Opinion ID: 198675
Heading Depth: 4
Heading Rank: 3

Heading: Coverage determinations (including related appeals and grievance processes).

Text: 30 Noting that the Commissioner does not dispute that the Massachusetts law and regulation mandating a full prescription drug coverage option are state standards relating to . . . benefit requirements, the Association invites us to declare that the quoted passage ends the matter. 31 We decline the Association's invitation to read subparagraph (B) as an entirely free-standing statutory provision for two reasons. For one thing, the text of the subparagraph includes the phrase under this paragraph. The Association attempts to slough off these words as nothing more than a drafting formality, akin to stating 'hereunder,' and optimistically suggests that the phrase refers only to the paragraph's title (Relation to state laws) and not to the conjoined subparagraphs that together constitute this paragraph. Appellee's Brief at 24 n.5. Although it is true that courts sometimes rely on the titles of statutory enactments in plumbing their meaning, see, e.g., United States v. Chapman, 60 F.3d 894, 897-98 (1st Cir. 1995), that practice should not be indulged at the expense of the text itself. For another thing, even if subparagraph (B) included no external referent, we would consider ourselves obliged to examine the statutory provision in context. See Medtronic, 518 U.S. at 486; see also O'Connell v. Shalala, 79 F.3d 170, 176 (1st Cir. 1996) (warning that statutory construction should never proceed by focus[ing] with Cyclopean intensity on a single provision). 32 What, then, does it mean to be superseded under this paragraph? The Commissioner accurately observes that the paragraph includes subparagraph (A), which provides: 33 The standards established under this subsection shall supersede any State law or regulation (including standards described in subparagraph (B)) with respect to Medicare + Choice plans which are offered by Medicare + Choice organizations under this part to the extent such law or regulation is inconsistent with such standards. [Emphasis supplied.] 34 From the parenthetical reference to subparagraph (B), the Commissioner deduces that subparagraph (A) circumscribes the preemptive scope of subparagraph (B) by applying a conflict preemption regime to all state standards, including those that relate to benefit requirements. Because Massachusetts law insists upon additional benefits, her thesis runs, it is not inconsistent with federal law. See, e.g., 42 U.S.C. § 1395w-22(a)(1)(B) (mandating that Medicare+Choice plans shall provide additional benefits required under section 1395w-24(f)(1)(A)); id. § 1395w-24(f)(1)(E) (clarifying that nothing in subsection 1395w-24(f) shall be construed as preventing organizations from providing supplemental benefits described in section 1395w-22(a)(3)); id. § 1395w-22(a)(3)(C) (similarly emphasizing that organizations may provide additional benefits). 2 Thus, the Commonwealth's ukase should be allowed to operate ex proprio vigore. 35 The Commissioner's interpretation possesses a patina of plausibility. In the last analysis, however, it would diminish subparagraph (B) to a list of examples - a role that the text and context of the subparagraph belie. This subparagraph declares that certain state standards are superseded under the paragraph; it does not intimate that these standards may be preempted if the Secretary promulgates particular types of regulations. As a general matter, we are loath to reduce statutory language to a merely illustrative function, and the language of this subparagraph does not readily invite a departure from that norm. This is particularly true when we recollect that [a]ll words and provisions of statutes are intended to have meaning and are to be given effect, and no construction should be adopted which would render statutory words or phrases meaningless, redundant or superfluous. United States v. Ven-Fuel, Inc., 758 F.2d 741, 751-52 (1st Cir. 1985). Though a list of examples is not necessarily superfluous - Congress may consider a specific point important or uncertain enough to justify a modicum of redundancy - the surrounding statutory framework compels a finding of superfluity in the case of subparagraph (B). In the same subsection, the Secretary is enjoined to establish by regulation . . . standards . . . for Medicare + Choice organizations and plans . . . to carry out this part, 42 U.S.C. § 1395w-26(b)(1), and the subject areas enumerated in subparagraph (B) are unquestionably central to the Medicare+Choice program, see, e.g., id. § 1395w-22 (Benefits and beneficiary protections); id. § 1395w-22(f) (Grievance mechanism); id. § 1395w-22(g) (Coverage determinations, reconsiderations, and appeals). In this context, it strains credulity to suppose that, absent this cryptic parenthetical, the Secretary would overlook the need for regulation in these vital areas. 36 Withal, the rule against superfluity can be a double-edged interpretive sword. Were the parenthetical in subparagraph (A) otherwise inexplicable, we would be faced with an unhappy choice between nullifying the parenthetical or reducing subparagraph (B) to mere window-dressing. Ordinary prudence, then, counsels in favor of searching the full paragraph's text and the surrounding statutory framework to see whether they collectively suggest a more substantive role for subparagraph (B), consistent with the odd parenthetical that appears in subparagraph (A). To this end, we mull three theories that the Association hawks. 37 The district court embraced the first of the Association's theories: that the parenthetical simply authorizes the Secretary to promulgate, among other standards, regulations pertaining to the subject areas specifically preempted by subparagraph (B). On this reasoning, subparagraph (A) describes the manner in which state standards are preempted by federal regulations, whereas subparagraph (B) declares that certain state standards are specifically superseded by the BBA itself. This hypothesis fails because it depends on the faulty assumption that the Secretary is blind to the rest of the statute. After all, the parenthetical is not the source of the Secretary's rulemaking authority in these areas; section 1395w-26(b)(1) fills that role. 38 What is more, subparagraph (B) would represent a curious placement for a provision describing the preemptive effect of the BBA itself. The subparagraph provides that certain state standards are superseded under this paragraph - not under this part - and the relevant paragraph appears in a subsection that orders the Secretary to establish standards by regulation. A far more logical location for an announcement of the BBA's preemptive effect would be section 1395w-22, which outlines the statutory benefit requirements for Medicare+Choice plans. 3 For these reasons, we reject the Association's first theorem. 