GAB Decision 114
August 1, 1980 North Carolina Statewide Family Planning Program;
Docket No. 79-179 Przybylinski, Donald; Woodruff, Robert Dell'Acqua, Frank
The North Carolina Statewide Family Planning Program (grantee)
applied for review of a decision issued by the Public Health Service
(PHS) Regional Grant Appeals Board with respect to discretionary grants
for family planning services (PHS Docket No. 79-3). The PHS Regional
Grant Appeals Board had 1) upheld the Region IV disallowance of costs
for nontherapeutic sterilizations performed on persons under age 21; 2)
reversed the Region's disallowance of sterilization costs, incurred in
the fiscal year ending June 30, 1974 (FY '74) and in the month of July
1974, questioned for lack of the proper notice on the consent form; and
3) upheld the Region's disallowance of costs, incurred in the remainder
of FY '75 or in FY '76, questioned for lack of the proper notice.
Grantee has not appealed that portion of the PHS decision related to
sterilizations performed on persons under age 21. In response to a
request by the Board, PHS has identified the amount remaining in dispute
at $81,257.05, and grantee has stated that it has no evidence to
disagree with this figure.
We have determined that there is no dispute as to a material fact and
that this case should be decided on the basis of the written record.
This consists of the grantee's application for review, the PHS response
to the appeal, and the parties' responses to an Order to Show Cause
issued by the Board Chairman.
Background
Section 1001(a) of Title X of the Public Health Service Act
authorizes the Secretary to "make grants to . . . public or non-profit
private entities to assist in the establishment and operation of
voluntary family planning projects which shall offer a broad range of
acceptable and effective family planning methods. . . ." 42 U.S.C. 300.
The Secretary has interpreted this section and other family planning
provisions to authorize Federal funding of sterilization services.
Although Congress had provided that all family planning should be on a
voluntary basis, there were initially no specific regulations governing
the circumstances under which there could be Federal funding of
sterilizations. After national attention was drawn to the problem of
improper coercion of needy persons to submit to sterilization upon
threat of loss of welfare benefits, the then Department of Health,
Education, and Welfare (HEW) published a notice in August 1973, 38 FR
20930, that it was adopting guidelines for issuance, by HEW agencies, of
regulations to insure informed consent and voluntariness in Federally
funded sterilizations. Following publication of the guidelines, PHS
issued such regulations, published in final form on February 6, 1974, 39
FR 4730. The effective date of the February 6 rules was delayed several
times pending the outcome of several court cases.
On March 15, 1974, the District Court for the District of Columbia,
in Relf v. Weinberger, 372 F. Supp. 1196 (D.D.C. 1974), found the
February 6 rules to be invalid. Among other defects, the Court found
that the rules were arbitrary and unreasonable in that they did not
require that legally competent persons be properly advised that their
Federal benefits could not be terminated by reason of a decision not to
be sterilized. The District Court declared in its Order that the
regulations were defective in authorizing the provision of Federal funds
without requiring that such advice be given prior to obtaining consent
and "without further requiring that such advice also appear prominently
at the top of the consent document. . . ." 372 F. Supp. at 1205.PHS then
published on April, 18, 1974, at 39 FR 13872, a new Subpart D to 42 CFR
Part 50 to replace the regulation struck down in Relf. In addition to
other requirements for informed consent for sterilizations, these
regulations provided that --
Each consent document shall display the following legend printed
prominently at the top:
NOTICE: Your decision at any time not to be sterilized will not
result in the withdrawal or withholding of any benefits provided by
programs or projects. 42 CFR 50.202(d)(7)(iii).
The regulations had an effective date of April 18, 1974.
The North Carolina State Board of Health, Department of Human
Resources, received funding for its Statewide Family Planning Program
under Section 1001 of the PHS Act, including funding for the budget
periods coextensive with FY '75 and FY '76. An audit, apparently
performed in the Fall of 1975, and supplemented in the Fall of 1976,
identified sterilizations funded through grantee for which the consent
documents did not contain the NOTICE required by the regulations, and
this formed the basis for the disallowance by Region, IV, upheld in part
by the PHS Board.
Grantee does not deny that the consent documents in question did not
contain the required NOTICE but asserts basically that 1) grantee made a
good faith effort to meet the informed consent requirements but was
hampered in its effort by Region IV's unresponsiveness; and 2) PHS
improperly made the NOTICE a "proxy" for compliance with the informed
consent requirements.
