Court Opinion

ID: 6350019
Source: CourtListenerOpinion
Date Created: 2022-06-15 16:00:43.281914+00
Date Added: 2024-06-11T09:16:03.808894
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2021                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

     AMERICAN HOSPITAL ASSOCIATION ET AL. v.
   BECERRA, SECRETARY OF HEALTH AND HUMAN
                SERVICES, ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
          THE DISTRICT OF COLUMBIA CIRCUIT

   No. 20–1114. Argued November 30, 2021—Decided June 15, 2022
The Medicare statute lays out a formula that the Department of Health
  and Human Services must employ annually to set reimbursement
  rates for certain outpatient prescription drugs provided by hospitals to
  Medicare patients. 42 U. S. C. §1395l(t)(14)(A)(iii). That formula af-
  fords HHS two options. Option 1 applies if HHS has conducted a sur-
  vey of hospitals’ acquisition costs for each covered outpatient drug.
  Under this option, the agency may set reimbursement rates based on
  the hospitals’ “average acquisition cost” for each drug, and may “vary”
  the reimbursement rates “by hospital group.” §1395l(t)(14)(A)(iii)(I).
  Absent a survey, option 2 applies, and HHS must set reimbursement
  rates based on “the average price” charged by manufacturers for the
  drug     as    “calculated   and     adjusted    by   the    Secretary.”
  §1395l(t)(14)(A)(iii)(II). Option 2 does not authorize HHS to vary re-
  imbursement rates for different hospital groups. From the time these
  provisions took effect in 2006 until 2018, HHS did not conduct surveys
  of hospitals’ acquisition costs, relied on option 2, set the reimburse-
  ment rates at about 106 percent, and did not vary those rates by hos-
  pital group. For 2018, HHS again did not conduct a survey. But this
  time it issued a final rule establishing separate reimbursement rates
  for hospitals that serve low-income or rural populations through the
  340B program and all other hospitals. For 2019, HHS set reimburse-
  ment rates the same way.
     The American Hospital Association and other interested parties
  challenged the 2018 and 2019 reimbursement rates in federal court.
  In response, HHS first contended that various statutory provisions
  precluded judicial review of those rates. The agency also argued that
2             AMERICAN HOSPITAL ASSN. v. BECERRA

                                 Syllabus

    it could vary the reimbursement rates by hospital group under its op-
    tion 2 authority to “adjust” the price-based reimbursement rates. The
    District Court rejected HHS’s argument that the statute precluded ju-
    dicial review, concluded that HHS had acted outside its statutory au-
    thority, and remanded the case to HHS to consider an appropriate
    remedy. The D. C. Circuit, however, reversed. The court ruled that
    the statute did not preclude judicial review, and upheld HHS’s reduced
    reimbursement rates for 340B hospitals.
Held:
    1. The statute does not preclude judicial review of HHS’s reimburse-
 ment rates. Judicial review of final agency action is traditionally
 available unless “a statute’s language or structure” precludes it, Mach
 Mining, LLC v. EEOC, 575 U. S. 480, 486, and this Court has long
 recognized a “strong presumption” in its favor, Weyerhaeuser Co. v.
 United States Fish and Wildlife Serv., 586 U. S. ___, ___. Here, no
 provision in the Medicare statute precludes judicial review of the 2018
 and 2019 reimbursement rates. HHS cites two nearby provisions that
 preclude review of the general payment methodology that HHS em-
 ploys to set rates for other Medicare outpatient services. See
 §§1395l(t)(12)(A), (C). But HHS sets rates for outpatient prescription
 drugs using a different payment methodology. HHS also argues that
 other statutory requirements would make allowing judicial review of
 the 2018 and 2019 reimbursement rates impractical. Regardless, such
 arguments cannot override the text of the statute and the traditional
 presumption in favor of judicial review of administrative action. Pp.
 7–9.
    2. Absent a survey of hospitals’ acquisition costs, HHS may not vary
 the reimbursement rates only for 340B hospitals; HHS’s 2018 and
 2019 reimbursement rates for 340B hospitals were therefore unlawful.
 The text and structure of the statute make this a straightforward case.
 Because HHS did not conduct a survey of hospitals’ acquisition costs,
 HHS acted unlawfully by reducing the reimbursement rates for 340B
 hospitals. HHS maintains that even when it does not conduct a sur-
 vey, the agency still may “adjus[t]” the average price “as necessary.”
 §1395l(t)(14)(A)(iii)(II). But HHS’s power to increase or decrease the
 price is distinct from its power to set different rates for different groups
 of hospitals. Moreover, HHS’s interpretation would make little sense
 given the statute’s overall structure. Under HHS’s interpretation, the
 agency would never need to conduct a survey of acquisition costs if it
 could proceed under option 2 and then do everything under option 2
 that it could do under option 1. That not only would render irrelevant
 the survey prerequisite for varying reimbursement rates by hospital
 group, but also would render largely irrelevant the provision of the
 statute that precisely details the requirements for surveys of hospitals’
                    Cite as: 596 U. S. ____ (2022)                    3

