Full opinion text
DELAWARE DIVISION OF HEALTH AND SOCIAL SERVICES v. U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET AL„ TABLE OF CONTENTS PACTS 1108 DISCUSSION ........................................................................................1109 I. JURISDICTION ...............................................................................1110 A. The Compliance/Disallowance Distinction ......„............................mo 1. The New Jersey Trilogy .......:..............................................mi 2. The Trilogy Applied .............................................................1113 B. District Court Jurisdiction Over Disallowance Proceedings ...........1114 1. The Statutory Language and Legislative History ...................1114 2. The Split in the Circuits ......................................................1115 a. District Court Jurisdiction ..............................................1115 b. Court of Claims Jurisdiction ...........................................1116 c. The Preferability of District Court Jurisdiction ................1117 II. THE SCOPE OF REVIEW ...1.......................................................1...-1118 III. STATUTORY CONSTRUCTION ........................................................1120 A. The Social Security Statute and Regulations ...............................1120 B. Delaware Complied With The Statute But Not The Regulations ...1122 1. The Statute ............ 1122 2. The Regulations ..................................................................1123 C. The Regulations Are Arbitrary and Capricious ............................H24 1. “Completed Reviews” Cannot Substitute for “Conducted Reviews” ......................,.........................................................1124 2. The Good Faith Exception .......... 1124 3. The Technical Failings Exception ..........................................1125 D. The Secretary’s Interpretation of the Statute and Regulations, as Upheld by the Grant Appeals Board, was Arbitrary and Capricious ................................................................................:.......1125 1. Completed Review ...............................................................1125 2. The Statutory Exceptions Construed .....................................1126 3. The Board’s Interpretation of the Good Faith Exception is Arbitrary and Capricious ..........................................................1127 4. The Board’s Interpretation of The Technical Failings Standard is Arbitrary and Capricious ..................................................1128 CONCLUSION ........................................................................................1130 OPINION CALEB M. WRIGHT, Senior District Judge. The question presented is whether the State of Delaware operates its nursing homes in compliance with the federal Social Security Act. The principal contention of the appellee, the Secretary of the United States Health and Human Services Department (“HHS”), is that the appellant, the Delaware Department of Health and Social Services (“Delaware”), failed to adequately inspect Delaware’s nursing homes to ensure that all of its patients are, in fact, entitled to federal Medicaid payments. In 1984, HHS denied Medicaid payments to Delaware for neglecting to inspect two nursing homes even though every patient in both facilities was reviewed, except for four residents. The State appealed the decision to the HHS Grant Appeals Board, which upheld the Secretary’s determination. . In reversing, this Court finds that the Appeals Board arbitrarily and capriciously interpreted the Social Security Act. Second, the Court determines that the regulations promulgated by the Secretary of HHS are impermissibly restrictive. Third, the Court holds that the Grant Appeals Board arbitrarily and capriciously upheld the Secretary’s denial of Medicaid funds to Delaware. FACTS Whether the sweeping Great Society programs enacted to care for this nation’s elderly succeeded, either in historic terms, or in comparative relation to other nations’ programs, remains an unanswered question. But whatever the .achievements or shortcomings of the New Deal agenda, this Court is not the first to observe that America’s system of caring for its aging, indigent population is literally the most complex in the world. The centerpiece of this system is the Social Security Act, and the current controversy involves a State challenge to a federal interpretation of that convoluted statute. At the most fundamental level, this case concerns four elderly Americans. John McColley, age 76, is a mentally retarded man who suffers from bronchiectasis and other chronic diseases; the State of Delaware cares for him at a Seaford, Delaware nursing home. Ortel Hedwig is an 85 year old woman afflicted with degenerative osteoarthritis and the pains of an artificial hip joint; Ms. Hedwig lives in the Jeanne Jugan State Facility located in Newark, Delaware. Also residing at the Newark facility is Edith Lovell — an 87 year old woman ailing from hypertension, osteoarthritis and a fractured wrist and ankle — and Joseph Schauber, age 70, who suffers from a pancreatic disorder, paralysis of the left side of his face, and a frontal lobotomy performed 20 years ago. Record at 5, Attachment B. HHS contends that because Delaware failed to inspect these four patients the federal government need not reimburse the State for any Medicaid funds going to all patients at the Newark and Seaford facilities. HHS constructs an intricate argument made more incomprehensible because federal transfers to the indigent are so complex that the law is a daily fact for those entitled to Medicaid. Regulations, procedures, routines, inspections, and forms circumscribe the daily existence of nursing home residents. To even proceed to discuss the facts of this case requires an explanation of the applicable law. Title XIX of the Social Security Act established a cooperative federal-state program called “Medicaid” to provide payment for medical services, including nursing care, to individuals. The Social Security Act, 42 U.S.C. §§ 1396 et seq. (1982). Although States are not obligated to establish a Medicaid program, if a State chooses to do so, the federal government will reimburse that State for a percentage of the medical costs incurred by qualified recipients. Rights engender reciprocal obligations and duties. In return for federal Medicaid payments, each State must make a “showing satisfactory to the Secretary [of HHS]” that for each calendar quarter that the State receives federal Medicaid payment, the State has an effective program of inspection and review to ensure that patients are entitled to Medicaid payments and require the care they are receiving. 42 U.S.C. § 1396b(g)(l)(A-D) (1982). The Social Security Act also mandates that the State review the medical care provided to each Medicaid recipient, in each State facility, at least annually. 42 C.F.R. 456.-652(a)(4) (1986). These reviews are to be performed by independent State inspection teams of doctors. Even if not every patient in every State facility is inspected, the State’s quarterly showing may be satisfactory if one or another statutory exception is satisfied. See 42 U.S.C. § 1396b(g)(4)(B) (1982); 42 C.F.R. § 456.653(a-b) (1986). If a State cannot make a satisfactory showing, federal Medicaid reimbursement for that quarter is decreased according to a statutory formula. 