contracting. The various documents themselves are not in accord and none of them explicitly recounts the policy as alleged by plaintiffs. The letter from Mr. Chin indicates no objection by HCFA to such private contracting. In the event that the patient changes his or her mind and submits a claim, however, HCFA would not be bound by a private agreement. The Gail Wilensky letter states that possibly in the situation where the private agreement is totally the idea of the patient and not influenced at all by the physician, the doctor may not be required to submit a claim. However, other medicare requirements, including the fee limiting charge, would have to be followed.
The bulletins from the carriers come closest to reflecting the policy alleged by plaintiffs. The bulletins make the broad statement that the law cannot be bypassed by entering into private contracts in which patients disclaim the coverage. Again, this statement does not "specifically prohibit Medicare patient-beneficiaries from paying for such services out of their own funds and requesting their physician not to submit a claim for Medicare Part B benefits to the Secretary on their behalf." Assuming, however, that the prohibitions alleged by the plaintiffs are the "law" to which the bulletins refer, then one may make the argument that the bulletins do enunciate the policy as challenged by plaintiffs.
Notwithstanding this possibility, plaintiffs have not placed any evidence in the record identifying the source of the bulletins such that they can be attributed to the Secretary. In their complaint plaintiffs allege that the bulletins were "prepared by the Defendant, Louis W. Sullivan, M.D., Secretary of the United States Department of Health and Human Services, and sent to health care providers." See Plaintiffs' complaint at 19 P. 30 . At oral argument plaintiffs' attorney responded when questioned about the origin of the bulletins, that they "come from intermediaries of the Secretary." T-38, L.13-L.14.
At oral argument the government took the position that it did not know the origin of the bulletins. T-38, L.1-L.5.
Given the confusion as to the origin of these bulletins, the lack of any evidence in the record attributing the statements in the bulletins to the Secretary, and the inconsistencies reflected in the HCFA letters, I cannot possibly conclude that the Secretary has clearly articulated a policy on the issue of private contracting. These bulletins may be nothing more than the intermediaries' interpretation of what the law may or may not be and not a statement by the Secretary as to his intentions regarding the proposed issue. Under the Medicare Act, the Secretary has enforcement power to bring sanction proceedings against the doctor. 42 U.S.C. § 1395w-4(g)(1) (violation of limiting charge); 42 U.S.C. § 1395w-4(g)(4)(B)(ii) (violation of claims submission requirement). The intermediaries do not have such power. Accordingly, such a statement coming from an organization which does not have enforcement power cannot be interpreted as a ripe threat against the doctors. Compare American Federation of Gov. Employees v. O'Connor, 241 U.S. App. D.C. 311, 747 F.2d 748, 749 (D.C. Cir. 1984) (case not ripe for review where plaintiffs present general question not wedded to the facts of a particular case and where plaintiffs offer advisory letters from entity with no enforcement power as the basis of their challenge), with Colonial Penn Insurance v. Heckler, 721 F.2d 431, 439-40 (3d Cir. 1983) (case ripe for judicial review where "it is apparent to a statistical and almost metaphysical certainty that claims will be pressed against" the plaintiff).
From my review of the documents submitted by the plaintiffs in their attempt to identify the Secretary's policy, it is clear to me that the challenge to the alleged policy of the Secretary is not fit for judicial decision. This is not a case where the Secretary has clearly stated his position on a posed issue. The Secretary has not promulgated any rules or regulations either formally or informally espousing the policy alleged by plaintiffs. See Colonial Penn, at 439. Nor have plaintiffs demonstrated that the bulletins supplied by the carriers were issued on behalf of or at the direction of the Secretary. See Association of American Physicians v. Bowen, 909 F.2d 161, 163 (6th Cir. 1990) (plaintiffs succeeded in challenge to letters issued by the carrier, "on behalf of the Secretary of Health and Human Services," as violative of the Medicare Act).
Nor have plaintiffs demonstrated that the documents represent statements of the Secretary intended to have the force of law such that conformity to them in the administrative process would be expected. See Abbott Labs, at 150-51 (Secretary's intentions clearly definitive where regulations were "promulgated in a formal manner after announcement in the Federal Register and consideration of comments by interested parties"). See also American Ambulance Service v. Sullivan, 911 F.2d 901 (3d Cir. 1990) (ripeness not in issue where plaintiffs challenge provisions in Secretary's Carrier Manual
and HCFA Regional Medicare letter).
