Opinion ID: 1469075
Heading Depth: 2
Heading Rank: 3

Heading: Einstein's Other Arguments

Text: Einstein makes numerous additional arguments, which the District Court succinctly characterized as follows: Generally, Plaintiff is arguing that the Secretary's continuity of control and bona fide sale positions conflict with the Statutory Merger [Provision's] plain terms and/or prior interpretations, thus effectively resulting in a new regulation, which was issued contrary to numerous statutory safeguards. Einstein, 2007 WL 2221417, at  14. For instance, Einstein argues that the 2000 PM was a new rule that was a `fundamental modification of a previous interpretation' and, therefore, required formal notice and comment rulemaking under the APA. Appellants Br. at 66 (quoting SBC Inc. v. FCC, 414 F.3d 486, 498 (3d Cir.2005)). These arguments hinge on whether the 2000 PM (stating that mergers are subject to a continuity of control test and the Bona Fide Sale Provision) and the 2000 PRM Amendment (stating that a bona fide sale requires arm's length negotiation and reasonable consideration) are inconsistent with prior agency interpretations. Essentially, the arguments turn on whether these agency statements are legislative or interpretive rules. We have previously described the difference in this way: Legislative rules are subject to the notice and comment requirements of the APA because they work substantive changes in prior regulations or create new law, rights, or duties. [Interpretive] rules, on the other hand, seek only to interpret language already in properly issued regulations. . . . [Interpretive], or procedural, rules do not themselves shift the rights or interests of the parties, although they may change the way in which the parties present themselves to the agency. . . . [Interpretive] or procedural rules and statements of policy are exempted from the notice and comment requirement of the APA. SBC Inc., 414 F.3d at 497-98 (quotations and citations omitted). After consideration of the parties' arguments, we conclude that the agency's interpretation of the Bona Fide Sale Provision is consistent with previous agency statements and in keeping with the underlying policy of the Medicare Act. Moreover, these interpretations did not retroactively alter Einstein's legal rights or duties. As noted above, prior agency statements, such as those in the 1982 case of Hosp. Affiliates Int'l, 543 F.Supp. at 1389, put Old Germantown on notice that § 413.134(f) and its `bona fide sale' requirement would be more than a nullity. Via Christi, 509 F.3d at 1276. We hold that the 2000 PM and 2000 PRM Amendment are interpretive rules that did not require notice and comment rulemaking. Therefore, Einstein's arguments with respect to improper rulemaking are without merit.