lundy in brooklyn for the plaintiff appellants twenty five puerto rico hospitals i would like to reserve three minutes for but with the court's permission and yes the hospitals are challenging the secretary's failure to count any low income puerto rico medicare beneficiaries when count delayed in their medicare disproportionate share hospital pavement also known as the dish payment under the medicare inpatient hospital payment system which i will refer to as i p p s and hopefully no more acronyms the key to understanding this case is a working knowledge of the medicare dish payment so that the court can understand why the secretar actions undermine the foundation of i p p s payments to puerto rico hospitals in the us or irrational just so its decision in maine medical center is a good place to start noting that the purpose of this  average patient and lower income they sions or more costly to treat than the average because they are sicker with higher incidence of diabetes asthma and other medical conditions this payments are based on what's known as the disproportionate patient percentage which is the sum of two fractions the medicaid fraction which is an issue here and the medicare s s i faxed in which gives it the purpose of the disproportionate patient percentage is determined what hospitals serve a disproportionately high number d of low income patients and thus qualify for a fish payment disproportionate patient percentage percentage does not correlate directly with the actual percentage of low income patients served rather it is this words an indirect proxy measure for low income close  the mechanism that congress enacted so that all hospitals share of low income patients can can see compared with other high p p s hospitals to determine whether the low income patient load in that hospital is disproportionately high compared to all other ip yes for low income purposes the medicaid fraction captures the inpatient care that a hospital provides in the year the patients eligible for medicaid which is the government insurance program for poor people but that fraction excludes people who are at a eligible for both medicare and medicaid because medicare is for aged and disabled but not for the  so medicare beneficiaries are counted for dish purposes only if they are also entitled to supplemental security income or s s i an income maintenance program for the aged glid income resident medicare beneficiaries of course it does its poorer than any study but because puerto rico's low income medicare beneficiaries are not entitled to s s i the secretary didn't count any of them didn't count a single low income puerto rico resident beneficiary in the medicare s s i fraction this results in a disproportionate percentage that does not reflect the number of low income patients served by puerto rico hospitals which obviously defeats the very purpose of the dish tax you can see there any reasons why a low income person would be ineligible for s s i benefits independent being a puerto rico resident well there are judged by their their qualification requirements including their income test their asset tests right here and your views and then you saying that it would be problematic for services creates a list of medicare beneficiaries and they send that over to the social security administration and the social security number ministration keeps track of individuals who receive side benefits and so they the actual phrase of being a recipient of s s i or is it just being eligible but i'm using eligibility because that's crucial to this case but what the statute thoughts about is in title meant as a side benefits and that's the thing that the social security administration its database so in other words it has the months where they received the benefits and those are the terms of the that's what i'm saying that that statute seems written with an idea that it was going to turn on being an actual recipient of the benefits as speaks in terms of entitlement right so that i will be reading i guess i'm saying aren't you reading it to be eligibility oh no i'm not reading it to be eligible of the un saying that it only makes sense if for puerto rico residents who can't qualify for in title mint if because you're located in puerto rico then what i'm saying is what would we do would we count all of them because what you're saying is in the normal circumstance for people who can qualify for states who can't qualify they get a list of who's actually getting yeah well i mean now you're asking what would have to report how would that work and what we don't have that last well i mean st of all well if you're asking me how would work from a kind of to whether they would show up on the list if they were in a state where they were eligible well it's not equivalent only in a way the prejudice is puerto rico hospitals because everybody who isn't eligible for a b de benefits would be eligible for for i benefits if they were in the states so yeah you're right it's not exactly a good measure because it prejudices and limits the payments to put usually nobody on that list would not be on the list that social security prepares if they were in a state where they could get oh not even close i mean the qualifications in puerto rico or fraction dollar wise what you have in the states on that point in addition it would be not much work at all for puerto rico to the hospitals for that matter or the social security administration to use the income and asset data that has been gathered by puerto rico to determine s s i eligibility and entitle me so the operational barriers there are things that need to be addressed but the are no way to prevent the government from being able to determine who would qualify who would be entitled to s s i benefits but the alternative here is to assume that there are no low income puerto rico medicare the fish aires which is irrational on its face of course there are six people and the only reason that they're not counted is because puerto rico doesn't have an s program so the facial irrationality of this is supported by the two thousand and sixteen fit federal register document from the government where they did an analysis and they said nationwide for every one hundred days inpatient days of medicaid eligibility of people have medicaid