GEISINGER COMMUNITY MEDICAL CENTER, Appellant v. SECRETARY UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; Marilyn Tavenner, Administrator, Centers for Medicare and Medicaid Services; Robert G. Eaton, Chairman, Medicare Geographic Classification Review Board.
No. 15-1202.
United States Court of Appeals, Third Circuit.
Argued April 21, 2015. Filed July 23, 2015.
794 F.3d 383
Furthermore, we agree with the District Court that the actions of the principals of Traderz and Fargo were not a superseding cause. Bocchino, 2014 WL 4796425, at *8 (citing Staub v. Proctor Hosp., 562 U.S. 411, 131 S.Ct. 1186, 1192, 179 L.Ed.2d 144 (2011)). A superseding cause is “a later cause of independent origin that was not foreseeable.” Exxon Co., U.S.A. v. Sofec, Inc., 517 U.S. 830, 837, 116 S.Ct. 1813, 135 L.Ed.2d 113 (1996); Bouriez v. Carnegie Mellon Univ., 585 F.3d 765, 771-72 (3d Cir.2009) (quoting Restatement (Second) of Torts § 443). Where an actor‘s conduct is a substantial factor in bringing about harm, an intervening force created by the actor‘s negligent conduct will not suffice to break legal cause. Restatement (Second) of Torts § 443. We find that the collapse of the private placements was neither abnormal nor extraordinary given Bocchino‘s lack of due diligence. Given the woeful state of the entities when Bocchino solicited the investments, we find that the losses were manifestly foreseeable. Moreover, not only has Bocchino failed to challenge any of the factfinding below, we note that nothing in the record indicates that the District Court committed clear error in concluding that the investments were destined for failure.
III. CONCLUSION
For the foregoing reasons, we affirm the District Court‘s order affirming the Bankruptcy Court‘s order of nondischargeability.
Kate L. Mershimer, Esq., D. Brian Simpson, Esq., Office of United States Attorney, Harrisburg, PA, Tara S. Morrissey, Esq., (Argued), Michael S. Raab, Esq., United States Department of Justice, Washington, DC, Counsel for Appellees.
Before: FISHER, CHAGARES and COWEN, Circuit Judges.
OPINION OF THE COURT
FISHER, Circuit Judge.
Hospitals that are disadvantaged by their geographic location may reclassify to a different wage index area for certain Medicare reimbursement purposes by applying for redesignation to the Medicare Geographic Classification Review Board (“Board“). Section 401 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999,
Geisinger Community Medical Center (“Geisinger“), a hospital located in an urban area, received rural designation under Section 401 but was unable to obtain further reclassification by the Board pursuant to the Reclassification Rule. Geisinger sued the Secretary, Sylvia Matthews Burwell; the Administrator of the Centers for Medicare and Medicaid Services (“CMS“), Marilyn Tavenner; and the Chairman of the Board, Robert G. Eaton, in their official capacities (collectively, “Appellees“), challenging the Reclassification Rule as unlawful. The District Court upheld the regulation under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), and granted summary judgment in favor of Appellees. Because we conclude that Section 401 is unambiguous, we will reverse.
I.
A.
The Medicare program provides a system of federally-funded health insurance for eligible elderly and disabled individuals under Title XVII of the Social Security Act,
A hospital‘s wage index is the wage index the Secretary assigns to the specific geographic area where the hospital is located. Hospitals located in rural areas receive a wage index that applies to all rural areas in their state. Hospitals located in urban areas are grouped and treated as a single labor market based on the area, known as the Core Based Statistical Area (“CBSA“), in which they are physically located. Higher wage indices, which reflect higher labor costs in relation to the national average, correspond to higher reimbursement rates. Thus, the wage index is a significant determinant of the way hospitals are reimbursed for inpatient care costs.