42 U.S.C. § 1396b(g)(l) (1982). But even if a State’s quarterly showing is “facially satisfactory,” the Social Security Act requires the Secretary of HHS to validate the State’s showing by reviewing the state’s reports. 42 U.S.C. §§ 1396b(g)(2), 1396b(g)(3) (1982). See Wisconsin v. Bowen, 797 F.2d 391, 393 (7th Cir.1986), cert. denied, — U.S.—, 107 S.Ct. 926, 93 L.Ed.2d 978 (1987) (describing the operation of State Medicaid programs). This controversy began when the Secretary of HHS reviewed Delaware’s Medicaid facilities’ inspection reports for the first quarter of calendar year 1984. The surveys disclosed that four recipients were not reviewed even though all the other patients in each of 40 facilities were inspected. HHS does not dispute that only four patients were missed and the agency concluded in a June 13,1984 report that "Delaware has an effective statewide surveillance and utilization control program for ... [nursing homes].” Utilization Control Report; Record at 2, Attachment E. The problem of patient inspection occurred at the Seaford Health Care Center and the Jeanne Jugan Residence in Newark. At Seaford, during an October 1983 review, John McColley was not reviewed because his name did not appear on a Medicaid review list prepared by the State inspection team and verified with the Nursing Staff. Supplement to Record. At Jeanne Jugan, during a November 4, 1984 review, the three other Medicaid patients were omitted from the list. In the case of one patient, Joseph Schauber, his name was omitted because his Medicaid coverage was newly reinstated on November 3, 1984, and the list had not yet been updated. Record at 2, Attachment D. The other two patients, Ortel Hedwig and Edith Lovell, were not reviewed because their names had not been placed on a State inspection list. Id. After learning of the oversight, Delaware remedied the situation in August 1984. Despite this, on December 27, 1984, HHS notified Delaware that because of its failure to inspect the four patients, it would disallow all Medicaid funds for the two facilities — totalling $201,824.62 — for the calendar quarters ending March 31, 1984, June 30,1984, and September 30, 1984. On January 25, 1985, Delaware appealed the disallowance to HHS’ Grant Appeals Board. Pending the appeal, the appellee wrote a letter to the Grant Appeals Board acknowledging that the unreviewed patients were reviewed during the August 1984 inspection and advising that the penalty would be revised to eliminate the quarter ending September 30, 1984. On March 21, 1986, the Grant Appeals Board upheld HHS’ decision to disallow Medicaid funding for the two facilities for the first two quarters of 1984. The Board directed that the disallowance be recalculated in accordance with a statutory formula to reflect the precise number of recipients. Delaware appealed the Board’s decision to this District Court on May 23, 1986. DISCUSSION This case, as with so many proceedings involving the payment of federal Medicaid funds, to indigent nursing home patients, is mired in a morass of regulatory and procedural complexities. Before tackling the important constitutional and statutory issues raised by a denial of Medicaid funding, the Court must slice through a thicket of seemingly incomprehensible rules that accompany federal transfers to the poor: complex statutory language, labyrinthine regulatory classifications, and Byzantine jurisdictional standards. I. JURISDICTION A. The Compliance/Disallowance Distinction In appealing to this Court from the Grant Appeals Board, Delaware invoked jurisdiction pursuant to the Administrative Procedure Act under general federal question jurisdiction. 5 U.S.C. § 702 (1970); 28 U.S.C. § 1331 (1976). The Appellee did not contest jurisdiction. Appellee’s Brief at 16, n. 3; But subject matter jurisdiction cannot be waived, and despite the fact that neither party briefed the question of jurisdiction, the Court raises the issue sua sponte. Fed.R.Civ.P. 12(h)(3). Not the least of the reasons for discussing this threshold question is that it has yet to be decided in this Circuit. Sadly, in appeals of this nature, “the knotty question of [the Court's] jurisdiction overshadows the merits of the underlying dispute.” Pennsylvania v. Heckler, 730 F.2d 923, 924 (3d Cir.1984). The decision of the Departmental Grant Appeals Board is a “final agency action for which there is no other adequate remedy in a court.” Administrative Procedure Act, 5 U.S.C. § 704 (1976). Judicial review is available unless the particular statute concerning the Board’s action “preclude^] judicial review,” 5 U.S.C. § 701(a) (1976), and review is not deemed forbidden unless the statute clearly forbids review. Abbott Laboratories v. Gardner, 387 U.S. 136, 140-41, 87 S.Ct. 1507, 1510, 18 L.Ed.2d 681 (1967). The problem is determining whether the statute — the Social Security Act — either prohibits judicial review or requires that this Court, or another court, scrutinize the Grant Appeals Board decision. This conundrum derives from the obscure statutory language of 42 U.S.C. § 1316 (1976) which creates two different tracks for review of a dispute involving Medicaid reimbursements to states. Under one track, there is a direct review in the Court of Appeals following the final administrative determination of disputes which are considered “compliance or plan-conformity disputes.” (emphasis added). A second track governs issues involving the Secretary’s determination “that any item or class of items on account of which federal financial participation is claimed ... shall be disallowed for such participation.” 42 U.S.C. § 1316(d) (Supp. Y 1982) (emphasis added). This section does not explicitly, provide for judicial review. Compliance disputes are more serious than disallowance controversies and involve the State’s entire inspection program. The Court, therefore, must conduct a bifurcated inquiry. First, the Court, must determine whether the dispute between HHS and Delaware involved a question of non-compliance or whether the Secretary’s determination amounted to a mere disallowance of funds. If the issue is one of compliance, jurisdiction properly lies in the Third Circuit Court of Appeals. If, on the other hand, the question is one of disallowance, then jurisdiction does not lie in the Third Circuit. But this leads to the Court’s second inquiry which is whether, assuming the dispute is characterized as a disallowance, the District Court has jurisdiction to review an opinion of the Grant Appeals Board. This question has yet to be decided in this Circuit. 