                               Syllabus

  acquisition costs. See §1395l(t)(14)(D). Finally, HHS’s argument that
  Congress could not have intended for the agency to “overpay” 340B
  hospitals for prescription drugs ignores the fact that Congress, when
  enacting the statute, was well aware that 340B hospitals paid less for
  covered prescription drugs. It may be that the reimbursement pay-
  ments were intended to offset the considerable costs of providing
  healthcare to the uninsured and underinsured in low-income and rural
  communities. Regardless, this Court is not the forum to resolve that
  policy debate. Pp. 9–14.
967 F. 3d 818, reversed and remanded.

  KAVANAUGH, J., delivered the opinion for a unanimous Court.
                        Cite as: 596 U. S. ____ (2022)                                 1

                              Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order that
     corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                    _________________

                                    No. 20–1114
                                    _________________

          AMERICAN HOSPITAL ASSOCIATION, ET AL.,
           PETITIONERS v. XAVIER BECERRA,
             SECRETARY OF HEALTH AND
               HUMAN SERVICES, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
    APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
                                  [June 15, 2022]

  JUSTICE KAVANAUGH delivered the opinion of the Court.
  Under the Medicare statute, the Department of Health
and Human Services must reimburse hospitals for certain
outpatient prescription drugs that the hospitals provide to
Medicare patients. HHS’s total reimbursements to hospi-
tals for prescription drugs add up to tens of billions of dol-
lars every year.
  To set the reimbursement rates for the prescription
drugs, HHS has two options under the statute. First, if
HHS has conducted a survey of hospitals’ acquisition costs
for the drugs, HHS may set the reimbursement rates based
on the hospitals’ average acquisition costs—that is, the
amount that hospitals pay to acquire the prescription
drugs—and may vary the reimbursement rates for different
groups of hospitals. Second and alternatively, if HHS has
not conducted such a survey, HHS must instead set the re-
imbursement rates based on the average sales price
charged by manufacturers for the drugs (with certain ad-
justments), and HHS may not vary the reimbursement
2         AMERICAN HOSPITAL ASSN. v. BECERRA

