that the court can can and should rule in favor of the hospitals in this case number one the two thousand and thirteen amendment by its own terms does not apply to these hospitals none of whom have requested a reopening are statute and finally you only need to reach this point if you agree that the rule prospectively applied is permissible even if it is permissible prospectively applied it's contrary to the statute into centuries of legal tradition to apply it retroactively to these hospitals and the secretary has failed to meet the two very narrow exceptions to that prohibition and as i mentioned should you agree with either of our first two points there's no need to reach the retroactivity issue first with respect to the two thousand and thirteen amendment two thousand thirteen amendment is an amendment to section four hundred five point eight hundred eighty five  which is entitled reopening a contractor determination or a reviewing entity decision it only applies to reopening the operative part of the regulation is found in  at i and that's where the three year limit applies and that only applies to quote a reopening made upon request so none of these hospitals have requested a reopening all of them have appealed to the provider reimbursement review board pursuant to the statutory authority of thirteen ninety five zero zero you agree that this theory is in inconsistent at least with the preamble  is that fair that as a theory your theory i agree that our theory is inconsistent the preamble the way i would respond to joe you would have to show that the government's reading of the underlying regulation is issues on warranted when his interpretation is plainly erroneous or inconsistent with the actual text of the regulation and this court recently in the kaiser case which is an important case for this made that very ruling that before the actual application in the case and in this case where regulation is issued and in the very same federal register notice raises explains what it mean that is  agency decides to explain the meaning of a wall that was passed ten years ago and it might seem inconsistent us face is that different real different deference where the agency is explaining the very rule that is how adopting i don't think that the asians see can can satisfy its obligations to clearly apply the rule simply by stating in the preamble a statement  inconsistent with the text of the regulation itself i don't think that the fact that it's i guess a question is in our determination of whether it's inconsistent or not and we all little more deference when it's done it very same time the rule i'm not aware of any authority for that your honor i would argue that the the contemporaneous nature of it actually probably mitigates against the secretary's interpretation rather than this being something that we ten years later come up with a theory about this is actually at the very moment when the secretary have the opportunity to very clearly publish regulation he didn't do so clearly and as as a clear in stating what it intended to do it just made a mistake in how it actually input that that's correct it is clear what they claim they intended to do and say nine percent clear but it's also clear that the text of the regulation itself doesn't support their interpretation the the part of the regulation that they changed was in subsection a where they had this definition of predicate facts on the part of the regulation and that is that issue the three year reopening isn't subsection b and it only applies to reopening xfer made upon request that's none of the hospitals in this case requested a reopening so just on its face it doesn't apply to our case they had the opportunity in the rule and the secretary noted that we considered amending four hundred five eight hundred thirty five which is what governs statutory appeals but we basically decided at this time not to do so we don't know why they decided not to do so but it would have made it very clear and the way sense this question i suppose the government's well what sense would it make not to have it apply to want to not the other well they're completely separate procedural mechanisms to appeal cos your blinders on and i'm just saying if you wanted to preclude challenges to predicate facts what sense would it make to a while predi secretary created where is the statutory appeals that we proceeded under five hundred thirty nine to five or quite clear that with very few restrictions other than the amount of controversy counter virtually and that you have to bring within one hundred eighty days the providers virtually unrestricted about what he can appeal under eight hundred thirty five so that's why the secretary didn't amend that regulation at the same time i don't know but keyser case and then th roman that for it's as a three year  the subsection that that provides the three year limit is on subsection b however and it's very clear that subsection b only applies to reopening is made upon requests what is the appeal filed your honor i don't know what the secretary intended with that that is a new part of the regulation it could mean the predicate fact was determined at a prior point in time from as a result of an appeal i don't know exactly section b which is the three year limit is the one that applies only to quote a reopening made upon request it doesn't say a reopening made upon request or appeals under eighteen thirty five it's only reopening so that's all that regulation applies to and the secretary made it made a mistake to judge cannot in in attempting to apply the regulation to these hospitals but didn't properly do so even though he said in the korean by this is what i want to do i'm going to have apply it to all pending appeals he didn't have the authority to do that by virtue of eight hundred eighty five if i could proceed your honor that argument on that as you're well aware is finality and maybe burden is a better word from in my view for that still records things like that so exactly how would the agency proceed do you suspect or do you propose if you were prevail on this on this claim your honor that's a something that that the secretary is going to have to determine there there could be a number of ways their briefs that is not part of the record below we don't have actually have any evidence of of what the secretary what data the secretary does or doesn't have would still have more of your argument is that at a minimum it should go back at a minimum for them to explain the staleness burden argument i i wouldn't ask them to explain the staleness a burden and if the court remands it i think the remand would be to instruct the secretary to am not meaning to be coy either i i can't really fix