there are fourteen days of people who have s s i who have the medicare beneficiaries with s s i so even the government acknowledges the the  prejudice to the puerto rico hospitals and so the issue here then becomes whether the exclusion of the low income puerto rico resident beneficiaries from the medicare s s i fraction is lawful well it's not the government argues that there is just one step one well it's clear from the language that that to to pay hospitals in puerto rico in the same manner and to the extent as they're paid in the states allows requires requires the exclusion of all low income medicare beneficiaries because puerto rico doesn't have an s s i program well that doesn't make any sense because when the whole the whole purpose of bringing puerto rico hospitals under the i p p s into the inpatient perspective him and systems to get away from a system that paid the hospitals costs so this was supposed to be a money savings approach for the government so they bring in puerto rico into i p p as after they did a study they didn't bring virgin islands they didn't bring it on they didn't bring any other territory in but they brought in puerto rico and they said the puerto rico come on in and we're going to treat you in the same manner and the same extent as the other  every state every state has low income medicare beneficiaries counted but not puerto rico so how was that in treated in the same manner in addition under a shell from one of the assist if in fact congress intended to give hot bring the consul's under i p p yes and then either reduce or eliminate their dish payment they want to said something about it they wouldn't have used this in the manner in to the extent by which they simply would have brought them under under the predicate for them being eligible for the payments that you're seeking is that right that's correct it's the that done by statute that puerto rico was brought him yes or yes yes originally it wasn't part of the system and  this language this to the extent and in the manner was that preexisting language at the time when puerto rico was brought him a new year on that was added in the words and said and now that we've brought the puerto rico hospitals under i p p yes we need to treat them in the same matter into the same and the extent that we treat hospitals in the states code is there any legislative history on the meaning of those words because you just saying they're brought in therefore you should be treated in a way not in the same enter in the sense that even though they're not getting the benefits treat them as if they're getting the benefits the other way to read it is they brought them in full well knowing that they  brought in with them getting a lower share because they would have a low income population that wasn't getting us a side benefit is reading the lesson of history that tells us which of those two views that speech the question of which of those two views the congress might have had in mind but i mean the one view you might be able to get to textually but you cannot get to rationally because there would be no reason for for congress to say come on and be under i d p s but we're not going to give you a full dish payment there's nothing that says that the only thing that's different in the conference report is where the statutory language says in the same manner and to the extent the the conference report says in the same manner into the same extent so that's the only language that you have where the hearings about bringing puerto rico and there was a report that was done that was commissioned when i p p s came in in eighty three dollars right and said with a has the secretary to weigh in to determine whether in fact  any of the territories including puerto rico would be a place where i could p s could be extended cause i p b s is a it is seen as a good financially responsible program and the report came back and said that only puerto rico because of the hospitals that that had low income patients were incurring additional costs but not getting paid so congress or asked the secretary to provide some kind of a dish payment wouldn't do it and so then effective  does the statute does specifically say specifically say to the same extent and in the matter to the extent of the dish and so obviously congress invision they're being  i understand your question and say well was there anything that said that you were going to count your dish payment the normal way of course there wasn't what they said was we're going to take into account the quarter we go was special and there was nothing nothing in the legislative history report in any publication of the government will be asked for discoveries we spent ten years doing to get information out of the government and there is no document from the government that has ever explained why it is rational what it is rational under the i ok questions from just from me which is just about the equal protection argument that you're making yes or is that an argument soley made on behalf of the patient population or is that made on behalf of the puerto rico hospital well in our in our in our brief we cited both for standing because the puerto rico residents are obviously affected by the underpayment of their ip but he separately claiming that the equal protection violation harms the hospitals yes we have that in our in our brief the secretary did not respond i think that's dean conceded on a posed but yes we have both of those in our brief in chief and noted in the reply brief that the government didn't address those those standing positions at all a nd question your honor he said well i guess the same question as mr specter that equal protection argument is is i understand the government's response to it it's in part based on the argument that the supreme court is going to decide in this pending case right now at least one version of the argument so i just wonder is there if you have a view about what we should do in light of the court having that protection issue before it well i mean regardless of the outcome does not affect our case what's crucial here in this case is that the court recognized that residents of puerto rico and puerto rico itself is a is an appropriate subject for an equal protection argument there has never been about