Azar v. Allina Health Services

Summary

Because the Department of Health and Human Services neglected its statutory notice-and-comment obligations when it revealed a new policy that dramatically—and retroactively—reduced Medicare payments to hospitals serving low-income patients, its policy must be vacated.

Text

(Slip Opinion) OCTOBER TERM, 2018 1 
 
Syllabus 
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is 
being done in connection with this case, at the time the opinion is issued.  
The syllabus constitutes no part of  the opinion of t he Court but has been 
prepared by the Reporter of Decisions for the convenience of the reader. 
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 
SUPREME COURT OF THE UNITED STATES 
Syllabus 
AZAR, SECRETARY OF HEALTH AND HUMAN 
SERVICES v. ALLINA HEALTH SERVICES ET AL. 
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 
THE DISTRICT OF COLUMBIA CIRCUIT 
No. 17–1484. Argued January 15, 2019—Decided June 3, 2019 
The Medicare program offers additional payments to institutions that 
serve a “disproportionate number” of low -income patients.  42 
U. S. C. § §1395ww(d)(5)(F)(i)(I).  These payments are calculated in 
part using what is called a hospital’s “Medicare fraction.”  The fra c-
tion’s denominator is the time the hospital spent caring for patients 
who were “entitled to benefits under” Medicare Part A, while the 
numerator is the time the hospital spent caring for Part -A-entitled 
patients who were also  entitled to income support payments under 
the Social Security Act.  §1395ww(d)(5)( F)(vi)(I).  Congress created 
Medicare Part C in 1997, leading to the question whether Part C en-
rollees should be counted as “entitled to benefits under” Part A when 
calculating a hospital’s Medicare fraction.  Respondents claim  that, 
because Part C enrollees tend to be wealthier than Part A enrollees, 
counting them makes the fraction smaller and reduces hospitals’ 
payments considerably.  In 2004, the agency overseeing Medicare i s-
sued a final rule declaring that it would count Part C patients, but 
that rule was later vacated after hospitals filed legal challenges.  In 
2013, it issued a new rule prospectively readopting the policy of 
counting Part C patients.  In 2014, unable to rely on either the vacat-
ed 2004 rule or the prospective 2013 rule, the agency post ed on its 
website the Medicare fractions for fiscal year 2012, noting that they 
included Part C patients.  A group of hospitals, respondents here, 
sued.  They claimed, among other things, that the government had 
violated the Medicare Act ’s requirement to  provide public notice and 
a 60-day comment period for any “rule, requirement, or other stat e-
ment of policy . . . that establishes or changes a substantive legal 
standard governing . . . the payment for services,” §1395hh(a)(2).  The

2 AZAR v. ALLINA HEALTH SERVICES 
  
Syllabus 
court of appeals ultimately sided with the hospitals. 
Held:  Because the government has not identified a lawful excuse for 
neglecting its statutory notice -and-comment obligations, its policy 
must be vacated.  Pp. 5–17. 
 (a) This case turns on whether the government’s 2014 announc e-
ment established or changed a “substantive legal standard.”  The 
government suggests the statute means to distinguish a substantive 
from an interpretive legal standard and thus tracks the Administra-
tive Procedure Act (APA), under which “substantive rules” have the 
“force and effect of law,” while “interpretive rules” merely “advise the 
public of the agency’s construction of the statutes and rules which it 
administers,” Perez v. Mortgage Bankers Assn., 575 U. S. 92, ___.  Be-
cause the policy of counting Part C patients in the Medicare fractions 
would be treated as interpretive rather than substantive under the 
APA, the government submits, it had no statutory obligation to pr o-
vide notice and comment before adopting the policy. 
 The government’s interpretation is  incorrect because the Medicare 
Act and the APA do not use the word “substantive” in the same way.  
First, the Medicare Act contemplates that “statements of policy” can  
establish or change a “substantive legal standard,” §1395hh(a)(2), 
while APA statements of policy are not  substantive by definition but 
are grouped with and treated as interpretive rules, 5 U.  S. C. 
§553(b)(A).  Second, §1395hh(e)(1) —which gives the government li m-
ited authority to ma ke retroactive “substantive change[s]” in, among 
other things, “interpretative rules” and “statements of policy”—would 
make no sense if the Medicare Act used the term “substantive” as the 
APA does, because interpretive rules and statements of policy —and 
any changes to them —are not substantive under the APA by defin i-
tion.  Third, had  Congress wanted to follow the APA in the Medicare 
Act and exempt interpretive rules and policy statements from notice 
and comment, it could have simply cross -referenced the exemption in 
§553(b)(A) of the APA.  And the fact that Congress did cross-reference 
the APA’s neighboring good cause exemption found in §553(b)(B), see 
§1395hh(b)(2)(C), strongly suggests that it “act[ed] intentionally and 
purposefully in the disparate” decisi ons, Russello v. United States, 
464 U. S. 16, 23.  Pp. 5–12. 
 (b) The Medicare Act ’s text and structure foreclose the govern-
ment’s position in this case, and the legislative history presented by 
the government is ambiguous at best.  The government also advances 
a policy argument: Requiring notice and comment for Medicare inte r-
pretive rules would be excessively burdensome .  But c ourts are not 
free to rewrite clear statutes under the banner of their own policy 
concerns, and the government’s argument carries l ittle force even on 
its own terms.  Pp. 13–16.

Cite as: 587  U. S. ____ (2019) 3 
 
Syllabus 
 (c) Because this Court affirms the court of appeals’ judgment under 
§1395hh(a)(2), there is  no need to address that court’s alternative 
holding that §1395hh(a)(4) independently required notice and co m-
ment.  Nor does this Court consider the argument, not pursued by the 
government here , that the policy did not “establis[h] or chang[e]” a 
substantive legal standard —and so did not require notice and com-
ment under §1395hh(a)(2) —because the statute  itself required t he 
government to count Part C patients in the Medicare fraction.   
Pp. 16–17. 
863 F. 3d 937, affirmed. 
 G ORSUCH, J., delivered the opinion of the Court, in which ROBERTS, 
C. J., and T HOMAS, GINSBURG, ALITO, SOTOMAYOR, and KAGAN, JJ., 
joined.  B REYER, J., filed a dissenting opinion.  K AVANAUGH, J., took no 
part in the consideration or decision of the case.

Cite as: 587 U. S. ____ (2019) 1 
 
Opinion of the Court 
NOTICE: This opinion is subject to formal revision before publication in the 
preliminary print of the United States Reports.  Readers are requested to 
notify the Reporter of Decisions, Supreme Court of the United States, Wash -
ington, D.  C. 20543, of any typographical or other formal errors, in order 
that corrections may be made before the preliminary print goes to press.  
SUPREME COURT OF THE UNITED STATES 
_________________ 
No. 17–1484 
_________________ 
ALEX M. AZAR, II, SECRETARY OF HEALTH AND 
HUMAN SERVICES, PETITIONER v. ALLINA 
HEALTH SERVICES, ET AL. 
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 
APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT 
[June 3, 2019]
 J USTICE GORSUCH delivered the opinion of the Court. 
 One way or another, Medicare touches the lives of nearly 
all Americans.  Recognizing this reality, Congress has told 
the government that, when it wishes to establish or 
change a “substantive legal standard” affecting Medicare 
benefits, it must first afford the public notice and a chance 
to comment.  42 U.  S. C. §1395hh(a)(2).  In 2014, the 
government revealed a new policy on its website that 
dramatically—and retroactively —reduced payments to 
hospitals serving low -income patients.  Because affected 
members o f the public received no advance warning and 
no chance to comment first, and because the government 
has not identified a lawful excuse for neglecting its stat u-
tory notice -and-comment obligations, we agree with the 
court of appeals that the new policy cannot stand. 
I 
 Today, Medicare stands as the largest federal program 
after Social Security.  It spends about $700 billion annually 
to provide health insurance for nearly 60 million aged or 
disabled Americans, nearly one -fifth of the Nation’s popu-

2 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
lation.  Needless to say, even seemingly modest modific a-
tions to the program can affect the lives of millions. 
 As Medicare has grown, so has Congress’s interest in 
ensuring that the public has a chance to be heard before 
changes are made to its administration.  As originally 
enacted in 1965, the Medicare Act didn’t address the 
possibility of public input.  Nor did the notice -and-
comment procedures of the Administrative Procedure Act 
apply.  While the APA requires many other agencies to 
offer public notice and a comment  period before adopting 
new regulations, it does not apply to public benefit pr o-
grams like Medicare.  5 U.  S. C. §553(a)(2).  Soon enough, 
though, the government volunteered to follow the informal 
notice-and-comment rulemaking procedures found in the 
APA when proceeding under the Medicare Act.  See Clarian 
Health West , LLC v. Hargan, 878 F.  3d 346, 356– 357 
(CADC 2017). 
 This solution came under stress in the 1980s.  By then, 
Medicare had grown exponentially and the burdens and 
benefits of public commen t had come under new scrutiny.  
The government now took the view that following the 
APA’s procedures had become too troublesome and pro-
posed to relax its commitment to them.  See 47 Fed. Reg. 
26860–26861 (1982).  But Congress formed a different 
judgment.  It decided that, with the growing scope of 
Medicare, notice and comment should become a matter not 
merely of administrative grace, but of statutory duty.  See 
§9321(e)(1), 100 Stat. 2017; §4035(b), 101 Stat. 1330–78. 
 Notably, Congress didn’t just adopt the APA’s notice -
and-comment regime for the Medicare program.  That, of 
course, it could have easily accomplished in just a few 
words.  Instead, Congress chose to write a new, Medicare -
specific statute.  The new statute required the government 
to provide pub lic notice and a 60- day comment period 
(twice the APA minimum of 30 days) for any “rule, r e-
quirement, or other statement of policy (other than a

