United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 24, 2022 Decided April 8, 2022

No. 21-5117

ST. HELENA CLEAR LAKE HOSPITAL, DOING BUSINESS AS 

ADVENTIST HEALTH CLEAR LAKE,

APPELLANT

v.

XAVIER BECERRA, SECRETARY, U.S. DEPARTMENT OF HEALTH 

AND HUMAN SERVICES,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:19-cv-00141)

Kelly A. Carroll argued the cause for appellant. With her 

on the briefs were Robert L. Roth and Patric Hooper.

Kyle T. Edwards, Attorney, U.S. Department of Justice, 

argued the cause for appellee. With him on the brief were 

Brian M. Boynton, Acting Assistant Attorney General, Michael 

S. Raab, Attorney, Janice L. Hoffman, Associate General 

Counsel, U.S. Department of Health & Human Services, and 

Susan Maxson Lyons, Deputy Associate General Counsel for 

Litigation.
2

Before: WILKINS and KATSAS, Circuit Judges, and 

SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

SILBERMAN.

SILBERMAN, Senior Circuit Judge: Appellant, a small 

California hospital, claims it should be compensated under 

Medicare for the cost of keeping various specialty doctors on 

call. The Secretary of the Department of Health and Human 

Services rejected that claim based on an interpretation of a 

governing regulation. The district court affirmed the 

Secretary’s decision and we agree.

I.

Faced with the high number of closures of rural hospitals, 

Congress created the special designation of “critical access 

hospitals.” That refers to certain rural hospitals that provide 

24-hour emergency services located far from other hospitals. 

They are limited to 25 inpatient beds and may not provide 

inpatient care—beyond emergency room treatment—for more 

than 96 hours (on the average). 42 U.S.C. § 1395i4(c)(2)(B)(iii). Patients more persistently ill are expected to 

be transferred to larger hospitals. See id. St. Helena is one of 

these critical access hospitals. 

Unlike ordinary hospitals, which have Medicare costs 

reimbursed based on a fixed fee schedule set by the Secretary 

of Health and Human Services, critical access hospitals are 

treated more favorably. They are reimbursed for 101% of 

their “reasonable costs” in providing patient services. 42 

U.S.C. §§ 1395f(l)(1), 1395m(g)(1). 
3

The Secretary has a long-term practice of denying 

Medicare reimbursement to compensate doctors for being “on 

call.” 63 Fed. Reg. 26,318, 26,353 (May 12, 1998). 

However, Congress intervened in 2000. It passed legislation 

authorizing emergency room doctors in critical access hospitals 

to be paid for on-call time.1 42 U.S.C. § 1395m(g)(5). The 

Secretary, who has broad authority to issue regulations 

interpreting Medicare, issued a regulation essentially tracking 

the statute. 42 C.F.R. § 413.70(b)(4) (hereinafter referred to 

as the “key regulation”).

St. Helena, nonetheless, applied for Medicare 

reimbursements for on-call costs it paid to non-emergency 

room specialists in surgery, obstetrics, pediatrics, and 

cardiology. It claimed that its on-call costs for inpatient care, 

just as for emergency room care, are “necessary and proper” 

under another Department regulation and therefore are, 

perforce, reasonable. See 42 C.F.R. § 413.9(a). St. Helena’s 

Medicare contractor, who administers St. Helena’s Medicare 

reimbursements, denied the request asserting that nonemergency room on-call costs were not reimbursable. St. 

Helena then appealed to the Provider Reimbursement Review 

Board. 

Before the Board, St. Helena argued that it was required 

by the federal Emergency Medical Treatment and Active Labor 

Act, 42 U.S.C. §§ 1395dd, and California law to incur those 

on-call costs. The Board rejected these arguments and 

explained that the Secretary’s key regulation implicitly 

prohibits St. Helena’s requested reimbursement because it only 

1 Congress later added physician assistants, nurse practitioners, and 

clinical nurse specialists to the list of emergency medical staff whose 

on-call costs could be reimbursed by Medicare. Medicare 

Prescription Drug, Improvement, and Modernization Act of 2003, 

Pub. L. No. 108-183, 117 Stat. 2066, 2266. 
4

allowed the reimbursement of on-call costs for the emergency 

room. The Administrator of the Centers for Medicare & 

Medicaid Services, to whom the Secretary delegated authority 

to review the Board, declined to review the decision, which 

became the Secretary’s final action. St. Helena then appealed 

to the district court, which granted the Secretary’s motion for 

summary judgment, essentially affirming the Secretary.

