The Freedom of Information Act and Medicare costs reports

Health care providers must submit cost reports to the Department of Health and Human Services or its designated intermediary before they can be reimbursed for their services by the Medicare system. These reports closely detail the financial operations of the provider. Whenever third parties have requested copies of the cost reports pursuant to the Freedom of Information Act and the Department of Health, Education and Welfare (now HHS) has declared its intention to comply with the request, the providers have sued to enjoin disclosure. This Note evaluates whether the cost reports are confidential and therefore exempt from mandatory disclosure under Exemption 4 of the Freedom of Information Act. It concludes that they should not be exempt, but that even if they are, disclosure is mandated by a validly promulgated HEW regulation. This regulation was enacted in compliance with the Administrative Procedure Act, and should not be considered on abuse of the HEW Secretary's discretion.