In this case — a dispute about how to count to three — the plaintiffs-appellants are Medicare beneficiaries who appeal from a grant of summary judgment of the United States District Court for the District of Connecticut (Hall, J.). Each of them spent at least three days in the hospital but was discharged less than three days after having been formally admitted, and each sought coverage under Part A of the Medicare program for a post-hospitalization nursing home stay. After their claims for coverage were initially denied, they brought this lawsuit challenging the denial. The district court granted summary judgment for the government, holding that the plaintiffs were not entitled to Medicare reimbursement because they had not spent the requisite amount of time as hospital inpatients. We agree and therefore affirm.
BACKGROUND
“Medicare is the federal government’s health-insurance program for the elderly.”
*103
Conn. Dep’t of Soc. Servs. v. Leavitt,
The entitlements under Part A include an extended care benefit, which provides coverage for “post-hospital extended care services for up to 100 days during any spell of illness.” 42 U.S.C. § 1395d(a)(2). Part A does not cover all extended care services that follow hospital stays, however. Rather, Part A requires that the hospital stay be a “qualifying” hospital stay before it covers the subsequent extended care. Specifically, the statute defines “post-hospital extended care services” to mean “extended care services furnished an individual after transfer from a hospital in which he was an inpatient for not less than 3 consecutive days before his discharge from the hospital in connection with such transfer.”
Id.
§ 1395x(i). In turn, it defines “extended care services” to mean “services furnished to an inpatient of a skilled nursing facility.”
Id.
§ 1395x(h). These services include nursing care, bed and board, physical and occupational therapy, and drugs.
Id.
If post-hospital extended care services are not covered by Part A, they still may be covered by Part B. Part B is a voluntary program, however, and unlike Part A beneficiaries, Part B enrollees must pay a monthly premium.
Matthews v. Leavitt,
Marion Landers, Marion Dixon, and Muriel Grigley, the first of whom is now deceased and is represented here by her estate, were Medicare beneficiaries who each received inpatient hospital care followed by care at a skilled nursing facility, or “SNF” — essentially, a nursing home. See 42 U.S.C. § 1395i-3(a) (defining SNF). Each of them spent three consecutive days in the hospital before moving to the SNF. Yet the Centers for Medicare and Medicaid Services (“CMS”) — the federal agency situated within the Department of Health and Human Services (“HHS”) that administers the Medicare program on behalf of the Secretary of HHS 1 — denied their claims for coverage with respect to their post-hospitalization SNF stays. CMS did so in accordance with its own rules for determining whether a patient is eligible for post-hospital SNF coverage. Accord *104 ing to one such rule, known as the “three-midnight rule,” a patient is eligible for SNF coverage only if he or she has been “hospitalized ... for medically necessary inpatient hospital or inpatient [critical access hospital] care, for at least 3 consecutive calendar days, not counting the date of discharge.” 42 C.F.R. § 409.30(a)(1). And according to another rule, “a patient is considered an inpatient if [he or she is] formally admitted as [an] inpatient.” Ctrs. for Medicare & Medicaid Servs., Publ’n No. 100-02, Medicare Benefit Policy Manual, ch. 1, § 10 (45th rev.2006) [hereinafter Medicare Benefit Policy Manual], available at http://www.cms.hhs.gov/Manuals/ IOMAistasp. Landers, Dixon, and Grigley all spent three — but only three — consecutive midnights in hospitals and then moved to nursing homes, where they received extended care services. But while in the hospital, each of them spent at least one midnight either in the emergency room or on observation status before being formally admitted. Accordingly, CMS determined that, because they had not spent three consecutive midnights hospitalized after having been formally admitted, Part A did not cover their SNF stays.
Landers, Dixon, and Grigley challenged CMS’s interpretation of the qualifying hospital stay requirement in a putative class action. They sought a permanent injunction and a writ of mandamus prohibiting the Secretary from excluding Medicare beneficiaries’ time in the emergency room and on observation status from counting toward the qualifying stay requirement. The district court granted class certification,
Landers v. Leavitt (Landers I),
DISCUSSION
The plaintiffs challenge the district court’s ruling on three grounds. First, they argue that the Medicare statute entitles them to coverage for their post-hospitalization SNF stays. Second, they contend that CMS’s interpretation of the statute violates the equal protection guarantee of the U.S. Constitution. Third, they argue that the district court erred by basing its decision exclusively on the administrative record.
I.
