Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-18-05595/USCOURTS-ca6-18-05595-0/pdf.json

Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 

---

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 19a0288p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

ANDREW AVERETT, M.D., et al.,

Plaintiffs-Appellees,

v.

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN 

SERVICES, et al.,

Defendants-Appellants.

┐

│

│

│

│

│

│

│

│

┘

No. 18-5595

Appeal from the United States District Court

for the Middle District of Tennessee at Nashville.

No. 3:16-cv-02815—Matthew F. Leitman, District Judge.

Argued: March 21, 2019

Decided and Filed: November 25, 2019

Before: GRIFFIN, KETHLEDGE, and THAPAR, Circuit Judges.

_________________

COUNSEL

ARGUED: Laura E. Myron, UNITED STATES DEPARTMENT OF JUSTICE, Washington, 

D.C., for Appellants. Michael A. Cottone, BASS, BERRY & SIMS, PLC, Nashville, Tennessee, 

for Appellees. ON BRIEF: Laura E. Myron, Mark B. Stern, UNITED STATES 

DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants. Michael A. Cottone, David 

A. King, David R. Esquivel, BASS, BERRY & SIMS, PLC, Nashville, Tennessee, for 

Appellees.

_________________

OPINION

_________________

KETHLEDGE, Circuit Judge. A statute’s terms are not ambiguous simply because the 

statute itself does not define them. Here, the Centers for Medicare and Medicaid Services 

>

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 1
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 2

interpreted the same phrase—“a physician with a primary specialty designation”—to have very 

different meanings in parallel provisions of the Affordable Care Act. The agency did so not 

because of any difference in context between the two provisions—instead their context is 

identical—but rather because the agency thought the different meanings made good policy sense. 

One of those meanings closely tracked the statute’s terms; the other, set forth in the agency’s 

“Final Medicaid Payment Rule,” assuredly did not. The plaintiffs here—all physicians—

challenged that rule after the Tennessee Medicaid agency invoked it in an effort to “recoup” 

some $2.3 million in payments to them. In a carefully reasoned opinion, the district court 

granted summary judgment to the plaintiffs and declared the rule invalid. We affirm. 

I.

A.

The Medicare program is funded and administered by the federal government; the 

Medicaid program is funded largely by the federal government but administered primarily by the 

states. In 1996, Congress directed the Secretary of Health and Human Services to create a 

“standard unique health identifier” for each “health care provider” participating in the Medicare 

and Medicaid programs and to “take into account” each provider’s “specialty classifications.” 

42 U.S.C. § 1320d-2(b). Accordingly, at the time relevant here, the Secretary required Medicare 

and Medicaid providers to complete a “National Provider Identifier” form that required providers 

to designate their “primary specialty.” See Form CMS-10114 (11/08) at 1–2. Medicare 

providers also completed a form that required them to “designate [their] primary specialty[.]” 

See CMS-855I (02/08) at 8. Medicaid providers likewise designated their primary specialties 

through “self-attestation” during most if not all states’ enrollment processes. See 77 Fed. Reg. 

66,673–75 (Nov. 6, 2012). 

Congress enacted the Affordable Care Act in 2010. The Act provided for a temporary 

increase in payments to certain physicians who provided primary-care services to Medicare and 

Medicaid patients. To have been eligible for increased payments for those services under 

Medicare, a physician must have had “a primary specialty designation” of certain primary-care 

services (for example, “family medicine” or “internal medicine”). 42 U.S.C. § 1395l(x). 

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 2
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 3

The Medicare provision also required physicians to attest that primary-care services “accounted 

for at least 60 percent” of their recent billings under Medicare. Id. To be eligible for increased 

payments under Medicaid, however, the Act required a physician only to have “a primary 

specialty designation” of one of those same primary-care services (except that “geriatric 

medicine” was not among the specialties listed for the Medicaid provision). 42 U.S.C. 

§ 1396a(a).

In 2012, the Centers for Medicare and Medicaid Services (an agency within HHS) 

promulgated its “Final Medicare Payment Rule,” which without much fuss said that physicians 

who met the criteria specified in § 1395l(x) were eligible for increased payments under the 

Medicare provision. Specifically, the agency interpreted the phrase “a physician . . . who has a 

primary specialty designation” to refer simply to physicians who had “[e]nrolled in Medicare 

with a primary specialty designation” of one of specialties recited in § 1395l(x)(2)(A)(i)(I); and, 

per the terms of subsection (II) of that provision, the rule otherwise required that “at least 

60 percent” of the physician’s recent billings to Medicare had been “for” those designated 

services. 42 C.F.R. § 414.80(a)(i). 

