Dana Farber Cancer Institute v. Eric Hargan

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 3, 2017 Decided December 22, 2017

No. 16-5379

DANA-FARBER CANCER INSTITUTE,

APPELLEE

v.

ERIC D. HARGAN, ACTING SECRETARY, UNITED STATES

DEPARTMENT OF HEALTH AND HUMAN SERVICES,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:14-cv-01269)

Carleen M. Zubrzycki, Attorney, U.S. Department of

Justice, argued the cause for appellant. With her on the briefs

were Michael S. Raab, Attorney, Janice L. Hoffman, Associate

General Counsel, U.S. Department of Health & Human

Services, and Susan Maxson Lyons, Deputy Associate General

Counsel for Litigation. R. Craig Lawrence, Assistant U.S.

Attorney, entered an appearance.

Douglas H. Hallward-Driemeier argued the cause for

appellee. With him on the brief was Deborah K. Gardner.

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Before: ROGERS, KAVANAUGH, and WILKINS, Circuit

Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The issue on appeal concerns

Medicare reimbursement owed to the Dana-Farber Cancer

Institute, Inc. for a tax that it paid monthly to the

Commonwealth of Massachusetts, the receipts of which

Massachusetts used to compensate Dana-Farber for services

provided to uninsured, low-income individuals. The Provider

Reimbursement Review Board in the U.S. Department of

Health and Human Services determined that by statute and

regulation Dana-Farber was entitled to reimbursement only for

the net of Medicare’s share of the tax and compensation Dana-

Farber received from Massachusetts. Dana-Farber appealed,

and the district court granted it partial summary judgment,

agreeing that Dana-Farber was entitled to full reimbursement

of Medicare’s share of the tax paid and vacating the Board’s

decision. The Secretary of Health and Human Services

appeals, and for the following reasons, we reverse.

I.

Medicare is a federal insurance program that compensates

hospitals for certain healthcare services provided to eligible

patients. 42 U.S.C. § 1395 et seq. Eligible patients must be at

least 65 years of age or suffering from disabilities. Id. § 1395c.

The Secretary is authorized to award Medicare compensation

only for “reasonable costs,” id. § 1395f(l), which Congress has

determined is the “cost actually incurred,” id.

§ 1395x(v)(1)(A). The Secretary is also to establish methods

for determining “reasonable costs” so “the necessary costs of

efficiently delivering covered services to individuals covered

by [Medicare] will not be borne by individuals not so covered,

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and the costs with respect to individuals not so covered will not

be borne by [Medicare.]” Id. The Secretary, acting through

the Centers for Medicare and Medicaid Services (“CMS”), 42

U.S.C. § 1395b-9(a)(1), (3), has by regulation defined

“reasonable costs” as “all necessary and proper costs incurred

in furnishing the [Medicare] services,” 42 C.F.R. § 413.9(a).

“All discounts, allowances, and refunds of expenses are

reductions in the cost of goods or services purchased and are

not income.” Id. § 413.98(c). Thus, “refunds of previous

expense payments are clearly reductions in costs and must be

reflected in the determination of allowable costs.” Id.

§ 413.98(d)(2).

Since 1985, Massachusetts has levied a tax on acute care

hospitals based upon each hospital’s share of private-sector

care provided. 1985 Mass. Acts 855. CMS approved the tax

(“Hospital Tax”) as a permissible means for generating revenue

to fund Medicaid payments; the tax is uniformly imposed,

broadly based, and does not contain a “hold harmless” feature,

42 U.S.C. § 1396b(w)(1)(A)(ii), (iii), (4); 42 C.F.R.

§ 433.68(b), (f). Revenue from the Hospital Tax is deposited

into a trust fund (“Fund”), which is also funded by State

appropriations and private insurance companies. The Fund is

used to reimburse hospitals for care provided to low-income

individuals under Medicaid, as well as to compensate medical

care organizations and experimental programs supporting low-

income individuals.

In the scheme administered by Massachusetts, acute care

hospitals are notified monthly of their estimated Hospital Tax

liabilities and Fund payments, if any. A Fund payment is

deposited into the hospital’s designated bank account. Next,

the hospital deposits its estimated tax liability minus the

anticipated Fund payment into the same account — a net

amount. Finally, Massachusetts collects the entire amount of

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money in the hospital’s bank account, which is the sum of the

deposited Fund payment and tax liability.

