David v. Heckler

*1035 MEMORANDUM and ORDER

This case began in Queens Small Claims Court where Joseph David filed suit for underpayment of Medicare reimbursement claims of his cancer-ridden wife. The United States removed the case to this court where Mr. David graphically explained that the grounds for his complaint were “the arbitrary mutilation of normal charges by considerate physicians.” The case has since expanded into a class action on behalf of hundreds of thousands of older people in Queens, New York whose Medicare Part B claims have been subjected to diminution and who allege that the notice and appeal procedures available to them violate due process.

In 1982, the court certified a class consisting of persons whose disputed medical claims of $100 or more are serviced by Group Health Incorporated (GHI) pursuant to a contract with the Secretary of Health and Human Services. Millions of like claims are filed each year by the tens of millions of people in the nation who participate in the Medicare program.

A trial was held in November 1983 focusing on the issue of adequacy of the review determination notices sent to Part B beneficiaries. The record was supplemented by further material and briefs in June 1984. The evidence demonstrated that the notices do not meet due process standards. They must be changed to provide claimants with comprehensible explanations of the actual reason full reimbursement is denied. In addition the trial revealed the persistence of error in the claims reimbursement process resulting in part from a dearth of information available to beneficiaries and those acting on their behalf.

I. Statutory Framework

The Medicare program — the health insurance program for the elderly and disabled — was established in 1965 under Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395c et seq. Part A of the Act, 42 U.S.C. §§ 1395 et seq., not directly in issue in this case, covers hospital and related post-hospital services and is funded out of Social Security taxes. 42 U.S.C. §§ 1395d, 1395i.

Part B is a voluntary supplemental insurance program covering most other health care costs. Enrolled individuals pay monthly premiums which together with government appropriations fund the program. In 1972, because some eligible elderly had been failing to enrole “due ... to inattention, or [inability] to manag[e] their own affairs,” H.Rep. No. 231, 92d Cong. 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News 4989, 5058, Congress amended the Medicare Act to provide that anyone who became eligible for Part B coverage would be enrolled automatically. 42 U.S.C. § 1395p(f). The Secretary of Health and Human Services is authorized by the Act to contract with private insurance carriers to administer the Part B claims process. 42 U.S.C. § 1395u. The carrier administering the program for the Secretary in the area covered by this suit is GHI.

Enrolled individuals are entitled to reimbursement of 80 percent of the reasonable and necessary charges for covered services after a yearly deductible of $75 has been met. 42 U.S.C. §§ 1395Z, 1395x(v)(l)(A). Claims are submitted to the carrier which determines whether the claim is covered and how much reimbursement is due. The carrier then sends the claimant a notice known as the “Explanation of Medicare Benefits” (EOMB) form, together with the allowed payment, if any. 42 C.F.R. § 405.803. The claimant may then request a review of the decision. Review is by a different employee of the carrier than the one who performed the initial determination. 42 C.F.R. §§ 405.807, 405.810. After review the carrier is required to send the beneficiary a notice which is supposed to provide notification of the basis of the review determination. 42 C.F.R. § 405.811. Whenever the amount remaining in controversy is $100 or more the provider is required to provide an opportunity for, and establish procedures for, a “fair hearing.” 42 U.S.C. § 1395u(b)(3)(C).

*1036 Hearings are held before hearing officers who are employees of the carrier. The hearing officer’s decision is final. See 42 U.S.C. § 1395ff; United States v. Erika, Inc., 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982).

II. Facts

A beneficiary can be denied partial or full reimbursement for payments made for medical treatment essentially for two reasons: if the treatment was not necessary or not covered or if the doctor’s charge was not “reasonable.” To assess the accuracy of the decision made on a claim, a beneficiary needs to be able to determine (1) whether the carrier properly classified the medical services provided and (2) whether the carrier correctly computed the reasonable charge allowance for that medical service. Under the present system most beneficiaries cannot make either of these determinations. The notices from the carrier are unintelligible to the average beneficiary. The information needed to decide whether the reasonable charge figure is correct is unavailable or inaccessible.

