[00:00:00] Speaker 05:
Face number 21-5122, American Clinical Laboratory Association Appellant versus Xavier Becerra, Secretary, United States Department of Health and Human Services.

[00:00:12] Speaker 05:
Mr. Parrish for the appellant, Ms.

[00:00:14] Speaker 05:
Neumeister for the appellant.

[00:00:20] Speaker 01:
Good morning, Your Honors.

[00:00:21] Speaker 01:
May it please the court, Ashley Parrish for Petitioner ACLA.

[00:00:24] Speaker 01:
I've asked to reserve three minutes for rebuttal.

[00:00:27] Speaker 01:
As you know, this is the second time this case is before the court.

[00:00:30] Speaker 01:
The first time the court first assured itself of jurisdiction, it held that the statutory bar on judicial review does not apply, and it remanded for the district court to consider the merits of our challenge to the 2016 data collection rule.

[00:00:45] Speaker 01:
On remand, the government resurrected a number of jurisdictional arguments that it had abandoned on the first appeal and convinced the district court to dismiss this case as moot.

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Why?

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Because it found that the case is moot because of the judicial review bar.

[00:01:01] Speaker 01:
We think the district court is wrong, and we're asking this court to reverse.

[00:01:04] Speaker 01:
What I'd like to do this morning is focus on really the two issues in the case.

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First, explain why there is no jurisdictional bar to the court addressing the merits.

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And then second, urging the court to address the merits by explaining why the 2016 rule is not a reasonable or non-arbitrary and capricious interpretation of the statute.

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Can I ask one question up front that's

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It gets different adjectives.

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Do we know at the time of the 2016 rule, how many hospital outreach labs had their own NPIs?

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I hear few, some, I hear some from the government and few from you.

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And do we just not, is that just an unknown fact?

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It's not something anyone could know because it seems somewhat relevant.

[00:01:52] Speaker 01:
So your honor, what I understand from the record is that 1% of the hospitals reported.

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And so I don't know what 1% calculates into an actual number, but I do know that 1%, which suggests that it was that percentage of the hospitals that had their own.

[00:02:08] Speaker 04:
Well, unless some of them fell out with the low volume or low cost threshold.

[00:02:15] Speaker 01:
That's exactly right, your honor.

[00:02:16] Speaker 01:
And I don't know if it's in the record, but unfortunately, I don't know the answer to your question when you take that into account.

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And then a couple of things about this 2018 rule.

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Did anyone, did you or anyone that you're aware of at the time of the 2016 rule suggested using this, it's long form, it's CMS 145014XDOV at that point or did that only first come up for the 2018 rule?

[00:02:48] Speaker 01:
My understanding, Your Honor, is that it was brought up in the context of 2016 rules, certainly the concept that it was implementing.

[00:02:56] Speaker 01:
I don't want to be 100% certain as to whether every jot and tittle was the same because it's a little bit complicated, but essentially that what had been proposed by the laboratory as the approach, which is looking at this in terms of claims, rather in terms of- By the labs, does that mean you all?

[00:03:11] Speaker 01:
Correct, correct.

[00:03:12] Speaker 04:
OK, maybe I'll rebuttal if you can give me a record site or after argument send in the letter to where you all suggested this form at the time of the 2016 rule.

[00:03:22] Speaker 01:
I'd be happy to do that.

[00:03:24] Speaker 04:
I don't want to distract you with time now.

[00:03:26] Speaker 04:
And then just to clarify the 28J letter, so am I right that the fee schedule, the implication of this new statute that has extended once again the data reporting period?

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is that the old fee schedule, the one from the 26, calculated through the process from the 2016 rule is going to continue now through 2023?

[00:03:49] Speaker 01:
Your Honor, I'd like the government to clarify that, but my reading of the data is that it now extends the reporting period through 2023, and it may not be that the rates will take effect until 2025.

[00:04:05] Speaker 01:
Okay.

[00:04:08] Speaker 04:
Right.