Cite as: 587 U. S. ____ (2019) 3 
 
Opinion of the Court 
national coverage determination) that establishes or 
changes a substantive legal standard governing the scope 
of benefits, the payment for services, or the eligibility of 
individuals, entities, or organizations to furnish or receive 
services or benefits under [Medicare].”  42 U.  S. C. 
§1395hh(a)(2). 
 Our case involves a dispute over this language.  Since 
Medicare’s creation and under what’s called “Medi care 
Part A,” the federal government has paid hospitals directly 
for providing covered patient care.  To ensure hospitals 
have the resources and incentive to serve low -income 
patients, the government has also long off ered additional 
payments to institutions that serve a “dispro portionate 
number” of such persons.  §1395ww(d)(5)(F)(i)(I).   These 
payments are calculated in part using a hospital’s so-
called “Medicare fraction,” which asks how much of the 
care the hospital provided to Medicare patients in a given 
year was provided to low-income Medicare patients.  The 
fraction’s denominator is the time the hospital spent 
caring for patients who were “entitled to benefits under” 
Medicare Part A.  The numerator is the time the  hospital 
spent caring for Part -A-entitled patients who were also 
entitled to income support payments under the Social 
Security Act.  §1395ww(d)(5)(F)(vi)(I).  The bigger the 
fraction, the bigger the payment. 
 Calculating Medicare fractions got more compli cated in 
1997.  That year, Congress created “Medicare Part C,” 
sometimes referred to as Medicare Advantage.  Under 
Part C, beneficiaries may choose to have the government 
pay their private insurance premiums rather than pay for 
their hospital care directly .  This development led to the 
question whether Part C patients should be counted as 
“entitled to benefits under” Part A when calculating a 
hospital’s Medicare fraction.  The question is important  
as a practical matter because Part C enrollees, we’re  
told, tend to be wealthier than patients who opt for tradi-

4 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
tional Part A coverage.  Allina Health Services v. Price, 
863 F. 3d 937, 939 (CADC 2017).  So counting them makes 
the fraction smaller and reduces hospitals’ payments 
considerably—by between $3 and $4 bi llion over a 9 -year 
period, according to the government.  Pet. for Cert. 23. 
 The agency overseeing Medicare has gone back and 
forth on whether to count Part C participants in the Medi-
care fraction.  At first, it did not include them.  See Nort h-
east Hospital Corp. v. Sebelius, 657 F. 3d 1, 15–16 (CADC 
2011).  In 2003, the agency even proposed codifying that 
practice in a formal rule.  68 Fed. Reg. 27208.  But after 
the public comment period, the agency reversed field and 
issued a final rule in 2004 declaring that it would begin 
counting Part C patients.  69 Fed. Reg. 49099.  This ab-
rupt change prompted various legal challenges from hospi-
tals.  In one case, a court held that the agency couldn’t 
apply the 2004 rule retroactively.  Northeast Hospital, 657 
F. 3d, at 14.  In another case, a court vacated the 2004 
rule because the agency had “
 ‘pull[ed] a surprise switch-
eroo’ ” by doing the opposite of what it had proposed.  
Allina Health Services  v. Sebelius, 746 F.  3d 1102, 1108 
(CADC 2014).  Eventually, and in response to these devel-
opments, the agency in 2013 issued a new rule that pr o-
spectively “readopt[ed] the policy” of counting Part C 
patients.  78 Fed. Reg. 50620.  Challenges to the 2013 rule 
are pending. 
 The case before us arose in 2014.  That’s when the agency 
got around to calculating hospitals’ Medicare fractions for 
fiscal year 2012.  When it did so, the agency still wanted to 
count Part C patients.  But it couldn’t rely on the 2004 
rule, which had been vacated.  And it couldn’t rely on the 
2013 r ule, which bore only prospective effect.  The agen-
cy’s solution?  It posted on a website a spreadsheet a n-
nouncing the 2012 Medicare fractions for 3,500 hospitals 
nationwide and noting that the fractions included Part C 
patients.

Cite as: 587 U. S. ____ (2019) 5 
 
Opinion of the Court 
 That Internet posting led to this lawsuit.  A group of 
hospitals who provided care to low -income Medicare p a-
tients in 2012 argued (among other things) that the go v-
ernment had violated the Medicare Act by skipping its 
statutory notice -and-comment obligations.  In reply, the 
government admitted that it hadn’t provided notice and 
comment but argued it wasn’t required to do so in these 
circumstances.  Ultimately, the court of appeals sided with 
the hospitals.  863 F. 3d, at 938.  But in doing so the court 
created a conflict with other circuits that had suggested, if 
only in passing, that notice and comment wasn’t needed in 
cases like this.  See, e.g., Via Christi Regional Medical 
Center, Inc. v. Leavitt, 509 F.  3d 1259, 1271 , n. 11 (CA10 
2007); Baptist Health  v. Thompson, 458 F.  3d 768, 776 , 
n. 8 (CA8 2006).  We granted the government’s petition for 
certiorari to resolve the conflict.  585 U. S. ___ (2018). 
II 
 This case hinges on the meaning of a single phrase in 
the notice-and-comment statute Congress drafted specially 
for Medicare in 1 987.  Recall that the law requires the 
government to provide the public with advance notice and 
a chance to comment on any “rule, requirement, or other 
statement of policy” that “establishes or changes a su b-
stantive legal standard governing .  . . the payme nt for 
services.”  §1395hh(a)(2).  Before us, everyone agrees that 
the government’s 2014 announcement of the 2012 Med i-
care fractions governed “payment for services.”  It’s clear, 
too, that the government’s announcement was at least a 
“statement of policy” because it “le [t] the public know [the 
agency’s] current .  . . adjudicatory ap proach” to a critical 
question involved in calculating payments for thousands of 
hospitals nationwide.  Syncor Int’l Corp. v. Shalala, 127 
F. 3d 90, 94 (CADC 1997).   So whether the government 
had an obligation to provide notice and comment winds up 
turning on whether its 2014 announcement established or

6 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
changed a “substantive legal standard .”  That phrase 
doesn’t seem to appear anywhere else in the entire United 
States Code, and t he parties offer at least two ways to 
read it. 
 The hospitals suggest the statute means to distinguish a 
substantive from a procedural legal standard.  On this 
account, a substantive standard is one that “creates du-
ties, rights and obligations,” while a procedural standard 
specifies how those duties, rights, and obligations should 
be enforced.  Black’s Law Dictionary 1281 (5th ed. 1979) 
(defining “substantive law”).  And everyone agrees that a 
policy of counting Part C patients in the Medicare fraction 
is substantive in this sense, because it affects a hospital’s 
right to payment.  From this it follows that the public had 
a right to notice and comment before the government could 
adopt the policy at hand.  863 F. 3d, at 943. 
 Very differently, the government suggests the statute 
means to distinguish a substantive from an interpretive  
legal standard.  Under the APA, “substantive rules” are 
those that have the “force and effect of law,” while “inter-
pretive rules” are thos e that merely “
 ‘advise the public of 
the agency’s construction of the statutes and rules which it 
administers.’ ”  Perez v. Mortgage Bankers Assn., 575 U.  S. 
92, ___–___ (2015) (slip op., at 2 –3).  On the government’s 
view, the 1987 Medicare notice -and-comment statute 
meant to track the APA’s usage in this respect.  And the 
government submits that, because the policy of counting 
Part C patients in the Medicare fractions would be treated 
as interpretive rather than substantive under the APA, it 
had no statutory obligation to provide notice and comment 
before adopting its new policy. 
 Who has the better reading?  Several statutory clues 
persuade us of at least one thing: The government’s inter-
pretation can’t be right.  Pretty clearly, the Medicare Act 
doesn’t use the word “substantive” in the same way the 
APA does —to identify only those legal standards that

Cite as: 587 U. S. ____ (2019) 7 
 
Opinion of the Court 
have the “force and effect of law.” 
 First, the Medicare Act contemplates that “statements 
of policy” like the one at issue here can establish or change 
a “substantive legal standard.”  42 U.  S. C. §1395hh(a)(2) 
(emphasis added).  Yet, by definition under the APA, 
statements of policy are not  substantive; instead they are 
grouped with and treated as interpretive rules.  5 U.  S. C. 
§553(b)(A).  This strongly suggests the Medicare Act just 
isn’t using the word “substantive” in the same way as the 
APA.  Even the government acknowledges that its contrary 
reading leaves the Medicare Act’s treatment of policy 
statements “incoherent.”  Tr. of Oral Arg. 19. 
 To be sure, the government suggests that the statutory 
incoherence produced by its reading turns out to serve a 
rational purpose: It clarifies that the agency overseeing 
Medicare can’t evade its notice -and-comment obligations 
for new rules that bear the “force and effect” of law by the 
simple expedient of “call[ing]” them mere “statements of 
policy.”  Id. , at 19–20.  The dissent echoes this argument, 
suggesting that Congress included “statements of policy” 
in §1395hh(a)(2) in order to capture  “substantive rules in 
disguise.”  Post, at 5 (opinion of B
REYER, J.). 
 But the statute doesn’t refer to things that are labeled  
or disguised as statements of policy; it just refers to 
“statements of policy.”  Everyone agrees that when Co n-
gress used that phrase in the APA and in other provisions 
of §1395hh, it referred to things that really are statements 
of policy.  See, e.g., Pacific Gas & Elec. Co.  v. Federal 
Power Comm’n, 506 F. 2d 33, 38 (CADC 1974); post, at 4–5 
(discussing §1395hh(e)(1)).  Yet, to accept the gover n-
ment’s view, we’d have to hold that when Congress used 
the very same phrase in §1395hh(a)(2), it sought to refer 
to things an agency calls statements of policy but that in 
fact are nothing of the sort.  The dissent admits this “may 
seem odd at first blush,” post , at 5, but further blushes 
don’t bring much improvement.  This Court does not lightly