that problem for the government what i can say is that a few years later seven years later they corrected this problem with the capital cost perspective payment system problem seems to be a pretty pervasive one which is it's really hard in the two thousand and seventeen to go back and figure out what's happening in hospitals in  hundred eighty three one thousand nine hundred eighty four and that's going to be true regardless of whether the issue is discharge or transfer or any other of the dozens if not hundreds of determinations that could go into a predicate fact and that wish i think that that raises the issue of finality versus accuracy that the government is trumping  over anything else but to respond to your question it's it's unreasonable yes it may be difficult to try to figure out the correct data or to figure out a proxy for that it's not something that i can do on the back of an omelet but it's even worse for these hospitals to continue forever to be under paid under the standardized amount because that area's not her how how could anyone do this and the government says statement when this issue first came up what in the early eighty's was that we can't really do this because the data at the time don't distinguish just charges from transfers and they couldn't unscramble that in the early eighty's how in the world are they going to do with thirty five years later that's not what the government said in one thousand nine hundred four your honor what the government said was that no data has been submitted or collected i don't remember the operative word to indicate the difference or the magnitude of the difference between transfers and discharges an important point is that the secretary was the one doing the collecting it wasn't up to the provider community to submit something because the secretary didn't even raise this issue until the final rule after the comment period had long expired and what the secretary said was he acknowledged there was an error he called the discrepancy so he acknowledged the error it wasn't that we can't determine if there was an error he acknowledged that transfers were counted as part of the discharge count and shouldn't be under p p s but he simply said that the magnitude of the change it's not significant we don't think it's material and fact is quite material so he made a decision what he calls and with the government calls in there in their brief a judgment call and claims that that we would get to that point if the court agreed that they had underpaid and that the standardized amount had been improperly calculated under thirteen ninety five deb you debbie and so if that statute was not followed then the statute was violated and for the secretary to violate the statute and then years later say well you know what we just we can't figure out quite how to fix that and so we're not going to fix it unless we can do it perfectly that wouldn't be a reasonable response you to facts that occurred in the early eighty's and not only with respect to this but with respect to all the other predicate facts that it's katz's was talking about if there's a burden why isn't the burden on challengers to say that oh no it doesn't matter that many years have passed but the data is still somewhere why isn't that alone sufficient to make the agency's judgment that it will be difficult and maybe impossible to correct the record at this late date it's to to accept that argument would be and in essence to reward the government for the original error and that's a different question i was on the start with the first question which is the government is not reasonable in saying that from the viewpoint of this year it's going to be hard if not impossible to correct something that occurred in the eighty's different computer systems and i didn't have computers i don't know how they listed that you know wrote these things out in those days that's not a that i get you're balancing issue but that issue is not a reasonable is that the observation that this was a long time ago and that this data is difficult to collect and colet didn't make some sense of it's not an unreasonable observation i agree now now we get to the other side of the question which is it's not fair it's not reasonable to be stuck with an heir but that's true of every kind of status if the bank robber is not caught in seven years he gets to keep his money it's terrible if somebody was saul somebody is not caught in a certain number of years you know it's terrible i happens but it's bad leave aside the criminal cases and all the civil cases are statute of limitations somebody cheated somebody out of something very bad but we don't go back and correct the record humberside is about the only only circumstance and terrorism where we actually go back and say we don't care about the passage of time we're going to correct so this is a kind of balancing that the law of the common law and statutory law does all the time why is this any different than that this case your honor i submit is different because examples that that the court just gave are of single acts homicide some sort of event that occurred at one point in time and there's a statute of limitations that expires before that event can be challenged or corrected this event the improper calculation of the standardized amount in one thousand nine hundred four recurs each and every year every time these secretary publishes the new inpatient perspective payment system final rule that error is embedded in that in that rule every time the hospitals admit a medicare patient and get paid for it they're getting paid a fraction less than they should have been paid had that been properly determined in  one i offered one suggestion of of however the secretary made the calculation for capital cost p p s just a few years later they made an adjustment to remove transfers from the discharge count i think it is you know about a one percent number i don't quote me on that the secretary all the time the medicare program it's a very complex program the secretary uses proxies and extrapolations and estimates all the time not everything in the medicare program is a is an absolutely perfectly principal calculation so the secretary's very accustomed to making judgment calls the judgment call that he made in one thousand nine hundred four it was just you know what it's not significant so we're not going to do anything about it and we submit that he could have made a judgement call and should have made a judgement call to to make some assessment of that era just that seem like an unreasonable judgement just intuitively you would think most people who leave hospital a leave it to go home rather than to be transferred to hospital b right doesn't that seem