Last week, the Federal Circuit heard oral argument in Metropolitan Area EMS Authority v. Secretary of Veterans Affairs, a veterans case that attracted an amicus brief. In this case the Federal Circuit is reviewing a final rule passed by the Department of Veterans Affairs that would enable VA to pay the lesser of the actual charge or the Medicare fee schedule amount for non-contract ground transports. Judges Lourie, Stoll, and Stark heard the argument. This is our argument recap.
Brian Stimson argued for the Metropolitan Area Ems Authority, the Valley Ambulance Authority, the Quaker Valley Ambulance Authority, and the Altoona Logan Township Mobile Medical Emergency Department Authority. Stimson began by arguing that 38 U.S.C § 111(b)(3)(C), the statute that the Secretary cites for his authority, applies only to transport “to or from department facilities.” Stimson explained that, because the statute does not include the phrase “or other place,” it is beyond the authority of the statute to reach all transports.
One judge asked Stimson to address another government argument, that the second sentence in § 111(a) uses and establishes the phrase “to or from department facilities” as shorthand for “to or from department facilities or other place.” In response, Stimson argued that a “shorthand canon of construction” does not exist. Additionally, he maintained, there is a long line of Supreme Court cases holding that if Congress uses the word “or” then the two words must have different meanings.
A judge then asked Stimson about the Secretary’s argument that adopting Stimson’s position would mean that VA would no longer have the authority to transport veterans by air. In response, Stimson contended that the proper reading of the sentence referred to by the Secretary in § 111(a) is that it only refers to commercial air travel. Stimson completed this section of the argument by pointing out that Congress had the opportunity to amend the statute “in 2011 and 2012, but chose not to.”
Finally, related to Stimson’s argument that the Secretary’s rule is arbitrary and capricious, Stimson suggested the Secretary did not take into account “actual cost data that the Secretary had in his possession.” Additionally, Stimson argued, the Secretary’s refusal to consider the option of carving out these ambulance authorities from the final rule was “extremely prejudicial.”
Borislav Kushnir argued for the Secretary of Veterans Affairs. One judge immediately asked Kushnir to begin with statutory interpretation. In response, Kushnir explained that he was not advocating for a new “shorthand canon” of construction. He argued, instead, that when a court interprets statutory language it must interpret that language in context, and “when that context shows that Congress used the shorthand of one phrase to stand in for a longer phrase the court should give that context meaning.” A judge responded by pointing out that “normally if a statute says ‘A or B’ and then later it only refers to ‘A,’ I don’t usually understand that to mean shorthand for ‘A or B.’” Kushnir then maintained that, with this interpretation, VA would not be able to pay for airfare to a non-department facility.
A judge noted that the Secretary’s rule has to find support in either § 111(a) or § 111(b)(3)(C). This judge suggested that the support cannot “be based on” § 111(b)(3)(C) “because it does not have the phrase ‘other places,’” and “it cannot be based on” § 111(a) since § 111(a) “does not have the lesser qualifications.” In response, Kushnir argued that VA has always understood § 111(b)(3)(C) to cover transport both to a department facility and other places. In response, a judge suggested Kushnir was “reading language into the statute that appears elsewhere and could have appeared here if the drafters had intended it.”
A judge finally asked about the Secretary’s argument that the appellants have forfeited many of their arguments. Agreeing, Kushnir argued that the Federal Circuit should adopt a forfeiture rule that has been adopted by “many other circuits.” That rule, he said, provides that “arguments of statutory authority can be forfeited if they are not raised during the rulemaking process.” A judge then asked how that rule could survive the Supreme Court’s precedent, which “requires courts to interpret statutes, particularly ones that are fundamental to agency authority.” Kushnir agreed that “courts certainly have the obligation to independently interpret statutory provisions,” but, he maintained, the forfeiture rule is required “because it promotes judicial efficiency.”
In his rebuttal time, Stimson addressed the Secretary’s policy concern that VA would not be able to reach non-department facilities through air travel. Stimson noted how the Secretary has a separate statutory authority to cover and pay for services that cannot be obtained at VA facilities. Stimson argued this other statute would “act as a backstop to that policy concern.” Stimson also maintained that the Secretary had an obligation to consider an exemption for his clients. Finally, Stimson addressed the forfeiture argument, stating that “since 1986” there has been “no waiver when the resolution” of a “statutory issue does not require the development of the factual record, the application of agency expertise, or the exercise of administrative discretion.”
We will continue monitoring this case and report on any developments.