Full opinion text
JAMES LAWRENCE KING, District Judge. Plaintiff Mount Sinai Hospital brought this action to contest the defendants’ right to recover some $6 million in Medicare payments received between 1966 and 1972 for services that the Government has since decided were not covered by the Medicare program. The case presents substantial questions about the scope of Governmental authority and the power of the courts to control its exercise, the decision of which will have important consequences for the administration of the Medicare program and the local community which the hospital serves. Plaintiff is a non-profit facility located in Miami Beach, Florida, a popular retirement haven for senior citizens from across the nation, a large percentage of whom are Medicare beneficiaries. Since the inception of the program following enactment of the Social Security Amendments of 1965 (Medicare amendments), the lion’s share of Mount Sinai’s services have understandably been devoted to meeting the needs of the great number of Medicare recipients in the surrounding community. As even defendants have recognized, Mount Sinai in 1971 received the highest daily income from Medicare of any hospital of comparable size in the United States, and submitted claims to the program the following year for more services than any other facility in the Southeast, irrespective of size. Mount Sinai has been an institution authorized to furnish Medicare services since the program began on July 1, 1965. To qualify as such a “provider of services,” the hospital was required to agree not to charge Medicare beneficiaries for its services, but to accept payment from the Federal Hospital Insurance Trust Fund. Payments were made by defendant Blue Cross of Florida, nominated by Mount Sinai to serve as its “fiscal intermediary,” and acting by agreement with the defendant Secretary of the Department of Health, Education and Welfare as his agent in administering the program. From 1966 through 1971, Blue Cross apparently reviewed and allowed, with few exceptions, the bills it received from Mount Sinai for Medicare services rendered during that period. Plaintiff’s problems with Medicare began in the summer of 1972 when Blue Cross learned from the Bureau -of Health Insurance of the Social Security Administration that charges of overutilization of services covered by the program had been made against Mount Sinai by an area physician. With the assistance of the Florida Medical Foundation Peer Medical Review Committee, Blue Cross and the Bureau proceeded to review some 700 patient charts for the year 1970 as a means of ascertaining whether erroneous payments had been made for services excluded from Medicare coverage and of projecting the amount of such overpayments during the entire period from 1966 to 1972. By affidavit of J. W. Herbert, President of Blue Cross, it is now alleged on the basis of that review that an estimated $6,380,587.40 in claims were improperly paid to Mount Sinai for items or services not covered by the program. Defendants specifically charge that Mount Sinai performed medically unnecessary procedures and that hospital stays were longer than required. On the basis of its investigation, Blue Cross delivered a written suspension order to plaintiff on May 10, 1973, which stated that 15 percent of the Medicare payments coming due to Mount Sinai for current services would henceforth be withheld so that the trust fund could begin to recover the alleged overpayments. The suspension order was predicated on regulations that became effective May 27, 1972, which detail a procedure for instituting such suspensions where there is “reliable evidence” that an overpayment has been made. Before the suspension could be implemented, plaintiff brought this action for temporary and permanent injunctive relief, challenging the statutory authority for the suspension order as well as the constitutionality of the procedures prescribed by the suspension regulations for its issuance. An emergency hearing was accordingly convened after notice to all the parties on May 17,1973. The evidence presented at the hearing demonstrated that not only Mount Sinai, but the entire community it serves would be irreparably injured by the threatened suspension of Medicare payments. The undisputed testimony indicated that if the suspension order were implemented, Mount Sinai’s income could be reduced by as much as $100,000 a week. Such a decrease in the hospital’s cash flow would jeopardize its ability to meet weekly payrolls and operating expenses, officials pointed out, because Mount Sinai’s capital assets have been fully mortgaged to permit the plant expansion required to meet ever increasing community needs. The impending loss of a major part of the hospital’s regular income, they said, would consequently necessitate the discontinuance of such vital, but money-losing, community services as Mount Sinai’s medical training program and emergency room operation. Upon finding that plaintiff had presented evidence sufficient to meet all the prerequisites for temporary relief, the court issued an order intended to preserve the status quo pending further consideration of the case. The order was subsequently extended by stipulation to permit formulation of the issues and decision on a motion to dismiss and on opposing motions for summary judgment to be prepared by the parties. Following the submission of these motions and oral argument thereon, the court further delayed initiation of the suspension with the acquiescence of the parties to permit preparation of this opinion. Defendants argue in their motion to dismiss that the doctrines of sovereign immunity, ripeness, finality and exhaustion of administrative remedies, as well as the Medicare amendments themselves, prevent the court from hearing plaintiff’s claims. We reject that conclusion and deny the motion to dismiss because under none of these theories was it ever intended that the courthouse doors be closed to a litigant in Mount Sinai’s shoes confronted with irreparable injury from Government action and seeking only to prevent what Congress may never have authorized. There being no genuine dispute as to any fact material to the issue of statutory authority, as the statements of the parties at oral argument and in their opposing motions for summary judgment reveal, we proceed to consider the question of statutory authority. The court independently arrives at the same conclusion expressed by Congress itself when it amended the Act to provide special authority and procedures to determine whether overutilization of Medicare services is occurring, to recover any payments improperly made for such services, and to safeguard the rights of hospitals and other providers of services in the process. These 1972 amendments were necessary because Congress, when it established the program, provided that if the Government once determined that hospital services were covered by Medicare and proceeded to pay for them, it could not return to the coverage question a second time years later and decide that the same services were not covered. The reason for such a limitation may be explained by the need to encourage hospitals to participate in Medicare despite the requirement that they agree not to charge their patients, but to bill the program for services it covers. By means of the prohibition against reopening coverage determinations, Congress