SMITH v. OFFICE OF CIVILIAN HEALTH AND MEDICAL PROGRAM OF UNIFORMED SERVICES (1995)

Erin Colleen Smith brought this action for declaratory and injunctive relief against the Office of Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) and William Perry, in his official capacity as the Secretary of the Defense, challenging the defendants' refusal to pay for certain procedures recommended by Smith's doctors as treatment for her breast cancer.   The district court declared the recommended procedures would be covered by CHAMPUS, held that the defendants had acted arbitrarily and capriciously in concluding otherwise, and entered a permanent injunction enjoining the defendants from denying Smith coverage.   We reverse the district court's judgment and remand for the district court to enter an appropriate order affirming CHAMPUS' initial determination to deny Smith coverage.

I.

At the time of her complaint, Erin Smith was a forty-year-old woman diagnosed with advanced breast cancer.   Because of her poor prognosis and the high risk that her cancer would reoccur following conventional treatment, Smith's doctors recommended immediate treatment involving high-dosage chemotherapy (HDC).   HDC involves administering the same chemotherapeutic agents used in standard chemotherapy but at higher dosages.   While HDC is more effective at killing the cancer, it is also more likely to kill the patient's stem cells, the cells which generate white blood cells, the primary component of the body's immune system.   To prevent this potential damage to the patient's immune system, it is necessary to extract (the technical term is “harvest”) some of the patient's stem cells prior to administering the HDC.   This harvesting process, referred to as autologous stem cell rescue (ASCR), is accomplished by one of two methods:  autologous bone marrow transplant support (ABMT), in which the stem cells are harvested from the patient's bone marrow, and peripheral stem cell rescue (PSCR), in which stem cells are harvested from the patient's blood stream.   Under either method, the harvested stem cells are frozen and stored until after completion of the HDC at which time the stem cells are reintroduced into the patient.

Smith's doctors advised her that her cancer had spread to her local lymph nodes and that HDC coupled with PSCR would provide her with the best chances of survival.   However, neither Smith's doctors nor St. Vincent Hospital in Indianapolis where the treatment was to be provided would commence treatment until they received assurances that Smith had the means to pay for the costs.

Smith, who was married to an Air Force retiree, received her primary health care coverage through CHAMPUS.   CHAMPUS was established by Congress pursuant to the Dependents' Medical Care Act, 10 U.S.C. § 1071 et seq., to provide medical and dental benefits to dependents of present and former members of the military.   CHAMPUS is not an insurance program, under which the insurer guarantees the indemnification of the insured in return for the insured paying a premium.   CHAMPUS beneficiaries pay no premiums.   Rather, CHAMPUS is funded by annual Congressional appropriations.   Another unique feature of CHAMPUS is that it is an “at risk” program.   That is, unlike insurance programs, where beneficiaries usually know before receiving medical care whether it is covered by their policy, CHAMPUS beneficiaries generally receive medical care first and then submit a claim to CHAMPUS which makes an after-the-fact determination as to whether the medical care received was a covered service.   Thus, the beneficiary is “at risk” in the sense that the medical services received may not qualify for payment under CHAMPUS.   These determinations of coverage as well as other day-to-day administrative duties of CHAMPUS have by statute been charged to the Secretary of Defense who has, in turn, delegated these duties to the Director of the Office of CHAMPUS (OCHAMPUS).  32 C.F.R. §§ 199.5, 199.7.

