Agendia , Inc. v. XAVIER BECERRA, Secretary of U.S. Department of Health and Human Services

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AGENDIA , I NC.,
Plaintiff-Appellee/
Cross-Appellant,
v.
XAVIER BECERRA, Secretary of U.S.
Department of Health and Human
Services,
Defendant-Appellant/
Cross-Appellee.
Nos. 19-56516
20-55041
D.C. No.
8:19-cv-00074-
DOC-JDE
OPINION
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Argued and Submitted January 15, 2021
Pasadena, California
Filed July 16, 2021
Before: Michelle T. Friedland and Mark J. Bennett, Circuit
Judges, and Frederic Block,* District Judge.
Opinion by Judge Friedland;
Dissent by Judge Block
* The Honorable Frederic Block, United States District Judge for the
Eastern District of New York, sitting by designation.

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2 AGENDIA V . BECERRA
SUMMARY**
Medicare
The panel reversed the district court’s summary
judgment in favor of Agendia, Inc. in its action alleging that
the Secretary of Health and Human Services (“HHS”)
wrongfully denied its claims for reimbursement for
diagnostic tests under the Medicare health insurance
program.
HHS reimburses medical providers for the cost of items
and services that are “reasonable and necessary” for the
treatment of beneficiaries. HHS employs private contractors
to process providers’ claims for reimbursement. To promote
consistency in initial determinations, a contractor can issue
a “local coverage determination,” which specifies whether
or under what conditions that contractor will approve
reimbursement for some set of items or services. Agendia’s
claims for reimbursement were denied based on a local
coverage determination.
Agendia argued that the denial of reimbursement was
improper because it was issued without notice and
opportunity for comment. The panel held that the Medicare
Act’s notice-and-comment provision – 42 U.S.C. § 1395hh
– did not apply to local coverage determinations because
such determinations did not establish or change a substantive
legal standard, and the district court erred in interpreting the
statute otherwise. A local coverage determination is
** This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

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AGENDIA V . BECERRA 3
therefore valid without undergoing the § 1395hh notice-and-
comment process.
Agendia also argued that the Medicare Act and its
implementing regulations unconstitutionally delegated
regulatory authority to Medicare contractors by permitting
them to issue local coverage determinations. The panel held
that, because those contractors acted subordinately to the
HHS officials implementing Medicare, there was no
unconstitutional delegation.
District Judge Block dissented from Part III.A of the
majority opinion, which addressed Agendia’s statutory
claims, and from the reversal of the district court’s grant of
summary judgment to Agendia. He would hold that the
“structure” of the Medicare statute was ambiguous and did
not clearly support the majority’s conclusion. Judge Block
joined in Part III.B of the majority’s opinion, which rejected
Agendia’s constitutional, non-delegation argument.
COUNSEL
Stephanie R. Marcus (argued) and Michael S. Raab,
Appellate Staff; Nicola T. Hanna, United States Attorney;
Ethan P. Davis, Acting Assistant Attorney General; Civil
Division, United States Department of Justice, Washington,
D.C.; for Defendant-Appellant/Cross-Appellee.
Patric Hooper (argued), Hooper Lundy & Bookman PC, Los
Angeles, California, for Plaintiff-Appellee/Cross-Appellant.

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4 AGENDIA V . BECERRA
OPINION
FRIEDLAND, Circuit Judge:
Through the Medicare health insurance program, the
Department of Health and Human Services (“HHS”)
reimburses medical providers for the cost of items and
services that are “reasonable and necessary” for the
treatment of beneficiaries. HHS employs private contractors
to process providers’ claims for reimbursement, including
by making initial determinations as to whether the items or
services for which reimbursement is sought are reasonable
and necessary. To promote consistency in initial
determinations, a contractor can issue a “local coverage
determination,” which specifies whether or under what
conditions that contractor will approve reimbursement for
some set of items or services.
Plaintiff Agendia, Inc. (“Agendia”) submitted claims for
reimbursement for its diagnostic tests, which were denied
based on a local coverage determination. Agendia contends
that the denial was improper because the local coverage
determination was issued without notice and opportunity for
comment in violation of a provision of the Medicare Act—
specifically, 42 U.S.C. § 1395hh. We hold that § 1395hh’s
notice-and-comment requirement does not apply to local
coverage determinations, and that the district court erred in
interpreting the statute otherwise.
In the alternative, Agendia suggests that the Medicare
Act and its implementing regulations have
unconstitutionally delegated regulatory authority to
Medicare contractors by permitting them to issue local
coverage determinations. We hold that, because those
contractors act subordinately to the HHS officials

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AGENDIA V . BECERRA 5
implementing Medicare, there is no unconstitutional
delegation.
I.
A.
For background, we begin with a summary of the
Medicare reimbursement process. Medicare Parts A and B
cover only medical items and services that are “reasonable
and necessary” for the treatment of beneficiaries. 42 U.S.C.
§ 1395y(a)(1)(A). Medical providers submit their claims for
reimbursement to a Medicare administrative contractor
(“MAC”), a private entity that processes claims in a
geographic region assigned by HHS. The MAC makes an
initial determination as to whether an item or service
qualifies for reimbursement in that geographic region.
42 C.F.R. § 405.920; see also 42 U.S.C. § 1395kk-
1(a)(4)(A). A provider that is dissatisfied with the initial
determination can file an administrative appeal. 42 C.F.R.
§ 405.904.
The administrative appeals process consists of up to four
steps: (1) a redetermination by the MAC that originally
denied the claim; (2) a review by a different contractor
(known as a “qualified independent contractor”); (3) a
hearing before an Administrative Law Judge (“ALJ”); and
finally, (4) review by the Medicare Appeals Council (“the
Council”), an adjudicatory body within HHS. Id.
§ 405.904(a)(2), (b). A provider that exhausts its
administrative appeals can seek judicial review in a federal
district court. 42 U.S.C. §§ 405(g), 1395ff(b)(1)(A).
Congress has authorized two mechanisms to promote
consistency in these adjudications: national coverage
determinations and local coverage determinations. National

