Court Opinion

ID: 151353
Source: CourtListenerOpinion
Date Created: 2010-07-22 23:06:19+00
Date Added: 2024-06-11T11:52:20.369648
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                FOR THE FIFTH CIRCUIT United States Court of Appeals
                                               Fifth Circuit

                                                                FILED
                                                               July 22, 2010

                                No. 09-10658                   Lyle W. Cayce
                                                                    Clerk

TEXAS CLINICAL LABS INC; TEXAS CLINICAL LABS-GULF DIVISION
INC; ESTATE OF DANIEL P CAMPBELL; TEXAS CLINICAL LABS LLC;
TEXAS CLINICAL LABS-GULF DIVISION LLC,

                                    Plaintiffs - Appellants

v.

KATHLEEN SEBELIUS,

                                     Defendant - Appellee

                Appeal from the United States District Court
                     for the Northern District of Texas

Before KING, JOLLY, and STEWART, Circuit Judges.
CARL E. STEWART, Circuit Judge:
      Texas Clinical Laboratories, Inc. and Texas Clinical Laboratories-Gulf
Division, Inc. (collectively, the “TCLs”) appeal the district court’s judgment
denying them additional interest on the principal of a Medicare reimbursement
ruling rendered in their favor against the Department of Health and Human
Services (the “DHHS”). For the reasons below, we affirm.
                                      I.
      The dispute between the TCLs and the DHHS began around 1986, when
the DHHS implemented a new formula for calculating reimbursement for certain
health care providers for travel expenses. The TCLs objected to this change and
                                 No. 09-10658
sought administrative review challenging two elements of the agency’s travel
allowance formula: (1) the thirty-five miles per hour (“35 m.p.h.”) average speed
used as the standard speed for delivery of services and (2) the median cost per
specimen.
      On January 31, 1992, an ALJ found that the median specimen figure was
not supported by the record, that the 35 m.p.h. figure was not supported by the
record, and that payment should be made by the DHHS for future claims that
had not been addressed in an earlier hearing decision.     The Office of Health
Affairs Appeals Council (the “Appeals Council”) vacated the ALJ’s ruling,
however, and remanded the action so that the DHHS could present evidence in
support of the 35 m.p.h. figure and median cost per specimen. The Appeals
Council also limited the scope of the ALJ’s decision to consider only claims
presently before him. Upon remand, the same ALJ issued another ruling in
favor of the TCLs, again finding that the DHHS had failed to produce evidence
to support its use of the 35 m.p.h. figure and median cost per specimen. The
Appeals Council, though, was persuaded by the DHHS’ representation that
evidence existed to support the 35 m.p.h. and median cost per specimen figures
and again reversed. This time, the Appeals Council remanded the matter to a
different ALJ. In June 1995, the successor ALJ rendered the third ruling in
favor of the TCLs; however, the Appeals Council reversed yet again, concluding
that the DHHS presented sufficient evidence to support its use of the 35 m.p.h.
and median cost per specimen figures.
      The TCLs then filed an action in the Northern District of Texas seeking
judicial review of the Appeals Council ruling.      The district court granted
summary judgment to the DHHS and dismissed the TCLs’ action. On appeal, we
affirmed the district court dismissal of the TCLs’ median cost per specimen
claim, but remanded the 35 m.p.h. claim because the record did not include any
objective evidence to support the DHHS’ use of the 35 m.p.h. figure. See Texas

                                        2
                                 No. 09-10658
Clinical Labs, Inc. v. Apfel, No. 00-10099, 2000 WL 34507667, at *1 (5th Cir.
Dec. 22, 2000). The district court in turn remanded the case back to the
administrative level directing that the record be supplemented with
documentation on which the DHHS relied to determine the 35 m.p.h. figure.
      After the administrative proceedings were re-opened, the DHHS
introduced into evidence an e-mail in which it admitted for the first time that
the 35 m.p.h. figure was not based on any objective evidence. In March 2003, the
ALJ ruled in favor of the TCLs for the fourth time, awarding them $581,157 plus
accrued interest. This time, the DHHS did not appeal. In December 2003, the
DHHS issued two checks which included interest of $41,104.75, which the
DHHS had calculated only from the March 2003 date of the ALJ’s fourth ruling.
      The TCLs objected to the DHHS’ calculation of interest and, in May 2004,
requested that the ALJ rule supplementally that interest began to accrue as of
January 1992, the date of the first of the four ALJ rulings rendered in their
favor. The ALJ held that he did not have the authority to rule on the issue, and
the TCLs appealed. The Appeals Council ruled that the ALJ did have the
authority to rule on the matter, and no additional interest was owed to the
TCLs.
      The TCLs appealed the Appeals Council’s ruling to the district court. After
a dispute over standing was resolved in favor of the TCLs, Texas Clinical Labs,
Inc. v. Leavitt, 535 F.3d 397 (5th Cir. 2008), both parties filed summary
judgment motions. The district court granted DHHS’ summary judgment
motion, finding in its favor on alternative grounds: (1) that because waivers of
sovereign immunity are to be construed narrowly, the Medicare statute cannot
be read to waive immunity for interest on judgments subsequently reversed by
the Appeals Council, and (2) that the Appeals Council interpretation of the
regulation was entitled to Chevron deference.