The oncology department at St. Vincent's Hospital, on Smith's behalf, filed a claim with CHAMPUS outlining the particulars of Smith's case and requested a pre-treatment determination by CHAMPUS as to whether the prescribed HDC/PSCR treatment would be covered.   By letter dated August 2, 1994, David S. Bogner, M.D., the medical director of CHAMPUS, issued an initial determination in which he explained that CHAMPUS would not cover the prescribed HDC/PSCR treatment.   In his letter Dr. Bogner explained that under the terms of its policy CHAMPUS does not provide coverage for treatments or procedures that are considered experimental or investigational.   He further explained that whether a treatment or procedure is experimental or investigational is determined by whether it meets the “generally accepted standards of usual professional medical practice in the general medical community.”   This, in turn, is determined by evaluating the outcomes of clinical trials which have been published in the medical literature.   Dr. Bogner informed Smith's doctors that due to the absence of such clinical trials in the medical literature it was his conclusion as the medical director of CHAMPUS that HDC/PSCR did not yet meet the generally accepted standards in the general medical community for the treatment of breast cancer and must therefore be excluded from benefits coverage as experimental or investigational.   In closing, Dr. Bogner invited Smith's doctors to submit documentation to support the position that HDC/PSCR does in fact meet the generally accepted standards of usual professional medical practice for the treatment of breast cancer.   However, Dr. Bogner informed them that “while personal opinions are valued, we must give the greatest weight to well-designed, Phase III, outcome-based studies which have been published in refereed medical journals.”

By letter of September 2, 1994, Smith's attorney filed a request for reconsideration of Dr. Bogner's initial denial of coverage.   Acting on Dr. Bogner's invitation, counsel submitted affidavits of two of Smith's oncologists along with a third familiar with Smith's case, each of whom maintained that HDC/PSCR was generally accepted in the medical community and was not considered experimental for the treatment of breast cancer.   Counsel also submitted two other bases for reconsideration:  an article which posited that most private insurance companies eventually approved coverage for HDC treatment;  and a reference to three recent district court decisions, Gripkey v. Mail Handlers Benefit Plan, No. 3:94-378-0, 1994 WL 276265 (D.S.C. Feb. 14, 1994) (unpublished), Hawkins v. Mail Handlers Benefit Plan, No. 1:94CV6, 1994 WL 214262 (W.D.N.C. Jan. 28, 1994) (unpublished), and Wheeler v. Dynamic Engineering, Inc., 850 F.Supp. 459 (E.D.Va.1994), aff'd, 62 F.3d 634 (4th Cir.1995), two of which involved similar determinations by Dr. Bogner to deny coverage for HDC/PSCR for the treatment of breast cancer (Gripkey and Hawkins ), and all of which had enjoined CHAMPUS from denying coverage for that form of treatment.¹  Counsel did not, however, provide Dr. Bogner with the requested clinical studies published in medical journals indicating that HDC/PSCR was generally accepted in the medical community for the treatment of breast cancer.

By letter of September 14, 1994, Dr. Bogner denied Smith's request for reconsideration.   Dr. Bogner noted counsel's failure to provide him with the requested medical literature upon which CHAMPUS could base a decision to provide coverage for this form of breast cancer treatment.   Given this absence of the requested evidence, and notwithstanding the opinions of the doctors contained in their affidavits, the article or the decisions from the district courts, Dr. Bogner remained of the opinion that HDC/PSCR breast cancer treatment had not yet gained general acceptance in the medical community for the treatment of breast cancer and thus remained experimental and investigational for that purpose.   Hence, Dr. Bogner reaffirmed his initial determination to exclude HDC/PSCR from coverage under CHAMPUS.

 Smith responded by filing a complaint in the district court in which she requested a declaration that HDC/PSCR was covered under CHAMPUS and an injunction prohibiting CHAMPUS from denying her coverage for it.   The Secretary filed a motion for summary judgment on the grounds that the decision to deny coverage was supported by the administrative record and was not arbitrary and capricious.   Following extremely expedited proceedings, the district court denied judgment to the defendants and entered judgment in favor of Smith.   As the principal reason for its ruling, the district court found that CHAMPUS relied on outdated medical studies in making its determination that HDC/PSCR was experimental for the treatment of breast cancer.   The court believed that these outdated studies could not defeat the affidavits submitted by Smith's oncologists stating that HDC/PSCR was generally accepted treatment for breast cancer and was not experimental.   The district court concluded that CHAMPUS' denial of coverage of HDC/PSCR was arbitrary and capricious and accordingly entered an order permanently enjoining the Secretary from denying coverage for Smith's treatment.²  The Secretary appeals the district court's grant of injunctive relief, arguing that the district court erred in its determination that the denial of coverage under CHAMPUS was arbitrary and capricious.³

II.

