UNITED STATES DISTRICT COURT
PLAINTIFF'S REPLY IN SUPPORT OF ITS MOTION
Public Citizen and defendants agree that the plain language of 42 U.S.C. § 1320c-3(a)(14) controls the outcome of this case. That subsection states that Peer Review Organizations ("PROs") "shall inform [complainants] of the organization's final disposition of the complaint." Defendants Health Care Financing Administration and Department of Health and Human Services argue that this language requires disclosure only of the fact that the PRO has completed its investigation into the beneficiary's complaint, and nothing more. In short, defendants read the provision as if it required PROs to inform complainants only "that there has been a final disposition of the complaint," rather than to inform complainants "of the final disposition of the complaint." As is evident from the lengthy discussion in defendants' memorandum, defendants cannot rely on the language Congress actually used to reach that conclusion.
The plain language argument defendants advance in this litigation is extraordinary in light of defendants' proposed rulemaking which acknowledges that subsection 3(a)(14) requires disclosure to the complainant of whether the standard of care had been violated and the corrective action taken. Defendants contend before this Court that the plain language of the disclosure provision requires only disclosure that an investigation has finished, but outside of this Court they embrace a far broader reading. As discussed below, defendants' public pronouncements about the scope of the statute are correct, and their contrary interpretation--asserted for the first time in this litigation--merits no deference from this Court.
Moreover, defendants' litigating position renders subsection 3(a)(14)'s disclosure requirement an empty gesture. PROs are required by statute to conduct investigations into beneficiary complaints, and they have no discretion to ignore complaints or abandon investigations prior to completion. Therefore, notifying complainants that an investigation is completed, without simultaneously informing them of the final disposition of the complaint, is of no value to complainants. Congress enacted subsection 3(a)(14) to improve PRO "responsiveness" to beneficiary complaints. H.R. Conf. Rep., at 361. Particularly in light of Congress' stated intention, the disclosure provision should not be interpreted, as defendant would have it, to require the disclosure only of meaningless information.
I. THE PRO ACT REQUIRES PROS TO INFORM COMPLAINANTS OF THE FINAL DISPOSITION OF THEIR COMPLAINT.
A. The Plain Language Of Section 1320c-3(a)(14) Requires Disclosure Of Substantive Information To Complainants.
Subsection 3(a)(14) means just what it says: PROs must investigate all complaints that they receive about the quality of Medicare services, and then inform complainants "of the final disposition" of each complaint. The phrase "final disposition" is synonymous with "final decision." See Public Citizen's Memorandum in Support of its Motion for Summary Judgment at 10 (citing Black's law dictionary's definition of "final disposition" and statutes and court opinions that use "final disposition" and "final decision" interchangeably). Consistent with this definition, the Administrative Procedure Act defines "order" to mean "the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than a rule making . . . ." 5 U.S.C. § 551(6) (emphasis added). Thus, the term "final disposition" describes the substance of a PRO's final decision regarding a complaint. PROs cannot keep that final disposition of the complaint to themselves, but, as stated in subsection 3(a)(14), they are required to impart that information to the complainant.
Defendants contend that subsection 3(a)(14) does not require disclosure of any substantive information, but rather mandates disclosure only of the fact that the investigation is completed. Although defendants purport to rely on the plain language of subsection 3(a)(14), they cannot reach the result they want without rewriting that provision. For example, defendants assert that statute's mandate that PROs inform complainants "of the final disposition" of their complaint only requires PROs to inform complainants that they are "finished with" the processing of the complaint. Defs' Mem. at 22. Defendants also suggest that, "stated another way," the statute requires each PRO to inform the complainant only that "his or her complaint was finally 'disposed of.'" Id. In short, defendants wish to rewrite the statute to instruct PROs to notify complainants "that there has been a final disposition" of the complaint, rather than to inform complainants "of the final disposition" of the complaint. Although defendants devote eleven pages to their argument that the plain language supports only their interpretation of the statute, the language they use is simply not the language enacted by Congress. Unlike defendants' interpretation, plaintiff's reading is supported by the plain language of the statute and does not require either "stat[ing]" the disclosure requirement "another way" or adding new language to the statute. See United States v. Murphy, 35 F.3d 143, 145 (4th Cir. 1994), cert. denied, 513 U.S. 1135 (1995) ("Courts are not free to read into the language what is not there, but rather should apply the statute as written.").
