Willie Goffney, Jr. v. Xavier Becerra ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WILLIE H. GOFFNEY, JR., M.D.; No. 19-56368
ADVANCED SURGICAL ASSOCIATES
MEDICAL OFFICE, INC., a California D.C. No.
corporation, 2:17-cv-08032-
Plaintiffs-Appellants, MRW
v.
OPINION
XAVIER BECERRA, Secretary of the
United States Department of Health
and Human Services, in his official
capacity,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Michael R. Wilner, Magistrate Judge, Presiding
Argued and Submitted March 2, 2021
Pasadena, California
Filed April 29, 2021
2 GOFFNEY V. BECERRA
Before: Susan P. Graber, Stephen A. Higginson, * and
Eric D. Miller, Circuit Judges.
Opinion by Judge Miller
SUMMARY **
Medicare
The panel affirmed the district court’s summary
judgment entered in favor of the Secretary of Health and
Human Services (“HHS”) in an action challenging HHS’s
denial of plaintiff Dr. Willie Goffney’s claim for
reimbursement from the Medicare program for services that
he provided covered patients.
In 2012, Dr. Goffney was informed that his Medicare
billing privileges had been deactivated in 2008. In 2015, Dr.
Goffney attempted to reactivate his billing privileges. The
Medicare contractor in his region, Nordian Healthcare
Solutions, approved Dr. Goffney’s request, but assigned him
a new effective date of August 31, 2015 – the date on which
he submitted the forms to reactivate his billing privileges.
That effective date precluded Dr. Goffney from obtaining
compensation for services he had performed in the preceding
decade. The HHS Departmental Appeals Board affirmed the
agency’s denial of Dr. Goffney’s petition for review, and
*
The Honorable Stephen A. Higginson, United States Circuit Judge
for the U.S. Court of Appeals for the Fifth Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
GOFFNEY V. BECERRA 3
concluded that Dr. Goffney had filed a qualifying
“enrollment application” and that the effective-date
provision of 42 C.F.R. § 424.520(d) controlled.
The panel held that 42 C.F.R. § 424.520(d) was
ambiguous, and did not specify whether a certification
submitted to reactivate billing privileges constituted a
“Medicare enrollment application” that triggered a new
effective date. Specifically, the panel held that the parties’
readings of other provisions of the regulations did not clearly
resolve the ambiguity. The panel held that Section
424.555(b) supported the government’s interpretation of
“Medicare enrollment application” in this context. The
panel further held that the regulatory history was not
illuminating, and that considerations of purpose did not
meaningfully affect its analysis.
The panel applied the principles of Auer deference to the
agency’s interpretation of its own regulations, and concluded
that the interpretation reflected in the Departmental Appeals
Board decision qualified for deference under Auer. Namely,
section 424.520(d) was “genuinely ambiguous” in this
context; the agency’s reading fell within the permissible
zone of ambiguity; and the agency’s reading met all three of
the additional criteria identified in Kisor v. Wilkie, 139 S. Ct.
2400 (2019). First, the Board’s interpretation represented
an authoritative statement of the agency. Second, the
ambiguity implicated the agency’s core expertise because it
involved the administration of the Medicare program. Third,
the agency’s reading was consistent with how it had
previously interpreted the relevant regulations. The panel
concluded that under the agency’s interpretation of section
424.520(d), Dr. Goffney’s reactivation request was “a
Medicare enrollment application” and its filing date of
4 GOFFNEY V. BECERRA
August 31, 2015 was the effective billing date of his billing
privileges.
The panel held that the district court did not abuse its
discretion in denying Dr. Goffney’s motion to order HHS to
supplement the administrative record.
COUNSEL
Charles G. Smith (argued) and Dana M. Silva, Law Offices
of Charles G. Smith, Sherman Oaks, California, for
Plaintiffs-Appellants.
Daniel Aguilar (argued) and Mark B. Stern, Appellate Staff;
Nicola T. Hanna, United States Attorney; Civil Division,
United States Department of Justice, Washington, D.C.; for
Defendant-Appellee.
OPINION
MILLER, Circuit Judge:
Dr. Willie Goffney sought reimbursement from the
Medicare program for services that he provided to covered
patients. Applying its interpretation of the governing
regulation, the Department of Health and Human Services
(HHS) denied his claim. The Supreme Court recently
reaffirmed that a reviewing court should defer to an agency’s
reasonable interpretation of ambiguous regulations. Kisor v.
