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Consumers' Checkbook, Center for the Study of Services v. United States Dep't of Health and Human Services

January 30, 2009

CONSUMERS' CHECKBOOK, CENTER FOR THE STUDY OF SERVICES, APPELLEE
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES ET AL., APPELLANTS AMERICAN MEDICAL ASSOCIATION, INTERVENOR



Appeal from the United States District Court for the District of Columbia (No. 06cv02201).

The opinion of the court was delivered by: Karen Lecraft Henderson, Circuit Judge

Argued October 8, 2008

Before: HENDERSON, RANDOLPH and ROGERS, Circuit Judges.

Separate opinion filed by Circuit Judge ROGERS, concurring in part and dissenting in part.

Consumers' Checkbook, Center for the Study of Services (CSS) filed this action under the Freedom of Information Act (FOIA), 5 U.S.C. §§ 552 et seq., seeking from the United States Department of Health and Human Services (HHS) records for all Medicare claims submitted to HHS by physicians in several localities during 2004. The district court granted summary judgment in CSS's favor, concluding that the records are not exempt from disclosure under FOIA Exemption 6, id. § 552(b)(6). See Consumers' Checkbook, Ctr. for Study of Servs. v. U.S. Dep't of Health & Human Servs., 502 F. Supp. 2d 79, 83-86 (D.D.C. 2007) (Memorandum Opinion). For the reasons set forth below, we reverse the judgment of the district court.

I.

On March 27, 2006, CSS submitted a FOIA request to the Centers for Medicare and Medicaid Services (CMS), a division within HHS, seeking a subset of data elements from all Medicare claims submitted by certain physicians in 2004. The data elements include the diagnosis, the type and place of service and the Unique Physician Identifying Number (UPIN) of the physician who performed the services. CSS limited its request to physicians in the District of Columbia, Illinois, Maryland, Washington and Virginia. It did not request data that identifies Medicare beneficiaries. At the time of the request, every physician was assigned a UPIN when he enrolled in Medicare.*fn1 A physician's name, office zip code, medical or surgical specialty and UPIN are publicly available on the internet. The fees a physician receives from Medicare for performing a specific service or procedure are also publicly available on the internet. Combined with the publicly available fee schedule, the data requested by CSS can be used to calculate the total payments Medicare made to any individually identified physician for claims submitted in 2004.

CMS denied the FOIA request and CSS appealed to the CMS Deputy Administrator. On December 26, 2006, CSS filed a complaint in district court under FOIA seeking injunctive relief. Both parties moved for summary judgment. HHS argued that the requested records are exempt from disclosure under FOIA Exemption 6. Alternatively, it argued that a twenty-nine- year-old permanent injunction issued by the United States District Court for the Middle District of Florida bars disclosure of the requested data from physicians who are American Medical Association (AMA) members. See Fla. Med. Ass'n v. Dep't of Health, Educ. & Welfare, 479 F. Supp. 1291 (M.D. Fla. 1979). In an opinion and order filed August 22, 2007, the district court granted summary judgment in CSS's favor and this appeal followed.*fn2 Memorandum Opinion at 81, 89.

II.

HHS appeals the district court's grant of summary judgment as to the requested Medicare records the court held were not exempt from disclosure under FOIA Exemption 6.*fn3 We review the district court's grant of summary judgment de novo. Judicial Watch, Inc. v. FDA, 449 F.3d 141, 145 (D.C. Cir. 2006). FOIA provides that an agency must disclose all records upon request by "any person," 5 U.S.C. § 552(a)(3), unless a statutory exemption applies. Id. § 552(b). FOIA Exemption 6 provides that FOIA "does not apply to matters that are . . . personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." Id. § 552(b)(6). It is undisputed that the requested Medicare records are personnel, medical, or "similar files." See Memorandum Opinion at 83. Accordingly, we must determine whether "disclosure would compromise a substantial, as opposed to a de minimis, privacy interest." Nat'l Ass'n of Retired Fed. Employees v. Horner, 879 F.2d 873, 874 (D.C. Cir. 1989). If a substantial privacy interest is at stake, then we must balance the privacy interest in non-disclosure against the public interest. Id. (citing Ripskis v. HUD, 746 F.2d 1, 3 (D.C. Cir. 1984)). Disclosure is not required if it "would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6). The agency bears the burden to persuade the court that the exemption applies. Ripskis, 746 F.2d at 3.

A.

