UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


UNITED SR ASSN INC

v.

SHALALA, DONNA


98-5142a

D.C. Cir. 1999


*	*	*


Garland, Circuit Judge: Section 4507 of the Balanced  Budget Act of
1997 provides that, for certain medical services,  a doctor may not
contract with a Medicare beneficiary outside  of Medicare unless the
doctor agrees to abstain from partici- pating in the Medicare program
for two years. Plaintiffs, a  senior citizens' organization and four
individual Medicare  beneficiaries, contend that section 4507 is
unconstitutional on  a number of grounds. The district court found the
statute  constitutional and granted summary judgment for the Secre-
tary of Health and Human Services. We affirm the grant of  summary
judgment without reaching the constitutional ques- tions because the
Secretary's recently-clarified interpretation  of section 4507, to
which we must defer, eliminates the injury  that is the basis of
plaintiffs' constitutional attack.


I


Medicare is a comprehensive insurance program designed  to provide
health insurance benefits for individuals 65 and  over, as well as for
certain others who come within its terms.  See 42 U.S.C. ss 1395c,
1395j. The program is administered  by the Health Care Financing
Administration (HCFA), a part  of the U.S. Department of Health and
Human Services  (HHS). In broad terms, Medicare Part A, which is not
at  issue in this case, covers care provided by institutional health 
care providers including hospitals. See id. ss 1395c-1395i.  Medicare
Part B, which is the focus here, covers medical  services including
those provided by physicians. See id.  ss 1395j to 1395w-4. Part B is
financed by a combination of  government funding and premiums paid by
beneficiaries. See 


id. s 1395j. Doctors who provide medical services to Part B 
beneficiaries must submit claim forms identifying the services 
provided. See id. s 1395w-4(g)(4)(A)(i). They receive com- pensation
in accordance with fee schedules that limit the  amount they may
charge and be paid. See id. s 1395w- 4(g)(2)(C), (D).1


Certain kinds of medical services, such as routine physical  checkups,
are categorically excluded from Medicare coverage.  See id. s
1395y(a)(7). Those that are not categorically ex- cluded may only be
reimbursed when medically "reasonable  and necessary." Id. s
1395y(a)(1)(A). If a service is deemed  not to have been reasonable
and necessary, Medicare will not  make payment and the doctor
generally is prohibited from  charging the patient. See id. s


Because at the time a physician provides a service it may  not be
certain whether Medicare will regard it as reasonable  and necessary,
the Medicare program includes a provision for  an "Advance Beneficiary
Notice" ("ABN"). Under this provi- sion, in advance of providing a
service the doctor may give  the patient an ABN, which advises that
Medicare may not  pay for the service. See id. s 1395u(l)(1)(C)(ii).




__________

n 1 Under Medicare, "participating physicians" generally do not  bill
their patients, but instead take an assignment of their patients' 
rights and receive payment directly from Medicare. "Nonpartici- pating
physicians" may accept assignments on a case-by-case basis  or bill
their patients directly. In the latter circumstance, it is the 
patient who obtains reimbursement from Medicare. In all cases, 
however, the fee schedules effectively limit the doctor's compensa-
tion. See 42 U.S.C. ss 1395u(b), (h), (i); id. ss 1395w-4(a), (b),
(g);  42 C.F.R. ss 402.1, 402.105, 405.504.


2 HHS enters into contracts with insurance carriers which  receive and
process claims for payment for medical services provid- ed to Part B
enrollees. 42 U.S.C. s 1395u(a). Claims are submit- ted to a carrier,
which makes an initial determination as to whether  the service is
covered. 42 C.F.R. s 405.803; id. s 421.200. Medi- care beneficiaries,
or the physicians to whom they have assigned  their rights to payment,
may require carriers to review their  determinations and are entitled
to post-review hearings. Id.  s 405.801.


patient agrees to pay from his or her own funds if Medicare  does not,
and if Medicare subsequently denies payment, the  doctor may bill the
patient directly. See id.


