controlling increases in the volume of covered outpatient department services that is what we have here found that the volume of a particular type of outpatient department services is for all intents and purposes the same price i haven't looked closely at the issue my understanding is that for all intents and purposes is the physician fee schedule rate you  again you're on it because this wasn't a matter that was the focus and for anything i don't want to overstate my knowledge but my understanding at a general level is that it is as a practical matter the rate that would be paid under the physicians the schedule within your definition of method so messages if you look at it the whole praise method for controlling an unnecessary increase in volume not a single method or just use the common english term tool means there's not a single method for doing that there are various ways that the agency can try to control an unnecessary increase in volume and congress did not that was the plaintiff's contention essentially that congress gave h h s one tool in its arsenal which is an across the board rate cut that would be the adjustment to the conversion factor and as the agency explained the statute doesn't limit the as right now my understanding is that for those not exempted the hospitals after th the ones that were sort of came into being after two thousand and fifteen a physician fee schedule adjustment is what's being applied and i'm trying to understand if what's going on here is also in your in your conception of an appropriate method a sort of secretarial created a just i don't want to use the word and only because that's a term of art under the statute that controlling volume is not a term of art in ordinary english how what are you doing to control volume you need the predicate finding the agency needs that there was in fact an unnecessary increase in the volume of particular services so here we're just talking about one type of service the routine clinic that's pretty much it includes simply just not paying for would if the predicate finding were you had services being provided unnecessarily and therefore an unnecessary increase in the volume then yes in theory the determination could be we're not going to make that pa in that respect it's it's not the same authority but it's with parallel what happened in amgen where there was a determination that there was no reason to be paying a higher rate for and jen's product because a similar th but here again just to be clear the two thousand and fifteen legislation took those newly established off campus outpatient departments out of the outpatient perspective payment system for all of the thousands of services they provide about six thousand dollars medicare rates set each year for the outpatient system and those newly established departments are getting essentially the equivalent of the physician fee schedule for every one of the rules at issue here he is just applying to the other category patient departments the chain general paragraph two f r d that could be may ask about the patient's medicines and then the patient leaves the finding documented by various underlying reports was that there is no medical reason that that type of team clinic visit  freestanding doctor's office one question with which is that in the statute you have the provision for which pertains to my terms medicare payment amount and then it sets forth the two but it doesn't reference to f and which raises the question whether the absence of two f and t for means that congress didn't contemplate that one application of two would be what effective adjustment to the payment amount w fund when certain types of services are being provided unnecessarily so you wouldn't expect to see a reference in their provisions and congress may not have anticipated was not a can fit within that terminology and then the question becomes whether even though that may be true other provisions in the statute tell you that the reading that the secretary has reached is inconsistent with the statute and c which is another provision that could be read to be in tension with the notion that to provide the authority that the secretary given the night he speaks directly to what happens then i too have to talk about a different response which is across the board adjustment to the conversion factor ninety is anticipating that you could have various methodology is under two s and that could include methodology that come with  benchmark for volume reduction and if those methodology is are unsuccessful nine c explicitly gives the agency what it would be very broad authority to do an across the board rate c but nothing in nine c takes away the authority to do something that's much more calibrated which is what the agency did here it's not penalizing outpatient departments is for services for which there's not been an unnecessary increase in volume it is in a very targeted way reducing the payment rate for a particular type of service for which there's been this documented finding of an unnecessary increase in volume and that's all otherwise be allowed under your reading of to us that it's a good question at least in theory to ask would be broad enough to allow this across the board rate cut like given that that's such an extreme you can use to ask to essentially target a specific service functionally take it out of the system altogether and throw it in to hear the positions t we're just addressing a very particular problem here ninety isn't contemplating an unnecessary increase in volume of one particular type of medicare outpatient service again there are about six thousand medicare rates that each year nine c is talking more globally he or the nephew get that from me no nine see isn't talking about exactly what you're doing here well we surely if you the question here is whether there is something in the statute that was good for the secretary from using this rate reduction as a targeted method of volume control when you have the predicate findings of to us an unnecessary increase in the volume of particular outpatient department services and there's nothing in the text that same about what the over there i'm trying to figure