[00:04:08] Speaker 04:
They can let me know if they just got a different understanding.

[00:04:12] Speaker 04:
Okay.

[00:04:12] Speaker 04:
I've interrupted you.

[00:04:13] Speaker 04:
Go ahead.

[00:04:14] Speaker 04:
No, not all address the jurisdictional points.

[00:04:16] Speaker 01:
Yeah.

[00:04:17] Speaker 04:
So you're honest with the concept of muteness, but we'll just call the inability to redress argument.

[00:04:26] Speaker 01:
Yes, your honor.

[00:04:27] Speaker 01:
And let me start with that.

[00:04:29] Speaker 01:
But in order to sort of put it in context, I think it's helpful to understand what the court said on standing, which is just that when it looked back in 2016 and that decision, it recognized that the 2018 rule had already been passed.

[00:04:43] Speaker 01:
It recognized that if we were correct, that there was a redressable remedy for standing purposes and all our point is is that nothing has changed for purpose of this so the only way that the government can be correct on this is if it was an advisory opinion before.

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Now, the reason why the government is not correct on this is that the 2016 rule remains essentially in effect.

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We asked that the court vacate the 2016 rule, and the court can still do that.

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Now, that will have consequences, including the consequence that the unlawful rates will have to be changed by the government, but that is what was contemplated all along by this lawsuit, and there's nothing that prevents the court from granting that relief.

[00:05:30] Speaker 01:
Happy to sort of go into more detail on that because I do think you can think about it in a whole bunch of ways a couple of easy ways to understand why it's not move is that as of today, we have claims that will have to be paid out, presumably at least till 2023 but in light of the 28 J letter until 2025.

[00:05:48] Speaker 01:
What are they supposed to do with those claims?

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There's also pending claims that have been submitted in the past that haven't been paid out yet.

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What are they supposed to do with those claims?

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And they've also been claims that have been paid out in the past over the objections that they were paid out at the wrong rates because the wrong data was collected.

[00:06:07] Speaker 04:
Your complaint also asks for a declaratory judgment that the old manner of collecting this data was legally erroneous.

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And I assume that would still be of value to you in its own right, given that even in the 2018 rule, they said, we're not sure we're sticking with this.

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In different words, but that was that explicitly that this could all change again, if we don't think it's worth the candle.

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We're not, we could go back to the old rule.

[00:06:42] Speaker 01:
Your honor is absolutely correct.

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And obviously our point in the briefing that we emphasize is that it's the government's burden.

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And it's a heavy burden to show that they won't go back.

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And there's certainly nothing in the record that would establish that.

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So even that alone also shows that it's not moved on its own terms.

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And with all respect to the district court, is it your contention counsel that

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that notwithstanding the statutory language, we could issue a ruling that vacates the 2016 rule.

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And to the extent that claims have been paid out, require those claims to be adjusted.

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Can we go that far?

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Is that your argument?

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So, so your honor I want to be really careful about answering your question as to what the court would declare versus what would happen.

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I think that what the court would declare is that the rule is invalid because it violates the statute.

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and that that would, as a natural consequence, mean, as the court found in the first decision, that the agency would have to recollect the data, and then because the existing rates are unlawful, it would have to do something to replace them.

[00:08:02] Speaker 01:
I'm not suggesting that the court, in its declaratory language, would tell the agency how to do that, but that would be the natural consequence.

[00:08:09] Speaker 01:
There's nothing unusual about that.

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For example, this court does not have authority to review internal rules of agency procedure, but if it turned out that a rule of procedure said we're going to discriminate and someone brought an action and you said you can't discriminate, that might change the rules.

[00:08:25] Speaker 01:
You can also think of, for example, the Lucia case with the SEC

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ALJs, the Supreme Court didn't tell the agency how to fix it, but it's clear that because the ALJs were improperly appointed, that that will have consequences for the decisions that they've issued.

[00:08:40] Speaker 01:
It's the same thing here.