Wilkie, 139 S. Ct. 2400 (2019). We agree with the district
court that the governing regulation is genuinely ambiguous
and that the agency’s interpretation is reasonable. We also
agree with the district court that its review was appropriately
GOFFNEY V. BECERRA 5
confined to the administrative record the agency produced
and that the agency was not required to supplement the
record. We therefore affirm.
I
Medicare is a federally subsidized medical insurance
program for the elderly and disabled. See 42 U.S.C. § 1395et seq.; Thomas Jefferson Univ. v. Shalala, 512 U.S. 504,
506 (1994). The Centers for Medicare & Medicaid Services
(CMS), an agency within HHS, oversees the Medicare
program. See Pharmaceutical Rsch. & Mfrs. of Am. v.
Walsh, 538 U.S. 644, 650 n.3 (2003). CMS contracts with
private entities to administer the program. See 42 U.S.C.
§§ 1395u(a), 1395kk-1(a); 42 C.F.R. § 421.5(b). Each
Medicare contractor is responsible for a particular region of
the country. 42 C.F.R. § 421.404(b)(1), (c)(1).
To be paid for performing Medicare services, healthcare
providers must enroll in the program, at which point they
receive billing privileges and a billing number. 42 C.F.R.
§ 424.505. (The statute distinguishes between hospitals,
which it calls “providers,” and physicians, whom it calls
“suppliers,” but because nothing in this case turns on that
distinction, we will refer to both as providers. 42 U.S.C.
§ 1395x(d), (u).) Billing privileges are not permanent—once
approved, they may be revoked or deactivated. 42 C.F.R.
§ 424.555(b). A revocation “means that . . . billing privileges
are terminated.” Id. § 424.502. A deactivation “means that
. . . billing privileges were stopped, but can be restored upon
the submission of updated information.” Id. Deactivation
exists “to protect the provider . . . from misuse of its billing
number and to protect the Medicare Trust Funds from
unnecessary overpayments.” Id. § 424.540(c).
6 GOFFNEY V. BECERRA
Goffney is a surgical oncologist in Long Beach,
California, who has provided services to Medicare patients
since 1991. In 2005, Goffney stopped receiving payments
for his Medicare claims, but he nonetheless continued to
provide services to Medicare patients for the next decade. It
is not clear—at least to us—exactly what happened during
that period. The record suggests that Goffney provided
services, received no payments, and made only occasional
efforts to remedy the situation. But the exact sequence of
events is not relevant to the legal issue before us.
In 2012, Goffney was informed that his Medicare billing
privileges had been deactivated in 2008 because he had not
submitted a claim for more than a year. See 42 C.F.R.
§ 424.540(a)(1). Goffney argues that the deactivation was
erroneous, but although the regulations provide a
mechanism for a provider to challenge a deactivation,
Goffney did not invoke that mechanism. See 42 C.F.R.
§§ 405.374(a), 405.375(a), 424.545(b).
Instead, in 2015, Goffney attempted to reactivate his
billing privileges. To do so, he submitted documents to
Noridian Healthcare Solutions, the Medicare contractor in
his region, verifying that his enrollment information had not
changed. Specifically, he submitted portions of Forms CMS-
855B, CMS-855I, and CMS-855R—entitled “Medicare
Enrollment Application”—which providers use for initial
enrollment in the program, reactivation, and various other
purposes. Goffney checked the box stating that he was
“revalidating [his] Medicare enrollment.”
Goffney hoped—and, he says, a Noridian employee
represented—that by recertifying the accuracy of his
information, he could keep his original effective billing date
and be paid for the services he had provided while his
privileges were inactive. But when Noridian approved
GOFFNEY V. BECERRA 7
Goffney’s request, it assigned him a new effective date of
August 31, 2015—the date on which he had submitted the
forms to reactivate his billing privileges. That effective date
precluded Goffney from obtaining compensation for
services he had performed in the preceding decade.
Goffney sought reconsideration, but Noridian denied his
request. It relied on 42 C.F.R. § 424.520(d), which provides
that “[t]he effective date for billing privileges for
physicians” is “[t]he date of filing of a Medicare enrollment
application that was subsequently approved by a Medicare
contractor.” Reasoning that what Goffney filed on August
31, 2015 was an “enrollment application,” Noridian
concluded that section 424.520(d) made that date the
effective date of his reactivated billing privileges.