In August 1997, Congress enacted section 4507 of the  Balanced Budget
Act of 1997, Pub. L. 105-33, s 4507, 111  Stat. 251, 439 (codified at
42 U.S.C. s 1395a). The section  establishes rules for what it
describes as "the use of private  contracts by medicare
beneficiaries." Id. Section 4507(b)(1)  permits doctors and patients
to contract for certain services  outside of Medicare and without its


Subject to the provisions of this subsection, nothing in  this title
shall prohibit a physician or practitioner from  entering into a
private contract with a medicare benefi- ciary for any item or


(A) for which no claim for payment is to be submitted  under this
title, and


(B) for which the physician or practitioner receives  ... no
reimbursement under this title....


42 U.S.C. s 1395a(b)(1); see id. s 1395a(b)(4). Section  4507(b)(2),
entitled "[b]eneficiary protections," lists certain  provisions that
private contracts authorized by (b)(1) must  include: Any contract to
provide items and services to which  paragraph (1) applies shall
clearly indicate ... that by  signing such contract the


(i) agrees not to submit a claim (or to request that the  physician or
practitioner submit a claim) under this  title for such items or
services even if such items or  services are otherwise covered by this
subchapter;


(ii) agrees to be responsible, whether through insur- ance or
otherwise, for payment of such items or ser- vices and understands
that no reimbursement will be  provided under this title for such
items or services;


(iii) acknowledges that no limits under this title ...  apply to
amounts that may be charged for such items  or services;  ... ; and
(v) acknowledges that the medicare beneficiary has  the right to have
such items or services provided by  other physicians or practitioners
for whom payment  would be made under this title.


Id. s 1395a(b)(2)(B).


Finally, section 4507(b)(3) further provides that such pri- vate
contracts are authorized only if the physician signs an  affidavit
which states that he or she


will not submit any claim under this title for any item or  service
provided to any medicare beneficiary (and will  not receive any
[Medicare] reimbursement ... for any  such items or service) during
the 2-year period begin- ning on the date the affidavit is signed....


Id. s 1395a(b)(3)(B)(ii). This means that a doctor who enters  into a
section 4507 private contract with even a single patient  is barred
from submitting a claim to Medicare on behalf of  any patient for a
two-year period.


II


Plaintiffs contend that section 4507 effectively makes it  impossible
for them to contract for medical services outside of  the Medicare
system--particularly for services Medicare will  not cover, either
because they are categorically excluded or  because Medicare deems
them unreasonable or unnecessary  in a particular case. As plaintiffs
read the section, it governs  almost any agreement between a doctor
and patient to pro- vide medical services outside of Medicare, without
regard to  whether Medicare would pay for the service if a claim were 
submitted. Plaintiffs argue that it will be virtually impossible  to
find a doctor willing to enter into such an agreement, given  the
importance of Medicare to doctors' practices and the two- year bar the
statute imposes for entering into even a single  private contract.3
The Secretary concedes that very few 




__________

n 3 Plaintiffs note that over 96% of practicing physicians receive 
Medicare Part B reimbursement. Pl. Br. at 11-12. They also note  that
to date, only 300 doctors nationwide have filed section 4507 


doctors will be willing to opt out of Medicare, Oral Arg. Tr. at  22,
and generally agrees that the two-year restriction "repre- sents a
substantial barrier to the receipt of contracted ser- vices." United
Seniors Ass'n., Inc. v. Shalala, 2 F. Supp. 2d  39, 41 (D.D.C.


Plaintiffs also reject the suggestion that the ABN proce- dure provides
a way to relieve the constraints imposed by  section 4507. They
recognize that an agreement under an  ABN is not a "private contract"
under section 4507, and  hence is not subject to its two-year bar. See
63 Fed. Reg.  58,814, 58,851 (1998). In theory this should mean that
pa- tients can obtain services they and their doctors consider 
reasonable or necessary, even if Medicare ultimately does not,  by
executing ABNs. But plaintiffs regard the ABN option as  unworkable.
First, it does not apply to services categorically  excluded from
Medicare. Second, plaintiffs contend that  under HCFA rules, doctors
who routinely use ABNs to obtain  reimbursement for services Medicare
deems unreasonable or  unnecessary are subject to penalties and
sanctions. Thus,  plaintiffs do not view ABNs as a practical solution
to the  problem created by section 4507.


