Chevron deference

Advocate Christ Medical Center v. Becerra

Issues

Are patients “entitled to” SSI benefits when they are eligible for SSI benefits or when they are receiving cash SSI benefits?

The Disproportionate Share Hospital adjustment (“DSH”) is a statutory provision administered by the Centers for Medicare & Medicaid Services (“CMS”) within the Department of Health and Human Services (“HHS”) that increases payments to hospitals serving high percentages of low-income patients to account for their increased treatment costs. At issue here is how eligibility for Supplemental Security Income (“SSI”) affects these DSH payments. Advocate Christ Medical Center argues that the phrase “entitled to [SSI] benefits” in the DSH provision should include all patients enrolled in the SSI program, even if they do not receive monthly cash payments. HHS counters that only patients receiving cash benefits during hospitalization should count. This case has important ramifications on agency interpretation, administrative workability, and hospitals’ ability to accept low-income patients.

Questions as Framed for the Court by the Parties

Whether the phrase “entitled ... to benefits,” used twice in the same sentence of the Medicare Act, means the same thing for Medicare part A and Supplemental Social Security benefits, such that it includes all who meet basic program eligibility criteria, whether or not benefits are actually received.

Administered by the Centers for Medicare & Medicaid Services (“CMS”) within the Department of Health and Human Services (“HHS”), the Medicare program aims to provide health insurance to elderly or disabled individuals. Advocate Christ Med. Ctr. v. Becerra at 349, 351. Hospitals receive a fixed payment for treating a Medicare patient. Id. At 349.

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American Hospital Association v. Becerra

Issues

Is the Department of Health and Human Services entitled to deference in its interpretation of a statute that enabled it to reduce drug reimbursement rates for hospitals; alternatively, is the Department of Health and Human Services’ action unreviewable because of 42 U.S.C. § 1395l(t)(12)?

This case asks the Supreme Court to determine the scope of authority granted to the Department of Health and Human Services (“HHS”) in setting hospital Medicare reimbursement rates for outpatient drugs. The Medicare Modernization Act (“MMA”) prescribes two alternative reimbursement rate methodologies for outpatient drugs—hospital acquisition cost or average drug price—and conditions HHS’s choice on whether HHS collects hospital drug cost-acquisition data. American Hospital Association et al. argue that MMA prevents HHS from tailoring rates to hospital acquisition costs and varying rates by group unless HHS has the requisite data. Xavier Becerra responds that MMA gives HHS the authority to “adjust” reimbursement rates as necessary, and therefore deference under Chevron permits HHS discretion to set reasonable rates. The outcome of this case has significant implications for the financial health of 340B hospitals, and the Medicare system more broadly, as well as the scope of the administrative state and judicial deference under Chevron.

Questions as Framed for the Court by the Parties

(1) Whether deference under Chevron U.S.A. v. Natural Resources Defense Council permits the Department of Health and Human Services to set reimbursement rates based on acquisition cost and very such rates by hospital group if it has not collected adequate hospital acquisition cost survey data; and (2) whether petitioners’ suit challenging HHS’s adjustments is precluded by 42 U.S.C. § 1395l(t)(12).

The Medicare program consists of Part A and Part B. Am. Hosp. Ass’n v. Azar at 820. Under Medicare Part B, which provides coverage for certain hospital-administered drugs, the Department of Health and Human Services (“HHS”) sets hospital reimbursement rates. Id. The “Outpatient Prospective Payment System” (“OPPS”) regulates the establishment of these rates.

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Becerra v. Empire Health Foundation

Issues

Did the Secretary of the Health and Human Services permissibly include in a hospital’s Medicare reimbursement calculation all the days that a hospital treated patients who satisfied the requirements to be entitled to Medicare Part A benefits, regardless of whether Medicare paid the hospital for those particular days?

This case asks the Supreme Court to determine whether an agency had the authority to interpret the Medicare statute and change the calculation of payments distributed to hospitals that serve low-income patients who receive Medicare benefits. Petitioner Xavier Becerra, the Secretary of Health and Human Services, argues that the Department of Health and Human Services properly followed the procedural and substantive requirements of the Administrative Procedure Act when implementing its interpretation of the meaning of “entitled to” Medicare benefits in effecting a new calculation for determining two different pools of low-income patients. Respondent Empire Health Foundation counters that the agency’s rule causes a severe undercount of the low-income patient pool, causing those hospitals that serve indigent patients to receive a significantly lower reimbursement amount. The outcome of this case has important implications for the distribution of Medicaid funding and the extension of deference to government agencies’ reasonable interpretations of legislation.

