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SLAVCOFF v. HARRISBURG POLYCLINIC HOSP.

March 25, 1974

Alexander SLAVCOFF
v.
HARRISBURG POLYCLINIC HOSPITAL


Nealon, District Judge.


The opinion of the court was delivered by: NEALON

NEALON, District Judge.

In this Civil Rights Action brought under 28 U.S.C. § 1331 and/or 28 U.S.C. § 1343, *fn1" plaintiff Alexander Slavcoff, a physician at defendant Harrisburg Polyclinic Hospital, alleges that his surgical and cystoscopic privileges were curtailed and restricted by the hospital without the safeguards of certain procedural rights guaranteed by due process of law.

 From the answers to interrogatories and the stipulation, the following facts emerge: *fn2"

 The general control of the property and affairs of the Harrisburg Polyclinic Hospital is vested in its board of directors, a self-perpetuating body, none of whose members represent governmental entities.

 From December, 1950 to September, 1971, the hospital received a total of $3,287,024 in Hill-Burton funds toward total construction costs of $9,724,034. *fn3" A total of $14,322,854 was expended by defendant on construction and capital equipment during the past ten years.

 In the past five years, the hospital has derived 24.05%, or $16,302,400, of its operating income from reimbursements under the Medicare Program; and 7.26%, or $4,923,202, of its operating income from reimbursements under the Medicaid Program. During that period, the hospital also received a total of $756,768 from the Pennsylvania Bureau of Vocational Rehabilitation for the care and training of patients following acute hospitalization. Its operating budget is exempt from federal taxation.

 Harrisburg Polyclinic has been approved by the Pennsylvania Department of Public Welfare and it is inspected by the Commonwealth of Pennsylvania.

 Capital Blue Cross serves as the fiscal intermediary for Medicare (42 U.S.C. § 1395h) at Harrisburg Polyclinic. The fiscal intermediary performs an auditing function, and can refuse reimbursement to participating hospitals if it determines that treatments rendered were medically unnecessary. It also determines the cost of services to Medicare patients, direct and indirect, less any costs deemed unnecessary to the efficient delivery of needed health services. In the performance of this task, the fiscal intermediary samples a percentage of discharges in order to ascertain whether the hospital facilities are being effectively utilized. It also reviews the quality of professional standards at the hospital to determine the necessity of medical treatment, rather than merely accepting the decisions of the hospital, attending physician, or the reviewing committees, as to the advisability of the care provided. Such review, however, is solely for fiscal purposes, since the fiscal intermediary does not exercise any supervision or control over the practice of medicine, over the manner in which medical services are provided, over the selection, tenure or compensation of hospital employees, or over the administration or operation of the hospital.

 As part of its function, the fiscal intermediary also determines whether the hospital has tissue, utilization, credentials, and transfusion committees, but does not set the standards to be employed by them. Those committees exercise control over the professional standards at the hospital by preventing continued removal of healthy tissue, by restraining misuse of the hospital facilities without medical necessity, and by reviewing the qualifications and practices of the members of the staff.

 Harrisburg Polyclinic is also accredited (42 U.S.C. § 1395bb) by the Joint Commission on Hospital Accreditation and was so accredited prior to the Medicare Act. As spelled out in § 1395bb, the effect of accreditation is to automatically bring the institution within the statutory definition of "hospital", as provided in 42 U.S.C. § 1395x(e). At oral argument counsel for plaintiff explained, without objection by counsel for defendant, that the Joint Commission on Accreditation is a completely private agency which has been recognized by the government as qualified.

 At the outset, plaintiff would have this Court adopt a per se rule which could inject state or governmental action into any activity which benefits by the receipt of Hill-Burton Funds. To so truncate the jurisdictional inquiry at that point would, I believe, abrogate the method of analysis spelled out in Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S. Ct. 856, 860, 6 L. Ed. 2d 45 (1961): "Only by sifting facts and weighing circumstances can the non-obvious involvement of the State in private conduct be attributed its true significance." The end product of the fact finding process must result in more than the mere conclusion that the state is involved in some activity of the institution. The state must be intertwined in the very activity which caused plaintiff's injury. Jackson v. Metropolitan Edison Co., 348 F. Supp. 954 (M.D. Pa. 1972). This was implicitly recognized by the Third Circuit Court of Appeals in affirming Jackson, supra, when the Third Circuit, after quoting from Moose Lodge 107 v. Irvis, 407 U.S. 163, 92 S. Ct. 1965, 32 L. Ed. 2d 627 (1972), stated: "The Court thus recognizes the importance of a connection between the state regulation and the proscribed conduct." *fn4" The doctrine to which I thus adhere is that "the state action, not the private action, must be the subject of complaint." Powe v. Miles, 407 F.2d 73 (2nd Cir. 1968). *fn5"

 The avowed purpose of the Hill-Burton Program (Hospital Survey and Construction Act, 42 U.S.C. § 291 et seq.) is:

 
"(a) to assist the several States in the carrying out of their programs for the construction and modernization of such public or other nonprofit community hospitals and other medical facilities as may be necessary, in conjunction with existing facilities, to furnish ...

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