The Medicare statute provides coverage for a post-hospitalization SNF stay for a beneficiary who receives extended care services in an SNF after having been “an inpatient for not less than 3 consecutive days” in a hospital. 42 U.S.C. § 1395x(i). Neither the statute nor any applicable regulation defines “inpatient.” CMS’s policy manual defines an inpatient as a person who has been formally admitted to a hospital. The government urges us to credit the interpretation of the statute that it has set forth in the policy manual. We only consider whether we should defer to the agency’s interpretation of the statute, however, upon finding the statute ambiguous.
Gen. Dynamics Land Sys. v. Cline,
The next question for us is whether the agency’s interpretation of “inpatient” is of the type that is eligible for deference under
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,
A.
“[A]n ‘administrative implementation of a ... statutory provision qualifies for
Chevron
deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.’ ”
Rotimi v. Gonzales,
Most agency interpretations that have qualified for
Chevron
deference are rules that have been promulgated in “regulations issued through notice and comment or adjudication, or in another format authorized by Congress for use in issuing ‘legislative’ rules.”
Cmty. Health Ctr. v. Wilson-Coker,
Although nonlegislative rules are not per se ineligible for
Chevron
deference as a general matter, we are aware of few, if any, instances in which an agency manual, in particular, has been accorded
Chevron
deference.
2
Indeed, we have remarked that
Christensen v. Harris County,
B.
An agency interpretation that does not qualify for
Chevron
deference is still entitled to “respect according to its persuasiveness,”
Mead,
1.
Our analysis of the
Skidmore
factors in this case leads us to conclude that CMS’s interpretation is entitled to a great deal of persuasive weight. First, CMS’s interpretation is longstanding.
See N. Haven Bd. of Educ. v. Bell,
The 3 consecutive days as a hospital inpatient; defined. The 3-consecutive-day hospital inpatient requirement is a period of 3 consecutive calendar days beginning with the calendar day of admission even if less than a 24-hour day, and ending -with the day before the calendar day of discharge. Thus, in determining whether the 3-consecutive-day requirement is met, the day of admission is counted as one day; the day of discharge is not counted as a day; and each intervening day is counted as a single day.
20 C.F.R. § 405.120(c) (1966). 3 CMS’s interpretation thus reflects a position that *108 HHS first adopted more than 40 years ago.
Second, CMS is consistent in its interpretation, employing the same definition elsewhere in its guidance manual and expressly declining to count time on observation status or in the emergency room toward the qualifying stay requirement. See Medicare Benefit Policy Manual, supra, ch. 8, § 20.1. This section of the policy manual also references the 1966 Federal Register publication in which HHS promulgated § 405.120(c), which further bolsters the conclusion that CMS desires to maintain its consistent and long-held position.
The plaintiffs urge us to find the government’s position inconsistent based on the way in which CMS reimburses beneficiaries for their hospital stays. The plaintiffs in this case sought Medicare reimbursement not only for their post-hospitalization SNF stays, but also for the time they spent in hospitals before their SNF stays. The same section of the Medicare statute that provides coverage for post-hospitalization SNF stays also provides coverage for hospital stays, in the latter case for “inpatient hospital services ... for up to 150 days during any spell of illness.” 42 U.S.C. § 1395d(a)(l). Yet the plaintiffs were reimbursed both for the services they received after they were formally admitted — in the government’s view, the only time during which they were inpatients — and for the services they received while in the emergency room and on observation status before being formally admitted. This reimbursement policy, the plaintiffs contend, makes the government’s position with respect to SNF reimbursement unreasonable and inconsistent: if pre-admission emergency room and observation status services are “inpatient hospital services,” why should time spent in the emergency room or on observation status not count as “inpatient” hospital time for the purpose of meeting the qualifying stay requirement?
The difficulty with this argument is that the statute mandates — or at least strongly counsels in favor of making — precisely the distinction that the government has drawn. Part A’s reimbursements for inpatient hospital services are determined by reference to the statutory term “operating costs of inpatient hospital services.” As the statute defines that term, it means operating costs “with respect to inpatient hospital services ..., and includes the costs of all services for which payment may be made under this subchapter that are provided by the hospital ... to the patient during the 3 days ... immediately preceding the date of the patient’s admission if such services are ... related to the admission.” 42 U.S.C. § 1395ww(a)(4) (emphases added). Thus, § 1395ww(a)(4) directs CMS to provide coverage for an inpatient hospital stay and up to three days of related in-hospital services rendered before the patient was admitted to the hospital. The statute does not, however, require or even suggest that the pre-admission days themselves be treated as inpatient days. Indeed, CMS has relied on this aspect of the statute to explain its present position. See Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2006, 70 Fed.Reg. 29,070, 29,100 (May 19, 2005) [hereinafter 2005 Proposed Rules]. Accordingly, regardless of whether we think it sensible as a policy matter for CMS to reimburse pre- *109 admission hospital services as if they were inpatient services but not consider that time to be part of a pre-SNF inpatient stay, the statutory requirement that pre-admission services be reimbursed leads us to find no regulatory inconsistency in CMS’s decision not to count pre-admission hospital time in determining whether a patient has had an SNF qualifying stay.
