services to the underserved.

in the case 201114. american hospital association. >> mr. chief justice may i please the court. i will refer to this as paragraph 14 to curb the discretion normally when it sets the rate for outpatient hospital services. for the drugs covered by the statute, paragraph 14 directs that the agency may set the rates based on the cost and a very them by hospital groups if it conducts a cost study that meets the requirements. if it doesn't do a cost to study the rates must equal the average price for the drug determined by a cross reference statutory formula calculated and adjusted as necessary for purposes of the paragraph. now in the issue hhs set the rates for the hospital's different from the other hospitals and purported to base

those rates on acquisition costs but didn't conduct the cost study of the statute requires. the threshold of the government asserts the courts cannot review without agency action with no statutory text review and it makes sense that congress would want the review because the point of that paragraph was to constrain the agency discretion. on the merits the government asserts the separate cost rates for the hospitals can be justified as an exercise of the agency's authority to addressed the rate from the cost study but the paragraph 14 doesn't authorize hhs to the price rates by hospital group and it authorizes the varying cost-based rates only in the presence of a cost study. beyond that, hhs didn't abase the raid on the hospitals on average price at all. it estimated the acquisition cost using a different formula and then swapped that number for the average price number.

that's a substitution. it's not an adjustment. i welcome the courts questions. >> if we don't agree with the last statement, but rather with the dc circuit and its application of chevron, and we agree that it disposes of this, would you argue or are you arguing that we should overrule to get to the statutory approach that you're taking?ay that we'vd that question is we think with respect to the application here we are asking the court to

reject the dc circuit application but there are several steps before getting to that final question. it's unambiguous and therefore, one doesn't get to the question whether it wants to be overruled and if the court finds ambiguity with respect to a statute we think this is a case very much like mci or the utilities board case in which whatever ambiguity and discretion the agency has, this is so far outside of it because it writes the provision out of the statute entirely and congress can't even delegate the agency to do that.

you say this better than i do, paragraph 14 down here on page 42. what we are trying to do here, we pay them back but if you can't figure out what they pay, look at the price of the drugs. then it says as calculated and adjusted by the secretary, as necessary for purpos paragraphs. the paragraph is 14. that's pretty clear because above they say he is a subparagraph. i'm reading a few times and say what's the point of that and the plaintiff seems to be to pay the

hospitals what they pay for the drugs which sometimes can't and when it adjusts for the purposes, they mean just so you get closer to what the hospitals are paying for these drugs. there is a fundamental precept at stake congress doesn't just legislate objectives but the means by which those objectives are to be -- this is for purposes of thearagraphnd refers to i think objectives. >> i think the objective is it's all about the means and previously they were sent under

the general section to authority that the agency had and that was producing unsatisfactory results so congress pulled this out of the methodology and said we are going to prescribe in minute detail the means by which you are going to calculate. the purpose of the statute is evident on its base and the purpose of the statute is to ensure reliability and accuracy and transparency in the methods congress has prescribed and accuracy and transparency in the calculation of average cost by using the cost study, accuracy and transparency in the calculation of the price rate using the statutory formula is necessary for the purpose of the

paragraph, but for the purpose of the paragraphs language as given carte blanche to aid the acquisition cost rate and a very the rates between the hospital groups which is a key point. they vary at the rates between the hospital groups. without the cost study it says you have to do those things. the transparency of section 1395 they haven't succeeded in that objective but it does seem to me you have to have some limited principle for with the purposes of these paragraphs mean. i think it might be wrong. the purposes in this seems

pretty unlimited. i don't think that it can be for the reason that it creates this problem that subparagraph one seems to say that rate shall be equal to the acquisition cost determined by the secretary taking into account the cost study. all of that becomes irrelevant if one reads the paragraph and that seems to me itself to be a constraint to the extent the agency can rely. i think the purposes means when we follow the methodology of the rates of acquisition cost follow the steps the statute prescribes to ensure that those rates are as accurate and transparent as possible. >> this is kind of a catch all at the end with the cost but it's come up with for the purposes but that the price is