IPPS may yield inequitable results where, for instance, a rural hospital‘s lower wage index does not accurately reflect its labor costs because it competes for the same labor pool as hospitals in a nearby but higher wage-index urban area. Thus, in 1987 and 1988, Congress amended the Medicare Act to allow a hospital to seek reclassification from its geographically-based wage index area to a nearby wage index area if it meets certain criteria. See Robert Wood Johnson Univ. Hosp. v. Thompson, 297 F.3d 273, 276 (3d Cir.2002) (explaining the history of the Board reclassification system). And in 1989, because only a limited number of hospitals were reclassified under those laws, Congress established the Board to systematically decide hospitals’ various reclassification requests. See
Under those guidelines, which are generally listed at
In 1999, ten years after the Board was established, Congress enacted Section 401. Section 401 allows hospitals located
42 U.S.C. [§] 1395ww(d)(8) [] is amended by adding at the end the following new subparagraph:(E)(i) For purposes of this subsection, not later than 60 days after the receipt of an application (in a form and manner determined by the Secretary) from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in paragraph (2)(D))1 of the State in which the hospital is located.
(ii) For purposes of clause (i), a subsection (d) hospital described in this clause is a subsection (d) hospital that is located in an urban area (as defined in paragraph (2)(D)) and satisfies any of the following criteria:
(I) The hospital is located in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed.Reg. 6725)).
(II) The hospital is located in an area designated by any law or regulation of such State as a rural area (or is designated by such State as a rural hospital).
(III) The hospital would qualify as a rural, regional, or national referral center under paragraph (5)(C) or as a sole community hospital under paragraph (5)(D) if the hospital were located in a rural area.
(IV) The hospital meets such other criteria as the Secretary may specify.
Hospitals qualifying under this section shall be eligible to qualify for all categories and designations available to rural hospitals, including sole community, Medicare dependent, critical access, and referral centers. Additionally, qualifying hospitals shall be eligible to apply to the Medicare Geographic [Classification] Review Board for geographic reclassification to another area. The Board shall regard such hospitals as rural and as entitled to the exceptions extended to referral centers and sole community hospitals, if such hospitals are so designated.
H.R. Conf. Rep. No. 106-479, 512 (1999).
The Secretary, in implementing Section 401, was concerned that the statute would “create an opportunity for some urban hospitals to take advantage of the [Board] process.” See 65 Fed.Reg. 47,054, 47,087 (Aug. 1, 2000). She was afraid that some hospitals, claiming to be disadvantaged by their urban status, could first be reclassified as rural under Section 401 and thereby “receiv[e] the benefits afforded to rural hospitals,” and then subsequently claim disadvantage from that rural status and “seek reclassification through the [Board]
An urban hospital that has been granted redesignation as rural under
§ 412.103 [the regulation implementing Section 401] cannot receive an additional reclassification by the [Board] based on this acquired rural status for a year in which such redesignation is in effect.
B.
Geisinger is a not-for-profit, general, acute care hospital physically located in the Scranton-Wilkes-Barre-Hazelton, PA CBSA. It applied for designation as a Section 401 hospital and was approved, effective June 11, 2014. It also applied for designation as an RRC and was approved, effective July 1, 2014.2 On August 26, 2014, Geisinger cancelled its Section 401 status, effective October 1, 2015.
On August 28, 2014, Geisinger submitted two applications to the Board to redesignate to a different urban area, effective October 1, 2015: (1) on the basis of its Section 401 status, a primary application as a rural hospital to reclassify to the Allentown-Bethlehem-Easton, PA-NJ CBSA (“Allentown CBSA“); and (2) on the basis of its cancelled Section 401 status, effective October 1, 2015, a secondary application as an urban hospital to reclassify to the East Stroudsburg, PA CBSA (“East Stroudsburg CBSA“), which would be considered only if the former was denied. Geisinger estimates that reclassification to the Allentown CBSA would increase its reimbursement payments by approximately $2.6 million per year and to the East Stroudsburg CBSA by approximately $1.3 million per year.
The 27-mile distance between Geisinger and the Allentown CBSA fails to meet the proximity requirement under the Secretary‘s rules for hospitals located in urban areas, but it meets the more relaxed criteria for hospitals located in rural areas. See
C.