Goffney then petitioned for review before an HHS
administrative law judge, arguing that a certification
attesting to the accuracy of existing enrollment information
does not constitute an “enrollment application” under
section 424.520(d). The administrative law judge denied
Goffney’s petition.
The HHS Departmental Appeals Board affirmed. The
Board concluded that Goffney had filed a qualifying
“enrollment application” and that the effective-date
provision of section 424.520(d) controlled. The Board
emphasized that no other regulation sets the effective date
for Medicare billing privileges. The Board also determined
that it lacked authority to consider the circumstances
surrounding Goffney’s initial deactivation, the Medicare
claims he submitted while his billing privileges were
inactive, or his equitable arguments about Noridian’s
representations to him.
8 GOFFNEY V. BECERRA
Having exhausted his administrative remedies, Goffney
sought review of the agency’s decision in federal district
court. See 42 U.S.C. §§ 405(g), 1395cc(h)(1)(A). Goffney
asked the district court to order the agency to supplement the
administrative record to include additional materials related
to the agency’s decision. The district court denied the
motion.
The district court granted summary judgment to the
Secretary of HHS. The court reasoned that HHS regulations
contain “a pretty obvious silence . . . about whether a past
‘effective date’ is warranted following reactivation,” and
therefore the “regulations are ‘genuinely ambiguous’ in this
area.” It concluded that the agency’s interpretation of the
regulations was entitled to deference and that the agency had
“provided a reasonable basis for applying the Section
424.520 effective date to [Goffney’s] circumstance.”
II
In this appeal, Goffney does not challenge the agency’s
conclusions about the scope of its authority, nor does he
dispute that the agency correctly identified August 31, 2015
as the date on which he submitted his reactivation request.
He also does not dispute that under section 424.520(d),
“[t]he effective date for billing privileges for physicians [is]
the date of filing of a Medicare enrollment application that
was subsequently approved.” The sole question before us is
whether Goffney’s reactivation request constituted a
“Medicare enrollment application” within the meaning of
section 424.520(d), such that its filing date of August 31,
2015 is the effective date of his billing privileges. More
specifically, the question before us is whether to accept the
Departmental Appeals Board’s interpretation of section
424.520(d)’s phrase “Medicare enrollment application.”
GOFFNEY V. BECERRA 9
The Supreme Court has held that an agency’s
interpretation of its own regulation is entitled to deference
when, among other things, the regulation is “genuinely
ambiguous.” Kisor, 139 S. Ct. at 2415. With that in mind,
we first “exhaust all the ‘traditional tools’ of construction”
in an effort to interpret the regulation by examining its “text,
structure, history, and purpose.” Id. (quoting Chevron U.S.A.
Inc. v. NRDC, Inc., 467 U.S. 837, 843 n.9 (1984)); see
Minnick v. Commissioner, 796 F.3d 1156, 1159 (9th Cir.
2015) (per curiam) (“Regulations are interpreted according
to the same rules as statutes, applying traditional rules of
construction.”). Because we conclude that the regulation is
ambiguous, we then consider what principles of deference
apply.
A
Section 424.520(d) itself does not specify whether a
certification submitted to reactivate billing privileges
constitutes a “Medicare enrollment application” that triggers
a new effective date. The parties direct us to various other
provisions of the regulations. One supports Goffney’s
reading and others support the government’s, and they do not
clearly resolve the ambiguity.
The regulations contain a definitional section, and
because an express textual definition would be controlling,
we begin there. See Burgess v. United States, 553 U.S. 124,
129–30 (2008). Unfortunately, “Enrollment application” is
defined unhelpfully, for our purposes, as “a CMS-approved
paper enrollment application or an electronic Medicare
enrollment process.” 42 C.F.R. § 424.502.
“Enroll/Enrollment” are also defined terms, but their
definitions shed no more light. Id. They refer to “the process
that Medicare uses to establish eligibility to submit claims
for Medicare-covered items and services,” which includes
10 GOFFNEY V. BECERRA
“validating the provider[’s] eligibility to provide items or
services to Medicare beneficiaries” and “granting the
Medicare provider . . . Medicare billing privileges.” Id. The
reference to “granting . . . billing privileges” could perhaps
be construed to encompass the reactivation of billing
privileges, but even on that understanding, it would not
necessarily follow that a request for reactivation would
constitute a “Medicare enrollment application” under
section 424.520(d).