calculated in an entirely different matter and that contains a very detailed formula for how one calculates a price base rate. the acquisition cost analysis. he does have the authority or she to adjust. with an adjustment to the price base rate to be consistent with the authority to make adjustments as we've argued with overhead to ensure there's fair compensation. i understand the basic point

that this shouldn't be taken to give the secretary authority to circumvent, but what is left? the overhead costs seem to be provided for elsewhere so what are these adjustments that this roman numeral provision is talking about? it isn't entirely taken care of. fourteen gave authority for two calendar years. although there is a plus 6% figure into the price formula in the cross reference statute. that is inadequate. as some of them come with high handling costs so one might

adjust that formula to ensure the compensation for that and there's other situations i can give some specifics but there are situations one can imagine let's say year-over-year the average price is coming in at a certain level and at the data for a particular year has dropped by 80% and that seems like an anomaly which the agency would exercise its authority to addressed the statutory formula to bring them into line with an average price to include other price concessions you've got to make a judgment or are they going to be in or out, that's an adjustment. excuse me for the references but they are what they are in this case to exclude certain cells.

they have to make a judgment about that. another one, section 1395 per when the prices are not available, when they don't actually have the data they've got to estimate that to bring the average price number into line making an accurate price number. the key point. but then roman numeral i don't know how even to do this saying what the average price is has already been done and now the secretary has additional

authority. it says calculated and adjusted. it is conveying the sense that i'm describing with the secretary's responsibility or authority is to come up with a more accurate number. talking about the varying rates by hospital group, you cannot determine on the basis of the for the price the data for statutory cross reference to look at because that comes from manufacturers and it's not broken out by hospital group it's the average price of the manufacturers to everyone. >> under subparagraph two, the secretary can make distinctions among providers. you say it can't make distinctions among hospital groups but it can make distinctions among hospitals and generals and other providers. you say on page 44 of the brief.

>> if the data would allow them to make meaningful price distinctions i don't read the statute before closing at but the data doesn't allow them to make those distinctions because the data is broken out by hospital versus nonhospital purchaser. >> you said page 44 the agency code adjust average price numbers to focus more closely on price paid by hospitals since those numbers include other kinds of medical providers as well. i took that to mean you can draw the distinction between hospitals and other providers. >> if the data supports it that wouldn't be outside of the scope of this tributary authority the agency would have to have is to vary the rate among the hospital groups. >> what do you find in subparagraph two that provides the basis for the distinction

between adjusting prices among hospital groups versus all hospital providers. a. >> it confers authority to vary if a condition is met. it doesn't contain that authorization to vary in hospital groups it just isn't there. if you're going to do that you want to make sure that you're

acting on reliable numbers. you have to look at the cost of data and it has to be significant there's a commonsense reason congress would have wanted that. >> is there any dispute that the hospitals pay a lot less? >> it specifically says the discounts shall not be included in that calculation and of the theagency recognizes that of the appendix so it would be odd to say that congress doesn't consider that when you are factoring in this number but then in the back door by

allowing an adjustment that prospectively sets a different cost rate for the hospitals doing the same thing the statute requires as a precondition. >> should we care about the difference between cost and price, does price do any work here? >> the cost under the first subclause requires the agency to get data from the hospitals and provides a more accurate basis for assessing about what the cost is and then in turn accurate basis among the hospital groups it then tells the agency to look at data they get from the manufacturers and then data details as and the

text is the average price for the drug. >> there's a difference between the sticker price and it does seem like the article the average price seems, i take your point it seems harder to bear whether you could have a major adjustment or a minor adjustment but with respect to the meaning it requires a consistent baseline. you start and adjust. you don't start with a and then substitute something totally different it shows the actual

price and the systems to decide cost. one of the discounts they don't let you look at is what you mentioned earlier and i think you have a stronger argument to say if congress says you can't include the 340 cost, then you

can't add it back in when they've restricted you from using it once already for the purposes of this paragraph it would limit the agency altogether deciding that there were regional differences that had to be compensated so, for example, if there were higher wages in one part of the country as opposed to another i don't see why the agency couldn't and wouldn't say for the northeast we think it should be 80%.