Defendants seek to evade the disclosure requirement by arguing that "final disposition" is a procedural or temporal term, and therefore does not require substantive disclosure. Defs' Mem. 22. Defendants real quarrel, however, is not with the term "final disposition," but with the statute's mandate that PROs inform complainants "of" the final disposition. For example, defendants argue that the term "final disposition" is a "procedural" term when used to describe the Supreme Court's decision to deny or grant a petition for certiorari. Id. However, when the Supreme Court informs a petitioner "of the final disposition" of a petition, the Court does not tell the petitioner only that it is "finished with" the petition, but also discloses the substance of that decision: the petitioner is informed whether the Supreme Court has granted or denied the petition. Thus, defendants' effort to classify "final disposition" as a procedural term--which in any case is not supported by the longstanding use of that term in the APA and elsewhere--does not further its reading of subsection 3(a)(14)'s disclosure requirement.
Not only is defendants' litigation position at odds with the statutory language, it also renders the disclosure requirement of subsection 3(a)(14) an empty gesture. That subsection states that PROs "shall conduct an appropriate review of all written complaints about the quality of services . . . not meeting professionally recognized standards of health care." (emphasis added). PROs have no discretion to ignore complaints or abandon investigations. Upon receiving complaints, PROs are required to write to complainants and inform them that they will investigate. PRO Manual § 5020(D) (Instructing PROs to respond to complaints with a letter stating that the PRO "will conduct a complete review of the medical records and thoroughly examine all the issues raised by the complainant."). Accordingly, informing complainants that the PRO has finished the investigation, without more, is of no value to complainants, who are already aware that the PRO will investigate their complaints. Defendants' interpretation should be rejected because it "plainly violates the familiar doctrine that the Congress cannot be presumed to do a futile thing." See Halverson v. Slater, 129 F.3d 180, 185 (D.C. Cir. 1997); see also RCA Global Communications, Inc. v. FCC, 758 F.2d 722, 733 (D.C. Cir. 1985) (rejecting interpretation that "would deprive [the provision] of all substantive effect, a result self evidently contrary to Congress' intent").
Moreover, Congress' stated intention in enacting subsection 3(a)(14) was to "Improve peer review responsiveness to beneficiary complaints." H.R. Conf. Rep., at 361 (emphasis added). Letters such as Public Citizen member David Shipp received--denying him any information about whether the PRO had found a violation of the quality of care because the very doctors Mr. Shipp believed to have been negligent had not consented to disclosure--cannot be described as "responsive" to his concerns about whether his wife received adequate medical care. A reading of subsection 3(a)(14) that requires PROs to disclose merely the fact that it has completed an investigation, leaving complainants ignorant about whether their concerns were justified, should be rejected because it subverts Congress' express intention in mandating disclosure.
Although defendants assert that the plain language of subsection 3(a)(14) cannot be read to require disclosure of substantive information, outside of this litigation defendants read the statute to require exactly that. Defendants state in a notice of proposed rulemaking that they read subsection 3(a)(14) to require PROs to disclose to complainants the "final disposition" of the complaint, that is, to disclose whether the practitioner or provider involved had met the quality of care standard, and any corrective action taken if the practitioner or provider did not meet that standard. Defendants' commentary in the Notice of Proposed Rulemaking makes clear that they are proposing to change their regulations to require such disclosure, not because they wish voluntarily to alter their disclosure policies, but rather because they believe that such disclosure is required by subsection 3(a)(14). As defendants explain:
54 Fed. Reg. 1956, 1960 (1989) (emphasis added).
Although the proposed rule has yet to be finalized, defendants have never abandoned their view that subsection 3(a)(14) requires PROs to disclose to complainants whether they found a violation of the standard of care and the corrective action taken. On November 30, 2000--eight months after this case was filed and nearly three months after plaintiffs filed their first motion for summary judgment--defendants confirmed that the proposed amendments to their regulations are still pending and reiterated their conclusion that subsection 3(a)(14) requires disclosure of the final dispositions of investigations of complaints. Defendants' November statement, published in the Unified Agenda of Federal Regulatory and Deregulatory Actions, explains:
65 Fed. Reg. 73782, 73844 (2000). Defendants' November statement, like their statements in the Notice of Proposed Rulemaking, recognizes that subsection 3(a)(14) requires disclosure of substantive information to the complainant.