Goffney principally relies on 42 C.F.R. § 424.540(b)
(2012), entitled “Deactivation of Medicare billing
privileges.” Although that provision has since been
amended, the amendment is not relevant to the issue in this
case, and the agency’s commentary explains that it was
intended simply to reduce “confusion” by “clarif[ying]” the
language of the rule. Medicare, Medicaid, and Children’s
Health Insurance Programs; Program Integrity
Enhancements to the Provider Enrollment Process, 84 Fed.
Reg. 47,794, 47,839 (Sept. 10, 2019). We therefore confine
our analysis to the version of the regulation that was in effect
at the time of the events in this case.
Section 424.540(b) outlines two procedures by which a
provider can reactivate billing privileges. A provider who
has been “deactivated for any reason other than
nonsubmission of a claim . . . must complete and submit a
new enrollment application to reactivate its Medicare billing
privileges or, when deemed appropriate, at a minimum,
recertify that the enrollment information currently on file
with Medicare is correct.” 42 C.F.R. § 424.540(b)(1) (2012).
On the other hand, a provider deactivated for nonsubmission
of a claim need only “recertify that the enrollment
information currently on file with Medicare is correct and
GOFFNEY V. BECERRA 11
furnish any missing information as appropriate.” Id.§ 424.540(b)(2) (2012).
Goffney emphasizes that only paragraph (b)(1) refers to
the filing of a “new enrollment application.” In his view,
section 424.540(b) creates a negative implication that when
a provider is deactivated for “nonsubmission of a claim”—
as Goffney was—the provider need not submit a “new
enrollment application.” But while that is a reasonable
inference, it is not conclusive here. Section 424.520(d)
provides for an effective billing date upon the contractor’s
receipt of an “enrollment application”—unlike section
424.540(b), it does not contain the qualifier “new.” So while
there is a strong argument that what Goffney filed was not a
“new enrollment application,” his filing might still have been
an “enrollment application.”
The government points to two other provisions, and
while they both support its alternative reading, neither is
decisive. First, 42 C.F.R. § 424.515 states that Medicare
providers “must resubmit and recertify the accuracy of
[their] enrollment information every 5 years,” a process that
involves submitting an “enrollment application and
supporting documentation,” id. § 424.515(a). That provision
suggests that the term “enrollment application” can describe
more than just a provider’s very first submission to enroll in
Medicare—and that a recertification, at least in this context,
might be one example of what is included. Accord id.
§§ 405.818, 424.510(d)(3)(ii) (both using the term
“enrollment application” in other contexts that appear not to
be restricted to initial enrollment).
Second, the government relies on 42 C.F.R.
§ 424.555(b), which restricts the government’s payment
liability by specifying that “[n]o payment may be made for
otherwise Medicare covered items or services furnished to a
12 GOFFNEY V. BECERRA
Medicare beneficiary by a provider . . . if the billing
privileges of the provider . . . are deactivated, denied, or
revoked.” The government reads that provision to mean that
a provider cannot ever bill Medicare for services that it
renders while its billing privileges are deactivated. If that is
true, it logically follows that the effective date of a
provider’s billing privileges should be reset upon the
reactivation of those privileges. See 42 C.F.R. § 424.5(a)(2).
Goffney responds that section 424.555(b) just means that a
provider must have reactivated its billing privileges by the
time of payment.
We think the government has the better reading of
section 424.555(b) because another regulation provides that
the agency will make payments only if “[t]he services [were]
furnished by a provider . . . that was, at the time it furnished
the services, qualified to have payment made for them.”
42 C.F.R. § 424.5(a)(2). That interpretation also accords
with section 424.555(c), which states that providers that
furnish services for which section 424.555(b) prohibits
payment are responsible for “any expense incurred” in
providing those services. If a provider could seek
retrospective payments once it reestablished its billing
privileges, section 424.555(c) would make little sense.
Although the regulations do permit retrospective billing in
certain narrow circumstances, see, e.g., 42 C.F.R.