it is a stronger argument to say they can't do this because that says you can't base it on that prior to the enactment. to make this kind of distinctions and they pull these judgments out of paragraph two

if you get the reliable transparent data it's to avoid the political favoritism it says no, no there is one way to do this and one way only and if you can justify the differences based on the transparent data go ahead and make that. no variations among hospital groups and that goes back to the statutory language about the average price for the drug for the year there's a single

average price for the drug for the year and the absence to vary among hospital groups. for the ability to make these group-based variations and the date of the cost study provides. the average price of the drug calculated for the purposes of this paragraph and you make a strong argument you say the average price of the drug in the

year is something people might read off a few charts. we make some changes in it because it isn't quite right but they can't go so far as to cut it 28% because they think the whole thing is too expensive. it's the smaller thing, not the bigger thing. now suppose i think, which i'm not sure, but it's possible i now see you could read it both ways. it's possible. now what do i do and the natural instinct for me is to say it's controversial et cetera and if you think about it, it's the

wrong case because whatever congress wanted done here it didn't want the agency to choose. it means it's a definite. it means you are right or they are right. when they get to something they know more about, we ought to pay more attention to them. i don't think it helps in this situation. it's not a question about the agency's expertise and whether the agency is invoking the statutory purpose to go beyond the means congress prescribed for carrying out that purpose. that's a question of the

statutory interpretation and said over and over again they can't invoke purpose that go beyond the specific means. this was micromanaging put it too strongly but congress legislatively with the category of drugs in minute detail it is said you're going to either do it this way with a cost study that is significant or that way. the average price using the statutory formula. now of course with the power to calculate i think to read that language is necessary for the paragraph two gave what it onces is the fundamental judgment congress made when it enacted this provision.

can i take you back to the first question if the only way we can reverse the dc circuit is to overrun chevron, do you want us to? >> yes. along those lines, say that i don't find the argument of this case it implicates the major questions doctrine and can be reasonably read as the dc circuit as some of my colleagues suggested here today. you indicated that we should reconsider in response to justice alito.

we don't think this is the case. we think the statute is unambiguous. the court disagrees with you. what does that look like? >> even if one thinks the reading in this circuit is the realm of possibility and is a valid justification for invoking chevron, which i don't think it is, that there is a best reading of the statute and it's our reading because the consequence of reading it in a way that the government is asking you to read it is that you really do read something congress prescribed as ismandatory as a precondition fr setting and you turn it into an

option that isn't the best of the statute so that it gets to where we want to go. the other way seems to me. it is suggested that the case is part of a troubling trend, but the court has emphasized repeatedly the lower court should employ the statutory interpretation as it turns out at least according to the studies only about 30% of them resolve cases in step one and this case is an example of that troubling trend. i want to give you a chance to comment on that. >> that is the essence of the finding of ambiguity and it

can't be right because overhead is already accounted for in other ways. because what seems like a mandatory cost study requirement for the acquisition cost rates to ensure it becomes superfluous in the sense but there's no hierarchy and therefore as i tried to illustrate in my conversation, to grant that there is, there is a vast difference between superfluity against opposition and in the sense of writing a whole column out entirely into the agency doesn't have to do the very thing congress said it had to do. >> i have a couple questions to

follow up on the question if you take footnote number nine is seriously that says to apply the traditional tools of the interpretation and construction and i understand that to be what you are saying we should do and not give up too soon but follow all the way through. we follow the path set forth and that requires consideration of context and structure and overall operation of the province and things you bring to bear. second question, what congress was getting at to protect against executive favoritism of particular kinds of hospitals you didn't connect that to what happened here but i gather what