8 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
assume that Congress silently attaches different meanings 
to the same term in the same or related statutes.  See Law 
v. Siegel, 571 U. S. 415, 422 (2014). 
 Besides, even if the statute’s reference to “statements of 
policy” could bear such an odd construction, the govern-
ment and the dissent fail to explain why Congress would 
have thought it necessary or appropriate.  Agencies have 
never been able to avoid notice and comment simply by 
mislabeling their substantive pronouncements.  On the 
contrary, courts have long looked to the contents  of the 
agency’s action, not the agency’s self -serving label, when 
deciding whether statutory notice -and-comment demands 
apply.  See, e.g., General Motors Corp. v. Ruckelshaus, 742 
F. 2d 1561, 1565 (CADC 1984) (en banc) (“[T]he agency’s 
own label, while relevant, is not dispositive”); Guardian 
Fed. Sav. & Loan Assn. v. Federal Sav. & Loan Ins. Corp., 
589 F. 2d 658, 666–667 (CADC 1978) (if “a so -called policy 
statement is in purpose or likely effect .  . . a binding rule 
of substantive law,” it “will be taken for what it is”).  Nor 
is there any evidence before us suggesting that Congress 
thought it important to underscore this prosaic point in 
the Medicare Act (and yet not in the APA) —let alone any 
reason to think Congress would have sought to make the 
point in such an admittedly incoherent way. 
 Second, the government’s reading would introduce 
another incoherence into the Medicare statute.  Subsection 
(e)(1) of §1395hh gives the government limited authority 
to make retroactive “substantive change[s]” in, among 
other things, “interpretative rules” and “statements of 
policy.”  But this statutory authority would make no sense 
if the Medicare Act used the term “substantive” as the 
APA does.  It wouldn’t because, again, interpretive rules 
and statements of policy —and any changes to them —are 
not substantive under the APA by definition. 
 Here, too, the government off ers no satisfactory reply.  
It concedes, as it must, that the term “substantive” in

Cite as: 587 U. S. ____ (2019) 9 
 
Opinion of the Court 
subsection (e)(1) can’t carry the meaning it wishes to 
ascribe to the same word in subsection (a)(2).  Tr. of Oral 
Arg. 16 –18.  So that leaves the government to suggest 
(again) that the same word should mean two different 
things in the same statute.  In (e)(1), the government says, 
it may bear the meaning the hospitals propose, but in 
(a)(2) it means the same thing it does in the APA.  But, 
once more, the government fails to offer any good reason 
or evidence to unseat our normal presumption that, when 
Congress uses a term in multiple places within a single 
statute, the term bears a consistent meaning throughout.  
See Law, 571 U. S., at 422. 
 Third, the government suggests Con gress used the 
phrase “substantive legal standard” in the Medicare Act as 
a way to exempt interpretive rules and policy statements 
from notice and comment.  But Congress had before it —
and rejected—a much more direct path to that destination.  
In a single s entence the APA sets forth two exemp - 
tions from the government’s usual notice -and-comment 
obligations: 
“Except when notice or hearing is required by statute, 
this subsection [requiring notice and comment] does 
not apply— 
 “ (A) to interpretative rules, gen eral statements of 
policy, or rules of agency organization, procedure, or 
practice; or 
 “ (B) when the agency for good cause finds .  . . that 
notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.”  5 
U. S. C. §553(b). 
In the Medicare Act, Congress expressly borrowed one  of 
the APA’s exemptions, the good cause exemption, by cross-
referencing it in §1395hh(b)(2)(C).  If, as the government 
supposes, Congress had also wanted to borrow the other  
APA exemption, for  interpretive rules and policy stat e-

10 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
ments, it could have easily cross -referenced that exem p-
tion in exactly the same way.  Congress had recently done 
just that, cross-referencing both of the APA’s exceptions in 
the Clean Air Act.  See §305(a), 91 Stat. 772,  42 U. S. C. 
§7607(d)(1).  Yet it didn’t do the same thing in the Med i-
care Act, and Congress’s choice to include a cross-reference 
to one but not the other of the APA’s neighboring exemp-
tions strongly suggests it acted “
 ‘intentionally and pu r-
posefully in the disparate’  ” decisions.  Russello  v. United 
States, 464 U. S. 16, 23 (1983). 
 The government’s response asks us to favor a most 
unlikely reading over this obvious one.  The government 
submits that Congress simply preferred to mimic the 
APA’s interpretive-rule exemption in the Medicare Act by 
using the novel and enigmatic phrase “substantive legal 
standard” instead of a simple cross -reference.  But the 
government supplies no persuasive account why Congress 
would have thought it necessary or wise to proceed in this 
convoluted way.  T he dissent  suggests that a cross -
reference could not have taken the place of other  language 
in §1395hh(a)(2) limiting the notice -and-comment r e-
quirement to rules governing benefits, payment, or elig i-
bility, post, at 17; but we can’t see why  this would have 
made a cross -reference less desirable than the phrase 
“substantive legal standard” as a means of incorporating 
the APA’s interpretive -rule exemption.  So we’re left with 
nothing but the doubtful proposition that Congress sought 
to accomplish in a “surpassingly strange manner” what it 
could have accomplished in a much more straightforward 
way.  RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 
566 U. S. 639, 647 (2012) ; see Advocate Health Care Net-
work v. Stapleton, 581 U. S. ___, ___ (2017) (slip op., at 8) 
(“When legislators did not adopt ‘obvious alternative’ 
language, ‘the natural implication is that they did not 
intend’ the alternative”). 
 The dissent would have us disregard all of the textual

Cite as: 587 U. S. ____ (2019) 11 
 
Opinion of the Court 
clues we’ve found significant because the word “substa n-
tive” carried “a special meaning in the context of admini s-
trative law” in the 1980s, making it “almost a certainty” 
that Congress had that meaning in mind when it used the 
word “substantive” in §1395hh(a)(2).  Post, at 3, 8.  But it 
was the phrase “substantive rule” that was a term of art in 
administrative law, and Congress chose not  to use that 
term in the Medicare Act.  Instead, it introduced a see m-
ingly new phrase to the statute books when it spoke of 
“substantive legal standards.”  And, for all the reasons we 
have already explored, the term “substantive legal stan d-
ard” in the Medicare Act appears to carry a more expa n-
sive scope than that borne by the term “substantive rule” 
under the APA. 
 In reply, t he dissent stresses  that §1395hh refers to 
agency actions requiring no tice and comment as “regul a-
tions.”  This is significant, the dissent says, because 
“courts had sometimes treated [the term ‘regulations’] as 
interchangeable with the term ‘substantive rules ’
 ” around 
the time of the 1987 Medicare Act amendments.  Post,  
at 4.  So if only “regulations” must proceed through notice 
and comment, the dissent reasons, that necessarily en-
compasses only things that qualify as substantive rules 
under the APA.  In fact, however, by 1987 courts had 
commonly referred to both substantive and interpretive 
rules as “regulations,” so the dissent’s logical syllogism 
fails on its own terms.  To see this, one need look no fu r-
ther than Chrysler Corp.  v. Brown, 441 U.  S. 281 (1979), 
which described the substantive-interpretive divide as “the 
central distinction among agency regulations found in the 
APA.”  Id. , at 301 (emphasis added); s ee also, e.g., Batter-
ton v. Francis, 432 U. S. 416, 425, n. 9 (1977) (distinguish-
ing between “[l]egislative, or substantive, regulations” and 
“interpretative regulation[s]”); United Technologies Corp.  
v. EPA, 821 F.  2d 714, 719 (CADC 1987) (“most of the

12 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
regulations at issue are . . . interpretative”).1 
 In the end, all of the available evidence persuades us 
that the phrase “substantive legal standard ,” which ap-
pears in §13955hh(a)(2) and apparently nowhere else in 
the U. S. Code, cannot bear the same construction as the 
term “substantive rule” in the APA.  We need not, however, 
go so far as to say that the hospitals’ interpretation, 
adopted by the court of appeals, is correct in every particu-
lar.  To affirm the judgment before us, it is enough to say 
the government’s arguments for reversal fail to withstand 
scrutiny.  Other questions about the statute’s meaning can 
await othe r cases.  The dissent would like us to provide 
more guidance, post, at 13–14, but the briefing before us 
focused on the issue whether the Medicare Act borrows 
the APA’s interpretive -rule exception, and we limit our 
holding accordingly.  In doing so, we follow the well -worn 
path of declining “to issue a sweeping ruling when a nar-
row one will do.”  McWilliams v. Dunn, 582 U.  S. ___, ___ 
(2017) (slip op., at 14).
2 
—————— 
1 Nor does §1395hh(e)(1) imply that the statute is using “regulations” 
and “interpretative rules” to mean different things.  Post , at 4–5.  True, 
that provision refers to “regulation s, manual instructions, interpret a-
tive rules, statements of policy, or guidelines of general applicability.”  
But contrary to the dissent’s suggestion that each item in the list 
“refers to something different,” post , at 5, the items appear to have 
substantial overlap.  For example, many manual instructions surely 
qualify as guidelines of general applicability; and, as explained above, 
the statute explicitly requires some statements of policy to be issued as 
regulations. 
2 Nor is it obvious that the dissent’ s approach would provide signifi-
cantly clearer guidance.   Lower courts have often observed “ that it is 
quite difficult to distinguish between substantive and interpretative 
rules,” Syncor Int’l Corp. v. Shalala, 127 F. 3d 90, 93 (CADC 1997), and 
precisely where to draw the boundary has been a subject “ of much 
scholarly and judicial debate ,” Perez v. Mortgage Bankers Assn. , 575 
U. S. 92, ___ (2015) (slip op., at 3).

