Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

PENNSYLVANIA MEDICAL SOC. v. MARCONIS

January 30, 1991

PENNSYLVANIA MEDICAL SOCIETY, AMERICAN MEDICAL ASSOCIATION, CRAWFORD COUNTY MEDICAL SOCIETY, AND ROBERT MOYERS, M.D., PLAINTIFFS,
v.
WILLIAM MARCONIS, M.D., SHIRLEY F. FOX, R.N., JAMES A. KANE, M.D., GUY L. KRATZNER, M.D., GARY W. LYONS, M.D., JOSHUA A. PERPER, M.D., MARK N. RICHARDS, M.D., GEORGE N. SHELVIN, BARBARA K. SHORE, PH.D., JASON C. SHU, M.D., AND MARY ELLEN WEINBERG, EACH INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE PENNSYLVANIA STATE BOARD OF MEDICINE, DEFENDANTS.



The opinion of the court was delivered by: Mencer, District Judge.

MEMORANDUM OPINION

By banning the practice of "balance billing," Pennsylvania limits the amount physicians may charge medicare recipients. Currently before this court is a declaratory judgment action challenging the Pennsylvania law under the supremacy clause of the United States Constitution. U.S. Const. Art. VI, cl. 2. Plaintiffs are three professional medical associations, Pennsylvania Medical Association (PMS), American Medical Association (AMA) and the Crawford County Medical Society (CCMS), and one doctor, Dr. Robert N. Moyers, M.D. (Moyers) (collectively The Societies). Defendants, sued in both their individual and official capacities, are the individual members of the Pennsylvania State Board of Medicine (collectively The Board); they are responsible for enforcing the Act against the members of PMS, AMA and CCMS including Dr. Moyers. See Stipulation of Facts ¶ 5 (Exhibit 2).*fn1 Both parties now move for summary judgment. For the reasons discussed below, defendants' motion will be granted.

FACTUAL BACKGROUND

Medicare is the federal insurance program designed to pay for medical care of those 65 and older. 42 U.S.C. § 1395 et seq. It is composed of two main parts, Part A and Part B. Part A covers hospitalization and institutional charges, and it is not implicated in the current case. Part B establishes an insurance program to pay for doctors' services. 42 U.S.C. § 1395j-1395w-4. Benefits under Part B are administered by local insurance carriers under the supervision of the United States Department of Health and Human Services (HHS). 42 U.S.C. § 1395u.

Benefits are paid on a fee-for-service basis. However, the "fee" that medicare pays out is not necessarily the same as that which the doctor charges. Medicare has established a "reasonable charge" (MRC)*fn2 for each procedure, and although beneficiaries are covered for 80% of Part B costs,*fn3 Medicare pays out no more than 80% of the MRC regardless of what the doctor actually charges.

Physicians have two payment options under Part B. They can "accept assignment" which means that they bill Medicare directly and accept the MRC as full payment for their services. They receive 80% from Medicare and the 20% of the MRC from the patient. One advantage of "accepting assignment" is the guarantee of prompt payment from medicare. As their other option, physicians can charge "on the basis of an itemized bill." By this method the doctor can charge more than the MRC. Even if it is higher than the MRC, the Doctor bills the patient directly for her entire fee, and the patient is responsible for 100% of doctor's bill while Medicare still only reimburses the patient for 80% of the MRC. 42 U.S.C. § 1395u(b)(3)(B). Billing in excess of the MRC is known as "balance billing."

Congress has established several mechanisms to encourage doctors to accept assignment rather than balance bill. The Deficit Reduction Act of 1984 (DEFRA) created the participating physicians program under which doctors may annually elect to accept assignment on all medicare patients for the coming year. Among other incentives, if they "participate" they can receive a 5% increase over the MRC. 42 U.S.C. § 1395u(b)(4)(A)(iv). DEFRA also froze charges for non-participating physicians. 42 U.S.C. § 1395u(j)(1); Whitney v. Heckler, 780 F.2d 963, 970-72 (11th Cir. 1986).