happened is that hhs thought it was inappropriate to give this degree to the category of the hospitals. is that an accurate story? >> i want to be clear -- >> the favoritism. >> with respect to the hospitals, yes that's what the agency decided the subsidy had been around for a long time and didn't want it to continue. when i say that's beyond the agency's authority if the agency wants to get rid of it it's got two options. one is you follow the means the statute prescribed for varying by hospital groups to determine you come up with data that is

significant and then if you think it's too partisan but they didn't do either of those things. they took a shortcut that the statute doesn't authorize. >> thank you, counsel. mr. chief justice and me i please the court. petitioners asked to hold a compiled medicare to knowingly and dramatically overpay the hospitals at the direct expense of the medicare beneficiaries and other hospitals. neither supports that result. first, congress precluded at the review of the covered drug rate for the same reason it precluded the review with other rates.

of those are bound together by the budget neutrality requirement and in invalidating them years after payments have gone out the door with badly destabilized medicare systems. congress instead reserved review for its self indeed as my friend said this morning the highly detailed nature of this illustrates that fact. in any event the rate under that provision the subclause sub clauseauthorizes the agencyt rates for purposes of paragraph 14. there was purposes must include aligning the reimbursement rates with acquisition costs after all that is what the sub clause expressly provides and importantly the cross references in a sub clause to our two proxies for the cost. the sub clauses are thus different means to the same end. petitioners have no plausible account of the paragraph purposes that excluded the

cost-based reimbursement. my friend said this morning hhs could exclude or carry the rate for different providers but that's not materially different than what hhs did here. my friend suggests 340 and chewers providers a subsidy under medicare but that cannot be correct because everyone agrees the subclause allows the agency to separate out acquisition cost. at the agency made a more modest adjustment requiring 340b providers to share some of the discount with medicare beneficiaries in hospitals. that approach was well within the statutory authority and the decision below should be deferred. >> it's hard to see what's left of the subparagraph if we accept your argument and interpretation of the subparagraph. why would you ever collect the

survey data if you can do everything you say you can do? >> the survey still provides a lot of benefits to the agency. first of all it makes it permissible for the agency to set the rate at the acquisition cost is determined by the survey. now the agency has to show a lot more than that. i don't think there's any dispute about the agency showing in this case and i took my friend to accept there is no debate about the data but that's it he goes and craddick about the case because remember hhs runs the program so it has the data but there's all kinds of other data about hospitals hhs could use under the subclause if it took the survey as a basis. a. >> how often have you conducted a subclause survey? >> the agency has only conducted one since the statute was

enacted while the case was pending. i would note in the same instructions congress gave to the agency to conduct periodic surveys it instructed them to take into account sub 14 to it told the agency to take into account the recommendations that conducted the original study back in 2004 and the recommendations were don't do very many studies because they are burdensome on the hospitals and don't produce results that are all that accurate. there is about 1400 hospitals and they gave two options you

can either tell the acquisition cost or check the box that says use the data you already have. a 7% of the hospitals gave the actual data. 55% checked the box into 38% didn't respond so the survey ended up producing a rate that was similar to that which would have been produced by the agency using its own data which is what it did under the subclause. a. >> what do i do with the fact that iiia when it's calculating cost permits so you can count almost any discount that's given to a hospital on the price that was established accept it bars you from using the discount even to 340b. what do i do with that statutory command not to include that in

the average price of data? how do you get the power to include it in the asp? it seems contradictory like you are trying to sneak through the backdoor prohibition on the front door. a. >> i have two basic answers to that. first, the reason most discounts are included in this is the 1395w iiia rate. 340 that was the rate for the reimbursement of physicians and physicians are not eligible for the discounts so that's why that is excluded. the second point is it can't be the case that that provision imposes some sort of duty in this provision to give a subsidy to hospitals because if the agency took the survey it could set the rate for the hospitals

that acquisition costs have no discounts or subsidies and there's no way congress said you could do that under a subclause that you lose that authority under subclause two in fact congress allowed the agency to make an adjustment, and the adjustment to change the rate instead of just physicians is the kind of adjustment congress would have had in mind. >> [inaudible] [laughter] i will ask two questions quickly. the problem is there's five other provisions. fourteen isn't one of them. the second one is we have one and two. one is cost and to is price. when you use to is when the cost

fails. we can't figure out cost so now we go to to which is price. ..