Cite as: 587 U. S. ____ (2019) 13 
 
Opinion of the Court 
III 
 Unable to muster support for its position in the statu - 
tory text or structure, the government encourages us to look 
elsewhere.  It begins by inviting us to follow it into the 
legislative history lurking behind the Medicare Act.  “But 
legislative history is not the law.”  Epic Systems Corp.  v. 
Lewis, 584 U. S. ___, ___ (2018) (slip op., at 23).  And even 
those of us who believe that clear legislative history can 
“illuminate ambiguous text” won’t allow “ambiguous legi s-
lative history to muddy clear statutory language.”  Milner  
v. Department of Navy, 562 U. S. 562, 572 (2011).  Yet the 
text before us clearly forecloses the government’s position 
in this case, and the legislative history presented to us is 
ambiguous at best. 
 The government points us first to a conference report on 
the 1986 bill that adopted §1395hh(b).  The 1986 report 
opined that the bill adopted at that time wouldn’t require 
notice and comment for interpretive rules.  See H. R. Conf. 
Rep. No. 99–1012, p. 311 (1986).  But the 1986 bill didn’t 
include the statutory language at issue here.  Congress 
added that language only the f ollowing year, when it 
enacted §1395hh(a)(2).  Nor does the government try to 
explain how a report on a 1986 bill sheds light on the 
meaning of statutory terms first introduced in 1987.  If 
anything, the fact that Congress revisited the statute in 
1987 may suggest it wasn’t satisfied with the 1986 notice-
and-comment requirements and wished to enhance them.  
Some legislative history even says as much.  See H.  R. 
Rep. No. 100– 391(I), p.  430 (1987) (expressing concern 
that, despite the 1986 legislation, the agency was still 
announcing “important policies” without notice and  
comment). 
 The conference report on the 1987 bill that did adopt the 
statutory language before us today doesn’t offer much help 
to the government either.  The House version of the bill 
would have required notice and comment for rules with a

14 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
“significant effect” on payments, a condition no doubt 
present here.  H. R. 3545, 100th Cong., 1st Sess., reprinted 
in 133 Cong. Rec. 30019.  Later, the conference committee 
replaced the House’s language with the current language 
of subsection (a)(2), which the report said “reflect[ed] 
recent court rulings.”  H. R. Conf. Rep. No. 100–495, p. 566 
(1987).  The government contends that this was an oblique 
reference to a then -recent decision  discussing the APA ’s 
interpretive-rule exception and an implicit suggestion that 
interpretive rules shouldn’t be subject to notice and co m-
ment.  See American Hospital Assn.  v. Bowen, 834 F.  2d 
1037, 1045–1046 (CADC 1987).  But, as the hospitals point 
out, Bowen was mostly a bout the APA’s treatment of 
procedural rules.  See id., at 1047–1057.  So it seems at 
least equally plausible that the conference committee 
revised the House’s language because it feared that la n-
guage would have subjected procedural rules to notice-
and-comment obligations. 
 The hospitals call our attention to other indications, too, 
that Members of Congress didn’t understand the confe r-
ence’s language to track the APA.  For example, the rele-
vant provision in the final bill was titled “Publication as 
Regulations of Significant Policies .”  §4035(b), 101 Stat. 
1330–78 (emphasis added).  And, as we’ve seen, “signif i-
cant policies” don’t always amount to substantive rules 
under the APA.  The House Ways and Means Committee 
likewise described the final bill as requiring notice and 
comment for “[s]ignificant policy changes,” not just su b-
stantive rules.  Summary of Conference Agreement on 
Reconciliation Provisions Within the Jurisdiction of the 
Committee on Ways and Means, 100th Cong., 1st Sess., 
12–13 (Comm. Print 1987).  So in the end and at most, we 
are left with exactly the kind of murky legislative history 
that we all agree can’t overcome a statute’s clear text and 
structure. 
 That leads us to the government’s final redoubt: a policy

Cite as: 587 U. S. ____ (2019) 15 
 
Opinion of the Court 
argument.  But as the government knows well, courts 
aren’t free to rewrite clear statutes under the banner of 
our own policy concerns.  If the government doesn’t like 
Congress’s notice- and-comment policy choices, it must  
take its complaints there.  See, e.g., Henson v. Santander 
Consumer USA Inc., 582 U. S. ___, ___–___ (2017) (slip op., 
at 9– 10); Sebelius v. Cloer, 569 U.  S. 369, 381 (2013) .  
Besides, the government’s policy arguments don’t carry 
much force even on their  own terms.  The government 
warns that providing the public with notice and a chance 
to comment on all Medicare interpretive rules, like those 
in its roughly 6,000 -page “Provider Reimbursement Ma n-
ual,” would take “
 ‘many years’  ” to complete.  Brief for 
Petitioner 18, 42.  But the dissent points to only eight  
manual provisions that courts have deemed interpretive 
over the last four decades, see post , at 10– 12, and the 
government hasn’t suggested that providing notice and 
comment for these or any other speci fic manual provisions 
would prove excessively burdensome.  Nor has the gov-
ernment identified any court decision invalidating a ma n-
ual provision under §1395hh(a)(2) in the nearly two years 
since the court of appeals issued its opinion in this case.  
For their part, the hospitals claim that only a few dozen 
pages of the Provider Reimbursement Manual might even 
arguably require notice and comment.  Tr. of Oral Arg. 49–
51.  And they tell us that the agency regularly and without 
much difficulty undertakes notice -and-comment rulemak-
ing for many other decisions affecting the Medicare pr o-
gram.  See Brief for Respondents 58; App. to Brief in 
Opposition 1a–3a.  The government hasn’t rebutted any of 
these points. 
 Not only has the government failed to document any 
draconian costs associated with notice and comment, it 
also has neglected to acknowledge the potential counte r-
vailing benefits.  Notice and comment gives affected par-
ties fair warning of potential changes in the law and an

16 AZAR v. ALLINA HEALTH SERVICES 
  
Opinion of the Court 
opportunity to be heard on those changes —and it affords 
the agency a chance to avoid errors and make a more 
informed decision.  See 1 K. Hickman & R. Pierce, Admin-
istrative Law §4.8 (6th ed. 2019).   Surely a rational Con-
gress could have thought those benefits especially valu a-
ble when it comes to a program where even minor changes 
to the agency’s approach can impact millions of people and 
billions of dollars in ways that are not always easy for 
regulators to anticipate.  None of this is to say Congress 
had to proceed as it did.  It is only to s ay that Congress 
reasonably could have believed that the policy decision 
reflected in the statute would yield benefits sufficient to 
outweigh the speculative burdens the government has 
suggested.  And if notice and comment really does threaten 
to “become a  major roadblock to the implementation of ” 
Medicare, post, at 10, the agency can seek relief from 
Congress, which—unlike the courts—is both qualified and 
constitutionally entitled to weigh the costs and benefits of 
different approaches and make the necessary policy  
judgment. 
IV 
 There are two more lines of argument that deserve brief 
acknowledgment.  One concerns §1395hh(a)(4), which 
provides that a Medicare regulation struck down for not 
being a logical outgrowth of the government’s proposal 
can’t “take effect” until the agency provides a “further 
opportunity for public comment.”  The hospitals claim, and 
the court of appeals held, that subsection (a)(4) also  and 
independently required notice and comment here.  But 
given our holding affirming the court of appeals’ judgment 
under §1395hh (a)(2), we have no need to reach this  
question. 
 Separately, we can imagine that the government might 
have sought to argue that the policy at issue here didn’t 
“establis[h] or chang[e]” a substantive legal standard—and

Cite as: 587 U. S. ____ (2019) 17 
 
Opinion of the Court 
so didn’t require notice and comment under 
§1395hh(a)(2)—because the statute  itself required it to 
count Part C patients in the Medicare fraction.  But we 
need not consider this argument either, this time because 
the government hasn’t pursued it and we normally have 
no obligation to entertain grounds for reversal that a party 
hasn’t presented.  Far from suggesting that the Medicare 
Act supplies the controlling legal standard for determining 
whether to count Part C patients, the government has 
insisted that the statute “does not speak directly to the 
issue,” Brief for Appellant in Northeast Hospital Corp.  v. 
Sebelius, No. 10 –5163 (CADC), p.  22, and thus leaves a 
“
 ‘gap’ ” for the agency to fill, Brief for Appellee in Allina  v. 
Price, No. 16 –5255 (CADC), p.  50 (quoting Northeast 
Hospital Corp. , 657 F.  3d, at 13).  The courts below ac - 
cepted the government’s submission, and the government 
hasn’t sought to take a different position in this Court.  So 
we express no opinion on whether the statute in fact con-
tains such a “gap .”  We hold simply that, when the go v-
ernment establishes or changes an avowedly  “gap”-filling 
policy, it can’t evade its notice- and-comment obligations  
under §1395hh(a)(2) on the strength of the arguments it 
has advanced in this case. 
* 
 The judgment of the court of appeals is 
Affirmed. 
 
 J
USTICE KAVANAUGH took no part in the consideration 
or decision of this case.

Cite as: 587 U. S. ____ (2019) 1 
 
BREYER, J., dissenting 
SUPREME COURT OF THE UNITED STATES 
_________________ 
No. 17–1484 
_________________ 
ALEX M. AZAR, II, SECRETARY OF HEALTH AND 
HUMAN SERVICES, PETITIONER v. ALLINA 
HEALTH SERVICES, ET AL. 
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 
APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT 
[June 3, 2019] 
 J USTICE BREYER, dissenting. 
 The statute before us, a subsection of the Medicare Act, 
refers to a “rule, requirement, or other statement of policy 
. . . that establishes or changes a substantive legal stand-
ard.”  42 U. S. C. § 1395hh(a)(2).  This phrase is nested 
within a set of provisions that, taken together, require  
the Secretary of Health and Human Services to use  
notice-and-comment rulemaking before promulgating 
“regulations.” 
 T he Government argues that the language at issue, like 
the notice -and-comment provisions of the Administrative 
Procedure Act (APA), applies only to “substantive” or 
“legislative” rules.  In its view, the language does not cover 
“interpretive” rules (which it believes the agency promu l-
gated here).  After considering the relevant language, the 
statutory context, the statutory history, and the related 
consequences, I believe the Government is right.  I would 
remand this case to the Court of Appeals to consider 
whether the agency determination at issue in this case is a 
substantive rule (which requires notice and comment) or 
an interpretive rule (which does not). 
I 
 The arguments in support of my interpretation are