Adequacy of the initial notice to the beneficiary (the EOMB form) is before the federal district court for the District of Columbia in a nationwide class action. See Gray Panthers v. Schweiker, 716 F.2d 23 (D.C.Cir.1983) (Gray Panthers II); Gray Panthers v. Schweiker, 652 F.2d 146 (D.C.Cir.1981) (Gr ay Panthers I). For that reason the initial notice has not been considered in this case. The major thrust of the trial in this case was directed to the issue of the adequacy of the review determination letter — the letter a beneficiary receives after the carrier has undertaken a review of the beneficiary’s request.

The total amount of money involved in the millions of claims that are processed in the country as a whole is substantial. In fiscal year 1983 payment was reduced on over 72 million unassigned claims (those payable to the beneficiary as opposed to those payable to the doctor) on reasonable charge grounds. The aggregate amount of all reductions was close to 2.5 billion dollars. Pl.Ex. 80A. For the individual claimants — many of whom live at close to the subsistence level — the losses may impose severe hardship. In 83.9% of all Medicare Part B unassigned claims the amount the carrier determines the reasonable charge to be is less than the doctor’s actual charge because of the reasonableness calculation. The national average dollar amount of the reduction is $28.48.

For claims processed by GHI, 83% were reduced with an average reduction of $34. Pl.Exs. 62A, 72A, and 80A. In one three month period alone GHI reduced the “reasonable charges” by over 11 million dollars. The amounts cut from claims represent 23.1% of covered charges. When combined with the coinsurance (claimants are only reimbursed up to 80%) this means that on the average beneficiaries are reimbursed by GHI for only about 60% of their actual medical costs. Pl.Ex. 80A.

When a claim is received by the carrier a clerk classifies the medical services provided to the beneficiary based on a computer operator’s review of a short form filled out by the physician's office which contains a blank space headed “services provided.” If ■the entry clerk fails to assign the correct code to the medical services, either because the doctor did not provide enough information, because the doctor’s notation was too cryptic or because the GHI clerk was careless, it is hard for the beneficiary to know what went wrong or even to know if the reimbursement is incorrect because neither the EOMB nor the review determination letter sets forth in ordinary terms the precise nature of the medical services on which the carrier based its determination. Moreover, while the name of the doctor or other provider is stated, the exact dates of the services provided may or may not be indicated; services provided on different dates may be grouped together with only the first and last dates indicated.

The notice plaintiff Joseph David received after he requested review of the allowance on claims he submitted on behalf of his wife illustrates the problems with the review letter received by members of the plaintiff class. It is long and confus *1037 ing, but the full explanation of the denial of additional payment reads as follows:

Our Medicare Department has reviewed these claims and have [sic] determined that no additional allowances are warranted. They were paid correctly to the doctors’ new and old profiles.

There is no indication of what the doctor’s reasonable charge allowance was even though one of the charges was for 719 dollars for which only 472 was allowed. “Doctors’ new and old profiles” is not defined. Plaintiffs’ uncontroverted expert on readability of prose documents, Dr. Edward Fry, testified that the letter received by Mr. David is understandable by someone at the 16th grade level or above in reading capacity — approximately the reading ability of a college senior. An employee of the carrier who testified for the government admitted that the letter sent to Mr. David was “terrible.” The evidence established that this letter is not unique.

The reading expert identified other review letters received by plaintiff class members as being written at the 12th and 14th grade levels. Dr. Fry’s formula, the government argues, exaggerates the reading difficulty of the letters since it takes into account numerals and proper names, both of which are used somewhat extensively. The long strings of numbers used in the letters inevitably do contribute to the difficulty many have in reading them. As Dr. Fry pointed out, by putting the numbers in tabular form, much of the difficulty would be alleviated. Moreover, even were we to ignore the numbers and proper names, the reading level of the letters Dr. Fry examined would still be above that acquired by most of the elderly population of New York. About 48 percent of the elderly in New York City (age 65 and older) have an eighth grade education or less. Evidence established that although the primary indicator of reading ability is years in school, it is sound to assume a decline of two to three years for adults in reading skill from the reported years of school.