>> the to have some relationship to each other. of course they do. that acquisition cost what a particular hospital has made and an average price for the drugs is much broader than that but it does not suggest

you can carry it by hospital group or individual hospitals in the question is why is it that you would lead this delegation at the end? but why would you read that to override the basic statutory structure here? you can charge acquisition cost when you do a survey but you haven't which the agency has refused to do for years, then you don't get to do this. you have to do something else. >> a couple of answers but on that singular point if you look at subclause one it also refers to the average acquisition cost. >> one is by hospital group the other is not so to suggest a single uniform number? >> especially reading the purposes of paragraph 14 that

goes back to earlier to determine the purposes of a statutory provision looking at the text of the statutory provision. >> the statutory provision sets that up if you do a survey you do one if you don't then you cannot. but this delegation is if you do a survey you can do this and if you don't and you can also do it. >> the statue also said if you don't dress survey but that's not what it says if acquisition cost data are not available. >> in subparagraph one make it conditioned on a survey. >> respectfully i disagree. it's a survey at the average acquisition cost.

>> then do that acquisition process otherwise due the average price. >> for purposes of this paragraph. >> that the point of doing the survey for the acquisition cost. >> the courts in michigan in that case it was interpreting to allow the agency to regulate the argument in that case because of the clean air act directed regulation by the cost and there was a defense in that case it was unanimous that it was reasonable for the agency to do the statute in that way because to necessarily take account of the cost and it did not express that inference so here we have the opposite to take

into account how could you be clear about the purposes of the paragraph says you can accept the rate this is not a new argument but the position the agency has had all along for the other drugs with that acquisition cost but it explicitly said because that approximates average acquisition cost but now they are here telling you it is unlawful and inaccurate with that average acquisition cost. >> so the force of the argument is the adjustments for purposes didn't mean

anything to you seem to think this means everything. >> paragraph 14 is not that broad all you really have to do in this case was to include the very purpose specified you can certainly imagine the agency coming up with all kinds of reasons they would like to adjust reimbursement rates up and down it could be political favoritism for the agency like hospitals to provide one particular service none of that is under this provision it is limited to those that are specified in the text i just want to make it completely clear this is not an indication of the statutory interpretation that

which for purposes. >> reading that text use average acquisition cost if you have survey data or if you don't have survey data and do the same thing and that is not what this says. this is we have survey data you do one thing if you don't then you do a different thing. >> with respect to the different thing is because it includes adjustment for purposes. >> you said it's the same thing. why way congress have a statute like that if you do this if you don't you can do that. but then they read the statute to make that mean this. >> wanting the common sense notion that reimbursement like acquisition cost with justice barrett's earlier example i like a car for $20000 i would like to be the first herself.

>> then go get a survey. >> we did. and that which undermines the argument to be invoking against that. >> does circuit secretary have to survey all hospitals could they do a survey of just the 340 be? >> that is an issue we are disputing that 2020 survey the reason that complies with those constructions surprisingly it doesn't because of 340 be hospitals don't want the results of the survey because that will be to lower rates for them. even lower now than hhs. >> that is the petitioner's

position. >> i don't want to put words in their. >> that there is set up my —- objective. >> if that is the case then that does seem to do what you have done under two if you have a group of hospitals that indisputably pay less that the only way that you can adjust for the hospital group is to do a survey of all hospitals to make it much more targeted with that particular situation. >> it goes back to the point of the chief justice earlier it is an idiosyncratic case that they have that data because we run the program and