Questions as Framed for the Court by the Parties

Whether, for purposes of calculating additional payment for hospitals that serve a “significantly disproportionate number of low-income patients,” the secretary of health and human services has permissibly included in a hospital’s Medicare fraction all of the hospital’s patient days of individuals who satisfy the requirements to be entitled to Medicare Part A benefits, regardless of whether Medicare paid the hospital for those particular days.

The Medicare program currently provides additional payments, known as the disproportionate-share-hospital (“DSH”) adjustment, to hospitals that treat a significantly higher number of low-in

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Coventry Health Care of Missouri, Inc. v. Nevils

Issues

Does the Federal Employees Health Benefits Act (“FEHBA”) preempt state anti-subrogation law and does 5 U.S.C. § 8902(m)(1) violate the Supremacy Clause? 

The Supreme Court will decide whether § 8902(m)(1) of the Federal Employees Health Benefits Act (“FEHBA”) allows insurance companies to collect reimbursements from the insured after personal injury claims or whether a “presumption against preemption” allows state anti-subrogation laws to prevail.  Petitioner Coventry Health of Missouri, Inc. argues that FEHBA unambiguously preempts state anti-subrogation laws; preemption comports with the Supremacy Clause; and the Office of Personnel Management’s new final rule, codified in § 8902(m)(1), should be granted Chevron deference. In contrast, Respondent Jodie Nevils argues that FEHBA’s language is ambiguous; Chevron deference does not apply; and allowing preemption of state anti-subrogation law violates the Supremacy Clause by encroaching on law traditionally left to the states to regulate. This case will clarify the potential for state anti-subrogation law preemption to influence the cost of health care coverage for FEHBA plan enrollees and will address federalism concerns regarding the balance of power between the federal government and the states for the administration and provision of health insurance to federal employees. 

Questions as Framed for the Court by the Parties

The Federal Employees Health Benefits Act (“FEHBA”), 5 U.S.C. § 8901 et seq., governs the health benefits of millions of federal workers and dependents, and authorizes the Office of Personnel Management (“OPM”) to enter into contracts with private insurance carriers to administer benefit plans. FEHBA expressly “preempt[s] any State or local law” that would prevent enforcement of “[t]he terms of any contract” between OPM and a carrier which “relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits).” In a 2015 regulation, OPM codified its longstanding position that FEHBA-contract provisions requiring carriers to seek subrogation or reimbursement “relate to . . . benefits” and “payments with respect to benefits,” and therefore FEHBA preempts state laws that purport to prevent FEHBA insurance carriers from pursuing subrogation and reimbursement recoveries. 5 C.F.R. § 890.106(h). Expressly disagreeing with multiple federal circuits and state appellate courts, the Missouri Supreme Court nevertheless construed FEHBA not to preempt state laws—explicitly refusing to accord any deference to OPM’s regulation. A majority of the court further concluded that Section 8902(m)(1) violates the Supremacy Clause of the U.S. Constitution. The questions presented are:

  1. Whether FEHBA preempts state laws that prevent carriers from seeking subrogation or reimbursement pursuant to their FEHBA contracts.
  2. Whether FEHBA’s express-preemption provision, 5 U.S.C. § 8902(m)(1), violates the Supremacy Clause. 

In 2006, Respondent Jodie Nevils, a federal employee working for the United States Postal Service, was injured in a car accident. See Brief for Respondent, Jodie Nevils at 11. Nevils was covered by a health insurance plan through the petitioner Coventry Health Care of Missouri, Inc.

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Cuomo v. Clearing House Association, L.L.C.

Issues

Whether the Office of the Comptroller of the Currency's regulation 12 C.F.R. § 7.4000, which interprets 12 U.S.C. §484(a) of the National Bank Act to preempt state enforcement of state laws against national banks even when the state laws are not substantively preempted, is entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and/or whether the regulation is invalid because of the construction of the National Bank Act, as announced in First National Bank in St. Louis v. Missouri, 263 U.S. 640 (1924).

 

Suspecting racially discriminatory lending practices, the Attorney General of New York State sent letters of inquiry to numerous national banks requesting information about their lending practices and warning them of the potential illegality of their acts. The Office of the Controller of the Currency ("OCC") and the Clearing House Association L.C.C., which consists of several national banks, maintained that the National Bank Act's "visitorial powers" provisions, interpreted by the OCC in 12 C.F.R. § 7.4000, bar states from enforcing state laws against national banks. The Attorney General argues that the OCC's interpretation of § 7.4000 violates the Administrative Procedures Act, and that the National Bank Act's "visitorial powers" provisions do not interfere with state enforcement of their generally applicable laws. The decision in this case may affect lending practices and the balance of power between the federal government and state governments.

