of how to indicate such. The Secretary's failure to use the amount recognized as reasonable for the base year in computing payment under the GME per resident amount violates the plain meaning of the statute.
The conclusion that Congress did not intend to authorize a reaudit follows naturally when looked at within the framework of the provision as a whole. Section 1886(h)(2)(A) is only the first of several paragraphs detailing the "approved FTE resident amount for each cost reporting period beginning on or after July 1, 1985." Subparagraph A specifies fiscal year 1984; the other subparagraphs outline the increases for subsequent years and how hospitals that did not have residency programs in fiscal 1984 should be treated. For example, subparagraph E provides that for hospitals that did not have an approved medical residency training program or were not participating in the program for a cost-reporting period beginning during fiscal 1984,
the Secretary shall, for the first such period for which it has a such a residency training program and is participating under this title, provide for such approved FTE resident amount as the Secretary determines to be appropriate, based on approved FTE resident amounts for comparable programs.
42 U.S.C. § 1395ww(h)(2)(E). The difference between this clause and the language of (A) is striking -- here the amount is an approved FTE as the Secretary determines to be appropriate, whereas in (A) it is the amount "recognized as reasonable". Subparagraph (E), by its terms, gives the Secretary much more discretion. In Section 1886(h)(4)(A), Determination of Full-Time-Equivalent Residents, Congress explicitly gave the Secretary authority to establish rules for the computation of the FTE residents. In contrast, the statute nowhere authorizes the Secretary to establish rules to determine the amount of costs recognized as reasonable. Where Congress chose different language, we must "'presume that Congress intended the terms to have different meanings.'" Washington Hospital Center v. Bowen, 254 U.S. App. D.C. 94, 795 F.2d 139, 146 (D.C. Cir. 1986)(quoting Wilson v. Turnage, 243 U.S. App. D.C. 10, 750 F.2d 1086, 1091 (D.C. Cir. 1984), vacated on other grounds, 244 U.S. App. D.C. 68, 755 F.2d 967 (D.C. Cir. 1985)).
Additionally, at the time the statute was passed, the base year determinations for fiscal year 1984 were subject to revision. Any concern the Secretary might have had about the accuracy of those figures could have been addressed within the standard three-year period time.
To paraphrase Judge Oberdorfer's opinion in Georgetown University Hospital v. Bowen, 698 F. Supp. 290, 296 (D.D.C. 1987), aff'd, 274 U.S. App. D.C. 96, 862 F.2d 323 (D.C. Cir. 1988), a final determination that a particular cost was reasonable for graduate medical education costs in the base year should provide conclusive proof that the cost should be included in the hospital-specific rate under the GME per resident amount for years subsequent to the base year. There should be no need for a reaudit, and insofar as a reaudit is likely to lead to two different base-year computations, it is impermissible under the statute.
Additional support for this interpretation is provided by the general disfavor of retroactive rulemaking.
The Supreme Court has previously stated that an agency is precluded from issuing a retroactive rule absent an "express" statutory grant of power in the statute. See Bowen v. Georgetown University Hospital, 488 U.S. 204, 208, 102 L. Ed. 2d 493, 109 S. Ct. 468 (1988) ("Georgetown I"). "Even where some substantial justification for retroactive rulemaking is presented, courts should be reluctant to find such authority absent an express statutory grant." 488 U.S. at 208-209. Indeed, in Georgetown I, the Supreme Court held that the Medicare Act does not grant general retroactive rulemaking authority to the Secretary, see 488 U.S. at 213, and that statutes authorizing the issuance of Medicare rules and regulations "will not be construed to have retroactive effect unless their language requires this result." 488 U.S. at 208.
In the preamble to the GME regulations, the Secretary indicated that he was not "relying on our general grant of rulemaking authority to support retroactive application". 54 Fed. Reg. 40314. Instead, defendant claims that the Medicare statute provides the "express" authority for the Secretary to issue GME regulations that have retroactive effect. See Defendant's Mem. at 31. Defendant points to an uncodified section of the statute that indicates that the GME amendments are to be effective for "hospital cost periods beginning on or after July 1, 1985" as providing the express authority. Pub. L. No. 99-272, § 9202(b), 100 Stat. 175 (1986). Defendant also notes that several sections of 42 U.S.C. § 1395ww(h) specifically provide that the operative date is for cost periods beginning on or after July 1, 1985, a date which was prior to the enactment of the GME amendments. See, e.g., 42 U.S.C. § 1395ww(h); 42 U.S.C. § 1395ww(h)(2); 42 U.S.C. § 1395ww(h)(2)(C); 42 U.S.C. § 1395ww(h)(3).