2 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
simple.  By using words with meanings that are well 
settled in the APA context, Congress made clear that the 
notice-and-comment requirement in the Medicare Act 
applies only to substantive, not interpretive, rules.  The 
statutory language, at minimum, permits this interpreta-
tion, and the statute’s histo ry and the practical cons e-
quences provide further evidence that Congress had only 
substantive rules in mind.  Importantly, this interpreta-
tion of the statute, unlike the Court’s, provides a familiar 
and readily administrable way fo r the agency to disti n-
guish the actions that require notice and comment from 
the actions that do not. 
A 
 I begin with the specific language of the statute.  There 
are, in my view, three relevant subsections that must be 
read together.  The f irst, a general provision, has been 
part of the Medicare Act since Congress created the pro-
gram in 1965.  It s ays that the Secretary “ shall prescribe 
such regulations as may be necessary to carry out the 
administration of the insurance programs. ”  42 U.  S. C. 
§1395hh(a)(1) (emphasis added). 
 The other two relevant provisions were added in the 
1980s.  The provision contained in the very next par a-
graph is the one directly at issue here.  It says: 
 “No rule, requirement, or other statement of policy 
. . . that establishes or changes a substantive  legal 
standard governing the scope of benefits, the payment 
for services, or the eligibility .  . . to furnish or receive 
services or benefits .  . . shall take effect unless it is 
promulgated by the Secretary by regulation  under 
paragraph (1).”  §1395hh(a)(2) (emphasis added). 
 And the third relevant provision, eight paragraphs 
away, contains the notice-and-comment requirement: 
 “[B]efore issuing in final form any r egulation under

Cite as: 587 U. S. ____ (2019) 3 
 
BREYER, J., dissenting 
subsection (a) . . . , the Secretary shall provide for n o-
tice of the proposed regulation in the Federal Register 
and a period of not less tha n 60 days for public co m-
ment thereon.”  §1395hh(b)(1) (emphasis added). 
 Taken together, these provisions say that the Secretary 
must use notice- and-comment procedures before promu l-
gating any “regulation,” and that a “rule, requirement,  
or other statement of policy” counts as a “regulation” 
whenever it “establishes or changes a substantive legal 
standard.” 
 The question at hand is whether an interpretive rule 
qualifies as the type of “regulation” that Congress intended 
to subject to the notice -and-comment requirement when it 
added the second and third provisions in the 1980s.  In my 
view, the answer is no. 
 In the 1980s, the words “regulation” and “substantive” 
(which I have repeatedly italicized above) carried a special 
meaning in the context of administrative law.  This Court 
had recognized the “central distinction” drawn by the APA 
between “
 ‘substantive rules’ on the one hand and ‘inter-
pretative rules, general statements of policy, or rules of 
agency organization, procedure, or practice’ on the other.”  
Chrysler Corp.  v. Brown, 441 U.  S. 281, 301 (1979).  A 
“substantive rule,” often promulgated pursuant to specific 
statutory authority, is a rule that “
 ‘bind[s]’ ” the public or 
has “ ‘the force and effect of law.’  ”  Id., at 301−302.   Su b-
stantive rules had also come to be known as “legislative 
rules.”  Id., at 302.  And some courts referred to substa n-
tive rules as “regulations” as well, s ee, e.g., American 
Hospital Assn.  v. Bowen, 834 F.  2d 1037,  1045 (CADC 
1987) (“  ‘ “regulations,” “ substantive rules ,” or “legislative 
rules” are those which create law ’ ”); Cabais v. Egger, 690 
F. 2d 234, 238 (CADC 1982) (same), although this practice 
was both less common and less consistent. 
 By way of contrast, courts had held that “interpretive

4 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
rules” do not have the “force and effect of law”; they simply 
set forth the agency’s interpretation of the  statutes or 
regulations that it administers.  Chrysler Corp., 441 U. S., 
at 302, and n. 31; see also American Hospital Assn., 834 
F. 2d, at 1045 (interpretive rules “merely clarify or explain 
existing law or regulations”) .  Then, as today, whether a 
rule was substantive or interpretive determined whether 
it had to be promulgated using the APA’s notice -and-
comment rulemaking procedures.  5 U.  S. C. §553(b)(3)(A) 
(exempting “interpretative rules,” among other things, 
from the notice -and-comment requirement); see also 
Shalala v. Guernsey Memorial Hospital , 514 U.  S. 87, 99 
(1995) (“Interpretive rules do not require notice and  
comment”). 
 At this point, we can begin to see support in the statutory 
language for the Government’s interpretation of the  
notice-and-comment provisions —one that excludes inte r-
pretive rules from their scope.  By applying the statute 
only to agency actions that “establish or change a substan-
tive legal standard ,” §1395hh(a)(2) (emphasis added), 
Congress used words that courts had long used to describe 
substantive rules under the APA.  See, e.g., American 
Hospital Assn. , 834 F.  2d, at 1045, 1046 (“
 ‘substantive 
rules’ ” are rules that “  ‘create law ’ ” or “  ‘establis[h] a 
standard of conduct which has the force of law’  ”); Linoz v. 
Heckler, 800 F.  2d 871, 877 (CA9 1986) (substantive rules 
“ ‘effect a change in existing law or policy’  ”).  Moreover, by 
limiting the notice- and-comment requirement to “ regula-
tion[s],” §1395hh(b)(1) (emphasis added), Congress used a 
word that courts had sometimes treated as interchangeable 
with the term “substantive rules.” 
 Another subsection of the statute, §1395hh(e)(1), simi-
larly implies that Congress had only substantive rules in 
mind when it used the term “regulations.”  That subsec-
tion bars the agency from retroactively applying certain 
policy changes articulated in “regulations, manual instruc-

Cite as: 587 U. S. ____ (2019) 5 
 
BREYER, J., dissenting 
tions, interpretative ru les, statements of policy, or guid e-
lines of general applicability.”  Ibid.   By using the word 
“or” to  connect “regulations” and the other words in the 
list, Congress suggested  that each linked phrase refers to 
something different.  This textual distinction  between 
“regulations” and “interpretive rules” further suggests 
that the “regulations”  that must go through notice and 
comment do not include interpretive rules. 
 There is, however, an important counterargument.  As 
the Court emphasizes, ante, at 7−8, the provision before us 
includes the words “statement[s] of policy.”  §1395hh(a)(2).  
Even if we can  easily rea d the words “rule[s] ” and “re-
quirement[s]” as referring to substantive or legislative 
rules, “statement[s] of policy” are a different matter.  Ibid.   
Indeed, the APA explicitly excludes “statements of policy”  
from its no tice-and-comment requirements.  5 U.  S. C. 
§553(d)(2).  So how can we say that our provision—which 
explicitly includes statements of policy—encompasses only 
those legislative rules that the APA subjects to notice-and-
comment rulemaking? 
 The answer to this question linguistically is that our 
provision does not include all  “statements of policy ,” but 
rather only those that are, in effect, substantive rules.  
That is because the statute d oes not “just refe[r] to ‘state-
ments of policy,’  ” ante, at 7; it refers to “statement[s] of 
policy . . . that establis [h] or chang [e] a substantive legal 
standard,” §1395hh(a)(2) (emphasis added).  Those words, 
read together, are simply another way of referring to 
substantive rules in disguise.  This reading may seem odd 
at first blush, but the statutory history and the cons e-
quences of the alternative interpretation persuade me that 
this is precisely what Congress intended. 
B 
 I turn next to the history of the statute, which provides 
significant support for believing that the Medicare rule-

6 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
making provision does not extend to interpretive rules.  As 
enacted in 1965, the Medicare Act authorized the agency 
to promulgate “regulations ” as necessary, but  did not 
require the agency to follow any particular rulemaking 
procedures.  See §102(a), 79 Stat. 331.  T he APA’s notice -
and-comment requirements did not apply to Medicare 
regulations, for the APA specifically exempts “matter[s] 
relating to .  . . benefits” from its scope.  5 U.  S. C. 
§553(a)(2). 
 In 1971, the agency nonetheless adopted a policy of 
voluntarily promulgating most regulations through notice-
and-comment rulemaking.  See Public Participation  in 
Rule Making, 36 Fed. Reg. 2532.  But the agency did not 
use notice and comment for all policy decisions during this 
time.  It also provided extensive guidance to participants 
in the Medicare system through less formal means like 
manuals (a practice it still follows today).  See, e.g., 
Daughters of Miriam Ctr. for the Aged  v. Mathews, 590 
F. 2d 1250, 1254 (CA3 1978)  (describing the agency’s 
Provider Reimbursement Manual, which “interprets and 
elaborates upon” Medicare regulations). 
 In the early 1980s, the agency proposed to change  its 
notice-and-comment policy:  It no longer  intended to use 
notice and comment when the disadvantages of doing so 
“outweigh[ed] the benefits of receiving public comment.”  
Administrative Practice and Procedu res, 47 Fed. Reg. 
26860 (1982).  T his announcement provoked widespread 
opposition.  Citizens’ groups and others asked Congress to 
“make it clear, by statute , that Medicare regulations .  . . 
should be subject to” the APA.  Medicare Appeals Prov i-
sions: Hearing on S. 1158 before the Subcommittee on 
Health of the Senate Comm ittee on Finance, 99th Cong., 
1st Sess., 62 (1985).  In 1986, Congress responded to these 
requests by enacting  a p rovision that required public 
notice and a 60 -day comment period for “any regulation,” 
with a few exceptions.  See 42 U.  S. C. §1395hh (1982 ed.,