Questions as Framed for the Court by the Parties

12 U.S.C. § 484(a), a provision of the National Bank Act, prohibits the exercise of "visitorial powers" as to national banks, except where those powers are authorized by federal law, vested in the courts of justice, or exercised by Congress or a House or committee thereof. The Office of the Comptroller of the Currency has issued a regulation (12 C.F.R. § 7.4000) interpreting § 484(a) to preempt state enforcement of state laws against national banks, even when the state laws are not substantively preempted.

The questions presented are:

1. Whether 12 C.F.R. § 7.4000 is entitled to judicial deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

2. Whether 12 C.F.R. § 7.4000 is invalid because it is inconsistent with the authoritative construction of the National Bank Act by this Court in First National Bank in St. Louis v. Missouri, 263 U.S. 640 (1924).

In 2005, Eliot Spitzer, in his official capacity as the New York State Attorney General, began investigating several national banks and their residential real estate lending practices for evidence of racial discrimination. See Clearing House Ass'n L.L.C. v.

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EPA v. EME Homer City Generation

Issues

Consolidated with American Lung Association v. EME Home City Generation (12-1183).

  1. Did the EPA permissibly interpret the phrase “contribute significantly” when it balanced achievable emission reduction levels against the cost of achieving such emission reductions?   
  2. Can states wait for the EPA to adopt a rule quantifying each state’s “good neighbor” obligations before they adopt a state implementation plan prohibiting emissions that “contribute significantly” to other states’ pollution problems?

In 1963, in response to growing concerns of pollution, Congress passed the Clean Air Act (CAA). The CAA requires the Environmental Protection Agency (EPA) to set certain air quality standards for harmful pollutants, and includes a “Good Neighbor” provision requiring states to adopt plans that prohibit pollution that would “contribute significantly” to other states’ nonattainment of these standards.  However, the CAA does not define “significant contribution.”  In 2011, the EPA finalized a rule known as the “Transport Rule.”  Mirroring the language of the “good neighbor” provision, the Transport Rule defines emission reduction obligations for several upwind states that “contribute significantly” to downwind states’ nonattainment of the EPA’s air quality standards.  In determining what constitutes a significant contribution, the EPA balanced achievable emission reductions against the cost of achieving those reductions.  However, in EME Homer City Generations v. EPA, the D.C. Circuit struck down the Transport Rule and rejected the EPA’s analysis for determining what constitutes a significant contribution in this context.  These two cases present the Supreme Court with questions about the EPA’s interpretation of its statutory grant of authority under the CAA as well as questions about the jurisdiction of the D.C. Circuit to hear the challenges presented.  This case also raises concerns about federal intervention in state affairs and public health concerns posed by the EPA’s interpretation of the CAA.  Should the Supreme Court decide this case on the merits, the Court’s decision will significantly affect the EPA’s grant of authority to regulate interstate pollution. 

Questions as Framed for the Court by the Parties

EPA V. EME HOMER CITY GENERATION

The Clean Air Act, 42 U.S.C. 7401 et seq. (Act of CAA), requires the Environmental Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) for particular pollutants at levels that will protect the public health and welfare. 42 U.S.C. 7408, 7409.  “[W]ithin 3 years” of promulgation of a [NAAQS],” each State must adopt a state implementation plan (SIP) with “adequate provisions” that will, inter alia, “prohibit[]” pollution that will “contribute significantly” to other States’ inability to meet, or maintain compliance with, the NAAQS. 42 U.S.C. 7410(a)(1), (2)(D)(i)(I).  If a State fails to submit a SIP or submits an inadequate one, the EPA must enter an order so finding. 42 U.S.C. 7410(k).  After the EPA does so, it “shall promulgate a [f]ederal implementation plan” for that State within two years. 42 U.S.C. 7410(c)(1).   

The questions presented are as follows: 

  1. Whether the court of appeals lacked jurisdiction to consider the challenges on which it granted relief.
  2. Whether States are excused from adopting SIPs prohibiting emissions that “contribute significantly” to air pollution problems in other States until after the EPA has adopted a rule quantifying each State’s interstate pollution obligations.
  3. Whether the EPA permissibly interpreted the statutory term “contribute significantly” so as to define each upwind State’s “significant” interstate air pollution contributions in light of the cost-effective emission reductions it can make to improve air quality in polluted downwind areas, or whether the Act instead unambiguously requires the EPA to consider only each upwind State’s physically proportionate responsibility for each downwind air quality problem.