out right we don't just look at the words of t we have to look at the statute as a whole is how it functions and so it's what i'm trying to understand if your if your reading of to make you know other protections that congress clearly sought came sort of arm in arm with two s like mine see that there's sort of a tag team process there at least as i read it then you have a you have a definition that says we can just pick a particular service and take it out of the system put it in a different payment scheme altogether so you would never have the tag team protections of mine see them that sort of effect the legitimacy of you reading of cuba so i don't think it's i don't think it's right to say that we don't need to talk about that just because two f is use the word like method that could be big and could be small to get a statute as a whole you have to have a rating and see i'm trying to figure out how taking a payment functionally or maybe just directly to the same functionally actually out of the op system and putting it in a different payment system is consistent with the structure because the general broad directive is to control an unnecessary increase in the volume of covered outpatient department services and if what you had were and across the  has used other direct methods of volume control such as the packaging and bundling of medicare services for more than anything other than the packaging the situation in the packaging are those the only two or are there other one s beginning in two thousand and fourteen gather data to get a more refined understanding of exactly what services we're talking about and which ones can be safely provided in a free standing doctor's office so it was a multi year process to gather the information but this to my knowledge is the st time you had a finding that the reason particular services were unnecessarily increasing in value particularly outpatient services was some points that here's here's a procedure that i just don't think should be performed at outpatient clinics at all it's just not appropriate for outpatient clinics i know sort of a blood transfusion or something just come in and get him but i don't think that needs to be done clinics at all and so any conduct evap process that procedure is too much volume that just should be zero that that patient that's less expensive is essentially good enough discourse didn't explore whether the secretary could have gone farther and say we're not going to pay amgen at all and i can't think of why the secretary would have said that  problematic if the services are provided by outpatient departments but it's dealing with a perverse incentive that cause a enormous increase you know i know i understand i'm just here but you kicked these things out of the op payment system and i'm trying to understand and here you've done it because the secretary looked at statistics and attributed those to what you call the proverbial incentive and i'm just trying to make sure i understand your position and what to have message allows you to do is to target particular services and make a determination that those whatever the for whatever here and that's that's functionally the only difference in my in my hypothetical of the different reason that's given but otherwise it's the same two as happened here let me try to explain why on the left and to go from what actually happened here to the hypothetical are the finding was that the higher rate was driving a shift in the sight of service and that that was an unnecessary shift and the calibrated to the payment differential that was driving that unnecessary shaft and i understand the hypothetical the secretary would be using a much cruder instrument that went well beyond what was other whatever other system the secretary points to one of the things that the agency would consider would be the done beneficiary access to the service and so that's why i'm reluctant to jump out ahead of what the agency  press whether it's i'm not asking you to address whether there might be other attacks on that under the a p a or whatever but i'm asking you to give me your conception of what to f l l i'm sorry to keep repeating myself but i'm really trying to understand it seems to me that die that sounds broader than what the agency concluded in the rule making which is essentially that the very thing that was driving the on necessary increase in volume here was the payment differential and so that was the targeted response to eliminate that stop having this incentive for services to shift from doctor's office to another way of saying the same thing isn't it right we're going to eliminate the payment deferential by kicking that service out of the op system and put agency would have to go through and i just want to back up because we do have a preclusion of review provision here that's very broad it's just as methods described in paragraph two f and it's this court and the supreme court  noted in recent decisions when you look at an expressed reclusion of review provision you're also thinking about the nature of the agency action and what you have here is year after year he agency sets rates in  is i congress will be the one to oversee the systematic cross cutting issues that could arise in the administration of this program congress has not set up a practical way for orderly judicial review which is as previously recognized issues of remedy become extremely complicated and the medicare trust fund administratively when what you're talking about is after the fact setting aside a rate that was set in advance for cost cutting purposes thank you miss call me just make sure that my colleagues don't have further questions for you or we'll give your rebuttal time but for their questions here before we hear from we don't think when congress set up these various medicare preclusion of review provisions that it was anticipating that a court might nonetheless come in after the fact and set aside cost cutting rates that if you just look wages estimates and other adjustments which include equitable adjustments and then it goes on below calculation a base amount that cetera my point is congress has set up a scheme understanding that