                     Opinion of the Court

rates for different groups of hospitals.
   For 2018 and 2019, HHS did not conduct a survey of hos-
pitals’ acquisition costs for outpatient prescription drugs.
But HHS nonetheless substantially reduced the reimburse-
ment rates for one group of hospitals—Section 340B hospi-
tals, which generally serve low-income or rural communi-
ties. For those 340B hospitals, this case has immense
economic consequences, about $1.6 billion annually.
   The question is whether the statute affords HHS discre-
tion to vary the reimbursement rates for that one group of
hospitals when, as here, HHS has not conducted the re-
quired survey of hospitals’ acquisition costs. The answer is
no. We therefore reverse the judgment of the U. S. Court of
Appeals for the D. C. Circuit.
                             I
                             A
   In 2003, Congress passed and President George W. Bush
signed landmark legislation expanding Medicare to cover
prescription drugs. See Medicare Prescription Drug, Im-
provement, and Modernization Act of 2003, 117 Stat. 2066,
42 U. S. C. §1395. Under that 2003 law, HHS must annu-
ally set reimbursement rates for certain outpatient pre-
scription drugs provided by hospitals. §1395l(t)(14).
   The Medicare statute meticulously lays out the formula
that HHS must employ to set those reimbursement rates.
As relevant here, the agency’s reimbursement rate for each
covered outpatient prescription drug “shall be equal” to one
of two measures:
    “(I) to the average acquisition cost for the drug for that
    year (which, at the option of the Secretary, may vary by
    hospital group (as defined by the Secretary based on
    volume of covered OPD services or other relevant char-
    acteristics)), as determined by the Secretary taking
    into account the hospital acquisition cost survey data
    under subparagraph (D); or
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                      Opinion of the Court

    “(II) if hospital acquisition cost data are not available,
    the average price for the drug in the year established
    under section 1395u(o) of this title, section 1395w–3a
    of this title, or section 1395w–3b of this title, as the case
    may be, as calculated and adjusted by the Secretary as
    necessary for purposes of this paragraph.”
    §1395l(t)(14)(A)(iii) (emphasis added).
   To simplify a bit: Congress afforded HHS two options to
set the reimbursement rates for hospitals. Option 1 applies
if the agency has conducted a survey of hospitals’ acquisi-
tion costs—that is, the amount that hospitals pay to acquire
the prescription drugs. If the agency has conducted a sur-
vey and collected that data, HHS may set reimbursement
rates based on the hospitals’ “average acquisition cost” for
each drug.         See §1395l(t)(14)(A)(iii)(I); see also
§1395l(t)(14)(D) (requirements for conducting surveys of
hospitals’ drug acquisition costs). Importantly for present
purposes, if HHS has conducted a survey of hospitals’ ac-
quisition costs, option 1 authorizes HHS to vary those re-
imbursement rates for different groups of hospitals.
   Option 2 applies if HHS has not conducted a survey of
hospitals’ acquisition costs. In that circumstance, the
agency must set reimbursement rates based on “the aver-
age price” charged by manufacturers for the drug, as “cal-
culated and adjusted by the Secretary as necessary for pur-
poses of ” this statutory provision. §1395l(t)(14)(A)(iii)(II).
The statute in turn sets “the average price” as 106 percent
of the drug’s average sales price. See ibid. (citing §1395w–
3a). Critically, option 2 does not authorize HHS to vary re-
imbursement rates for different groups of hospitals.
   For more than a decade after those provisions took effect
in 2006, HHS did not conduct a survey of hospitals’ acqui-
sition costs. Indeed, HHS has only once attempted to con-
duct such a survey—in 2020, after this litigation com-
menced. At oral argument in this Court, the Government
4          AMERICAN HOSPITAL ASSN. v. BECERRA