1. The New Jersey Trilogy The question of whether, for jurisdictional purposes, an administrative holding is a compliance decision or a disallowance decision is not new in this Circuit. In the New Jersey Trilogy, the Third Circuit devised a functional test for ascertaining the proper appellate jurisdiction over HHS denials of Medicaid funds to States. New Jersey v. Department of Health & Human Services, 670 F.2d 1262, 1268-77 (3d Cir.1981) (“New Jersey F); New Jersey v. Department of Health & Human Services, 670 F.2d 1284, 1290-92 (3d Cir.), cert. denied, 459 U.S. 824, 103 S.Ct. 56, 74 L.Ed.2d 60 (1982) (“New Jersey II''); New Jersey v. Department of Health & Human Services, 670 F.2d 1300 (3d Cir.1982) (“New Jersey III’). See also Pennsylvania v. H.H.S., 723 F.2d 1114 (3d Cir.1983). HHS characterizes this dispute as a disallowance. Record at 1; Decision of Department Grant Appeals Bd. Del. Dep. of Health & Human Services, Dep. Grant Appeals Bd., No. 732 slip op. at 1 (HHS March 21,1986) (final admin, review) [hereinafter cited as “Board Op. at -”]. Were the Court to look no further than the record of the Secretary below, it would simply assert jurisdiction. But this Court is bound by the New Jersey Trilogy which refused to adopt an approach that allows the Secretary “to foreclose judicial review under Section 1316(a) [the compliance provision] in situations where one administrative route is pursued when another would be more appropriate.” New Jersey I, 670 F.2d at 1271. Rather, a Court of Appeals is obligated to look beyond the label the Secretary puts on his or her actions, and is required to conduct an independent evaluation of the underlying substance of the dispute. “To do otherwise ... would make the jurisdiction of a Court of Appeals contingent upon the Secretary’s unfettered discretion.” Id. The Court must first look to the language of the statute. W. Hurst, Dealing With Statutes 57 (1982). If the statute is ambiguous, then the Court must be guided by the statute’s legislative history. Sutherland, Stat. Const. § 45.01 (1943). The statute does not define either a “disallowance” or a “compliance” dispute, and the legislative history of the Social Security Act is not helpful. But because Congress provided scant guidance, the Third Circuit, drawing partly on some “meager indicia” of legislative intent, and an established line of Fifth Circuit cases, has enunciated a statutory interpretation in the New Jersey Trilogy. There, the Court reasoned that compliance disagreements “concern either the validity of a state’s plan as a whole or its overall administration.” New Jersey I, 670 F.2d at 1271. Disallowance disputes, by contrast, “are far more narrowly focused; they generally arise ‘in connection with a routine audit’ and involve ‘the accuracy of [that] audit.’ ” Id., quoting Medical Services Admin. v. United States, 590 F.2d 135, 146 (5th Cir.1979). The Third Circuit is squarely of the opinion that its functional approach, as opposed to the methodology adopted in other Circuits, yields precise and consistent results. In practice, the compliance label has been appended to all “but those disputes involving the most technical minutiae.” Pennsylvania v. Heckler, 730 F.2d 923, 927 (3d Cir.1984). The true mettle of the functional approach is best illustrated by comparing the Third Circuit’s decision in New Jersey III with the Court’s holdings in New Jersey I and New Jersey II. The differences provide the dividing line with which to evaluate the current controversy. In New Jersey I, HHS refused to reimburse New Jersey for child-support enforcement services that the State provided to non-welfare recipients who had not filed applications required by HHS regulations. The amount that HHS declined to reimburse was almost $2 million and the case involved many non-welfare recipients suddenly subject to certain restrictions under new HHS regulations. The Court determined that review under Section 1316(a) was mandated where a State raised “difficult and significant legal issues having to do with the construction of the Social Security Act ... and [with] the legality of certain HHS administrative actions.” New Jersey I at 1273. In New Jersey II, the question decided was whether the State was entitled to amend its plan retroactively to extend coverage to certain aged, institutionalized individuals who were eligible for federal funds but had inadvertently been excluded under the State plan. The Court found that Section 1316(a) procedures were properly invoked because the dispute involved “the coverage of certain individuals under the Medicaid program, the estoppel of a federal agency for its allegedly misleading advice to State officials, and the ability of a State retroactively to alter provisions of its Social Security plan so as to maximize its receipt of federal dollars.” New Jersey II, 670 F.2d at 1291. In both New Jersey I and New Jersey II, the Third Circuit concluded that HHS “in effect had found that New Jersey, in the overall administration of one of its State Social Security plans, was not conforming with applicable federal requirements.” New Jersey I, 670 F.2d at 1273; New Jersey II,, at 1291-1292. See also Pennsylvania v. HHS, 723 F.2d at 1118 (the Court found a compliance dispute when Pennsylvania sought reimbursement for abortions performed between the date the Hyde Amendment took effect and the earliest date the State could notify welfare recipients of the new restriction on abortion funding); Pennsylvania v. Heckler, 730 F.2d 923, 927 (3d Cir.1984) (the Court again found a compliance dispute when the Department of Public Welfare sought to include part of the Philadelphia DA’s welfare prosecution expenses as reimbursable costs). Unlike New Jersey I and New Jersey II, the administrative decisions at issue in New Jersey III in no way affected the State’s entire Medicaid plan. There the controversy centered on whether an official’s one-line handwritten notation approving a nursing home was sufficient to certify the home for Medicaid purposes. The Third Circuit found an “almost archetypical” disallowance situation when the Secretary “merely refuses. to credit the State for expenses incurred for a limited period of time at a single nursing home.” New Jersey III, 670 F.2d at 1303. The Court reasoned that the failure of New Jersey’s survey authority properly to inform the single State agency about the Medicaid status of a single nursing home in no way “implicate[d] the administration of ... New Jersey’s [Medicaid] program as a whole,” New Jersey III at 1303 quoting New Jersey I at 1275 (and cases cited therein). 2. The Trilogy Applied Because the instant case is factually similar to New Jersey III, not the other two New Jersey cases, the Court finds that the dispute is a disallowance rather than a compliance controversy. Given this characterization, jurisdiction does not lie in the Circuit Court. In this case, there was never any question that HHS found Delaware’s overall program to comply with federal requirements. HHS concluded in a report, prepared during the disputed period, that “Delaware has an effective statewide surveillance and utilization control program for ... skilled nursing facilities and intermediate care facilities.” Utilization Control Report, Record at 2, Attachment E. The facts of this case are significantly similar to those in New Jersey III. There HHS denied a claim for Medicaid disallowance in the amount of $221,824.00 on the grounds that one of New Jersey’s nursing homes had not been properly certified. The denial was only at one home and only for a limited period of time. New Jersey III, 670 F.2d at 1303. In the case at bar, the amount disallowed by HHS amounts to only $201,824.62 for two Delaware institutions for a limited time period — three calendar quarters. Record at 2, Attachment A. Most importantly, the disallowance dispute in the case at bar arose, as did the dispute in New Jersey III, from a “routine audit.” Pennsylvania v. H.H.S., 723 F.2d at 117. The audit did not involve any other aspects of Delaware’s plan for providing health.care services. Record at 2, Attachment A; Record at 2-1 to 4. The only difference between this case and New Jersey III is that, in the latter case, only a single health care provider was implicated. Because only one facility was involved in New Jersey III, it could be argued that the current controversy over two facilities