to accord with common sense well if i understand your honor's question the p p s statute was quite clear to treat discharge and transfer separately but the secretary's judgment that it's a relatively small error doesn't seem the asli wrong to me on this particular question hundreds of millions or hundreds of millions of dollars your honor and if the the judgment call that the secretary made at the time was to acknowledge the error he called the discrepancy but he acknowledged we did not adjust for transfers but he simply minimized and said it doesn't have a significant effect seven years later he realized it actually did have a significant effect might have appeared small might have appeared small the time but now with the with the passage there's no opportunity for anyone to comment that the provider community didn't really understand this issue at the time i think frankly our clients in the early two hundred in the early to two thousand and three two thousand for the decision makers a were getting reimbursements under this scheme at what time frame or that was there anyone who was around in the early eighty's who could have a challenge that i really don't know the answer i'm sure some of them or you can i ask i thought that this was just a stark unitary legal question which is either the regulation means what the government says in which case nobody can ever go back and challenge a predicate fact or it means what you say and the question is wide open in any appeal for any predicate fact  today i understand you towards the beginning of the argument to suggest a different possibility which is maybe some predicate facts can be challenge and others not and there's an capricious one of the things is to is to allow embedded error into the system that has no opportunity for correction it replicate what you don't each and every year but you just say that but it seems like your legal theory would enable challenges regardless of whether the error was small or large and regardless of whether the error was obvious or subtle that's right that's because thirteen ninety five which is the operative  statutory provision governing all medicare appeals is virtually unrestricted other than one hundred eighty day requirement and the ten thousand dollar amount of controversy required there are no restrictions in that statute as to the topic that can be  it can be any matter covered by a cost report the standardized amount is baked into both the secretary's final rule and the individual cost reports of each provider each year i understood you to be saying that it's unreasonable to in trying false predicate facts in the formula going forward but it's going to be different in different kinds of product in fact cases to go back and try to challenge them as being wrong in this case you would be able to you say show that the transfer discharge number is wrong and you have some support for that given what the secretary did in other contacts in other to pick up on judge cats question  other contexts though you may not be able to go back and really recreate things to show that it was wrong in the first place and i really i can't speculate whether there might be any hard other what are your points about this predicate fact the regulation as it is unreasonable that is applied to this predicate fact we know it's wrong and therefore and you say this is all the hard part of the case for me would you say can be corrected and therefore it's unreasonable not to correct it that this predicate fact amendment the two thousand thirteen amendment by definition only applies to predicate facts that have extended or permanent  implications for the future it doesn't apply to facts that are your to your source of facts the secretary was there for all to limit that way so by definition what he's doing is not just for us but for any hospital that wants to challenge an incorrect predicate fact that has ongoing reimbursement consequences that are out of luck if they didn't do it under within that that's their time period i guess my point is this can be hard to show in correctness for some that are really old and there  records but here you're saying we can easily show incorrectness because they've admitted in correctness in the other as to the transfer discharge number i think i know the precise amount of the incorrectness but we know there's a correctness that that's that's correct and i and i'm trying not trying to make an argument for any other plaintiffs out there but but our point is a is a broader one indeed than just this case we are saying that it's unreasonable for the secretary to adopt a regulation that has no statutory underpinning itself that completely eliminates challenges to reimbursement formulas that have by definition ongoing reimbursement if you increase you agree that in the context of any particular challenges it would be the hospital spurgeon to show error yes ok yes can i ask you when you were distinguishing my examples of stature limitations your argument was that none of them are those cases preserve ongoing effect of past actions essentially yes so in the lead better case the supreme court held that each new discriminatory pay is a separate item subject to the statue and not withstanding the fact the fact that it could be affected by discrimination that occurred outside of the time period and so that you were not allowed to make an argument that like lack of payment for medical costs i'm not familiar with the leather case your honor but i would just emphasize that the the nature of the medicare reimbursement system is such that and particularly in the perspective payment systems part of it that each year is a new year for that hospital and so using other examples  the courts are aware of for example g and me or the caps on the number of residents there's a formula that's baked in from a base year and that has implications in the future so each and every year in the future that formula is going to impact the reimbursement that year it's a brand new reimbursement russets the same thing is true for a woman who current pay is lower than the man's because of discrimination five years ago eight years ago and yet she can't complain under the let the next congress overrule that by statute but the supreme court in reading the that statute said that she can't complain about those past tax because her past acts even though they affect the present and here the agency is saying this happened a very long time ago it could have been corrected sometime in the interim you could have done it within three years actually could have done it all  republican and that's what they've done here because of the problems that have cats as it was talking about the difficulty of going back that far my