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                                  No. 09-10658
                                        II.
      We review a grant of summary judgment de novo, applying the same
standard as the district court. Wilson v. Sec’y, Dept. of Veterans Affairs, 65 F.3d
402, 403 (5th Cir. 1995). Under the Administrative Procedures Act (“APA”),
“[t]he district court, and this court . . . may overturn the Secretary’s ruling only
if it is arbitrary, capricious, an abuse of discretion, not in accordance with law,
or unsupported by substantial evidence on the record taken as a whole.” Sun
Towers, Inc. v. Schweiker (Sun Towers I), 694 F.2d 1036, 1038 (5th Cir. 1983).
In reviewing an agency’s decision under the arbitrary and capricious standard,
there is a presumption that the agency’s decision is valid, and the plaintiff has
the burden to overcome that presumption by showing that the decision was
erroneous. Delta Foundation Inc. v. United States, 303 F.3d 551, 564 (5th Cir.
2002). As Justice Scalia recently reminded us, the standard of review is thus
highly deferential to the administrative agency whose final decision is being
reviewed and a court “should not substitute [its] own judgment for the agency’s.”
F.C.C. v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1810 (2009). An agency’s
decision “need not be ideal or even, perhaps, correct so long as not “arbitrary” or
“capricious” and so long as the agency gave at least minimal consideration to the
relevant facts as contained in the record.” Am. Petroleum Inst. v. E.P.A., 661
F.2d 340, 349 (5th Cir. 1999); see also, id. “The [agency’s] purely legal questions
are reviewed de novo,” giving deference to the agency’s interpretation of the
statute and regulations as appropriate. Alwan v. Ashcroft, 388 F.3d 507, 510
(5th Cir. 2004).
      Payment of interest on Medicare debts is required pursuant to 42 U.S.C.
§ 1395l(j):

      (j) Accrual of interest on balance of excess or deficit not paid

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                                   No. 09-10658
      Whenever a final determination is made that the amount of
      payment made under this part either to a provider of services or to
      another person pursuant to an assignment under section
      1395u(b)(3)(B)(ii) of this title was in excess of or less than the
      amount of payment that is due, and payment of such excess or
      deficit is not made (or effected by offset) within 30 days of the date
      of the determination, interest shall accrue on the balance of such
      excess or deficit not paid or offset (to the extent that the balance is
      owed by or owing to the provider) at a rate determined in
      accordance with the regulations of the Secretary of the Treasury
      applicable to charges for late payments.
The crux of the problem in this case, however, is which of the four ALJ rulings
rendered in the TCLs’ favor constituted a “final determination” for the purposes
of triggering the accrual of interest.
      Our review is governed by the classic two-step framework from Chevron
USA v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984): If Congress
“has directly spoken to the precise question at issue,” we “must give effect to [its]
unambiguously expressed intent”; on the other hand, “if the statute is silent or
ambiguous,” we must defer to the agency’s interpretation so long as it is “based
on a permissible construction of the statute.” Id. at 842-43. “We accord deference
to agencies under Chevron because of a presumption that Congress, when it left
ambiguity in a statute meant for implementation by an agency, understood that
the ambiguity would be resolved, first and foremost, by the agency, and desired
the agency (rather than the courts) to possess whatever degree of discretion the
ambiguity allows.” United States v. Mead, 533 U.S. 218, 240 (2001) (Scalia, J.
dissenting). In this case, while the Medicare statute requires interest to be paid
on the unpaid balance of underpayments and overpayments, the statute does not
define what type of rulings constitute “final determinations” upon which interest
should accrue. Nor is its language so clear as to only permit a single
interpretation. Since the statute does not unambiguously speak to the precise
question at issue we look to the regulation for guidance.