insured that participating hospitals would be protected by prompt notification if the services they had provided were not covered, so that they could immediately proceed to collect from their patients. Not until 1972 did Congress grant Medicare the authority to recover funds it had paid to a hospital under the circumstances of this case. Because the payments Medicare now seeks to recover were made between 1966 and 1972, at a time when Congress had not given Medicare the authority to recoup such payments, we hold that defendants are barred from implementing a suspension order against Mount Sinai for those years. Under the authority granted by Congress in 1972, Medicare can now recover payments resulting from alleged over-utilization of services. Consequently, the problem presented in this case will not hereafter arise. I Defendants’ motion to dismiss must be considered first because it goes to the heart of the court’s power to resolve the questions of statutory authority and constitutionality raised by plaintiff’s complaint. At the outset it is useful to delimit the precise issues presented by the motion: Whether the court has jurisdiction over this action and, if so, whether that authority should be exercised in this case. Not at issue are such factual problems as whether overutilization of Medicare services actually took place at Mount Sinai between 1966 and 1972, what the extent of the alleged abuses might have been, and whether overpayments to plaintiff resulted. Plaintiff contends, as the complaint alleges, that the court’s power to hear its claims is properly predicated on general federal question jurisdiction and on Section 10 of the Administrative Procedure Act (APA). Defendants respond that this action is barred by the Social Security Act itself and by the doctrines of sovereign immunity, ripeness, finality and exhaustion of administrative remedies. We will consider these theories seriatim. STATUTORY PRECLUSION The limitation on judicial review contained in the original Social Security Act presents the initial impediment advanced by defendants to the court’s assumption of federal question jurisdiction. Section 205(h) provides that subject only to the review afforded by the Act, the results of an administrative hearing are final and may not be relitigated in the courts under federal question or other independent jurisdictional provisions. This limitation was incorporated by reference in Section 1872 of the Medicare amendments, and consequently governs any disputes arising under the program. Because the Act authorizes judicial review pursuant to Section 205(g) for health care facilities in only two instances, neither of which includes the suspension of Medicare payments to a provider of services, defendants assert that Section 205(h) expressly prohibits federal question jurisdiction. The short answer to this argument is that Section 205(h) must be read in pari materia with Sections 205(b) and 205(g) which complete the statutory scheme for review of Medicare disputes. Section 205(g) conditions the limited judicial review it carefully details on the availability of an administrative hearing and the exercise of that right in accordance with Section 205(b). Likewise, it is only “after a hearing” that Section 205(h) by its terms renders decisions of the Secretary binding and unreviewable by any route other than Section 205 (g). Where a hearing is authorized, therefore, Section 205(h) serves to prevent the premature disruption of the administrative hearing procedure established by Section 205(b), and to insure that the limited scope of judicial review intended by Section 205(g) is not circumvented by the development de novo of a judicial record unguided by the hand of agency expertise. It does not follow, however, that Section 205(h) likewise forbids judicial scrutiny where the Act makes no provision for a hearing that is subject to administrative and judicial review. In the absence of any administrative hearing and appeal procedure, there is no need to protect the integrity of the administrative process; and where no administrative record has been prepared, limiting the scope of judicial review fails to serve any paramount purpose. More weighty are the constitutional considerations which caution against such a broad interpretation of Section 205(h). To suggest that Congress intended to foreclose even judicial review in every case for which it did not provide an administrative hearing is to impute to the legislature a cavalier disregard for the dictates of due process. We therefore concur in the view that “[ajbsent any evidence to the contrary, Congress may rather be presumed to have intended that the courts should fulfill their traditional role of defining and maintaining the proper bounds of administrative discretion and safeguarding the rights of the individual.” Cappadora v. Celebrezze, 356 F.2d 1, 6 (2d Cir. 1966). The authority advanced by defendants for reading Section 205(h) as an absolute bar to jurisdiction under any circumstances is consequently unpersuasive. Only two of the four cases they cite so much as suggest that the provision’s prohibition of judicial review extends to disputes for which no administrative hearing may be obtained. One decision avoided consideration of the due process problems inherent in such a holding by ruling that nothing prevents actions like this one which are limited to questions of the constitutionality and statutory basis for Medicare determinations. Schroeder Nursing Care, Inc. v. Mutual of Omaha Ins. Co., 311 F.Supp. 405 (E.D.Wis.1970). The other likewise stopped considerably short of suggesting that due process would tolerate a complete denial of review to be implied in every case, deciding only that Congress may prohibit judicial consideration of de minimus beneficiary claims to benefits where its intention to do so has been plainly and expressly stated. Kuenstler v. Occidental Life Ins. Co., 292 F.Supp. 532 (C.D.Cal.1968). Far from expressing such an intent, the legislative history of the Medicare amendments does little more than paraphrase the language incorporated from Section 205(h) which must be construed by the court. The report of the Senate Finance Committee states that “[i]t is intended that the remedies provided by [the Medicare] review procedures shall be exclusive.” Insofar as that observation expresses congressional intent, it explains the Committee’s purpose in amending House Bill 6675 to incorporate Section 205(h) by reference; namely, to insulate the Medicare appeal procedure just as review of social security determinations had always been insulated. The statement therefore assumes, rather than defines, the circumstances under which Section 205(h) is to be applied to preclude review. To interpret it as extending the prohibition of judicial scrutiny to cases for which no administrative hearing is available would be to ignore the rule that where agency action is challenged as a denial of due process, it is “immune from judicial review, if ever, only by the plainest manifestation of congressional intent to that effect.” Gonzalez v. Freeman, 118 U.S.App.D.C. 180, 334 F.2d 570, 575 (1964) (Burger, J.). In the absence of more compelling authority, it is difficult to justify according unlimited scope to the Act’s prohibition of federal question jurisdiction as a means to the end of barring judicial review. The court is convinced that Section 205(h) was intended