Defendants argue that they are not legally bound by the statements they made in the notice of proposed rulemaking. Defs' Mem. at 36-37 n.23. Whether or not defendants are correct that they are free to take one position in litigation while maintaining a diametrically opposed position outside the courtroom, plaintiff's submission here is more narrow: Because defendants have gone on record as interpreting subsection 3(a)(14) just as plaintiff does, they cannot credibly argue that the plain language of the statute supports only a contrary interpretation. Defendants' assertion that the plain language only supports their litigation position, while they stand by a proposed regulation that forwards a contrary interpretation, approaches the absurd.
For the same reason, defendants cannot rely on Congress' failure to amend the PRO Act as evidence that Congress supports their newfound litigation position. In light of defendants' pending proposal to alter its regulations to comply with subsection 3(a)(14)'s disclosure requirement, Congress' inaction cannot be viewed as an implicit approval of defendants' current policy. In any case, it is hard to see what an amendment to the statute would accomplish. Considering that defendants admit that their regulations are out of step with the law, but have yet to act on that knowledge, Congress has no reason to think that an amendment reaffirming the disclosure requirement would cause defendants to start complying with the law now.
B. The Structure Of The PRO Act Supports The Substantive Disclosure Requirement of Subsection 3(a)(14).
Second, defendants place extraordinary weight on the absence of a specific provision in 42 U.S.C. § 1320c-9(b) requiring PROs disclose the final dispositions of complaints. Defendants assert that Congress would never have intended to permit disclosure of information that was not explicitly listed in that subsection. Defs' Mem. at 26-30. While it is true that permissible and impermissible disclosures of PRO information are addressed in section 1320c-9, defendants' argument that all permissible disclosures must be listed in subsection 9(b) ignores disclosures permitted under subsection 9(a). Subsection 9(a) provides that PROs must disclose information:
42 U.S.C. § 1320c-9(a) (emphasis added). In other words, subsection 9(b) does not contain the exclusive list of occasions on which disclosure of PRO information is allowed; disclosure is also permitted "to the extent that may be necessary to carry out the purposes of this part." 42 U.S.C. § 1320c-9(a)(1). Defendants' contention that PROs are permitted to disclose information only in circumstances enumerated under subsection 9(b) renders subsections 9(a)(1) a nullity. Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) ("In construing a statute we are obliged to give effect, if possible, to every word Congress used."). Furthermore, defendants' reading would needlessly require Congress to repeat itself in two different sections of the PRO Act every time it enacted new disclosure obligations. Because Congress expressly stated that PROs are required to inform complainants of the final disposition of their complaints in section 3(a)(14), disclosure is "necessary to carry out the purposes of this part" and therefore is mandated under subsection 9(a)(1), notwithstanding the absence of a redundant disclosure requirement in subsection 9(b).(1)
In an effort to prove that subsection 9(b) contains the exclusive list of permissible disclosures, defendants argue that whenever Congress required disclosure of practitioner-specific information as part of a PRO's duties, "Congress simultaneously enacted a corresponding amendment to subsection 1320c-9(b) to permit such disclosure." Defs' Mem. at 29. But that is not true. For example, under 42 U.S.C. § 1320c-3(e)(3)(A), if a hospital informs a patient that he or she no longer requires inpatient hospital care, and if the patient requests that a PRO review that decision, the PRO must conduct a review and inform the patient (or the patient's representative) "of the results of the review." Attending physicians play an integral role in deciding whether patients continue to require inpatient hospital care, see 42 U.S.C. § 1320c-3(e)(1). Accordingly, informing patients of the results of the PRO's inpatient care review implicitly or explicitly identifies the attending physician, just as informing complainants of the final disposition of complaints does. In short, subsection 3(e) requires disclosure of practitioner-specific information, yet that disclosure requirement is not repeated in subsection 9(b). See also 42 U.S.C. § 1320c-3(a)(10) (requiring PROs to organize "information exchanges" between PROs and public or private review organizations; no corresponding disclosure requirement in subsection 9(b)). Thus, neither the language of section 1320c-9, nor Congress' practice in legislating disclosure of PRO information, supports the conclusion that Congress only intended disclosure of PRO information under circumstances enumerated in subsection 9(b).