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                                No. 09-10658
      A similar two-step test applies when interpreting an agency regulation.
First, the court must ask whether the regulation is “ambigu[ous] with respect
to the specific question considered.” Moore v. Hannon Food Serv., 317 F.3d 489,
495 (5th Cir. 2003); Christensen v. Harris County, 529 U.S. 576, 588 (2000).
Second, if the regulation is ambiguous, the agency’s interpretation (as contained
in, e.g., opinion letters) is “controlling unless plainly erroneous or inconsistent
with the regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997). If the regulation
is unambiguous, the court may still consider the agency’s interpretation, but
only according to its persuasive power. See Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944).
       In relevant part, 42 C.F.R. § 405.378(c) reads:
      (c) Definition of final determination.
            (1) For purposes of this section, any of the following constitutes a
            final determination:
                   ...
                   (ii) In cases in which an NPR [Notice of Public Rulemaking]
                   is not used as a notice of determination (that is, primarily
                   under part B), one of the following determinations is issued--
                   (A) A written determination that an overpayment exists and
                   a written demand for payment;
                   (B) A written determination of an underpayment; or
                   (C) An Administrative Law Judge (ALJ) ruling that reduces
                   the amount of an overpayment below the amount that CMS
                   has already collected.

            (2) Except as required by any subsequent administrative or
            judicial reversal, interest accrues from the date of final
            determination as specified in this subsection.
(emphasis added).
      While the language of subsection 405.378(c)(1)(ii)(B)—“[a] written
determination of an underpayment”—unambiguously identifies an ALJ’s written
judgment as a “final determination” from which interest accrues, subsection
405.378(c)(2) creates ambiguity as to the effect of an order by the Appeals

                                        6
                              No. 09-10658
Council vacating and remanding an ALJ’s final determination on the accrual of
interest. As a result, the regulation is not detailed enough to resolve the
particular question before the court. On one hand, it would be completely
consistent with the regulatory language for the court to decide that the litigation
in this case constituted a single string of appeals of the 1992 judgment, and that
interest began to accrue in 1992 on the portion of the judgment that was
ultimately upheld. However, it would also be consistent with the regulation to
conclude that a ruling by the Appeals Council vacating an ALJ judgment and
remanding for additional proceedings nullifies the ALJ judgment and restarts
the clock on the interest determination. This second interpretation is even more
reasonable under the circumstances before the court, where there is a mixed
judgment, i.e., an initial award amount containing claims that were ultimately
resolved against the party asking for interest. Because the regulation
comfortably bears more than one interpretation, we find it ambiguous and turn
to the agency’s interpretation for guidance.
      Generally, an agency’s interpretation of its own ambiguous regulation is
“controlling” unless “plainly erroneous or inconsistent with the regulation.”
Auer, 519 U.S. at 461 (quotation marks and citation omitted); Belt v. EmCare,
Inc., 444 F.3d 403, 408 (5th Cir. 2006). This deference is inappropriate, however,
where the interpretation is a novel litigating position “wholly unsupported by
regulations, rulings, or administrative practice.” Brown v. Georgetown Univ.
Hosp., 488 U.S. 204, 212 (1988) (explaining that “[d]eference to what appears to
be nothing more than an agency’s convenient litigating position would be
entirely inappropriate”); see also Auer, 519 U.S. at 462 (stating that a “post hoc
rationalization” that does not represent the “agency’s fair and considered
judgment on the matter in question” is not entitled to deference); Belt, 444 F.3d
at 415.

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                                 No. 09-10658
        The Appeals Council concluded that under section 405.378(c)(2) interest
does not accrue on a final determination that is subsequently reversed by an
administrative or judicial ruling.1 It also means, according to the Appeals
Council that interest cannot accrue on a mixed judgment where part of that
judgment is reversed. Accordingly, because the 1992 judgment was vacated by
the Appeals Council, and because the original judgment resolved a mix of claims,
only some of which were ultimately upheld, interest did not begin to accrue in
1992.
        The TCLs respond that section 405.378(c)(2) has never been applied in the
manner proposed by DHHS and instead means that erroneously collected
interest will be refunded if, on appeal, the amount of overpayment or
underpayment is adjusted. The TCLs urge the court to treat the twenty years
of litigation in this case as a lengthy adjustment of the initial determination.
Because they were eventually successful on their challenge to the 35 m.p.h.
component, they argue that interest accrued from the initial judgment for the
portion of the claim on which they were successful.
        In support of their interpretation, the TCLs point to one prior agency
statement and one unpublished case which suggest that interest accrues during
the pendency of an appeal. In its comment on the final rule implementing the
interest accrual statute, the Secretary stated, “[w]e believe that [starting
interest accrual after exhaustion of all avenues of appeal] is inconsistent with
congressional intent . . . since it would encourage appeals simply to avoid or
delay the payment of interest.” 47 Fed. Reg. 54811-01, 54812 (Dec. 6, 1982).
According to the TCLs, in Berthschland Family Practice Clinic, P.C. v.
Thompson, No. IPO1-562-CH/F, 2002 WL 136415 (S.D. Ind. June 4, 2002) the