only question is why isn't that i know it's not the one you want but the question is why isn't that reasonable how can it be under reasonable to put so much value on a value propose that our system obviously puts high even sometimes higher than brace sexism and not to minimize the very him for not satisfy that issue and i'm not familiar that case but i have my reply this court in the cape cod case stated affirmatively that it's not a reasonable or permissible construction of the medicare statute to embed errors indefinitely into the future that's what we're relying on your honor the new congress passed a statute doing so and then if you like the lead better case if congress passed statute that said you couldn't wrestle absolutely predicate facts after the question here is the exercise of agency discretion not reading the statute that precludes the challenge and the question and whether it's reasonable and due to darwin raises a good point above all often puts a period of  repose or says that certain old facts can't be shelves the question here is whether it's reasonable what the agencies we can and and to respond to that the agency has argued this same issue the other way multiple times quite clear that you can't do that if it's going to simply lock in harmony errors into the system these are not one off claims the claims are reassert themselves each and every year and we believe that the secretary in appropriately calculated standardise amount originally and failed to even though disagree with the kaiser case failed to publish a regulation that applies to our hospitals who didn't ask to reopen any of their is the only thing that you are guarding as retro active here the application to pending cases or is it also retroactive for a regulation issued in twenty thirteen to effect a cost year which is already finished even though the hospital hasn't yet filed its request for reimbursement so i just this is a hypothetical ratio and twenty thirteen there's a cost year of twenty twelve the hospital hasn't yet filed for whatever reason and the twenty thirteen rule is not going to affect its ability to recover from twenty twelve is that also retroactive in your note if i can restate it i would argue that the a cost reporting period that has been completed but has not been appealed in any kind of way by the provider of the two thousand and thirteen amendment could apply to that the that would not have a retroactive effect to are the fact that we had already filed our appeals years before so it's only because of fact that you filed your appeal correct so i'm just wondering i'm not asking you to expand your claim but i'm just wondering about that it doesn't mean that  if it applies to specter the way in which we had decided kaiser that now won't be able to get the money that you would have otherwise been able to get it for a year that's already passed that it is a consequence of a rule from twenty thirteen that applies the cost years where there hasn't even been an opinion and that's the nature of the appeal process and cost reporting live i don't regard that as retroactive that's a prospect of that that's correct but we obviously argue that the rule is impermissible you understand it can't be a an error was made you can't go back and ask us to change that error at some point there is a limitations period it is not trying to reopen cos reports correct they're not trying to reopen closed cos records not in that sense general but they are trying to reopen a determination made many many cost reports so but isn't it now i would have thought the definition of arbitrary capricious is for the government to come in and say we are going to knowingly use a false fact in perpetuity to calculate how much money you're owed that would seem inherently unreasonable and less the government could say it's not false or there's no way for us to figure out whether it's false i think we're i think we're getting close to the merits here just doesn't matter what i make clear the board did not actually engage with the merits of the claim under w in fact a false fact that could be corrected and that that could be corrected is key as applied to particular cases but even if it could be corrected the government's saying forget about it we made a mistake once so who was a provider then would have had ample notice what happened to voters who want to around then they have a separate rule then if they weren't around then you can challenge it no your honor but i think the idea that you if you come into the system after a number has sort of been hard wired into the formula and remember this is part of a system designed to pay all future reimbursements to a determination made in one thousand nine hundred three i think it's hard for you to say i wasn't on notice about what that what that variable in the formula would be that i thought i would have a chance to turn that cannot talk and when trying to you're on notice you just think it's wrong it's wrong for me to be forced to pay no use of a receive millions of dollars last because of something that we all know is a think that there is consistent with the idea of repose you have to believe you're saying that the merits haven't been decided it's really a little bit misleading because on your view the merits never decided that's right your honor i think that the idea i don't want to leave any impression that we can see that there was some sort of problem with the way we implemented the one thousand nine hundred three prospective payment system with the calculations we did back in one thousand nine hundred three my point to judge kavanagh is that if this court were to decide that the regulation did not bar these appeals for whatever reason the proper course would be to remove the agency for further proceedings such that the agency could then engage with that again we at which point we would defend our implementation i think that if you read reasons your honor at their direction is a different lesson to be taken in regions recall of rather the the the providers were the ones saying no no these ears are closed you cannot go back and reopen you can't  errors are baked in and there in an exercise of discretion the secretary and not to a targeted regulation that departed from what we consider to be the background rule that after three years those determinations are closed but even with an only five year gap in regions it was about one thousand eighty four data that was subject to a one nine hundred eighty nine reality thing regulation that this the supreme court specifically noted the validity of concerns about fading memories about loss documentation and it went through an analysis to decide whether or not the regulation the reality regulation the secretary