[00:08:41] Speaker 01:
We're not asking you to actually rule on the rates themselves, but it is true that a natural consequence of striking the 2016 rule is that those will go away.

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And Judge Wilkins, you put your finger on the real difference between the two parties.

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Our position is that Congress allowed for judicial review of the rates and that that has consequences, sorry, of the rule and that has consequences later for the rates.

[00:09:07] Speaker 01:
And the government's position is that everything's encased in amber, that no matter whether you review this or not, the rates somehow don't have any

[00:09:15] Speaker 01:
can't be changed by them or otherwise once they're put in place.

[00:09:19] Speaker 01:
And with respect, that's inconsistent with the court's earlier decision.

[00:09:23] Speaker 01:
And it just doesn't make sense of Congress's scheme either, which is Congress was limiting what this court could review.

[00:09:29] Speaker 01:
It wasn't necessarily saying that the consequences of an unlawful agency action would be forever unremediable.

[00:09:38] Speaker 01:
I know I've got a little bit of time.

[00:09:39] Speaker 04:
I think to my colleagues, you know, you want to reserve time for rebuttal.

[00:09:45] Speaker 04:
I'll give you a one sentence windup if there was one other point you wanted to flag.

[00:09:50] Speaker 01:
I was just going to thank the court.

[00:09:51] Speaker 01:
I'll save my time for rebuttal if that would be OK.

[00:09:54] Speaker 04:
My colleagues don't know for the questions?

[00:09:56] Speaker 00:
No, no.

[00:09:57] Speaker 04:
Thank you.

[00:09:57] Speaker 04:
We'll hear from the government now.

[00:09:59] Speaker 04:
Maybe we can start by clarifying the time frame on the 28-J letter.

[00:10:02] Speaker 04:
Did I misunderstand it?

[00:10:03] Speaker 04:
That's the most likely answer.

[00:10:07] Speaker 02:
Yes, Your Honor.

[00:10:07] Speaker 02:
I'll start with that.

[00:10:08] Speaker 02:
So my apologies if there's any confusion.

[00:10:12] Speaker 02:
My understanding is that the statute

[00:10:15] Speaker 02:
as amended provides that the next reporting period is January 1st, 2023, ending March 31st, 2023.

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And then the agency would then put new rates into effect beginning January 1st, 2024.

[00:10:30] Speaker 02:
And I apologize, Your Honor, may it please the court, McKay Neumeister for the government.

[00:10:40] Speaker 02:
from the beginning of this case.

[00:10:41] Speaker 02:
Do you have an answer?

[00:10:42] Speaker 04:
I'm so sorry.

[00:10:43] Speaker 04:
It's been noodling in my head.

[00:10:45] Speaker 04:
You don't have any different answer on any sort of concrete number on how many hospital outreach labs actually have, or at the time of the 2016 rule had NPIs?

[00:10:55] Speaker 02:
I don't, Your Honor.

[00:10:57] Speaker 02:
The number isn't specifically discussed in the rule, and I'm not aware.

[00:11:00] Speaker 04:
Did the government have any basis for believing that it was

[00:11:06] Speaker 04:
Even a substantial I'm using substantial in the API context of less than 50%, but a substantial number of material number of these, when it picked up.

[00:11:17] Speaker 04:
I'm not, I'm not certain.

[00:11:23] Speaker 02:
So from the beginning of this case, there have been two potential kinds of relief that plaintiff could have thought in challenging the 2016 rule.

[00:11:32] Speaker 02:
Either wholly prospective relief in the form of vacating the rules definition of applicable laboratory or retrospective relief that would change the payment rates established under the statutory scheme.

[00:11:42] Speaker 02:
In the prior appeal, the court agreed that plaintiff could challenge the 2016 rule, even though the review bar and subsection H1 prohibits it from challenging the payment rates.

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On remand, the district court addressed a different question, whether there remained any effective relief that the court could grant if plaintiff prevailed.

[00:12:00] Speaker 04:
Isn't it a declaratory judgment that this, I'm not saying it would happen to be clear.