the agency sets these rates year after year in a hurry congress has precluded review through an array of provisions of the cross cutting issues and this is just one of the cross cutting issues which is a body in control method that affected the rate for a particular type of s all of which are taken into account by the other things the statute talks about the including the conversion factor the way huge adjustment the outlier adjustments the equitable adjustments under to t two d and d and then goes on to explain you subtract a deductible and you apply a payment proportion and that's how you get the medicare payment amount that is the way the amount is determined now for the amount to be determined by something other than what is contained what the secretary has done with respect to this specific service because this specific service as you pointed out is now paid i think the exact words are equivalent to the fee the physician's fee schedule but going adjustments and one of them gives the secretary a former team to adopt a method for controlling unnecessary increases and volume so the problems we think under the statute with what the secretary has done here are multi layered they do not comport with a message under the system because of course this method has taken this particular payment out of the system altogether they don't comport with t four because there is nothing t four that gives the secretary of the right to import a message for controlling volume into determining the payment amount srinivasan you also asked about nine c and whether it was in tension with it your understanding that that two f would stand alone and disregard of the statute in other words that t for provides the entire mechanism for determining payment and there's everything they see there in that sentence the medicare o p c schedule amounts computed on your paragraph three dollars d and that is what dates in the conversion factor is adjusted for relative differences in the cost of labor and other next necessary to ensure equitable payments adjustments for certain classes of hospitals so that one the sub paragraph of the payment amount already has a whole bunch baked into it and then the payment amount owed on to say you determine to do with two d into e s l and the way that section nine b the budget neutrality provision plays into that one of the themes of our brief is that the secretary has to wait not just one but those adjustments those targeted adjustments have to be budget neutral that's under nine b the other way that the secretary can make an adjustment is by adjusting the conversion factor that's across the board every payment under the law and that conversion factor what the secretary has said over and over again right up until two thousand and fifteen when congress passed a statute the didn't do everything that the secretary wanted it to do was that the methods for volume control articulated into authorize the secretary to update the conversion factor and you can see that actually in the federal register sites that the secretary himself  stablished through those methodology then the secretary may appropriately adjust the update i stuck in the word zan because sort of an if then that that suggests that the think there are two different maybe strands to that answer the st is i don't think that that we need to argue that the in just went to the conversion factor is the only way is the only method to control volume and that's because as we've knowledge in our agree with the distinction between methodologies and message that i accept i'm not saying i do but assume for the purposes of the question that the government description of methodology the meaning of the word is one more topic for purposes  don't need to establish or to conceive the opposite of that that the conversion factor adjustment is the only method of volume control available to the secretary the secretary himself has spoke and you know over the years in federal register notices of trying to find other methods of volume control including things like a now salit volume control metrics that was used on the physician fee schedule side i point in reciting all of those federal register notices to use is what's not in there and what's not in there is any acknowledgement that that sub provision method of controlling volume actually contains a silent way to is just a payment that isn't present in any of the other specific adjustments in the statute and i think this is ever my word especially because what you said you're not going for the that the only thing they can really do with the ninety across the much yet i think one of the do you think they could do i think what would be permissible i think what what is permissible are the sort of things that the secretary has done the secretary has described district  the problem in front of us here were what they call the sort of perverse incentives the shifting of services that could equally be done in a physician's office for much cheaper and i know i know you sort of dispute the causal analysis but take that as a given could get rid of the price incentive you just have to do it in a budget neutral way and that was my point earlier about to be and there are adjustments that are available to the secretary including the equitable adjustment that his client mentioned that was put to use in an agenda that permits the secretary to make targeted adjustments to payments for bishop particular services but what the secretary can't do is make a non budget neutral targeted adjustment that takes you outside extra paperwork to get them compensated that if you have to show you have to include an explanation just patient why this needed to be done and outpatient as an outpatient service rather than a physician's office without being appropriate work if you have to call and get permission to go to a hospital outpatient clinic for clinic services that would tend to cut down on volume i think the reaction to a pre authorization requirement specifically in light of the administrative burdens the judgment you just mentioned could they then say if you don't do that or we don't think that justification with the fish and or appropriate you won't get