                     Opinion of the Court

explained that HHS had not previously attempted to con-
duct such surveys because the surveys are “very burden-
some on the study takers,” are “very burdensome on the
hospitals,” and do not “produce results that are all that ac-
curate.” Tr. of Oral Arg. 41–42.
   As a result, until 2018, HHS consistently relied on option
2 and set reimbursement rates for each drug based on the
average-sales-price data provided by manufacturers. Every
year, HHS set the reimbursement rates at about 106 per-
cent of each covered drug’s average sales price, and HHS
used the same reimbursement rates for all hospitals. In
other words, until 2018, HHS never varied the reimburse-
ment rates by hospital group. See Medicare Program: Hos-
pital Outpatient Prospective Payment and Ambulatory
Surgical Center Payment Systems and Quality Reporting
Programs, 82 Fed. Reg. 52490, 52494–52495 (2017).
   During its rulemaking for 2018, HHS proposed a change
to reduce the reimbursement rates only for 340B hospitals.
Importantly, HHS did not conduct a survey of hospital ac-
quisition costs. As a policy matter, HHS said that its exist-
ing reimbursement rates resulted in what the agency
viewed as overpayments to hospitals that serve low-income
or rural populations through the federal 340B program.
Federal law requires drug manufacturers to sell prescrip-
tion drugs to those 340B hospitals at prices below those
paid by other hospitals. See 42 U. S. C. §256b(a)(1) (setting
a “ceiling price” that manufacturers can charge to 340B hos-
pitals). Consistent with the Medicare statute, however,
HHS historically had reimbursed 340B hospitals for cov-
ered outpatient prescription drugs at the same reimburse-
ment rates that were set for all other hospitals. For 2018,
HHS said that the uniform reimbursement rates combined
with the discounted prices paid by 340B hospitals for pre-
scription drugs meant that 340B hospitals were able to
“generate significant profits” when they provided the pre-
scription drugs to Medicare patients. 82 Fed. Reg. 52494.
                  Cite as: 596 U. S. ____ (2022)             5

                      Opinion of the Court

   In response to HHS’s proposed change, the 340B hospi-
tals countered that, under the Medicare statute, HHS could
not single out 340B hospitals without conducting a survey
of hospitals’ acquisition costs. With respect to HHS’s policy
arguments, the 340B hospitals explained that the reim-
bursement payments for prescription drugs helped those
hospitals offset the considerable costs of providing
healthcare to the uninsured and underinsured in low-
income and rural communities. The 340B hospitals pointed
out, moreover, that Congress had long been aware of the
situation. Indeed, the hospitals claimed that Members of
Congress not only were aware, but actually intended for the
340B program’s drug reimbursements to subsidize other
services provided by 340B hospitals. The hospitals noted
that Congress had never singled out 340B hospitals for
lower Medicare reimbursements for outpatient prescription
drugs. Nor, until 2018, had HHS ever done so. Further-
more, the 340B hospitals asserted that reducing their reim-
bursement rates for prescription drugs would force those
hospitals to eliminate or dramatically curtail other crucial
programs that provide a wide range of medical services in
low-income and rural communities—such as treatments for
cancer, mental health issues, opioid addiction, and diabe-
tes.
   In the final rule for 2018, HHS decided to establish two
separate reimbursement rates: one rate for non-340B hos-
pitals and another rate for 340B hospitals. The reimburse-
ment rate for non-340B hospitals remained at the historical
rate of approximately 106 percent of the average sales price
for each drug. But HHS established a substantially re-
duced rate for 340B hospitals—a rate equal to 77.5 percent
of the average sales price for each drug. In setting that rate,
HHS relied on an estimate from the Medicare Payment Ad-
visory Commission that 340B hospitals obtained prescrip-
tion drugs at an average discount of at least 22.5 percent
below the average sales price charged by manufacturers.
6         AMERICAN HOSPITAL ASSN. v. BECERRA