The parties agree that the Hospital Tax is an allowable cost

under Medicare. From fiscal years 2004 to 2008, Dana-Farber

incurred and paid a total of $23,402,239 in Hospital Tax

liability. Dana-Farber also received Fund payments during

each fiscal year, totaling $9,001,366. Dana-Farber then sought

Medicare reimbursement for the full amount of Hospital Tax

assessment attributable to Medicare. A Medicare intermediary

ruled Dana-Farber was entitled only to the net of the Hospital

Tax assessment less the Fund payments received in each fiscal

year. For example, in fiscal year 2007 Dana-Farber paid

$5,245,830 in Hospital Tax liability and received $2,479,708

in Fund payments, so the intermediary determined Dana-Farber

actually incurred only the net of these two amounts,

$2,766,122.

Dana-Farber consolidated its challenges to the

intermediary’s decisions and appealed to the Provider

Reimbursement Review Board. See 42 U.S.C. § 1395oo; 42

C.F.R. § 405.1845. The Board affirmed the intermediary’s

decisions, except for a mathematical error not relevant to this

appeal. The Board determined that the statutory directive to

reimburse providers only for “reasonable cost[s] . . . actually

incurred,” 42 U.S.C. § 1395x(v)(1)(A), and the implementing

regulations, 42 C.F.R. §§ 413.9, 413.98, meant that Dana-

Farber was entitled to reimbursement only for the net amount

of the Hospital Tax it actually paid. Further, the Board

concluded that, under 42 U.S.C. § 1395x(v)(1)(A) and 42

C.F.R. § 413.9, “the uncompensated care payments act as a

refund to reduce cost (i.e., the Tax)” and that this interpretation

was consistent with 42 C.F.R. § 413.98 and the Provider

Reimbursement Manual, pub. 15-1, pt. 1 §§ 800, 804. Dana

Farber Cancer Inst., 2014 WL 11127854, at *10 (May 28,

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2014) (emphasis added). When the Administrator of CMS

declined to review the Board’s decision, and the Secretary took

no action to revise or reverse it, the Board decision became

final. 42 U.S.C. § 1395oo(f)(1); 42 C.F.R. § 405.1877(b)(2).

Dana-Farber appealed, arguing in the district court that the

decision to offset the Fund payments from the gross amount of

Dana-Farber’s Hospital Tax was arbitrary and capricious under

the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-

06. The parties filed cross motions for summary judgment, and

the district court partially granted Dana-Farber’s motion. The

district court reasoned that under a “plain reading” of the

regulation, a refund has a “temporal and substantive

relationship” such that “the amount paid back must be for a

‘previous expense payment’ to reduce the ‘related expense.’”

Dana-Farber Cancer Inst. v. Burwell, 216 F. Supp. 3d 49, 58-

59 (D.D.C. 2016) (quoting 42 C.F.R. § 413.98(a)). Finding the

Fund payments were made to reduce Dana-Farber’s costs of

providing care to under- and uninsured patients, and not to

reduce the expense of the Hospital Tax, the district court

vacated the Board’s decision. Id. at 59-60. The district court

also noted the Board’s interpretation of the regulation did not

account for the circumstance where a hospital’s Fund payments

exceeded the amount it paid in hospital taxes. Id. at 60.

The Secretary appeals, and this court reviews the grant of

summary judgment de novo, “review[ing] the administrative

record directly.” Dist. Hosp. Partners, L.P. v. Burwell, 786

F.3d 46, 54 (D.C. Cir. 2015) (internal quotation marks and

citation omitted).

II.

At issue is the Board’s interpretation of two regulations

expounding upon the statutory directive to reimburse only

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“reasonable cost[s] . . . actually incurred,” 42 U.S.C.

§ 1395x(v)(1)(A). Under 42 C.F.R. § 413.9(b)(1), the

“[r]easonable cost of any services must be determined in

accordance with regulations establishing the method or

methods to be used.” Under 42 C.F.R. § 413.98, which

prescribes the method for taking into account offsets such as

refunds, the stated “[p]rinciple” is: “Discounts and allowances

received on purchases of goods or services are reductions of

the costs to which they relate. Similarly, refunds of previous

expense payments are reductions of the related expense.” Id.