to insure the orderly resolution of disputes through procedures the Act established, not to risk frustration of due process by foreclosing judicial consideration of determinations for which Congress provided no reviewable administrative hearing. We therefore join in the construction of the provision adopted by most courts which have considered the question: “Where the Medicare Act establishes procedures for review of the Secretary’s decision, a court may not review that decision by any other means. However, where the Act does not provide such procedures, section [2] 05 (h) does not preclude review.” Aquavella v. Richardson, 437 F.2d 397, 402 (2d Cir. 1971), quoted in Kingsbrook Jewish Medical Center v. Richardson, 486 F.2d 663, 666-667 (2d Cir. 1973); and Temple University v. Associated Hosp. Serv., 361 F.Supp. 263, 269 (E.D.Pa.1973). So construed, the Act presents no bar to the adjudication of this case. Because the amount in controversy unquestionably exceeds $10,000, we hold that this action may be maintained on the basis of federal question jurisdiction. However, the question of whether plaintiff has stated a claim upon which relief can be granted remains to be considered. NONSTATUTORY REVIEW The APA authorizes nonstatutory review of such challenges to administrative determinations as this one through “any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction ... in a court of competent jurisdiction. Having held that Section 205(h) does not prohibit federal question jurisdiction, we need not enter the controversy over whether the APA itself vests power in the court to hear this action for declaratory and injunctive relief. There can be no dispute, at least, that this is a court of “competent jurisdiction” because an independent basis for subject matter jurisdiction exists and personal jurisdiction over the defendants has been obtained. Review cannot be secured under the APA, however, “to the extent that — (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law.” The latter exception presents no difficulty because defendants have not suggested that the challenged suspension determination is entrusted to agency discretion “to the extent that” the APA would not apply even if there were a clear abuse of authority or procedure. In any event, the exception is inapplicable because the dispute over whether the Act commits issuance of a suspension order exclusively to agency discretion cannot be resolved on. the conflicting allegations of the pleadings. Nor did Congress intend the exception to prevent review under the APA except where a statute is “drawn in such broad terms that there is no law to apply,” which is not the case here. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Defendants nonetheless contend that relief cannot be obtained under the APA because the Medicare amendments “preclude judicial review.” Although we have held that review is not expressly prohibited by Section 205(h), they advance the alternative argument that it is foreclosed by the doctrine of implied preclusion. Relying on the provisions for review of Medicare determinations in Section 1869 of the Act, defendants submit that Congress, having carefully designated the types of disputes for which judicial review could be obtained, must have intended that no other controversies be reviewable. We cannot accept such an argument, however, because Congress intended the APA to apply to a wide range of agency action absent “clear and convincing evidence” in a particular statute to the contrary. This presumption of review-ability has resulted in the rule that judicial review “will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress.” Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967); Air Line Pilots Ass’n Int’l v. Department of Transportation, 446 F.2d 236, 241 (5th Cir. 1971). The court is not persuaded that the silence of the Medicare amendments on the availability of review for determinations other than those specified in Section 1869 can be considered either a clear or a convincing manifestation of congressional intent. Aquavella v. Richardson, 437 F.2d at 402. We therefore conclude that the APA applies to this action, and that plaintiff has stated a claim for which relief can be granted on the basis of nonstatutory review. SOVEREIGN IMMUNITY Defendants argue that the APA, if it provides a presumption of reviewability, does not constitute a waiver of sovereign immunity. In 1961, however, the Fifth Circuit endorsed the contrary view that the APA “makes a clear waiver of sovereign immunity in actions to which it applies,” and explained that “by providing judicial review in an action brought by ‘any person adversely affected or aggrieved by any agency action’ Congress permitted suits which under established tests would certainly be barred as suits against the government.” Estrada v. Ahrens, 296 F.2d 690, 698 (5th Cir. 1961). Although the continuing vitality in this Circuit of the rule in Estrada has been questioned, it has yet to be explicitly overruled. Treating the APA as a waiver of sovereign immunity as in Estrada, has many virtues. Not the least would be the simplicity and ease of application of the rule in our overburdened courts. Secondly, the prerequisites to review under the APA protect the very interests sovereign immunity serves. Not only is administrative action unreviewable under the APA where “statutes preclude judicial review” or agency action is “committed to agency discretion by law,” but the doctrines of ripeness, finality and exhaustion insure that the public business entrusted to administrative agencies will not be unduly burdened. If an increase in judicial review results, it will fulfill a basic policy objective of administrative law by deterring administrative arbitrariness in a government which has become increasingly, if unavoidably, bureaucratic. Nonetheless, we cannot be unmindful of the limitations on Estrada, and of the five other circuits that have rejected the APA waiver theory. Nor can we ignore the fact that since the enactment of the APA in 1946, the Supreme Court has warned that it may not “be deemed an implied waiver of all governmental immunity from suit,” Blackmar v. Guerre, 342 U.S. 512, 516, 72 S.Ct. 410, 412, 96 L.Ed. 534 (1952), and decided at least five cases in which sovereign immunity barred attempts to review administrative decisions. Although the Court has since granted review in several cases under the APA without mention of sovereign immunity, it has yet to articulate the operative distinguishing principle. We are therefore constrained to assume, without deciding, that Estrada does not control our decision here, and that the doctrine of sovereign immunity demands independent consideration. There can be no dispute that agents of the sovereign are named as defendants in this action. Kuenstler v. Occidental Life Ins. Co., 292 F.Supp. 532 (C.D.Cal.1968). But that fact does not determine whether a jurisdictional bar is necessarily interposed by the doctrine of sovereign immunity. The applicability of the doctrine “is to be determined, not by the fact of the party named as defendant on the record, but by the result of the judgment or decree which may be entered . . . .” Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 687 n. 6, 69 S.Ct. 1457, 1460, 93 L.Ed. 1628 (1949), quoting Minnesota v. Hitchcock, 185 U.S. 373, 387, 22 S.Ct. 650, 46 L.Ed. 954 (1902). Sovereign immunity' governs “if, ‘the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,’ or if the effect of the judgment would be ‘to restrain the Government from acting, or to compel it to act.’ ” Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963). The latter test is met by Mount Sinai’s request that the court “permanently enjoin the defendants from withholding, suspending or reducing any current or future payments” on authority of the challenged suspension regulations, and we can only conclude that the doctrine of sovereign immunity applies. Nonetheless, the courts have long indulged the legal fiction that when an agent of the sovereign acts ultra vires his statutory or constitutional authority, his actions are not those of the sovereign and equitable relief may be granted against him individually. Such “officer suits” are available in the ease of “(1) action by officers beyond their statutory powers and (2) even though within the scope of their authority, the powers themselves or the manner in which they are exercised are constitutionally void.” Dugan v. Rank, 372 U.S. at 621-622. The officer suit exception for action in excess of statutory authority has been given limited scope, however, since the Larson decision. Prior to that ruling, if a plaintiff alleged this exception, courts would admit jurisdiction on the pleadings and proceed to a ruling on the merits unless the officer’s actions could not be said to exceed the statutory authority pleaded by the government. The Larson case in effect shifted the burden from the government to the plaintiff by prohibiting consideration of the merits if the officer demonstrates, by way of a prima facie showing of “general ‘authority’ to do the sort of act complained of,” that his actions “do not conflict with the terms of his valid statutory authority.” Moreover, it is no longer enough in the wake of Larson to invoke the exception by alleging simply that the actions of a government officer are “illegal” or “unauthorized.” 337 U.S. at 693. Rather, the plaintiff must specifically “set out in his complaint the statutory limitation on which he relies.” 337 U.S. at 690. Although the tests subsequently applied have varied from circuit to circuit, the Fifth Circuit has found the allegations of the complaint determinative. An officer suit may be maintained if plaintiff’s averments are “affirmative” and “explicit” rather than “insubstantial” or “frivolous,” and if, assuming their truth for jurisdictional purposes, they demonstrate a “clear, legal duty” imposed by statute on a government officer. Carter v. Seamans, 411 F.2d 767, 770-771 (5th Cir. 1969), cert. denied 397 U.S. 941, 90 S.Ct. 953, 25 L.Ed.2d 121. Mount Sinai’s substantial allegations meet this standard not only by affirmatively and explicitly denying that defendants’ actions are authorized, but also by citing a provision imposing a contrary duty. It is impossible to make a prima facie determination of whether defendants are authorized to do “the sort of act complained of” by Section 1815 of the Act upon which defendants rely. Confronted with plaintiff’s reliance on a different provision, the court is unable to say whether defendants’ actions do or “do not conflict with the terms of [their] valid statutory authority” without considering the merits. We therefore conclude that the complaint sufficiently invokes this officer suit exception to demand inquiry into the merits. Sovereign immunity likewise will not defeat jurisdiction over plaintiff’s constitutional challenge because it is one of the few due process claims to come within the second officer suit exception. Since Larson, the rule has been settled: “Where the action against which specific relief is sought is a taking, or holding, of the plaintiffs’ property, the availability of a suit [e. g., in the Court of Claims] for compensation against the sovereign will defeat a contention that the action is unconstitutional as a violation of the Fifth Amendment.” 337 U.S. at 697 n. 18. Unlike the plaintiff in Larson, however, Mount Sinai has no viable legal remedy by which it may obtain compensatory damages for the injury it stands to suffer from defendants’ actions. No subsequent legal remedy can conceivably compensate the hospital or the public for the loss of trained personnel and community medical services that will result from implementation of the suspension order. Notwithstanding the availability of an officer suit, however, sovereign immunity may sometimes remain a jurisdictional bar because of the impact of the relief requested, in accordance with a celebrated footnote to the Larson decision: “Of course, a suit may fail, as one against the sovereign, even if it is claimed that the officer being sued has acted unconstitutionally or beyond his statutory powers, if the relief requested cannot be granted by merely ordering the cessation of the conduct complained of but will require affirmative action by the sovereign or the disposition of unquestionably sovereign property.” 337 U.S. at 691 n. 11. Nonetheless, Mount Sinai seeks no affirmative government action, but only an end to the suspension order. The fact that Medicare payments would then continue as usual requires no more of the government than the routine distribution of funds concededly due the hospital for services currently rendered, not the “disposition of unquestionably sovereign property.” The application of the Larson affirmative impact rule has subsequently been refined, moreover, to require the dismissal only of those actions in which the relief requested would “work an intolerable burden on governmental functions outweighing any consideration of private harm.” Washington v. Udall, 417 F.2d 1310, 1318 (9th Cir. 1969); Littell v. Morton, 445 F.2d 1207, 1213 (4th Cir. 1971). Whatever the extent to which the relief Mount Sinai requests might be characterized as affirmative in nature, we conclude on balance that sovereign immunity should not bar this action because it is the burden on the plaintiff and the public, not that on the government, which is an intolerable one. Nor would the requested relief thwart efforts by Medicare to prevent ongoing overutilization and to recoup any resulting overpayments from Mount Sinai or other providers of services. The Act now expressly provides procedures holding providers accountable for any medically unnecessary services charged to the program after October 30, 1972. The one serious burden on the government if relief were granted would be frustration of the present attempt to recover alleged overpayments made prior to 1972. That effort, however, can serve only one purpose: To protect the economic viability of the program. Yet defendants do not suggest that Medicare has been placed in any financial jeopardy as a result of the suspected over-payments, or that failure to recoup them will endanger the continued operation of the program. To the contrary, however costly to the trust fund the relief requested may seem, the Medicare program has survived without visible impairment in the years since the alleged overpayments were made. It therefore appears that the burden on governmental functions has been tolerable, and would hardly become otherwise if relief were granted. By comparison, the “private” harm to be considered here poses a twofold threat of substantial public injury. First, although the consequences of denying review to Mount Sinai will have no little impact on the