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6 AGENDIA V . BECERRA
coverage determinations are decisions by the Secretary of
Health and Human Services (“the Secretary”1) as to whether
a particular item or service will be covered by Medicare on
a nationwide basis. 42 C.F.R. § 405.1060(a)(1); see also
42 U.S.C. § 1395y(l)(6)(A). National coverage
determinations bind HHS at all levels of claims adjudication.
42 C.F.R. § 405.1060(a)(4). Before issuing a national
coverage determination, the Secretary must follow a unique
notice-and-comment process that the Medicare Act requires
only for those determinations. See 42 U.S.C. § 1395y(l)(3).
Specifically, the Secretary must publish a draft version of the
national coverage determination online and allow a public
comment period of thirty days. Id. § 1395y(l)(3)(A)–(B);
see also id. § 1395y(a) (“In making a national coverage
determination . . . the Secretary shall ensure consistent with
subsection (l) that the public is afforded notice and
opportunity to comment.”).
Local coverage determinations, by contrast, are issued
by MACs. See id. § 1395kk-1(a)(1), (4). A local coverage
determination governs only the issuing MAC’s claims
adjudications. Id. § 1395ff(f)(2)(B). Unlike a national
coverage determination, a local coverage determination is
not binding at the higher levels of administrative review
conducted by the qualified independent contractor, an ALJ,
or the Council. Id. § 1395ff(c)(3)(B)(ii)(II); 42 C.F.R.
§§ 405.968(b)(2)–(3), 405.1062(a)–(b). Still, qualified
independent contractors, ALJs, and the Council all owe
“substantial deference” to a relevant local coverage
determination and, if they decline to apply that
determination, must explain their reasons. 42 C.F.R.
1 Xavier Becerra is substituted for his predecessor, Alex M. Azar II,
as the Secretary of Health and Human Services. Fed. R. App.
P. 43(c)(2).

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AGENDIA V . BECERRA 7
§§ 405.968(b)(2)–(3), 405.1062(a)–(b). The primary
dispute before us is about what procedures are required
before a MAC may issue a local coverage determination.
B.
Agendia is a clinical laboratory that furnishes molecular
diagnostic tests to doctors treating breast cancer patients.
After Agendia provided such tests for eighty-six Medicare
beneficiaries in 2012 and 2013, it sought reimbursement
from HHS. The MAC assigned to adjudicate claims in
Agendia’s region denied payment based on a local coverage
determination the MAC had previously issued. Under that
local coverage determination, certain molecular diagnostic
tests—including those Agendia provided—were not
reasonable and necessary.
Agendia administratively appealed. The qualified
independent contractor that reviewed Agendia’s claims
agreed that payment should be denied. The reviewing ALJ,
however, reversed, concluding that the diagnostic tests were
reasonable and necessary, notwithstanding the local
coverage determination. On its own motion, the Council
overturned the ALJ’s decision, holding that the tests were
not in fact reasonable and necessary. The Council explained
that there was “no reason to not apply substantial deference”
to the relevant local coverage determination.
Agendia then sued the Secretary in federal district court,
asserting that the denial of its reimbursement claims was
improper because the process for issuing the relevant local

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8 AGENDIA V . BECERRA
coverage determination was unlawful for two reasons.2
First, Agendia argued that a provision of the Medicare Act,
42 U.S.C. § 1395hh, requires that a local coverage
determination undergo a notice-and-comment process
before being adopted. Second, Agendia argued that the
portions of the Medicare Act and its implementing
regulations that authorize MACs to issue local coverage
determinations unconstitutionally delegate regulatory
authority to private entities.
The district court rejected Agendia’s constitutional
challenge but agreed with Agendia’s statutory argument,
concluding that § 1395hh requires local coverage
determinations to undergo notice and comment. Because no
such process had occurred, the district court granted
summary judgment for Agendia and remanded to the
Council to reevaluate the claims for reimbursement without
relying on the local coverage determination. The Secretary
appealed.3
2 Agendia also initially argued that the relevant local coverage
determination was arbitrary and capricious. On appeal, Agendia has
expressly abandoned this contention.
3 Agendia filed a putative cross-appeal of the district court’s
rejection of its constitutional challenge. Instead of cross-appealing,
Agendia could have made the same argument in its response to the
Secretary’s appeal as a proposed alternative ground for affirmance.
Ecological Rts. Found. v. Pac. Gas & Elec. Co., 874 F.3d 1083, 1092
n.3 (9th Cir. 2017) (“Where an appellee properly raised an argument in
the district court and raises it on appeal in an effort ‘seek[ing] to preserve,
and not to change, the judgment,’ it need not file a cross-appeal.”
(alteration in original) (quoting Lee v. Burlington N. Santa Fe Ry. Co.,
245 F.3d 1102, 1107 (9th Cir. 2001))). We accordingly consider that
constitutional argument as a possible alternative reason to affirm.
Spencer v. Peters, 857 F.3d 789, 797 n.3 (9th Cir. 2017) (treating

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AGENDIA V . BECERRA 9
II.
Although the district court remanded this case, the grant
of summary judgment is a final order subject to appellate
review under 28 U.S.C. § 1291 because it “terminated the
civil action challenging the Secretary’s final determination”
denying Agendia’s claims for reimbursement. Sullivan v.
Finkelstein, 496 U.S. 617, 625 (1990). We review de novo
a grant of summary judgment. Kaiser Found. Hosps. v.
Sebelius, 649 F.3d 1153, 1157 (9th Cir. 2011).
III.
A.
We first turn to Agendia’s principal argument that the
process for adopting local coverage determinations requires
notice and comment.
The Medicare Act requires the Secretary to follow a
notice-and-comment procedure for any “rule, requirement,
or other statement of policy (other than a national coverage
determination) that establishes or changes a substantive legal
standard governing . . . the payment for services.” 42 U.S.C.
§ 1395hh(a)(2). This process consists of “notice of the
proposed regulation in the Federal Register and a period of
not less than 60 days for public comment thereon.” Id.
§ 1395hh(b)(1). (As discussed above, national coverage
determinations have a separate notice-and-comment process
that requires that a draft be posted online with thirty days for
public comment. Id. § 1395y(l)(3)(A)–(B).) Agendia
argues that the more formal notice-and-comment process
“arguments on cross-appeal as alternative arguments to affirm the
judgment”).