is more serious and therefore is properly characterized as a compliance dispute. But, in New Jersey III, a team of inspectors actually found “operating deficiencies sufficient to render the institution ineligible for both Medicare and Medicaid funds.” New Jersey III, 670 F.2d at 1301. In the case at bar, no operating deficiencies were uncovered. Rather, there was a simple failure on the part of the State to review four patients in two facilities, even though every other patient in both facilities was reviewed. Record at 2-1; Board Op. at 6. The State claimed that the only reason the patients had not been reviewed was that “[f]or some unknown reason their names had been deleted inadvertently from the regional Medicaid list” used by the State Review team. Id. at 6; Record at 5, Attachment D. This failure is precisely the type of dispute involving “technical minutiae” that the Third Circuit labels a disallowance matter. See Pennsylvania, v. Heckler, 730 F.2d at 927. If anything, the failure to review four patients in two facilities constitutes a more technical oversight than the failure to inspect an entire facility as in New Jersey III. Under the applicable standards created by the Third Circuit’s functional approach, the matter before this Court must be characterized as a disallowance dispute. A Circuit Court simply has no jurisdiction over such matters. B. District Court Jurisdiction Over Disallowance Proceedings A finding that the Third Circuit has no jurisdiction is not tantamount to a conclusion that this District Court has no jurisdiction to hear a disallowance claim. Under the Social Security Act, it may be that no court has jurisdiction to hear an appeal of a disallowance claim from the Department Grant Appeals Board. The Third Circuit Court of Appeals, and to this Court’s knowledge, no District Court in this Circuit, has ever addressed this question. See. New Jersey II, 670 F.2d at 1290 at n. 11 (“It is an open question, at least in this Circuit, whether a disallowance entered by the Secretary after reconsideration under 42 U.S.C. § 1316(d) is reviewable by a District Court or, for that matter, by any other court.”); New Jersey I, 670 F.2d at 1270-1271 (same); Pennsylvania v. Heckler, 730 F.2d at 926 (“This court has never had an opportunity to decide [the question] of whether a District Court has jurisdiction to review a disallowance dispute).” 1. The Statutory Language and Legislative History To decide this case of first impression, the Court must begin with the language of the statute. All the Social Security Act provides is that whenever the Secretary grants a disallowance, “the State shall be entitled to and upon request shall receive a reconsideration of the disallowance.” 42 U.S.C. § 1316(d) (1982). The statute never indicates where the “reconsideration” shall take place. The hoary-principle of statutory construction, expressio unius est ex-clusio alterius, suggests that Congress’ failure to stipulate a mode of judicial review of disallowances, while specifying an avenue of appeal for plan nonconformity decisions, means that there is simply no review to be had for disallowances. But Karl Llewlleyn cautioned long ago that for each precept of statutory construction, there is an equal and opposite precept. See generally K. Llewellyn, The Common Law Tradition, Appendix C (1960). Further, it is much in favor to suggest that nothing can be inferred from Congressional silence. Illinois v. Schweicker, 707 F.2d 273, 277 (7th Cir.1983); Herman & MacLean v. Huddleston, 459 U.S. 375 n. 23, 103 S.Ct. 683 n. 23, 74 L.Ed.2d 548 (1983). Even if expressio unius is not fancied today, it could have been popular when the Social Security Act was passed in 1965. If so, however, the Court would also have to attribute to Congress knowledge of the legal presumption that final agency action is reviewable in District Court if no specific method of judicial review is prescribed by statute. See Illinois v. Schweiker, 707 F.2d at 277. The legislative history provides little more guidance than the ambiguous statutory language. Some courts rely on a remark quoted by Senator Javits in the legislative debates that “to involve audit exceptions or issues other than those of plan conformity in the judicial review process would create many additional problems.” See State Dept. of Public Welfare of Texas v. Califano, 556 F.2d 326, 329 (5th Cir. 1977), cert. denied, 439 U.S. 818, 99 S.Ct. 78, 58 L.Ed.2d 108 (1978). See also S.Rep.No. 404, 89th Cong., 1st Sess. 150-51 (1965); U.S. Code Cong. & Admin. News 1965, p. 1943. It is not certain, however, that Senator Javits’ comments were addressed to § 1316(d) disallowance claims, and may have only been intended for § 1316(a)(3) plan conformity claims. Illinois v. Schweiker, 707 F.2d at 277. 2. The Split in the Circuits The ambiguity of the statutory language and the legislative history has prompted courts to adopt different jurisdictional theories. To this Court’s knowledge, no court has squarely held that a District Court does not have jurisdiction to hear a disallowance claim. The majority of courts that have considered the question hold that District Courts do have jurisdiction. A second group of courts believes that District Courts are limited in their ability to hear disallowance claims to situations where States request injunctive or other equitable relief. a. District Court Jurisdiction The emerging majority view holds that District Courts have jurisdiction to review an appeal from a disallowance. This concept is grounded in the purposes of the Administrative Procedure Act and its presumption that final agency decisions are reviewable in federal District Courts. The opposing theory takes a different tack, suggesting that disallowance matters belong in the orbit of monetary claims brought against the United States and that therefore jurisdiction is properly in the United States Court of Claims. The reasoning of the emerging majority view is superior and will be adopted here. While many Circuits, including the Third, have declined to address the issue, the Seventh Circuit holds squarely that District Courts have jurisdiction over appeals from disallowance decisions. Illinois v. Schweiker, 707 F.2d 273 at 277-78 (7th Cir.1983). The reasoning behind Schweiker evinces concerns for judicial economy and a wariness of statutory interpretation. The result “reduces the pressure for an expansive interpretation of Section 1316(a)(3) and brings to center stage the practical consideration that jurisdictional lines should be clearly marked. A litigant ought to know whether he belongs in the District Court or the Court of Appeals.” Id. at 277-278. This analysis begs the question of whether a litigant is entitled to any review of a disallowance dispute. It may be that under the statute, once an action is categorized as a disallowance dispute, a litigant is simply out of court. Nor is there any evidence for Schweiker’s assertion that, if District Courts could not review disallowance matters, Courts would be tempted to stretch the language of 42 U.S.C. § 1316(a)(3) to find compliance disputes where a disallowance dispute should be found simply so that some court could assert jurisdiction. Although Schweiker’s reasoning is suspect, its result is grounded in the important policy provisions of the Administrative Procedure Act. It reflects the centrality of “the presumption that final agency action is reviewable in [District [C]ourt if no specific method of judicial review is prescribed by statute.” Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967); Rusk v. Cort, 369 U.S. 367, 371-72, 82 S.Ct. 787, 789-90, 7 L.Ed.2d 809 (1962); Illinois v. Schweiker, 707 F.2d at 277, citing 5 U.S.C. § 703; National Ass’n. of Home Health Agencies v. Schweiker, 690 F.2d 932, 936 (D.C.Cir.1982). The Ninth Circuit and several District Courts in the Second and Eleventh Circuits also hold that District Courts have jurisdiction over disallowance disputes. See County of Alameda v. Weinberger, 520 F.2d 344, 347 (9th Cir.1975). A Connecticut court expressly found that “[rjeview of actions under Secton 1316(d) lies in the District Court, which has subject matter jurisdiction.” Connecticut v. Schweiker, 557 F.Supp. 1077, 1079 (D.Conn.1983). See 28 U.S.C. § 1331 (Supp. IV 1980) amending 28 U.S.C. § 1331 (1976) quoting Davis, Administrative Law Treatise § 23.-03-1 at 373 (Supp.1982) (provision in APA section 703 for review in “court of competent jurisdiction” means, in absence of contrary statute, review in District Court, which has general jurisdiction under 28 U.S.C. §§ 1331, 1337). See also Georgia v. Califano, 446 F.Supp. 404 (N.D.Ga.1977), cert. denied, 474 U.S. 1059, 106 S.Ct. 803, 88 L.Ed.2d 779 (1986) (same). b. Court of Claims Jurisdiction Other courts hold that District Court jurisdiction in disallowance matters is limited. Instead of focusing on the underlying purposes of the Administrative Procedures Act, these courts rely on the theory of the Tucker Act, which grants Court of Claims jurisdiction to hear cases brought against the United States for amounts over $10,000.00. The Eighth Circuit holds that District Courts have no jurisdiction to require HHS to return to a State federal funds withheld pursuant to a disallowance. Minnesota v. Heckler, 718 F.2d 852 (8th Cir.1983). The Court further deduced that the District Court’s jurisdiction is limited to injunctive or other equitable relief, and concluded that “[w]e must vacate the [District [Cjourt’s money award restoring past disallowance funds since jurisdiction for this claim is exclusively in the United States Claims Court.” Minnesota v. Heckler, 718 F.2d at 857. Heckler reasoned that exclusive jurisdiction of the Claims Court applies to monetary claims in excess of $10,000.00 against the United States and its agencies. The Tucker Act, 28 U.S.C. § 1491 (1976) (Supp. Y 1981). “This jurisdictional limitation results in a bifurcation of claims between the District Court and the Claims Court, because the District Court is unable to grant monetary relief on claims over $10,000.00.” Minnesota v. Heckler, 718 F.2d at 852. Even if the Heckler reasoning were accepted, this Court can keep jurisdiction by invoking the doctrine of pendent jurisdiction to attach the monetary claims to Delaware’s claims for declaratory and injunctive relief. “Ordinarily, pendent jurisdiction is used to give federal court jurisdiction over State claims related to a federal claim properly before the court. The concept has also been used, however, to give the federal court jurisdiction over another federal claim which was otherwise not properly before the court.” Woodland Nursing Home Corp. v. Califano, 487 F.Supp. 9, 11 (S.D.N.Y.1979) (District Court with jurisdiction over non-monetary claim can exercise pendent jurisdiction over monetary claim to provide a “common sense solution” for complete relief in one court.) See Am.Comp. ¶¶17 A-F. c. The Preferability of District Court Jurisdiction This Court does not have to rely on pendent jurisdiction over the injunctive claims to gain jurisdiction over the monetary claims involved here. The Court is persuaded by the Seventh and Ninth Circuits that District Courts have full jurisdiction to hear both monetary and non-monetary claims in disallowance proceedings. This position is preferable to the position of the Eighth Circuit for three reasons. The first reason concerns judicial economy. The bifurcated proceedings advocated by the Eighth Circuit would add another layer of complexity to an arena already straining under excess jurisdictional baggage and procedural weightiness. To enter the Court of Claims in the Medicaid jurisdictional horse race would create a dilemma for litigants. Many proceedings would become fragmented with District Courts considering claims for injunctive and declaratory relief while the Court of Claims provided monetary relief. Such proceedings would in turn lead to further quarrels over whether the jurisdiction of the Claims Court is exclusive, or whether District Courts can exercise concurrent equitable jurisdiction. See, e.g., Minnesota v. Heckler, 718 F.2d at 858 n. 11. Ancillary problems would result from plaintiffs having to file a complaint in three forums: the Circuit Court, the District Court, and the Court of Claims. The second objection to the reasoning of the Eighth Circuit derives from statutory construction. Whether a court decides to adopt the reasoning of the Eighth Circuit on the one hand, or the Seventh and Ninth Circuits on the other hand, depends on whether disallowance proceedings are characterized as a “claim against the United States” or a “review of a final agency determination.” A claim properly belongs in the Claims Court while a final administrative decision properly belongs in a District Court. As a matter of statutory construction, the jurisdictional statute, 28 U.S.C. § 1491 (1976), governs “any claim against the United States ... in cases not sounding in tort____” But plaintiffs in the instant case have not brought a “claim”, rather their complaint asks this Court to “overturn the defendant’s decision disallowing $133,482.39 ... for failure to conduct utilization control reviews.” Complaint. at 3. What the plaintiffs seek sounds more like what is offered in the Social Security statute: The State “shall receive a reconsideration of the disallowance.” The Social Security Act, 42 U.S.C. § 1316(d) (1976). Properly speaking, Delaware is requesting a reconsideration, not pressing a claim. See, e.g., Maryland v. Dept. of H.H.S., 763 F.2d 1441, 1449-1451 (D.C.Cir.1985) (holding that “an implied cause of action for damages against the United States will not be lightly inferred” and that a disallowance under the Social Security Act is not an action for money damages so the Tucker Act does not apply). The final reason for rejecting Heckler is that the policies of the APA take precedence over the purposes of the Tucker Act. In the conflict between two statutes, established principles of statutory construction mandate a broad construction of the APA and a narrow interpretation of the Tucker Act. The Court of Claims is a court of limited jurisdiction, because its jurisdiction is statutorily granted and it is to be strictly construed. 