Cite as: 587 U. S. ____ (2019) 7 
 
BREYER, J., dissenting 
Supp. IV); §9321(e)(1), 100 Stat. 2017. 
 Congress meant the term “regulation” to include only 
substantive or legislative rules.  As I have said, supra,  at 
3, at the time Congress  wrote the notice -and-comment 
provision in the 1980s , courts sometimes used all three 
terms interchangeably.  See, e.g., Cabais , 6 90 F.  2d, at 
238.  And the legislative history confirms that Congress 
expected the APA principles to apply.  The House- Senate 
Conference Report stated that the 1986 notice -and-
comment provi sion would not require rulemaking for 
“items (such as interpretive rules, general statements of 
policy, or rules of agency organization, procedure or pra c-
tice) that are not currently subject to that requirement.”  
H. R. Conf. Rep. No. 99–1012, p. 311. 
 As of 1986, then, it was clear that the Medicare Act 
required notice- and-comment rulemaking only for su b-
stantive rules, not for interpretive rules.  That was true 
even though the Medicare Act did n ot expressly cross -
reference the APA’s exception for interpretive rules.  
Instead, Congress simply understood that the statutory 
term “regulation” excluded interpretive rules, statements 
of policy, and the like. 
 Now I shall turn to the subsection before us, a provision 
enacted one year later.  Did that provision , enacted in 
1987, significantly change the scope of the Medicare Act’s 
notice-and-comment requirement ?  The House of Repr e-
sentatives passed a version of the provision that seemed to 
say yes.  The House Report on that bill said that the provi-
sion arose from a “concer[n] that important policies  [were] 
being developed without benefit of the public notice and 
comment period and, with growing frequency, [were] being 
transmitted, if at all, through manual instructions and 
other informal means.”  H.  R. Rep. No. 100−391, pt. 1,  
p. 430 (emphasis added) .  Thus , the House bill required 
notice and comment for any “rule, requirement, or other 
statement of policy . . . that has (or may have) a significant

8 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
effect on the scope of benefits, the payment for services, or 
the eligibility” for benefits or services .  H.  R. 3545, 100th 
Cong., 1st Sess., §4073(a)(2) (1987), 133 Cong. Rec. 30019. 
 The Senate, however, thought the scope of this language 
was too broad.  And the House-Senate Conference Com-
mittee agreed with the Senate, not the House.  It revised 
the House  version by taking out the words “ has (or may 
have) a significant effect  on the scope of ” benefits, pay-
ment, or eligibility, and by substituting for those wor ds 
the current language —namely, “establishes or changes a 
substantive legal standard  governing the scope of ” bene-
fits, payment , or eligibility.  §1395hh(a)(2) (emphasis 
added); see §4035(b), 101 Stat. 1330−78 (1987); H. R. Conf. 
Rep. No. 100 –495, p.  566 (1987).  The revised language 
thus focused on the legal effect of the agency decision, not 
its practical importance. 
 The Conference R eport explains that the Committee  
substituted its language for that of the House in order to 
“reflec[t] recent court rulings.”  I bid.  What were those 
“court rulings ”?  I have described many of them above.  
See supra, at 3−4.  Among others, they included rulings 
describing “substantive rules” as rules that “
 ‘establis[h] a 
standard of conduct which has the force of law’  ” or that 
change “substantive standards.”  American Hospital Assn., 
834 F. 2d, at 1046, 1056.  G iven this case law, it is almost 
a certainty  that the Conference Committee had in mind 
the meaning that courts had already given to the term 
“substantive”; indeed, neither the Court nor the hospitals 
point to any other recent rulings to which the Report could 
have referred.  And if that is correct, Congress would not 
have intended to include interpretive rules within the 
scope of the revised provision. 
 Then-recent court rulings also explain  why Congress 
added the words “statement of policy,” given its desire to 
mimic the scope of the APA’s rulemaking provision.   At 
the time Congress added this language  in 1987, the D.  C.

Cite as: 587 U. S. ____ (2019) 9 
 
BREYER, J., dissenting 
Circuit had recently described it as  “well established that 
a court, in determining whether notice and comment 
procedures apply to an agency action, will consider the 
agency’s own characterization of the particular action.”  
Telecommunications Research and Action Ctr. v. FCC, 800 
F. 2d 1181, 1186 (1986); s ee also United Tech nologies 
Corp. v. EPA, 821 F.  2d 714, 718 (CADC 1987)  (“[T]he 
agency’s characterization of a rule is ‘relevant’ ”).  And in 
practice, courts appeared to give the agency’s characteri-
zation at least some weight.  See Telecommunications, 800 
F. 2d, at 1186 (finding “no reason to question the Commis-
sion’s characterization” of the challenged action as a “pol- 
icy statement”); General Motors Corp. v. Ruckelshaus, 742 
F. 2d 1561, 1565 (CADC 1984) (en banc) ( finding a rule 
exempt from notice and comment in part because “the 
agency regarded its rule as interpretative”).  These cases 
thus reinforce the likelihood that Congress inserted the 
words “statement of policy” to make clear that the agency 
could not evade the notice- and-comment obligation simply 
by calling a substantive rule  a “statement o f policy.”  In 
deciding whether a particular agency action is (or is not) a 
substantive rule, it is the substantive legal effect  that will 
matter, not the label. 
 In short, the statute’s history provides considerable 
evidence that Congress intended  to replicate the APA 
framework.  Nowhere in this history is there any indic a-
tion that Congress intended to require notice and com-
ment for a broader category than substantive rules. 
C 
 The third—and perhaps strongest—reason for believing 
that Congress inte nded this interpretation is a practical 
reason.  Medicare is a massive federal program, “embodied 
in hundreds of pages of statutes and thousands of pages of 
often interrelated regulations.”  Shalala v. Illinois Council 
on Long Term Care, Inc. , 529 U.  S. 1, 13 (2000).  To help

10 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
participants navigate the statutory and regulatory 
scheme, the agency has issued tens of thousands of pages 
of manual instructions, interpretive rules, and other guid-
ance documents.  And it has followed this practice since 
well before Congress enacted the notice -and-comment 
provisions at issue here.  See supra, at 6. 
 This combination of regulations and informal guidance 
is, we have said, “a sensible structure for the complex 
Medicare reimbursement process.”  Guernsey Memorial 
Hospital, 514 U.  S., at 101.  Notice -and-comment proce-
dures are elaborate and take time to complete.  The Gov-
ernment cites a study showing that notice -and-comment 
rulemakings take an average of four years to complete.  
Pet. for Cert. 20 (citing GAO, D. Fantone, Fed eral Rul e-
making 5, 19 (GAO–09–205, 2009)). 
 To imagine that Congress wanted the agency to use 
those procedures in respect to a large percentage of its 
Medicare guidance manuals is to believe that Congress 
intended to enact what could become a major roadblo ck to 
the implementation of the Medicare program.  As the 
Government warns us, the Court of Appeals’ interpreta-
tion may “substantially undermine” and even “cripple” the 
administration of the Medicare scheme.  See Brief for 
Petitioner 21, 42.  To illustrate this point, consider the 
following provisions of the Medicare Provider Reimburs e-
ment Manual, which the agency has published for de c-
ades.  All of these provisions were held by courts to be 
“interpretive rules,” and hence not subject—before today—
to the statute’s notice-and-comment requirements: 
 
• Provisions governing when provider contributions to 
employee deferred compensation plans are nec essary 
and proper and therefore reimbursable.  Visiting Nurse 
Assn. Gregoria Auffant, Inc.  v. Thompson, 447 F.  3d 
68, 76−77 (CA1 2006).

Cite as: 587 U. S. ____ (2019) 11 
 
BREYER, J., dissenting 
• Provisions governing exceptions to the per diem cost 
limits that the Secretary can authorize in respect to 
routine extended care service costs.  St. Francis Health 
Care Centre v. Shalala, 205 F.  3d 937, 940−943, 947 
(CA6 2000). 
 
• A provision governing whether certain hospital costs 
should be classified as “routine” or “ancillary.”  Na-
tional Med. Enterprises, Inc.  v. Shalala, 43 F.  3d 691, 
694 (CADC 1995). 
 
• A provision governing whether borrowing is considered 
“necessary” when the provider has funds in its funded 
depreciation account that are not committed by co n-
tract to a capital purpose.  Sentara -Hampton Gen. 
Hospital v. Sullivan, 980 F.  2d 749, 751, 756− 760 
(CADC 1992). 
 
• A provision restricting the type of financial arrang e-
ments for which hospitals can recover reimbursement 
for on -call emergency room physicians.  Samaritan 
Health Serv. v. Bowen, 811 F.  2d 1524, 1525, 1529 
(CADC 1987). 
 
• A provision regarding the recapture of excess reim-
bursements resulting from a provider depreciating its 
assets using an accelerated method.  Daughters of Mir-
iam Ctr., 590 F. 2d, at 1254–1255. 
 
• A provision governing whether providers are entitled 
to reimbursement for bad debts when States are obl i-
gated to pay those debts under Medicaid.  GCI Health 
Care Ctrs., Inc. v. Thompson, 209 F.  Supp. 2d 63, 
68−69 (DC 2002). 
 
• A provision disallowing reimbursement of stock

12 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
maintenance costs.  American Medical Int’l, Inc.  v. 
Secretary of Health, Education and Welfare , 466 
F. Supp. 605, 615−616 (DC 1979). 
 
 These examples all involve provisions of the Provider 
Reimbursement Manual, but the agency also publishes 
more than a dozen other manuals , with tens of thousands 
of additional pages of instructions governi ng “the scope of 
benefits, the payment for services, [and] the eligibility” for 
benefits or services.  §1395hh(a)(2).  These include the 
Medicare General Information, Eligibility and Entitlement 
Manual; the Medicare Claims Processing Manual; the 
Medicare Benefit Policy Manual; the Medicare Secondary 
Payer Manual; the Medicare Program Integrity Manual; 
the Medicare Prescription Drug Benefit Manual; and 
many others.  Many provisions of these manuals have 
been deemed interpretive rules as well.  See, e.g., Err inger 
v. Thompson, 371 F. 3d 625, 632 (CA 9 2004) (provisions of 
Program Integrity Manual governing contractors’ creation 
of local coverage determinations); Linoz, 800 F. 2d, at 876–
878 (provision of Carrier ’s Manual carving out an exce p-
tion to the rule gov erning reimbursement for ambulance 
service). 
 Is it reasonable to believe that Congress intended to 
impose notice- and-comment requirements u pon all, or 
most, or even many of these rules, requirements , or 
statements of policy?  See ante, at 16 .  In my view, the 
answer is clearly no.  Yet the Court’s opinion might i m-
pose this unnecessary and potentially severe burden on 
the administration of the Medicare scheme. 
D 
 Finally, interpreting the statute as replicating the APA 
has the added virtues of cl arity and stability.  We know  
that Congress could not have meant to require notice-and-
comment rulemaking for all  agency actions that could