The review letters defy understanding by the general populace. They are filled with confusing cross-references to “control numbers” and are composed of paragraphs that seem strung together randomly. Explanations are couched in technical jargon. The words and phrases “approved charges,” “customary charges,” “prevailing charges,” “locality,” “economic index,” and “physicians’ old and new profile,” which are the substance of the letter, are specialized Medicare vocabulary. To a layman unfamiliar with Medicare regulations, this language has no real meaning. For example, “approved charge” is the term used in Part B notices for “reasonable charges.” It does not connote — as the common sense meaning of the term implies — the amount actually approved for payment. A review determination letter which says a claim was “reviewed by the Medicare Department” means a clerical employee reviewed the claim, while a letter stating that the claim was “reviewed by the Medical Department” means a doctor has reviewed it. The distinction is indicated by the use of the word “Medical” rather than “Medicare.” No other explanation of the difference is given. The difference may be important for if a review was by a doctor it is an indication that a close call on a medical issue was involved — something a claimant would want to know in deciding whether to request further review. An elderly person with less than eighth grade reading ability is left with no understanding of the facial sense of the letter, let alone the actual reasons why a claim was not reimbursed to the 80% level.

Review letters are not only incomprehensible, but the information they do contain is insufficient and misleading. They set forth the figure which the carrier says is controlling without making any pretense of showing how the carrier arrived at the figure. The notices explain the computation of the carrier’s payment to the beneficiary only in generalized terms, assuming the correctness of the reasonable charge. This despite the fact that the key ingredients in the total computation are the reasonable charge figure and the method by which it is determined.

*1038 Other paragraphs give generalized descriptions of the procedure allegedly used to determine “approved charges” but do not offer any actual computations or other back-up material. The trial evidence showed that these descriptions often conceal the facts about how computations of approved charges are made, using interpolations, incomplete data, human and computer error, subjective decisions and sometimes pure guesswork — facts which, if disclosed, would alert anyone that more questions need to be answered before any appellate rights are waived.

Different decisions plaintiff Joseph David received at the various review and hearing stages illustrate the many options available to a carrier in calculating the reasonable charge for computing reimbursement. Part of the David claim was for reimbursement for anesthesia services for which he had paid the anesthesiologist $320. At the original processing level the reasonable charge was calculated on the basis of 20% of the surgical allowance plus $5. The allowed amount was $208. At the review level, the reasonable charge was calculated to include an additional amount on the basis of a “relative value unit” and a “one-and-one-half surgery” rule. The allowed amount became $225.88. At the hearing stage the reasonable charge was recalculated on the basis of a listed “basic unit value” and “time units.” This final amount was $265.60. See Pl.Ex. 9, pp. 16, 19-20. These differing approaches to one of the critical elements in the benefit reimbursement formula underscore the need for a meaningful and effective notice and appeal procedure.

Lack of information is an ongoing problem in the Medicare Part B process; it is not limited to the problem of notice. When a hearing file is assembled for the beneficiary or his or her representative, the final approved (“reasonable”) charge is supplied. Sometimes a printout of the doctor’s customary charge calculations is included, but rarely is there an array of locality prevailing charge computations. Under present policy the only way a beneficiary can find out the customary charge by a particular doctor for a particular procedure is through the Freedom of Information Act. The file usually does not indicate when a “gapfiller” or other makeshift procedure was used in arriving at the approved fees, nor does it indicate the underlying calculations used in arriving at the reasonable charge.

The trial proof concerning a conversion factor used by GHI to pay plaintiff Salvatore Civello’s claim — along with hundreds of others — illustrates the arbitrary and improper decisions which can underlie a carrier’s “reasonable charge” computations. The carrier claimed that the conversion factor used to calculate Civello’s reimbursement was based on a 1973 base year calculation, increased by the Medicare Economic Index. Pl.Ex. 15, p. 4. The nature of the base figure ($10.00) makes the number itself suspect, and the method of calculation by using the index is and was explicitly prohibited by HCFA Medicare Carrier’s Manual § 5022. IB. Reasonable charge procedures prescribed in the Manual require that dollar conversion factors be recalculated each year based on prevailing charge data. Medicare Carrier’s Manual § 5022.1. GHI disregarded this requirement and simply issued an internal staff memorandum stating what the conversion factor was to be. Pl.Ex. IB.