[00:12:06] Speaker 04:
There was a whole separate argument on, that's another part of the brief.

[00:12:11] Speaker 04:
But if they prevail on their arbitrary and capricious argument,

[00:12:15] Speaker 04:
Why wouldn't a declaratory judgment that would prevent the government from returning to this method for calculating the payments using the MPIs because of, as in this case presented, the gap in outreach labs that are covered.

[00:12:34] Speaker 04:
Why wouldn't that be effective relief?

[00:12:35] Speaker 04:
Given that the government itself has said, well, we got this 2018 rule, we're not sure we're sticking with it.

[00:12:41] Speaker 04:
If it doesn't seem worth the candle, we can go back to the organ.

[00:12:45] Speaker 02:
To be clear, what the agency said in the 2018 rulemaking was simply that it could revisit the decision to start using the CMS 1450 type of bill 14X.

[00:12:59] Speaker 02:
The specific thing the agency chose to do in the 2018 rulemaking, it could revisit that.

[00:13:04] Speaker 04:
In light of the heavy, we recognize the heavy burden of doing this.

[00:13:09] Speaker 04:
We can revisit it and combine that with a brief that says our prior rule

[00:13:15] Speaker 04:
was correct.

[00:13:16] Speaker 04:
We think that was the best rule.

[00:13:18] Speaker 02:
That's right, Your Honor, but there's simply no, there's simply no affirmative indication that it's likely that the agency will return to the challenge.

[00:13:27] Speaker 04:
Do you have to show your burden?

[00:13:29] Speaker 04:
What is your burden to show from it?

[00:13:32] Speaker 02:
So respectfully, Your Honor, we disagree with that characterization.

[00:13:35] Speaker 02:
For mootness, it's our burden to establish that the case is moot.

[00:13:38] Speaker 02:
It is the opponent's burden to establish any exceptions to mootness, as this court has explained.

[00:13:46] Speaker 04:
But the voluntary cessation test requires a pretty high threshold when the government, at any party, sorry, just not just the government.

[00:13:53] Speaker 04:
Yes, Your Honor, but the court has explained.

[00:13:55] Speaker 04:
Oh, go ahead.

[00:13:56] Speaker 02:
Sorry, the court has explained that voluntary cessation is a mootness exception and so to show that it's likely that this is going to recur, that's the burden on the opponent because of the exception.

[00:14:06] Speaker 02:
applies.

[00:14:07] Speaker 02:
And I want to give the court a citation for that.

[00:14:10] Speaker 02:
In the court's decision in Alaska, the USDA, it's a recent decision.

[00:14:15] Speaker 02:
It's 17F4, 1224, issued in November of last year.

[00:14:22] Speaker 02:
The court referred to voluntary cessation as an exception and also explained some very helpful things that are relevant to this case about the application of the voluntary cessation doctrine.

[00:14:34] Speaker 02:
The court again in that case reiterated the well established principle that where a rule is.

[00:14:41] Speaker 02:
rescinded and replaced that challenges to that rule are deemed moot.

[00:14:46] Speaker 02:
In that case in particular, not only had the rule been rescinded and replaced, the agency subsequently said it was planning to propose a new rule that would repeal or replace the second rule that rendered the challenge moot.

[00:15:04] Speaker 02:
The agency

[00:15:05] Speaker 04:
It was planned to replace it with the old rule that they had challenged or a third option altogether.

[00:15:13] Speaker 02:
I'm not certain, Your Honor.

[00:15:15] Speaker 04:
That matters for voluntary sensation.

[00:15:19] Speaker 04:
So yes, I'm not certain, Your Honor, but the court... We've had other cases where it's been a rulemaking and the agency expressed its inclination to

[00:15:35] Speaker 04:
reinstate the prior rule and there we found no movements.

[00:15:41] Speaker 02:
So my understanding of that case and I'll just explain the general facts that involved a rule whereby roads could not be constructed in national forests and that was the default rule that that was being challenged by the state of Alaska.