                     Opinion of the Court

Id., at 52496, 52499. HHS estimated that the reduction in
the reimbursement rates for 340B hospitals would save
Medicare (and deprive 340B hospitals of ) about $1.6 billion
annually, which by law would be re-allocated for other Med-
icare services. Id., at 52509–52510. For 2019, HHS set re-
imbursement rates for 340B hospitals in the same way.
  When setting the 2018 and 2019 reimbursement rates,
HHS acknowledged that it had not conducted a survey of
hospitals’ acquisition costs—the statutory prerequisite for
varying the reimbursement rates by hospital group. Id., at
52496. Nonetheless, HHS pointed to its statutory authority
under option 2 to “adjust” the average price “ ‘as necessary
for purposes of ’ ” this statutory provision. Id., at 52499.
HHS claimed that its authority to “adjust” the average price
for each drug also implicitly encompassed the authority to
vary the reimbursement rates by hospital group. Ibid.
                              B
  The American Hospital Association, along with two other
hospital industry groups and several hospitals, sued in
U. S. District Court to challenge HHS’s 2018 and 2019 re-
imbursement rates for 340B hospitals. Among other things,
the Hospitals asserted that HHS did not conduct a survey
of hospitals’ acquisition costs and therefore could not im-
pose different reimbursement rates on different groups of
hospitals.
  In response, HHS first contended that various statutory
provisions precluded judicial review of the 2018 and 2019
reimbursement rates. As relevant here, HHS further ar-
gued that it could vary the reimbursement rates by hospital
group under its authority to “adjust” the price-based reim-
bursement rates, even though HHS had not conducted a
survey of hospitals’ acquisition costs.
  The District Court ruled for the Hospitals. The court re-
jected HHS’s argument that the statute precluded judicial
review. On the merits, the court concluded that HHS had
                  Cite as: 596 U. S. ____ (2022)            7

                      Opinion of the Court

acted outside its statutory authority, and the court re-
manded to HHS for the agency to consider an appropriate
remedy. See American Hospital Assn. v. Azar, 385 F. Supp.
3d 1 (DC 2019) (remedy); American Hospital Assn. v. Azar,
348 F. Supp. 3d 62 (DC 2018) (merits).
  A divided panel of the U. S. Court of Appeals for the D. C.
Circuit reversed. On the question of judicial review, the
court unanimously ruled that the statute did not preclude
judicial review. See American Hospital Assn. v. Azar, 967
F. 3d 818, 824 (2020). On the merits, however, the court
upheld HHS’s reduced reimbursement rates for 340B hos-
pitals. Id., at 828.
  In dissent, Judge Pillard contended that HHS’s reduced
reimbursement rates for 340B hospitals contravened the
text and structure of the statute. Id., at 835. In her view,
“HHS may institute its large reductions, tailored for a dis-
tinct hospital group,” only if the agency has conducted the
required survey of hospitals’ acquisition costs. Ibid.
  This Court granted certiorari. 594 U. S. ___ (2021).
                                II
   HHS first argues that the Medicare statute precludes ju-
dicial review of the 2018 and 2019 reimbursement rates.
See 42 U. S. C. §1395l(t)(12). The Court of Appeals rejected
HHS’s preclusion argument, as did the District Court. We
likewise conclude that the statute does not preclude judicial
review of HHS’s reimbursement rates.
   This Court has long recognized a “strong presumption” in
favor of judicial review of final agency action. Weyerhaeuser
Co. v. United States Fish and Wildlife Serv., 586 U. S. ___,
___ (2018) (slip op., at 11) (quoting Mach Mining, LLC v.
EEOC, 575 U. S. 480, 489 (2015)). Judicial review of final
agency action in an otherwise justiciable case is tradition-
ally available unless “a statute’s language or structure” pre-
cludes judicial review. Mach Mining, 575 U. S., at 486.
   No provision in the Medicare statute precludes judicial
8          AMERICAN HOSPITAL ASSN. v. BECERRA