Third, defendants argue that Congress cannot have intended to mandate disclosure of the final disposition of complaints because the PRO statute prohibits discovery in civil proceedings of "document[s] or other information produced by [a PRO] in connection with its deliberations in making determinations under section 1320c-3(a)(1)(B) or 1320c-5(a)(2)." 42 U.S.C. § 1320c-9(d); Defs' Mem. at 31-32. Sections 1320c-3(a)(1)(B) and 1320c-5(a)(2) describe PROs' obligations to review the quality of care provided by both health care practitioners and providers. Those obligations are listed separately from, and are independent of, PROs' obligations to review beneficiary complaints under subsection 3(a)(14). Thus, the prohibition against discovery does not apply to PRO information generated in an investigation of beneficiary complaints undertaken pursuant to subsection 3(a)(14).
Even if subsection 9(d)'s prohibition against discovery applied to PRO information gathered pursuant to investigations of complaints under 3(a)(14), however, it would not conflict with subsection 3(a)(14)'s disclosure requirement. Subsection 9(d) prohibits discovery into information produced by a PRO "in connection with its deliberations," but does not preclude disclosure of the end result of a PRO investigation. Prohibiting discovery into the PRO's deliberative process makes sense because secrecy is needed to encourage the frank exchange of opinions and ideas between the PRO and the practitioners it interviews about quality of care concerns, and among members of the PRO's deliberating body. Similar policy concerns do not support prohibiting disclosure of the final disposition of PRO investigations. Cf. 5 U.S.C. § 552(b)(5) (FOIA Exemption 5 prohibits disclosure of agency deliberative material but not the final results of agency decisionmaking); Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980) (noting that Exemption 5 protects agency deliberative process from disclosure by exempting pre-decisional documents from disclosure).
Defendants cannot reasonably fear that a practitioner's colleagues would hide information from PROs if they knew that the complainant would receive the final disposition of the PRO's investigation. See Defs' Mem. at 40. A practitioner's colleagues are expected to provide information to PROs about the practitioner although they know that the PRO's findings will be shared with state licensing agencies and the hospital at which the practitioner works--both institutions which have the ability to do far greater damage to a practitioner's career than a civil litigant. Moreover, a practitioner's colleagues know that the results of the PRO's investigation will be shared with the practitioner him or herself, and that the practitioner may be able to identify which of his or her colleagues was the source of any negative information about the quality of medical care. Considering the number and extent of disclosures required by the PRO statute, disclosure of the final disposition of the investigation to complainants does not provide a meaningful additional disincentive to share information with the PRO.
Significantly, defendants' reading of subsection 9(d)'s discovery prohibition makes no sense in light of defendants' policy requiring PROs to disclose the final dispositions of complaints that identify providers, such as hospitals and clinics. See PRO Manual § 5035(A). If disclosure of final dispositions that identify practitioners would render subsection 9(d) a "nullity," as defendants contend, Defs' Mem. at 32, then disclosure of final dispositions that identify providers should do so as well. Of course, it does not, because subsection 9(d) does not apply to investigations under subsection 3(a)(14) and in any case only applies to deliberative material. For the same reason, subsection 9(d) does not conflict with the requirement that PROs disclose the final dispositions of complaints that identify practitioners.
II. THE LEGISLATIVE HISTORY SUPPORTS THE CONCLUSION THAT CONGRESS INTENDED TO REQUIRE PROS TO DISCLOSE TO COMPLAINANTS THE FINAL DISPOSITIONS OF COMPLAINTS.
The brief references to subsection 3(a)(14) in the legislative history support the conclusion that Congress meant what it said: PROs are to inform complainants "of the final disposition" of their complaints, and not that they "have finished" their investigations. The legislation that passed the House discussed subsection 3(a)(14) in a section entitled "Improve peer review responsiveness to beneficiary complaints." H.R. Conf. Rep. 99-1012, at 459 (Oct. 17, 1986) (emphasis added). The House bill stated that a "PRO is required to inform the complainant of its conclusions and final disposition" of the complaint. Id. As defendants concede, the House's clear intention was to require PROs to disclose whether or not the standard of care had been met. Defs' Mem. at 32-33. The Senate's version did not require PROs to disclose its final disposition of complaints. Instead, the Senate would have required only that each PRO "inform the individual that the organization has received the complaint and will take appropriate action." H.R. Conf. Rep. No. 99-1012, at 360.