28 U.S.C. § 1491 (1982). See Transcountry Packing Co. v. U.S., 215 Ct.Cl 390, 568 F.2d 1333 (Ct.Cl.1978); Woodland Nursing Home Corp. v. Califano, 487 F.Supp. 9, 11 (S.D.N.Y.1979). When considering the Administrative Procedure Act, the Supreme Court found that “the legislative material elucidating that seminal act manifests a congressional intention that it cover a broad spectrum of administrative action, and this Court has echoed that by noting that the Administrative Procedure Act’s ‘generous review provisions’ must be given a ‘hospitable’ interpretation.” Abbott Laboratories v. Gardner, 487 U.S. at 140-141, 87 S.Ct. at 1511. See also Abbott Laboratories v. Celebreeze, 228 F.Supp. 855, 864 (D.Del.1964) (holding that District Courts have jurisdiction to review agency rule making). Much recent academic writing emphasizes the importance of District Court review of agency action. The theoretical justification for judicial review of agency action is grounded in concerns about constraining the exercise of discretionary power by administrative agencies. That power is legitimized by the technical expertise of agencies. But judicial review promotes fidelity to statutory requirements, and, when congressional intent is ambiguous, it increases the likelihood that the regulatory process will be a responsible exercise of discretion. Judicial review is also important when considered in light of the questionable constitutional pedigree of administrative agencies. These agencies are not subject to the ordinary safeguards of public electoral accountability and separation of power. As a result, there is always the fear that administrative decisions will be marred by powerful private influences and that decisions will be taken free from public scrutiny and evaluation. Judicial review is the safeguard that protects the coherence and integrity of the regulatory process. See Cass Sunstein, Reviewing Agency Inaction After Heckler v. Chaney, 52 U.Chi.L.Rev. 653, 655-657 (1985). See also Sunstein, Factions and Self-Interest, 72 U.Va.L.Rev. 271 (1986). The policies of the APA take precedence over the Tucker Act and plaintiff’s action should properly be treated as a final agency action reviewable in District Court. II. THE SCOPE OF REVIEW Before deciding the merits, this Court must continue its jurisdictional odyssey and address the proper standard of review for dissecting the Grant Appeals Board decision. Choosing the correct standard — and giving that standard meaningful structure and content — is one of the more difficult tasks in administrative law. Reflecting differing theoretical concerns, the Administrative Procedure Act provides for four types of review: de novo, clearly erroneous, substantial evidence, and review to ensure that decisions are neither arbitrary nor capricious. De novo review is reserved for those situations when an administrative action is adjudicatory in nature and the agency fact finding procedures are inadequate or when issues not before the agency are raised in a proceeding to enforce non-adjudicatory agency action. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). De novo review rarely applies and does not here. Much debate surrounds the differences between the substantial evidence test, the clearly erroneous standard and the arbitrary and capricious standard. Some commentators even suggest that the standards are the same. See Davis, Administrative Law Treatise, § 29.00 p. 519 (1982 Supp.). The usual standard of judicial review of agency action is the arbitrary and capricious standard. A court may only set aside findings and conclusions deemed to be “arbitrary, capricious, and an abuse of discretion or otherwise not in accordance with the law or unsupported by substantial evidence in the record as a whole.” 5 U.S.C. § 706(2)(A); Samaritan Health Services v. Heckler, 619 F.Supp. 713, 718 (D.D.C.1985), rev’d., Samaritan Health Services v. Bowen, 811 F.2d 1524 (D.C.Cir.1987); Colo. Dept. of Soc. Serv. v. Dept. of Health, 558 F.Supp. 337 (D.Colo.1983). An “arbitrary and capricious” finding is one where the agency has made a clear error of judgment. When an agency interprets a statute in establishing regulations, the arbitrary and capricious standard is not, however, automatically applied. Under the principle of clear statement, recently enunciated by the Supreme Court, courts must first determine whether Congress delegated to an agency the power to interpret a statute. First, the Court must determine whether Congress has spoken clearly on the meaning of the statute. If it has, that ends the matter and no agency interpretation is needed. If the statute is ambiguous, the Court must then decide whether Congress explicitly or implicitly delegated to an agency the power to explain a statute through regulation. If the delegation is explicit, an arbitrary and capricious standard applies. If, however, the delegation is implicit, a reasonableness standard governs. In applying this two-part standard, the Court finds that Congress has not spoken clearly on the meaning of the statute in question. The intent of Congress as to what constitutes compliance with the Social Security Statute is ambiguous. This very equivocation spawned the current controversy, and this Court is not the first to note the mystical properties of the Social Security Act. The statute was dismissed by one court as “an aggravated assault on the English language, resistant to attempts to understand it.” Friedman v. Berger, 409 F.Supp. 1225, 1226 (S.D.N.Y.1976), aff'd., 547 F.2d 724 (2d Cir.1976), cert. denied, 430 U.S. 984, 97 S.Ct. 1681, 52 L.Ed.2d 378 (1977). The Supreme Court is just as uncharitable. “The Social Security Act is among the most intricate ever drafted by Congress. Its Byzantine construction, as Judge Friendly has observed, makes the Act almost unintelligible to the uninitiated.” Schweiker v. Gray Panthers, 453 U.S. 34, 43, 101 S.Ct. 2633, 2640, 69 L.Ed.2d 460 (1981), quoting Friedman v. Berger, 547 F.2d at 727 n. 7. Because Congress’ intent as to the meaning of the statute is unclear, the Court must then decide whether Congress explicitly directed the Secretary to interpret the statute. Although the statute requires that States “make a showing satisfactory to the Secretary” that they have inspected their nursing homes, there is no explicit direction to the Secretary to interpret the requirements of the statute. 42 U.S.C. § 1396b(g)(4)(B) (1982). See Bowen v. Yuckert, — U.S. —, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987); see, e.g., Wisconsin v. Bowen, 797 F.2d at 397 (distinguishing Schweiker v. Gray Panthers, 453 U.S. 34, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981), and noting that Congress did not expressly delegate power to interpret the compliance portion of the Social Security Act). At most, there is only an implicit delegation of authority to the Secretary to interpret the statute. Therefore, the District Court must defer only if the Secretary’s interpretation of the statute is reasonable and statutorily permissible. This is a less deferential standard than the arbitrary and capricious standard. The “clear statement” principle appears to require a reasonableness standard of review, and that is the basic yardstick the Court will employ. But the proper scope of review is a much debated and constantly changing standard. Therefore, the Court will also review the Appeals Board decision under the more deferential arbitrary and capricious standard. Under either standard, the Board’s opinion must be reversed. III. STATUTORY CONSTRUCTION Having taken jurisdiction, and identified the standard of review, the Court now scrutinizes HHS’ actions in light of the Social Security Act and attendant regulations. First, the Court will provide an overview of statutory and regulatory inspection requirements imposed on States that receive Medicaid funding for nursing homes. Second, the Court finds that Delaware complied with the literal requirements of the Social Security Act, but not with the Secretary’s regulations. Third, the Court concludes that the regulations interpreting the Social Security Act are arbitrary and capricious and must be struck down. Finally, the Court holds that the Secretary’s interpretation of the statute and regulations, as upheld by the Grant Appeals Board, was arbitrary and capricious and must be overturned. A. The Social Security Statute and Regulations. The Social Security Act requires that the State agency responsible for the administration of the State’s medical plan submit quarterly reports demonstrating that the State “has an effective program of medical review of the care of patients in ... intermediate care facilities ... whereby the professional management of each case is reviewed and evaluated at least annually by independent professional review teams.” 