had put forth was reasonable despite that concern about stale evidence secretar the one they're arguing that's not it should not be a concern yes and we had to justify why in that particular context and remember what a barrier this is our concern about the rule is that it bars any examination of something that could be easily corrected and then you would push back on the merits of the one back to the secretary this was getting out of my question justify yourself could this be corrected or it can't it really can't speak corrected now you have some boilerplate language about staleness and records but i don't know if that's true or not it's not explained in any way maybe it is true maybe it's not but as to the facts here it seems questionable because of the correction of the discharge transfer figure that was done in the in the other part of the system so what you would say doesn't matter even if we knew that it was wrong and even if it was easily corrected and even if for a particular predicate fact we had a right here we could do it in ten minutes and corrected you know be hundred million dollars you would still say that q b challenge and that's perfectly reasonable yes and let me explain why your honor if it were really so evident that there was some sort of air if we had said this is wrong and we're going to use it anyway we have tens of thousands of providers out there who have not only one hundred eighty day to appeal and recall that in both region  still what about if your home the supreme court specifically said these are sophisticated providers who are fully capable of with one hundred eighty day finding errors one of several only became apparent later question one variation and what if it's a provider that wasn't around at the time able to protect its right and here's the second part of my answer your honor which is that the prospective payment system is designed to promote predictability you're supposed to take a say freeze false facts indefinitely and then congress said take that standardized amount calculation that results from the aggregated allowable costs per discharge and carry it forward every year updated only for inflation and i want to note that this is a two way street your honor we have we have bound ourselves if we find an error and we say oh gosh we have been overpaying people the new regulation ties our hands from going back and clawing back amounts paid previous helps to save the government finding itself to throwing away hundreds of millions of dollars of its own i think that we made a mistake in the formula and i think it means that compounds the problem your honor i think that it shows that the secretary is serious i think is handed but yeah or even handed in saying that there is real value in proposing repose and predictability in this scheme if we have the standardized amount that undergirds every single  inpatient payment system payment across decades and tens of thousands of providers changing and changing year to year remember the theory here is that every time it gets carried forward that restarts your clock to challenge it so suppose these providers were to succeed on this appeal and suppose they got to remain and suppose the board said yeah we're going to change the standardized amount that when we have what's the sky is falling if that happens that would mean that every other provider who thinks that they have come up with a new dataset that's been in the closet since one nine hundred eighty one could also force a change that means that was a change in lawyers you standardize from in the standardized amount such that we would have an ever shifting standardized you know it also means that the government you really think hardwired into the formula for thirty years at this point and i think it is notable that congress is certainly not attentive to the medicare statute and not in a tenant perspective payment system payments here repeatedly against the backdrop of a static to engage a new rule making that made clearer but then the secretary's you these types of challenges are not evergreen you get three years to challenge them and then at that point everybody the government can't change them providers can't change them it's a fixed constant if we accept your friend's concession that its the burden will always lie on the challengers to show error why doesn't the difficulty of showing error of facts that challenges and almost all of them will fail because they can't meet their burden of showing error thirty five years ago well first you're right think that that would entail a quite high level of administrative burden and the supreme court in auburn regional said listen when the secretary has interpreted statutes here we need to pay attention to her expertise in running this massive program we need when she is when when she said that the appeal you get to challenge an heir however long ago it was made that's touchy it says you may appeal in your intermediaries decision with respect to a cost report and in a very real sense these are not errors within a cost report which is a one year period subject to a one hundred eighty day appeal challenge it is somewhat startling to say that by enacting that scheme congress thought you essentially were going to have an unlimited opportunity to challenge the law since you bring up the appeal statute let's go back to the first issue in the case which is whether the regulation even covers peals i guess you're right your brief does a very effective job a lighting the preamble which is very helpful for you with the actual text of the regulation which is not so helpful to you i have to say i just don't see how this regulation in the context of this scheme can be read to cover peals appeals and reopening serveti different schemes and the is part of the very rule making it was done through not noticing comment but it doesn't have the force and effect of law you still you still need and it an argument why the position in the preamble is at least  minimally reasonable reading of the regulation you do and so i think that the only argument they have is that our interpretation of the statute is flatly inconsistent with the plain language i also want to know i know that there is some use talk about the relation concerns that often arise with that regime are when an agency is trying to post hoc narrow yeah i understand they're not look i mean we can we can talk about whether to with just the level of our deference depending on whether it's a preamble or ten years later or a sub regulatory dock and i get that but you still you still have to have some textual basis for extending this regulation from reopening stew appeals so i think the statutory and regulatory structure seems crystal clear that an