        1
         At various points in their brief, the TCLs allege that the DHHS is arguing that the
regulation means that interest does not accrue until all administrative and judicial appeals are
exhausted. This is a mischaracterization; DHHS does not seem to dispute that if an ALJ
judgment is not reversed then interest accrues from the date of judgment.

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                           No. 09-10658
DHHS argued that interest accrued from an ALJ determination of an
underpayment despite subsequent appeals and even though the determination
did not finally calculate the amount owed.
      Even assuming arguendo that the TCLs’ interpretation of the Secretary’s
statement and Berthschland are correct, the TCLs fail to meaningfully challenge
the agency’s interpretation of the effect of an Appeals Council reversal and
remand on a mixed judgment. The TCLs do not point to a single comment or
case suggesting that the agency has ever paid interest on a judgment that was
reversed in whole or in part by the Appeals Council. In fact, the TCLs do not
point to a single comment or case that addresses the application of the interest
accrual regulation in the case of multiple ALJ judgments stemming from an
Appeals Council reversal and remand.
      Without stronger evidence that the agency has applied the regulation at
issue inconsistently, there is little reason to believe that the DHHS’
interpretation—which was initially articulated in adjudication by the Appeals
Council—is merely a litigating position rather than the agency’s “fair and
considered judgment on the matter in question.” Auer, 519 U.S. at 462. Because
the interpretation represents the DHHS’ considered judgment, it is entitled to
substantial deference under Auer.
      While the dissent argues that there is no other reason, besides “an
automatic nod” to agency deference to support the conclusion that interest
should not run on the favorable portion of the award we disagree. As the
Secretary has stated “[t]he amount of [a] debt must be established before it
becomes due and payable and thus subject to interest.” 56 Fed. Reg. 54811-01,
54812 (July 10, 1991). In this case, the 2003 ALJ decision specifically identified
the exact amount of the principal due to the TCLs.         In contrast, the 1992
decision did not establish the amount of the debt or identify an underpayment
of $581,157 specifically related to the carrier’s decision to use the 35 m.p.h.

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                               No. 09-10658
component. Instead, the 1992 decision established underpayments of $692,865
to Texas Clinical Labs and $800,852 to Texas Clinical Labs – Gulf Division and
included amounts based on three findings: (1) the median specimen figure was
not supported; (2) the 35 m.p.h. figure was not supported; and (3) that payment
should be made for future claims that had not been addressed in an earlier
hearing. As noted above, the Appeals Council ultimately reversed the 1992
judgment’s conclusion that the median specimen figure was not supported and
revised the scope of the claims addressed in the judgment. These conclusions
were later affirmed by the district court and this court. The 1992 judgment
cannot be considered a final determination because in addition to being a mixed
judgment, the debt included inappropriate claims that were inseparably
intertwined with the amount awarded for the m.p.h. component.2

