Neil McGill Gorsuch

“ 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 seemingly 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 standard” in the Medicare Act appears to carry a more expansive scope than that borne by the term “substantive rule” under the APA.
In reply, the dissent stresses that §1395hh refers to agency actions requiring notice and comment as “regulations.” ”

“ 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. ”

“ Since Medicare’s creation and under what’s called “Medicare 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 offered additional payments to institutions that serve a “disproportionate number” of such persons. ”

“ 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. ”

“ 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.” ”

“ Surely a rational Congress could have thought those benefits especially valuable 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. ”

“ So it seems at least equally plausible that the conference committee revised the House’s language because it feared that language would have subjected procedural rules to notice-and-comment obligations. ”

“ Amalgamated Bank, 566 U. S. 639, 647 (2012) ; see Advocate Health Care Network 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”) . ”