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10 AGENDIA V . BECERRA
contained in § 1395hh(b)(1) is required for local coverage
determinations. For clarity, we will refer to that process as
the “§ 1395hh notice-and-comment process.”
The parties agree that local coverage determinations
have never undergone the § 1395hh notice-and-comment
process. Agendia contends that this procedural error makes
all local coverage determinations invalid. Because the
Council’s denial of Agendia’s claims for reimbursement
rested on a local coverage determination, Agendia insists
that denial was improper.
We hold that local coverage determinations are not
subject to the § 1395hh notice-and-comment process
because such determinations do not “establish[] or change[]
a substantive legal standard.” Id. § 1395hh(a)(2).4 We have
no occasion to define the outer boundaries of “substantive
legal standard” today because only one standard is
potentially implicated here: an item or service must be
“reasonable and necessary” for a provider to have a right to
payment. Id. § 1395y(a)(1)(A). A local coverage
determination does not “establish[] or change[]” that
standard. See, e.g., Establish, Black’s Law Dictionary (11th
ed. 2019) (“To make or form; to bring about or into
existence.”); Change, Oxford English Dictionary Online,
www.oed.com/view/Entry/30468 (last visited July 8, 2021)
(“To substitute one thing for (another); to replace
(something) with something else.”).
A local coverage determination guides the application of
that legal standard in a particular claim adjudication.
4 Given this holding, we need not decide whether a local coverage
determination is a “rule, requirement, or other statement of policy”
within the meaning of § 1395hh(a)(2).

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AGENDIA V . BECERRA 11
Specifically, it reflects a MAC’s view of what qualifies as
reasonable and necessary, and accordingly it controls that
MAC’s claims determination. But although the agency
adjudicators reviewing a MAC’s decision must consider the
local coverage determination, they are not bound by it. A
qualified independent contractor, an ALJ, and the Council
all ultimately must apply the statutory reasonable and
necessary standard to determine whether to approve a
claim.5
This understanding of the effect of local coverage
determinations is consistent with our court’s precedent. We
have previously explained that the reasonable and necessary
standard is independent of local coverage determinations
because, if such determinations “did not exist, Medicare
contractors would still have an overarching duty to deny
claims for items and services that are not ‘reasonable and
necessary.’” Erringer v. Thompson, 371 F.3d 625, 631
(9th Cir. 2004) (quoting 42 U.S.C. § 1395y(a)(1)(A)). To be
sure, Erringer did not interpret § 1395hh. See 371 F.3d
at 633. But its recognition that the reasonable and necessary
standard would remain unaltered if local coverage
determinations ceased to exist is consistent with our holding
that such determinations neither “establish[]” nor “change[]”
that substantive legal standard.
Our conclusion is also driven by the structure of the
statute. Congress created a special notice-and-comment
5 Citing various dictionaries, our dissenting colleague contends that
the word “change” can also mean “to make different in some particular.”
Dissent at 22. Using this definition would not alter our conclusion. A
local coverage determination simply reflects one contractor’s attempt to
apply the reasonable and necessary standard to a given item or service.
The application of a statutory standard does not—and could not—make
the relevant standard different in any way.

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12 AGENDIA V . BECERRA
process for national coverage determinations, requiring
HHS to post a draft on the internet and provide thirty days
for public comment. 42 U.S.C. § 1395y(l)(3)(A)–(B).
Agendia argues that local coverage determinations must
undergo the more arduous § 1395hh notice-and-comment
process from which national coverage determinations are
expressly exempt: publication in the Federal Register with at
least sixty days for public comment. Id. § 1395hh(b)(1).
Subjecting local coverage determinations, which are not
binding, to a more demanding procedure than their national,
binding counterparts would make little sense. Cf. Util. Air
Regul. Grp. v. EPA, 573 U.S. 302, 320 (2014) (“[W]ords of
a statute must be read in their context and with a view to their
place in the overall statutory scheme.” (quoting FDA v.
Brown & Williamson Tobacco Corp., 529 U.S. 120, 133
(2000))).6
6 In 2016, Congress amended the Medicare Act by adding a separate
public notice requirement specifically for local coverage determinations.
See 21st Century Cures Act, Pub. L. No. 114-255, § 4009, 130 Stat.
1033, 1185 (2016) (codified at 42 U.S.C. § 1395y(l)(5)(D)). Under this
new provision, a MAC must post a local coverage determination online
at least forty-five days before its effective date, as well as a “response to
comments submitted to the contractor with respect to such proposed
determination.” 42 U.S.C. § 1395y(l)(5)(D). Because the amendment is
not retroactive, id. § 1395y note, it does not govern the local coverage
determination challenged by Agendia here.
Nonetheless, we infer from this amendment that local coverage
determinations were not previously subject to the § 1395hh notice-and-
comment process. See FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 143 (2000) (“The classic judicial task of reconciling many
laws enacted over time, and getting them to make sense in combination,
necessarily assumes that the implications of a statute may be altered by
the implications of a later statute.” (quotation marks and citation
omitted)). In enacting this provision, Congress sought to “increase
transparency” in the development of local coverage determinations.

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AGENDIA V . BECERRA 13
Agendia’s arguments to the contrary are not persuasive.
First, Agendia asserts that the Supreme Court’s decision in
Azar v. Allina Health Services, 139 S. Ct. 1804 (2019),
compels the opposite result. In that case, the Secretary
argued that a Medicare reimbursement policy adopted by
HHS was exempt from the § 1395hh notice-and-comment
process. 139 S. Ct. at 1811. The Secretary did not argue that
H.R. Rep. No. 114-190, at 127 (2015). Indeed, the amendment is part of
a pattern of congressional actions adding procedural requirements for
local coverage determinations. See Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. No. 108-173,
§ 731, 117 Stat. 2066, 2350 (imposing a new consultation requirement
for the development of local coverage determinations). This suggests
that Congress passed the 2016 amendment with the understanding that
local coverage determinations were not subject to any notice-and-
comment requirements under the pre-amendment regime.
Our dissenting colleague reads the 2016 amendment as confirming
the applicability of § 1395hh because the amendment “arguably reflects
congressional intent to remove [local coverage determinations] from
§ 1395hh(a)(2)’s stringent notice provisions.” Dissent at 28–29. The
dissent cites no support for this counter-intuitive hypothesis, which
contradicts Congress’s desire to “begin the process of bringing greater
accountability” to the adoption of local coverage determinations. H.R.
Rep. No. 114-190, at 127 (2015) (emphasis added). Moreover, if the
dissent were correct, Congress presumably would have added an express
exemption for local coverage determinations to § 1395hh(a)(2)
simultaneously—as it already had for national coverage determinations.
Cf. Hillman v. Maretta, 569 U.S. 483, 496 (2013) (“We have explained
that where Congress explicitly enumerates certain exceptions to a
general prohibition, additional exceptions are not to be implied, in the
absence of evidence of a contrary legislative intent.” (quotation marks,
alteration, and citation omitted)); United States v. Johnson, 529 U.S. 53,
58 (2000) (“When Congress provides exceptions in a statute, . . . [t]he
proper inference . . . is that Congress considered the issue of exceptions
and, in the end, limited the statute to the ones set forth.”). Congress did
not do so, leaving us confident that Congress did not think local coverage
determinations were ever subject to the § 1395hh notice-and-comment
process.

