Circuit Split Remains, Deference Afforded to Informal Agency Approvals

The Supreme Court denied California Medical Association’s (CMA) petition for a writ of certiorari that sought review of the Ninth Circuit’s ruling in Managed Pharmacy Care v Sebelius. The question presented to the Supreme Court was whether the Ninth Circuit erred when it gave Chevron, U.S.A., Inc. v Natural Resources Defense Council, Inc. deference to an “implicit and informal” CMS approval of lowered Medicaid reimbursement rates.

As was previously reported, the Ninth Circuit reversed the district court’s preliminary injunction in Managed Pharmacy Care v Sebelius, enjoining the California Medicaid director and CMS from reducing Medicaid reimbursement rates by ten percent. The Ninth Circuit sided with the Third, Fifth, Sixth, and D.C. circuit courts in giving deference to CMS under the Chevron decision. However, the circuit courts are split, as the First, Second, and Eighth Circuits have used a lower level of deference, as set forth in Skidmore v Swift & Co., with regard to informal agency approvals.

CMA’s petition for certiorari argued that the issue presented was important, recurring, and too consequential to not decide. Further, given the lower court split on the level of deference that should be afforded to agency approvals, CMA argued that the Supreme Court’s decision would make an “enormous difference,” as it could impact access to health care for millions of individuals in California alone.