Plaintiffs agree with defendant that several provisions in 42 U.S.C. § 1395ww(h) do expressly permit retroactive rulemaking,
but argue that such express provision for some items indicates that Congress knew how to permit retroactive rulemaking when it wanted to do so. They argue that the absence of any such explicit direction to retroactively establish GME costs "recognized as reasonable under this title" indicates that Congress did not want to provide retroactive power in this case. Plaintiffs' Memorandum in Opposition to Defendant's Motion for Summary Judgment and in Further Support of Plaintiffs' Motion for Summary Judgment at 24-25. We agree.
While Congress expressly provided the Secretary with some authority to issue rules retroactively, this exception to the general rule of non-retroactivity does not mean that the Secretary may issue any retroactive regulations he cares to in implementing the statute. Specifically, the language of the statute weighs against finding retroactive power for the agency to institute new audit requirements. As discussed above, the provision's explicit command to develop rules to compute the FTE residents in 42 U.S.C. 1395ww(h)(4)(A) indicates that Congress considered the need for the Secretary to develop procedures for certain aspects of the GME program; the absence of any such explicit provision for new determinations of reasonable cost gives rise to a strong inference against the Secretary's position. Cf. Georgetown I, 488 U.S. at 213-214; Fedorenko v. United States, 449 U.S. 490, 512-13, 66 L. Ed. 2d 686, 101 S. Ct. 737 (1981); Department of Air Force v. Federal Labor Relations Authority, 278 U.S. App. D.C. 248, 877 F.2d 1036, 1041 (D.C. Cir. 1989).
Accordingly, we find that 42 U.S.C. § 1395ww(h)(2)(A) does not permit a reaudit of the base year in order to determine the hospital specific per resident amount for GME costs. The Secretary's regulation constituted an unauthorized retroactive rule. Therefore the Secretary must use the base year costs previously recognized as reasonable for fiscal year 1984 to determine the direct GME costs of the hospital for each FTE resident.
Finally, plaintiffs have moved to compel the production of the opinion of Keith Braganza, a member of the PRRB, dissenting from the Board's EJR determination and for summary judgment with respect to the agency's non-disclosure policy. The PRRB indicated that it was the Board's policy not to release dissents. However, the defendant's response to interrogatories indicated that this "policy" was adopted only nine days before the PRRB decision in this case was issued and after Braganza had discussed his views with the rest of the Board. Indeed, other PRRB dissents have been released and relied upon by district courts.
Plaintiffs argue that the Freedom of Information Act ("FOIA") considers dissents as part of the material that must be released. See 5 U.S.C. § 552(a)(2)(A). They argue that the dissents are part of the "record" that must be reviewed by the court. Defendant argues that the dissent is protected by the deliberative process privilege. However, this privilege applies to pre-decisional agency documents, and the dissent in issue is not pre-decisional in nature, as it is adjunct to the PRRB's majority decision to deny the request for EJR. All materials not privileged are discoverable. Fed. R. Civ. P. 26(b)(1). Insofar as there are any remaining issues in these cases, we grant plaintiffs' motion to compel production.
The arguments regarding the legality of the policy not to release dissents revolve around whether the Board's EJR determination is judicially reviewable
As we do not decide whether a PRRB determination to deny EJR is reviewable as a final decision pursuant to 42 U.S.C. § 1395oo(f)(1), we likewise do not reach whether a policy to preclude publication of dissents by a member of the PRRB in an EJR determination is contrary to law. Accordingly, we deny plaintiffs' motion for summary judgment with respect to the PRRB's policy of non-disclosure of dissenting opinions.
In conclusion, we deny defendant's motion to dismiss and defendant's motion for summary judgment. We grant plaintiffs' motion for summary judgment except that we deny plaintiffs' motion for summary judgment with respect to PRRB's policy not to disclose dissenting opinions in EJR determinations. We hold that the Secretary's reaudit regulation, 42 C.F.R. § 413.86(e)(ii), is unlawful as it conflicts with the plain meaning of 42 U.S.C. § 1395ww(h)(2)(A) and is an impermissible retroactive rule.
An Order in accordance with the foregoing is entered this day.
JOHN H. PRATT
United States District Judge
EDITOR'S NOTE: The following court-provided text does not appear at this cite in 799 F. Supp. 1210.
Date: 17 July 92
ORDER - July 17, 1992, Filed
In accordance with the Memorandum Opinion entered this day, it is by the court, this 17th day of July, 1992, hereby
ORDERED that Defendant's Motion to Dismiss is denied; and it is
ORDERED that Defendant's Motion for Summary Judgment is denied; and it is
ORDERED that Plaintiffs' Motion for Summary Judgment is granted, except that plaintiffs' Motion for Summary Judgment with respect to PRRB's policy not to disclose dissenting opinions is denied; and it is
ORDERED that Plaintiffs' Motion to Compel Production is granted; and it is
FURTHER ORDERED that the Secretary's reaudit regulation, 42 C.F.R. 413.86(e)(ii), is unlawful as it conflicts with the plain meaning of 42 U.S.C. § 1395ww(h)(2)(A) and is an impermissible retroactive rule.
JOHN H. PRATT
United States District Judge