Cite as: 587 U. S. ____ (2019) 13 
 
BREYER, J., dissenting 
conceivably affect substantive Medicare policy.  So there 
must be a way to distinguish the “substantive” rules that 
are covered from the “substantive” rules that are not.  And 
the APA’s notion of a “substantive rule” provides a nat u-
ral, legally understandable, and customary way for judges, 
agencies, and lawyers to perform that task.  In that sense, 
the APA offers us a familiar port in an interpretive storm. 
 The Court not only leaves the APA behind; it fails to 
substitute any reasonably clear alternative standard.  
How is the agency to determine whether a rule “establishes 
or changes a substantive legal standard”?  At one point, 
the Court refers to the hospitals’ view that the statute 
applies to agency actions “that ‘creat[e] duties, rights and 
obligations,’ as distinct from [agency actions] that specif[y] 
how those duties, rights, and obligations should be en-
forced.”  Ante, at 6.  But it later declines to “go so far as” to 
fully endorse that view.  Ante, at 12. 
 At another point, the Court refers to the notice -and-
comment requirement as applying to “avowedly ‘gap’ -
filling polic[ies],” suggesting the case might be differen t if 
the Government had argued that “the statute  itself ” “sup-
plie[d] the controlling legal standard.”  Ante , at 16−17.  
But these statements sound as if the Court is embracing 
the very interpretive -rule exception that its holding d e-
nies.  See, e.g. , Hemp Industries Assn.  v. DEA, 333 F. 3d 
1082, 1087 (CA9 2003) (interpretive rules “merely explain, 
but do not add  to, the substantive law that already exists 
in the form of a statute”); American Hospital Assn. , 834 
F. 2d, at 1046 (agency action is interpretive where it 
“merely reminds parties of existing duties” under a sta t-
ute); cf. Clarian Health West , LLC v. Hargan, 878 F.  3d 
346, 355−356 (CADC 2017) (concluding, after the decision 
below, that manual instructions governing reconciliation 
of outlier payments did not require notice and comment 
because they did not “bind” the agency and because exis t-
ing statutory and regulatory provisions “establish[ed the]

14 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
substantive legal standards”).  If the Court is going to 
effectively exempt interpretive rules from the notice -and-
comment requirement, why not simply say so? 
 Nor does t he Court’s resolution of this particular case  
offer clarity as to the scope of the statute.  The Court holds 
that the agency must provide notice and comment before 
including Medicare Part C patients in the Medicare fra c-
tion.  But  it does not explain why that agency decision 
“establishes or changes a substantive legal standard.”  Is 
it because the decision “affects a hospital’s right to pa y-
ment”?  Ante, at 6.  Is it because the decision ’s financial 
impact is “considerabl[e]”?  Ante, at 3−4.  Is it because the 
agency had previously sought to adopt the same policy 
through notice and comment?  Ante, at 4.  The Court does 
not say. 
 This lack of explanation aggravates the potential burden 
that the Court’s opinion already imposes upon the Medi-
care program.  It may also lead to legal challenges to the 
validity of interpretive rules (or even procedural rules) 
previously thought to have been settled.  And i t will  
thereby increase the confusion that is inevitable once the 
Court rejects the settled and readily available principles that 
courts have learned to use t o identify substantive rules 
under the APA.  These potential adverse consequences 
are, in my view, persuasive evidence that Congress did not 
intend the statute to be construed in this way.   
 To consider these consequences in no way invades Con-
gress’ constitutional authority to “weigh the costs and 
benefits of different approaches and make the necessary 
policy judgment.”  Ante, at 1 6.  Congress exercised that 
authority when it passed the Medicare Act’s notice -and-
comment provisions.  But it  used language that even the 
Court describes as “enigmatic,” ante, at 10, and our role as 
judges is to decipher that enigma.  Examining the poten-
tial consequences of each competing interpreta tion helps 
us perform that task, as we can  presume that Congress

Cite as: 587 U. S. ____ (2019) 15 
 
BREYER, J., dissenting 
did not intend to produce irrational or undesirable practi-
cal consequences.  See  Kirtsaeng v. John Wiley & Sons, 
Inc., 568 U.  S. 519, 538, 544−545 (2013) (concluding that 
Congress did not intend an interpretation of the copyright 
statute that would produce  serious and extensive “pract i-
cal problems”); cf. Home Depot U.  S. A., Inc.  v. Jackson, 
ante, at ___ (ALITO, J., dissenting) (slip op., at 8) (“[A] good 
interpreter also reads a text charitably, not lightly ascri b-
ing irrationality to its author”). 
II 
 The reasons set forth above provide sufficient grounds to 
believe that Congress only intended to require notice and 
comment for substantive rules.  The Court nonetheless 
concludes that three “textual clues” foreclose this interpre-
tation.  Ante, at 10−11.  I have already mentioned one of 
them:  Congress’ use of the w ords “statement of policy” in 
the provision before us.  As I have explained, the most 
plausible explanation for this language is that Congress 
sought to make clear that the agency must use notice and  
comment for any agency pronouncement that amounts to a 
substantive rule—irrespective of the label that the agency 
applies.  See supra, at 8−9. 
 T he remaining two arguments  that the Court off ers to 
defend its interpretation are, in my view, similarly inade-
quate.  The  Court points, for example, to §1395hh(e)(1), 
which Congress added in 2003.  See §903(a)(1), 117 Stat. 
2376.  That subsection limits the agency’s authority to 
make retroactive any “substantive change” in “regulations, 
manual instructions, interpretative rules, statements of 
policy, or guidelines of general applicability.”  The Court  
points out that the word “substantive” in this subsection 
does not mean a “substantive rule” under the APA.  Ante , 
at 8−9.  And  I agree with that observation.  But I cannot 
see how that fact sheds light on the meaning of the phrase 
“establishes or changes a substantive legal standard ,”

16 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
where the adjective “substantive” modifies an entirely 
different noun. 
 We of course normally presume that the same word 
carries a single meaning throughout a given statute.  
Here, however, that presumption is overcome.  The word 
“substantive” in §1395hh(e)(1) modifies the word “change,” 
and the phrase “substantive change” has a known mean-
ing in the law.  It refers to a change to the substance of a 
rule, rather than a technical change to its form.  See, e.g., 
Northwest, Inc.  v. Ginsberg, 572 U.  S. 273, 282 (2014) 
(noting t hat statutory recodification “did not effect any 
‘substantive change’
 ” to the law); see also Black’s Law 
Dictionary 1 469 ( 8th ed. 200 4) (defining “substance” as, 
inter alia, “the essential quality of something, as opposed 
to its mere form ” (emphasis added)).  Thus, §1395hh(e)(1) 
simply says  that the agency cannot retroactively apply 
nontechnical changes made to policies articulated in 
“regulations, manual instructions, interpretative rules, 
statements of policy, or guidelines of general applicabil-
ity.”  The provision before us deals with an entirely diffe r-
ent subject, namely, the use of notice- and-comment proce-
dures.  And the word “substantive” in this context has a 
different and significantly narrower scope. 
 The Court also points to the fact that the Medicare Act  
cross-references the APA’s good -cause exception.  Had 
Congress wanted to pick up the APA ’s exclusion of  inter-
pretive rules, the Court says, it could simply have cross -
referenced the APA’s interpretive- rule exception  as well .  
Ante, at 9– 10.  As a practical matter, the legislative his - 
tory suggests that the absence of a cross-reference is a par-
ticularly unreliable guide to congressional intent in this 
case.  The initial version of the bill passed by the House of 
Representatives unambiguously sought to broaden the 
scope of the APA.  See supra, at 7−8.  Rather than starting 
anew, the Conference Co mmittee retained some of the 
language from the House’s version but revised it to reflect

Cite as: 587 U. S. ____ (2019) 17 
 
BREYER, J., dissenting 
the APA’s notion of a substantive rule.  See ibid.   
 Even putting the drafting history aside, there are many 
reasons why Congress might have chosen to spell out the 
governing standard rather than rest upon an explicit 
cross-reference to a portion of the APA.  Section 
1395hh(a)(2), for example, reflects Congress’  judgment 
that rulemaking is necessary only for a certain subset of 
substantive rules—namely, those governing  “the scope of 
benefits, the payment for services, or the eligibility” for 
benefits or services.  A simple cross-reference to the APA’s 
interpretive-rule exception would not have adequately 
captured this judgment.  The APA’s exception would have 
exempted interpretive rules, but Congress also wanted to 
exempt those substantive rules that do not govern ben e-
fits, payment, or eligibility.  True, Congress could have 
produced the same result by first amending the statute to 
require notice-and-comment for any regu lation governing 
benefits, payment, or eligibility and  then cross-referencing 
the interpretive -rule exception.  But the language of 
§1395hh(a)(2) accomplishes both of those tasks at once.  
 And even  were that not so, there is no rule requiring 
Congress to use cross-references.  As I have explained, the 
Medicare Act’s notice -and-comment provisions already 
operate by way of three cross -linked subsections.  See 
supra, at  2−3.  G iven the complexity of this scheme,  I 
would not second -guess Congress’ decision not  to add yet 
another cross-reference here.   
*  *  * 
 Given the statute’s context, its language, its history, and 
related practical consequences,  I believe th at Congress 
intended the provision before us to apply to all substantive 
rules, irrespective of the labels that the a gency affixed.   
Congress did not, however, intend the provision to require 
notice and comment for  interpretive rules that, by defini-
tion, lack the force and effect of law.  I fear that the Court,

18 AZAR v. ALLINA HEALTH SERVICES 
  
BREYER, J., dissenting 
in rejecting this interpretation, has impr operly (and need-
lessly) “ignore[d] persuasive evidence of Congress’ actual 
purpose.”  W est Virginia Univ. Hospital s, Inc.  v. Casey, 
499 U. S. 83, 115 (1991) (Stevens, J., dissenting) ; cf. John-
son v. United States, 163 F. 30, 32 (CA1 1908) (Holmes, J.) 
(“[I]t is not an adequate discharge of duty for courts to say: 
We see what you are driving at, but you have not said it, 
and therefore we shall go on as before”).   
 If I am right, and if the Court’s opinion will cause seri-
ous confusion or delay , Congress can, through legislation, 
fix the Court’s mistake.  “But legislative action takes time; 
Congress has much to do; and other matters .  . . may 
warrant higher legislative priority.”  Milner v. Department 
of Navy, 562 U.  S. 562, 592 (2011) ( BREYER, J., dissen t-
ing).  Rather than requiring Congress to “revisit the ma t-
ter” and “restate its purpose in more precise English,” 
Casey, 499 U. S., at 115 (Stevens, J., dissenting) , I would 
hold that the Medicare Act only requires notice and co m-
ment for what this Court has  traditionally considered to 
be substantive rules .  I would remand for the Court of 
Appeals to decide in the first instance whether the agen-
cy’s decision in this case qualifies as a substantive or an 
interpretive rule. 
 For these reasons, I respectfully dissent.