appeal is one kind of thing and a reopening is another kind of thing  from one decision maker to another they are statutory they have their own limitations period there they are just different but they have always been understood  this courts and allison kaiser i think it sets the backdrop here the court if it had been so clear that the reopening regulation just didn't intersect with your appeal rights recall that the challenges there were also brought through the appeal mechanism but the she was changed up process the when kaiser identified was not that somehow reopening regulations had no intersection with the appeal that somehow you could be in your appeal time but outside your reopening window the problem was that the regulation then did not to narrow the statute of limit to the three year statute of limitations that applies to reopening not to be confused with the separate statutory i think it's one hundred eighty day far as i can tell the only textual reference to appeals in the amendment correct i believe that is correct but i think it has to be read and if you put the pieces together so so in roman it three so it says and looking at the parent that it will write in an appeal filed or a group reopening requested run what that modifies is the period at issue if what you are complaining about in the period issue in the cost report that's still open whether  period at issue in a reopening request recall that subsection the two four makes clear that you calculate that the three year limit for each predicate fact separately so read together i think these provisions need when what you are complaining about when the period at issue that you're complaining about whether through an appeal or through a reopening is a predicate fact you calculate the limit little  period by virtue of subsection b two for the separately the period issue here is something proximate to the present right it's fifteen or sixteen or seventeen right i believe it cost report  i don't see what this does other than tell you that the initial determination here in the early eighty's can happen through an appeal or a reopening now see how that impacts the question here whether the statute of limitations that on its face addresses reopening should be extended to the separate scheme for appeals well your honor we may just be reading the parent that a t differently at a the i think properly read and certainly as the secretary unambiguously expressed in the preamble is that it is supposed to cut off challenges to a predicate fact unless they are through a timely appeal of the first cost period when they arose or were determined or applied in this particular way and so i think to the extent that this regulation is ambiguous and i do want to note that judge bates determines that properly read as simply understanding how these provisions intersect and i get against the backdrop of hisor where the problem was your regulation just doesn't even outside predicate facts it is very clear what the secretary was trying to accomplish is so messy that to pick up on just cats point this is an easy we understood situation when a language could have been clearly articulated in the regulation but it's but it's not  what happened your honor i think agencies can can always be clear i do think it's helpful to remember tonight that's always true and that's true of judges too but this is particularly botched and we should be having this argument if kaiser was the backdrop and given honor i think two facts are important remember one while this and this certainly does cover the particular scenario at issue in kaiser in this regulation covers huge swaths of activities it's not only intermediary determinations secretary determinations it's board determinations so the idea that the phrasing may be not entirely lucid as applied to the situation i don't think should surprise anyone when the secretary is having to regulate across such a wide spectrum of different types of decisions and second this was put out i think several months after the kaiser decision was issued that the no suppose rule making i think came out and july of that year i think three or four months after the kaiser decision so i think it would be a little unfair to say well we know exactly what you were trying to do agency and maybe there's a way that you can read the references to appeal here to get there but we're just not going to believe you when you said and when you committed yourself recall that this is an interpretation of the statute promulgated through notice and comment rule making the agency thinks it's going to deviate from this rule by which it is down itself and by its providers i think it would have to go through notice and comment rule making again i don't think you could come in with  rule making interpretation to kind of yank the rug out from people here so in this instance i think it would be very strange to say well we just don't know what the secretary means the secretary didn't mean it to apply appeals as just a court found it is crystal clear that the that the secretary was trying to get out both appeals and reopening through this change and to me the parent article actually hurts your case because it underscores what other parts of eight hundred eighty five confirm which is that appeals and reopening sure differ yes your honor but by referring to appeals if if if the period at issue that you are complaining about whether through an appeal or through a reopening is about a predicate of the old eight hundred eighty five regulation the peel can't isn't challenging the reported issue because to to the extent it's trying to go back and determine a predicate fact which you say is not really in the cost report go to that i don't think any of that language that was in that was in the regulation at the time recall that we thought it already said that we thought that the finding on the matter at took their argument why the regulation is inconsistent with the sachem used to say well period covered by the report just means the cost period insofar as it challenges newly a really it's not really a two thousand and fifteen cost report at that point well your honor that we're we're looking at slightly different phrasings in the statute and i don't think that the secretary and in referring to go to the period at issue and roman at three necessarily was was harking back to the with respect to such a cost report the i certainly think that that is it permissible and or reflects a permissible understanding of the appeal statute that the appeals statute does not give you an unfettered right and unfettered clock that restarts every year the prospect of payment system but i don't think the secretary by using these somewhat different words to refer