# Appalachian Regional Healthcare, Inc. v. Shalala > Court of Appeals for the D.C. Circuit · December 23, 1997 · 131 F.3d 1050 URL: https://www.frixlaw.com/law-library/cases/9439061 ## Case - **Full name:** APPALACHIAN REGIONAL HEALTHCARE, INC., Appellant, v. Donna E. SHALALA, Secretary of Health and Human Services, Appellee - **Court:** Court of Appeals for the D.C. Circuit - **Decided:** December 23, 1997 - **Citations:** 131 F.3d 1050; 327 U.S. App. D.C. 396; 1997 U.S. App. LEXIS 35976; 1997 WL 783990 - **Precedential status:** Published - **Opinion:** Dissent by Sentelle - **Judges:** Silberman, Sentelle, Garland - **Cited by:** 29 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9439061 ## How later opinions describe it (automated extraction) - explaining that the IPPS provides a single payment “in full satisfaction of the bundle of covered items and services provided during a single inpatient hospital stay” based on the diagnosis related group (“DRG”) of the patient’s stay, rather than on the separate services a pat… - noting that the “case would be easier had the Board [within the Department of Health and Human Services] provided a more thorough explanation for its decision,” but “nevertheless” finding that the Board’s “reading [is one] we can accept, especially in light of the particular d… - holding Secretary not bound by intermediary’s statements before the Board ## Opinion text SENTELLE, Circuit Judge, dissenting: As the majority makes clear, the validity of the Secretary’s action in this case, and therefore of the district court decision upholding it, depends upon the validity of the interpretation of § 1862(b) of the Social Security Act, 42 U.S.C. § 1395y(b) (1994), by the Provider Reimbursement Review Board. The relevant portion of that statute provides that payment under this subchapter may not be made ... with respect to any item or service to the extent that ... payment has been made or can reasonably be expected to be made promptly ... under a workmen’s compensation law or plan of the United States or a State.... 42 U.S.C. § 1395y(b)(2)(A). The administration of this section may have been fairly straightforward before the 1983 amendments to the Social Security Act, which switched the reimbursement system from a cost-based system in which the troublesome phrase “item or service” had an evident meaning and relevance, to the present Prospective Payment System (“PPS”) described in the majority opinion in which the meaning and relevance of that phrase is, as the majority establishes, not at all apparent. We are all in agreement that to survive the two-step analysis drawn from Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984), the Board’s ruling (as applied by the Secretary) need not be perfect, or even the best, but only reasonable. The Secretary’s counsel, the district court, and the majority have all done yeoman’s work in demonstrating the possible reasonableness of an interpretation of a statute whose critical wording is probably the result of a congressional oversight in failing to amend by deletion a no longer sensible operative phrase. My difficulty lies in the fact that neither the Board *1055 nor the Secretary did the same yeoman’s work. Our review at the second step of Chevron partakes of a nature similar to the arbitrary and capricious review under the Administrative Procedure Act, 5 U.S.C. § 706 (2)(A). Independent Petroleum Ass’n of America v. Babbitt, 92 F.3d 1248, 1258 (D.C.Cir.1996). Therefore, even under our deferential review, an agency’s interpretation of an ambiguous statute must at least be a reasoned one in order for us to determine if it is reasonable. Again, the majority and I are not in disagreement as to the standard employed. The majority expressly upholds the Board’s (and therefore the Secretary’s) decision because it finds the Board’s recorded reasoning to be “tolerably terse,” a styling drawn, quite properly, from Greater Boston Television Corp. v. FCC, 444 F.2d 841 , 852 (D.C.Cir.1970). That decision, pre-dating Chevron, recognized in the context of administrative procedure review that “reasoned decision-making remains a requirement of our law.” Id. My disagreement with the majority is a narrow one. That is, although I believe the majority is correct in the framework of its review, I part company with- it only at the point of whether the agency action has “cross[ed] the line from the tolerably terse to the intolerably mute.” Id. Greater Boston establishes that in drawing the line between tolerable terseness and intolerable muteness the court will uphold an agency where its reasoning, “though of less than ideal clarity,” is such that “the agency’s path may reasonably be discerned.” Id. at 851. Here, the Board’s decision required it to interpret the concededly ambiguous statute governing payment for “any item or service to the extent that ... payment has been made or can reasonably be expected to be made,” by a plan contemplated in the statute in a context in which items and services were no longer key to agency payment, but payment was being made by a covered plan where that collateral source might or might not cover all the costs of a patient’s treatment depending upon whether the patient had medical needs supplied that were not directly encompassed within the pneumoconi-osis diagnosis. In common with appellant, I do not see how the Board could have accomplished this task without construing the meaning of the term “any item or service” in the PPS context. As the majority suggests, appellant understands the Board’s decision as having construed the phrase to mean that “item or service” encompassed the entire inpatient hospital admission, an understanding shared by the district court. Although the question is not free from doubt, I also think that is what the Board did. I understand the majority’s disagreement with appellant, however, because I find it impossible to determine with any certainty from the “operative portion of the Board’s decision interpreting the statute,” Maj. op. at 1053, precisely what the Board did. As the portion the Board’s decision excerpted in the majority opinion reveals, the key sentence of the operative portion in construing § 1862(b)(4) reads: “the Board finds this permits payment by the Medicare Program for the remainder of this charge, but may not exceed the amount Medicare would pay if there were no primary payer.” (Emphasis in the original.) This is the whole of the Board’s reasoning. Not only do I not know what it means, it doesn’t even make grammatical or syntactical sense. Either the clause “but may not exceed the amount Medicare would pay if there were no primary payer,” has no subject, or the subject of the subordinate clause is the same as the subject of the independent clause to which it is appended, to wit “this.” The antecedent of the pronoun “this” comes from the immediately preceding sentence which reads: “§ 1862(b)(4) of the Act makes provision for coordination of benefits when the payment by a primary payer for an item or charge is less than the full charge.” Therefore, reading the questionable clause with “this” as its subject, makes it read “this may not exceed the amount Medicare would pay if there were no primary payer,” where “this” is the entire preceding sentence — a sentence which neither exceeds nor equals any payment. In short, I find the Board’s statement of its reasons meaningless. A meaningless statement is intolerably mute, not tolerably terse. I am further troubled that the Board’s statement, whatever it means, does not pro *1056 vide reasoning supportive of the interpretation of the statute which it and the Secretary seem to have adopted. It is true that something “may not exceed the amount Medicare would pay if there were no primary payer.” For example, the amount paid by Medicare may not exceed that amount. It does not necessarily follow that the sum of Medicare reimbursement for an “item or service” and the workmen’s compensation primary payment for an admission inclusive of that “item or service” cannot exceed the amount Medicare would pay if there were no primary payer. The latter formulation is not inconsistent with the Board’s opinion; it is simply not supported by it. Thus, I find that the Board’s reasoning is at best opaque and at worst a non sequitur. I am not suggesting that the Board’s interpretation, accepted by the Secretary, is inherently an impermissible one. Further, I agree with the majority that the Board was faced with an ambiguity that rendered it entirely reasonable for the Board to “look[ ] to the [Medicare as Secondary Payer] provisions as a whole for guidance.” Maj. op. at 1053. Further, I am prepared to join with the majority in deferring to a reasoned interpretation that does just that. However, on the present record, I do not find such a reasoned interpretation to which we can defer. Therefore, I would vacate and remand to the district court for further remand to the Secretary to provide a reasoned decision, lacking on the present record. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9439061. Public record. Not legal advice.