Nor, plaintiffs contend, is it realistic to suggest that senior 
citizens can avoid the restrictions of section 4507 by simply  opting
out of Medicare Part B altogether. Notwithstanding  the government's
repeated suggestion that "plaintiffs may  disenroll at any time" from
Part B, see, e.g., HHS Br. at 3, 27,  28, 29, at oral argument it
conceded there is no "meaningful  equivalent to Medicare" in the
private market. Oral Arg. Tr.  at 18-19.4 Accordingly, opting out is
hardly a viable way for  patients to bypass section 4507.


Plaintiffs' complaint charges that the restrictions imposed  by section
4507 violate the First, Fourth, Fifth, Ninth, Tenth 




__________

n contracts with the Secretary of Health and Human Services. Pl.  Reply
Br. at 4 (citing 9 Medicare Rep. (BNA) 18 (May 1, 1998)).


4 See United Seniors, 2 F. Supp. 2d at 41 n.2 ("Medicare is, in 
effect, the only primary health insurance available to people over 
65. No private health insurance companies offer 'first dollar' 
insurance to this group; they offer only supplemental insurance.").


and Fourteenth Amendments to the Constitution, as well as  the Spending
Clause of Article I, section 8. Plaintiffs contend  those restrictions
violate their liberty to contract privately for  health care services,
violate their ability to maintain the  privacy of their medical
information by requiring them to file  claims for all medical
services, and violate their equal protec- tion and due process rights
by denying them the same liberty  to contract enjoyed by other
citizens. They also contend that  section 4507 exceeds Congress'
powers under the Spending  Clause, and invades the reserved powers of
the States and  the people under the Tenth Amendment, by regulating
health  care for which the federal government does not pay.


Critical to our analysis is that the injury plaintiffs assert is  to
their ability to purchase services for which Medicare will  not itself
pay, thus rendering them unable to obtain those  services on any
terms. Oral Arg. Tr. at 4-6. The right they  assert is to contract for
services they and their doctors  regard as necessary or even merely
salutary, regardless  whether Medicare agrees. Section 4507 abridges
this right,  they contend, by making it virtually impossible to find a
 doctor willing to enter into a private contract with a Medicare 
beneficiary. Plaintiffs made clear at oral argument, however,  that
they disavow any claim to a constitutional right to pay  their doctors
more than the Medicare fee limits for services  they can obtain
through Medicare. Id.


III


The district court examined plaintiffs' constitutional claims, 
rejected them on the merits, and granted summary judgment  for the
Secretary. See United Seniors, 2 F. Supp. 2d at  42. We review the
grant of summary judgment de novo.  Hunter-Boykin v. George Washington
Univ., 132 F.3d 77, 79  (D.C. Cir. 1998). When we do so, we find we
have no need to  reach the merits of plaintiffs' constitutional
claims. After  careful examination and clarification of the
Secretary's inter- pretation of section 4507, we find that
interpretation effective- ly eliminates the injury--whether of


or not--that plaintiffs fear, and provides them with all the  relief
they seek.


The Secretary contends that plaintiffs have simply misun- derstood
section 4507. The purpose of the section, she  argues, is to prevent
doctors from coercing elderly patients  into paying more for
Medicare-covered services than Medi- care's fee schedules permit. HHS
Br. at 10, 12. Consistent  with that purpose, the section--including
its two-year bar-- applies only to services that Medicare would
reimburse but  for the private contract. Id.; Oral Arg. Tr. at 51-52.
If a  patient and doctor want to enter into a private contract for 
such services, the doctor must wholly opt out of the system  for two


The Secretary stresses, however, that section 4507 does not  do what
plaintiffs assert--that is, it does not impose restric- tions on
agreements to provide services for which Medicare  would not pay.
Hence, if a doctor and patient agree with  respect to a service that
would not be reimbursed by Medi- care--either because it is
categorically excluded or because it  is deemed unreasonable or
unnecessary in the particular  case--then the agreement does not fall
within section 4507  and the doctor is not subject to the two-year
bar. HHS Br.  at 9-10, 18, 23; Oral Arg. Tr. at 48-49. The Secretary
also  contends that plaintiffs have misunderstood the ABN proce- dure
which, she says, provides a workable way to handle  those charges as
to which Medicare payment is uncertain.  HHS Br. at 23.