On September 10, 2014, while its applications were pending before the Board, Geisinger filed a complaint in the U.S. District Court for the Middle District of Pennsylvania. Count I alleged that the Reclassification Rule violates Section 401.
The parties filed cross-motions for summary judgment and the District Court granted Appellees’ motion on December 22, 2014. See Geisinger Cmty. Med. Ctr. v. Burwell, 73 F.Supp.3d 507 (M.D.Pa. Dec. 22, 2014). The District Court first explained that it had subject matter jurisdiction because Geisinger challenged the legality of the Reclassification Rule itself and not the agency‘s decisions on its applications, over which the Medicare Act precludes judicial review. See
On February 23, 2015, the Board did not treat Geisinger as located in the rural area of Pennsylvania and denied Geisinger‘s primary application for reclassification to the Allentown CBSA. It approved Geisinger‘s secondary application for reclassification to the East Stroudsburg CBSA on the basis that Geisinger had cancelled its Section 401 status. Reinforcing the application of the Reclassification Rule, the Administrator of CMS affirmed the Board‘s decision on June 1, 2015.4
II.
The District Court exercised jurisdiction under
The Court reviews the District Court‘s grant of summary judgment de novo. Montone v. City of Jersey City, 709 F.3d 181, 189 (3d Cir.2013). Under the APA, a reviewing court may “hold unlawful or set aside agency action, findings, and conclusions” that are found to be, inter alia, “not in accordance with law.”
III.
Because this case concerns a challenge to an agency‘s construction of a statute, we use the familiar two-step analysis set forth in Chevron. “First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842-43. We proceed to Step Two “if the statute is silent or ambiguous with respect to the specific issue.” Id. at 843. Then, “the question for the court is whether the agency‘s answer is based on a permissible construction of the statute,” and the regulation must be given deference unless it is “arbitrary, capricious, or manifestly contrary to the statute.” Id. at 843, 844.
The “precise question at issue” here is whether the Secretary is required to treat hospitals with Section 401 status like hospitals physically located in rural areas for purposes of Board reclassification. Id. at 842. Based on the plain language of the statute, we conclude that Congress has unambiguously expressed its intent that the Secretary shall do so. Because Congress‘s intent is clear, we complete our analysis at Step One and do not proceed to Step Two to determine whether the Reclassification Rule is a permissible construction of Section 401.
A.
To determine whether a statute is unambiguous under Step One, “court[s] should always turn first to one, cardinal canon before all others[:] We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there.” Conn. Nat‘l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992). That is, because we presume Congress expresses its intent through the ordinary meaning of the words it uses, an exercise of statutory interpretation must begin by examining the plain and literal language of the statute. See United States v. Geiser, 527 F.3d 288, 294 (3d Cir.2008). And “[w]here the statutory language is plain and unambiguous, further inquiry is not required.” Rosenberg v. XM Ventures, 274 F.3d 137, 141 (3d Cir.2001); In re Price v. Del. State Police, Fed. Credit Union, 370 F.3d 362, 368 (3d Cir.2004) (“We are to begin with the text of a provision and, if its meaning is clear, end there.“).
While we also read the language in its broader context of the statute as a whole, see id. at 369-70, this Court made clear in United States v. Geiser that “legislative history should not be considered at Chevron [S]tep [O]ne,” 527 F.3d at 294; In re Phila. Newspapers, LLC, 599 F.3d 298, 304 (3d Cir.2010) (“Where the statutory language is unambiguous, the court should not consider statutory purpose or legislative history.“). Following the Court‘s established precedent on this matter, we will not consider legislative history in our Step One analysis.5
1.
Geisinger‘s first argument relates to Section 401‘s opening clause, “[f]or purposes of this subsection.”