American Lung Association v. EME Home City Generation (12-1183)

QUESTIONS PRESENTED:

The Clean Air Act’s “Good Neighbor” provision requires that state implementation plans contain “adequate” provisions prohibiting emissions that will “contribute significantly” to another state’s nonattainment of health-based air quality standards. 42 U.S.C. 7410(a)(2)(D)(i).  A divided D.C. Circuit panel invalidated, as contrary to statute, a major EPA regulation, the Transport Rule, that gives effect to the provision and requires 27 states to reduce emissions that contribute to downwind states’ inability to attain or maintain air quality standards.  The questions presented are:

  1. Whether the statutory challenges to EPA’s methodology for defining upwind states’ “significant contributions” were properly before the court, given the failure of anyone to raise these objections at all, let alone with the requisite “reasonable specificity,” “during the period for public comment,” 42 U.S.C. 7607(d)(7)(B);
  2. Whether the court’s imposition of its own detailed methodology for implementing the Good Neighbor provision violated foundational principles governing judicial review of administrative decision-making; 
  3. Whether an upwind state that is polluting a downwind state is free of any obligations under the Good Neighbor provision unless and until EPA has quantified the upwind state’s contribution to downwind states’ air pollution problems.  

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Facts

In passing the Clean Air Act, Congress empowered the Environmental Protection Agency (EPA) to set National Ambient Air Quality Standards (NAAQS), the maximum permissible levels of common pollutants released into the air.  See EME Homer City Generation v. EPA, 696 F.3d 7, 12 (D.C. Cir. 2012).

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Hawkins v. Community Bank of Raymore

Issues

  1. Do loan guarantors have the same rights and protections that their applicant spouses are given by the Equal Credit Opportunity Act?
  2. Does the Federal Reserve Board have the authority to define guarantors as applicants for purposes of the Equal Credit Opportunity Act?

 

The Supreme Court will consider whether protections for applicants in the Equal Credit Opportunity Act (“ECOA”) also extend to spouses who sign guaranties, and whether the Federal Reserve Board (the “Fed”), in promulgating Regulation B, permissibly expanded the definition of “applicant” in the ECOA to include such guarantors. See Brief for Petitioners, Hawkins & Patterson at i, 8; Brief for Respondent, Community Bank of Raymore at i. The loan guarantors in this case (Hawkins and Patterson) maintain that ECOA’s protections for applicants extend to guarantors, because the ECOA does not explicitly exclude them, and Regulation B clarifies that the ECOA definition of applicants includes guarantors. See Brief for Petitioners at 16, 56. Accordingly, Hawkins and Patterson assert that they have standing to sue to invalidate the loan agreement as illegal and unenforceable under ECOA.  See id. at 51. Raymore, the creditor here, counters that the plain language of the ECOA protects only applicants, not guarantors. See Brief for Respondent at 17–21. Raymore contends that any attempt by the Fed, through Regulation B, to expand the definition of “applicant” in the ECOA to include guarantors was impermissible. See id. at 46. The Supreme Court’s  decision in this case  could affect the cost of borrowing and change the underwriting standards and costs for loans to married business owners.

Questions as Framed for the Court by the Parties

  1. Whether “primarily and unconditionally liable” spousal guarantors are unambiguously excluded from being Equal Credit Opportunity Act applicants because they are not integrally part of “any aspect of a credit transaction”; and
  2. Whether the Federal Reserve Board has authority under the ECOA to include by regulation spousal guarantors as “applicants” to further the purposes of eliminating discrimination against married women.

This case begins with a loan dispute between Valerie Hawkins and Janice Patterson, as guarantors, and the Community Bank of Raymore, (“Raymore”), as creditor. See Hawkins v. Cmty. Bank of Raymore, 761 F.3d 937, 939 (8th Cir.

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Kingdomware Technologies, Inc. v. United States of America

Issues

Does the Veterans Act of 2006 allow the Department of Veterans Affairs discretion in deciding whether to award a contract to a veteran-owned business?

