US SUPREME COURT DECISIONS

452 U.S. 1301

Richard S. SCHWEIKER, Secretary of Health & Human Services et al. Appellants,
v.
William McCLURE et al.
No. A-961.

June 12, 1981.

Justice REHNQUIST, Circuit Justice.

Applicants request that I stay a judgment of the District Court for the Northern District of California pending a direct appeal of that judgment 503 F.Supp. 409, to this Court pursuant to 28 U.S.C. 1252. On May 5, 1981, applicants filed a notice of appeal.

This case involves the constitutionality of the hearing procedures available under Part B of the Medicare Act, 42 U.S.C. 1395j-1395w, 1395ff (1976 ed. and Supp.III). The Medicare Act is divided into two parts. Part A provides insurance for hospital and related post-hospital services. 42 U.S.C. (& Supp. III) 1395c; 1395d (1976 ed. and Supp. III). Part B provides a voluntary program of supplementary medical insurance covering, in general, 80% of the reasonable costs of

Page 452 U.S. 1301 , 1302

certain other services, primarily physicians services and medical supplies . 42 U.S.C. 1395k, 1395l (1976 ed. and Supp.III). The Secretary determines whether an individual is eligible to enroll in the Part B program, and the individual is entitled to an administrative hearing and judicial review of that eligibility determination. 42 U.S.C. 1395ff(a) and (b)(1)(B). As to the implementation of Part B, Congress authorized the Secretary to enter into contracts with private insurance carriers under which the carriers would determine and pay Part B benefits on a reimbursable basis. 42 U.S.C. 1395u. Under these contracts, the carriers receive advances of funds, which they then disburse to claimants in reimbursement for medical services found by the carriers to be covered by Part B. 1395u(c). If a claimant is dissatisfied with the reimbursement allowed by the private carrier, the claimant is entitled to a "fair HEARING" CONDUCTED BY THE PRIVATE CARRIER IF the amount of the claim is $100 or more. 1395u(b)(3)(C). The Act does not provide for an appeal to the Secretary of an adverse judgment by the carrier after a hearing.

Respondents, a class of Part B beneficiaries, brought suit challenging the constitutionality of that hearing procedure. In a decision rendered May 19, 1980, the United States District Court for the Northern District of California concluded that Congress' vesting of final decisionmaking authority in the carrier violates the claimant's due process rights because, in the court's view, hearing officers selected by the carrier may be biased and because hearings conducted by Administrative Law Judges employed by the Government may be more reliable. In relief, the District Court ordered that any Part B claimant whose claim was finally rejected after a full evidentiary hearing by the carrier's hearing officer on or after May 1, 1980, be given the opportunity for a de novo evidentiary hearing before an Administrative Law Judge of the Secretary. On May 1, 1981, the District Court denied the applicants' application for a stay of its order pending appeal. [452 U.S. 1301 , 1303]

Full Text of Opinion