In conference, Congress chose to adopt the House's requirement that PROs disclose the final disposition of the complaint:
H.R. Conf. Rep., at 361 (emphasis added).
Defendants assert that because the House Bill originally stated that PROs must disclose its "conclusions" and its "final disposition" of the complaint, the deletion of the word "conclusions" evidences Congress' intent to limit disclosure to the mere fact that PROs had completed their investigations. Defs' Mem. at 33. Defendants' rationale for the word change is at odds with the conference agreement, which adopts the House Bill's disclosure requirement. A more reasonable explanation for the deletion is that the drafters realized that disclosure of "conclusions" and "final disposition" were redundant, and thus eliminated the word "conclusions." Indeed, the conference report's reference to disclosure of the "final action taken" demonstrates that neither the House nor the Senate put great weight on the specific word used: the House Bill and conference agreement use the words "conclusions," "final action," and "final disposition" interchangeably, without any indication that the drafters considered the type of disclosure to vary depending on the specific word used. In sum, the conference agreement makes plain that the House and Senate agreed to adopt the House Bill's requirement that PROs disclose the "final action taken," which they expressed by requiring disclosure "of the final disposition" of the complaint.
III. IF THIS COURT FINDS THE PLAIN LANGUAGE OF SECTION 3(a)(14) TO BE AMBIGUOUS, IT SHOULD NOT DEFER TO DEFENDANTS' LITIGATION POSITION, BUT INSTEAD SHOULD ADOPT THE INTERPRETATION IT FINDS TO BE THE MOST REASONABLE CONSTRUCTION OF THE STATUTE.
If this Court finds subsection 3(a)(14)'s disclosure requirement to be ambiguous, it should adopt the interpretation it finds most reasonable. Plaintiff's interpretation--the same interpretation embraced by defendants outside of this litigation--is the most reasonable reading of the language used in subsection 3(a)(14), and it fits comfortably within the PRO Act's structure. Defendants' reading is not only at odds with the language, but is also irrational because it assumes that when Congress required that each PRO inform beneficiaries "of the final disposition" of their complaints, it intended only that the PRO inform the beneficiary that it had finished with the investigation (which the PRO is legally bound to do), leaving the beneficiary in the dark as to whether the PRO found a problem with the quality of care. The language, structure, and legislative history of the PRO Act make clear Congress' intent to require disclosure of substantive information to complainants. Accordingly, subsection 3(a)(14) can most reasonably be read to require disclosure of the final disposition of the investigation.
Defendants argue that the Court must defer to their interpretation, even if the Court finds plaintiff's interpretation to be the more reasonable one, because their view is entitled to Chevron deference. Defs' Mem. 36-38. Defendants are mistaken. No deference is due because defendants' interpretation is newly adopted in litigation and is inconsistent with their previously stated interpretation of the same provision. See, e.g., Christensen v. Harris County, 529 U.S. 576, 587 (2000) ("Interpretations . . which lack the force of law . . . do not warrant Chevron-style deference."); Martin v. OSHRC, 499 U.S. 144, 156 (1990) ("[A]gency 'litigating positions' are not entitled to deference when they are merely appellate counsel's 'post-hoc rationalizations' for agency action, advanced for the first time in the reviewing court.") (citation omitted); Bowen v. Georgetown University Hospital, 488 U.S. 204, 212 (1988) (refusing to defer to agency's litigation position because it was inconsistent with agency's prior interpretation of statute).
As discussed, defendants have proposed altering their disclosure regulations to require PROs to inform beneficiaries whether they had found a violation of the standard of care, even if that information would implicitly or explicitly identify the practitioner. See 54 Fed. Reg. at 1960. Defendants explained that they proposed the change in response to the disclosure requirement in subsection 3(a)(14). Id. Outside of this litigation, defendants have not abandoned that interpretation. Even after this litigation commenced, defendants reaffirmed their commitment to the proposed rule and their intention to alter their regulations to comply with subsection 3(a)(14)'s disclosure requirement. See 65 Fed. Reg. at 73844.