A. Jurisdiction

 As a threshold matter, we must address whether the district court had jurisdiction to entertain Smith's suit seeking review of CHAMPUS' denial of benefits.   There is no dispute that the denial of benefits under CHAMPUS is an issue arising under federal law and thus comes within the federal question jurisdiction of the district courts under 28 U.S.C. § 1331.   See Cronin v. United States Dept. of Agriculture, 919 F.2d 439, 443 (7th Cir.1990);  State of Ill., Dept. of Public Aid v. Schweiker, 707 F.2d 273, 275 (7th Cir.1983).   Nor does this case present a situation similar to that in Florida Power & Light Co. v. Lorion, 470 U.S. 729, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985), or in Commonwealth Edison Co. v. United States Regulatory Comm'n, 830 F.2d 610, 612 (7th Cir.1987), and Schweiker, supra, in which Congress explicitly placed initial judicial review of one type of agency order in the courts of appeals, but said nothing about judicial review of another type of order from the same agency, leaving courts to grapple with whether Congress intended to locate initial review of the latter in the courts of appeals or the district courts.   Congress nowhere in the CHAMPUS statute provided for initial judicial review in any court.   Thus, initial review of CHAMPUS' decision to deny benefits is in the district courts.   See III Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise § 18.2 at 165 (3d ed. 1994) (“In the absence of a statutory provision to the contrary, 28 U.S.C. § 1331 confers on district courts exclusive jurisdiction to review any reviewable action of a federal agency”).

Rather, the question here is whether the United States has waived its sovereign immunity with respect to the form of relief sought by Smith in the district court.   In 1976, Congress amended Section 702 of the Administrative Procedures Act (APA) to abolish sovereign immunity in actions for “relief other than money damages.”   The pertinent portion of § 702 provides:

An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.   The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States.

5 U.S.C. § 702 (emphasis added).   Although Smith framed her claim as a request for injunctive relief, the ultimate effect would be an order to CHAMPUS to pay for her breast cancer treatment, arguably a judgment for money damages outside the scope of § 702.⁴

 Fortunately the Supreme Court has resolved this question.   Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988), states that the test for determining whether a suit is for money damages and thus outside the waiver of sovereign immunity under § 702 is whether the damages are sought as a substitute for a suffered loss, or an attempt to obtain the very thing to which plaintiff claims he is entitled.   The former is an action for money damages;  the latter, a claim for injunctive relief.  Id. at 895, 108 S.Ct. at 2732.   Using this as our guide, we have no difficulty concluding that this is not suit for “money damages” within the meaning of § 702.   Smith is not seeking damages as a substitute for losses she will suffer if she is denied coverage;  she is seeking payment of the very monies to which she believes she is entitled under CHAMPUS, that is, specific relief.   Consequently, this suit falls within the waiver of sovereign immunity provided in § 702 of the APA.