§ 424.521(a), HHS has not allowed that practice as a general
matter, see Urology Grp. of NJ, LLC, DAB No. 2860, 2018
WL 4144023 (H.H.S. 2018) (explaining that “a deactivated
provider . . . was not intended to be entitled to Medicare
reimbursement for services rendered during the period of
deactivation”). Section 424.555 thus supports the
government’s interpretation of “Medicare enrollment
application” in this context.
GOFFNEY V. BECERRA 13
Finally, we consider the regulatory history and purpose.
See Kisor, 139 S. Ct. at 2415. The history is not illuminating,
and we conclude that considerations of purpose do not
meaningfully affect our analysis. Section 424.540(c) states
that the agency deactivates billing privileges “to protect the
provider . . . from misuse of its billing number and to protect
the Medicare Trust Funds from unnecessary overpayments.”
The government argues that this purpose would be frustrated
if the agency had to presume that every claim submitted
during a period of deactivation was legitimate, and that to
avoid that result, it must set a new effective billing date. That
justification makes some sense, especially in a case like this
one, in which the provider’s billing privileges were
apparently inactive for a decade. (To be clear, the record
contains no suggestion that any of Goffney’s claims were
fraudulent.)
On the other hand, regulations, like statutes, often reflect
compromises among competing objectives, and “it is quite
mistaken to assume . . . that ‘whatever’ might appear to
‘further[] the statute’s primary objective must be the law.’”
Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718,
1725 (2017) (alteration in original) (quoting Rodriguez v.
United States, 480 U.S. 522, 526 (1987) (per curiam)). And
even under Goffney’s reading of section 424.555(b), the
agency would not be required to pay claims submitted during
a period of deactivation until after the provider’s billing
privileges were reactivated. In that situation, the provider
would have confirmed the accuracy of its information, so
there would be little reason to suspect that past claims were
fraudulent. The regulations also set time limits on when
claims can be filed—generally within one year of the
service, see 42 C.F.R. § 424.44—further reducing the
concern about fraudulent billing. The regulatory purpose
therefore does not help us resolve the textual ambiguity.
14 GOFFNEY V. BECERRA
B
Because this case “involves an interpretation of an
administrative regulation,” we must “look to the
administrative construction of the regulation if the meaning
of the words used is in doubt.” Bowles v. Seminole Rock &
Sand Co., 325 U.S. 410, 413–14 (1945). When an agency
interprets its own ambiguous regulation, the agency’s
interpretation is generally “of controlling weight unless it is
plainly erroneous or inconsistent with the regulation.” Id. at
414. Although Seminole Rock represents one of the Supreme
Court’s earliest expositions of that principle, the doctrine has
come to be associated with the Court’s more recent decision
in Auer v. Robbins, 519 U.S. 452, 461 (1997).
The Supreme Court recently reaffirmed Auer deference,
but in doing so, it noted some limitations on the doctrine’s
scope. See Kisor, 139 S. Ct. at 2408. The most important
limitation is that the regulation must be “genuinely
ambiguous.” Id. at 2415; Christensen v. Harris County,
529 U.S. 576, 588 (2000). In other words, a court may not
“wave the ambiguity flag” and abandon its interpretive
efforts simply because the regulation appears “impenetrable
on first read” or “make[s] the eyes glaze over.” Kisor,
139 S. Ct. at 2415. Instead, a court must first “exhaust all
the ‘traditional tools’ of construction” and consider the
regulation’s “text, structure, history, and purpose,” just as it
would “if it had no agency to fall back on.” Id. (quoting
Chevron, 467 U.S. at 843 n.9). Even then, it may defer only
to an agency interpretation that is “reasonable,” Thomas
Jefferson Univ., 512 U.S. at 515, in the sense that it falls
within the permissible “zone of ambiguity” created by the
regulation. Kisor, 139 S. Ct. at 2415–16.
Although Auer deference to an agency’s interpretation of
a regulation is conceptually distinct from Chevron deference
GOFFNEY V. BECERRA 15
to an agency’s interpretation of a statute, the two forms of
deference operate in similar ways. See Kisor, 139 S. Ct.
at 2416 (rejecting the suggestion that “agency constructions
of rules receive greater deference than agency constructions
of statutes”). Like Auer deference, Chevron deference
applies only if a court first deems a statute ambiguous after
exhausting “traditional tools of statutory construction.”