Third, CMS has recently reconsidered its position on the public record. In 2005, CMS “invite[d] comments on whether [it] should consider the possibility of counting the time spent in observation status toward meeting the SNF benefit’s qualifying 3-day hospital stay requirement.” Id. at 29,099. In inviting these comments, CMS observed that the three-day stay requirement was designed “to target the SNF benefit more effectively at the limited segment of the nursing home population that the benefit was actually designed to cover (that is, those beneficiaries requiring a short-term, fairly intensive stay in a SNF as a continuation of an acute hospital stay of several days).” Id. It observed, further, that the medical practice of placing patients on observation status before formally admitting them has grown in prevalence since Congress enacted the Medicare statute in 1965, that some commentators have suggested that patients on observation status receive qualitatively the same type of care as admitted patients, and that some view it as unfair for Medicare reimbursement decisions to turn on a distinction that they believe to be “a mere recordkeeping convention on the part of the hospital rather than a substantive change in the actual care that the beneficiary receives there.” Id.
Following this invitation, CMS received comments on this precise issue. Many of these comments “expressed support for the idea that hospital time spent in observation status immediately preceding a formal inpatient admission should count toward satisfying the SNF benefit’s statutory qualifying three-day hospital stay requirement.” Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2006, 70 Fed.Reg. 45,026, 45,050 (Aug. 4, 2005). “[S]ome others supported counting the observation time,” but not “time spent in the emergency room.” Id.
Ultimately, however, CMS declined to change its interpretation. With regard to the suggestion that emergency room time count toward the qualifying stay requirement, CMS “d[id] not share the belief ... that time spent in the emergency room is essentially comparable to observation time in this context” because “the mere presence of time spent in the emergency room prior to formal admission would not, in itself, serve to identify the degree of severity of a particular patient’s condition during that time.” Id. With regard to the suggestion that time on observation status count toward the requirement, CMS stated that it was “continuing to review this issue, but [was] not yet ready to make a final determination.” Id. CMS was wary of changing its interpretation, it said, because it did not want to adopt a reimbursement guideline that conflicted with what it viewed as Congress’s “intent in establishing the qualifying hospital stay requirement” — namely, that the SNF benefit “serv[e] as a less expensive alternative to what would otherwise be the final, convalescent portion of an acute care stay of several days as an inpatient at a hospital.” Id. at 45,051.
The preceding exchange shows that CMS opened its policies to public comment, received comments challenging the interpretation at issue in this case, and declined to change its position in light of what it perceives as Congress’s intent in imposing the qualifying stay requirement.
*110
CMS’s statement with respect to observation status may be less than wholly satisfying, but it is not so deficient that it lacks persuasive force. To be sure, we may reject an agency interpretation that merely “mirrors the common understanding” at the time the agency adopted its interpretation but has not been revised to reflect “changing circumstances, particularly in areas characterized by rapid technological development.”
Detsel v. Sullivan,
The plaintiffs urge us to view this public comment opportunity and CMS’s reconsideration of its interpretation as a farce or as otherwise tainted because it was conducted during the pendency of this litigation. We decline to do so. Although we do not defer to agency constructions of statutes asserted as litigating positions,
see Rhodes-Bradford v. Keisler,
Fourth, CMS’s rule is the product of an interpretation that is relatively formal within the universe of informal interpretations. “[T]he deference due” to an agency interpretation “is at the high end of the spectrum of deference” when “the interpretation in question is not merely ad hoc but ... is applicable to all cases.”
Chauffer’s Training Sch., Inc. v. Spellings,
*111 In sum, the Skidmore factors lead us to regard the statutory interpretation set forth in CMS’s policy manual as persuasive.
2.
In view of our Skidmore analysis, we conclude that a Medicare beneficiary is not an inpatient within the meaning of § 1395x(i) unless he or she has been formally admitted to a hospital. We reach this conclusion not only because our decision is informed by CMS’s highly persuasive interpretation, but also because it accords with the statutory text and our governing precedents.