Good Faith
The record does indicate that grantee attempted to develop a consent
document which would meet the regulatory requirements and that PHS
failed to act in a timely manner to approve the forms or to assist the
grantee in developing an adequate form. The PHS Board specifically
stated that it "recognized the good faith efforts made by the grantee in
trying to develop the appropriate informed consent documents and the
delays it encountered." (PHS Board Decision, p. 3.) The PHS Board
concluded, however, that this did not excuse the failure to include the
NOTICE on whatever consent forms were in use. The PHS Board pointed
out, and the record supports, the fact that grantee does not claim any
lack of awareness of the NOTICE requirement. The April 18, 1974
regulations were noted in "Remarks" appearing on the Notice of Grant
Award for the budget period beginning July 1, 1974 and, at least as
early as July 16, 1974, the grantee informed its providers of the
consent requirements, including provision for the NOTICE. Based on
these factors, the PHS Board concluded that "the fact that the NOTICE
did not subsequently appear on consent forms was due to the grantee's
lack of monitoring of its service providers." (PHS Board Decision, p.
3.)
While the PHS Board does not discuss the basis for its finding that
grantee failed to monitor its service providers adequately and that
finding is not supported by any direct evidence in the record, it
appears to be a fair implication that, if grantee had more closely
monitored whether the providers were meeting the requirements, there
would have been better compliance. Grantee attempts to excuse itself
from a duty to monitor compliance. Grantee had agreed with its
providers that the most efficient method for insuring that forms met the
regulatory criteria would be for grantee to work with regional officials
to develop an acceptable form. Grantee argues that only PHS could
provide "definitive" guidance with regard to consent documents, and
that, where PHS could not stipulate how the requirements of the
regulation could be met, the onus should not be placed on grantees to
attempt to comply. (Grantee's Response to Order, p. 2.)
It is clear, however, that some form had to be in use while the
approval process was ongoing. Although compliance with certain of the
requirements (such as, inclusion of a description of alternatives to
sterilization) would involve a subjective judgment as to what was
intended and guidance from PHS might be critical, compliance with the
NOTICE requirement could have been accomplished without such guidance.
The wording of the NOTICE was specified in the regulation, as was the
requirement that the NOTICE be placed prominently at the top of the
dodument.
The PHS Board nevertheless allowed grantee until August 1, 1974, as a
reasonable period of time in which to implement the NOTICE requirement
imposed on April 14, 1974. The PHS Board concluded, however, that after
that period of time, the failure to comply should not be excused even in
light of the grantee's good faith efforts and the unresponsiveness on
the part of the Regional Office.
We agree. As noted by this Board in previous decisions, an agency
disallowance based on the unambiguous terms of a validly promulgated
regulation should not be overturned on the basis of purely equitable
arguments. See, e.g., New Mexico Department of Human Services, DGAB
Docket Nos. 78-32-NM-HC, 79-33-NM-HC, 79-37-NM-HC, Decision No. 70,
December 11, 1979.
The NOTICE as a Proxy
Grantee's second major argument, that it was invalid and arbitrary
for PHS to use the NOTICE requirement as a "proxy" for other informed
consent criteria, also lacks merit.
Grantee states that the NOTICE is only a "small segment of informed
consent" and, in a program like grantee's, is "much less important
than
other aspects of consent." (Application for Review, p. 2.) Grantee
explains that welfare recipients were not handled directly by grantee's
project, since they were eligible for Medicaid-supported sterilizations,
so the NOTICE was not as important for sterilizations funded by grantee.
According to grantee, the important point is that "individuals fully
understand the sterilization procedure and its consequences."
(Application for Review, p. 2.)
Grantee may be correct that the problem of threat of loss of benefits
would not be as great where the recipients of services are not "welfare"
beneficiaries (although the family planning project itself was a
Federally funded program providing benefits to the recipients in
question). Regardless of the relative importance of the NOTICE
requirement to grantee's project, however, it was a requirement imposed
by regulation. Futhermore, the District Court in Relf considered such a
notice to be an element of the voluntariness of consent within the
meaning of the statute and, therefore, it cannot be regarded as a mere
administrative requirement which might be less necessary in certain
circumstances.
To the extent that PHS audited the grantee only for compliance with
the NOTICE requirement, which as PHS points out is minimal in nature,
grantee was not penalized but, to the contrary, perhaps benefited by not
being audited for compliance with the more subjective elements of the
informed consent criteria. The practicalities of grants administration
sometimes preclude an agency from performing the type of comprehensive
audit which would have examined compliance with all of the informed
consent requirements.
Focusing on the readily identifiable element of inclusion of the
NOTICE on the forms appears to have been a reasonable action, not
prejudicial to the grantee.
Conclusion
For the reasons stated above, we uphold the decision of the PHS
Regional Grant Appeals Board.
OCTOBER 04, 1983