Case No. 17-1484, D.C. Cir.
Preview by Samuel E. Meredith, Senior Online Editor
The litigants in Allina ask the Court to determine “the scope of notice-and-comment rulemaking requirements that the Department of Health and Human Services (HHS) must follow in administering the Medicare Act.” Brief for the Petitioner at 2, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Nov. 13, 2018). The litigation stems from an HHS standard for calculating the amount of benefits to be given to Medicare Part C beneficiaries. The standard was initially introduced in 2004 in connection with formal notice-and-comment proceedings. Some years later, in Allina Health Services v. Sibelius, the standard was vacated because the district court found (and the D.C. Circuit agreed) that the standard “was not a logical outgrowth” of the policy introduced at the beginning of the comment period. 746 F.3d 1102, 1105, 1110–11 (D.C. Cir. 2014).
According to the respondents in this case, HHS responded improperly to the courts’ rulings when it again tried to enact its desired policy, “this time without undertaking any notice and comment.” Brief for Respondents at 1, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Dec. 13, 2018). The respondents argue that this course of action was a violation of 42 U.S.C. § 1395hh(a)(2) and § 1395hh(a)(4). According to the respondents, these provisions impose notice-and-comment requirements for Medicare policy that are stricter than those codified in the Administrative Procedure Act.
HHS, on the other hand, contends that § 1395hh(a)(2) and § 1395hh(a)(4) “did not require notice-and-comment rulemaking.” Brief for the Petitioner at 15, 18, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Nov. 13, 2018). According to HHS, the respondents’ reliance on § 1395hh(a)(2) is misplaced because § 1395hh(a)(2) “does not apply to interpretive rules,” and “[t]he challenged agency action here is, at most, an interpretive rule.” Id. at 16–17. HHS further contends that § 1395hh(a)(4) is inapplicable because “it applies only ‘[i]f the Secretary publishes a final regulation,’” and HHS “did not publish [the disputed standard] as a final regulation.” Id. at 19 (quoting 42 U.S.C. § 1395hh(a)(4)). Moreover, HHS argues, its response to the D.C. Circuit’s 2014 ruling was proper because it was “free to choose between rulemaking and adjudication,” and simply “chose to proceed by adjudication.” Id.