II.

Appellant reiterates the arguments presented both to the 

Board and the district court. It offers both evidentiary and 

legal grounds to show that it was necessary and proper, and 

therefore reasonable, to pay on-call costs for all doctors—not 

just emergency room doctors. 

When Appellant sought reimbursement, it entered into a 

stipulation with its contractor to the effect that it could not 

comply with its obligations without paying on-call specialists 

for inpatient services. But as we have previously held, the 

contractor is not the government and therefore the Secretary is 

not bound by any such stipulation. See Appalachian Reg’l 

Healthcare, Inc. v. Shalala, 131 F.3d 1050, 1053 n.4 (D.C. Cir. 

1997). In any event, the stipulation of fact assumes a legal 

conclusion—that the hospital is obliged to provide such 

extensive inpatient services.

The parties agree that critical access hospitals have an 

obligation to treat patients under federal law—at least for a 

short time—after emergency room treatment. That obligation 

apparently stems from the federal Emergency Medical 

Treatment and Active Labor Act, which requires hospitals 

providing emergency room service to “stabilize” patients 

before releasing them or transferring them to a large hospital. 

42 U.S.C. §§ 1395dd(b), (c); see also 42 C.F.R. § 489.24. 
5

Appellant also points to another Departmental regulation 

which obliges all participating Medicare hospitals to comply 

with state laws. 42 C.F.R. § 485.608. And it asserts 

California law requires all hospitals to provide various 

specialty services, particularly surgery. It is claimed that 

Appellant cannot comply with both federal and state 

obligations unless it can pay on-call compensation to 

specialists in surgery, obstetrics, pediatrics, and cardiology. 

We agree with the Secretary that the federal obligation to 

stabilize patients coming from an emergency room does not 

necessarily imply the need for various specialists. In that 

regard, the Board reasonably concluded that since emergency 

room doctors were readily available, they would have 

sufficient capability to stabilize patients for transfer if 

necessary.2

Appellant and the Secretary disagree as to whether, under 

California law, St. Helena must provide obstetrics, pediatrics, 

and cardiology services. See Cal. Code Regs. Tit. 22 § 70067. 

But regardless of whether St. Helena is obligated to provide 

those services, California law allows Appellant to make use of 

“alternate . . . personal qualifications” in providing those 

services. Cal. Code Regs. Tit. 22 § 70307(a). Thus, the 

requirements governing obstetrics, pediatrics, and cardiology 

services can be met with non-specialists with requisite 

experience. Id.; see also Cal. Code Regs. Tit. 22, § 70435(a), 

70539(a), 70549(a). Nor is the Secretary bound by the cases 

Appellant cited in which the California Department of 

Healthcare Services concluded that Appellant’s expenditures 

2 Appellant argues that separate regulations discourage transfers to 

other hospitals. But that regulation simply discourages unnecessary 

transfers. 78 Fed. Reg. 50,496, 50,751.
6

were reimbursable under the state’s Medi-Cal program. An 

authorized expenditure is not the same as a requirement. 

To be sure, Appellant makes a strong argument that 

California law could be read, with a bit of a stretch, to oblige 

critical access hospitals to have a surgeon on call. Cal. Code 

Regs. Tit. 22, § 70225(a). On the other hand, the California 

statute does provide that its requirements could be satisfied by 

someone with surgical training. Id. It therefore seems 

reasonable for the Board to conclude that St. Helena had 

available emergency room doctors who would have sufficient 

surgical training to meet the state requirements.