42 U.S.C. § 1396b(g)(l)(D) (1982) (Supp. Ill 1985). If an inadequate showing is made, the Secretary may reduce the State’s Medicaid grant by using a statutory formula. 42 U.S.C. § 1396b(g)(5) (1982). Congress attempted to modify this rigid inspection requirement in another part of the statute. An exceptions clause permits the Secretary to find a satisfactory showing if the State makes a good faith inspection effort within certain limits. An adequate showing is made if the State “conducts ” an on-site inspection during a one year period ending on the last date of the calendar quarter in each of not less than 98% of all facilities requiring such inspection and in every facility of 200 or more beds. The statutory exception also requires that “with respect to such ... facilities not inspected within such period, the State has exercised good faith and due diligence in attempting to conduct such inspection, or if the State demonstrates to the satisfaction of the Secretary that it would have made such a showing but for failings of a technical nature only.” 42 U.S.C. § 1396b(g)(4)(B) (1982) (Supp.III 1985). • The statute never addresses the question before the Court today: Whether the State’s failure to review a single patient, when all other patients in a facility are reviewed, constitutes a failure to “conduct ... [an] inspection”? Neither does the statute answer the related question of whether Delaware’s inspection effort falls within one of the statutorily created exceptions. To implement the provisions of the Medicaid statute granting aid to States, the Secretary promulgated regulations defining when the agency’s showing is satisfactory. The regulations track the statutory language, but add two important changes: With respect to all unreviewed facilities, the agency exercised good faith and due diligence by attempting to review those facilities and would have succeeded but for events beyond its control which it could not have reasonably anticipated; or (b) The agency demonstrates that it failed to meet the standard in paragraphs (a)(1) and (2) of this section by the close of the quarter for technical reasons, but met the standard within 30 days after the close of the quarter. Technical reasons are circumstances within the agency’s control. 42 C.F.R. § 456.653 (1986) (emphasis added). Whether the State of Delaware complied with the statute and subsequent regulations is the issue before the Court. B. Delaware Complied With The Statute But Not The Regulations. 1. The Statute The Social Security Act requires that the “professional management of each case is reviewed and evaluated at least annually.” 42 U.S.C. § 1396b(g)(l)(D) (1982). But the exceptions clause of the statute reveals that the review of each case in each hospital is merely a goal, not a requirement. The statute further intimates that the State has made a showing if it “has conducted such an on-site inspection” in 98% of the facilities requiring inspection, and in every facility with 200 or more beds, and that with respect to facilities not inspected, the State has exercised “good faith and due diligence” or if the State demonstrates to the Secretary that the failings were of a technical nature. 42 U,S.C. § 1396b(g)(4)(B) (1982) (Supp. Ill 1985) (emphasis added). Arguably, the State has complied with the statute because it has conducted an on-site inspection in 100% of its facilities. Nowhere does the statute define “on-site inspection” such that every patient in every facility must be inspected. Even assuming that the State has not inspected 2 out of 42 facilities — fewer than the 98% requirement — it appears plain under the statute that the State falls within the good faith and technical failings exception. The State certainly demonstrated “good faith and due diligence” by conducting reviews of every patient in every facility with the exception of four individuals. The Social Security Act, because of its remedial purposes, must be broadly construed to fávor the intended beneficiaries of the Medicaid program. Gartmann v. Secretary U.S. Dept. of Health, 633 F.Supp. 671 (E.D.N.Y.1986). Courts must not “disentitle the old, chronically ill and basically helpless, bewildered and confused people ... from the broad remedy Congress intended for senior citizens.” Ridge ly v. Secretary of Department of Health, Education and Welfare, 345 F.Supp. 983, 993 (D.Md.1972). To the extent that the Board’s opinion finds that Delaware’s inspection program violates the Medicaid statute, the decision was unreasonable. The Board’s opinion was also arbitrary and capricious and will be reversed. 2. The Regulations. Although Delaware complied with the plain language of the statute, the Board correctly determined that the State has not adhered to the Secretary’s regulations. First, the State cannot qualify for the good faith exception because the failure to review four patients -did not demonstrate that the State “would have succeeded but for events beyond its control which it could not have reasonably anticipated — ” 42 C.F.R. § 456.653 (1986). The ability to identify patients within State facilities entitied to Medicaid payments rests entirely within the State’s control. Neither did the State come under the technical failing exception. The regulations require the State to meet the standard, i.e., review the four patients “within 30 days after the close of the quarter.” The reason for not reviewing the patients was technical — the review lists were circumstances within the agency’s control— but the State review was not performed until 30 days past the end of the quarter. 42 C.F.R. § 456.653 (1986). Delaware did not perform the reviews until August 15, 1984. Record at 2, Attachments B, C and D. Therefore, the State was in compliance with the regulation only for the third quarter of 1984, ending September 30, 1984. No penalty can be assessed for the third quarter, and the Grant Appeals Board so held. Board Op. at 20. The federal government is “in the process” of refunding the disallowance for this quarter. Answer to Am.Comp. at 113. Under the regulations, however, the State was not in compliance for the first two quarters of 1984— quarters ending June 30, 1984 and March 31, 1984. Because the State falls into neither the technical failing exception nor the good faith exception for the first two quarters of 1984, Delaware had not “completed review” of 98% of all facilities requiring review. 