Chevron, 467 U.S. at 843 n.9; Turtle Island Restoration
Network v. United States Dep’t of Com., 878 F.3d 725, 733
(9th Cir. 2017). And even when a statute is ambiguous at
Chevron step one, the agency’s resolution of the ambiguity
must be reasonable to survive step two. Compare Chevron,
467 U.S. at 845, with Kisor, 139 S. Ct. at 2415–16. In other
words, “where Congress has established an ambiguous line,
the agency can go no further than the ambiguity will fairly
allow.” City of Arlington v. FCC, 569 U.S. 290, 307 (2013);
see United States v. Home Concrete & Supply, LLC,
566 U.S. 478, 493 n.1 (2012) (Scalia, J., concurring in part
and concurring in the judgment) (“It does not matter whether
the word ‘yellow’ is ambiguous when the agency has
interpreted it to mean ‘purple.’”); Global Tel*Link v. FCC,
866 F.3d 397, 419 (D.C. Cir. 2017) (Silberman, J.,
concurring).
The Court in Kisor held that even if those threshold
requirements are satisfied, an agency’s interpretation must
satisfy three other criteria to merit deference under Auer. See
Kisor, 139 S. Ct. at 2416–18. First, the interpretation “must
be the agency’s ‘authoritative’ or ‘official position,’” and not
merely an “ad hoc statement not reflecting the agency’s
views.” Id. at 2416 (quoting United States v. Mead Corp.,
533 U.S. 218, 257–59, 258 n.6 (2001) (Scalia, J.,
dissenting)). That means that the interpretation must
“emanate from those actors, using those vehicles,
16 GOFFNEY V. BECERRA
understood to make authoritative policy in the relevant
context.” Id.Second, “the agency’s interpretation must in some way
implicate its substantive expertise.” Kisor, 139 S. Ct.
at 2417; see Martin v. Occupational Safety & Health Rev.
Comm’n, 499 U.S. 144, 152–53 (1991). The “most obvious”
situation in which that criterion is satisfied is “when a rule is
technical.” Kisor, 139 S. Ct. at 2417. But it can also be
satisfied in situations involving “more prosaic-seeming
questions” as long as the agency has some “comparative
expertise” and the issue is not one that “fall[s] more naturally
into a judge’s bailiwick.” Id.; see City of Arlington, 569 U.S.
at 309 (Breyer, J., concurring in part); cf. Adams Fruit Co. v.
Barrett, 494 U.S. 638, 649–50 (1990).
Third, the interpretation must reflect the agency’s “fair
and considered judgment.” Kisor, 139 S. Ct. at 2417(quoting Christopher v. SmithKline Beecham Corp.,
567 U.S. 142, 155 (2012)). That does not mean that the
agency must engage in an exhaustive interpretive
discussion—even an interpretation implicit in an agency’s
order can reflect the agency’s “fair and considered
judgment.” See Association of Bituminous Contractors, Inc.
v. Apfel, 156 F.3d 1246, 1252 (D.C. Cir. 1998); accord
Southern Utah Wilderness All. v. Office of Surface Mining
Reclamation & Enf’t, 620 F.3d 1227, 1236 (10th Cir. 2010).
Rather, this part of the test protects reliance interests
associated with longstanding agency practices or
interpretations. Courts may not defer to an interpretation that
“creates ‘unfair surprise’ to regulated parties” or that
amounts “to a merely ‘convenient litigating position.’”
Kisor, 139 S. Ct. at 2417–18 (first quoting Long Island Care
at Home, Ltd. v. Coke, 551 U.S. 158, 170 (2007), and then
quoting Christopher, 567 U.S. at 155).
GOFFNEY V. BECERRA 17
C
Applying those principles here, we conclude that the
interpretation reflected in the Departmental Appeals Board’s
decision qualifies for deference under Auer. As we have
explained, section 424.520(d) is “genuinely ambiguous” in
this context, and the agency’s reading falls within the
permissible zone of ambiguity. Kisor, 139 S. Ct. at 2415–16.
And the agency’s reading meets all three of the additional
criteria identified in Kisor.