In 1974 the Regional Office of HCFA discovered that GHI was not using a conversion factor based on community prevailing charges, as required by regulations, but rather one of the carrier’s own invention. The regional office staff recommended that GHI properly develop conversion factors during the 1974 annual review, but the carrier did nothing about it. Nonetheless HCFA continued to give the carrier satisfactory ratings for six years until the 1980 review, when the annual review downgraded the rating because of “GHI’s failure to properly use conversion factors.”

This incorrect GHI conversion factor was necessarily used by the carrier on every Medicare Part B claim for surgery reimbursement where a “gap filler” was em *1039 ployed to calculate the reasonable charge, presumably resulting in improper payments to many beneficiaries throughout the period. The conversion figure was cut out of whole cloth in a manner highly improper under existing regulations, yet beneficiaries had no way of knowing they had been cheated.

Coding and reasonable charge computation are the key elements in accuracy of carrier reimbursement. They are beyond the reach of review for most beneficiaries precisely because they are not adequately set forth in the notices now in use and because the information necessary to alert others to the problems is not readily available in the hearing files or hearing process.

III. Jurisdiction

As the basis of jurisdiction, plaintiffs rely upon section 205(g) of the Social Security Act, 42 U.S.C. § 405(g), and the mandamus statute, 28 U.S.C. § 1361. Section 205(g) provides:

Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision.

This provision for judicial review is made applicable to Medicare claims by 42 U.S.C. § 1395ff. The Medicare Act, however, only provides for judicial review pursuant to 42 U.S.C. § 405(g) for part A claims and even then only if the amount in controversy is $1000 or greater. 42 U.S.C. § 1395ff(b)(2). The statute does not provide for judicial review of Part B claims and the Supreme Court has held that Congress specifically intended to preclude judicial review of Part B claims for reimbursement under 42 U.S.C. § 405(g). United States v. Erika, Inc., 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982).

Since plaintiffs allege constitutional due process claims, general federal question jurisdiction, 28 U.S.C. § 1331, would be appropriate were it not for the apparent bar created by 42 U.S.C. § 405(h). That provision states:

The findings of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.

42 U.S.C. § 405(h). This section is made applicable to the Medicare Act by 42 U.S.C. § 1395Ü.

The statute does not literally apply. Plaintiffs do not seek to “recover on any claim” for benefits. Rather they claim that the procedures used, including the review notices, were constitutionally inadequate and they seek injunctive relief — ordering the Secretary to make specific changes in her procedures. Nevertheless, the Supreme Court has construed “arising under” very broadly to encompass “ ‘both the standing and the substantive basis for the presentation’ ” of a claim. Heckler v. Ringer, — U.S. —, —, 104 S.Ct. 2013, 2022, 80 L.Ed.2d 622 (1984) (quoting Weinberger v. Salfi, 422 U.S. 749, 762, 95 S.Ct. 2457, 2465, 45 L.Ed.2d 522 (1975)). It has applied the bar to cases raising constitutional challenges. See Heckler v. Ringer, supra; Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975).

Although in each of the Supreme Court’s rulings the claim was styled a procedural challenge, if relief ultimately were granted the plaintiff would have received benefits or reimbursement. See Ringer, supra — U.S. at —, 104 S.Ct. at 2022 (for most plaintiffs, following “the declaration which [they] seek ... only essentially ministerial details will remain before [they] would receive reimbursement”); Salfi, supra, 422 U.S. at 760, 95 S.Ct. at 2464. The instant case is distinguishable since plaintiffs seek prospective relief against a continuing illegal practice rather than specific benefits. *1040 But cf. Heckler v. Ringer, — U.S. —, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984) (jurisdiction rejected when declaratory relief was sought respecting reimbursement for prospective surgical procedure).

In addition, the cases in which the Court has held federal question jurisdiction precluded, even when constitutional procedural claims were in issue, were cases in which jurisdiction would ultimately lie under section 205(g) after a final disposition. The issue was whether the exhaustion requirement of section 205(g) had been satisfied or waived. See, e.g., Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Here there is no possible claim under 205(g), 42 U.S.C. § 405(g).