       2
          There is also a more subtle explanation to support the conclusion that the agency’s
interpretation of the regulation is due considerable deference. “Apart from constitutional
requirements, in the absence of a specific provision by contract or statute, or ‘express consent
. . . by Congress’ interest does not run on a claim against the United States.” United States v.
Louisiana, 446 U.S. 253, 264-65 (1980): see also, 28 U.S.C. § 2516(a) (“Interest on a claim
against the United States shall be allowed in a judgment of the United States Court of Federal
Claims only under a contract or Act of Congress expressly providing for payment thereof.”) In
cases where Congress has provided a limited waiver of sovereign immunity not only must that
waiver be strictly construed but it must, in fact, be construed in favor of the sovereign. See,
e.g., Gomez v. Potter, 128 S. Ct. 1931 1942 (2008); Library of Congress v. Shaw, 478 U.S. 310,
319 (1986); McMahon v. United States, 342 U.S. 25, 27 (1951).
         In this case, Congress has provided a limited waiver of sovereign immunity on claims
of interest brought under 42 U.S.C. § 1395l(j). Thus, because 42 U.S.C. § 1395l(j) only offers
a limited waiver of sovereign immunity it must be strictly construed, in term of its scope, in
favor of the sovereign. The TCLs seek to impermissibly broaden the statute by including
provisions that (1) require interest on any written determination of an underpayment; (2)
require interest to be paid even if the underpayment determination itself is modified; and (3)
require interest to begin before a debt is determined and a balance is calculated.
         The doctrine of limited waiver of sovereign immunity also explains why we choose not
to read 42 C.F.R. § 405.378(c)(ii)(B) in pari materia with 405.378(e)(1) which provides that
interest on an overpayment runs against a provider “during periods of administrative and
judicial appeal and until final disposition of the claim.” Unlike the government, who is
generally protected from the payment of interest by sovereign immunity, providers who are
overpaid and ultimately must pay interest on the overpayment under 405.378(e)(1) are
provided no such protection. If we were to read 405.378(c)(ii)(B) in pari materia with
405.378(e)(1) we would violate the principles of limited sovereign immunity by broadening the
interpretation of when 405.378(c)(ii)(B) requires the government to pay interest on an

                                              10
                               No. 09-10658
                                    III.
     For the foregoing reasons, we affirm the district court’s judgment.

underpayment.

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                                    No. 09-10658

E. GRADY JOLLY, Circuit Judge, dissenting:
         I respectfully dissent because deference is not due the Medicare Appeals
Council’s unreasonable and inequitable interpretation of the regulations at
issue.
                                          I.
         While acknowledging the risk of redundancy, the key facts bear repeating.
This protracted litigation has spanned an incredible twenty-two years, beginning
in 1988 when the plaintiffs first challenged their Medicare reimbursement before
a Regional Administrator for the Health Care Finance Administration. They
challenged two aspects of their reimbursement: the rate paid per collected
specimen, and the rate paid for travel to collect samples. After two abortive
attempts to bring suit, the plaintiffs began their journey through the labyrinth
of agency review.
         In 1992, an administrative law judge (ALJ) agreed with the plaintiffs that
there was no evidence to support the travel rate or the specimen rate and
calculated an amount owed to the plaintiffs. The Medicare Appeals Council
vacated and remanded. Again, in 1993, the ALJ found for the plaintiffs; again,
this ruling was vacated and remanded. In 1995, a different ALJ again found in
favor of the plaintiffs; yet, this ruling was reversed by the Appeals Council. This
last reversal was appealed to the Northern District of Texas, which found
against the plaintiffs. We reversed and the same case was remanded to another
ALJ. In 2003, the ALJ also found for the plaintiffs, still again; the Appeals
Council finally let stand the aged relief granted the plaintiffs.
         In 2003, the Department of Health and Human Services paid the plaintiffs’
judgment plus two months’ interest for some fifteen years’ use of the plaintiffs’
money. The plaintiffs obviously disagreed with the interest calculation and
challenged it before the ALJ. The ALJ rejected the challenge; on appeal, the

                                         12
                               No. 09-10658
Appeals Council found no additional interest was due. The plaintiffs appealed
to the district court, which dismissed for lack of standing; this dismissal was
reversed on appeal to our court; we again remanded to the district court for
adjudication on the merits. The district court granted HHS summary judgment,
holding it did not owe further interest. That is the decision before our court.
The plaintiffs contend interest should run from 1992 when the first ALJ issued
a written opinion in their favor; the government contends that it owes only two
months’ interest from 1988 through 2003. The majority, operating on automatic,
nods to the Appeals Council’s discriminatory and self-serving new interpretation
of the regulations.
                                       II.
      Under the regulations issued by the Health Care Finance Administration
(now called the Centers for Medicare and Medicaid Services [CMS]), interest
accrues from the date of “[a] written determination of an underpayment”
“[e]xcept as required by any subsequent administrative or judicial reversal.” 42
C.F.R. § 405.378(c) (emphasis added). A written determination issued in 1992;
no subsequent administrative or judicial reversal required a different interest
date for the award, as upheld.     Thus plaintiffs’ proffered reading of this
regulation—that interest began running in 1992, when they were first awarded
a written determination of underpayment by the ALJ—is undoubtedly correct.
      In contrast, the Appeals Council’s interpretation—that interest only began
running some 15 years later in 2003, when the plaintiffs obtained their last
administrative determination of underpayment—is not only erroneous but
makes a regrettable policy choice that serves to reward agency delay and abuse.
This arbitrary position cannot be considered consistent with the regulation nor
with Congress’ intent in allowing interest. As HCFA explained in its response
to notice-and-comment for § 405.378,
      One area of concern in developing these regulations involved the
      point at which a final determination occurs and interest begins to