But the agency gave an altogether different meaning to the phrase “a physician with a 

primary specialty designation” as used in the Medicaid provision. Specifically, in its “Final 

Medicaid Payment Rule,” the agency did not—as it did in the Final Medicare Payment Rule—

interpret that phrase to refer simply to physicians who had designated, as their primary specialty, 

one of the specialties recited in § 1396a(a). Instead, the rule also required the physician to show 

that (1) she was “Board certified” in that specialty or that (2) 60 percent of her recent Medicaid 

billings were for certain primary-care services (the “60-percent” or “60-percent-of-billings” 

requirement). 42 C.F.R. § 447.400(a).

B.

The plaintiffs in this case are 21 physicians who practice family medicine in Tennessee, 

mostly in rural areas, and who received increased payments in 2013 and 2014 under the 

Medicaid provision described above. But in 2015 Tennessee’s Medicaid agency, TennCare, 

brought an administrative action to “recoup” about $2.3 million of those payments—an average 

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 3
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 4

of more than $100,000 per physician. As grounds for the recoupment, TennCare alleged that the 

physicians had not met the 60-percent requirement of the Final Medicaid Payment Rule. The 

physicians then brought this lawsuit in federal court, seeking both a declaration that the 

60-percent requirement is contrary to the terms of the Medicaid provision, and an injunction 

barring the requirement’s enforcement against them. The district court granted summary 

judgment to the physicians, declared the Final Medicaid Payment Rule invalid, and enjoined the 

defendants from enforcing that rule against them. This appeal followed. 

II.

We review the district court’s decision de novo. See McMullen v. Meijer, Inc., 355 F.3d 

485, 489 (6th Cir. 2004) (per curiam). 

The statutory provision at issue states as follows:

[A state plan for medical assistance must provide] payment for primary care 

services . . . furnished in 2013 and 2014 by a physician with a primary specialty 

designation of family medicine, general internal medicine, or pediatric medicine 

at a rate not less than 100 percent of the payment rate that applies to such services 

and physician under part B of subchapter XVIII . . . .

42 U.S.C. § 1396a(a)(13)(C) (emphasis added). The question presented is whether, in the Final 

Medicaid Payment Rule, the agency correctly interpreted the phrase “primary specialty 

designation” as used in § 1396a(a), to mandate not only that the physician have the requisite 

designation of primary specialty, but also that the physician either be board-certified in that 

specialty or satisfy the 60-percent-of-billings requirement. See 42 C.F.R. § 447.400(a). 

As an initial matter, we address briefly the agency’s argument—made without a single 

citation to precedent—that the district court’s decision to invalidate the Final Medicaid Payment 

Rule is reversible on the ground that it does not “redress the plaintiffs’ injury.” Gov’t Br. at 16. 

Specifically, the agency says, “invalidation of the regulation does not establish that plaintiffs are 

entitled to keep the enhanced payments they received pursuant to the regulation.” Id. We set 

aside the question whether this argument is about standing or some other doctrine; for in any 

event the argument is meritless. The argument’s very terms reflect the agency’s mistaken view 

of its place in this statutory scheme—a view that pervades this appeal. The physicians did not 

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 4
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 5

receive increased payments “pursuant to the regulation”—the agency obviously lacked authority 

to increase them on its own—but instead received them pursuant to an act of Congress, 

specifically the provision codified at 42 U.S.C. § 1396a(a). More to the point, this suit is not so 

much about whether these doctors are “entitled to keep” monies paid to them years ago, as about 

whether the government is entitled to take those monies away. The payments at issue have been 

the plaintiffs’ property for years; the Tennessee Medicaid agency sought to deprive the plaintiffs 

of that property solely by means of enforcing the Final Medicaid Payment Rule; and the district 

court prevented that deprivation by invalidating the rule and enjoining its enforcement against 

them. Hence the court’s decision redressed the imminent injury of which the plaintiffs 

complained. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 

185–86 (2000).

As for the merits, we begin by asking whether, “employing traditional tools of statutory 

construction,” Congress has already answered the question presented—in the statute itself. See

Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 & n.9 (1984). If so, 

“that is the end of the matter.” Id. at 842.

Here, nobody disputes the meaning of “primary specialty”; that term simply refers to the 

physician’s principal area of practice or expertise. Nor is the meaning of “designate” hard to 

discern; in the sense employed here, it simply means “[t]o indicate or specify; point out.” See, 

e.g., The American Heritage Dictionary 506 (3d ed. 1992). Again nobody argues otherwise. 

That leaves the question of who must do the designating. As to this question too there is 

not much dispute: in the relevant Medicare provision of the Affordable Care Act, as discussed 

above, Congress used precisely the same term—“primary specialty designation”—in precisely 

the same context of providing a temporary bump in payments to primary-care providers. See

42 U.S.C. § 1395l(x). And CMS interpreted that term to refer simply to the physician’s own 

designation, as her primary specialty, of one of the specialties recited in that Medicare provision. 