One of our “most basic interpretive canons” is that “[a] statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S. 303, 314, 129 S.Ct. 1558, 173 L.Ed.2d 443 (2009) (alteration in original) (internal quotation marks omitted); see also Rosenberg, 274 F.3d at 142 (“[T]he preferred construction of a statute and its regulations is one that gives meaning to all provisions.“). Here, Congress must have intended that Section 401 apply comprehensively over subsection (d), including subsection (d)(10), because the language “[f]or purposes of this subsection” would not have any purpose or meaning if it did not.
Appellees counter that because Section 401 is not applicable to every paragraph within subsection (d), whether Section 401 must apply to the Board reclassification process is ambiguous. For instance, the command that a hospital shall be treated as rural is not applicable to subsection (d)(6), which requires the Secretary to make certain publications in the Federal Register,
But this does not contravene Congress‘s intent demonstrated by using the clause
The District Court disagreed with this construction, concluding that “the statute does not discuss the Board reclassification process at all, nor does it discuss the intersection of redesignation and geographic reclassification under the Medicare Act.” Geisinger, 73 F.Supp.3d at 516; see also Appellees’ Br. at 23 (arguing that Section 401 is “silent” with regard to Board reclassification). Appellees further contend that if Congress had intended that subsection (d) hospitals be able “to take advantage of both reclassification procedures almost simultaneously, piling exception on top of exception,” then it would have done so more clearly. Appellees’ Br. at 25.
In other words, the District Court and Appellees read ambiguity into the statute because of what it does not say, rather than read it for what it plainly says. To be sure, Congress did not explicitly provide that Section 401 applies to subsection (d)(10). But it did explicitly provide that Section 401 applies for purposes of subsection (d), which covers subsection (d)(10) and had covered it for ten years before Section 401 was amended. To comprehensively amend subsection (d)--which contains dozens of paragraphs and subparagraphs concerning inpatient reimbursement, many of which involve a hospital‘s rural or urban status—rather than each provision within it, Congress necessarily used broad language. Still, “[a]s a general matter of statutory construction, a term in a statute is not ambiguous merely because it is broad in scope.” See In re Phila. Newspapers, 599 F.3d at 310; see also Diamond v. Chakrabarty, 447 U.S. 303, 315, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980) (“Broad general language is not necessarily ambiguous when congressional objectives require broad terms.“). If the phrase was not intended to cover subsection (d)(10), contrary to the literal reading of the text, then Congress would have noted which paragraphs of subsection (d) were specifically excluded or included. It did not. And despite Appellees’ attempt to infer intent against layering the two reclassification processes, the Court cannot ignore the plain language of the statute. “Our task is to apply the text, not to improve upon it.” Pavelic & LeFlore v. Marvel Entm‘t Grp., 493 U.S. 120, 126, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989).
2.
Next, Geisinger points to the portion of the text mandating that hospitals with Sec-
Appellees argue, however, that Geisinger‘s interpretation is permissible under the plain language of the statute, but it is not compelled. Another interpretation of Section 401, they reason, is that the Secretary must treat Section 401 hospitals as rural for all inpatient reimbursement purposes and, therefore, must not reclassify those hospitals as urban under the Board reclassification process.
To be sure, “[a] provision is ambiguous only where the disputed language is reasonably susceptible of different interpretations.” In re Phila. Newspapers, 599 F.3d at 304 (internal quotation marks omitted). “But just because a particular provision may be, by itself, susceptible to differing constructions does not mean that the provision is therefore ambiguous.... Rather, a provision is ambiguous when, despite a studied examination of the statutory context, the natural reading of a provision remains elusive.” In re Price, 370 F.3d at 369. Here, the natural reading of Section 401 and the statutory scheme reinforces Geisinger‘s view.