also there has been a decade's worth of independent studies but that's not the case for all manner of other adjustments that hhs might want to make and then the original 2005 survey that i mentioned to justice thomas earlier through teaching hospitals urban hospitals the gao found there are significant differences that because we don't have the data we will not make adjustments based on that. all we are saying is here where we do have the data that my friend does not dispute we can take that into an account and his position has to be that congress compel the overpayment. said that comes at the half on —- expense of that beneficiaries which is the purpose of the statute. >> that the word with the 340 be hospital is questionable we see amicus brief to provide one third of the hospitals

huge amount of uncompensated care. west virginia the states and arkansas and those rural areas and those hospitals say that congress is well aware so to say overpayment is part of the picture but doesn't take account of the whole 340 be picture which is more complicated. >> . >> congress allowed hhs to take out the whole 340 be discount. >> but that's a constraint the agency has to treat the hospitals the same. >> no. >> it is the agency has to treat the same only if they do the same so it is a precondition. >> my point again that is not what the statute says i don't

understand how congress would have that purpose in subclause one they and that by subclause two but to a more factual point to read the amicus brief of the federation of american hospitals those that are filed on our side of the case and those that explain that the rural hospitals in particular is offsetting three.2 percent adjustment to provide care to their patients and also the federation of american hospitals with the for-profit hospitals many of those provide equally large levels of care uninsured persons. and then to have that distinctive entitlement they supports the work of 340 be hospitals we make payments to them we are not here saying that the work should not be that the medicare program is

not designed to subsidize 340 be has that all. >> they are keeping a lot of the overpayment and keeping a lot of the discounts because anytime you hear about medicare is all of the other operations private insurance and state insurance and they themselves benefit from the offset adjustment obviously 340 be hospitals provide those services. >> talk about chevron deference your friend on the other side said that we should apply the approach to emphasize chevron needs to apply tools in the toolkit. but those that have to do with those are on either side. i would have thought with

chevron if there is ambiguity maybe that is a better description it is the delegated authority to the agency to fill it but the dc circuit describes it this way that with each occasion that manifest that statutory ambiguity that chevron permits the agency does the government agree with that statement of chevron deference? >> it is an accurate statement and the principal submission is that we don't have to apply chevron deference because we have a better reading of the statutes. really the key question is what does that is? >> you don't think it is chevron. why? and there is a reasonable legislator and to do either.

>> the answer to that question must be no because then with the agency a big power and justice alito went into it with some degree. so did justice kagan. a big power. and i don't see how they want to give that the power to interpret that. that is a ready-made doctor from that situation describing in that. >> i'm not here to reject any

type of deference that you want. >> to get it right for the reason as it has implications spent the provision we are interpreting says as calculated and adjusted by the secretary as necessary for purposes of this paragraph you would be hard-pressed to find a more explicit delegation of authority. >> you say delegation but does that word purposes mean purposes more directly related? or doesn't mean purposes that might be broad enough that word -underscore justice kagan's point about eviscerating through the limitation as we listen to this but not before i do think it is fairly important question i don't see how the agency would be given the

power to shift from one or the other that's why this time i will change 50 times. >> with that final matter it's clearly as chevron case with the authority of the secretary to issue a notice and comment rule for the legal interpretation. in some ways it is almost a state farm question that what factors can the agency consider what it interprets the phrase my friend has the argument we think that they do that in either event that with that state farm argument if it's clearly within that box of chevron. >> so what is the purpose?

>> i would say at a minimum with the acquisition cost that is was specified and by the way the purpose of the paragraph but the medicare statute has a pervasive focus on cost -based reimbursement —- reimbursement has all kinds of references to labor cost it's a common sense understanding of the notion of reimbursement so all of those things illustrate whatever paragraph 14 are they at least have to include that. >> can i return to my question from before because i do see this differently is justice breyer. the dc circuit said the basis for chevron deference was resulting which was worse was

one for the agency is that difficulty that should trigger any type of deference? it seems to me that maybe the interpretive question the classic problem that the court should resolve as opposed to wine that reflects a certain delegation to the agency. >> there is a clear delegation here the court has many times to them medicare statutes and we also recognize that it should apply all the tools a statutory construction and that includes looking at super fluidity questions. >> so that statement?