                     Opinion of the Court

review of the 2018 and 2019 reimbursement rates. More-
over, the detailed statutory formula for the reimbursement
rates undermines HHS’s suggestion that Congress implic-
itly granted the agency judicially unreviewable discretion
to set the reimbursement rates. Cf. Weyerhaeuser Co., 586
U. S., at ___−___ (slip op., at 13−14).
   HHS cites two provisions—§§1395l(t)(12)(A) and (C)—
that preclude judicial review of HHS’s “development of the
classification system under paragraph (2)” and “periodic ad-
justments made under paragraph [(9)].” But both of those
provisions refer to the general payment methodology that
HHS employs to set rates for other Medicare outpatient ser-
vices. By contrast, when HHS sets rates for outpatient pre-
scription drugs, it uses a different payment methodology—
namely, the methodology specified by paragraph (14) of
§1395l(t). And nothing in the statute precludes judicial re-
view of reimbursement rates set under paragraph (14).
   HHS further argues that allowing judicial review of the
2018 and 2019 reimbursement rates would be impractical
because the agency is required to operate the program on a
budget-neutral basis. Due to that budget-neutrality re-
quirement, HHS says that a judicial ruling invalidating the
2018 and 2019 reimbursement rates for certain hospitals
would require offsets elsewhere in the program. The Hos-
pitals respond that various potential remedies could make
340B hospitals whole for the past shortfalls without run-
ning afoul of the budget-neutrality provision. At this stage,
we need not address potential remedies. Regardless, HHS’s
arguments against judicial review cannot override the text
of the statute and the traditional presumption in favor of
judicial review of administrative action.
   In sum, HHS’s preclusion argument lacks any textual ba-
sis. We agree with the District Court and the Court of Ap-
peals that the Medicare statute does not preclude judicial
review of the 2018 and 2019 reimbursement rates.
                  Cite as: 596 U. S. ____ (2022)             9

                      Opinion of the Court

                               III
   We turn next to the merits. The question is this: If HHS
has not conducted a survey of hospitals’ acquisition costs,
may HHS still vary the reimbursement rates for outpatient
prescription drugs by hospital group? The answer is no.
   The 2003 Medicare Act authorizes HHS to set reimburse-
ment rates for covered outpatient prescription drugs pro-
vided by hospitals. The Act also specifies how HHS must
set    those    reimbursement       rates.       42    U. S. C.
§1395l(t)(14)(A). The statute therefore reflects a careful
congressional focus not only on the goal of proper reim-
bursement rates, but also on the appropriate means to that
end.
   To reiterate, the statute affords HHS two options for set-
ting reimbursement rates for outpatient drugs. Option 1
applies if HHS collects “hospital acquisition cost survey
data” from hospitals. §1395l(t)(14)(A)(iii)(I). If the agency
has conducted a survey and collected that data, then HHS
may use the data to set reimbursement rates equal to “the
average acquisition cost for the drug.” Ibid. Importantly,
in that circumstance, HHS may “vary” reimbursement
rates “by hospital group.” Ibid.
   By contrast, if HHS does not conduct a survey of hospi-
tals’ acquisition costs and if acquisition cost data are there-
fore “not available,” HHS must instead proceed under op-
tion 2 and obtain price data from drug manufacturers.
§1395l(t)(14)(A)(iii)(II). And in that circumstance, HHS
must set reimbursement rates based on “the average price
for the drug” as “calculated and adjusted by the Secretary
as necessary for purposes of ” this statutory provision. Ibid.
Critically, that second option does not authorize HHS to
vary reimbursement rates by hospital group. Instead, HHS
must set uniform reimbursement rates for all hospitals for
each covered drug, and the rates must be equal to the aver-
age price for that drug for that year.
   HHS’s authority to proceed under option 1 and to vary
10         AMERICAN HOSPITAL ASSN. v. BECERRA