We have consistently held that an individual has a substantial privacy interest under FOIA in his financial information, including income. In Multi AG Media v. Department of Agriculture, 515 F.3d 1224 (D.C. Cir. 2008), we found that the disclosure of information on "irrigation practices, farm acreage, and the number and width of rows of tobacco and cotton" implicated substantial privacy interests because it would "in some cases allow for an inference to be drawn about the financial situation of an individual farmer" receiving federal subsidies. 515 F.3d at 1226, 1230. In Painting and Drywall Work Preservation Fund, Inc. v. HUD, 936 F.2d 1300 (D.C. Cir. 1991), we found that contractors on federal construction projects had a substantial privacy interest in their names, addresses, hourly pay, hours worked and wages. 936 F.2d at 1301-02; see also Sheet Metal Workers Int'l Ass'n, Local No. 9 v. U.S. Air Force, 63 F.3d 994, 995, 998 (10th Cir. 1995) (government contractors on federal construction projects have substantial privacy interest in payroll records); Painting Indus. of Haw. Market Recovery Fund v. U.S. Dep't of Air Force, 26 F.3d 1479, 1484 (9th Cir. 1994) (same); Hopkins v. HUD, 929 F.2d 81, 86-87 (2d Cir. 1991)(same). The Congress has also recognized the privacy interest an individual taxpayer has in his tax return information, including the "nature, source, or amount of his income," 26 U.S.C. § 6103(b)(2)(A), and has prohibited the disclosure of tax return information with limited exceptions. Id. § 6103(a).

The information requested by CSS would reveal the total Medicare payments received by a physician for covered services. CSS notes that the information would not reveal a physician's gross revenue because it would not include income from non-Medicare sources. Nor would it reveal a physician's net income because it would not include business operating expenses. But the requested information need not reveal completely an individual's personal finances to implicate substantial privacy concerns. See Multi AG Media, 515 F.3d at 1228-29 (substantial privacy interests implicated because requested information "would necessarily reveal at least a portion of the owner's personal finances") (quoting Nat'l Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673, 685 (D.C. Cir. 1976)). CSS also argues that a physician does not have a privacy interest in Medicare payments because the payments relate to business activities and not personal finances. We have, however, recognized substantial privacy interests in business-related financial information for individually owned or closely held businesses because the "financial makeup of the businesses mirrors the financial situation of the individual family members." Multi AG Media, 515 F.3d at 1229 (internal quotations omitted); cf. Wash. Post Co. v. U.S. Dep't of Justice, 863 F.2d 96, 100 (D.C. Cir. 1988) (information related to employees' business decisions in developing and marketing medication does not implicate privacy interests under FOIA Exemption 7); Wash. Post Co. v. U.S. Dep't of Health & Human Servs., 690 F.2d 252, 261-62 (D.C. Cir. 1982) (no substantial privacy interest in list of organizations in which scientific consultants have financial holdings related to their consulting duties, but not dollar amounts of holdings). Accordingly, we conclude that physicians have a substantial privacy interest in the total payments they receive from Medicare for covered services.

B.

We next examine the public interest in disclosure. The only relevant public interest in disclosure "is the extent to which disclosure would serve the 'core purpose of the FOIA,' which is 'contribut[ing] significantly to public understanding of the operations or activities of the government.'" U.S. Dep't of Def. v. FLRA, 510 U.S. 487, 495 (1994) (quoting U.S. Dep't of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 775 (1989)). The requested information must "shed[] light on an agency's performance of its statutory duties." Reporters Comm. for Freedom of Press, 489 U.S. at 773. "[I]nformation about private citizens . . . that reveals little or nothing about an agency's own conduct" does not serve a relevant public interest under FOIA. Id. The requesting party's intended use for the information is irrelevant to our analysis. See id. at 771 ("[T]he identity of the requesting party has no bearing on the merits of his or her FOIA request.").

CSS claims that disclosure of the requested records will serve the public interest by revealing information about "(i) HHS's performance in maintaining and enhancing the quality and efficiency of services provided under the Medicare program, (ii) the agency's ability to root out Medicare fraud and waste; and (iii) the agency's compliance with various transparency initiatives." Appellee's Br. 21. We examine each contention in turn.

1.

The Congress has charged HHS with "promoting the effective, efficient, and economical delivery of health care services, and of promoting the quality of services of the type for which payment may be made" by contracting with peer review organizations.*fn4 42 U.S.C. § 1395y(g). In 2003, the Congress directed HHS to establish a demonstration program to "examine health delivery factors that encourage the delivery of improved quality in patient care." Id. § 1395cc-3(b). While CMS has certain responsibilities to promote quality healthcare for Medicare beneficiaries, it is not authorized to "exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services." Id. § 1395.

CMS is also responsible for enrolling health care providers and suppliers, including physicians, in the Medicare program. A "provider" or "supplier" must be enrolled in the Medicare program to receive payment for covered services. 42 C.F.R. §§ 424.505, 424.510. The term "supplier" refers to "a physician or other practitioner, or an entity other than a provider, that furnishes health care services under Medicare." Id. § 400.202. The term "physician" includes "a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action." 42 U.S.C. § 1395x(r). CMS may exclude from participation in any Federal health care program, including Medicare, "[a]ny individual or entity . . . whose license to provide health ...


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