§ 413.98(a). The regulation further provides that, under the

“[n]ormal accounting treatment,” refunds “are reductions in the

cost of goods or services purchased and are not income.” Id.

§ 413.98(c). Thus, under the plain terms of the regulation,

refunds “must be reflected in the determination of allowable

costs.” Id. § 413.98(d)(2). The Manual similarly instructs that

discounts, allowances, and refunds “are reductions of the cost”

or “related expense,” Manual § 800, explaining that “[t]he true

cost of goods and services is the net amount actually paid for

the goods or services,” id. § 804.

Because Dana-Farber does not maintain that the

regulations are contrary to the statute, the question for the court

is whether the Board’s interpretation of the regulations was

reasonable. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504,

506, 512 (1994). The court may only “hold unlawful and set

aside agency action,” 5 U.S.C. § 706(2), that is “arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law,” id. § 706(2)(A). In addressing that

question, a court must accord substantial deference to an

agency’s interpretation of its own regulations, particularly

where the regulations involve “a complex and highly technical

regulatory program,” such as Medicare. Thomas Jefferson, 512

U.S. at 512 (internal quotation marks and citation omitted).

Regardless of whether a court determines a different

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interpretation “best serves the regulatory purpose,” the court is

to give the agency’s interpretation “‘controlling weight unless

it is plainly erroneous or inconsistent with the regulation.’” Id.

(quoting Udall v. Tallman, 380 U.S. 1, 16-17 (1965)). We find

no such error or inconsistency.

A.

The Board determined that its interpretation is “consistent

with the principles for accounting of refunds described in 42

C.F.R. § 413.98 and [the Manual] §§ 800 and 804.” Dana

Farber, 2014 WL 11127854, at *10. On appeal, the Secretary

contends “the Board properly concluded[] those principles

preclude providers from receiving Medicare reimbursement for

the costs of Hospital Tax payments to the extent that the

hospitals received payments funded by the proceeds from that

very tax, effectively reducing the net economic impact of the

assessed tax.” Appellant’s Br. 14. Regardless of whether the

payments constitute refunds or function analogous to refunds,

we conclude this interpretation was reasonable. Because the

tax is imposed to generate revenue for the Fund payments, the

tax and payments were, as the Board concluded, “inextricably

linked,” Dana Farber, 2014 WL 11127854, at *10, and thus

they were related as required by 42 C.F.R. § 413.98(a).

The relatedness of the tax and Fund payment is clear from

the manner in which Massachusetts administered the Hospital

Tax, seeking only a net payment from Dana-Farber. In its

decision, the Board provided the following example of

Massachusetts’s administration of the Hospital Tax and Fund

payments:

[I]f a provider is notified in advance for a particular

month that its Tax liability will be $20 and the

uncompensated care payment will be $5, then that

provider need only deposit $15 into its designated

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account to cover the tax liability because the $5

payment for uncompensated care will be deposited

into that account prior to it being swept for the Tax

liability. Thus, through these mechanics, the actual

cost incurred by the Provider in this scenario is the net

amount due to the [Fund].

Dana Farber, 2014 WL 11127854, at *10. The example shows

that the Fund payment of $5 reduced the cost of the provider’s

tax liability. See 42 C.F.R. § 413.98(c). Following the

regulatory requirement that refunds be “reflected” in the

allowable costs, id. § 413.98(d)(2), the Board took the Fund

payment into account when calculating the allowable cost.

Thus, as administered by Massachusetts, Dana-Farber’s

“actually incurred” cost is the amount of tax it deposits into the

Fund, rather than its nominal liability without reference to the

Fund payment it receives. This analysis also comports with 42

C.F.R. § 413.9(c)(3)’s direction that a provider is “reimbursed

[for] the actual costs of providing quality care,” because in the

example, the provider actually paid $15, and the Board found

this cost allowable. The example was thus consistent with the

relevant regulations, and Dana-Farber has not distinguished

what happened in its case from this example.

Dana-Farber nonetheless offers a different interpretation,

maintaining that the denial of full compensation for Medicare’s

share of the Hospital Tax violated statutory and regulatory

requirements as well as APA procedural requirements, and it

was arbitrary and capricious.

First, Dana-Farber maintains that it actually incurred the

full amount of the Hospital tax because the Fund payments

were neither refunds nor analogous to refunds. Appellee’s Br.