whether that predicate point that there is an equal protection problem even possible before we weigh in or not well it seems to me that if the if the court finds that this is a chevron one case then then that works then it walks into the potential constitutional case right and so maybe we wait and see what goes on there but this isn't the chevron step one case and it failed and the government's policies and actions fail under chevron step two and also fail because they didn't take the a p a so if the if the court wants to raise this to a constitutional dimension which is what the government's argument would require you to do in the navy you should believe me should wait but the but the we believe that  we talked about in our brief that in the under the doctrine of constitutional avoidance that the court doesn't have to force a constitutional confrontation on the statute because it simply doesn't say anything about s s i it doesn't say any think about underpaying puerto rico hospitals and in addition the irrationality that the fits the secretary's actions under chevron step two with also defeat the secretary's actions underneath the protection analysis  you would mute your video and audio mr ross good morning may it please the court critics and or the secretary congress directed at the statutory visions relating to disproportionate share hospitals shall apply to puerto rico in the same manner those provisions like to state hospital counsel because i think would help me get the context of this yes so it'll keep the key language and i understand your techs are going to like woods which is this to the extent and manner language that language appears when with respect to puerto rico being brought into the program that would allow these hospitals to get any benefit at all these are the language chain quoting puerto rico in the prospective payment system so that in the same manner and to the extent language prefatory clause to several statutory provisions congress is saying we're including puerto rico in the prospective payment system the following provisions apply puerto rico in the same manner and to the extent they apply to state hospitals and when and then just walk me through when the decision was made to bring puerto rico in with that language is there any report of a state of history beyond the text that the luminance whether this issue was discussed by anybody about whether in doing that you understand it would be that all the low income people that are counted in all the other states would not be counted even though puerto rico was being brought in with language that you might think was a signal that they were going to be treated the same way so a few responses to that st so the primary piece of legislative history here is the secretary's report the secretary finalized that report in the summer of one thousand nine hundred and eighty six that was after the dish provisions had been enacted earlier in one thousand nine hundred and six and if you look at the secretary's report you know the secretary finds that in general the prospect of payment system is compatible with puerto rico and factors that will forty two and a half percent lower than state hospital the secretary's report also notes that at the time public hospitals in puerto rico treated patients on public benefits assistance and then there are other hospitals that inform you can treat other patients the secretary report concludes that there didn't seem to be a large cost differential between the public hospitals in puerto rico treating predominately low incompletions and other hospitals so to answer your honest question there wasn't specific language in the secretary's report discussing you know the things that we're discussing today there are you know actual bases in the secretary's report which congress could have looked at and thought you know we're applying the same provisions to puerto rico these provisions that set system because of course the purpose of the prospect of payment system is to you know not to overcompensate hospitals or else that that kind of that could ruin the purpose of the system which is supposed to in incentivise posse if i just say one thing to something you just said i want to just make sure he understands about the puerto rico hospitals can treat s s i eligible you're talking about visitors certainly your honor yes and that gets captured in the reporting from the hospital i thought just the risk you i know i'm oversimplifying it and i apologize but but from what all you're saying in answer to these questions it strikes me that the answer is no go on go on with from the secretary to anyone in congress legislative history no on ever sat back and said you know we recognize that as a practical matter that medicare excess i fraction for substance there nobody's ever said oh no this is simply going to rule out that fraction with respect to the original so here's my question if that's the case is there some reason why the secretary would be allowed to use the language in the same manner in the in the state and or into the same extent to use to say well obviously i'm just mentioning puerto rico hospitals to get one and so i just don't quite know why the word provisions is doing all that work it's true that they're talking about the provisions and the provisions out to be applauded but i guess the question is why doesn't the word to the extent give no that's a different that's a separate issue about how to apply some of the on and that goes to whether we think the secretary thought it was bound to do this whether the secretary thought it in its discretion it was choosing the most natural reading i don't want to put that aside assume the district court the secretary is read to have thought it was bound to adopt this reading then there might be a problem if in fact it had discretion to adopt alternative reading so with respect to that issue whether it had any room to adopt an alternative reading could you just tell me why the textual use of the word provisions precludes the secretary from having that discretion i understand that maybe the secretary should be affirmed even if it had that discretion but i just want to know whether you seem to be ar doesn't have the discretion at least as one argument and i want to know what the reason for that