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14 AGENDIA V . BECERRA
the Medicare Act supplied the controlling legal standard, but
instead he asserted that the adoption of the policy did not
require notice and comment because it was an interpretative,
or “gap-filling,” rule. See id. at 1816–17. The Supreme
Court rejected this argument, deciding only that the
§ 1395hh notice-and-comment process does not contain the
same exemption for interpretative rules as does the
Administrative Procedure Act, 5 U.S.C. § 553(b). 139 S. Ct.
at 1814. Thus, the Court held that “when the government
establishes or changes an avowedly ‘gap’-filling policy, it
can’t evade its notice-and-comment obligations under” the
Medicare Act simply by claiming that the policy is an
interpretative rule. Id. at 1817.
The Court, however, explicitly left open another line of
argument the Secretary could pursue in future cases: “the
government might have sought to argue that the policy at
issue . . . didn’t ‘establis[h] or chang[e]’ a substantive legal
standard—and so didn’t require notice and comment under
§ 1395hh(a)(2)—because the statute itself” provided the
relevant standard. 139 S. Ct. at 1816 (alterations in original).
In Allina, the Secretary did not make that argument, id., but
here the Secretary has done so. And we believe that
argument carries the day. Although local coverage
determinations help adjudicators apply the reasonable and
necessary standard to the facts of a claim, they do not
“establish[] or change[]” the standard for reimbursement
contained in the statute itself. Agendia’s reliance on Allina
is therefore misplaced.
Nor are we persuaded by Agendia’s contention that the
phrase “other than a national coverage determination” in
§ 1395hh implies that local coverage determinations must
undergo the notice-and-comment procedures. 42 U.S.C.
§ 1395hh(a)(2) (emphasis added). Because local coverage

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AGENDIA V . BECERRA 15
determinations clearly do not “establish[] or change[]” a
substantive legal standard, there was no reason for Congress
to exempt them from a requirement that does not, by its plain
terms, apply.
A local coverage determination is therefore valid without
undergoing the § 1395hh notice-and-comment process.
B.
We also reject Agendia’s alternative theory that
contractors’ ability to issue local coverage determinations
reflects an unconstitutional delegation of regulatory power
to private entities. See 42 U.S.C. § 1395kk-1(a)(4)
(authorizing MACs to “develop[] local coverage
determinations”). The statutory and regulatory scheme is
constitutional because the contractors “function
subordinately” to the Secretary. Sunshine Anthracite Coal
Co. v. Adkins, 310 U.S. 381, 399 (1940). The Secretary
retains the relevant decision-making power: although HHS
regulations provide that local coverage determinations are
entitled to “substantial deference,” the regulations also
provide that ALJs and the Council can refuse to apply a local
coverage determination in any claim appeal if they
adequately explain their reasons for departing from it.7 See
42 C.F.R. § 405.1062(a)–(b). Moreover, the Secretary can
prescribe requirements for contractors issuing local
coverage determinations,8 and he can issue national
7 The ALJ reviewing Agendia’s claims did precisely that, even
though the Council ultimately concluded that the ALJ’s reasoning was
unpersuasive.
8 See generally Medicare Program Integrity Manual: Chapter 13—
Local Coverage Determinations (rev. 2019), https://www.cms.gov/Reg
ulations-and-Guidance/Guidance/Manuals/downloads/pim83c13.pdf

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16 AGENDIA V . BECERRA
coverage determinations that supersede any conflicting local
coverage determination, see 42 C.F.R. § 405.1060(a)(4).
ALJs and the Council can also review and invalidate a local
coverage determination in a challenge brought by a
Medicare beneficiary. See id. §§ 426.400–426.490.
Because MACs “function subordinately” to the Secretary,
the Constitution does not forbid them from carrying out the
administrative function of issuing local coverage
determinations.
Agendia resists this conclusion by arguing that the
Secretary’s oversight is limited. First, it highlights that
“unappealed Medicare claims denials based on [local
coverage determinations] and other MAC policies are final.”
While true, the fact that unappealed decisions are not
reviewed does not mean that the Secretary—acting through
an ALJ or the Council—cannot approve, disapprove, or
modify a contractor’s determination if an appeal is brought.
Cf. Adkins, 310 U.S. at 388. That a particular claimant can
waive or forfeit its challenge to a contractor’s decision does
not make the contractor unaccountable to the Secretary.
Second, Agendia contends that because HHS regulations
allow ALJs and the Council to invalidate a local coverage
determination only in a beneficiary’s (rather than a
provider’s) appeal, Agendia must separately appeal each
reimbursement claim denied by a MAC even if each is based
on the same local coverage determination. See 42 C.F.R.
§ 405.1062(c) (“An ALJ or . . . the Council may not set aside
or review the validity of a[] . . . [local coverage
determination] for purposes of a claim appeal.”); id.
§§ 426.110, 426.320 (precluding a provider from
(requiring MACs to follow certain procedures when issuing local
coverage determinations).

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AGENDIA V . BECERRA 17
challenging a local coverage determination directly).
Although we recognize that separate appeals are
burdensome, Agendia cites no authority for the proposition
that burdensome limitations on remedies in an
administrative review process can create an unconstitutional
delegation.
Finally, Agendia contends that consideration of local
coverage determinations in litigation under the False Claims
Act, 31 U.S.C. § 3729 et seq., demonstrates that those
determinations create regulatory policy that goes unchecked
by HHS. False claims, such as fraudulent requests for
Medicare reimbursement, must be material to be actionable.
United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d
890, 899 (9th Cir. 2017). We have held that the existence of
a local coverage determination can be a relevant factor in
determining whether a false statement was material to the
approval of a Medicare reimbursement, and therefore
probative of whether a plaintiff has satisfied her burden
under the False Claims Act. See Godecke v. Kinetic
Concepts, Inc., 937 F.3d 1201, 1213 (9th Cir. 2019).
Consideration of local coverage determinations in this
manner, however, does not demonstrate that the Secretary
lacks control over the MACs issuing and applying local
coverage determinations.
IV.
Because local coverage determinations do not require
notice and comment under 42 U.S.C. § 1395hh, and because
the Constitution permits contractors to issue such

