Cospito v. Heckler

Congress gave the secretary of the Department of Health and Human Services (secretary) (defendant) the authority to certify a facility as eligible for the Medicare program. The statutes governing the Medicare program also specifically allowed the secretary to use findings made by the Joint Commission on Accreditation of Healthcare Organizations (commission) (defendant) as part of the certification process. The commission was a nonprofit organization that conducted on-site surveys of healthcare facilities to determine whether a facility met the quality standards for the organization’s own accreditation program. The Medicare system relied on the commission’s accreditation findings to determine whether a facility was eligible for Medicare certification. However, the secretary had the authority to change the Medicare standards, if desired. The secretary could also conduct an additional survey to independently evaluate a facility before making a final decision about Medicare eligibility. After several on-site evaluations, the commission withdrew its accreditation from the Trenton Psychiatric Hospital (TPH). Relying on the commission’s findings, the secretary decertified the TPH for eligibility in several federal benefit programs, including Medicare. Douglas Cospito and other patients (plaintiffs) had been involuntarily committed to the TPH. The decertification meant that these patients lost their Medicare, Medicaid, and certain Social Security benefits. The patients sued, arguing that the federal government had deprived them of their right to these federal benefits without due process, and that Congress had unconstitutionally delegated its legislative power to the commission to make decisions about Medicare eligibility. The district court dismissed the claims, and the patients appealed.