Section 401 does not say that we cannot reclassify the Section 401 hospital as urban. It says we must treat the Section 401 hospital as rural for purposes of subsection (d), including subsection (d)(10). This means that Section 401 hospitals must be able to participate in the Board reclassification process and seek redesignation from their current location to another location for purposes of receiving a new standardized rate or wage index. To this end, Section 401 mandates that hospitals with Section 401 status be treated as rural, which has well-settled meaning and implications under the Medicare Act. See supra Part I.A. Thus, hospitals with Section 401 status should apply as being located in the rural area of their state and be evaluated by the Board under the more relaxed standards regularly applied to rural hospitals. Considering this “broader, contextual view” together with the text, In re Price, 370 F.3d at 369, we find the statute unambiguous. Appellees’ view that Section 401 hospitals cannot be reclassified as urban would, in effect, prohibit hospitals with Section 401 status from reclassifying under subsection (d)(10), contrary to the plain and natural reading of the statute.
3.
Third, and finally, Geisinger focuses on Section 401‘s command that “the Secretary shall treat” hospitals with Section 401 status as rural.
Appellees do not dispute that Section 401 uses mandatory language, nor do we. Appellees argue, rather, that because Congress granted the Secretary authority to promulgate guidelines for the Board reclassification process, see
But this authority was granted in subsection (d)(10), which, again, covers the Board reclassification process. While the Secretary is unquestionably authorized to issue guidelines regarding Board reclassification, e.g., to design the proximity standards for urban versus rural hospitals, it does not follow that the Secretary is authorized to disregard the plain language of Section 401. Rather, Section 401‘s mandate that the Secretary shall treat Section 401 hospitals as rural without adding any discretionary language as Congress used in subsection (d)(10) and elsewhere in Section 401 itself, see
B.
Section 401 refers to subsection (d) in its entirety, which includes the Board reclassification process; requires the Secretary to treat Section 401 status hospitals as rural, which has a singular definition and well-settled implications under the Medicare Act; and uses mandatory language (“shall“). Altogether, we read Section 401 to reflect Congress‘s unambiguous intent on the “precise question at issue,” Chevron, 467 U.S. at 842: for subsection (d) purposes, including administering Board applications for wage index reclassification, the Secretary shall treat Section 401 hospitals as located in the rural area of the state. Because Congress‘s intent is clear, we end our inquiry here and do not reach Chevron Step Two. See id. at 843 n. 9 (“If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.“).
IV.
Congress has unambiguously expressed its intent that the Secretary shall treat Section 401 hospitals as rural for Board reclassification purposes. See
The majority offers a well-reasoned reading of Section 401. In fact, the majority may even offer the most persuasive interpretation of this statutory provision. However, it is not this Court‘s job to adopt what it believes to be the best reading of the statute. Instead, we must “use the familiar two-step analysis set forth in Chevron.” (Majority Opinion at 12.) Under this doctrine, we must first decide whether or not “Congress has directly spoken to the precise question at issue.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). If we conclude that the statute is silent or ambiguous with respect to the specific question at issue, the Court must then consider whether the agency‘s approach is based on a permissible construction of the statute. See, e.g., id. at 843. ”Chevron deference is premised on the idea that where Congress has left a gap or ambiguity in a statute within an agency‘s jurisdiction, that agency has the power to fill or clarify the relevant provisions.” Santomenno ex rel. John Hancock Trust v. John Hancock Life Ins. Co. (U.S.A.), 768 F.3d 284, 299 (3d Cir.2014) (quoting Core Commnc‘ns, Inc. v. Verizon Pa. Inc., 493 F.3d 333, 343 (3d Cir.2007)), cert. denied, U.S., 135 S.Ct. 1860, 191 L.Ed.2d 726 (2015). Accordingly, the Court must leave undisturbed “a reasonable accommodation of conflicting policies that were committed to the agency‘s care by the statute ... unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned.” Chevron, 467 U.S. at 845 (citation omitted). We must defer to an agency‘s reasonable construction of a statute—“whether or not it is the only possible interpretation or even the one a court might think best.” Holder v. Martinez Gutierrez, 566 U.S. 583, 132 S.Ct. 2011, 2017, 182 L.Ed.2d 922 (2012) (citing Chevron, 467 U.S. at 843-44 & n. 11). Because I believe that Section 401 is ambiguous and that the Reclassification Rule constitutes a permissible interpretation of this statutory provision, I must respectfully dissent.