hospital’s financial condition, the interest of the public it serves will sustain a still greater injury. If the challenged suspension order were held immune from judicial review, the public health and welfare would stand to suffer irrevocable harm from whatever cutbacks in money-losing community services become necessary as a result of the reduction of the hospital's income. Secondly, there is a broader public interest that would be injured by holding that sovereign immunity bars such a limited action as this one. It has never been thought that even unconstitutional or unauthorized actions by agents of the sovereign should be immunized from judicial review simply because the remedy requested might conceivably have an affirmative impact .on agency action, no matter how remote it might be. If that were true, the precaution might often prove more deleterious to the public interest than the cost of the cure. Where, as here, the operation of a government program will not be adversely affected, the public interest in insuring lawful agency action should ordinarily prevail. We therefore conclude that the potential injury to the public outweighs any burden on governmental functions which might be imposed if the relief Mount Sinai seeks were granted. The same balancing of interests supports an alternative theory. There is authority for the proposition that even where an officer suit may be unavailable, sovereign immunity will not defeat an action, which, on balance, does not constitute a “substantial bothersome interference with the operation of government.” Littell v. Morton, 445 F.2d at 1214. Either approach supports our holding that the doctrine of sovereign immunity is not so transcending as to require dismissal of this action. II Defendants next contend that if neither the Medicare amendments nor the doctrine of sovereign immunity defeats the court’s jurisdiction, its exercise must be declined because this action is not ripe, the agency determination challenged is not final, and plaintiff has failed to exhaust its administrative remedies. Although some judicial discussion suggests that these issues have become so interrelated as to mandate a broad balancing of interests, the result has been criticized for occasionally losing sight of important considerations. In the interest of articulating the pertinent factors, we will examine each issue separately. RIPENESS Ripeness, a judicial construct formulated to prevent the depletion of judicial resources through premature judicial action, has traditionally been thought to have as its focus the crystallization of the legal controversy between the litigants, as opposed to the concern expressed by the doctrine of finality for the integrity of the administrative process. Although the issue of ripeness ordinarily does not arise in the context of adjudicatory proceedings, the interests embodied in the doctrine are always relevant considerations in determining whether to grant nonstatutory review. In Abbott Laboratories, the leading case on the application of the ripeness doctrine, the Supreme Court articulated the elements to be examined in deciding whether the issues are fit for judicial decision. The Court considered such factors as whether the issues were predominantly legal rather than factual, whether the impact of the agency action was suffficiently direct and immediate to create a real case or controversy, and whether intervention at a later stage of the agency process might not better serve the interests of judicial economy without causing further serious and unnecessary harm to the petitioner. We therefore turn to an examination of these elements. The complaint restricts itself to challenging the statutory authority for the suspension order and the constitutional adequacy of the procedures which led to its issuance. Both issues have long been considered purely “legal” questions to be entrusted to the judiciary rather than to executive agencies for resolution. As their opposing motions for summary judgment indicate, neither side argues that disputed issues of fact remain that require further administrative consideration prior to judicial resolution of the issues Secondly, the record as it now stands is adequate' for the limited review requested, and delay of judicial intervention pending further administrative proceedings would produce no substantial clarification of the issues. The necessary factual foundation for determining the statutory authority question is to be found in the statute itself and its legislative history, rather than in any factual record the agency might prepare. In addition, the constitutional issue is clearly drawn, and the pertinent facts are supplied by the regulations under which the suspension order was issued. Thirdly, the impact of the suspension order on the hospital is sufficiently direct and immediate to insure that judicial review at this stage will produce more than an advisory ruling on hypothetical questions. The withholding of Medicare payments due the hospital for services rendered is not simply a distant threat or possibility. Whereas, judicial intervention might have been premature if plaintiff had brought suit when first notified that the agency was considering such action, or if the suspension had been subject to further administrative review prior to implementation, it is timely now. The suspension will take effect immediately unless judicial review is granted at this point in the agency proceedings. A more direct and immediate impact could hardly be imagined than the substantial effect which a 15 percent cutback in Medicare payments will have on Mount Sinai’s cash flow position. The suspension will certainly work “an immediate and significant change” in the hospital’s conduct of its affairs. Abbott Laboratories v. Gardner, 387 U.S. at 153. Nor does Mount Sinai have any realistic means at its disposal by which it might avoid the impact of the cutback in payments. Its assets are fully mortgaged as uncontradieted testimony revealed, and projected donations are budgeted. To bill patients who received the disputed services, if it were possible, would not promptly ameliorate the problem, and to increase charges for non-Medicare patients to offset the losses would be as unconscionable as it would be unfeasible. Finally, considerations of judicial economy do not counsel delay in determining the questions presented until a later stage of the administrative process. The issues of statutory authority and constitutionality that have been raised are fundamental to the agency’s license to proceed, yet the regulations contemplate no hearing on these questions, but only refinement of the overpayment determination which led to the challenged suspension order. There appears little likelihood, therefore, that the issues presented will be mooted by further administrative consideration. It would be a false economy, indeed, that thought to conserve judicial resources at the expense of continued unlawful government action. The issues therefore appear fit for judicial determination and the controversy ripe for decision. We will postpone final resolution of the question, however, to permit an examination of finality, which was considered by the Supreme Court as an element of ripeness in Abbott Laboratories. FINALITY Defendants contend that their determination to suspend Medicare payments is not “final agency action” within the meaning of the APA, but