[00:15:58] Speaker 02:
The agency then

[00:16:01] Speaker 02:
passed a sorry promulgated a new rule exempting the particular forest at issue from the original rule and then the agency said that it was going to propose a rule that would repeal that exemption or replace that exemption.

[00:16:17] Speaker 02:
And of course something different.

[00:16:21] Speaker 02:
possibly, Your Honor, but it could also have been repealed, in which case it would just go back to the original.

[00:16:27] Speaker 04:
If we don't know if it was explicit, that matters.

[00:16:29] Speaker 04:
So the Supreme Court has said, quote, the heavy burden of persuading the court that the challenge conduct cannot reasonably be expected to start up again lies with the party asserting mootness.

[00:16:42] Speaker 04:
That's the Supreme Court.

[00:16:43] Speaker 04:
So are you saying that this decision from last fall

[00:16:49] Speaker 04:
Just ignore what the Supreme Court said.

[00:16:52] Speaker 02:
I don't believe it was it was very specific.

[00:16:55] Speaker 02:
Your honor did refer to this.

[00:16:56] Speaker 04:
Do you disagree with what the Supreme Court said there that the heavy burden of persuading that the challenge conduct cannot reasonably be expected to start up again is with you?

[00:17:07] Speaker 04:
This is friends of the earth where there's late law.

[00:17:09] Speaker 02:
Your Honor, I'm not aware of any subsequent Supreme Court precedent that would call that into question.

[00:17:14] Speaker 02:
So I'm not in a position to dispute that.

[00:17:18] Speaker 02:
But I would note there is one other aspect of the court's decision in Alaska v USDA that is particularly relevant here, Your Honor.

[00:17:24] Speaker 02:
And there the court specifically explained that when you're dealing with voluntary cessation and a voluntary cessation claim with respect to an agency,

[00:17:37] Speaker 02:
The court specifically explained, and this is at page 1227 of the decision, that the, quote, the voluntary cessation exception to mootness has no play when the agency did not act, quote, in order to avoid litigation.

[00:17:53] Speaker 02:
This court has recognized that the relevant question is whether the agency can be treated as trying to manipulate the judicial process, and that's simply not an inference that can be drawn in the context of this case, Your Honor, and it's helpful to look at the timing of how things progressed.

[00:18:13] Speaker 02:
The suit was filed in December of 2017.

[00:18:19] Speaker 02:
proposed rule to revise the definition was issued in July of 2018.

[00:18:25] Speaker 02:
That was before the district court even ruled the first time in this case.

[00:18:31] Speaker 02:
Then the final and in ruling the district court ruled in the agency's favor.

[00:18:35] Speaker 02:
And so there is simply no adverse ruling that the agency could be treated as being trying to get out of and to manipulate.

[00:18:44] Speaker 02:
uh, in the context here, which is similar to what the court explained in Alaska, the USDA or circumstances in which voluntary cessation does not apply, uh, to agency action.

[00:18:55] Speaker 02:
And so we would submit that that, that case controls, uh, controls the outcome here with respect to voluntary cessation.

[00:19:03] Speaker 02:
One last question.

[00:19:04] Speaker 04:
Do you agree that redressability, the component of standing is assessed at the time the complaint is filed?

[00:19:12] Speaker 02:
That's correct, Your Honor.

[00:19:13] Speaker 02:
And because redressability is assessed at the time the complaint is filed,

[00:19:18] Speaker 02:
which is what the court was assessing in its prior opinion.

[00:19:21] Speaker 02:
It's important to look at the kind of relief that was available at that time, which we submit there was wholly prospective relief.

[00:19:29] Speaker 02:
The definition could have been vacated.

[00:19:31] Speaker 02:
The agency could have been directed to go back to the drawing board and come up with a new definition that would apply prospectively in future rate cycles.

[00:19:40] Speaker 02:
And that's really what was available when the suit was filed.