B. Standard of Review

 However, the absence of any jurisdictional impediments to this suit is only the first step:  we must next determine the appropriate standard of review.   This is governed by the § 706 of the APA, which provides that “[t]he reviewing court shall[ ] ․ hold unlawful and set aside agency action, findings, and conclusions” which fail one of six listed standards, only two of which are pertinent here.   The first applies to agency action taken pursuant to a formal adjudicatory hearing, in which case the reviewing court would examine the agency record to see if the challenged action was supported by “substantial evidence.”  5 U.S.C. § 706(2)(E);  Camp v. Pitts, 411 U.S. 138, 141, 93 S.Ct. 1241, 1243, 36 L.Ed.2d 106 (1973) (per curiam);  Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 414, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971).   So, for example, had CHAMPUS denied Smith benefits based on the results of an optional adjudicatory hearing conducted pursuant to 32 C.F.R. § 199.10(d), review under the “substantial evidence” test would be appropriate.   But Smith never requested a formal hearing;  instead, she submitted her claim for initial hearing and reconsideration, both of which are nonadjudicatory and are not designed to produce a record developed by formal, trial-type proceedings.   That being the case, the appropriate standard of review is whether CHAMPUS' denial of benefits was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”  5 U.S.C. § 706(2)(A);  II Kenneth Culp Davis and Richard J. Pierce, Administrative Law Treatise § 11.4 at 200 (3d ed. 1994).   In making this review, the reviewing court must limit itself to the administrative record at the time the agency acted, not extra-record material produced later in court.  Lorion, 470 U.S. at 743-44, 105 S.Ct. at 1606-07;  Camp, 411 U.S. at 142, 93 S.Ct. at 1244;  Overton Park, 401 U.S. at 420, 91 S.Ct. at 825-26;  National Medical Enterprises, Inc. v. Shalala, 43 F.3d 691, 695 (D.C.Cir.1995);  Osaghae v. United States Immigration and Naturalization Serv., 942 F.2d 1160, 1162 (7th Cir.1991).  “[W]e must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.”  Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866-67, 77 L.Ed.2d 443 (1983) (quotations and citations omitted).   More important, the court must guard against substituting its own judgment for that of the agency.  State Farm, 463 U.S. at 43, 103 S.Ct. at 2867;  Overton Park, 401 U.S. at 416, 91 S.Ct. at 823-24.

 Nothing we have said so far is altered by the fact that the district court resolved this matter on summary judgment.   A motion for summary judgment in a district court reviewing agency action does not serve the same purposes as it does in the usual civil setting.   In civil litigation, summary judgment is a device to eliminate useless trials on undisputed issues of fact.   6 James Wm. Moore, Moore's Federal Practice ¶ 56.15[1.-0] at 56-200 (2d ed. 1995).   If the nonmovant fails to respond to a properly supported motion, this constitutes an admission that the factual issues are undisputed and do not require a trial, which may result in judgment being entered against him.   Compare that to the situation before us.   Here there is no need to eliminate useless trials for no trial will take place in the district court;  if there is a need for further factual development the matter will be remanded to the agency.  Florida Power & Light Co., 470 U.S. at 744, 105 S.Ct. at 1607;  Osaghae, 942 F.2d at 1162.   Moreover, the nonmovant's failure to respond to the motion cannot constitute a factual admission, for all the facts are already contained within the record developed before the agency.   Thus, a review of agency action is well-suited for disposition by summary judgment because it asks the reviewing court to determine an issue of law:  whether the agency's action passes muster under one of the standards of review listed under the APA.   See 6 Moore, supra ¶ 56.17[3] at 56-362.   And since questions of law are the province of the appellate court, we will make our own determination of this issue without deference to the district court.  Chula Vista City Sch. Dist. v. Bennett, 824 F.2d 1573, 1579 (Fed.Cir.1987), cert. denied, 484 U.S. 1042, 108 S.Ct. 774, 98 L.Ed.2d 861 (1988).

C. Analysis

Now to the merits.   There appear to be two issues in this case.   The first is whether CHAMPUS properly interpreted its regulations as requiring publicized results of Phase III clinical trials in order to determine whether HDC/PSCR for the treatment of breast cancer met “accepted professional medical standards,” and thus was no longer “experimental” under the CHAMPUS regulations.   If so, then the second issue is simply whether, employing that interpretation, CHAMPUS' decision to deny benefits for Smith's breast cancer treatment was arbitrary and capricious.

