JACOBS, Chief Judge.
Michael O. Leavitt, the Secretary of the United States Department of Health and Human Services (the "Secretary" of "HHS"), appeals from the decision of the United States District Court for the District of Connecticut (Dorsey, J.), which reversed on motion for summary judgment a final decision of the Secretary denying to Yale-New Haven Hospital ("Yale") Medicare coverage for treatment involving investigational cardiac devices provided to 48 patients. The Secretary denied reimbursement on the ground that the devices had not received premarket approval from the FDA; in the district court, Yale successfully argued that the denial of the claims on the categorical ground of FDA classification was predicated on a rule altering the previous Medicare practice of conducting device-by-device review of safety and efficacy, and that the rule change was improperly adopted. We agree with the district court that the new rule is unenforceable because the Secretary did not satisfactorily explain his reasons for its promulgation. Nevertheless, we vacate the judgment of the district court (which reversed) and remand the case to the district
Medicare, which at the time of the events at issue was administered by the Health Care Financing Administration ("HCFA")
Under certain circumstances, see 42 C.F.R. § 405.710(b), a provider may seek administrative and judicial review of a fiscal intermediary's initial coverage determination, see 42 U.S.C. § 1395ff; see also 42 C.F.R. §§ 405. 702, 405. 704(b), (c)(1); 421. 100(a), (b). The successive levels of administrative review available to a provider are [i] reconsideration by the fiscal intermediary, see 42 C.F.R. §§ 405.710, 405.711; [ii] review before an administrative law judge, see 42 C.F.R. §§ 405.720, 405.722; and [iii] review before the Medicare Appeals Council ("Appeals Council"), which may also review the ALJ's decision sua sponte, see 20 C.F.R. §§ 404.967-404.969. A provider that has exhausted its administrative remedies may seek judicial review of the Secretary's final decision under 42 U.S.C. § 1395ff(b) (incorporating 42 U.S.C. § 405(g)). See Weinberger v. Salfi, 422 U.S. 749, 762-65, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975).
With a few exceptions, the Medicare Act does not specify which devices are covered or excluded from coverage. Broad wording excludes from Medicare Part A coverage "any expenses incurred for items or
The Medicare reimbursement manuals issued to fiscal intermediaries in July 1986, see Yale-New Haven Hosp., 162 F.Supp.2d at 59, announced that only medical devices that had received FDA premarket approval for commercial distribution were covered under Medicare. The FDA is authorized to regulate medical devices by the Medical Devices Amendments Act of 1976 ("MDA"), 21 U.S.C. § 360 et seq. See Medtronic, Inc. v. Lohr, 518 U.S. 470, 476-77, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Under the MDA, each medical device is classified according to the stringency of regulatory control necessary to ensure safety and effectiveness. See 21 U.S.C. § 360c(a). Certain devices, such as those at issue in this case, require FDA "premarket approval" before they may be commercially distributed to the general public. Such "Class III" devices are so designated if (i) the controls provided for under Classes I and II are insufficient to guarantee the device's safety and effectiveness and (ii) the device (a) is "purported or represented to be for a use in supporting or sustaining human life or . . . of substantial importance in preventing impairment of human health" or (b) "presents a potential unreasonable risk of illness or injury." 21 U.S.C. § 360c(a)(1)(C)(ii)(II). To obtain premarket approval, the manufacturer must furnish "detailed information about the device's testing, design, components, performance standards, manufacturing, packaging, and labeling" sufficient to reasonably assure the FDA that the device is safe and effective. Martello v. Ciba Vision Corp., 42 F.3d 1167, 1168 (8th Cir. 1994) (citing 21 U.S.C. § 360e(c)(1); 21 C.F.R. § 814.20 (1994)); 21 U.S.C. § 360c (a)(1)(C).
In 1980, the FDA promulgated regulations establishing an investigational device exemption ("IDE"), which authorizes the lawful sale—to hospitals and physicians, for use in clinical trials—of certain devices that have not obtained premarket approval. See 21 U.S.C. § 360j(g). The IDE exemption is intended "to encourage . . . the discovery and development of useful devices" by generating the data necessary to determine safety and effectiveness. Id.
