The case:
On Monday hospitals won at the Supreme Court. In Azar v. Allina Health Services which is a Medicare case with potentially wider implications for administrative law the justices came to a 7-1 decision. The ruling in this case provides a statutory interpretation analysis saying little about administrative law or Medicare.
The issue…
The question was whether the Department of Health and Human Services (DHHS) was permitted to change a reimbursement formula for hospitals treating low-income patients without notice and comment. This decision according to the government was worth more than $3 billion in this case alone. The DHHS changed in the reimbursement calculation whether Medicare Part C patients should be counted along with Medicare Part A patients.
The DHHS claim was that the APA’s exception for interpretive rules applied to its payment change in the formula. The hospitals assert the APA’s substantive/interpretive divide had nothing to do with this case. Instead they maintain the Medicare Act’s distinctive language differs intentionally from the APA’s exemption. The court agreed with the hospitals.
From the ruling…
From SCOTUSblog https://www.scotusblog.com/2019/06/opinion-analysis-notice-and-comment-under-the-medicare-act-no-big-moves-for-the-apa/#more-286502 The opinion written by Justice Gorsuch determined that the “case hinges on the meaning of a single phrase in the notice-and-comment statute Congress drafted specially for Medicare in 1987,” Justice Gorsuch focused on the language of Medicare Section 1395hh(a)(2). That section requires notice and comment for any “rule, requirement, or other statement of policy” that “establishes or changes a substantive legal standard governing … the payment for services.”
The court’s majority wasted little time deciding the trickiest administrative law question in the case. Opining that “everyone agrees that a policy of counting Part C patients in the Medicare fraction is substantive in this sense, because it affects a hospital’s right to payment,” the court found no need to delve into the intricacies of what “substance” means for purposes of the APA.
In finding the Medicare Act’s exemptions from notice and comment distinct from those of the APA, the majority relied on a textualist tool. That being the presumption that Congress uses words consistently across statutes and, so, when it doesn’t, the court should assume that any deviation is intentional. Here, the court noted that the Medicare Act uses the word “substantive” differently from the APA.
The decision…
The Supreme Court basically stopped there. It avoided making a broader ruling. It considered only the policy change before it. The majority paid relatively little mind to the dissent’s concerns. Instead, it engaged the legislative history the dissent offered but found it “ambiguous at best.” It also concluded that policy concerns have little place when the statutory language is clear.
Bottom line: DHHS did not follow its own administrative rules. Hospitals 7 – DHHS 1. Games, set and match to the hospitals.