American Hospital Association v. Otis R. Bowen, Secretary, H.H.S.

Opinion for the Court filed by Chief Judge WALD.

Opinion concurring in part and dissenting in part filed by Circuit Judge MIKVA.

*1041WALD, Chief Judge:

We face here the issue of whether the Department of Health and Human Services (“HHS”), in implementing the system of “peer review” of Medicare outlays called for by Congress in its 1982 amendments to the Medicare Act, erred in not first undertaking the notice and comment rulemaking generally prescribed by the Administrative Procedure Act (“APA”), 5 U.S.C. § 533. Because we conclude that the directives issued and contracts entered into by HHS…