The statutory definition of inpatient hospital services enumerates such services as “bed and board,” 42 U.S.C. § 1395x(b)(l), “nursing services,” id. § 1395x(b)(2), and “other diagnostic or therapeutic items or services,” id. § 1395x(b)(3). The plaintiffs urge us to credit their argument that anyone who receives these services in the hospital is receiving inpatient hospital services and is therefore an inpatient. In light of the statutory text, however, this argument is ultimately question-begging. The statute defines inpatient hospital services to include the aforementioned items and services when they are “furnished to an inpatient of a hospital and ... by the hospital.” Id. § 1395x(b) (emphasis added). Thus, services cannot be inpatient hospital services unless they are furnished to an inpatient. The construction of the statute that the plaintiffs propose would read the words “to an inpatient of a hospital” out of the statutory text. The facts of this case demonstrate, at most, that the services rendered to the plaintiffs would have been inpatient hospital services if the plaintiffs had been inpatients. Unfortunately, that is not enough to entitle the plaintiffs to reimbursement because it still leaves unanswered the essential issue of defining an inpatient.
The conclusion here — that one is an inpatient for the purpose of § 1395x(i) only if one has been formally admitted to a hospital — is also not in tension with our decision in
Levi v. Heckler,
Accordingly, we conclude this portion of our opinion by reiterating our core
*112
holding in this case: in determining whether a Medicare beneficiary has met the statutory three-day hospital stay requirement needed to qualify for post-hospitalization SNF benefits under Part A, the time that the patient spends in the emergency room or on observation status before being formally admitted to the hospital does not count. In so holding, we expressly reject the rule of
Jenkel v. Shalala,
II.
The plaintiffs also challenge the constitutionality of CMS’s rule, arguing that it violates their rights to equal protection under the Fifth Amendment.
See Nicholas v. Tucker,
The plaintiffs concede that CMS’s interpretation does not implicate any suspect classifications and that, therefore, we should apply rational basis scrutiny.
See Furlong v. Shalala,
We conclude that the rule does not violate the Constitution’s guarantee of equal protection. As CMS has noted, Congress intended to create an extended care benefit to serve “as a less expensive alternative to ... the final, convalescent portion of an acute care stay ... at a hospital.” Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2006, 70 Fed.Reg. 29,070, 29,099 (May 19, 2005). CMS rationally could have concluded that a bright line rule measuring inpatient time based on formal admission would simplify claims processing and reduce administration costs, while targeting the program at the group Congress intended to benefit. CMS’s legitimate interest in administrative efficiency is sufficient to uphold this rule against a rational basis challenge.
See Ellis v. Apfel,
*113 III.
Plaintiffs final argument is that the district court erred when it refused to consider evidence outside the administrative record. Judicial review of administrative determinations with respect to Medicare benefits is governed by 42 U.S.C. § 1395ff(b)(l)(A), which incorporates the provisions of 42 U.S.C. § 405(g). According to the latter statute, the district court ordinarily must base its judgment “upon the pleadings and transcript of the record.” 42 U.S.C. § 405(g);
see also Mathews v. Weber,
In support of their motion for summary judgment, the plaintiffs submitted a statement of material facts, several declarations, and interrogatories in which CMS officials explained the policy at issue. The district court granted the government’s motion to strike these extra-record submissions, ruling that because the case presents “a purely legal challenge to the Secretary’s policy,” it “does not require factual determinations with respect to individual plaintiffs that would require resort to evidence outside the administrative record.”
Landers II,
The district court correctly excluded the interrogatories. In the ordinary case, we must uphold or set aside the agency’s action on the grounds that the agency has articulated.
State Farm,
The district court also correctly excluded the plaintiffs’ declarations and statement of material facts. The facts set
*114
forth in these submissions are not material to the plaintiffs’ eligibility for reimbursement because the nature of the medical services rendered to the plaintiffs cannot, by themselves, establish the plaintiffs’ eligibility for SNF coverage.
See Jones v. Sullivan,
CONCLUSION
For the foregoing reasons, we affirm the judgment of the district court.
Notes
. In 1977, HHS — then called the Department of Health, Education, and Welfare — established the Health Care Financing Administration (the "HCFA”), see Reorganization Order, 42 Fed.Reg. 13,262 (Mar. 9, 1977), and vested in it the Secretary's full rulemaking powers under the Medicare statutes, see Statement of Organization, Functions, and Delegations of Authority, 49 Fed.Reg. 35,247, 35,248 (Sept. 6, 1984). The HCFA was renamed the Centers for Medicare and Medicaid Services in 2001. See Centers for Medicare & Medicaid Services; Statement of Organization, Functions and Delegations of Authority; Reorganization Order, 66 Fed.Reg. 35,437 (July 5, 2001).
. Arguing to the contrary, the government points us to the Ninth Circuit's recent decision in
County of Los Angeles v. Leavitt,
. This regulation, although codified, was not subject to the Administrative Procedure Act’s notice-and-comment process because Medicare regulations were not subject to 5 U.S.C. § 553(b)’s requirements until 1971.
Nat'l Med. Enters., Inc. v. Sullivan,