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                                  No. 09-10658
       accrue. One approach in defining a final determination is the point
       after which all administrative and judicial avenues of appeal have
       been exhausted. We believe this approach is inconsistent with
       congressional intent to impose interest since it would encourage
       appeals simply to avoid or delay the payment of interest.
Medicare Program; Interest Charges on Overpayments and Underpayments to
Providers and Suppliers of Services, 47 Fed. Reg. 54811-01, 54812 (December 6,
1982) (emphasis added). Here, although the Appeals Council’s interpretation
avoids exhaustion, it nonetheless defies congressional intent by encouraging
appeals “simply to avoid or delay the payment of interest.” This case only too
well proves that point: had it not been for the agency’s three administrative
appeals, each of which arose from the agency’s groundless claim that evidence
existed to support its travel-allowance-calculation methodology, there would be
no question that interest began to accrue in 1992.                  Plainly said in street
language that all such victims understand, the bureaucracy has been “jerking
the plaintiffs around”—and we should not sanction an unreasonable, self-
serving, and tendentious interpretation of the regulations that enables such
abusive behavior.1
       The majority accepts the Appeals Council’s shallow explanation that the
mixed nature of the 1992 administrative judgment somehow justifies interest
not accruing from that date. But there is no logic to this argument. There is no
reason established in the regulations as to why interest should not run on the
favorable portion of the award; the majority, lacking any recognized basis for its
arbitrary position, must retreat to a reference that is merely the agency’s

       1
         As the Supreme Court has made plain, an administrative rule or regulation is
arbitrary and capricious when “the agency has relied on factors which Congress has not
intended it to consider, entirely failed to consider an important aspect of the problem, offered
an explanation for its decision that runs counter to the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view or the product of agency
expertise.” Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co.,
463 U.S. 29, 43 (1983).

                                              14
                               No. 09-10658
comment during the rulemaking process.2 Although the majority argues that the
debt must be established, let me remind the majority that the obligation of the
government was established in 1992; the ALJ judgment was only modified when
upheld on appeal. The majority’s interpretation frustrates the purpose of
interest accrual: to make sure plaintiffs are compensated for the time value of
money owed to them.
       Furthermore, the Appeals Council’s interpretation                         is not only
unreasonable but it is discriminatory and inequitable. Under 42 C.F.R. §
405.378(e)(1), interest on an overpayment runs against a provider “during
periods of administrative and judicial appeal and until final disposition of the
claim.” This provision, of course, means that if the ALJ had ruled in favor of
HHS in 1992 (and if HHS had ultimately prevailed), the plaintiffs would owe
over 20 years’ interest. But rather than read 42 C.F.R. § 405.378(c)(ii)(B) in pari
materia with this section, the Appeals Council reads it to exempt the agency
from such an obligation that it imposes on others.3                     It is fundamentally
inexcusable to treat providers and the agency so differently with so little
justification and for the reasons I have indicated herein, we owe no deference to
this arbitrary and capricious interpretation.
       For these reasons, I respectfully dissent.

       2
         Even then, the majority does not treat all such comments equally. The majority cites
with favor the agency’s statement that “[t]he amount of [a] debt must be established before it
becomes due and payable and thus subject to interest,” 56 Fed. Reg. 31332, 31335 (July 10,
1991), but conveniently ignores the agency’s statement “that [starting interest accrual after
exhaustion of all avenues of appeal] is inconsistent with congressional intent . . . since it would
encourage appeals simply to avoid or delay the payment of interest," 47 Fed. Reg. 54811-01,
54812 (Dec. 6, 1982).
       3
          Although the majority attempts to find refuge in sovereign immunity, the government
only argued that sovereign immunity requires that we read the entire regulation narrowly; the
government never argued what the majority asserts today: that sovereign immunity entitles
the agency to interpret the phrase “final determination” at its pleasure, thus entitling CMS to
collect interest on the one hand and deny it on the other. There is certainly no statutory basis
for this rank discrimination.

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