 We first examine the specific language of the pertinent regulations.   The general exclusion of experimental or investigational procedures from CHAMPUS is contained in 32 C.F.R. § 199.4(g)(15), which provides:

(g) Exclusions and limitations.   In addition to any definitions, requirements, conditions, or limitations enumerated and described in other sections of this part, the following specifically are excluded from the Basic Program:

․

(15) Not in accordance with accepted standards, experimental or investigational.   Services and supplies not provided in accordance with accepted professional medical standards;  or related to essentially experimental or investigational procedures or treatment regimens.

32 C.F.R. § 199.4(g)(15).   The term “experimental” is defined as:

Medical care that essentially is investigatory or an unproven procedure or treatment regimen (usually performed under controlled medicolegal conditions) that does not meet the generally accepted standards of the usual professional medical practice in the general medical community.

32 C.F.R. § 199.2.   The regulations do not set forth the criteria for determining whether a treatment or procedure meets “the generally accepted standards of the usual professional medical practice in the medical community.”   CHAMPUS' Policy Manual essentially defines “experimental” the same as § 199.2;  it does not offer any additional criteria for determining whether a procedure has gained the requisite acceptance in the medical community.

In his letters denying benefits initially and upon reconsideration, Dr. Bogner explained that CHAMPUS relies upon the outcomes of Phase III clinical trials published in refereed medical journals in determining whether a treatment is experimental.   Clinical trials evaluate new treatments for cancer patients, and are organized into three phases.   In Phase I the new medical procedure is tried out on human subjects for the first time, the aim being to determine the subject's maximum tolerance for a drug.   In Phase II, therapies which have successfully passed phase I are given to a larger group of individuals to determine if the procedure is efficacious for treatment of the disease.   Phase III involves randomized clinical trials in which some patients receive the experimental treatment and others receive the conventional, nonexperimental treatment;  the responses of the two groups of subjects are documented, analyzed and compared to assess the efficacy of the experimental treatment.   See Fuja v. Benefit Trust Life Ins. Co., 18 F.3d 1405, 1410 (7th Cir.1994).   In his letters Dr. Bogner explained that relying upon the unbiased reporting of the Phase III results provides the most objective basis upon which CHAMPUS could determine whether to extend benefits coverage to new treatments such as HDC/PSCR.

 The district court was of the opinion that CHAMPUS' interpretation of the regulations as requiring publicized results of Phase III trials “find[s] no basis in” the regulations and therefore refused to give it effect.   The district court too quickly cast aside CHAMPUS' interpretation of its own regulations.   Courts “must give substantial deference to an agency's interpretation of its own regulations,” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, ----, 114 S.Ct. 2381, 2386, 129 L.Ed.2d 405 (1994), which means “the agency's interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation.”  Id.  CHAMPUS' interpretation easily passes this test.   The regulations require an experimental treatment or procedure to meet “accepted professional medical standards” before it can be included for coverage under CHAMPUS.   Obviously, some sort of criteria are necessary to determine whether a treatment or procedure passes that test.   CHAMPUS could have provided that whether a procedure is experimental is to be decided on a case-by-case basis, following the agency's review of expert testimony on one side claiming that it is, and the other side's equally qualified expert testimony claiming it isn't.   But CHAMPUS did not adopt such an interpretation.   Instead, CHAMPUS decided that the proper criteria for making this determination should be the publicized results of Phase III trials.   This interpretation of the regulation sets forth an objective and efficient method of making the required determination.   We find nothing erroneous in this interpretation, nor do we find it inconsistent with the regulation.   The district court erred in concluding otherwise.

