Term: 2018
Docket: 17-1484
Azar v. Allina Health Services
- Pro
17-1484 AZAR, SECRETARY OF HEALTH & HUMAN SERVICES V. ALLINA HEALTH SERVICES DECISION BELOW: 863 F.3d 937 LIMITED TO THE FOLLOWING QUESTION: WHETHER 42 U.S.C. §1395hh(a)(2) or §1395hh(a)(4) REQUIRED THE DEPARTMENT OF HEALTH AND HUMAN SERVICES TO CONDUCT NOTICE-AND-COMMENT RULEMAKING BEFORE PROVIDING THE CHALLENGED INSTRUCTIONS TO A MEDICARE ADMINISTRATOR CONTRACTOR MAKING INITIAL DETERMINATIONS OF PAYMENTS DUE UNDER MEDICARE. JUSTICE KAVANAUGH IS RECUSED IN THIS CASE. CERT. GRANTED 9/27/2018 QUESTION PRESENTED: The Department of Health and Human Services (HHS) must utilize notice-and-comment rulemaking to promulgate rules, requirements, or statements of policy that "establish[] or change[]" a "substantive legal standard" governing payment for services under the Medicare Act, 42 U.S.C. 1395hh(a)(2). See 42 U.S.C. 1395hh(b)(l). The question presented is: Whether Section 1395hh(a)(2) requires HHS to conduct notice-and-comment rulemaking before providing instructions to a Medicare Administrative Contractor that makes initial determinations of payments due under Medicare, when those instructions rest on a non-- legally-binding administrative interpretation of a relevant statutory provision. LOWER COURT CASE NUMBER: 16-5255
In the case of Azar v. Allina Health Services, healthcare providers challenged a method used by the Department of Health and Human Services (HHS) to calculate Medicare payments. The HHS included Part C patients in its calculation without undergoing notice-and-comment rulemaking procedures, which was contested by hospitals as they argued it led to lower reimbursements. The Supreme Court ruled in favor of the healthcare providers stating that HHS violated the Medicare Act's requirement for public notice and comment before changing substantive legal standards governing Medicare benefits. This decision affirmed that changes affecting substantial rights or interests could not be implemented without providing stakeholders an opportunity for input.
In the dissenting opinion for Azar v. Allina Health Services, Justice Stephen Breyer argued that the majority's decision was based on a misinterpretation of the Medicare Act and could have significant implications for future administrative rulemaking. He contended that not all changes to substantive legal standards should be subject to notice-and-comment procedures, especially when they are part of an interpretive rule or policy statement rather than a legislative rule. According to him, such requirements would unnecessarily burden agencies with procedural formalities and hinder their ability to provide guidance on complex regulatory schemes like Medicare. Furthermore, he disagreed with the majority's view about what constitutes a "substantive legal standard" under Section 1395hh(a)(2) of the Act and suggested that it should only refer to rules having force of law instead of including calculations related to payments as well.