Doubt as to whether this type of claim should be construed as barred by section 205(h), 42 U.S.C. § 405(h), should be resolved in favor of finding jurisdiction since the availability of judicial review for constitutional questions is generally “presumed.” Califano v. Sanders, 430 U.S. 99, 107, 97 S.Ct. 980, 986, 51 L.Ed.2d 192 (1977). See also Trinity Memorial Hospital v. Associated Hospital Service, Inc., 570 F.2d 660, 665 (7th Cir.1977). Courts have found jurisdiction over claims challenging Medicare Part B procedures on constitutional grounds. See Leduc v. Harris, 488 F.Supp. 588, 590 (D.Mass.1980); McClure v. Harris, 503 F.Supp. 409, 412 (N.D.Cal.1980) (jurisdiction over constitutional claims because they are collateral to claims for benefits), rev’d on other grounds, 456 U.S. 188, 102 S.Ct. 1665, 72 L.Ed.2d 1 (1982). See also St. Louis University v. Blue Cross Hospital Service, 537 F.2d 283, 291-93 (8th Cir.), cert. denied, 429 U.S. 977, 97 S.Ct. 484, 50 L.Ed.2d 584 (1976) (jurisdiction under § 1331 to consider provider’s due process claim that hearing on reimbursement was inadequate). But cf. Trinity Memorial Hospital v. Associated Hospital Service, Inc., 570 F.2d 660, 665 (7th Cir.1977) (although district court had no jurisdiction over provider’s due process claims under § 1331, Court of Claims has jurisdiction over due process claim).

If the statute were, construed to deprive all courts of jurisdiction over plaintiffs’ substantial constitutional claims, that preclusion itself would present a due process constitutional problem. See Weinberger v. Salfi, 422 U.S. 749, 762, 95 S.Ct. 2457, 2465, 45 L.Ed.2d 522 (1975); Johnson v. Robison, 415 U.S. 361, 367, 94 S.Ct. 1160, 1165-66, 39 L.Ed.2d 389 (1974). Federal jurisdiction over the constitutional claims would also seem to be required since the only persons to whom plaintiffs could present their due process claims would be hearing officers, who do not even have to be lawyers and who are employed by the private insurance company whose practices are being challenged. See Schweiker v. McClure, 456 U.S. 188, 102 S.Ct. 1665, 1672 & n. 14, 72 L.Ed.2d 1 (1982).

Alternatively, jurisdiction is probably available under the mandamus statute. 28 U.S.C. § 1361. Cf. Heckler v. Ringer, — U.S. —, —, 104 S.Ct. 2013, 2022, 80 L.Ed.2d 622 (1984) (“We have on numerous occasions declined to decide whether the third sentence of [42 U.S.C.] § 405(h) bars mandamus jurisdiction over claims arising under the Social Security Act.”). The Second Circuit has held mandamus jurisdiction available in social security cases, despite section 205(h), for procedural challenges that are unrelated to the merits of a claim. See Dietsch v. Schweiker, 700 F.2d 865, 868 (2d Cir.1983); Ellis v. Blum, 643 F.2d 68 (2d Cir.1981). See also Soberal-Perez v. Schweiker, 549 F.Supp. 1164 (E.D.N.Y.1982) (for claim seeking to require Secretary to provide Social Security notices in Spanish, mandamus jurisdiction available to determine whether constitutional duty exists and to review the agency action within the scope provided by the Administrative Procedure Act), aff'd, 717 F.2d 36 (2d Cir.1983), ce rt. denied, — U.S. —, 104 S.Ct. 1713, 80 L.Ed.2d 186 (1984).

Mandamus jurisdiction lies if the plaintiffs have “exhausted all avenues of relief and only if the defendant owes [them] a clear nondiscretionary duty.” Heckler v. Ringer, — U.S. —, —, 104 S.Ct. 2013, 2022, 80 L.Ed.2d 622 (1984). *1041 The plaintiffs do not have another avenue for relief. Asserting their claims before a hearing officer would be of no value. See Mathews v. Eldridge, 424 U.S. 319, 330, 96 S.Ct. 893, 900, 47 L.Ed.2d 18 (1976). If there is a duty, it arises under the Constitution and is not discretionary. See Soberal-Perez v. Schweiker, 549 F.Supp. 1164, 1169-70 (E.D.N.Y.1982), aff'd, 717 F.2d 36 (2d Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 1713, 80 L.Ed.2d 186 (1984).