 Given that, we see no basis in the record for concluding that CHAMPUS' decision to deny benefits was arbitrary and capricious.   In making his initial determination, Dr. Bogner looked to a variety of medical studies to determine if there were any publicized results of Phase III clinical trials regarding the use of HDC/PSCR for breast cancer.   One was a 1988 study from the Office of Health Technology Assessment, entitled “Public Health Service Reassessment:  Autologous Bone Marrow Transplantation.”   Although ABMT and PSCR are distinct procedures, they are similar in that both are techniques to harvest stem cells from the patient before the administration of HDC.   This study concluded by noting the absence of any Phase III clinical trials directly comparing the use of ABMT to other conventional therapies for the treatment of most cancers.   Dr. Bogner also relied on a January, 1990 study from the American Medical Association entitled “Autologous Bone Marrow Transplantation-Reassessment.”   While this study reported that ABMT was viewed as promising for the treatment of various forms of cancer, it concluded that more clinical trials were necessary to reach a consensus on the use of this form of treatment.   The final study was a 1993 publication from ECRI, an independent health technology assessment organization, entitled “Autologous Bone Marrow Transplant and Peripheral Blood Stem Cell Rescue for the Treatment of Breast Cancer.”   While this study did observe that results from Phase I and II clinical trials suggested that HDC/PSCR may be more effective for the treatment of breast cancer than HDC/ABMT, it stated that at present there were no published results from Phase III clinical trials.   In addition to these studies, Dr. Bogner performed a review of the refereed medical literature on this topic and confirmed that, to date, there were no publicized results of Phase III clinical trials regarding the use of HDC/PSCR for breast cancer.   He even requested Smith to have her physicians submit documentation of this type so that CHAMPUS could properly reassess its initial determination that HDC/PSCR had not yet gained general acceptance in the medical community for the treatment of breast cancer.   No such documentation was produced.   Instead, Smith's attorney submitted affidavits from Smith's physicians, each of whom simply asserted that, in his opinion, HDC/PSCR was a generally accepted treatment for breast cancer.   Of course this evidence was not of the type required by CHAMPUS and so the agency had no choice but to affirm its initial denial.   Therefore, far from being arbitrary and capricious, CHAMPUS' decision to deny coverage was the only conclusion it could reach given its criteria and the absence of the requisite evidence.

 In reaching the opposite conclusion, the district court found that Dr. Bogner had relied upon outdated studies for his initial determination that HDC/PSCR for the treatment of breast cancer was experimental and that he was just being stubborn and “arguing that the treatment's status has not changed.”   We find no basis in the record for such a sweeping finding.   To begin with, the district court in its memorandum order failed to explain at what point in time a medical study becomes “outdated.”   But it would have to be a very short time frame, given that the ECRI report stating that there were no publicized results of Phase III trials was only a year old at the time the agency made its decision as to Smith's claim.   The only “rationale” offered by the district court for its conclusion that these studies were dated was that “the status ․ of many medical treatments is constantly in a state of flux.”   While this may be a true statement, it provides no basis to undermine the conclusions of the studies Dr. Bogner relied on in reaching his decision.   To do that required evidence of recent studies reaching opposite conclusions;  and Smith presented no such evidence to Dr. Bogner.   And even if she had, a reasonable disagreement among experts does not allow a reviewing court to conclude that an agency decision was arbitrary and capricious, even if a court finds other views more persuasive than those relied upon by the agency.   See, e.g., Florida Manufactured Housing Ass'n, Inc. v. Cisneros, 53 F.3d 1565, 1572 (11th Cir.1995) (remarking that in the context of rulemaking, “[w]hen the agency is confronted with opposing views among specialists, it must be given the discretion to rely on the reasonable opinions of its own experts, even if a court finds other views more persuasive”);  Franklin Sav. Ass'n v. Director, Office of Thrift Supervision, 934 F.2d 1127, 1144 (11th Cir.1991), cert. denied, 503 U.S. 937, 112 S.Ct. 1475, 117 L.Ed.2d 619 (1992) (observing in the context of reviewing agency action that “[c]onflicting expert opinion, ․, is not sufficient to allow a reviewing court to conclude the agency decision was arbitrary, capricious or an abuse of discretion”).