paid at all for that service i think that i think that this starts verging into a very different set of reimbursement questions you know when when something coded a particular way or coded the wrong way or when a medicare contractor concludes that it's been coded the wrong way but i think i think at bottom imposing an administrative requirement like pre authorization like additional documentary support is something that the secretary has and so i'm trying to i'm trying to i'm trying to have a little a little more force behind the paperwork here right behind paperwork we do that all the time a consequence or not could be consequence for not either not doing it or it's not credited the paperwork is not credited they just don't failing to put in appropriate administrative paperwork could lead to nonpayment or reduction of payment i think that happens quite frequently when a medicare contractor decides to something hasn't been adequately documented and i  but they can't be justified and we're doing a forty percent rate cut i know i don't think it's the functional equivalent of that at all just because i think before they could impose an across the board targets targeted serve a specific non budget neutral rate cut they would need to come within the payment directives of t four dollars and the rest of the statute but if they do it case by case as i had originally hypothesised they wouldn't be subject to budget neutrality it's only because they're doing it  many other considerations wrapped up in the kind of administrative and reimbursement fireman's for me to say that that is a quote unquote method of volume control what i can say is what the secretary said which is st they haven't really used this much before and nd that pre authorization that kind of administrative burden is a potential message a volume control but this kind of deaths by tiny cuts idea of imposing the rate cut singularly across every hospital i think would pose a whole host of other problems and of course this is nothing that the secretary has attempted to argue here i want to talk to about ms klein statement that the agency hasn't encountered an issue like this before an existing and later ms build hospital outpatient departments into the ops system and treated future of patient departments as equivalent to the physician fee schedule they had two different voices in the ear right they had the best headway saying medicare is paying too much for exactly these services evaluation and management services done by hospital outpatient clinics exactly what we're talking about here and the other voice of course in the air is what the hospitals were saying which is we need these outpatient clinics these are rural areas these are under served areas these are areas where we can't build out so we're building somewhere else to try to serve these communities and if you look at the declaration supporting our complaint you'll see example really stark examples of some of those so balancing those two voices what congress did was to make a very stark solomonic choice and what ms klein said was you know they haven't encountered am because that that comes down to the fact that as judge this judge garland mentioned we have to walk through the preclusion on judicial review before we get to the merits here and one of the things that the supreme court recently unanimously said in smith's vs very hill is that an agency doesn't get deference when a court is examining the extent of its own ability to review when the court's examining a judicial review provision and i think when you when you have the review provision meshed with the parent the way that and just suggest here it seems sort of odd to say the chapter on wouldn't apply because you'd be saying that chevron didn't apply because you're dealing with  provision that precludes administrative and judicial review in other words give you more and so it seems a little bit odd to say in that context that's a situation in which you wouldn't apply chevron and you would apply something that's stricter by way of r of question as well is when you are examining a jurisdictional provision that jurisdictional provision and the presumption is that attached to it have to govern the inquiry i don't think it's possible to switch midstream precisely because it increaser all of the times this court has said you know last year in american clinical laboratory association one a statute a judicial review statute is reasonably susceptible to divergent interpretations we adopt the reading that accords with traditional understandings and basic principles that executive determinations generally are subject to judicial review that's actually a quote from tucson versus holder the supreme court case but it comes from american clinical lab versus a's are from last year  the same thing was set in and there is a strong presumption that congress intends review of administrative action and i think when you when you take all this kind of in a broad context what that leaves you with is you walk into that was a postal service case and the postal service actually was completely outside of other statutory avenues for review so they didn't have that kind of preliminary question about whether judicial review statute applied or not it was quite plainly not political so that's i think why eight association just went right to the chevron increase because that was the appropriate step to take there but that's not appropriate here where you've got this judicial review statute it demands a presumption in favor of it and i think the amgen case and american clinical labs itself action we examine a test that is arguably ambiguous you can see that from american clinical last discussion on its face and determines that it allows for judicial review so that's that's why i think chevron in these narrow circumstances and they are unusual as comcast said where the merits question merges with the jurisdictional question that presumption in favor of review trumps deference to the secretary makes an adjustment that purports to be under subseries graph a little adjustment but it causes the estimated amount of the expenditures to go out of whack then i think it would be reviewable