* * *

In any event, even if Appellant’s reading of California law 

were persuasive, Appellant conceded at oral argument that if 

the key regulation was legitimately interpreted by the Board, 

that would be the end of the matter. We think that is exactly 

the situation here. The statute and the regulation specifically 

address on-call costs only for emergency room physicians. 42 

U.S.C. § 1395m(g)(5); 42 C.F.R. § 413.70(b)(4). The 

legislative maxim expressio unius est exclusio alterius

therefore comes into play. 

The maxim is particularly applicable here because it is 

undeniable that the Secretary had a de facto policy prior to the 

passage of the key legislation whereby all physician on-call 

costs were disallowed. Indeed, in a Q&A section 

accompanying a regulation clarifying Medicare 

reimbursements, the Secretary explained that Medicare did not 

recognize “costs of ‘on-call’ physicians as allowable costs of 

operating a [critical access hospital].” 63 Fed. Reg. at 26,353. 

Thereafter, Congress intervened. It seems obvious, therefore, 

that Congress acted because of its understanding of the 
7

Secretary’s policy. Moreover, the preamble of the critical key 

regulation also described this policy, which the statute and 

regulation modified for emergency room physicians. 66 Fed. 

Reg. 39,828, 39,922. 

To be sure, Appellant challenges any recognition of the 

prior policy of not paying on-call costs because another 

provision of the Medicare statute, 42 U.S.C. § 1395hh(a)(2), 

precludes the Secretary from establishing or changing cost 

policy without using notice-and-comment rulemaking and the 

preamble of the regulation is not adequate to constitute legal 

rulemaking. That is a troubling argument and, if correct, it 

does at least cast doubt on the legality of the policy before 

Congress acted. Still, although we have held that the 

preamble of a regulation does not have quasi-legislative bite, 

in other words it is not part of the legal requirement of the 

regulation, AT&T Corp. v. Fed. Commc’ns Comm’n, 970 F.3d 

344, 350–351 (D.C. Cir. 2020), the preamble of the key 

regulation can be used to explain the regulation even if the preexisting policy turned out to be legally defective. 

So even if invalid, the de facto policy can still be referred 

to in interpreting the statute Congress passed in 2000 (and by 

extension what the Secretary meant in the implementing 

regulation). Certainly, Congress thought that the Secretary’s 

policy of refusing to pay physicians’ on-call expenditures was 

controlling, otherwise it would not have passed 42 U.S.C. 

§ 1395m(g)(5) allowing on-call payments for emergency room 

doctors. Indeed, if Appellant’s legal position is correct, it 

would have been wholly unnecessary for Congress to have 

passed the statute dealing with emergency room doctors; all 

expenses for on-call doctors at critical access hospitals would 

have been reimbursable. 
8

In sum, it is at least reasonable to read the key regulation 

as precluding a policy change extending beyond on-call 

emergency room physicians.3 And therefore we should defer 

to the Secretary’s interpretation. See Auer v. Robbins, 519 

U.S. 452 (1997); Chevron v. Nat. Res. Def. Council, 467 U.S. 

837 (1984) (both Chevron and Auer are relevant precedents 

since as, we’ve noted, the regulation closely tracks the statute);

see also St. Luke Cmty. Health Care v. Sebelius, No. CV 09-

92-M-DWM, 2010 WL 1839405 (D. Mont. May 5, 2010) 

(deferring to the Secretary’s determination that on-call nurse 

anesthetist costs are not reimbursable because nurse 

anesthetists are not mentioned in the key regulation). 

Yet, Appellant argues that we should not defer to the 

Board’s interpretation of the regulation because the decision 

was made by the Board rather than the Secretary. The district 

court, however, was quite correct to reject that argument and 

defer to the Board’s interpretation of its regulation because the 

Secretary had ratified the Board’s interpretation by refusing to 

reverse or modify it. HCA Health Servs. of Oklahoma, Inc. v. 

Shalala, 27 F.3d 614, 616 n.1 (D.C. Cir. 1994). 

* * *

For the reasons we set forth above, we affirm the district 

court. 

3 Appellant suggests an alternative reading that the key regulation is 

limited to the outpatient, as opposed to inpatient, context. Even if 

that interpretation was plausible, it would not be enough to overcome 

the Board’s alternative reasonable interpretation.