 Perhaps the district court was influenced by the holding of other district courts which have also concluded that CHAMPUS relied upon outdated and unreliable studies in denying coverage for HDC/PSCR.   See, e.g., Wilson v. Office of Civilian Health and Medical Program of Uniformed Services (CHAMPUS), 866 F.Supp. 903, 907 (E.D.Va.1994);  Gripkey v. Mail Handlers Benefit Plan, No. 3:94-378-0, 1994 WL 276265 *3 (D.S.C. Feb. 14, 1994) (unpublished);  Hawkins v. Mail Handlers Benefit Plan, No. 1:94CV6, 1994 WL 214262 *4-5 (W.D.N.C. Jan. 28, 1994) (unpublished).   Yet these decisions simply offered up the same “state of flux” rationale, which we just concluded provides no basis to undermine the reliability of the studies used by Dr. Bogner.   District court decisions may be looked to as persuasive-although they are not binding precedent, either at the appellate or district court level, Mueller v. Reich, 54 F.3d 438, 441 (7th Cir.1995);  Colby v. J.C. Penney Co., 811 F.2d 1119, 1124 (7th Cir.1987).   Yet these decisions are not even persuasive, because they too failed to provide any rationale for their determination that the medical studies were outdated.   Because we find nothing in the record or the case law which would provide a rational basis for the district court to have cast aside Dr. Bogner's studies, we are left with no other alternative but to say that the district court effectively substituted its own judgment for that of CHAMPUS in reaching its conclusion that the decision to exclude coverage for Smith's treatment was arbitrary and capricious.   Even with such a sympathetic case, that is not the proper role for a reviewing court.

III.

The judgment of the district court is Reversed.   We Remand to the district court to enter an appropriate order affirming CHAMPUS' initial determination denying Smith coverage.

FOOTNOTES

1.   In Wheeler, the plaintiff sought a declaration that her primary insurer, a self-funded plan sponsored by her employer, was obligated to cover her claims for HDC/PSCR breast cancer treatment.   Plaintiff had secondary insurance coverage through CHAMPUS due to her husband's prior military service.  Wheeler, 850 F.Supp. at 461.   Although the district court's order only specifically required plaintiff's primary insurer to cover her claim, the court went on to hold that CHAMPUS was secondarily liable for plaintiff's claim.  Id. at 469.We note that CHAMPUS did not appeal from this ruling, see Wheeler v. Dynamic Engineering, Inc., 62 F.3d at 637 n. 2 (4th Cir.1995), and therefore the issue of CHAMPUS' secondary liability was not before the Fourth Circuit.

2.   Although Smith requested a preliminary injunction, the district court granted her a permanent injunction instead because it believed it could not properly enter a preliminary injunction unless Smith posted a bond, and Smith claimed she was financially unable to post one.   However, the language in Fed.R.Civ.P. 65(c) is sufficiently flexible to permit a district court discretion in setting the amount of the bond, which could include even a nominal amount under appropriate circumstances.   See Coyne-Delany Co., Inc. v. Capital Dev. Bd. of State of Ill., 717 F.2d 385, 391 (7th Cir.1983).

3.   Since the district court's decision, Smith has received the HDC/PSCR treatment and from what the parties told us at oral argument she is alive and no longer undergoing any treatment.   The issue is not moot, however, because CHAMPUS has not paid the hospital for the costs of this procedure.

4.   And seen in that light, Smith's suit would thus fall within the Tucker Act's waiver of sovereign immunity for such suits against the United States.  28 U.S.C. § 1491(a)(1).   However, because Smith's treatment would amount to over $10,000, her claim would be a suit against the United States for more than $10,000, which, pursuant to 28 U.S.C. §§ 1346(a)(2) and 1491(a)(1), is within the exclusive jurisdiction of the United States Claims Court.   If that is so, this suit was filed in the wrong court and we would have to remand with orders to dismiss for lack of jurisdiction.

MANION, Circuit Judge.