Schweiker v. McClure, 456 U.S. 188 (1982)

Schweiker v. McClure

No. 81-212

Argued March 1, 1982
Decided April 20, 1982
456 U.S. 188

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF CALIFORNIA

Syllabus

Part B of the Medicare program under the Social Security Act provides federally subsidized insurance against the cost of certain physician services, outpatient physical therapy, X-rays, laboratory tests, and certain other medical and health care. The Secretary of Health and Human Services is authorized to contract with private insurance carriers to administer the payment of Part B claims. If the carrier refuses on the Secretary’s behalf to pay a portion of a claim, the claimant is entitled to a "review determination," based on the submission of written evidence and arguments, and, if the amount in dispute is $100 or more, a still-dissatisfied claimant then has a right to an oral hearing, at which an officer chosen by the carrier presides. The statute and regulations make no further provision for review of the hearing officer’s decision. After decisions by hearing officers were rendered against them, appellee claimants sued in Federal District Court to challenge the constitutional adequacy of the hearings afforded to them. The court held that the hearing procedures violated appellees’ rights to due process insofar as the final, unappealable decision regarding their claims was made by carrier appointees, that due process required additional safeguards to reduce the risk of erroneous deprivation of Part B benefits, and that appellees were entitled to a de novo hearing conducted by an administrative law judge of the Social Security Administration.

Held: The hearing procedures in question do not violate due process requirements. Pp. 195-200.

(a) While due process demands impartiality on the part of those who function in a quasi-judicial capacity, such as the hearing officers involved in this case, there is a presumption that these officers are unbiased. This presumption can be rebutted by a showing of conflict of interest or some other specific reason for disqualification. But the factual findings here disclose no disqualifying interest. The officers’ connection with the private insurance carriers would be relevant only if the carriers themselves are biased or interested, and there is no basis in the record for such a conclusion. The carriers pay Part B claims from federal, not their own, funds, the hearing officers’ salaries are paid by the Federal Government, and the carriers operate under contracts requiring compliance with standards prescribed by the statute and the Secretary. In the absence of proof of financial interest on the carriers’ part, there is no basis for assuming a derivative bias among their hearing officers. Pp. 195-197.

(b) Nor does the record support the contention that accuracy of Part B decisionmaking may suffer because the carriers appoint unqualified hearing officers, and that thus additional procedures would reduce the risk of erroneous decisions. Pp. 198-200.

503 F.Supp. 409, reversed and remanded.

POWELL, J., delivered the opinion for a unanimous court.