Azar v. Allina Health Services (17-1484)
argument 17-1484Azar v. Allina Health Services
Supreme Court of the United States
55 min
4 speakers
8 chapters
transcribed 7 days ago
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Does Section 1395 HH require notice‑and‑comment rulemaking for agency calculations?
We'll hear argument next in case seventeen fourteen eighty four. uh ASAR versus Alina Health Services.
Mr
Niegler.
Mr. Chief Justice, and may it please the Court, Section thirteen ninety-five HH did not require CMS to go through notice incumbent rulemaking before it could furnish its calculation of one component of a hospital's reimbursement to the contractors that perform the initial determination of reimbursement for the agency. That calculation was not binding on the agency. the courts or respondents and it could be challenged on administrative appeal, as in fact respondents did here.
I have a a sort of problem with this and and I know you say that. But I don't know how you take this outside of being a policy. meaning it's applying to every single provider. uniformly. I don't know the basis that you could have an individual adjudication And what would happen? The board would look at it and say we're not going to listen Even though we're required to listen. to the agency's position. We're going to tell them they're wrong. If one case tells you the agency is wrong, does that case then become the new policy? Or or are you I I am a little lost as to how this is not a p agency policy. A statement of policy.
Several points, Justice Sudomer. The first is that we are relying on the operative language in thirteen ninety five H H, whether it's called a w whether the issuance is called a policy or a requirement or whatever the agency calls it, it is only re it only triggers notice and comment rulemaking if it establishes or changes a substantive legal standard. And that is the Well that's what I'm
uh that's what I'm having a problem with. It's every single provider. is going to be given A fraction. that incorporates your policy And that binds what they are going to get. Because they have to use that fraction in the claims they made against you.
It it only governs what the contractor does. The contractor is just like an agency employee making determinations on behalf of the agency at the first step. From you,
from the contractor, from the agency, they're only going to get the fraction as you told the contractor to calculate it.
Only if they don't appeal. And and uh as as we point out
I just don't understand what difference it means it it means I mean, even a regulation Or a rule. um may have legal meaning. only until it's accepted. But even a rule can be challenged later on appeal. The grounds for that challenge might be different. But I can go into court and say it's ultra virus. I can go into court and say Um it's not supported by the statute. It's not binding. in in any meaningful way other than that's what the agency's going to do.
Well i if if I if I may, in in our view, thirteen ninety five H H codifies for the Medicare program uh what this court referred to in Chrysler Corporation as the central distinction in the APA uh between substantive and interpretive rules. And this court in Chrysler
adds something is not just rule regulation, it's statement of policy. And it seems to suggest to me that there are some interpretive rules that are encompassed by that. Now which ones is the open question. But it does seem to suggest that it's broader than the APA ever was. Because the APA only talks about rules.
Well but um Again, several point several points about that. This court's decision in Guernsey Memorial Hospital, which described the general APA standards, distinguished between substantive rules and interpretive rules, and the interpretive rule there was something in the provider reimbursement manual, which just as here bound the contractor, but could be changed or could be challenged and set aside on appeal.
What did Congress just say? This is like the APA. Why does it change the language at all? Well, I have to give m some meaning different than the APA. To conquer this express choice. of a different articulation of the standard.
Well, uh first of all, when when Congress first uh enacted the uh provisions or amended the provisions and the rulemaking in nineteen eighty-six, it it said certain regulation regulations have to go through notice and comment.
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Chapters
8 chapters
1
Does Section 1395 HH require notice‑and‑comment rulemaking for agency calculations?
0:00–6:14
2
Is a CMS statement of policy legally binding or merely interpretive?
6:14–12:32
3
How does the Supreme Court distinguish substantive from interpretive rules under the APA?
12:32–20:23
4
What did the 1986 and 1987 amendments change about notice‑and‑comment requirements?
20:23–27:36
5
Are the Medicare fraction calculations issued by CMS binding on hospitals?
27:36–34:26
6
Do provider‑reimbursement manuals trigger notice‑and‑comment under the statute?
34:26–40:23
7
Can the agency use adjudication instead of rulemaking to change Medicare policy?
40:23–46:34
8
What is the Court’s likely ruling on the statutory interpretation of Section A2?
46:34–55:22