 

The Supreme Court will consider whether the 2006 Veterans Act (the “Veterans Act”) always requires the Department of Veteran Affairs (the “VA”) to award its contracts to veteran-owned small businesses. See Brief for Petitioner, Kingdomware Technologies, Inc. at i. Kingdomware, a veteran-owned small business, maintains that the language, purpose, and history of the Veterans Act verify that the requirement is mandatory. See Brief for Petitioner at 28. The United States, as respondent, maintains that the Veterans Act’s contract-awarding procedure does not apply when the VA places orders under pre-existing Federal Supply Schedule contracts. See Brief for Respondent, United States of America at 25. Further, the United States asserts that the VA’s interpretation of the Veterans Act is reasonable and warrants judicial deference. See Brief for Respondent at 47. The Court’s  decision in this case  could significantly affect the business opportunities available to veterans and the VA’s ability to provide efficient and cost-effective services. See Brief of Amici Curiae National Veteran Small Business Coalition et al. (“NVSBC”), in Support of Petitioner at 12; see Brief for Respondent at 39.

Questions as Framed for the Court by the Parties

Did the Federal Circuit err in construing the 2006 Veterans Act's mandatory set-aside restricting competition for Department of Veterans Affairs’ contracts to veteran-owned small businesses as discretionary?

In January 2012, the Department of Veteran Affairs (“VA”) decided to obtain an Emergency Notification System (“ENS”) for several of its medical centers and outpatient clinics. Kingdomware Techs., Inc. v. United States, 107 Fed. Cl. 226, 235 (Fed. Cl.

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Kisor v. Wilkie

Issues

Should the Supreme Court overrule Auer v. Robbins and Bowles v. Seminole Rock & Sand Co., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation?

This case asks the Supreme Court to determine whether Auer deference—a rule that requires a court to defer to an agency’s reasonable interpretation of its own ambiguous regulation—ought to be overruled. James Kisor contends that the Auer doctrine is not part of the lawmaking authority that Congress has delegated to agencies, but it instead circumvents the limits that Congress has placed on their authority, is inconsistent with the U.S. Constitution, and lacks any policy justification. Robert Willkie, the Secretary of Veterans Affairs, counters that, while there should be significant limitations on Auer deference, altogether discarding the doctrine would have heavy practical consequences for both agencies and regulated parties. The outcome of this case will affect the ability of regulated individuals and entities to comply with agency regulations and to challenge agency interpretations of their own regulations.

Questions as Framed for the Court by the Parties

Whether the Supreme Court should overrule Auer v. Robbins and Bowles v. Seminole Rock & Sand Co., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation.

Petitioner James L. Kisor is a veteran who served on active duty in the Marine Corps from 1962 to 1966. Kisor v. Shulkin at 1361. Kisor filed a claim for disability compensation benefits with the Department of Veteran Affairs (“VA”) Regional Office in Portland, Oregon in 1982, claiming that he suffered from post-traumatic stress disorder (“PTSD”).

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Long Island Care at Home v. Coke

Issues

Must a federal court defer to a Department of Labor regulation that interprets the Fair Labor Standards Act as exempting home care workers employed by agencies or other third parties if the regulation was published under the heading “Interpretations?”

 

The Fair Labor Standards Act sets the minimum wage and other mandatory benefits for workers. Homecare workers such as babysitters and companions to the elderly are exempt from its provisions when employed directly for the family they work for, but what about when they are employed by a third party provider of such services? After following a notice-and-comment rulemaking procedure the Department of Labor said, in 29 C.F.R. § 552.109(a) under the heading “interpretations,” that such third-party employed workers are exempt from the minimum wage requirement. Coke, a homecare worker employed by third-party provider Long Island Care at Home, brought suit questioning the validity of § 109(a). The Second Circuit Court of Appeals held the regulation was unenforceable. The United States Supreme Court now takes up the question of whether the Second Circuit gave the proper amount of deference to the Department of Labor’s stance on the regulation in question.

Questions as Framed for the Court by the Parties

Whether the Second Circuit erred in refusing to give deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), to a thirty-year-old Department of Labor regulation—a regulation that has twice been upheld by the Tenth Circuit—on the ground that, even though it was promulgated under express grants of legislative authority and after full notice-and-comment rulemaking, the regulation was contained in a subpart headed “Interpretations.”
Whether, in holding that a longstanding Department of Labor regulation was not persuasive and thus undeserving of any deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), the Second Circuit erred by failing to address the governing provisions of the Fair Labor Standards Act and by declining to give any weight to the Department’s interpretation of its own regulations.

Originally, the Fair Labor Standards Act (FLSA) mandated a minimum wage and overtime benefits to those workers whose employer was engaged in commerce or produced goods for commerce and whose gross sales met or exceeded $250,000. 29 U.S.C. § 213.

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