At oral argument, plaintiffs made clear that if section 4507  really
says what the Secretary says it says, then their case is  at an end.
Oral Arg. Tr. at 4-5, 59. Plaintiffs have no  interest, they aver, in
obtaining the right to enter into  agreements to pay more for services
they can obtain for less  under Medicare. Id. Rather, their
interest--and the consti- tutional right they assert--is in obtaining
services they can- not get under Medicare at any price. Id. at 6. The
plaintiffs  are skeptical, however, that section 4507 really means


the Secretary says it means--and equally skeptical that the  Secretary
actually reads and applies it that way.


Plaintiffs' skepticism is not unjustified. The meaning of  section 4507
is hardly plain on its face. Moreover, because  HCFA did not
promulgate formal regulations regarding the  section until ten days
after the oral argument in this case, its  own interpretation could
only be gleaned from memoranda  issued to Medicare carriers and
testimony delivered to Con- gress, of which Medicare beneficiaries may
well have been  unaware. Nonetheless, as we discuss below, the
Secretary's  interpretation is a reasonable interpretation of the
less-than- plain language of section 4507. In addition, the
Secretary's  current interpretation, as foreshadowed in the briefs
filed in  this case and expressed in the subsequent regulations, is 
consistent with the position HCFA has taken since the section  was
enacted. Under Chevron U.S.A. Inc. v. National Re- sources Defense
Council, Inc., if a statute is ambiguous we  must defer to an agency's
reasonable interpretation of its  terms. 467 U.S. 837, 842-45 (1984);
see United States v.  Haggar Apparel Co., 119 S. Ct. 1392, 1395
(1999). This is so  regardless whether there may be other reasonable,
or even  more reasonable interpretations. See Serono Labs., Inc. v. 
Shalala, 158 F.3d 1313, 1321 (D.C. Cir. 1998). Following the 
injunction of the Supreme Court, we are required to accord  such


A


Section 4507 of the Balanced Budget Act does not clearly  indicate the
kinds of services to which it applies. Paragraph  (1) of subsection
(b) states that "[s]ubject to the provisions of  this subsection,
nothing in this title shall prohibit a physician  or practitioner from
entering into a private contract with a  Medicare beneficiary for any
item or service ... for which no  claim for payment is to be submitted
under this title...." 42  U.S.C. s 1395a(b)(1). This provision is the
source of plain- tiffs' apprehension, since it appears to apply to any
service-- Medicare-reimbursable or not--for which no claim for pay-
ment is submitted.


But the introductory clause of paragraph (1) makes it  "[s]ubject to
the provisions of this subsection." To under- stand the scope of
paragraph (1), therefore, we must examine  the balance of subsection
(b). The key language is in para- graph (2), which states that "[a]ny
contract to provide items  and services to which paragraph (1) applies
shall clearly  indicate ... that the medicare beneficiary has the
right to  have such items or services provided by other physicians or 
practitioners for whom payment would be made under this  title." 42
U.S.C. s 1395a(b)(2)(B) (emphasis added). The  Secretary argues that
since "any" private contract under  section 4507 must indicate that
the beneficiary has "the right"  to have the same services paid for by
Medicare, section 4507  should be read as applying only to services
that Medicare  would reimburse but for the parties' private contract.
Al- though we find the relationship between paragraphs (1) and  (2)
less than plain, the Secretary's interpretation of section  4507 is at
least a reasonable one.


B


Our parsing of the language of section 4507 leads us to  conclude that
it is reasonable to read section 4507 as applying  only to private
contracts for services that are reimbursable  under Medicare.
Plaintiffs question, however, whether that  truly is the way HCFA
reads section 4507. Although it is  unquestionably the view expressed
in the Secretary's briefs in  this case, plaintiffs contend it has not
previously been the  position of HCFA.