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18 AGENDIA V . BECERRA
determinations, judgment must be entered in favor of the
Secretary.
REVERSED.
BLOCK, District Judge, dissenting:
Agendia has been trying to secure agency approval for
its BluePrint and TargetPrint tests for almost a decade.1 In
2018, it nearly succeeded. After a hearing, an ALJ issued a
detailed decision that was “fully favorable” to Agendia. But
Agendia’s victory was fleeting. The Medicare Appeals
Council decided, on its own motion, to review and reverse
the ALJ’s decision. Specifically, the Council held that the
favorable decision must be reversed because it “was
inconsistent with the LCDs in effect during the dates at
issue,” and there was “no reason not to apply substantial
deference to the LCD[s].” It described the ALJ’s failure to
defer to the LCDs as “an error of law material to the outcome
of [Agendia’s] claim.” That error obviated the need to
determine whether the ALJ’s decision was supported by
sufficient evidence.
Consequently, the Council’s own statements reflect that
an ALJ can be reversed for failing to follow an LCD, and
thus that LCDs significantly alter the nature of appellate
review in Medicare cases. See generally 42 U.S.C.
§ 1395y(a)(1)(A) (setting out the statutory “reasonable and
necessary” standard). Had there been no LCD applicable to
1 I agree with the majority’s factual recitations and assume the
reader’s familiarity with them. I likewise assume familiarity with the
shorthand in the majority opinion (e.g., “LCD” for “Local Coverage
Determination,” “ALJ” for “Administrative Law Judge” etc.).

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AGENDIA V . BECERRA 19
Agendia’s tests, the ALJ’s determination that they were
“reasonable and necessary”—which was supported by a
detailed analysis of live physician testimony—might well
have been upheld and would at least have been evaluated on
its merits. Instead, the ALJ’s factual analysis was ignored
and his decision reversed due to its “inconsistency” with a
purportedly nonbinding LCD.
The majority acknowledges all these facts. Nonetheless,
it insists that LCDs neither “establish [nor] change a
substantive legal standard” because LCDs merely “guide”
and do not replace the statutory “reasonable and necessary”
standard. This argument elevates form over substance. In
Allina Health Servs. v. Price (Allina I), then Judge
Kavanaugh explained that, “a substantive legal standard at a
minimum includes a standard that creates, defines and
regulates the rights, duties and powers of parties.” 863 F.3d
937, 943 (D.C. Cir. 2017) (emphasis added) (internal
citations omitted). Because LCDs are binding at the initial
stage of the Medicare claim adjudication process and can
compel the reversal of an ALJ’s judgment, they “define and
regulate the rights” of parties even if, as the majority says,
they also “guide” the application of a statutory standard. See
Azar v. Allina Health Servs. (Allina II), 139 S. Ct. 1804,
1812 (2019) (“if ‘a so called policy statement is in purpose
or likely effect . . .a binding rule of substantive law, . . . it
‘will be taken for what it is’”) (quoting Guardian Fed. Sav.
and Loan Ass’n v. Fed. Sav. Loan Ins. Corp., 589 F.2d 658,
666–67 (D.C. Cir. 1978)) (emphasis added). Put another
way, because LCDs bind initial claim adjudicators and
“narrowly limit[]” subsequent reviewers’ discretion to
weigh evidence and consider arguments, they “establish” a
standard at the initial stage of review and “change” the
standards applied on appellate review. Fed. Sav. Loan Ins.
Corp., 589 F.2d at 666–67; accord Agendia, Inc. v. Azar,

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20 AGENDIA V . BECERRA
420 F. Supp. 3d 985, 997–98 (C.D.C.A. 2019) (concluding
that a standard can be “substantive [regardless of] whether it
is binding or entitled to substantial deference”). See
generally Change, Merriam Webster Dictionary Online,
https://www.merriam-webster.com/dictionary/change (last
accessed Jun. 11, 2021) (defining “change” as “to make
different in some particular”). They should therefore be
subject to notice and comment under 42 U.S.C.
§ 1395hh(a)(2) (requiring notice and comment when a “rule,
requirement, or other statement of policy. . . establishes or
changes a substantive legal standard”) (emphasis added).
Because the majority’s selective readings of dictionaries
and abstract analysis of the Medicare statute’s “structure” do
not change the reality of the administrative proceeding
below, I respectfully dissent from Part III.A of the majority
opinion, which addresses Agendia’s statutory claims, and
from the reversal of the district court’s grant of summary
judgment to Agendia. I join in Part III.B of the majority’s
opinion which rejects Agendia’s constitutional, non-
delegation argument.
I.
The majority attempts to obscure the reality of the
Medicare claims process—and the practical effect LCDs had
on Agendia’s claim—in two ways.
First, the majority holds that LCDs do not “change
substantive legal standards” because, notwithstanding any
relevant LCDs, Medicare ALJs and the Appeals Council
“ultimately must apply the statutory reasonable and
necessary standard.” Citing the Oxford English Dictionary
(“OED”), the majority implies that a “change” occurs only
when one thing is “substituted for” or “replaced with”
another. See Change, Oxford English Dictionary Online,

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AGENDIA V . BECERRA 21
www.oed.com/view/Entry/30468 (last visited Jun. 11,
2021). It then reasons that, because LCDs do not “replace”
the statutory standard, they do not “change” that standard
within the meaning of § 1395hh(a)(2).
Second, the majority contends that its decision to exempt
LCDs from 42 U.S.C. § 1395hh(a)(2)’s notice and comment
requirements is “driven by the structure of the [Medicare]
statute.” Specifically, the majority argues that it would not
make sense to “[subject] local coverage determinations,
which are not binding, to a more demanding procedure than
their national, binding counterparts,” the NCDs.
Both arguments are flawed. Neither provides more than
a fig leaf for the majority’s efforts to obscure the fact that the
Council reversed an ALJ’s decision because his opinion was
“inconsistent with the LCDs in effect during the dates at
issue.”
A. Definitional Arguments
The phrase “substantive legal standard” and its corollary,
“change a substantive legal standard,” appear to be unique.
See Allina II, 139 S. Ct. at 1814 (“the phrase ‘substantive
legal standard’ . . .appears in § 1395hh(a)(2) and apparently
nowhere else in the U.S. Code”). Thus, the majority was
within its rights to analyze those terms’ “ordinary meaning”
and to consider the dictionary definitions of relevant words.
See United States v. Cox, 963 F.3d 915, 920 (9th Cir. 2020)
(Where “[the] statute does not define [a word] . . .we
construe the word pursuant to its ordinary meaning. To
determine ordinary meaning, we consider dictionary
definitions”).
However, the majority’s “ordinary meaning” analysis is
neither complete nor persuasive. It considers only a single