[00:19:44] Speaker 02:
Apart from that, what plaintiff seeks now is a form of retrospective relief that is asking that the agency be directed, be ordered to collect more data and use that data to adjust the rates that were established.

[00:19:59] Speaker 02:
And the statute simply does not permit that kind of relief.

[00:20:03] Speaker 02:
Subsection A1 specifically delineates and controls the reporting periods.

[00:20:09] Speaker 02:
I think my time is up, Your Honor.

[00:20:12] Speaker 02:
Subsection A1 specifically delineates the reporting periods and Congress has very carefully controlled those periods, provided that no reporting can occur before the next reporting period, set very clear deadlines for the next reporting period.

[00:20:27] Speaker 02:
Moreover, in subsection B4B, Congress specifically provided that there can be no adjustment of rates once established, which the Secretary established in this case in November 2017, and Congress's clear desire for continuity, stability, and finality of rates prevents any order directing the Secretary to recalculate the rates that have been established.

[00:20:52] Speaker 04:
Thank you.

[00:20:53] Speaker 04:
I'm sorry I was hogging up your time.

[00:20:57] Speaker 04:
Do my colleagues have any questions?

[00:20:59] Speaker 04:
No.

[00:21:01] Speaker 04:
OK.

[00:21:01] Speaker 04:
Thank you very much.

[00:21:03] Speaker 04:
Mr. Parrish, we'll give you the three minutes you asked for.

[00:21:16] Speaker 01:
Your honor, as I'm trying to unmute, I just want to make sure you can hear me.

[00:21:18] Speaker 04:
I can hear you.

[00:21:20] Speaker 01:
Thank you.

[00:21:20] Speaker 01:
Your eyes I like to make three points on rebuttal here first about voluntary cessation, second about redress ability and then third on the merit on voluntary secession opposing counsel's Alaska case was never cited in the brief so I can't tell you much about that I can tell you, I'd be surprised if it overturned this court's Zuckerman decision in 2020 which makes clear that it's their burden to make absolutely clear that the conduct won't reoccur.

[00:21:45] Speaker 01:
But I'd also point out that it doesn't matter because here, unlike the cases they rely on, and I suspect this is the problem with the Alaska case, is that the effects of the 2016 rule are undoubtedly continuing, which is different from a situation like the Larson case that they rely on where the effects are completely cut off.

[00:22:03] Speaker 01:
So either way, they lose on that.

[00:22:05] Speaker 01:
On redressability, Judge Malait, you are absolutely correct.

[00:22:08] Speaker 01:
It's assessed at the time of the complaint is filed.

[00:22:12] Speaker 01:
But I also think that it would be passing strange if this court, when it assured itself of standing that was not really raised in the earlier appeal, that it wouldn't have instantly gone to mootness.

[00:22:22] Speaker 01:
And instead, what the court said, if I could read to you, is requiring the secretary to collect more fully representative market data and use it to calculate a new weighted median appears sufficiently likely to increase Medicare reimbursement rates to establish readdressability at this stage.

[00:22:38] Speaker 01:
and nothing has changed.

[00:22:39] Speaker 01:
It's still the case that that's sufficient, which is the point is that the remedy we seek is a vacatur of the 2016 rule.

[00:22:46] Speaker 01:
There are consequences to that, but that is what Congress contemplated by permitting judicial review.

[00:22:52] Speaker 01:
There's no way in which these rates are encased in amber and the government can just throw up its hands and say, sorry, they're unlawful, but it doesn't make any difference.

[00:23:01] Speaker 01:
And then finally on the merits we haven't talked about that because the government really doesn't have anything to say on the merits, it is clear that the statute says look at each laboratory, look at its revenues and determine whether those revenues, a majority of them come from to specific fee schedules.

[00:23:18] Speaker 01:
And the problem here is that the government, instead of taking a look at the revenues for outreach labs that were attributable to those labs, it swept in all of the revenues from the entire hospital, including for open heart surgery and other things, which meant that none of the hospitals, unless they had a separate NPI, would qualify.