because it conflicts with the pla is a method there's no review of how well or sloppily or reasonably they adopted the method by the same token i would have thought that if they did an equitable adjustment there was no doubt it was an is still a path for review there and it comes from starting from chamber of commerce st is right in ninety six dollars and i'll just read this quote if an agency openly violates a clear mandate of a statute and even a review bar was there even if the bar on judicial review applies the argument that was being made by the appellant there was that the district court should still have to set aside the calculation as alter the rest because it failed to use appropriate data same with american clinical there was that discussion of the presumption of favor her view review was found available there and the court the panel went on to discuss a different argument even if the limitation applies we should nonetheless re because it's all trivial risk and the reason i'm emphasizing all those even if is because that is where that standard that the government talks about in its brief kicks in if you were to conclude that the secretary in your hypothetical was every arguable accidental misstep and open violation no but i think i certainly don't think that but i think your hypothetical was that they had made an equitable adjustment that was demonstrably not budget what the budget to travel the adjustment says is if the secretary makes adjustments they may not cause the budget to go out of whack so it doesn't matter whether the secretary did it on purpose or as a mistake that would be a violation of appropriate method and for all of the reasons that we've talked about this method of volume control which is nothing other than a relabeled payment adjustment that can't be tolerated or explained anywhere else in the statute is not an appropriate method of volume control if i could i want to make one last point based on something that ms klein mentioned she mentioned how important it is that congress oversees the systematic cross cutting issues and how much work it does every year after the schedules are published to revise or clarify certain things that makes our point about section six hundred and three perhaps better than we could which is when congress looked at exactly this issue using exactly the reports that are cited in the appellant's brief here it decided to make the cut where it did and further when when c m s attempted to bring into that new payment system the fees the fee schedule the mid build hospitals congress acted again and said no these are subject to the system that is congress using its systematic cross cutting oversight to make a very specific point about what hospitals within the accepted category get paid and what they get paid outside of that category that the two asked instruction to the agency to develop a method for controlling volume would be entitled to chevron deference in the ordinary framework that's not taken away when congress precludes judicial review judge millette hypothetical about the pre authorization paperwork that is functionally the determination that the agency made here in advance of the particular visits and the way that the coded already takes into account complexity so the agency has already made the determination that these types of routine business do not have to be provided an outpatient setting and so there was no reason to put it an extra step saying  document on a case by case basis why you needed to provide these in an outpatient setting the argument about how t for provides of articulated method for and this quote correctly recognized that the paragraph two dollars there was the authority is a qualification that flows through to the provisions that follow even though it's the six didn't have an explicit  be the same is true of paragraphs to ask here that is a broad authority that the agency can use to qualify the instructions that follow elsewhere in the statute and for every service they provide thousands of services they provide that's not something that the secretary could have done as a volume control method because there was no finding that all of the services were being provided on necessarily that was a judgment for congress but at the same time congress left that type of fact and fact intensive judgement about a particular service to be made by the secretary with respect to the pretty exhausting outpatient departments which are subject to  more it's just hard for me to penetrate through all of it even if they get what is functionally the amount that's on the physician fee schedule to they still get other adjustments like like the rural payments but is there i'm trying to understand whether this is taking the service out or whether it's simply controlling payment within the system and i just don't have a sense of how to figure out the difference between the two well the nd as a formal matter what's happening is just that the payment rate that they're getting under off has been lowered to bring it into parity with what they would get if they were under the physician fee schedule so there's no other change to their place under the ops and when you get some of these other adjustments are they sort of across the board or are they are they are just ones that are tied to particular services that are rendered authorities for it to ask it conspicuously did not and that's because what you're what you're dealing with here are services that are unnecessary to provide and by controlling that unnecessary one of the reasons for the higher charges they've got you know it's an outpatient of a hospital and a lot more regulatory requirements that don't go away so this was part of the years of data gathering and refinement of this clinic as i said is always something that the agency looked at so that's a yet another thing it looks that in calibrating a volume control method but here are the plaintiffs position is essentially the agency hands are tied regardless of whether there is an unnecessary shift to outpatient department and an unnecessary diminution freestanding doctor's offices you cannot use a calibrated method to address that particular problem