The 1986 Manual Provision explained Medicare's policy with respect medical devices that had received IDEs but had not been accorded premarket approval. The provision, identified as a "New Policy," instructed intermediaries to adopt a per se rule against reimbursement for these devices:
Yale-New Haven, 162 F.Supp.2d at 59. Prior to the FDA's adoption of the IDE in 1980 (and promulgation of the per se rule against IDE reimbursement in the 1986
The 1986 Manual Provision, or similar initiatives, evidently provoked some congressional disapproval. A (non-retroactive) 1987 amendment to the Medicare Act, 42 U.S.C. § 1395hh(a)(2), explicitly forbade the Secretary from promulgating any "rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals, entities, or organizations to furnish or receive services or benefits under this subchapter . . . unless it is promulgated by the Secretary" through notice-and-comment rulemaking. See Warder v. Shalala, 149 F.3d 73, 79 n. 4 (1st Cir.1998). This refraining of settled law under the Administrative Procedure Act (see id. at 79) can be read as a congressional shot across the bow: The House Budget Committee noted its concern that "important policies are being developed without benefit of the public notice and comment period and, with growing frequency, are being transmitted, if at all, through manual instructions and other informal means." H.R.Rep. No. 100-391, at 430 (1987).
In 1995, the 1986 Manual Provision was superseded by published final regulations governing coverage of IDE devices ("1995 Regulations"). Under the 1995 Regulations, the Medicare coverage determination was made to depend on an exquisite adjustment in the FDA status-classification system, which was developed by the FDA in conjunction with HCFA. See 42 C.F.R. §§ 405.203, 405.205, 405.211; see also 61 Fed.Reg. 7011 (Feb. 23, 1996). As long as all other coverage requirements were met, the 1995 Regulations extended coverage to IDEs classified by the FDA as Category B (non-experimental/non-investigational), which included those Class III devices that constituted refinements or replications of technologies that had already been demonstrated as being safe and effective.
This case arises out of the efforts of the Secretary to recover $1.5 million paid to
These claims have been embroiled in prolonged litigation. Yale, along with 131 other hospitals, was a defendant in a sealed qui tam action brought in 1994, alleging that the hospitals violated the False Claims Act by knowingly submitting false Medicare claims for payment of services involving investigational cardiac devices.
The allegations in the qui tam action prodded the Secretary to seek information from Yale about Medicare claims submitted for services involving ICDs. Yale's Medicare fiscal intermediary ultimately determined that Yale had been improperly reimbursed for treatment involving the ICDs, and informed Yale that the erroneous payments would be recouped from the ongoing stream of Medicare reimbursements. Yale, joined by the Medicare beneficiaries who received ICDs, successfully requested hearings before an ALJ. In June 1996, the ALJ—observing that the 1986 Manual Provision had been held invalid in Cedars-Sinai—found that Yale had presented sufficient evidence to demonstrate that the ICDs were "reasonable and necessary" to each beneficiary's treatment. Accordingly, the ALJ ruled in favor of Yale and the beneficiaries on each of the claims. The Appeals Council reviewed the ALJ's decision sua sponte, and reversed the ALJ in a single consolidated decision issued in October 1999. By that time, the Ninth Circuit had vacated the district court decision in Cedars-Sinai that had invalidated the 1986 Manual Provision (the Appeals Council having stayed its decision to await the Ninth Circuit ruling). The Appeals Council sustained the denial of Medicare reimbursement on the grounds that the 1986 Manual Provision (i) remained in effect as a valid rule, (ii) was applicable to the devices at issue, and (iii) was entitled to deference. See Appeals Council Decision at 5-6. In the alternative, the Appeals Council ruled that a remand to the ALJ would otherwise be needed because the record evidence did not support the conclusion that the devices had been shown to be "safe and effective" or "generally accepted." Id. at 6 n. 3.
The Secretary appeals the district court judgment, arguing that (i) it is not arbitrary and capricious for the Secretary to have denied Yale's reimbursement claims on the ground that the devices lacked FDA premarket approval; (ii) substantial evidence supports the Secretary's conclusion that Yale failed to show that the devices were safe and effective; and (iii) even if the Secretary's determination is arbitrary and capricious and unsupported by substantial evidence, the appropriate remedy would be remand to the agency for further proceedings rather than reversal (per the district court judgment). Yale and the 48 individual beneficiaries cross-appeal the specific holding of the district court that because the 1986 Manual Provision was an interpretive—not legislative—rule, its promulgation did not require notice-and-comment rulemaking.