                      Opinion of the Court

reimbursement rates by hospital group thus depends on
whether HHS has obtained acquisition cost survey data
from hospitals. The statute expressly authorizes HHS to
vary rates by hospital group if HHS has conducted such a
survey. But the statute does not authorize such a variance
in rates if HHS has not conducted a survey. Cf. Babb v.
Wilkie, 589 U. S. ___, ____ (2020) (slip op., at 12); Sandoz
Inc. v. Amgen Inc., 582 U. S. ___, ___ (2017) (slip op., at 16);
Russello v. United States, 464 U. S. 16, 23 (1983).
   The statute thus protects all hospitals by imposing an im-
portant procedural prerequisite—namely, a survey of hos-
pitals’ acquisition costs for prescription drugs—before HHS
may target particular groups of hospitals for lower reim-
bursement rates. The survey allows the agency to deter-
mine whether there is in fact meaningful, statistically sig-
nificant variation among hospitals’ acquisition costs. The
data regarding variation in hospitals’ acquisition costs in
turn help HHS determine whether and how much it should
vary the reimbursement rate among hospital groups. See
§§1395l(t)(14)(D)(iii)–(iv). But absent that survey data, as
Congress       determined,      HHS      may      not     make
“billion-dollar decisions differentiating among particular
hospital groups.” 967 F. 3d, at 837 (Pillard, J., dissenting).
   In this case, all agree that HHS did not conduct a survey
of hospitals’ acquisition costs. See, e.g., 82 Fed. Reg. 52501.
HHS nonetheless varied the rates by hospital group, fixing
a substantially lower reimbursement rate for 340B hospi-
tals than for non-340B hospitals.
   Under the text and structure of the statute, this case is
therefore straightforward: Because HHS did not conduct a
survey of hospitals’ acquisition costs, HHS acted unlawfully
by reducing the reimbursement rates for 340B hospitals.
   HHS maintains that there is more to the case than that
straightforward analysis would suggest. HHS emphasizes
that even when it does not conduct a survey of acquisition
costs and thus is required to employ option 2 (based on
                  Cite as: 596 U. S. ____ (2022)            11

                      Opinion of the Court

price), the agency still may “adjus[t]” the average price “as
necessary for purposes of ” this statutory provision.
§1395l(t)(14)(A)(iii)(II).
   It is true that the statutory text of option 2 affords HHS
discretion to adjust the average price. The parties here vig-
orously debate how much HHS may adjust the price. To
resolve this case, however, we need not determine the scope
of HHS’s authority to adjust the price up or down.
   Regardless of the scope of HHS’s authority to “adjust” the
average price up or down under the statute, the statute
does not grant HHS authority to vary the reimbursement
rates by hospital group unless HHS has conducted the re-
quired survey of hospitals’ acquisition costs. Under the
statute, varying a rate by hospital group is not a lesser-
included power of adjusting price. Otherwise stated, HHS’s
power to increase or decrease the price is distinct from its
power to set different rates for different groups of hospitals.
   The text of option 2 confirms the point. It requires reim-
bursement in an “amount” that is equal to “the average
price for the drug in the year.” Ibid. The text thus requires
the reimbursement rate to be set drug by drug, not hospital
by hospital or hospital group by hospital group. The only
item that the agency is allowed to adjust is the “average
price for the drug in the year.” Ibid. Such an adjustment
can consist of moving the average-price number up or down,
but it cannot consist of giving a single drug two different
average prices for two different groups of hospitals. (Tell-
ingly, before 2018, the agency never used its adjustment au-
thority to vary reimbursement rates by hospital group.)
   Moreover, HHS’s contrary interpretation of the statute—
and its broad understanding of its adjustment authority—
would make little sense given the statute’s overall struc-
ture. To proceed under option 1 (based on cost) and vary
the rate by hospital group, HHS must conduct a survey. In
HHS’s view, the agency can decline to conduct a survey and
can proceed under option 2, and then can still do everything
12         AMERICAN HOSPITAL ASSN. v. BECERRA