40. It interprets 42 C.F.R. § 413.98 as providing that “only

specifically enumerated categories — discounts, allowances,

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and refunds, all of which [have] . . . the very purpose of making

a provider whole for some or all of the original cost — are

considered reductions of that original cost.” Appellee’s Br. 38.

Additionally, Dana-Farber insists that an offset must have a

“close substantive connection” with the cost. Id. at 37.

Dana-Farber, much as the district court, overreads the

regulation, which defines refunds as “amounts paid back or a

credit allowed on account of an overcollection.” 42 C.F.R.

§ 413.98(b)(3). Nowhere in this definition does the agency

require the refund to have the specific purpose to reduce the tax

or substantive connection that Dana-Farber advances. See id.

§ 413.98. And even if Dana-Farber’s interpretation were

plausible, the regulatory text does not require that the

regulation be interpreted as Dana-Farber suggests. The

Board’s interpretation need not be “the only possible

interpretation.” Entergy Corp. v. Riverkeeper, Inc., 556 U.S.

208, 218 (2009). The Board reasonably focused on “the

guiding principle [of] . . . the statutory and regulatory language,

which instructs that reimbursement is allowed only for costs

actually incurred.” Appellant’s Br. 15 (quoting Abraham

Lincoln Mem’l Hosp. v. Sebelius, 698 F.3d 536, 550 (7th Cir.

2012) (internal quotation marks omitted)).

Second, Dana-Farber maintains that the Board’s decision

violates the statutory and regulatory requirement, 42 U.S.C.

§ 1395x(v)(1)(A); 42 C.F.R. 413.9(b)(1), that Medicare costs

cannot be passed off onto non-Medicare entities. Dana-Farber

points out that the Hospital Tax and Fund payments are

calculated based upon independent factors — private sector

care and care provided to low-income individuals, respectively.

So, Dana-Farber concludes, Fund payments cannot

“simultaneously represent” compensation for services to low-

income patients and compensation for Medicare costs incurred

under the Hospital Tax. Appellee’s Br. 33. By considering the

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Fund payments to be refunds of the tax liability, Dana-Farber

maintains, the Board is essentially denying Dana-Farber its

reimbursement for care to low-income patients.

The Board did not shift Medicare costs onto non-Medicare

entities. The Board acknowledged the separate purposes of the

Hospital Tax and Fund, noting the latter is “set up solely to pay

for uncompensated care,” and explained that, nonetheless,

under “[t]he methodology utilized by” Massachusetts, the Fund

payments reduce the amount of tax Dana-Farber must deposit

in its bank account. Dana Farber, 2014 WL 11127854, at *10.

Dana-Farber minimizes the implications of Massachusetts’s

methodology by referring to it as one of “administrative

convenience.” Appellee’s Br. 26. But the fact remains that

Massachusetts has chosen to structure its compensation for

low-income care in a manner that this compensation serves to

reduce the Hospital Tax liability owed. See 42 U.S.C.

§ 1396a(a)(13)(A)(iv).

B.

Dana-Farber’s remaining objections that the Board’s

decision failed to adhere to notice-and-comment requirements

and was, in any event, arbitrary and capricious are

unpersuasive. The APA includes notice-and-comment

procedures requiring that “[g]eneral notice of proposed rule

making shall be published in the Federal Register,” 5 U.S.C.

§ 553(b), and “the agency shall give interested persons an

opportunity to participate in the rule making through

submission of written data, views, or arguments with or

without opportunity for oral presentation,” id. § 553(c). Dana-

Farber objects that the “inextricably linked” standard upon

which the Board relied violates these notice-and-comment

requirements because this standard is not contained in the

refund regulation and therefore constitutes a substantive new

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legal standard that should have been subject to notice and

comment.

As an initial matter, it is doubtful the “inextricably linked”

phrase constitutes a new rule or policy. Nowhere did the

Board’s decision state a payment must be inextricably linked

to a cost in order to constitute a refund. Instead, the Board

reasoned that because it found that the payments and tax were

inextricably linked and that the payments reduced the cost of

Dana-Farber’s tax liability, the payments “act as a refund to

reduce cost[s] (i.e., the Tax) under 42 U.S.C. § 1395x(v)(1)(A)

and 42 C.F.R. § 413.9.” Dana Farber, 2014 WL 11127854, at

*10. This interpretation is consistent with the regulatory

requirements that refunds must be related to and reduce an

expense. 42 C.F.R. § 413.98(a), (d).