to the period at issue was importing the same definition  of thirteen ninety five zero and i do want to make the point that the district court did not consider the appeal right in thirteen ninety five zero and that is it has it was not it was not actually charged i understand that and i agree with your waiver point and they don't they don't have a free standing statutory argument any appeal but i also think that the structure of that statute which defines  be appealed sister creature wholly separate from reopening this has some pairing on how we read the reopening way it may have some bearing on it your honor but i think again filtered through the preamble which is the secretary's definitive interpretation that this language should not be be interpreted to allow appeals to go forward with not clearly was not the secretary's intent and i do want to know if the if the court thinks that this language didn't do what the secretary thought it did the appropriate thing to do would be to remain to the agency for further proceedings and it is possible the secretary would have another crack at it at that point since we know exactly what the secretary wanted to do and the reasons that the secretary thought that that was the best for further agency proceedings if you were to determine that this regulation did not apply to appeals on its face you would you would revanche the board would presumably restart the appeal process that was halted w decided it lacked jurisdiction under this appeal but as an hisor i think that would leave the secretary free to to use her discretion to put out a regulation that perhaps more clearly did what she thought it did your time with the kaiser i i believe that this court affirmed the district courts remained for further agency proceedings and kind of just says a farm but i think earlier in the decision it says that the district court remounted for further agency proceedings and that would be the appropriate remedy here as well as two questions  for having made those business decisions if we were go the way that i think that is a risk your honor especially because that the plaintiffs theory here would open it up to the secretary to also start deciding that there were errors or an accuracies in the standardized amount and so to the extent that their position is the statute requires anyone to be able to make these sorts of changes i think it very much  d would hurt hospitals and the medicare system who are trying to project their hostages out i think well there are a lot of different variables in these formulas your honor but one thing is always that understood to be fixed and that is the baseline here it's  standardized amount but these sorts of baseline where congress says take a certain year and then inflate from there those have been understood to be to be unchanging they're supposed to be unchanging and so i think if you week we all got into the  use the most current data available and we're on a different subject and i see my question is are there hospitals at a range their own allocation of patients based on what they thought was a fix number who if it now turns out that number is not fixed might be disadvantaged they made business decisions they built things they put in operating rooms or they didn't they put bro in students to study or they didn't based on what they understood how much they would be reimbursed for and yes if it's changed would that for some of them anyway would it be i disadvantage i think that is a real possibility your honor yes we're on the record is that explanation it doesn't say that your honor but it does say that the secretary did know both medicare programs and providers interest in repose and these issues and it goes on to note in response to the comments that say well you're just throwing accuracy under the bus and we don't we don't think this is we don't think this is the way to go they explained that at some point both providers in the medicare program should be able to close their books and know what i think i don't like i don't know that scout that but but as i said the plaintiffs counsel i don't really see that explained in the way to judge harlan just explained that he he did a better explanation than i see in what the agency did i don't see this spelled out in terms of skies falling repercussions i just see a conclusion already repo's balanced against accuracy and i don't know if it's hard not hard to change these things maybe certain ones can be changed and certain ones can maybe we should allow any of them to be changed because but i don't see the cause explaining well you know that i think the secretary thought that the problems that still evidence against the backdrop of reagents which you know that that that was a problem even for a five year gap and here of course the secretary's looking back over thirty years to all sorts of predicate facts that have been determined along the way per different statutory regimes and said there is a problem that documents are no longer available witnesses are no longer available and that thirteen seventeen the secretary does clearly spell out that concern and so i think that the agency's pa on this point is is reasonable and reasonably discerned i think if the agency had wanted to it could have said something along the lines of what just judge garland just articulated but i do not think it was required to in order to sustain this rule making under so just  up on this point under the law as it existed post kizer but before the regulatory amendment what wasn't the preexisting law that providers could use appeals to challenge predicate facts in the circuit between twenty thirty years that's that's what happened in kaiser itself it is so to the extent that the law is being changed in a way that might upset hospital planning i would think that's a problem with the regulation not with the regulation makes that problem worse by changing the laws existed well your honor i think there was only a brief period when it was  in circuits other than this one post kizer where providers used appeals to challenge predicate facts and were tossed out on the ground that even before this amendment they couldn't do th that the provider understood this to be closed and that we can go back in riyadh it just seems that when the preamble says that was the traditional that was our traditional understanding they're awfully thin on examples  statutory or regulatory sites it does not give us i think the example it gives is the statement in the graduate medical education rule making that issue in regions that that have been how they are always understood to be that certainly was the understanding the provider there was off by the reopening regulation and this court said that the