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22 AGENDIA V . BECERRA
definition for the word “change,” drawn from the nonlegal
Oxford English Dictionary. Cf. Cox, 963 F.3d at 920–21
(rejecting a defendant’s proposed definition of the undefined
term, “notice,” because “most standard English-language
dictionary. . . definitions do not define notice in relation to
audience size”) (emphasis added); see also Wisconsin Cent.
Ltd. v. United States, 138 S. Ct. 2067, 2070–71 (2018)
(basing “ordinary meaning” analysis on three different
dictionary definitions and a prior interpretation drawn from
caselaw). Significantly, the word “change” can also mean
“to make different in some particular” (Merriam Webster),
“to make or become different” (Cambridge Dictionary), or
“to alter; . . . [and] to make different in some particular”
(Black’s Law Dictionary, 6th ed.). See Change, Merriam
Webster Dictionary Online, https://www.merriam-
webster.com/dictionary/change (last accessed Jun. 11,
2021); Change, Cambridge Dictionary Online,
https://dictionary.cambridge.org/us/dictionary/english/chan
ge (last accessed Jun. 11, 2021); Change, Black’s Law
Dictionary (6th ed. 1990). Indeed, even the majority’s use of
the OED is suspect insofar as it refers to the definition of the
term “change” listed under the heading “[s]enses relating to
substitution or exchange” but ignores all the definitions
under the heading “[s]enses relating to alteration, variation
or mutability,” several of which mirror the definitions I list
above. See Change, Oxford English Dictionary Online,
www.oed.com/view/Entry/30468 (last visited Jun. 11,
2021).
Had the majority considered these alternative
definitions, it might have concluded—as I have—that a
standard can “change” even if it is not replaced root and
branch. It might also have realized that grafting
presumptions and deference regimes onto statutory rules
substantially alters the scope of the conduct those rules

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AGENDIA V . BECERRA 23
cover, “making them”—and the outcomes that result from
their application to real cases—“different in some
particular.” Such an interpretation would be consistent with
the ordinary meaning of the word “change” and a more
accurate reflection of the decisive role LCDs played in the
administrative proceeding below.2
Because the majority’s definitional analysis is deficient,
I reject its claim that 42 U.S.C. § 1395hh(a)(2)’s notice and
comment requirement “does not, by its plain terms, apply”
to LCDs. The “plain meaning” of the phrase “change a
substantive legal standard” is ambiguous, and the majority
offers no compelling reason to favor its interpretation over
any other.
B. Structural Arguments
The majority’s structural analysis ignores the plain text
of the statute, its legislative history and the canons of
statutory interpretation.
42 U.S.C. § 1395hh(a)(2) states: “No rule, requirement
or statement of policy (other than a national coverage
determination) that establishes or changes a substantive legal
standard. . . shall take effect unless it is promulgated by the
2 The majority’s citation to Erringer v. Thompson, 371 F.3d 625,
631 (9th Cir. 2004), does not save its deficient analysis. Even if that case
applied to § 1395hh(a)(2)—and the majority concedes that it does not—
the fact that the agency would still have a duty to apply the statutory
standard even “if. . . LCDs did not exist” does not imply that existing
LCDs have no effect on the underlying standard. As explained above,
LCDs can “change” the underlying standard without supplanting it.

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24 AGENDIA V . BECERRA
Secretary by regulation.”3 This language establishes only
one exception—for NCDs—and expressly provides that no
other “rule, requirement or statement of policy” shall fall
outside its scope. We are therefore left with a statute that
expressly exempts NCDs and nothing else, along with a
congressional record that suggests the legislature meant to
give § 1395hh(a)(2) a broad scope. See H.R. Rep. No. 100-
391(l), at 430 (1987) (“The only explicit exclusion [from
§ 1395hh rulemaking] would be national coverage
determinations. The Committee expects, in any case in
which there might be a doubt as to whether a policy is
covered by this provision, to treat [the policy] as if [the
provision] applied”).
The lack of an explicit exemption for LCDs is, however,
no obstacle for the majority, which concludes that Congress
must have intended to exempt LCDs from § 1395hh(a)(2),
because it “would make little sense” for it to have done
otherwise. But it is not for this Court to tell Congress what it
ought to have done or say what it “makes little sense” for
Congress to do. Nor should the majority assume, without
reason or citation to the congressional record, that Congress
left LCDs out of § 1395hh(a)(2) because it obviously
thought them insubstantial. “Courts aren’t free to rewrite
clear statutes under the banner of [their] own policy
concerns,” even if those statutes appear illogical, are poorly
constructed or function sub-optimally. Allina II, 139 S. Ct.
at 1815. If Congress had wanted to exempt LCDs from
3 The parties “[did] not contest that [an] LCD is at least a statement
of policy” at the district court level. Agendia, 420 F. Supp. 3d at 997.
Accordingly, I assume for the sake of argument that LCDs are at least
“statements of policy.” See AMA Multimedia, LLC v. Wanat, 970 F.3d
1201, 1213–14 (2d Cir. 2020) (“Absent exceptional circumstances, we
generally will not consider arguments raised for the first time on appeal”)
(quoting In re Am. W. Airlines, 217 F.3d 1161, 1165 (9th Cir. 2000)).