is your even if the secretary has discretion i think that called me that you are not don't want to talk about that it wants you to answer the question about whether the word provisions according to you and i want to dissent why the use of the word provisions requires that conclusion certainly i mean hey i didn't intend to be pushing i know i'm just i just want to get to the heart of what i am certainly and i think it goes you know to the structure of the statute payment rate for puerto rico hospitals and applies to state hospitals and congress didn't apply to puerto rico hospitals the provision related to so community hospitals and referral centers generally we do presume that congress be treated to the same extent in the same manner as state hospitals which means i'm going to get dish payments for my disproportionate share of paying for poor care and then you know i wake up the next day and say wait a minute no i'm not  you know it could be forced of course it is it is because you're not going to capture all the poor care that you pay for by any stretch you've got surrogate formulas of course everybody understands that but if i'm in one dollar of the fifty states i'm going to get a positive number that's somewhat representative if not exact and not precise if i'm puerto rico i'm getting zero i'll get it you know it's not that you're getting zero of course but i'm not i'm not taking into account visitors who come from miami and get sick while they're on i'm interested as well as anybody ever wake up and say hey you know what he just excluded puerto rico from the from the fraction we've just totally excluded them they're never going to get anything did anybody ever take note of that just that maybe they thought about it but what you're arguing is of course they thought about it because they never said anything i'm saying of course they didn't think about it because they never said anything to get for our present purposes your honor assuming they did or did not see it and scratch their head about this particular problem i explanation for that was the pose that's what the secretary said they said you know because they their costs are lower and they're more efficient and so on so on we recommend in congress that you give them a lower reimbursement basis and here this is a they could have had no reason because nobody thought about it and i guess that's what i'm trying to get to is that's a sick problem is did somebody ever say look you know you're excluding puerto rico and congress as you know in a manner of speaking yeah we know but there's a reason we mean you let me give you the reader adjustment given the fact that had this question which is well i guess two questions really one is just going back to chief judge howard's point about whether hospitals do the reporting of visitors it might matter because if they don't notwithstanding the record saying what it said we don't understand how that could plausibly happen then it's a bit of an odd formulation the way it's written with respect to puerto rico because the more natural way to write it would be to simply say you get a disk payment with a different fraction we're going to apply the same practice this year is always going to have zero for part of it so your answer to that is well actually it's not zero because they can get some payments for visitors but then when we ask you well how does that actually happen and i understand you don't have an answer to that but if we don't know how that actually happens it's a little strange to credit the fact that this formula makes sense because it practically have and how do they know who it is because we thought social security was keep the bill that's now you're saying no actually it must come from the hospitals then we asked the hospitals have that information to they supply it is then get verified and you say you don't know that's fine that you don't  but it does then raise the question in fact was the formula designed in a way in which puerto rico's number would not be zero you are hospitals and it possible it's the medicare it's my understanding that  was what you think we should do about the pending supreme use given that in your briefing to us you were one of your arguments on the equal protection grounds is that essentially the st circuit analysis was wrong is that right no it the dish payment now seventy five percent of it is not now these statutory formulas that's not relevant for the fiscal years that is an issue in this case but i think it is very relevant for the  couple of let me just make a point with respect to administer ability nonissue government counsel was was was discussing what happened with the new change from the from the affordable care act and what happens to the seven thousand five hundred and twenty five percent and what's in our secretary has been entirely silent so i think it's nice you know it's all fine and good but how are you on these i think that we lost attorney dixon and she's just come back she's coming back and now counsel so you need to consider it in that regard and further just because of your point the government would have to have you believe that the congress brought puerto rico hospitals into the  pays costs so whatever cost you have you get paid those costs so just so i understand it would bringing the puerto rico hospitals into the system but affectively zeroing out their s s i fraction make them worse off than if they were outside the system unquestionably because the whole purpose of the i p p s if you if you remember back to you know the st term of president reagan's presidency with there were it can still consider all deficit issues considered deficit concerns and this was a response she turned to the hospitals in patient payments into a p p s system where they were paid on pre determined rates not on their actual cost with an inflation factor so yeah so the hospital and the whole idea is that in order for that to work  medicare beneficiaries are balanced against the s s a database and hospitals know nothing about those hospitals or completely have no access to this information this is a government that terminations and still got sick from not matching which will concludes argument in this case attorney roth's an attorney dixon you should disconnect from the hearing at this time