Plaintiffs cite Whitney v. Heckler, 780 F.2d 963 (11th Cir.1986) in support of their argument that this claim is ripe for judicial review. In Whitney, plaintiffs challenged as unconstitutional a provision of the Medicare Act that placed a temporary freeze on the fees non-participating physicians may charge their Medicare patients. In addressing the question of ripeness, the court concluded that "because this appeal raises a facial attack on the constitutionality of § 2306 and presents a purely legal question, we will never be in a better position to decide this issue." Id. at 968-69 n.6. This case is clearly distinguishable. Here, the plaintiffs attack an alleged policy of the secretary. Plaintiffs have failed, however, to establish that such a policy exists. Not until the secretary has taken a position on this issue, will plaintiffs case be fit for judicial review.
I also must evaluate the hardship to the parties of withholding court consideration. Pacific Gas & Elec., at 201. For reasons similar to those that lead me to conclude that plaintiffs' claim was not fit for judicial review, I am satisfied that no undue hardship is suffered by the plaintiffs in withholding such review. The Whitney court stated that "it is well established that an issue is ripe for judicial review when the challenging party is placed in the dilemma of incurring the disadvantages of complying or risking penalties for noncompliance." Whitney, at 969.
Pursuant to the Medicare Act, the imposition of sanctions by the Secretary is discretionary. 42 U.S.C. § 1395w-4(g). The discretionary sanctions for violating the fee limiting provisions are only authorized where the physician acts "knowingly and willfully on a repeated basis." Id. Similar preliminary requirements exist for the Secretary to exercise his discretion in imposing sanctions for violation of the claims submission requirement. Id. As concluded above, plaintiffs have not established a determination by the Secretary that doctors who engage in private contracting whereby claim forms are not submitted and the fee limitation provision is not followed have engaged in knowing and willfull violations of the Medicare statute. Inasmuch as such a determination is a prerequisite to the Secretary's exercise of discretion in imposing sanctions, it is difficult for me to conclude that Dr. Copeland is facing the real dilemma of complying or being sanctioned that was the concern of the Whitney court. See American Medical Ass'n v. Bowen, 857 F.2d 267, 272 (5th Cir. 1988) (no case or controversy where physician not personally threatened with sanctions); see also Abbott Labs, at 151-53, (case ripe for judicial review where regulations are clear-cut and effective immediately upon publication and plaintiffs risk serious criminal and civil penalties).
d. Plaintiffs 'constitutional attack on the statute
In their verified amended complaint, plaintiffs make a constitutional attack on the validity of 42 U.S.C. § 1395w-4. Plaintiffs claim that to the extent that § 1395w-4 authorizes the alleged policy of the Secretary prohibiting private contracting on a case-by-case basis without filing any claims for payment and requiring beneficiaries to disenroll and threatening sanctions against the physician if such private contracting is done, the statute constitutes an unconstitutional delegation of legislative power to the defendants in violation of Article I, § 1, and the Fifth Amendment to the United States Constitution.
From my reading of the verified amended complaint, plaintiffs' papers and the position taken by plaintiffs at oral argument, I understand plaintiffs' constitutional attack to be predicated on a finding by this court that the statutory provision being challenged authorizes the alleged policy. Inasmuch as I have concluded that plaintiffs' challenge to the alleged policy of the Secretary is not ripe for determination because plaintiffs have failed to establish the existence of such a policy, I find that it is unnecessary to address plaintiffs' constitutional attack on the statute.
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of an action for failure to state a claim upon which relief can be granted. In the instant case, plaintiffs claim to be challenging a clearly articulated policy of the Secretary prohibiting private contracting on a case-by-case basis and threatening sanctions against doctors who enter into such arrangements. Plaintiffs argue that such a policy is in contravention to the Medicare Act and to various provisions of the United States Constitution. In addition, plaintiffs challenge, as an unconstitutional delegation of legislative authority, a provision of the Act to the extent that it is found to authorize such a policy. I have concluded that plaintiffs' claims are not ripe because plaintiffs have not established that the Secretary has clearly articulated a policy on private contracting. Accordingly, plaintiffs have failed to state a claim upon which relief can be granted. Based upon the foregoing discussion, defendant's motion to dismiss is GRANTED and plaintiffs' cross-motion for summary judgment is DENIED.
NICHOLAS H. POLITAN, U.S.D.J.