But even assuming a new “inextricably linked” standard

was announced, APA notice and comment was not required.

An agency “has the option of choosing whether to establish

new policies through notice-and-comment rulemaking or

adjudication,” Masters Pharm., Inc. v. DEA, 861 F.3d 206, 219

(D.C. Cir. 2017), and here Dana-Farber’s challenges were

addressed by adjudication. See also Nat’l Biodiesel Bd. v. EPA,

843 F.3d 1010, 1017 (D.C. Cir. 2016). Dana-Farber’s reliance

on Mendoza v. Perez, 754 F.3d 1002 (D.C. Cir. 2014), is

misplaced. In that case, the Department of Labor issued two

letters providing special procedures, id. at 1008, that the court

concluded “substantively affect[ed] the regulated public” and

thus were substantive rules subject to notice-and-comment

requirements, id. at 1024 (internal quotation marks and citation

omitted) (alteration in original). That case did not involve an

adjudication. Neither did the court hold, as Dana-Farber

suggests, that substantive rules announced in adjudications

must undergo notice and comment. Because, even assuming

the “inextricably linked” phrase constitutes a new standard, the

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agency exercised its discretion to announce the standard

through an adjudication, Dana-Farber’s procedural objection

fails.

C.

To determine whether the Board’s decision was arbitrary

or capricious, the court must

consider whether the decision was based on a

consideration of the relevant factors and whether there

has been a clear error of judgment. Normally, an

agency [decision] would be arbitrary and capricious if

the agency has relied on factors which Congress has

not intended it to consider, entirely failed to consider

an important aspect of the problem, offered an

explanation for its decision that runs counter to the

evidence before the agency, or is so implausible that

it could not be ascribed to a difference in view or the

product of agency expertise.

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 43 (1983) (internal quotation marks

and citations omitted). Dana-Farber suggests that the decision

was arbitrary and capricious for three reasons. None has merit.

1. Dana-Farber views the decision as inconsistent with

CMS’s August 16, 2010 Medicare Program Rule, 75 Fed. Reg.

50,042 (“Offset Guidance”). The Offset Guidance was issued,

in part, to “clarify [CMS’s] policy concerning when provider

taxes may be considered allowable costs under Medicare.” Id.

at 50,363. The Guidance became effective October 1, 2010, id.

at 50,042, after the years at issue here. Even assuming the

Offset Guidance applies, Dana-Farber’s challenge fails.

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The Guidance states, in relevant part, that when States tax

hospitals and then pay hospitals from funds generated from that

tax,

the treatment of these types of payments on the

Medicare cost report should be analogous to the

adjustments described at § 413.98 of the

regulations. . . . In situations in which payments that

are associated with the assessed tax are made to

providers specifically to make the provider whole or

partly whole for the tax expenses, Medicare should

similarly recognize only the net expense incurred by

the provider. Thus, while a tax may be an allowable

Medicare cost in that it is related to beneficiary care,

the provider may only treat as a reasonable cost the

net expense; that is, the tax paid by the provider,

reduced by payments the provider received that are

associated with the assessed tax.

Id. at 50,363 (first emphasis added).

Dana-Farber reads the word “specifically” to mean that

“only associated payments that have a specific substantive link

to the tax can properly be considered refunds.” Appellee’s Br.

39. This reading ignores the plain text of the Offset Guidance,

which lists such situations as an example of when a payment

constitutes an offset, but nowhere states that these are the only

situations where a payment is considered an offset of a tax. The

Guidance follows this specific example with the more general

principle that when a tax is “reduced by payments the provider

received that are associated with the assessed tax,” those

payments are offsets. 75 Fed. Reg. 50,363. See Breckinridge

Health, Inc. v. Burwell, 193 F. Supp. 3d 788, 796 (W.D. Ky.

2016), aff’d sub nom. Breckinridge Health, Inc. v. Price, 869

14

F.3d 422 (6th Cir. 2017). Dana-Farber reads into the Offset

Guidance a requirement that does not exist.

In any event, the Board’s decision was consistent with the

Offset Guidance. The Board determined that the Fund

payments were “analogous to the adjustments” in 42 C.F.R.