“Section 401 refers to subsection (d) in its entirety” (which includes subsection (d)(10)), expressly requires the Secretary to treat a Section 401 hospital as being located in the rural area (as defined in subsection (d)(2)(D)) of the State in which the hospital is located, and, in the process, “uses mandatory language” (i.e., provides that the Secretary “shall” treat the hospital as being located in a rural area). (Id. at 21.) Even if Section 401 unambiguously requires that a Section 401 hospital be treated as though it were a hospital located in a rural area for purposes of subsection (d)(10), it does not follow that this statutory provision unambiguously requires the Secretary and the Board to consider applications filed by Section 401 hospitals under the same exact criteria the Secretary adopted to govern reclassification applications filed by hospitals physically located in rural areas.
I agree with the District Court (as well as the United States District Court for the District of Connecticut) that Section 401 is silent as to whether hospitals reclassified as rural under Section 401 must be considered eligible for Board reclassification pursuant to subsection (d)(10).1 See Lawrence & Mem‘l Hosp. v. Burwell, No. 3:13cv1495 (JBA), 2014 WL 7338859, at *6 (D.Conn. Dec. 22, 2014); Geisinger Cmty. Med. Ctr. v. Burwell, 73 F.Supp.3d 507, 515-16 (M.D.Pa. 2014); Lawrence & Mem‘l Hosp. v. Sebelius, 986 F.Supp.2d 124, 135 (D.Conn.2013). Section 401 does not expressly address the specific criteria that must be satisfied in order to obtain Board reclassification. Even though it contains mandatory language, this statutory provision does not expressly direct the Secretary or the Board to treat Section 401 hospitals exactly the same as hospitals physically located in rural areas as part of the Board reclassification process. In fact, the provision does not address the Board reclassification process at all—nor does it take into account the intersection or relationship between Board reclassification under subsection (d)(10), on the one hand, and Section 401 reclassification, on the other hand.
According to the majority, the District Court and Appellees have read ambiguity into the statute based on what it does not say, as opposed to what it plainly says. However, “what it does not say” (id. at 17) is of special significance here given Congress‘s creation of two reclassification mechanisms. Both Section 401 and subsection (d)(10) effectively serve as exceptions to the general principle that a hospital‘s reimbursement is tied to its physical
Most of the substantive standards or criteria that the Board uses to dispose of reclassification applications are set forth in the Secretary‘s own regulations. Congress did expressly direct the Secretary to include guidelines for, inter alia, “comparing wages” in the area in which the hospital is classified and the area in which the hospital is applying to be classified.
The majority appears to suggest that this delegation of authority is entitled to little, if any weight, in the current inquiry because it was set forth in subsection (d)(10)—and not Section 401. According to the majority, “Section 401‘s mandate that the Secretary shall treat Section 401 hospitals as rural without adding any discretionary language as Congress used in subsection (d)(10) and elsewhere in Section 401 itself lends itself to the opposite conclusion [that the Secretary is not ‘authorized to disregard the plain language of Section 401‘].” (Id. at 20-21 (citations omitted).) As the majority recognized, we nevertheless must read the language of a statutory provision in its broader context. See, e.g., FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000).