Even if the legal briefs contained the first expression of the 
agency's views, under the appropriate circumstances we  would still
accord them deference so long as they represented  the agency's "fair
and considered judgment on the matter."  Auer v. Robbins, 117 S. Ct.
905, 912 (1997); see Association  of Bituminous Contractors, Inc. v.
Apfel, 156 F.3d 1246,  1251-52 (D.C. Cir. 1998); Tax Analysts v. IRS,
117 F.3d 607, 


613 (D.C. Cir. 1997). In this case, however, HCFA has  expressed
similar views since Congress first enacted section  4507. Although
until recently those views were expressed  only in the form of
memoranda and congressional testimony,  "an agency need not promulgate
a legislative rule setting  forth its interpretation of a statutory
term for that interpreta- tion to be entitled to deference."
Association of Bituminous  Contractors, 156 F.3d at 1252. Moreover,
although HHS'  past pronouncements have not been perfectly clear, an
agen- cy's interpretation of its own rules is "controlling unless 
'plainly erroneous or inconsistent' " with them. Auer v. Rob- bins,
117 S. Ct. at 911; see United States v. Stinson, 508 U.S.  36, 45
(1993). In this case, the agency's past and current  views are not


The Secretary first calls our attention to a program memo- randum and
fact sheet HCFA issued to all Medicare carriers  in November 1997. See
HCFA, Program Memorandum,  Transmittal No. B-97-9 (Nov. 1997) (Joint
Appendix ("J.A")  207-08). Consistent with the Secretary's position
here, the  fact sheet describes section 4507 as applying to "private 
contracts with Medicare beneficiaries to provide covered ser- vices."
Id. The document then expressly states that "[w]ith  respect to
non-covered services, a private contract is unneces- sary and section
4507 does not apply." Id. at 208. This  means, the fact sheet says,
that "beneficiaries continue to be  able to pay for any services that
Medicare does not cover out  of their own pockets ... without having
to enter into a  private contract subject to the provisions of section


The HCFA fact sheet lists cosmetic surgery, hearing aids  and routine
physical examinations as examples of "non- covered" services. Although
these services are all of the  categorically-excluded variety, the
next paragraph of the fact  sheet states that a physician may also
"furnish a service that  Medicare covers under some circumstances but
which the  physician anticipates would not be deemed 'reasonable and 
necessary' by Medicare in the particular case." Id.; see also 


Oral Arg. Tr. at 53 (HHS counsel's explanation of "non- covered" as
including services not necessary in particular  case). If the
beneficiary receives an ABN for such a service,  the fact sheet
continues, "a private contract [under s 4507] is  not necessary to
bill the beneficiary if the claim is denied."  J.A. 208.


The fact sheet concludes that when a physician and benefi- ciary enter
into a private contract to provide services "that  would otherwise be
covered by Medicare," the physician must  " 'opt out' of Medicare for
a two-year period." Id. The  phrase, "would otherwise be covered by
Medicare," is not free  from ambiguity. Plaintiffs suggest, and worry,
that it refers  to services that would be covered but for Medicare's
conclu- sion that they are not reasonable and necessary in the 
particular case. Under that reading, services the doctor  believes are
necessary but Medicare does not could only be  provided under section
4507 (with its two-year bar). But  such a reading would be
inconsistent with the language  discussed in the preceding paragraph,
which makes clear that  payment for a claim denied on the ground that
the service  was not necessary does not require a section 4507
contract.  The Secretary, by contrast, interprets "would otherwise be 
covered by Medicare" as meaning "covered but for the fact  that the
parties have entered into a private contract." This  reading is
consistent both with the rest of the fact sheet, and  with the
Secretary's position that physicians must opt out of  Medicare only if
they enter into contracts for services that  Medicare would reimburse
but for those contracts them- selves.5




__________

n 5 Another HCFA program memorandum, issued to all Medicare  carriers
in January 1998 and specifically addressed to "the imple- mentation of
... s 4507," is also consistent with this interpretation.  See HCFA,
Program Memorandum, Transmittal No. B-97-17 (Jan.  1998) (J.A. 225-26)
(stating that private contracts with their attend- ant opt-out rules
are not required for services: (1) that are "cate- gorically
exclude[d]" from Medicare; (2) that are "not covered  because, under
Medicare rules, the service is never found to be  medically necessary
to treat illness or injury"; or (3) for which 