should rather be characterized as “preliminary” only. The regulation under which the agency has proceeded states that payments to providers of services may be suspended in whole or part when there is “reliable evidence” that an overpayment has been made. A separate regulation provides that the suspension may be rescinded or adjusted as the result of subsequent agency review. Nonetheless, we conclude for the reasons which follow that a suspension of Medicare payments based only on reliable evidence must itself be characterized under the APA as final agency action. In accord with the presumption of reviewability mandated by the APA, “[t]he cases dealing with judicial review of administrative actions have interpreted the ‘finality’ element in a pragmatic way.” Abbott Laboratories v. Gardner, 387 U.S. at 149. In keeping with this functional approach, an agency order need not be the very last administrative ruling in order to be deemed a “final” one. Isbrandtsen Co. v. United States, 93 U.S.App.D.C. 293, 211 F.2d 51, cert. denied sub nom. Japan-Atlantic & Gulf Conf. v. United States, 347 U.S. 990, 74 S.Ct. 852, 98 L.Ed. 1124 (1954). Moreover, it is not the label affixed to its action by an agency that is determinative of finality, but a realistic appraisal of the consequences of exercising jurisdiction to permit appeal. Isbrandtsen Co. v. United States, 211 F.2d at 55. Such an appraisal, however, must not lose sight of a twofold concern for the proper judicial-administrative separation of power and the integrity of agency processes. It is to a consideration of these two factors that we now turn. Concern for the Constitutional separation of powers between the judiciary and the executive agencies bridges the conceptual morass between ripeness and finality. Many of the relevant factors, such as the adequacy of the record, the clarity of the issues, and the potential for judicial resolution of the controversy, relate primarily to ripeness. or fitness for judicial determination, and need not be reviewed here. Two additional considerations come into focus, however, in conjunction with an examination of finality: The need for uniformity of decision and for the development of agency expertise. When Congress perceives a need for prompt nationwide uniformity of decision, it may commit to an agency adjudicatory functions it might otherwise entrust to the courts. Yet this congressional concern that substantive regulatory principles receive equal nationwide application does not extend to the questions presented here of statutory authority and the constitutionality of agency action, which the founding, fathers entrusted to judicial resolution. We therefore need not consider it further. Courts must also be concerned that by exercising jurisdiction they will not unduly interfere with an agency’s acquisition of administrative expertise pursuant to its congressional mandate. Particular solicitude is appropriate where an agency is first embarking upon a new field of regulation or administration of a novel program. The substantive factual issues that confront Medicare in its investigation of overutilization, and about which expertise might arguably need to be developed, concern the medical necessity for providing specific treatment in a given case and the reasonable cost of services properly rendered. Yet, defendants have been required to develop reasonable cost expertise since the Medicare program’s inception in 1966. If a question of the reasonableness of the costs charged by Mount Sinai were involved in this case, which it is not, defendants would therefore have had adequate opportunity to acquire the necessary expertise in the subject. Similarly, neither an opportunity nor a need exists for the development of agency expertise to evaluate the medical necessity of the treatment provided. In accord with the apparent intent of Congress, medical determinations were left in this case to a peer review group of physicians. Moreover, although overutilization is a problem which Medicare may again confront in the future, the 1972 amendmehts provide for its resolution without the development of a special body of agency expertise. Neither the need for uniformity of decision nor for the development of agency expertise consequently cautions against judicial intervention at this stage of the administrative process in view of the limited, but fundamental issues that have been raised. Not only from the previously examined standpoint of the judiciary, therefore, but also from that of the executive agencies, the proper allocation of authority between their respective branches does not militate against a determination that the disputed agency action is final. Whether holding that the suspension order meets the test for finality would unduly disrupt the integrity of agency processes remains to be considered. The factors which control are “whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication and whether rights or obligations have been determined or legal consequences will flow from the agency action.” Port of Boston Marine Terminal Ass’n v. Rederiaktiebolaget Trans-Atlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 27 L.Ed.2d 203 (1970). Courts ordinarily hesitate to disrupt the orderly process of adjudication by intervening in the absence of a final agency decision for two major reasons, each of which subsumes a number of corollary considerations. The first is the need to give wide scope to agency discretion and expertise; the second, the desirability of encouraging the efficient and effective functioning of the administrative process. To the extent that these factors do not pertain to the issues presented, of course, the disruptive effect of the judicial exercise of jurisdiction is correspondingly minimized. Having created an agency for the purpose of implementing a statutory scheme, Congress must be understood to intend that a factual record be developed and the statute applied in the first instance by the body to which it entrusted the necessary discretion and expertise. Ordinarily, therefore, the agency should be given the first chance to develop the record, exercise its discretion and apply the sum of its experience. However, the role of agency discretion and expertise, like the need for development of a factual record, diminishes when the issues raised are those of statutory authority and the constitutionality of agency action. The question presented in this case of how much fifth amendment process may be due has been confided by the Constitution to the discretion and expertise of the judiciary, rather than to the agencies of the executive branch. Likewise, the judiciary is the ultimate arbiter of challenges such as this one to the statutory authority for agency action. Although an administrative agency’s construction of its governing statute may be entitled to great weight, only the courts may finally decide the limits of its statutory authority. Where, as here, only issues of statutory authority and constitutionality have been raised, there is no compelling reason to give wide scope to agency discretion and experience. Before intervening in the administrative process, the courts must also consider society’s need to leave administrative agencies free to pursue their congressional mandate in the public interest without continual interruption from individual grievances. Thus, with an eye to agency efficiency and effectiveness, courts