Page:Azar v. Allina Health Services, 587 U.S. (2019) (slip opinion).pdf/33

Rh conceivably affect substantive Medicare policy. So there must be a way to distinguish the “substantive” rules that are covered from the “substantive” rules that are not. And the APA’s notion of a “substantive rule” provides a natural, legally understandable, and customary way for judges, agencies, and lawyers to perform that task. In that sense, the APA offers us a familiar port in an interpretive storm.

The Court not only leaves the APA behind; it fails to substitute any reasonably clear alternative standard. How is the agency to determine whether a rule “establishes or changes a substantive legal standard”? At one point, the Court refers to the hospitals’ view that the statute applies to agency actions “that ‘creat[e] duties, rights and obligations,’ as distinct from [agency actions] that specif[y] how those duties, rights, and obligations should be enforced.” Ante, at 6. But it later declines to “go so far as” to fully endorse that view. Ante, at 12.

At another point, the Court refers to the notice-and-comment requirement as applying to “avowedly ‘gap’filling polic[ies],” suggesting the case might be different if the Government had argued that “the statute itself ” “supplie[d] the controlling legal standard.” Ante, at 16−17. But these statements sound as if the Court is embracing the very interpretive-rule exception that its holding denies. See, e.g., Hemp Industries Assn. v. DEA, 333 F. 3d 1082, 1087 (CA9 2003) (interpretive rules “merely explain, but do not add to, the substantive law that already exists in the form of a statute”); American Hospital Assn., 834 F. 2d, at 1046 (agency action is interpretive where it “merely reminds parties of existing duties” under a statute); cf. Clarian Health West, LLC v. Hargan, 878 F. 3d 346, 355−356 (CADC 2017) (concluding, after the decision below, that manual instructions governing reconciliation of outlier payments did not require notice and comment because they did not “bind” the agency and because existing statutory and regulatory provisions “establish[ed the]