In their motion for summary judgment, defendants reverse course, arguing for the first time that subsection 3(a)(14) requires only that PROs disclose to complainants that they "have finished" their investigation. Defendants deny that this interpretation originates in this litigation, claiming that their PRO Manual and regulations contain their "official" interpretation of subsection 3(a)(14)'s disclosure requirement. Defs' Mem. at 37 n.23. However, neither defendants' PRO Manual nor their regulations purport to interpret subsection 3(a)(14). Indeed, defendants' regulations establishing that practitioner-specific information is confidential and nondisclosable were promulgated in 1985--a year prior to Congress' enactment of subsection 3(a)(14)'s disclosure requirement--and thus simply cannot be cited as defendants' interpretation of that statutory provision. See Defs' Mem. at 36 (citing 50 Fed. Reg. 15347 (1985)).
The new interpretation of section 3(a)(14) defendants forward in this litigation epitomizes the kind of "post hoc rationalization" that is not entitled to deference. Martin, 499 U.S. at 156; Bowen, 488 U.S. at 212. Indeed, defendants' about-face in this litigation is reminiscent of the Department of Health and Human Services' ("HHS") reversal of position in Bowen v. Georgetown University Hospital, a case in which HHS adopted a litigating position that was markedly different from its previously-stated interpretation of the statutory language at issue. The Supreme Court refused to grant HHS Chevron deference in such circumstances, declaring that "[f]ar from being a reasoned and consistent view of the scope of [the statute], the Secretary's current interpretation of [the statute] is contrary to the narrow view of that provision advocated in past cases." Bowen, 488 U.S. at 213; see also General Care Corp. v. Mid-South Foundation, 778 F. Supp. 405, 409 (W.D. Tenn. 1991) (rejecting HHS' interpretation of its own disclosure regulation because HHS' interpretation is "unreasonable and inconsistent with the underlying purpose and history of the regulatory scheme.").
In sum, the most reasonable interpretation of subsection 3(a)(14)'s disclosure provision is that it requires disclosure of whether the practitioner or provider identified in a complaint violated the standard of care, and, if so, the corrective action taken. This interpretation gives meaning to the disclosure requirement, and is supported by both the language of the PRO Act and the legislative history. Indeed, defendants are hard-pressed to argue that this is not the most reasonable reading of subsection 3(a)(14) when they continue to support this interpretation outside of this litigation.
For the foregoing reasons, defendants' prohibition against disclosure of the final disposition of PRO investigations absent the involved practitioner's consent violates 42 U.S.C. § 1320c-3(a)(14). Accordingly, this Court should grant Public Citizen's motion for summary judgment, declare defendants' regulations prohibiting disclosure of the final disposition of PRO investigations invalid, declare the provisions in the PRO Manual directing nondisclosure invalid, and order defendants to direct PROs to disclose the final disposition of every investigation to the complainants, regardless of whether the practitioners involved consent to disclosure.
DATED: April 30, 2001 Respectfully submitted,
Amanda Frost (D.C. Bar. No. 467425 )
CERTIFICATE OF SERVICE
I, Amanda Frost, hereby certify that on this 30th day of April, 2001, I have caused copies of Plaintiff's Reply in Support of its Motion for Summary Judgment and Opposition to Defendants' Motion for Summary Judgment and Plaintiff's Response to Defendants' Statement of Undisputed Material Facts to be faxed and mailed, first class, postage pre-paid to:
G. Michael Harvey
1. Moreover, defendants' reading of section 1320c-9 does not square with defendants' own interpretation of subsection 3(a)(14)'s disclosure requirement. Defendants' position in this litigation is that subsection 3(a)(14) requires PROs to inform complainants only that they are "finished with" the investigation. Yet subsection 9(b) does not contain a specific requirement that PROs disclose to complainants that they are "finished with" an investigation. Thus, unless PROs are allowed to disclose information that is not explicitly enumerated in subsection 9(b), PROs could not disclose even the limited information that defendants assert subsection 3(a)(14) requires be disclosed.