normally find it wiser to permit the administrative process and the public business to go forward than to encourage attempts to frustrate agency procedures by offering shelter in the courts at intermediate stages. Nonetheless, it has been recognized that judicial intervention may be justified at an earlier stage in the administrative process than usual where, as here, there is a substantial showing that an agency has exceeded the authority granted it by Congress, or that it is acting unconstitutionally. The simple reason for this exception is that both the public business and the public interest are advanced by resolving such issues promptly. Although disruption of the administrative process cannot be avoided, the public business stands to benefit from early notice of fundamental defects which would invalidate lengthy agency proceedings upon ultimate review. The public interest is likewise served by timely judicial supervision to insure that administrative action is lawful. Not even considerations of agency efficiency and efficacy, therefore, counsel against the limited review plaintiff seeks in this case. INJURY The ultimate question courts must answer in determining finality is whether the extent and character of the injury suffered is sufficient under the circumstances of the case to justify disruption of the agency process. The Supreme Court has articulated the test as “whether rights or obligations have been determined or legal consequences will flow from the agency action.” Port of Boston Marine Terminal Ass’n v. Rederiaktiebolaget Trans-Atlantic, 400 U.S. at 71. Substantially the same question, although with different emphasis, requires consideration in determining ripeness under the two-step test enunciated in Abbott Laboratories. It is not enough that the injury occasioned by agency action is sufficiently direct and immediate to insure that a real, justiciable controversy exists, Courts must “assess the hardship to the parties if judicial relief is denied” by inquiring whether “irremediable adverse consequences flow from requiring a later challenge.” Toilet Goods Ass’n v. Gardner, 387 U.S. 158, 162, 164, 87 S.Ct. 1520, 1523, 1525, 18 L.Ed.2d 697 (1967). Both the finality and ripeness injury tests are cut from the same cloth, the jurisprudence of equitable remedies. Yet by focusing on the extent of the harm to the plaintiff, or the timing of the request for judicial intervention, the judicial shorthand of each obscures the balancing of interests which has always been the touchstone for the exercise of judicial discretion in granting equitable relief. What courts must and do consider does not stop with the question of the character and extent of the individual injury occasioned by agency action. The adverse effect on the agency and the judiciary of granting review must also be weighed, as well as whether the public interest argues for or against judicial intervention. Consequently, no hard and fast rule can define either finality or ripeness in terms of the injury to the aggrieved party. Any attempt to formulate such an objective standard simply expresses a conclusion about the appropriate balance in a particular ease. However characterized, the injury confronting Mount Sinai if review were denied at this stage of the suspension proceedings would be serious enough to foreclose a legal right. If the disputed services provided by the hospital are finally determined not to be covered by Medicare, Mount Sinai would acquire the right to collect for them from its former patients. However, the fact that the contested suspension order by its own terms represents no more than a tentative determination of non-coverage operates to defeat the hospital’s right. Daily prejudice to Mount Sinai’s ability to collect from its patients is occasioned by delay in the final determination, given the advanced age and declining health of the program’s beneficiaries. Because the suspension order thereby works to foreclose the hospital’s right to collect for services rendered as long as six years ago, it finally “determines a legal right.” Moreover, even if that right were not effectively foreclosed, its exercise could do little to moderate the immediate financial injury Mount Sinai will incur in the absence of judicial intervention. The loss of as much as $100,000 a week from the 15 percent cutback in Medicare payments contemplated by the suspension order will have a severe impact on Mount Sinai’s cash flow position, requiring reductions in its staff and in the community services it now performs. To be sure, there is some authority for ending our inquiry at this point in reliance on the rule that “a threat of economic injury has always been regarded as sufficient . . . for the purpose of finding an order final and reviewable.” Environmental Defense Fund v. Ruckelshaus, 142 U.S.App.D.C. 74, 439 F.2d 584 (1972). Like all other injury tests, however, this precept expresses no more than a conclusion about the appropriate balance among the competing factors in a particular case. Claims of financial hardship constitute only one sympton of injury, and a difficult one to evaluate at that. According them priority in judicial analysis creates the misimpression that prompt judicial review of agency action may be obtained only by a fortunate few with much to lose. The extent to which such a financial injury test may serve to denote the result in this or other cases equally depends on how much any adverse effect on the public interest, the judiciary, and the agency, weighs against granting review. Whether affording judicial review to Mount Sinai at this stage of the suspension process would do a disservice to the public interest is a debatable issue. Suspension procedures, which Congress ordinarily authorizes expressly, are designed to provide an administrative procedure for protecting the public health, safety and welfare in emergency situations. Orders issued in accordance with such authority have consequently received a great measure of judicial deference, particularly where the individual injury they occasion is no more than a private economic interest in business profits. By comparison, not only does the suspension procedure Mount Sinai challenges lack express congressional authorization, but it protects a financial interest that operates to defeat, rather than promote, the public health and welfare. Although the importance of preserving the economic viability of the Medicare program cannot be denigrated, it must compete in this case with the harm to the public health and welfare that would follow from the hospital’s reduction or discontinuance of vital public services as a result of the suspension order. Moreover, the potential jeopardy to the economic viability of the Medicare program would be slight if implementation of the suspension order were delayed by judicial review. If defendants were ultimately to prevail in the action, the postponement of their ability to collect any overpayments finally determined to exist would not itself jeopardize the recovery of those sums. The Medicare amendments provide extraordinary remedies for recouping payments made for non-covered services from individual beneficiaries and their relatives should attempts to recover from the hospital prove unsuccessful. Under these circumstances, we think that the public interest in health and safety served by Mount Sinai outweighs the public interest in