The Omnibus Budget Reconciliation Act of 1986 (OBRA 86) lifted the DEFRA freeze and substituted a system of "maximum allowable actual charges" (MAACs) as a new form of "price control for non-participating doctors." AMA v. Bowen, 857 F.2d 267, 268-69 (5th Cir. 1988). MAACs place an across the board limit on the amount that non-participating doctors can charge (balance bill) medicare beneficiaries. 42 U.S.C. § 1395u (j)(1)(C). OBRA 86 also established the Physician Payment Review Commission (PPRC) as an advisory body to Congress. The PPRC is to submit annual recommendations for rates and methods of payment for physician's services under medicare part B. 42 U.S.C. § 1395w-1.

Against this backdrop of federal activity, Pennsylvania enacted the Pennsylvania Health Care Practitioners Medicare Fee Control Act, Pub.L. 1990-81, 35 P.S. § 449.31 et seq. (the Act), which makes it flatly unlawful to balance bill at all.*fn4 The plaintiffs claim that the Act is preempted by the sprawling Medicare legislation, while the defendants argue that the Act is of no concern or consequence to the federal scheme.

The parties agree that there are no factual disputes which a trial is needed to resolve, and thus resolution by summary judgment is particularly appropriate. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265, 273 (1986); Chipollini v. Spencer Gifts, 814 F.2d 893, 896 (3d Cir. 1987).

DISCUSSION

In deciding whether a federal law preempts a state law, our "sole task" is to discern Congressional intent. California Fed. Savings & Loan v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 689, 93 L.Ed.2d 613 (1987). Intent to preempt is found in three interrelated ways. Schneidewind v. ANR Pipeline, 485 U.S. 293, 300, 108 S.Ct. 1145, 1150, 99 L.Ed.2d 316 (1988); Pokorny v. Ford, 902 F.2d 1116, 1120 (3d Cir. 1990). First, Congress may expressly preempt state law by so stating. No such express provision is present in the instant case. Second, courts will imply preemption where Congress has "occupied the field" by extensive regulation. Rice v. Santa Fe Elevator, 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947); Schneidewind, 485 U.S. at 300, 108 S.Ct. at 1150. Preemption will also be found in a third situation: where there is "an actual conflict" between state and federal law. The presence of an actual conflict, though most often referring to situations where it would be physically impossible to comply with both laws, may also be found where the state law "stands as an obstacle to the accomplishment of and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941); Hillsborough County v. Automated Medical, 471 U.S. 707, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985).

Under any approach, "we start with the basic assumption that Congress did not intend to displace state law." Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129, 68 L.Ed.2d 576 (1981). When Congress legislates within "the historic police powers of the States" plaintiff bears the heavy burden of proving that preemption "was the clear and manifest purpose of Congress." Pacific Gas & Elec. v. Energy Resources Comm'n, 461 U.S. 190, 206, 103 S.Ct. 1713, 1723, 75 L.Ed.2d 752 (1983) (quoting Rice, 331 U.S. at 230, 67 S.Ct. at 1152); California v. ARC America, 490 U.S. 93, 101, 109 S.Ct. 1661, 1665, 104 L.Ed.2d 86, 94 (1989). The regulation of public health, and therefore medical care costs, is well within those historic police powers. Hillsborough, 471 U.S. at 707, 719, 105 S.Ct. at 2371, 2378; Great Atlantic and Pacific Tea Co. v. Cottrell, 424 U.S. 366, 371, 96 S.Ct. 923, 927, 47 L.Ed.2d 55 (1976); Massachusetts Nurses Association v. Dukakis, 726 F.2d 41, 44 (1st Cir. 1984); Rebaldo v. Cuomo, 749 F.2d 133, 138 (2d Cir. 1984). In fact, from its inception, the medicare program itself specifically sought to prevent any impact on the state's traditional role in the health care area. 42 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.