IV. Due Process

The government does not contest plaintiffs’ assertion that their interests in receiving medicare reimbursement are sufficient to invoke due process protections, including notice and an opportunity to be heard. See Mathews v. Eldridge, 424 U.S. 319, 332, 96 S.Ct. 893, 901, 47 L.Ed.2d 18 (1976); Goldberg v. Kelly, 397 U.S. 254, 261-62, 90 S.Ct. 1011, 1017, 25 L.Ed.2d 287 (1970). See also Schweiker v. McClure, 456 U.S. 188, 102 S.Ct. 1665, 1671, 72 L.Ed.2d 1 (1982) (“We may assume that the District Court was correct in viewing the private interest in Part B payments as ‘considerable,’ though ‘not quite as precious as the right to receive welfare or social security benefits.’ ”). The government argues, however, that the present notice and procedure used in the Medicare Part B program are constitutionally adequate.

Plaintiffs challenge many aspects of the procedure by which Medicare Part B claims are determined. They assert that both the initial and review notices are constitutionally inadequate as are the methods by which the carrier initially codes and determines claims. The challenge to the adequacy of the initial notice (EOMB form) is not addressed because, as already noted, the issue is sub judice in the District of Columbia federal courts. Plaintiffs also challenge the actual procedures used in the hearings — such as the lack of subpoena power, lack of precedent, and alleged ex parte communications between hearing officers and other carrier employees.

The claims must be examined using the balancing process articulated by the Supreme Court in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). The factors considered to determine whether certain procedures are constitutionally required are:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

Id. at 335, 96 S.Ct. at 903. See also Kraemer v. Heckler, 737 F.2d 214, 221-23 (2d Cir.1984) (applying Eldridge balancing to due process challenge to Medicare procedures); Gray Panthers I, 652 F.2d 146, 165-66 (D.C.Cir.1981) (same). All procedures must be taken into consideration when assessing the adequacy of the process. See Gray Panthers II, 716 F.2d 23, 28 (D.C.Cir.1983).

The private interest remains the same— the claimant’s need to obtain reimbursement for medical bills that he or she has already paid. The amounts involved may sometimes appear small, but to an elderly person living on a fixed income, they loom relatively large. Moreover, many small denials aggregated over a year may be substantial. The total cost of medical care to the elderly can be enormous. See Kraemer v. Heckler, 737 F.2d 214, 221 (2d Cir.1984). Congress enacted the Medicare program in 1965 to provide “help for old people who need assistance in meeting medical costs.” S.Rep. No. 404, 89th Cong., 1st Sess., reprinted in 1965 U.S. Code Cong. & Ad.News 1943, 1964. The Part B medical insurance program was set up not only to aid the indigent elderly, but to provide security to all of the nation’s elderly against overwhelming medical bills. See id. (“Government action should not be limited to measures that assist the aged only after they have become needy.”).

*1042 A. Notice

Plaintiffs claim the review notices are constitutionally inadequate in two respects. First, they are incomprehensible to most of the people who receive them, and second, they do not contain enough information about why reimbursement was denied and how the reimbursable amount was calculated to enable an individual or his or her representative to effectively appeal the decision.

“[N]otice must be of such nature as reasonably to convey the required information.” Mullane v. Central Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). It is essential to due process, for if notice is inadequate other procedural protections become illusory. Gray Panthers II, 716 F.2d 23, 32 (D.C.Cir.1983).

Citing Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the Secretary asserts that due process only requires her to inform the claimant of the review determination decision and tell him or her of the right to a hearing before a hearing officer. She resists providing the information on the calculation of the reasonable charge plaintiffs assert is necessary for a beneficiary to be able to assess the accuracy of the determination. Mullane held that a notice meeting due process requirements is one reasonably calculated to “apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Id. at 314, 70 S.Ct. at 657. Mullane, however, dealt with the due process problems presented when an action potentially affects persons whose addresses or even names are unknown. This case presents the issue of how much information an administrative agency is required to give a claimant and how clearly that information must be presented. These issues are governed by more recent case law which outlines the due process parameters of the procedures administrative agencies must use in determining entitlements to government benefits. See, e.g., Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Goldberg v. Kelly,