See 42 C.F.R. § 414.80(a)(i)(A). That interpretation makes perfect sense, given the apparently 

uniform practice of physician self-designation under Medicare and Medicaid. Meanwhile, 

“[a] standard principle of statutory construction provides that identical words and phrases within 

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 5
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 6

the same statute should normally be given the same meaning.” Powerex Corp. v. Reliant Energy 

Servs., Inc., 551 U.S. 224, 232 (2007); see also, e.g., Erlenbaugh v. United States, 409 U.S. 239, 

243 (1972) (“a legislative body generally uses a particular word with a consistent meaning in a 

given context”). Absent some good reason to conclude otherwise, therefore, the term “primary 

specialty designation” as used in § 1396a(a)(13)(C) (the relevant Medicaid provision of the 

Affordable Care Act) means the same thing that it means in § 1395l(x)(2)(A)(i)(I) (the relevant 

Medicare provision). 

We see no reason to conclude otherwise. As an initial matter, nobody assigns any 

significance to the fact that, for technical reasons, the relevant Medicare and Medicaid provisions 

of the Affordable Care Act were enacted in separate bills passed four days apart. Nor does the 

agency offer any actual interpretation of the statute in support of its reading of “primary specialty 

designation” as used in § 1396a(a)(13)(C). To the contrary, in both the Federal Register and in 

its briefs to this court, the agency does not offer so much as a dictionary definition in support of 

its interpretation of “primary specialty designation” as used in the Medicaid provision. Indeed, 

so far as we can tell, the agency does not employ a single “tool[] of statutory construction,” 

Chevron, 467 U.S. at 463 n.9, in support of its construction of the statute here.

Instead the agency offers only policy arguments. CMS argues as follows: “Congress did 

not define ‘primary specialty designation’ in either the Medicare or Medicaid” provisions; “[i]t 

was thus incumbent on the agency to give effect to the limitation of payments to providers with a 

‘primary specialty designation’”; and CMS did so by reading that term to mean one thing in the 

Medicare provision and a different, much more restrictive thing in the Medicaid provision. 

Gov’t Br. at 20–21. (The agency based that more restrictive interpretation upon a perceived need 

to “verif[y]” the physician’s designation of her specialty. 77 Fed. Reg. 66,674.) But the 

Medicare and Medicaid provisions are not merely starting points, from which the agency can 

then make the real policy choices. “Statutes are instead law, which are bounded in a meaningful 

sense by the words that Congress chose in enacting them.” United States v. Hughes, 733 F.3d 

642, 646 (6th Cir. 2013) (emphasis added). The agency is seriously mistaken, therefore, to assert 

that “the statute . . . imposed no specific limitations on the agency’s authority” to interpret the 

Medicaid provision as it did. Gov’t Br. at 21. The “specific limitations” were the statute’s 

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 6
No. 18-5595 Averett, et al. v. United States Dep’t of 

Health and Human Servs., et al.

Page 7

words themselves. And here no one (the agency included, as to the Medicare provision) seems 

to be confused about what they mean.

The actual content of the Final Medicaid Payment Rule only underscores its lack of any 

statutory basis. Congress included a 60-percent-of-billings requirement in the Medicare 

provision (§ 1395l(x)), but chose to omit that requirement from the Medicaid provision 

(§ 1396a(a)). “Omitting a phrase from one statute that Congress has used in another statute with 

a similar purpose ‘virtually commands the inference’ that the two have different meanings.” 

Prewett v. Weems, 749 F.3d 454, 461 (6th Cir. 2014) (ellipses omitted) (quoting United States v. 

Ressam, 553 U.S. 272, 276–77 (2008)). The “different meanings” here are that—“as a matter of 

elementary statutory interpretation[,]” In re United States, 817 F.3d 953, 964 (6th Cir. 2016)—

the Medicare provision (§ 1395l(x)) has a 60-percent-of-billings requirement but the Medicaid 

provision (§ 1396a(a)) does not. Yet the agency purported to enforce the 60-percent requirement 

against Medicaid physicians anyway. In doing so, the agency overlooked that, “[w]here a 

statute’s language carries a plain meaning, the duty of an administrative agency is to follow its 

commands as written, not to supplant those commands with others it may prefer.” SAS Inst., Inc. 

v. Iancu, 138 S. Ct. 1348, 1355 (2018); see also, e.g., Hadden v. United States, 661 F.3d 298, 

303 (6th Cir. 2011) (the question whether “to treat Medicaid [physicians] differently from 

Medicare ones, is for Congress to decide”). 

In sum, “whatever its virtues or vices, Congress’s prescribed policy here is clear[.]” 

Iancu, 138 S. Ct. at 1358. There is no 60-percent-of-billings requirement in § 1396a(a). And the 

phrase “a physician with a primary specialty designation” means in § 1396a(a) the same thing 

that the agency said it means in § 1395l(x): namely, a physician who has himself designated, as 

his primary specialty, one of the specialties recited in those provisions. The Medicaid Final 

Payment Rule is flatly inconsistent with that meaning. The district court was therefore correct to 

declare it invalid. 

* * *

The district court’s judgment is affirmed.

 Case: 18-5595 Document: 35-2 Filed: 11/25/2019 Page: 7