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AGENDIA V . BECERRA 25
§ 1395hh(a)(2)’s requirements, it could have easily added
the phrase “and LCDs” to that subsection. It has not done so.
Cf. H.R. Rep. No. 100-391(l), at 430 (1987) (acknowledging
that “national coverage determinations” are
§ 1395hh(a)(2)’s “only explicit exclusion”) (emphasis
added). If “the government doesn’t like Congress’s notice
and comment policy choices, it must take its complaints
there.”4 Allina II, 139 S. Ct. at 1815.
But even assuming that the majority is right to look
beyond the text of the statute, it fails to show why its
interpretation of congressional intent is the right one. Cf.
Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1631 (2018)
(“[L]egislative history is not the law”). As Justice Gorsuch
points out in Allina II, § 1395hh’s “legislative history is
ambiguous at best.” 139 S. Ct. at 1814. In seeming support
of the majority’s reading, a 1986 congressional report
suggested that § 1395hh would not “require the Secretary to
provide an opportunity for public comment for items (such
as interpretive rules, general statements of policy, or rules of
agency, organization, procedure or practice) that are not
currently subject to that requirement.” H.R. Conf. Rep. No.
99-1012, at 311 (1986). One year later, however, Congress
amended the statute and issued a second report, which
expressed “concern that important policies are being
developed without the benefit of the public notice and
comment period and, with growing frequency, are being
transmitted, if at all, through manual instructions and other
4 The majority would likely respond that this critique is inapplicable
because “there was no reason for Congress to exempt [LCDs] from a
requirement that does not, by its plain terms, apply.” I reject the premise
of this defense, which assumes the correctness of the majority’s selective
definitional arguments. The “plain meaning” of the phrase “change a
substantive legal standard” is unclear, and the majority’s interpretation
is not the only plausible one.

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26 AGENDIA V . BECERRA
informal means.” H.R. Rep. No. 100-391(l), at 430 (1987).
In that Report, the legislature also suggests that “the
Committee Bill”—which became the 1987 version of
§ 1395hh—would “define those policies which must be
subject to the rulemaking procedure [in § 1395hh]” to
include “all those [policies] which are of general
applicability and have a significant effect on Medicare
enrollees, on providers, or on the administration of the
program,” and that § 1395hh’s rulemaking requirements are
“intended to apply to the duties and responsibilities of. . .
[among other entities] carriers and intermediaries who
administer the program [i.e. contractors].”5 Id. Such broad
language could easily capture LCDs.
In light of the foregoing, I agree with Justice Gorsuch
that the legislative history of § 1395hh(a)(2) is ambiguous.
While I readily acknowledge that some portions of the
congressional record favor the majority’s decision to exempt
LCDs from notice and comment rulemaking,6 the more
5 Before 2003, Medicare’s administrative contractors were called
“fiscal intermediaries.” Dep’t of Health & Hum. Servs., Medicare
Administrative Contractors, https://www.cms.gov/Medicare/Medicare-
Contracting/Medicare-Administrative-Contractors/MedicareAdministrative
Contractors (last accessed Jun. 11, 2021).
6 For instance, the 1987 Report states that “there will still remain
policy matters. . .that are not required to go through public rulemaking.”
H.R. Rep. No. 100-391(l), at 430 (1987). It also discusses
“policies. . .adopted by the fiscal intermediaries [i.e.
contractors]. . .includ[ing] payment screens applicable only in the area
served by the contractor [i.e. LCDs]” in their own paragraph, perhaps
implying that these policies are distinct from the “policies of general
applicability” that must go through notice and comment rulemaking. Id.
at 431. However, the case for inferred intent is by no means
overwhelming, particularly since the paragraph discussing “payment
screens applicable only in [a contractor’s area]” suggests that Congress

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AGENDIA V . BECERRA 27
persuasive reading is that Congress wanted Medicare rules
to have the “benefit of notice and comment rulemaking,” and
therefore that it intended to give § 1395hh’s rulemaking
provisions the broadest possible scope. See H.R. Rep. No.
100-391(l), at 430 (1987). Such intent is consistent with
Congress’s own statements in the legislative record and
aligns with a robust judicial consensus on the salutary effect
of notice and comment rulemaking. See, e.g. United States
v. Reynolds, 710 F.3d 498, 517 (3d Cir. 2013) (explaining
that “among the purposes [of notice and comment
rulemaking] are (1) to ensure that agency regulations are
tested via exposure to diverse public comment, (2) to ensure
fairness to affected parties, and (3) to give affected parties
an opportunity to develop evidence in the record to support
their objections to the rule and thereby enhance the quality
of judicial review”) (internal citations omitted); McLouth
Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1325 (D.C.
Cir. 1988) (notice and comment rulemaking “allow[s] the
agency to benefit from the expertise and input of parties who
file comments. . . and [ensures] that the agency maintains a
flexible and open-minded attitude toward its own rules”)
(internal citations omitted); Batterton v. Marshall, 648 F.2d
694, 703 (D.C. Cir. 1980) (“The essential purpose of. . .
notice and comment opportunities is to reintroduce public
participation and fairness to affected parties after
wanted to impose notice requirements on contractors who draft local
policies, and thus that it felt some additional process was needed. Id.
(requiring contractors to develop a process “reasonably designed to
provide notice to parties likely to be affected by [contractor-specific]
policies”). Because an LCD-specific notice process was not added until
2016, and the Report itself reflects intent to resolve ambiguity in favor
of requiring notice and comment rulemaking, I conclude that the
Congress of 1987 likely believed that contractor-specific determinations,
like LCDs, could be subject to § 1395hh(a)(2)’s rulemaking
requirements.

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28 AGENDIA V . BECERRA
governmental authority has been delegated to
unrepresentative agencies”). The majority fails to show why
it would “make little sense” for Congress to seek these
benefits for LCDs.
Moreover, Congress’s statements in the 1987 Report
suggest that it wanted courts to determine which policies are
subject to rulemaking requirements based on the “effects”
those policies have on stakeholders in the Medicare system.
H.R. Rep. No. 100-391(l), at 430 (1987) (“The policies
affected would be all those which. . .have a significant effect
on Medicare enrollees, on providers, or on the administration
of the program”). Because LCDs decide coverage issues as
a practical matter, they have “a significant effect” on
companies like Agendia and the Medicare beneficiaries they
serve, so Congress probably meant them to be subject to
rulemaking requirements. At the very least, Congress did not
clearly intend to exempt them from such requirements.
Finally, recent changes to the Medicare statute appear to
confirm that the LCDs used to deny Agendia’s claims should
have been subject to § 1395hh(a)(2)’s notice and comment
procedure. In 2016, Congress amended the Medicare statute
to create a specific notice procedure for LCDs. See 42 U.S.C.
§ 1395y(l)(5)(D); see also 21st Century Cures Act, Pub. L.
No. 114-255, § 4009, 130 Stat. 1033, 1185 (2016). The 2016
amendment does not apply to the LCDs at issue in this case,
but its passage may shed some light on Congress’s
understanding of the pre-2016 notice and comment
requirements and their application to LCDs. See, e.g., Food
& Drug Admin. v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 143 (2000) (finding that “a specific policy
embodied in a later federal statute should control our
construction of the [earlier] statute”) (internal citations
omitted). Specifically, because “it is a commonplace of