>> it's appropriate for the court. >> i understand you have other reasons but i'm just saying if that's the basis? >> i think it is. >> . >> i did want to follow up but your answer is i thank you focused on the competing problems of both interpretations of fluidity so if that's with enough ambiguity but the question that chevron tends to pose if

it is ambiguous enough to trigger deference to the government? and in our circumstances where we don't have chevron applicable with competing problems we go down the statutory interpretation and then we come up with an answer but you both have weaknesses but we have to pick one and we do and are always able to do it so why shouldn't that be true here? >> to be clear at the outset we are not conceding there is super fluidity on both sides that therefore chevron

deference i'm asking why in this case we can resolve these cases without any problem quick. >> i don't think that's what the dc circuit was saying messy argument we are making here but to include those that are specified. >> i will ask you a question how much ambiguity is enough? >> . >> but then to apply the statutory interpretation how much ambiguity is enough? >> it has been a long time.

>> that in this case and i think there is much ambiguity at all as those that are specified. >> i can't help myself sorry. the government cannot tell so much in ambiguity then these cases often tend to arise in circumstances like this where the government seeking deference at the expense of hospitals of low income patients of those that lobby them as effectively what are

your thoughts about that quick. >> this does not advantage it specifically calls reallocating indirect correspondence with a downward adjustment to align those hospitals with the cost and then to reallocate. >> and those providers would not be here with that 340 be hospital. >> i don't dispute they have a complaint but as i said earlier they actually benefit if you look at the federation of american hospitals and they are indicating nearly half we are not disputing the standing they do have an interest in

obtaining the extra payments but that is one because of the budget neutrality requirement. >> that to pick up by injustice spirits question i would think those tools of that would include in resolving the superfluity's. >> i think it could that i think the dc circuit in this case applied the statutory interpretation and concluded there is still some ambiguity. and the case where the dc circuit rep their hands to say whatever the government said. there is that detail statutory analysis in which he goes

through the different interpretations and ultimately to understand the whole dc circuit all done within the chevron framework that doesn't require chevron deference spent the second question we haven't talked to enough about as the mci decision to say don't read a word like modify or adjust that is something modest to allow this effort as justice kagan points out. so on that word adjust with the focus of the paragraph goes back to calculated and that seems modest.

>> energy say i have a child in college and here is the context to make that adjustment but it means making an adjustment. >> but to respond to the different acquisition cost and the reimbursements and that is 5 percent and we made a 50 percent change, it's not an adjustment for the other purposes with a cautious estimate of that. that is up to eradicate the requirement. to accomplish the end of the statute permits with the

survey. just by calling it the adjustment. >> just to come back to that point what the statute requires with respect to the survey after taking into account recommendations from gao. so that it starts with acquisition cost, that means congress had to contemplate it would be years the agency did not take the survey and they wanted to use this. and other than periodically. so the survey requirement. >> thank you. >> you have a rebuttal?

>> we have a second point and then for the first point with my friends argument here is that but this is all about the means congress did have the authority in paragraph to a with the statute to consider with in a discretionary way this came along to take that discretion a way to tell you exactly how to do that and i'm sure this provision was the consequence of the compromise and you can see how much care and specificity went into it this is about the means not the ends not that position of accuracy but with respect to

the study the agency has conducted with the statutory requirement that is sufficiently acquisition cost so it should meet that general requirement but then to gather to give them what they wanted to check the box and then more generally with that the government relies the government has said repeatedly that no contest the accuracy of it but and then that did it

in the result only five.3 percent drop not four times that rate and then the third point that justice kavanaugh alluded to it's important to understand the full picture if you take a one.$6 billion from these hospitals you are reducing the care to those populations by that amount. other medicare beneficiaries will pay more because it is budget neutral that is true and those two we raised the reimbursement rates for others which is the co-pay so other people will pay for as a result of this judgment and that respect to chevron

deference how much is enough i think the answer is way more

>> may b