                      Opinion of the Court

under option 2 that it could do under option 1—including
varying the reimbursement rates by hospital group. So un-
der HHS’s interpretation, the agency would never need to
conduct a survey of hospitals’ acquisition costs. But why,
then, would Congress have constructed this elaborate stat-
ute premised on HHS’s surveys of hospitals’ acquisition
costs, including specifying when HHS could vary reim-
bursement rates by hospital group? HHS has no good an-
swer to that question.
   HHS’s interpretation not only would render irrelevant
the survey prerequisite for varying reimbursement rates by
hospital group, but also would render largely irrelevant the
provision of the statute that precisely details the require-
ments for surveys of hospitals’ acquisition costs. See
§1395l(t)(14)(D). We must hesitate to adopt an interpreta-
tion that would eviscerate such significant aspects of the
statutory text. See, e.g., Chicago v. Fulton, 592 U. S. ___,
___ (2021) (slip op., at 5); Maine Community Health Options
v. United States, 590 U. S. ___, ___ (2020) (slip op., at 16);
Whitman v. American Trucking Assns., Inc., 531 U. S. 457,
484−485 (2001).
   In short, the statute allows HHS to set reimbursement
rates based on average price and affords the agency discre-
tion to “adjust” the price up or down. But unless HHS con-
ducts a survey of hospitals’ acquisition costs, HHS may not
vary the reimbursement rates by hospital group.
   As a final argument, HHS insists that Congress could not
have intended for the agency to “overpay” 340B hospitals
for prescription drugs. But when enacting this statute in
2003, Congress was well aware that 340B hospitals paid
less for covered prescription drugs. After all, that had been
the law for the duration of the 340B program, which began
in 1992. In 2003, Congress nonetheless did not see fit to
differentiate 340B hospitals from other hospitals when re-
quiring that the reimbursement rates be uniform under op-
tion 2. And for more than a decade after this statute took
                  Cite as: 596 U. S. ____ (2022)            13

                      Opinion of the Court

effect, HHS employed option 2 but did not differentiate
340B hospitals from other hospitals—an agency practice
that was known in the wider hospital industry and in Con-
gress.
   If HHS believes that this Medicare reimbursement pro-
gram overpays 340B hospitals, it may conduct a survey of
hospitals’ acquisition costs to determine whether and how
much the data justify varying the reimbursement rates by
hospital group—for example, reducing reimbursement
rates paid to 340B hospitals as compared to other hospitals.
Or if the statute’s requirement of an acquisition cost survey
is bad policy or is working in unintended ways, HHS can
ask Congress to change the law.
   Of course, if HHS went to Congress, the agency would
presumably have to confront the other side of the policy
story here: 340B hospitals perform valuable services for
low-income and rural communities but have to rely on lim-
ited federal funding for support. As amici before this Court,
many 340B hospitals contend that the Medicare reimburse-
ment payments at issue here “help offset the considerable
costs” that 340B providers “incur by providing health care
to the uninsured, underinsured, and those who live far from
hospitals and clinics.” Brief for 37 State and Regional Hos-
pital Associations as Amici Curiae 7. As the 340B hospitals
see it, the “net effect” of HHS’s 2018 and 2019 rules is “to
redistribute funds from financially strapped, public and
nonprofit safety-net hospitals serving vulnerable popula-
tions—including patients without any insurance at all—to
facilities and individuals who are relatively better off.” 967
F. 3d, at 840 (Pillard, J., dissenting). In other words, in the
view of those hospitals, HHS’s new rates eliminate the fed-
eral subsidy that has helped keep 340B hospitals afloat. All
of which is to say that the 340B story may be more compli-
cated than HHS portrays it. In all events, this Court is not
the forum to resolve that policy debate.
   In sum, after employing the traditional tools of statutory
14        AMERICAN HOSPITAL ASSN. v. BECERRA

                     Opinion of the Court

interpretation, we do not agree with HHS’s interpretation
of the statute. We conclude that, absent a survey of hospi-
tals’ acquisition costs, HHS may not vary the reimburse-
ment rates for 340B hospitals. HHS’s 2018 and 2019 reim-
bursement rates for 340B hospitals were therefore contrary
to the statute and unlawful.
                        *     *    *
  We reverse the judgment of the U. S. Court of Appeals for
the D. C. Circuit and remand the case for further proceed-
ings consistent with this opinion.
                                           It is so ordered.