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AGENDIA V . BECERRA 29
statutory construction that the specific governs the general,”
and courts will typically “construe a specific provision as an
exception to the general one,” the passage of the 2016
amendment arguably reflects congressional intent to remove
LCDs from § 1395hh(a)(2)’s stringent notice provisions and
subject them to § 1395y(l)(5)(D)’s more lenient ones. See
RadLAX Gateway Hotel, LLC v. Amalgamated Bank,
566 U.S. 639, 645 (2012) (citations omitted). It therefore
supports an inference of congressional understanding that,
prior to 2016, LCDs fell under § 1395hh(a)(2)’s catchall
provision.7
7 Underscoring the ambiguity of the Medicare statutory scheme—
and with it, the imprudence of prioritizing “structure” over text in
statutory interpretation—the majority draws the opposite inference from
the 2016 amendment, namely “that local coverage determinations were
not previously subject to the § 1395hh notice-and-comment
requirements.” This conclusion rests on (1) legislative materials from
2003 and 2015, which suggest that the amendment is “part of pattern of
adding procedural requirements for local coverage determinations. . .
.[and imply] that Congress passed the 2016 amendment with the
understanding that local coverage determinations were not subject to any
notice-and-comment requirements under the pre-amendment regime”;
and (2) the principle of statutory interpretation that “when Congress
provides exceptions in a statute. . .the proper inference. . .is that Congress
considered the issue of exceptions and, in the end, limited the statute to
the ones set forth.” United States v. Johnson, 529 U.S. 53, 58 (2000)
(cleaned up).
As to the first argument, I agree with the majority that the legislative
history of the Medicare Act reflects consistent concern that LCDs and
other policies are being enacted without adequate procedural safeguards.
See generally H.R. Rep. No. 100-391(l), at 430 (1987). However, unlike
the majority, I refuse to twist Congress’s understandable concern into an
argument against imposing further safeguards. See Amalg. Transit
Union Local 1398, AFL-CIO v. Laidlaw Transit Servs., Inc. 448 F.3d
1092, 1093 (9th Cir. 2006) (en banc) (“When we interpret a statute, our
purpose is always to discern the intent of Congress”) (internal quotations

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30 AGENDIA V . BECERRA
In sum, I reject the majority’s “structural” analysis
because it is not grounded in the text of the Medicare Act or
and citations omitted). I likewise find it peculiar that the majority relies
heavily on the legislative history of the 2016 amendment to refute my
“structural” analysis of the Medicare Act but refuses to engage with the
history of the provision we interpret today: § 1395hh(a)(2). The majority
may not pick and choose when to consider Congress’s intentions, and it
certainly may not consider only those portions of the legislative record
that support its preferred outcome.
The second argument is the product of a selective, outcome-driven
application of interpretive canon. If the majority truly believed that
Congress’s choice to enumerate exceptions to a statute implies intent to
“limit[] the statute to the [exceptions] set forth,” it would agree that
Congress’s choice to explicitly exempt NCDs—and only NCDs—from
§ 1395hh(a)(2) suggests that an “additional exception[]” for LCDs is
“not to be implied in the absence of contrary legislative intent.” Cf.
Hillman v. Maretta, 569 U.S. 483, 496 (2013) (internal quotations and
citations omitted); Johnson, 529 U.S. at 58. And of course, the majority
offers no competing account of the “legislative intent” behind
§ 1395hh(a)(2).
To the extent that the majority believes—again without citation or
explanation—that the interpretive principle articulated in Maretta and
Johnson applies solely to the 2016 amendment, I respond that my
interpretation of the amendment rests on another principle cited by the
majority, namely the principle that “the implications of a statute may be
altered by the implications of a later statute.” See United States v. Fausto,
484 U.S. 439, 453 (1988). Put another way, my interpretation posits that
the 2016 amendment may reflect congressional intent to clarify that
LCDs should no longer be considered “substantive legal standards,”
thereby altering § 1395hh(a)(2)’s “implications” for LCDs.
All that said, I hesitate to draw any strong conclusions from the
passage of the 2016 amendment. Unlike the majority, my analysis is not
“driven by the structure of the [Medicare] statute,” but rather by that
statute’s text and legislative history. I include the “structural” analysis
above not because I believe it is decisive, but simply to show that the
“structure” of the Medicare Act is ambiguous and does not lead
inevitably to the majority’s conclusion.

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AGENDIA V . BECERRA 31
its legislative history. It is also undercut by subsequent
amendments to that statute. The “structure” of the Medicare
statute is ambiguous and does not clearly support the
majority’s conclusion.
II.
My disagreement with the majority is fundamentally
definitional. Without defining its terms or citing to the
congressional record, the majority gives the phrase
“substantive legal standard” a narrow construction that
excludes LCDs.8 By contrast, I define the term “substantive
legal standard” to include all “rules” and “statements of
policy” that decide Medicare claims, impact the rights of
parties in the Medicare adjudicative process, or otherwise
have “a significant effect” on stakeholders in the Medicare
system. See H.R. Rep. No. 100-391(l), at 430 (1987) (“The
policies affected would be all those which. . .have a
significant effect on Medicare enrollees, on providers, or on
the administration of the program”). I believe my definition
takes a more realistic view of the role LCDs played in the
proceedings below than does the majority, that it shows
proper respect to § 1395hh(a)(2)’s plain language, and that
it is consistent with that section’s legislative history.
Today’s opinion is a missed opportunity. In Allina II,
Justice Gorsuch opened the door to judicial interpretation of
the sui generis phrase “change a substantive legal standard.”
139 S. Ct. at 1814. This Court could have taken up the
Supreme Court’s challenge and defined the term
8 Because the majority found “no occasion to define the outer
boundaries of [what constitutes a] substantive legal standard,” it is
unclear which administrative rules, if any, the majority would deem
“substantive.”

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32 AGENDIA V . BECERRA
“substantive legal standard” in a realistic manner. Perhaps
the Supreme Court may now decide to address this important
and unresolved issue.
But for now, the majority relies on an overly narrow
semantic argument and a “structural” analysis that ignores
the text and history of the statute it claims to interpret. In so
doing, the majority obscures the substantial effects that
LCDs have on companies like Agendia and ultimately, on
Medicare beneficiaries.
I respectfully dissent.

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