39 The Association's remaining two theories are: (1) that the parenthetical informs the Secretary that she has interpretative authority to determine whether a particular state standard falls into one of the categories enumerated in subparagraph (B); and (2) that it puts the Secretary on notice that certain types of state laws are deemed per se to clash with her regulations (should she promulgate any). At first blush, both of these attributions may seem extraneous. Subparagraph (B) is obviously within the part which the Secretary is instructed to implement via regulation, see 42 U.S.C. § 1395w-26, and one might think it equally obvious that the Secretary's power extends to subparagraph (B) itself. But that glib Conclusion overlooks that the presumption against preemption applies to the task of defining the scope of an express preemption clause. See Medtronic, 518 U.S. at 485. Hence, the general delegation provision in paragraph (1) may not by itself resolve the potential deadlock between the presumption and the need for deference to agency expertise. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984); see generally Jack W. Campbell IV, Regulatory Preemption in the Garcia/Chevron Era, 59 U. Pitt. L. Rev. 805 (1998). 40 This brings us to Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 743-44 (1996), in which the Court unanimously held that deference to a regulation that defines an ambiguous term in a substantive statutory provision is appropriate, even though the effect is to preempt state law. The Smiley Court distinguished Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), on the ground that the issue there involved the meaning of an express preemption clause. See Smiley, 517 U.S. at 744. Thus, Smiley left open the question of what happens when the strong centrifugal force of deference to an agency's interpretation of an express preemption clause comes into contact with the strong centripetal force of the presumption against preemption. 41 The intervening decision in Medtronic only complicates matters. There, five Justices accorded what appears to be an intermediate level of deference to an agency's interpretation of the scope of an express preemption provision. See Medtronic, 518 U.S. at 496 (according the agency's interpretation substantial weight); id. at 505-06 (Breyer, J., Concurring) (allowing the agency a degree of leeway). 4 Against the backdrop of this doctrinal uncertainty, the parenthetical here may well indicate that Congress intended the Secretary's regulations, including those designed to delineate the reach of subparagraph (B), to warrant at least some measure of deference, the non-preemption presumption notwithstanding. 42 Although this distinction seems plausible, we need not rest our decision on it. The Association says that the most logical purpose of the parenthetical is to put the Secretary on notice that state standards in particular areas create a per se conflict with federal regulation. On its own, this proposed function merely restates the argument's Conclusion. If subparagraph (B) clearly provides for the automatic preemption of state law in the three listed categories, then it affords ample notice to the Secretary without recourse to (or need for) the parenthetical in subparagraph (A). Despite this deficiency, however, the appellee's argument contains a solid kernel of truth. The important idea is not notice but, rather, the implied suggestion of a special category of inconsistency. Recognizing this fact brings the most natural reading of subparagraph (B) and the earlier parenthetical into focus, and supplies the last piece of the interpretive puzzle. 43 We believe that paragraph (3) as a whole concerns the relationship between federal regulations and state criteria. This follows from the placement of the paragraph in a section that deals with the establishment of standards by the Secretary, not in the section containing the relevant self-executing provisions. As part of this construct, subparagraph (A) provides a general rule of conflict preemption that (as the parenthetical and title [In general] make clear) applies universally - that is, all state standards are preempted to the extent they are inconsistent with federal regulations. 44 Subparagraph (B) goes a step further. It says in unqualified terms that state standards relating to three enumerated areas are superseded under this paragraph. In context, we think this means that state standards concerning these three enumerated areas are deemed to be per se inconsistent with any federal regulation. This taxonomy makes sense when one considers the centrality of the enumerated areas vis-aa-vis the Medicare+Choice program. Subparagraph (B) thus makes explicit what might well have been implied: the anticipation that, once promulgated, federal regulations will dominate these particular fields, leaving no room therein for state standard-setting. 45 The distinction between this interpretation and the theory advanced by the Association, as we parse the statutory scheme, is that state standards in the three enumerated areas are not expressly preempted unless and until the Secretary triggers preemption by promulgating regulations. 5 This makes sense in light of the intentionally skeletal nature of the statute. Congress, in the midst of enacting a massive budget bill, chose not to limn the exact parameters of a complex new program. Instead, it provided the ossature and left the Secretary the duty of adding flesh and sinew by regulation. Perhaps Congress believed that to preempt state law before the Secretary made the Program's corpus complete would have been premature. 6 In all events, once the Secretary established regulations pursuant to subsection (b) - as she has done, see 42 C.F.R. pt. 422 - the Commonwealth's requirement that supplemental health care providers must offer full prescription drug coverage became ineffectual. 46 There is a final and decisive textual argument, not made by the parties or the amici. Paragraph (1) of section 1395w-25(a) requires Medicare+Choice organizations to be licensed under state law. Paragraph (2) outlines a mechanism whereby provider-sponsored organizations can secure waivers of this requirement from the Secretary. As a condition to procuring such a waiver, an organization must comply with all state consumer protection and quality standards insofar as such standards are consistent with the standards established under this part. Id. § 1395w-25(a)(2)(G)(i)(III). In the very next sentence, the statute warns that [s]uch standards shall not include any standard preempted under section 1395w-26(b)(3)(B) of this title. This warning is gibberish unless subparagraph (B) itself preempts certain state standards - an assumption that is fundamentally incompatible with the Commissioner's characterization of that subparagraph as a mere list of examples.