reopening regulation did not at that time cut off that type of did not actually apply at all to that predicate fact of terminations so it was the agency's reason for changing the real things the only section that was being attacked by the court was reopening section i believe so your honor that was that that was the problem this court identified and in the preamble it explained that it was undertaking this rule there was no reference to the language of the appeal regulation i know but throughout the throughout the rule making the secretary actually does talk the of the latter day decisions they were they were challenging that they were timely in that sense our argument was that well no because you're outside the three year period to reopen predicate backs what you're complaining about happened long before these cost reports and of course that's the argument we lost and that's what we were trying to fix these are the this really making up what i'm asking is was there an argument made in the kaiser litigation that your peals regulation was the only one the should have been considered because it was an touch the regulation is clear and the preambles also clear clear in which direction you're on the other the opposite direction what we do in that circumstance you know both the preamble and the text clearly say that appeals can go forward now they said the opposite thing said the preamble is clear in one direction the text of a regulation is clear in the other direction if you mean clear in the sense that our interpretation is inconsistent with the statute with the with the regulations text then i think that you would say that th doesn't just does not apply to appeals and you would remember the agency for further proceedings i want to stress that so it really turns on the clarity or ambiguity of the regulation i think we can bring the preamble into it but i think if the regulation is a now includes a predicate fact and you say ok how do you start the clock on that ok if you're challenging a predicate fact you start from the date when that predicate fact was first determined i think the structure also suggests the result that the agency thought it it had accomplished here so i think both that parents got a call and the overall structure of how reopening works did what the agency clearly said she thought she was doing let me ask you one final way which is do you think a clear parent protocol can create tried again if the text of a regulation was a text of a regulation is we think clear and goes against the government the preamble is in favor of the government can we use the just two or three key points i'd like to make your first the court spent a lot of time with government counsel discussing the text of the regulation and the meaning of that sort of thing and i want to point you to the regulation itself the december tenth two thousand and thirteen federal register because i think it's instructive about why we're having this debate in your joint appendix it's at page thirteen thirteen and thirteen seventeen secretary after the discussion about the purpose of the rule as a whole says finally although we proposed revisions only to four hundred five point eight hundred eighty five in order to clarify our regulations in accordance with this proposal we stated that we were considering making similar changes regarding predicate facts to the regulations governing intermediary appeals at four o five point eight hundred eleven and paragraph so so they they noted that point that they contemplated and were contemplating making similar changes to the p r b appeals regulation at four o five eight hundred thirty five and then at the conclusion of the regulation on page seven five one six nine of the federal register it says at this time we have decided not to make similar changes regarding predicate facts to the regulations governing intermediary appeals at four or five thousand eight hundred eleven and appeals to the board of four or five thousand eight hundred thirty five now we don't acknowledge that the secretary would have had the authority to do that we absolutely reject that but certainly the secretary could have been more clear by amending  amend the regulation that's the reason that her into excuse me the government the secretary's interpretation is is completely contrary to the text of the regulation this court has no deference to that kind of and for protection  i want to also mention one of the arguments that counsel made to support sort of the reasonableness of the regulation is that woods good for the goose is good for the gander were applying this regulation to ourself as well and it page seven five one six four of the federal register in the middle column it says in talking about applying with rule it says however we recognize exceptions when a particular legal provision of the medicare statute regulations or c m s rulings authorizes as part of the specific rule of review and revision of a predicate fact after the expiration of the three year rule so there's a hole big enough for the government to drive its truck through and we don't think that's any evidence that the that the regulation is reasonable if the court agrees with us that that the regulation is is invalid and is in appropriately applied to these to these hospitals i want to emphasize that we filed our first appeals in two thousand and five we've been in this administrative process for thirteen years almost the the the remedy that we've asked for  to order the secretary to recalculate the standardized amount by removing the discharge transfer amount from discharges if the court was otherwise disposed to remand the case for some eyes mouth that the secretary did acknowledge the error despite the council's statement second the federal register it says there is a discrepancy we didn't make this adjustment we don't know today the exact magnitude or the exact way to correct and so they were able to do what they found in error in their base year and but they didn't identify that error until after three years had passed from the reopening it was the very same by the way the very same issue that the government successfully changed in the regions case they went back and revisited the base here for g m me in the regions case and did it they argued under the authority of a regulation but that's what the plaintiffs and kaiser were requesting an adjustment to their g and a base year and this court agreed and so they were to my understanding is they were paid that that g m made base here was correct and so the caps were raised and they received additional reimbursement just for the years that were on appeal if you have any sense of how much money is involved in our case hundreds of millions a lot of money ar