42 C.F.R. § 456.653 (1986). Since Delaware was not in compliance, the Court must now evaluate the regulations to determine whether they are reasonable interpretations of the Social Security Act. C. The Regulations Are Arbitrary and Capricious 1. “Completed Reviews” Cannot Substitute for “Conducted Reviews” Delaware argues, inter alia, that the regulations prescribed by the Secretary are unduly restrictive and should be struck down as violative of the statute. The State suggests that the Secretary’s regulations substitute the more restrictive term “completed review” for the statute’s term “conducted review.” Opening Brief at 21. The statute does not define what “conducting” a review means. Nor does it stipulate whether “conducting” .a review requires that every patient in every facility be reviewed. The plain meaning of “conducted” is to “have the direction of; manage, carry on.” Webster’s New Collegiate Dictionary 172 (2d ed. 1956). The plain meaning of “completed” is “brought to an end, concluded.” Id. at 169. No matter how an inspection is defined — by facility or by patient — the regulations unreasonably supersede the “conducted” language of the statute with a completion requirement. This attempted revision of the statutory language is not only unreasonable; it is arbitrary and capricious. The regulation must be overturned. 2. The Good Faith Exception The State also argues that the regulations are invalid because the Secretary’s interpretation of the “good faith and due diligence” and of the “technical failings” exceptions are impermissibly more restrictive than those provided in the Social Security Act. The regulations interpret “good faith and due diligence” to mean “circumstances beyond the agency’s control.” 42 C.F.R. § 456.653 (1986). This is an objective standard, requiring the State to prove objectively that because of some factor beyond its control, the State cannot review the facility. But the legislative history explicitly requires a subjective standard. The Conferees agreement on the 1977 Social Security Act Amendments provides that: “If a facility is not reviewed, there will be a reduction in matching unless the Secretary finds there was a good faith attempt to review the institution, and there is no evidence that any institution, or kind or type of institution, is deliberately not reviewed.” H.Rep. No. 95-673, 95th Cong., 1st Sess. 48 (1977), U.S. Code Cong. & Admin. News 1977, pp. 3039, 3122 (emphasis added). By using the term “attempt” and by mandating that facilities are not “deliberately” unreviewed, the legislature plainly directed the Secretary to employ a subjective standard that focuses on the State’s good faith. This interpretation comports with the statutory language that requires a showing that the State “has exercised good faith.” 42 U.S.C. § 1396b(g)(4)(B)(ii) (1982) (Supp. Ill 1985). The cynosure of the statute is on the intentions of the State; the emphasis of the regulations is on proving something other than the State’s intentions. In order for an agency interpretátion to be granted deference, it must be consistent with the congressional purpose. Morton v. Ruiz, 415 U.S. 199, 237, 94 S.Ct. 1055, 1075, 39 L.Ed.2d 270 (1974). If a regulation promulgated under the Social Security Act is more restrictive than the standards provided by federal statute, it is void. Regents of Univ. of Cal. on Behalf of Univ. of Cal. Davis Medical Center v. Heckler, 771 F.2d 1182 (9th Cir.1985). And while a regulation promulgated by the Secretary may be helpful in clarifying the language of the statute, it should not be read to destroy the spirit and intent of the law. Whitman v. Weinberger, 382 F.Supp. 256, 262 (E.D.Va.1974). The “good faith” exception regulation is unreasonably restrictive and conflicts with the language of the statute. Because the language of the regulation directly contradicts Congress’ intent, the regulation must also fail as being arbitrary and capricious. 3. The Technical Failings Exception Delaware also opposes the Secretary’s regulations allowing an exception to the compliance requirement for “technical reasons.” The challenge is to the requirement that the standard be met 30 days after the close of the quarter and that technical reasons are “circumstances within the agency’s control.” While the legislative history is silent as to what constitutes a “technical failing”, it does specify that the exception covered instances where a state had reviewed patients in most facilities on time, with the remaining facility reviewed within several weeks after the end of the quarter. S.Rep. No. 95-453, 95th Cong., 1st Sess. 41 (1977). The 30 days requirement is a reasonable application of “several weeks” as required by the statute and therefore will be upheld. The requirement that technical reasons are “circumstances within an agency’s control” also is a reasonable interpretation of the statutory requirement that the State demonstrate to the satisfaction of the Secretary that it would have made a showing “but for failings of a technical nature only.” 42 U.S.C. § 1396b(g)(4)(B) (1982) (Supp. Ill 1985). To say that technical reasons are reasons within the State’s control is sufficiently broad as to be consistent with the reasonableness approach developed in the legislative history. Many matters will be in the control of the State and, on its face, the regulation would appear to encompass the case at bar where a state failed to inspect a de minimus number of patients due to poor record keeping. D. The Secretary’s Interpretation of the Statute and Regulations, as Upheld by the Grant Appeals Board, was Arbitrary and Capricious The Secretary’s interpretation of the statute and regulations, as upheld by the Grant Appeals Board, is also arbitrary and capricious. The Board’s holding that the Secretary’s completed review requirement, “good faith” exception and “technical failings” exception are valid, is overturned. 1. Completed Review. The Secretary argues, and the Board concurs, that in order to comply with the statute, a State “is required to review every patient in every facility due for review.” Board Op. at 7, Record at 14, p. 6. Neither the language of the statute nor its legislative history supports this draconian interpretation. The statute nowhere requires review of every patient. Rather, it speaks of inspections at “facilities”. 42 U.S.C. § 1396b(g)(4)(B) (1982) (Supp. Ill 1985). . Moreover, the penalties assessed for failing to review a facility are the loss of that facility’s Medicaid funds — not simply the funds of each patient. 42 U.S.C. § 1396b(g)(5) (1982). And even the regulations mirror the language of the statute that speaks of “facilities” rather than each patient. See 42 C.F.R. 456.652 (1986); 42 C.F.R. 456.653 (1986); 42 C.F.R. 456.657 (1986) (assessing a penalty based on the “facility”); 42 C.F.R. 456.653 (1986) (speaks of “unreviewed facilities” and not unreviewed patients). See also Record at 14, p. 7 (defining the technical failing exception in terms of a “facility” approach). The statute does suggest that a State must have an “effective program ... whereby the professional management of each case is reviewed” annually. 42 U.S.C. § 1396b(g)(l)(D) (1982) (Supp. Ill 1985). But having an “effective program” does not impose an absolute requirement that every patient be reviewed. More importantly, the strictures of 42 U.S.C. § 1396b(g)(l)(D) (1982) (Supp. Ill 1985) must be read in conjunction with the exceptions clause, 42 U.S.C. § 1396b(g)(4)(B) (1982). Read simultaneously, the statute plainly does not require that every patient in every facility be reviewed; otherwise, there would be no purpose to a clause that waives penalties even in cases where entire facilities go unreviewed. Nor does the legislative history support the Board's restrictive interpretation. The Medicare-Medicaid Anti-Fraud and Abuse Amendments o