immediately restoring alleged overpayments to the Medicare program. Whether the injury Mount Sinai stands to suffer in the absence of judicial review outweighs the concerns represented by the concepts of finality and ripeness remains to be considered. Of course, it is not the individual injury to the hospital, strictly speaking, that is determinative. Rather, the individual attempt to invoke judicial review must be weighed as an expression of the public interest in obtaining access to the courts to secure relief from allegedly unlawful agency action. As the court’s discussion of the considerations underlying the doctrine of finality concluded, the integrity of the administrative process would not be seriously jeopardized if the limited review requested were granted. We think the modest disruption necessary would be more than outweighed by the harm from the “legal consequences [which] will flow” from denying review, and accordingly hold that the suspension determination is a final order within the meaning of the APA. Likewise, any potential impediment to the fitness of the issues for judicial resolution is removed by the narrow scope of review sought by Mount Sinai. The concerns articulated in the foregoing discussion of ripeness, moreover, are vastly overshadowed by the “irremediable adverse consequences” of the injury both to the public and the hospital which implementation of the suspension order will produce. We consequently hold that this controversy is ripe for judicial resolution. To say this much, however, is not to imply that any agency action that is involved in a ripe controversy is necessarily final. Although finality and ripeness share a common concern for the injury occasioned by agency action, the countervailing factors differ. Ripeness balances the injury suffered against the fitness of the issues for judicial consideration. Finality weights the injury against the harm to the integrity of the administrative process that would result from judicial intervention. There is no guarantee, therefore, that the same result will emerge from- balancing both of these factors, although that happened to be the ease here. Having held that the challenged suspension order constitutes final agency action and that plaintiff’s claims are ripe for judicial review, we need consider only one last obstacle to the exercise of jurisdiction. Defendants contend that this action must be dismissed, if for no other reason, because plaintiff has not exhausted its administrative remedies. EXHAUSTION The doctrine that administrative remedies must be exhausted prior to judicial review of agency action is a well established principle of judicial administration. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 82 L.Ed. 638 (1938). The general rule, formulated early in this century, is that failure to appeal an agency decision within the administrative process precludes judicial review. United States v. Sing Tuck, 194 U.S. 161, 24 S.Ct. 621, 48 L.Ed. 917 (1904). Interpreted as an expression of executive and administrative autonomy, and as a matter of comity, the principle applies not only where the governing statute makes administrative appeal procedures exclusive, but also where the requirement of exclusivity is not so explicitly mandated. McKart v. United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969). Although care must be exercised to distinguish the different situations in which it applies and the factors which require consideration in each, the exhaustion doctrine has long been held a bar to judicial review of interlocutory agency decisions while the administrative process continues. Defendants accordingly invoke the doctrine here as an alternative to finality, arguing that if the suspension order constitutes final agency action, judicial review cannot be granted until Mount Sinai exhausts the remaining procedures provided by the suspension regulations for administrative review of the order. Although it may be an oversimplification to say that problems of exhaustion begin where questions of finality end under the APA, the factors to be weighed by the courts are substantially identical in review of an interlocutory agency decision. The difference is that where Congress has mandated an administrative appeal procedure or expressly authorized its creation, courts are properly more reluctant to intervene than if confronted with final action for which an agency appeal has not been provided. Administrative appeal provides an added opportunity for plaintiff’s claims to be vindicated, thereby mooting the controversy and conserving judicial effort. Moreover, the appellate procedure provides at least some evidence of congressional intent to achieve uniformity of decision, encourage development of agency expertise, leave a wide berth for the exercise of agency discretion, and prevent disruption of the administrative process. Even where congressional intent is not expressed by statutory provision of a procedure for administrative appeals, judicial restraint and a concern for executive autonomy require consideration in the name of exhaustion of substantially the same factors that inform a determination of finality. Although the suspension regulations at issue in this case were propounded by Medicare, rather than provided by Congress, there is no need to reiterate the reasons previously articulated as a basis for the conclusion that the suspension order is a final one. The same considerations support our holding that Mount Sinai need not exhaust further administrative remedies before it will be entitled to judicial review. The exhaustion rule has traditionally come into play, moreover, only when the administrative remedy provided is adequate to protect the claim which is asserted. The remedy contained in the suspension regulations is deficient in two respects. In the first place, where an aggrieved party must await at its risk such further enforcement procedures as the agency may choose to initiate, no viable remedy has usually been thought to be available. Frozen Food Express v. United States, 351 U.S. 40, 76 S.Ct. 569, 100 L.Ed. 910 (1956). The suspension regulations under which defendants have proceeded against Mount Sinai authorize the subsequent review of a suspension order, but do not require in mandatory terms that one be held. Secondly, an administrative remedy is deemed inadequate if it fails to protect against irreparable injury. Although that criterion is not satisfied simply by the expense of litigation, , however great it may be, Myers v. Bethlehem Shipbuilding Corp., 303 U.S. at 51-52, there is authority for the view that financial injury resulting from the forfeiture of a right may be considered irreparable. If the substantial financial loss that Mount Sinai stands to suffer from the suspension of even a portion of the payments rightfully due it for current services does not qualify, the non-finaneial injury to the community which will be occasioned by the resulting cutback of hospital services is surely irreparable. For these traditional reasons, therefore, the exhaustion doctrine does not present a bar to judicial review in this case. However, Section 10(c) of the APA is equally dispositive of the exhaustion issue presented here. United States v. Consol. Mines & Smelting Co., 455 F.2d 432, 433-440 (9th Cir. 1971). It provides that in the absence of an express statutory mandate to the contrary, a party subjected to