On February 26, 1998, the Administrator of HCFA submit- ted a statement
to the Senate Finance Committee intended to  "clarify" "substantial
misunderstanding about what section  4507 of the Balanced Budget Act
does." J.A. 254. Consis- tent with the HCFA fact sheet just discussed,
the Adminis- trator stated that a private contract under section 4507
is one  for which the service "would be covered if a claim were 
submitted" to Medicare, id. at 252, and that such a contract is  the
only kind to which the opt-out rule applies, id. at 254. "A  physician
does not have to opt out of Medicare for two years,"  she said, "in
order to provide a non-covered service to a  Medicare beneficiary."
Id. at 255. Nor does a physician  have to opt out when, employing the
ABN procedure, the  doctor provides a service Medicare later
determines was not  reasonable and necessary. Id. at 256.6


At oral argument, counsel for the Secretary advised that  HCFA was
planning to issue formal regulations incorporating  the above-stated
views. Those regulations were published on  November 2, 1998. See 63
Fed. Reg. at 58,901. Consistent  with the position recounted above,
the explanatory preamble 




__________

n "Medicare denies the claim on the basis that the service was not 
medically necessary" in the particular beneficiary's case).


6 The Administrator used prostate specific antigen tests (PSAs)  as an
example to make her point. J.A. 256. Medicare currently  covers such
tests only when used for diagnosis to evaluate a  symptom of a
particular patient, and only when such use is reason- able and
necessary. Medicare will not pay for the tests when used  for
screening patients across the board. "Therefore," the Adminis- trator
said, "a private contract is not needed when a beneficiary  wants a
PSA test for screening purposes because it is not now a  covered
service." Id. Likewise, the Administrator explained, a  physician may
believe "that Medicare is likely to deny payment for  a certain
diagnostic PSA (for example, when the patient wants to  have the test
more frequently than Medicare would likely pay for  [it])." Id. In
such circumstances, although an ABN should be  used, section 4507 does
not apply. Id. at 256-57. See also Bal- anced Budget Act of 1997, Pub.
L. 105-33, s 4103, 111 Stat. 251, 362  (codified at 42 U.S.C. s
1395l(h)(1)(A)) (providing coverage for  screening PSA tests beginning


states that "[t]he private contracting rules do not apply to ... 
services that Medicare does not cover." Id. at 58,850. It  further
states that when a physician "furnishes a service that  does not meet
Medicare's criteria for being reasonable and  necessary, and the
[physician] has furnished the beneficiary  with an ABN ... , there are
no limits on what the [physician]  may charge the beneficiary....
[and] [t]he act of providing  an ABN does not then require that the
[physician] opt-out of  Medicare...." Id. at 58,851.


On the basis of our examination of HCFA's announced  views, we conclude
that the agency has consistently interpret- ed section 4507 and its
opt-out rules as applying only to  contracts for services that
Medicare itself would reimburse.


C


Finally, we briefly address plaintiffs' contention that the  ABN
procedure is not a realistic way to ensure patients'  access to
services they or their doctors regard as necessary  but Medicare does
not. Under the ABN procedure, before  providing a service the
physician informs the patient that  Medicare may not pay, and obtains
the patient's agreement to  pay on his or her own if Medicare denies
the claim. See 42  U.S.C. s 1395u(l)(1)(C)(ii). As noted above,
because an ABN  is not considered a private contract under section
4507, if  Medicare does not pay the doctor may receive payment from 
the patient without being subject to the opt-out rule. See 63  Fed.


Plaintiffs contend that the ABN option is illusory because  HCFA has a
policy of sanctioning doctors who repeatedly use  ABNs for services
they believe warranted but Medicare  regards as unnecessary and will
not reimburse.8 The Secre-




__________

n 7 An ABN is neither utilized nor necessary for services categor-
ically excluded from Medicare, and section 4507 has no application  to
such services. See J.A. 255-57 (statement of HCFA Administra- tor).