First, the Board’s interpretation represents an
authoritative statement of the agency. The Secretary of HHS
appoints the Board’s members, 45 C.F.R. § 16.5(a), and the
Board “generally issues HHS’s final decision, which may
then be appealed to a federal court.” Arizona Health Care
Cost Containment Sys. v. McClellan, 508 F.3d 1243, 1248
n.6 (9th Cir. 2007). The Board’s decision is the product of a
formal process that merits deference. Cf. id. at 1249, 1253–
54 (deferring under Chevron to the Board’s interpretation of
an ambiguous statute).
Second, the ambiguity implicates the agency’s core
expertise because it involves the administration of the
Medicare program. See Kisor, 139 S. Ct. at 2417. The
regulatory scheme allows providers to bill only in certain
circumstances and limits their ability to receive Medicare
payments depending on their billing status. See 42 C.F.R.
§§ 424.521(a), 424.555(b). The regulations also reflect
HHS’s policy of deactivating billing privileges to prevent
Medicare fraud and to protect the public fisc. See 42 C.F.R.
§ 424.540(c). The ambiguity here affects the implementation
of that policy, and the agency has “comparative expertise”
in resolving the issue. Kisor, 139 S. Ct. at 2417. See
generally Urology Grp. of NJ, DAB No. 2860.
18 GOFFNEY V. BECERRA
Third, far from being a new interpretation or one that
would create unfair surprise, the agency’s reading is
consistent with how it has previously interpreted the relevant
regulations. See Kisor, 139 S. Ct. at 2417–18; cf.
Christopher, 567 U.S. at 155–57. CMS’s Program Integrity
Manual (PIM)—a guidebook that instructs Medicare
contractors on how to process provider applications, pay
claims, and minimize fraud—has long required contractors
to reset providers’ effective billing dates when they grant
reactivation requests. See Urology Grp. of NJ, DAB
No. 2860 (explaining that since 2009, the PIM has treated a
“reactivation application . . . as an initial enrollment
application” for purposes of section 424.520(d) (quoting
Medicare Program Integrity Manual § 10.6.1.4 (rev. 289,
Jan. 1, 2009))); see also Medicare Program Integrity Manual
§ 15.27.1.2 (rev. 865, Mar. 12, 2019); id. § 15.27.1.2.1 (rev.
765, Jan. 1, 2018); id. § 15.27.1.2.2 (rev. 765, Jan. 1, 2018).
More than a decade ago, the Board recognized, if not tacitly
endorsed, that interpretation. See Arkady B. Stern, DAB No.
2329, 2010 WL 3810867, at *3 & n.5 (H.H.S. 2010)
(interpreting the PIM to mean that “a reactivated provider
will have a new effective date”). Indeed, when Noridian
denied Goffney’s reconsideration request, it cited the PIM
for the same principle.
As currently written, section 15.27.1.2.2(A) of the PIM
requires providers seeking reactivation to submit a packet of
documents that CMS calls a “reactivation certification
package,” even if their enrollment information has not
changed. Section 15.27.1.2 says that if “the contractor
approves a provider’s . . . reactivation application or
reactivation certification package . . . the reactivation
effective date shall be based on the date the contractor
received the application or [reactivation certification
package].” The PIM therefore directly resolves the
GOFFNEY V. BECERRA 19
ambiguity at issue here. And even though the PIM, like its
counterpart in the social security context, “does not impose
judicially enforceable duties,” Lockwood v. Commissioner
Soc. Sec. Admin., 616 F.3d 1068, 1073 (9th Cir. 2010); see
42 C.F.R. § 405.1062(a), it still shows that HHS’s
interpretation is more than just a “convenient litigating
position,” Christopher, 567 U.S. at 155.
Goffney argues that the Board’s decision was not a “fair
and considered judgment” because it was “ad hoc”; it
“ignore[d] the plain language of Section 520”; and it did not
cite “any legal precedent or administrative rules.” We
disagree. The Board invoked section 424.520(d), quoted the
relevant “recertification” language from section 424.540(b),
and recognized that the contractor had “treated [Goffney’s
request] as an application . . . to reactivate his billing
privileges.” Even if its analysis could have been more
comprehensive, the Board resolved the legal question of
whether section 424.520(d) applies to reactivation requests
like Goffney’s. See Association of Bituminous Contractors,
156 F.3d at 1252.
We conclude that the Board’s interpretation of section
424.520(d) merits Auer deference and controls this case. See
519 U.S. at 461. Under that interpretation, Goffney’s
reactivation request was “a Medicare enrollment
application,” and its filing date of August 31, 2015 is the
effective date of his billing privileges.