Retrieval chunks

• #1

  (Slip Opinion) OCTOBER TERM, 2018 1 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of t he Court but has been prepared by the Reporter of Decisions for t…

• #2

  standard governing . . . the payment for services,” §1395hh(a)(2). The 2 AZAR v. ALLINA HEALTH SERVICES Syllabus court of appeals ultimately sided with the hospitals. Held: Because the government has not identified a lawful excuse for neglecting its statutory notice -and-comment obligations, its policy must be…

• #3

  464 U. S. 16, 23. Pp. 5–12. (b) The Medicare Act ’s text and structure foreclose the govern- ment’s position in this case, and the legislative history presented by the government is ambiguous at best. The government also advances a policy argument: Requiring notice and comment for Medicare inte r- pretive rules…

• #4

  benefits, it must first afford the public notice and a chance to comment. 42 U. S. C. §1395hh(a)(2). In 2014, the government revealed a new policy on its website that dramatically—and retroactively —reduced payments to hospitals serving low -income patients. Because affected members o f the public received no…

• #5

  and-comment regime for the Medicare program. That, of course, it could have easily accomplished in just a few words. Instead, Congress chose to write a new, Medicare - specific statute. The new statute required the government to provide pub lic notice and a 60- day comment period (twice the APA minimum of 30 d…

• #6

  Opinion of the Court tional Part A coverage. Allina Health Services v. Price, 863 F. 3d 937, 939 (CADC 2017). So counting them makes the fraction smaller and reduces hospitals’ payments considerably—by between $3 and $4 bi llion over a 9 -year period, according to the government. Pet. for Cert. 23. The agency…

• #7

  circumstances. Ultimately, the court of appeals sided with the hospitals. 863 F. 3d, at 938. But in doing so the court created a conflict with other circuits that had suggested, if only in passing, that notice and comment wasn’t needed in cases like this. See, e.g., Via Christi Regional Medical Center, Inc. v…

• #8

  adopt the policy at hand. 863 F. 3d, at 943. Very differently, the government suggests the statute means to distinguish a substantive from an interpretive legal standard. Under the APA, “substantive rules” are those that have the “force and effect of law,” while “inter- pretive rules” are thos e that merely “ …

• #9

  REYER, J.). But the statute doesn’t refer to things that are labeled or disguised as statements of policy; it just refers to “statements of policy.” Everyone agrees that when Co n- gress used that phrase in the APA and in other provisions of §1395hh, it referred to things that really are statements of policy. …

• #10

  other things, “interpretative rules” and “statements of policy.” But this statutory authority would make no sense if the Medicare Act used the term “substantive” as the APA does. It wouldn’t because, again, interpretive rules and statements of policy —and any changes to them —are not substantive under the APA b…

• #11

  just that, cross-referencing both of the APA’s exceptions in the Clean Air Act. See §305(a), 91 Stat. 772, 42 U. S. C. §7607(d)(1). Yet it didn’t do the same thing in the Med i- care Act, and Congress’s choice to include a cross-reference to one but not the other of the APA’s neighboring exemp- tions strongly …

• #12

  ingly new phrase to the statute books when it spoke of “substantive legal standards.” And, for all the reasons we have already explored, the term “substantive legal stan d- ard” in the Medicare Act appears to carry a more expa n- sive scope than that borne by the term “substantive rule” under the APA. In reply,…

• #13

  holding accordingly. In doing so, we follow the well -worn path of declining “to issue a sweeping ruling when a nar- row one will do.” McWilliams v. Dunn, 582 U. S. ___, ___ (2017) (slip op., at 14). 2 —————— 1 Nor does §1395hh(e)(1) imply that the statute is using “regulations” and “interpretative rules” to…

• #14

  include the statutory language at issue here. Congress added that language only the f ollowing year, when it enacted §1395hh(a)(2). Nor does the government try to explain how a report on a 1986 bill sheds light on the meaning of statutory terms first introduced in 1987. If anything, the fact that Congress revi…

• #15

  likewise described the final bill as requiring notice and comment for “[s]ignificant policy changes,” not just su b- stantive rules. Summary of Conference Agreement on Reconciliation Provisions Within the Jurisdiction of the Committee on Ways and Means, 100th Cong., 1st Sess., 12–13 (Comm. Print 1987). So in th…

• #16

  also has neglected to acknowledge the potential counte r- vailing benefits. Notice and comment gives affected par- ties fair warning of potential changes in the law and an 16 AZAR v. ALLINA HEALTH SERVICES Opinion of the Court opportunity to be heard on those changes —and it affords the agency a chance to avoid…

• #17

  hasn’t presented. Far from suggesting that the Medicare Act supplies the controlling legal standard for determining whether to count Part C patients, the government has insisted that the statute “does not speak directly to the issue,” Brief for Appellant in Northeast Hospital Corp. v. Sebelius, No. 10 –5163 (CA…

• #18

  whether the agency determination at issue in this case is a substantive rule (which requires notice and comment) or an interpretive rule (which does not). I The arguments in support of my interpretation are 2 AZAR v. ALLINA HEALTH SERVICES BREYER, J., dissenting simple. By using words with meanings that are we…

• #19

  gating any “regulation,” and that a “rule, requirement, or other statement of policy” counts as a “regulation” whenever it “establishes or changes a substantive legal standard.” The question at hand is whether an interpretive rule qualifies as the type of “regulation” that Congress intended to subject to the not…

• #20

  At this point, we can begin to see support in the statutory language for the Government’s interpretation of the notice-and-comment provisions —one that excludes inte r- pretive rules from their scope. By applying the statute only to agency actions that “establish or change a substan- tive legal standard ,” §1395…

• #21

  The answer to this question linguistically is that our provision does not include all “statements of policy ,” but rather only those that are, in effect, substantive rules. That is because the statute d oes not “just refe[r] to ‘state- ments of policy,’ ” ante, at 7; it refers to “statement[s] of policy . . . t…

• #22

  should be subject to” the APA. Medicare Appeals Prov i- sions: Hearing on S. 1158 before the Subcommittee on Health of the Senate Comm ittee on Finance, 99th Cong., 1st Sess., 62 (1985). In 1986, Congress responded to these requests by enacting a p rovision that required public notice and a 60 -day comment per…

• #23

  8 AZAR v. ALLINA HEALTH SERVICES BREYER, J., dissenting effect on the scope of benefits, the payment for services, or the eligibility” for benefits or services . H. R. 3545, 100th Cong., 1st Sess., §4073(a)(2) (1987), 133 Cong. Rec. 30019. The Senate, however, thought the scope of this language was too broad. …

• #24

  F. 2d 1181, 1186 (1986); s ee also United Tech nologies Corp. v. EPA, 821 F. 2d 714, 718 (CADC 1987) (“[T]he agency’s characterization of a rule is ‘relevant’ ”). And in practice, courts appeared to give the agency’s characteri- zation at least some weight. See Telecommunications, 800 F. 2d, at 1186 (finding …

• #25

  Pet. for Cert. 20 (citing GAO, D. Fantone, Fed eral Rul e- making 5, 19 (GAO–09–205, 2009)). To imagine that Congress wanted the agency to use those procedures in respect to a large percentage of its Medicare guidance manuals is to believe that Congress intended to enact what could become a major roadblo ck to t…

• #26

  Care Ctrs., Inc. v. Thompson, 209 F. Supp. 2d 63, 68−69 (DC 2002). • A provision disallowing reimbursement of stock 12 AZAR v. ALLINA HEALTH SERVICES BREYER, J., dissenting maintenance costs. American Medical Int’l, Inc. v. Secretary of Health, Education and Welfare , 466 F. Supp. 605, 615−616 (DC 1979). Th…

• #27

  The Court not only leaves the APA behind; it fails to substitute any reasonably clear alternative standard. How is the agency to determine whether a rule “establishes or changes a substantive legal standard”? At one point, the Court refers to the hospitals’ view that the statute applies to agency actions “that ‘…

• #28

  agency had previously sought to adopt the same policy through notice and comment? Ante, at 4. The Court does not say. This lack of explanation aggravates the potential burden that the Court’s opinion already imposes upon the Medi- care program. It may also lead to legal challenges to the validity of interpret…

• #29

  comment for any agency pronouncement that amounts to a substantive rule—irrespective of the label that the agency applies. See supra, at 8−9. T he remaining two arguments that the Court off ers to defend its interpretation are, in my view, similarly inade- quate. The Court points, for example, to §1395hh(e)(1…

• #30

  referenced the APA’s interpretive- rule exception as well . Ante, at 9– 10. As a practical matter, the legislative his - tory suggests that the absence of a cross-reference is a par- ticularly unreliable guide to congressional intent in this case. The initial version of the bill passed by the House of Represen…

• #31

  tion, lack the force and effect of law. I fear that the Court, 18 AZAR v. ALLINA HEALTH SERVICES BREYER, J., dissenting in rejecting this interpretation, has impr operly (and need- lessly) “ignore[d] persuasive evidence of Congress’ actual purpose.” W est Virginia Univ. Hospital s, Inc. v. Casey, 499 U. S. 83…