8 Plaintiffs also contend that if their doctor is a "participating 
physician" who bills Medicare directly, see supra note 1, or if the 


tary vehemently denies having such a policy. HHS Br. at 24.  At least
on their face, HCFA's pronouncements support the  Secretary since they
expressly advise doctors to employ  ABNs in precisely those
circumstances. Standard ABN  forms, for example, require a statement
that the patient has  "been informed by my physician that he or she
believes that,  in my case, Medicare is likely to deny payment." J.A.
94; see  also 42 C.F.R. s 411.408(f) ("[T]he physician must inform the
 beneficiary ... that the physician believes Medicare is likely  to
deny payment."). Similarly, a 1998 HCFA program memo- randum explains
that where a service is not covered by  Medicare because it is "never
found to be medically neces- sary," the physician may charge the
patient without opting  out "only if he or she gives the beneficiary"
an ABN. J.A.  225.9 These pronouncements would make no sense if HCFA 
did not intend doctors to use ABNs for services they believe  Medicare
would regard as unnecessary.


The preamble to HCFA's new regulations should also give  plaintiffs
some comfort. It notes that ABNs may state that 




__________

n medical service they seek is one statutorily required to be provided 
on an assignment basis, see, e.g., 42 U.S.C. s 1395l(h)(5)(C)
(clinical  diagnostic laboratory tests), then the ABN procedure may
not be  used. Although the language of the statutory ABN provision 
appears to support this contention, see id. s 1395u(l)(1)(A), the 
Secretary interprets other statutory provisions and HCFA regula- tions
to permit a doctor to obtain an ABN agreement in such  circumstances
and to charge the patient if Medicare denies pay- ment. HHS Br. at 25
n.5 (citing 42 U.S.C. s 1395pp; 42 C.F.R.  ss 411.402(a)(2), 411.404;
HCFA, Medicare Carriers Manual  ss 7300.5, 7330.D).


9 Where the service is one Medicare never finds medically  necessary,
the memorandum states that "no claim need be submit- ted." J.A. 225. A
claim "must be submitted," however, if the  service "is one which
Medicare has determined is medically neces- sary where certain
clinical criteria are met, but is not medically  necessary where these
criteria are not met." Id. In both cases, "if  Medicare denies the
claim on the basis that the service was not  medically necessary, the
physician or practitioner who has given the  advance beneficiary
notice may bill the beneficiary." Id.


the physician "believes that the service will not be covered by 
Medicare" and that the "act of providing an ABN does not  then require
that the physician or practitioner opt-out of  Medicare so that he or
she avoids being at risk of having a  penalty assessed...." 63 Fed.
Reg. 58,851. And it closes  with an effort to assuage precisely the
concern plaintiff  expresses here: "[P]hysicians and practitioners
should not  hesitate to furnish services to Medicare beneficiaries
when  the physician or practitioner believes that those services are 
in accordance with accepted standards of medical care, even  when
those services do not meet Medicare's particular and  often unique
coverage requirements." Id.


It should not be missed, of course, that HCFA exempts  from this note
of encouragement those services not "in accor- dance with accepted
standards of medical care." Id. This  qualifier may well explain some
of the confusion. Although a  HCFA regulation does state that ABNs are
not acceptable if  the "physician routinely gives this notice to all
beneficiaries  for whom he or she furnishes services," 42 C.F.R.  s
411.408(f)(2)(i), the Secretary makes clear that this rule is  aimed
at a doctor who "require[s] all his patients to sign  ABNs on a
blanket basis in order to bill them for unwarrant- ed procedures." HHS
Br. at 24 (citing s 411.408) (emphasis  added). Needless to say,
billing patients for unwarranted  procedures may well be subject to
sanction, see generally 42  U.S.C. s 1320a-7(b)(6)(B), and plaintiffs
do not urge other- wise.


In sum, the evidence before us does not support the  assertion that
HCFA interprets the ABN procedures in a  manner that denies plaintiffs
access to services they regard  as reasonable or necessary. We have
briefly addressed this  question because of plaintiffs' contention
that it is linked to  the section 4507 issue. We should note, however,
that the  ABN issue is analytically distinct from plaintiffs' facial
chal- lenge to the constitutionality of section 4507, since ABNs are 
not private contracts under that section and are not governed  by it.
To the extent plaintiffs feel HCFA enforces the ABN  statute and
regulations in a manner inconsistent with the 


agency's own pronouncements, they are of course free to  challenge such
enforcement in a particular case.


IV


Because the Secretary's reading of section 4507 eliminates  the
constitutional injury plaintiffs allege, and because we are  bound
under Chevron to defer to that interpretation, the  order of the
district court is affirmed.