[00:23:35] Speaker 01:
That's clearly not a reasonable or appropriate or non-arbitrary interpretation of the statute.

[00:23:41] Speaker 01:
And so we should prevail on that.

[00:23:43] Speaker 01:
Your Honors,

[00:23:45] Speaker 01:
This case was litigated heavily the first time.

[00:23:47] Speaker 01:
I think the reason why the government is not supposed to hold jurisdictional arguments in reserve is that they're supposed to all be aired out and fully adjudicated.

[00:23:57] Speaker 03:
Mr. Parrish, before you end, I'm sorry, I just had one more question.

[00:24:02] Speaker 01:
Yes.

[00:24:02] Speaker 03:
If we assume that we have jurisdiction, as you're urging us to do, and if we agree with you that the statute is unambiguous, does that mean

[00:24:15] Speaker 03:
that the 2018 rules interpretation is also unlawful?

[00:24:22] Speaker 01:
No, Your Honor, because the 2018 rule addresses this precise problem.

[00:24:27] Speaker 01:
So what we've always argued is that the NPI was not fit for purpose because it didn't distinguish between the laboratory's revenues and the larger hospital's revenues.

[00:24:38] Speaker 01:
And the 2018 rule gets at that because instead of looking at the revenues as the hospitals of the whole, it looks at specific basically claims for individual tests.

[00:24:49] Speaker 01:
And so what it ends up doing is it teases out the lab tests from the rest of the stuff that the hospital does.

[00:24:56] Speaker 03:
No, I understand that.

[00:24:57] Speaker 03:
But I guess I'm just trying to focus on the idea that if the statute is unambiguous,

[00:25:04] Speaker 03:
then the agency shouldn't be making these kinds of interpretations, right?

[00:25:08] Speaker 03:
I mean, it shouldn't.

[00:25:10] Speaker 01:
So Your Honor, we're not arguing that the statute is unambiguous in all of its interpretations and applications.

[00:25:17] Speaker 01:
What we're saying is that it unambiguously does not allow them to sweep in the other revenues from the hospital.

[00:25:25] Speaker 01:
So we're not suggesting that the agency doesn't have discretion to decide what laboratories are in or out.

[00:25:32] Speaker 01:
What we're saying is that what the agency has done here is outside any reasonable interpretation of the language at all and therefore arbitrary and capricious.

[00:25:40] Speaker 01:
And it's as if, and I don't mean to be silly about this, but just to really make it clear, if the agency had sort of said, we are going to look at what the lab's revenues are, and we're going to do that by just, you know, I don't know, counting how many sunny days there are in July, you would say that's so far out of the range of any reasonableness, that can't possibly be a fair interpretation, even if there might be some ambiguity in some other application.

[00:26:05] Speaker 01:
That's our point here, which is that it's completely unreasonable to say that when you're trying to figure out the revenues,

[00:26:10] Speaker 01:
associated with the lab, that you would then take a look at things like open heart surgeries or the other services that the hospital provides, which obviously would dwarf it.

[00:26:20] Speaker 01:
And your honor, I point out there's a med pack report that was prepared at the request of Congress.

[00:26:26] Speaker 01:
And they look at this and they said, well, because they've gone ahead and excluded these labs, those hospital labs are between 45 to 53 percent higher in rates.

[00:26:35] Speaker 01:
And so we know that that exclusion has had a real significant effect.

[00:26:38] Speaker 01:
So the courts

[00:26:39] Speaker 01:
intuitions that we had pled sufficient for standing, that we actually have concrete injuries here, has been reaffirmed by the government itself in its own congressional report, which is that this decision not to comply with the data collection requirements of the statute has had the effect of both hurting us competitively, that's the first concrete injury, and secondly, resulting in rates that flow from that that are unlawful and unlawfully too low.

[00:27:09] Speaker 04:
If my colleagues have no further questions, then the case is submitted.

[00:27:13] Speaker 04:
Thank you to council.