American Hospital Association v. Becerra

American Hospital Association v. Becerra
Supreme Court of the United States
Argued November 30, 2021 Decided June 15, 2022
Full case name	American Hospital Association, et al. v. Xavier Becerra, Secretary of Health and Human Services, et al.
Docket no.	20-1114
Citations	596 U.S. 724 (more) 142 S. Ct. 1896 (2022)
Argument	Oral argument
Questions presented
Whether Chevron deference permits HHS to set reimbursement rates based on acquisition cost and vary such rates by hospital group if it has not collected adequate hospital acquisition cost survey data. Whether petitioners' suit challenging HHS's adjustments is precluded by 42 U.S.C. §13951(t)(12).
Holding
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 does not preclude judicial review of the reimbursement rates set by the Department of Health and Human Services for certain outpatient prescription drugs that hospitals provide to Medicare patients; in this case, because HHS did not conduct a survey of hospitals’ acquisition costs in 2018 and 2019, its decision to vary reimbursement rates only for 340B hospitals in those years was unlawful.
Court membership
Chief Justice John Roberts Associate Justices Clarence Thomas · Stephen Breyer Samuel Alito · Sonia Sotomayor Elena Kagan · Neil Gorsuch Brett Kavanaugh · Amy Coney Barrett
Case opinion
Majority	Kavanaugh, joined by unanimous
Laws applied
Medicare Prescription Drug, Improvement, and Modernization Act

American Hospital Association v. Becerra, 596 U.S. 724 (2022), was a United States Supreme Court case relating to administrative law. The case centered on a rule from the Department of Health and Human Services, which reduced reimbursement rates for certain hospitals. Several hospital associations and hospitals affected by the rule sued HHS, alleging that it exceeded its statutory authority. The court was tasked with deciding if the rule was a reasonable interpretation of the law, and if the statute blocked judicial review of the rule in the first place.

Background

Rule in question

The rule challenged dealt with 340B hospitals and Medicare Part B insured patients. Previously, the government reimbursed hospitals at a uniform rate if they provided outpatient care to Medicare Part B recipients. HHS then changed the rule to reduce reimbursement rates for 340B hospitals, because they could get drugs at lower costs.

Lower court decisions

The United States District Court for the District of Columbia initially found in favor of the American Hospital Association (AHA), stating the government exceeded its statutory authority. The United States Court of Appeals for the District of Columbia Circuit reversed, finding that the rule was a reasonable interpretation of the law, and applied deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.. On March 15, 2021, the AHA filed a petition for a writ of certiorari.

Supreme Court

The Supreme Court granted certiorari on July 2, 2021, adding a question presented of whether the courts had jurisdiction to consider the challenge to the rule. It heard oral arguments on November 30, 2021. On June 15, 2022, the Supreme Court reversed the D.C. Circuit in a 9–0 decision, written by Justice Brett Kavanaugh.

The court ruled that the statute does not give the Department of Health and Human Services the authority or the discretion to vary the reimbursement rates for 340B hospitals.

Many legal experts considered the case to have significant consequences for the future of Chevron deference, and although the precedent was discussed extensively during oral arguments, the opinion did not mention it even once.

See also

• Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.
• Loper Bright Enterprises v. Raimondo

External links

• Text of American Hospital Association v. Becerra, 596 U.S. ___ (2022) is available from: Google Scholar Justia Oyez (oral argument audio) Supreme Court (slip opinion)