III
The district court did not abuse its discretion in denying
Goffney’s motion to order HHS to supplement the
administrative record. See Lands Council v. Powell,
395 F.3d 1019, 1030 n.11 (9th Cir. 2005). Goffney argues
that the agency failed to include in the record all materials
20 GOFFNEY V. BECERRA
related to its decision to assign him an August 31, 2015
effective billing date. In his view, “[t]he missing documents
likely show that the Agency’s decision was arbitrary and
capricious.” He does not, however, identify any specific
documents that he believes to be missing.
The Administrative Procedure Act requires us to review
an agency’s action based on “the whole record.” 5 U.S.C.
§ 706. That “includes everything that was before the agency
pertaining to the merits of its decision.” Portland Audubon
Soc’y v. Endangered Species Comm., 984 F.2d 1534, 1548
(9th Cir. 1993); see Thompson v. United States Dep’t of
Labor, 885 F.2d 551, 555–56 (9th Cir. 1989) (“The ‘whole’
administrative record . . . consists of all documents and
materials directly or indirectly considered by agency
decision-makers.” (emphasis omitted) (quoting Exxon Corp.
v. Department of Energy, 91 F.R.D. 26, 33 (N.D. Tex.
1981))). HHS has codified that requirement in a regulation
that directs the Office of Medicare Hearings and Appeals—
the agency tasked with compiling the record for HHS
administrative proceedings—to include in the record “the
appealed determinations, and documents and other evidence
used in making the appealed determinations and the ALJ’s
or attorney adjudicator’s decision,” as well as any proffered
evidence excluded by the adjudicator. 42 C.F.R.
§ 405.1042(a)(2).
We have explained that a court reviewing an agency’s
action may examine “extra-record evidence” only in
“limited circumstances” that are “narrowly construed and
applied.” Lands Council, 395 F.3d at 1030 (citing Camp v.
Pitts, 411 U.S. 138, 142–43 (1973) (per curiam)). Such
circumstances are present, for example, when “the agency
has relied on documents not in the record” or “when
plaintiffs make a showing of agency bad faith.” Id. (quoting
GOFFNEY V. BECERRA 21
Southwest Ctr. for Biological Diversity v. United States
Forest Serv., 100 F.3d 1443, 1450 (9th Cir. 1996)); see
Department of Com. v. New York, 139 S. Ct. 2551, 2573–74
(2019); Portland Audubon Soc’y, 984 F.2d at 1548. But like
other official agency actions, an agency’s statement of what
is in the record is subject to a presumption of regularity. See
Angov v. Lynch, 788 F.3d 893, 905 (9th Cir. 2015). We must
therefore presume that an “agency properly designated the
Administrative Record absent clear evidence to the
contrary.” Bar MK Ranches v. Yuetter, 994 F.2d 735, 740
(10th Cir. 1993); accord Oceana, Inc. v. Ross, 920 F.3d 855,
865 (D.C. Cir. 2019); see also Angov, 788 F.3d at 905 (“[I]n
the absence of clear evidence to the contrary, courts presume
that [government officials] have properly discharged their
official duties.” (quoting National Archives & Records
Admin. v. Favish, 541 U.S. 157, 174 (2004))).
Goffney has not presented “clear evidence”—or any
evidence at all. His argument rests on speculation that the
agency must have considered more documents than it said it
had because, in his view, the agency’s decision was
“unprecedented.” As the district court recognized, however,
Goffney’s petition posed a legal issue, not a factual one.
Noridian’s denial of Goffney’s reconsideration request
shows that Noridian reviewed Goffney’s application, section
424.520(d), the PIM, and Noridian’s policy about its
authority to set billing privileges. It does not follow that
there must be additional documents underpinning Noridian’s
decision. Nor is there any indication that the ALJ or the
Board relied on any other materials in reaching their
decisions.
Goffney also claims that CMS’s decision “to deny
benefits in this manner appeared only to apply to physicians
of color” and that the agency has “manipulate[d] the
22 GOFFNEY V. BECERRA
administrative record” to shield it from review. In his district
court filings, Goffney did not so much as hint at the
possibility of racial bias; to the contrary, he stated that “there
is no allegation of bad faith in this case.” Goffney has
provided no evidence of bias, and the record reveals none.
AFFIRMED.