§ 413.98 in that they “act as a refund” by reducing the Tax

payments Dana-Farber owed. Dana-Farber, 2014 WL

11127854, at *10. Thus, in accordance with the Offset

Guidance, the Board concluded Dana-Farber had incurred the

reasonable cost of the net expense of the Tax payments less the

Fund payments.

2. Dana-Farber suggests that the Board’s interpretation of

the refund regulation will produce absurd results. Its position

rests on hypotheticals involving other hospitals, including a

scenario where Hospital A pays $40,000 in tax but receives no

Fund payments, rendering the entire tax payment a

reimbursable cost. Dana-Farber poses a hypothetical where

Hospital A merges with Hospital B, which paid no tax but

received $40,000 in Fund payments, and speculates that

Hospital A cannot claim any portion of the $40,000 tax as a

reimbursable cost, an arbitrary result. Appellee’s Br. 48-49.

The Board’s decision does not bear on the Medicare

reimbursement owed to a hospital that merges with another

hospital. Thus, “the hypothetical problem posed by [Dana-

Farber] is inapposite.” R.I. Hosp. v. Leavitt, 548 F.3d 29, 37

(1st Cir. 2008). As to Dana-Farber’s hypothetical in which a

hospital receives a greater Fund payment than the tax liability

it incurred, Appellee’s Br. 49, the Fund payment would still

reduce the cost of the tax liability incurred. And to the extent

Dana-Farber posits hypotheticals in which the incurred cost has

a purpose unrelated to low-income care, such as a payroll tax,

id. at 42-43, this simply reprises Dana-Farber’s flawed position

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that Fund payments cannot represent both compensation for

low-income care and refunds of the Hospital Tax. See

discussion § II(A) at 9-10.

3. Dana-Farber also maintains that the Board’s decision is

inconsistent with CMS’s approval of the Hospital Tax under

Medicaid. In order for a tax to be permissible under Medicaid,

it may not contain a hold harmless feature. 42 U.S.C.

§ 1396b(w)(1)(A)(iii); 42 C.F.R. § 433.68(b)(3). If a state

“provides (directly or indirectly) for any payment, offset, or

waiver that guarantees to hold taxpayers harmless for any

portion of the costs of the tax,” then the tax has a hold harmless

feature. 42 U.S.C. § 1396b(w)(4)(C)(i). Dana-Farber suggests

that by treating the Fund payments as a refund of the Hospital

Tax, the Board’s decision effectively treats the Tax as having a

“hold harmless” feature for hospitals that receive Fund

payments. Dana-Farber relies on Greater Boston Television

Corp. v. F.C.C., 444 F.2d 841, 852 (D.C. Cir. 1970).

Although “an agency changing its course must supply a

reasoned analysis indicating that prior policies and standards

are being deliberately changed,” id., Dana-Farber has not

shown that the Board’s decision involved a change in agency

analysis of or policy involving the Tax. The Board did not

revoke or otherwise change the determination that the Hospital

Tax remains a permissible tax — and thus does not contain a

hold harmless feature — under Medicaid. Moreover, to the

extent that the decision may appear to be in tension with the

approval of the tax under Medicaid, and the court has no

occasion to decide whether it is, Dana-Farber has pointed to no

authority stating that an agency must interpret two different

statutory phrases — “reasonable cost” and “hold harmless” —

in two different statutory frameworks — Medicare and

Medicaid — in the same manner. To the contrary, the court

has held that it is “not impermissible . . . for an agency to

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interpret [a] term differently in two separate sections of a

statute which have different purposes,” Verizon Cal., Inc. v.

F.C.C., 555 F.3d 270, 276 (D.C. Cir. 2009) (internal quotation

marks and citation omitted), and so it certainly may be

permissible to interpret two separate terms differently. Nor has

Dana-Farber shown that interpretations under Medicaid control

analysis under Medicare. See Abraham Lincoln, 698 F.3d at

553. “[B]ecause Medicare and Medicaid are two separate and

independent programs, we cannot conclude that CMS’s

decisions under Medicaid necessarily control [its] decisions

under Medicare, such that the [Board’s] [d]ecision at issue here

was arbitrary, capricious or contrary to law.” Id. at 554.

Accordingly, because the Board’s interpretation is

reasonable and Dana-Farber fails to show otherwise — much

less that the interpretation violates the APA — the court

appropriately defers to it, and we reverse the grant of partial

summary judgment to Dana-Farber.