Section 401 itself purportedly amends subsection (d)(10) (which was enacted ten years earlier). It is this subsection (and not Section 401) that establishes the Board and grants the Secretary the power to develop guidelines for the Board. It is reasonable to conclude that Congress believed there was no need to add additional language expressly granting the Secretary power to adopt regulations regarding the eligibility of Section 401 hospitals for Board reclassification (and the criteria to be used in assessing their applications for Board reclassification) because Congress had already delegated to the Secretary broad discretionary authority over the entire Board reclassification process. In subsection (d)(10)(D)(iii), Congress expressly prohibited the Secretary from adopting any guideline allowing the Board to reject an application filed by a hospital that has at any time been classified as an RRC on the basis of a comparison of its AHW to the AHW of hospitals in the area in which it is located. Congress similarly could have amended subsection (d)(10) to add, for instance, language directing the Secretary to publish a guideline requiring the Board to consider applications filed by Section 401 hospitals under the same exact criteria that govern reclassification applications filed by hospitals physically located in rural areas. It did not do so, and I find that this fact strongly weighs against the majority‘s conclusion that Congress unambiguously expressed its intent that the Secretary shall treat Section 401 hospitals as rural for Board reclassification purposes. (Cf., e.g., id. at 20-21 (“‘[W]here Congress includes particular language in one section of a statute but omits it from another, it is generally presumed that Congress acts intentionally and purposefully in the disparate inclusion or exclusion.’ Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983)
Because I conclude that Congress has not “directly spoken to the precise question at issue” in this case, Chevron, 467 U.S. at 842-43, I must consider whether the Reclassification Rule constitutes a permissible construction of Section 401. Given the statutory ambiguity, it was the Secretary‘s task—exercising the broad discretionary authority granted under subsection (d)(10)—to attempt to fill the gap that exists between two reclassification mechanisms. See, e.g., Santomenno, 768 F.3d at 299. It is then our obligation to decide whether this “interpretation is reasonable in light of the language, policies, and legislative history” of Section 401 and the statutory scheme as a whole. United States v. McGee, 763 F.3d 304, 315 (3d Cir.2014) (quoting GenOn REMA, LLC v. EPA, 722 F.3d 513, 522 (3d Cir.2013)), cert. denied, U.S., 135 S.Ct. 1402, 191 L.Ed.2d 361 (2015). In light of the fact that Chevron deference is especially appropriate in the Medicare context, see, e.g., Robert Wood Johnson, 297 F.3d at 282, I believe that the Reclassification Rule satisfies Chevron Step Two.
As the District Court aptly pointed out in its ruling, “[i]t cannot be said that the Secretary‘s regulation, which was promulgated to avoid permitting a hospital to be treated as rural for some purposes and as urban for others allowing the hospital to receive inappropriate reimbursements, was unreasonable, even if the plaintiff can point to other reasonable policy choices.” Geisinger, 73 F.Supp.3d at 518. In the respective preambles to the proposed and final rules implementing Section 401, the Secretary addressed the statutory language, identified her primary concern about this legislation (e.g., that hospitals physically located in urban areas might try to take advantage of Section 401 by obtaining reclassification under this statutory provision and the various benefits accorded to rural hospitals and then seek reclassification under subsection (d)(10) back to urban areas for standardized amount and wage index purposes), explained why such a result would be inappropriate, and considered but rejected alternative approaches. Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems & Fiscal Year 2001 Rates, 65 Fed.Reg. 47,054, 47,087-89 (Aug. 1, 2000); Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems & Fiscal Year 2001 Rates, 65 Fed.Reg. 26,282, 26,308 (May 5, 2000); see also, e.g., Lawrence & Mem‘l Hosp., 2014 WL 7338859, at *8 (“[T]he record shows that the Secretary‘s decision was deliberate, logical, and considered.“). She expressly addressed the Conference Report accompanying Section 401. 65 Fed.Reg. at 47,087-89; 65 Fed.Reg. at 26,308. By stating that the Section 401 hospitals shall be eligible for Board reclassification and that “[t]he Board shall regard such hospitals as rural,” the report does weigh in favor of Geisinger‘s reading of this statutory provision. H.R. Conf. Rep. No. 106-479, 512 (1999). However, this report (which did not mention subsection (d)(10)‘s delegation of authority to the Secretary and did not expressly consider the potential problems that could arise from the existence of two distinct reclassification mechanisms) is insufficient to establish that Congress would never have sanctioned the Secretary‘s Reclassification Rule. See, e.g., Chevron, 467 U.S. at 845. In the end, the Secretary appropriately exercised the power she was granted by Congress so as to reconcile the distinct reclassification mechanisms created by Congress.
For the foregoing reasons, I would affirm the order of the District Court grant-