"On appeal from a grant of summary judgment in a challenge to agency action under the APA, we review the administrative record and the district court's decision de novo." Bellevue Hosp. Ctr. v. Leavitt, 443 F.3d 163, 173-74 (2d Cir. 2006); see Abbott Radiology Assocs. v. Shalala, 160 F.3d 137, 139 (2d Cir.1998).
The district court's jurisdiction over Yale's challenge to the Secretary's determination arises under 42 U.S.C. § 1395ff(b), which authorizes a provider or supplier of services who represents an individual beneficiary to appeal adverse claims determinations under the Act.
Section 1395ff(b) specifies 42 U.S.C. § 405(g) as "the sole avenue for judicial review for all `claim[s] arising under' the Medicare Act." Heckler, 466 U.S. at 615, 104 S.Ct. 2013 (establishing that specification of § 405(g) is "to the exclusion of 28 U.S.C. § 1331"). We therefore review the Secretary's actions pursuant to the specific provisions of § 405(g) where applicable; where no provision of § 405(g) is on point, we apply the judicial review provisions of the APA, see 5 U.S.C. § 559 ("[A][s]ubsequent statute may not be held to supersede or modify . . . [the APA] . . . except to the extent that it does so expressly."); see also Dickinson v. Zurko, 527 U.S. 150, 154-55, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999).
Yale has challenged the validity of the 1986 Manual Provision on the grounds that
The inquiry into whether the promulgation of the 1986 Manual Provision was arbitrary and capricious is guided by the criteria established in State Farm:
463 U.S. at 43, 103 S.Ct. 2856 (internal citations omitted); see also Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 158, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991) (holding that "Secretary's interpretation of an ambiguous regulation is subject to the same standard of substantive review as any other exercise of delegated lawmaking power," including review of "quality of the Secretary's elaboration of pertinent policy considerations" under State Farm); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), overruled on other grounds by Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977) (applying arbitrary and capricious review under § 706(2)(a) to agency action outside of ambit of 5 U.S.C. § 553(b), (c)); Sentara-Hampton Gen. Hosp. v. Sullivan, 980 F.2d 749, 755 (D.C.Cir.1992) (per curiam) (applying State Farm to review of interpretive rule promulgated by Secretary under Medicare Act).
Our review is particularly searching in this instance because the record indicates that the 1986 Manual Provision altered historical practice. "A settled course of behavior embodies the agency's informed judgment that, by pursuing that course, it will carry out the policies committed to it by Congress"; therefore, "an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance." State Farm, 463 U.S. at 41-42, 103 S.Ct. 2856 (internal quotation marks omitted); see Huntington Hosp. v. Thompson, 319 F.3d 74, 80 (2d Cir.2003) ("While an agency is not locked into the first interpretation of a statute it embraces, it cannot simply adopt inconsistent positions without presenting some reasoned analysis.") (internal quotation marks omitted). As we have explained,
N.Y. Council, Ass'n of Civilian Technicians v. Fed. Labor Relations Auth., 757 F.2d 502, 508 (2d Cir.1985) (internal citations and quotation marks omitted).
The record reflects that, prior to the 1986 Manual Provision, fiscal intermediaries exercised some discretion (albeit narrow) in determining coverage for investigational medical devices. The 1977 intermediary letter instructed fiscal intermediaries that, in determining coverage of an investigational device that was neither specifically covered nor excluded from coverage, the primary consideration is whether the device has been demonstrated as "generally accepted by the professional medical community as an effective and proven treatment for the condition for which it is being used." However, this letter also explained that Medicare would pay for an investigational or experimental treatment upon the receipt of authoritative evidence that the treatment is "safe and effective." Thus coverage was available for a device that was safe and effective even if the device was not generally accepted within the medical community.
The 1986 Manual Provision—telling intermediaries that there is no coverage unless treatments received FDA premarket approval—was an evident change of course. Despite some hedging elsewhere,
In 1977-86, providers could justify reimbursement by giving fiscal intermediaries evidence sufficient to establish safety and efficacy; after the 1986 Manual Provision, no prudent provider would treat a Medicare beneficiary with a device that was investigational unless the provider was charitable, or looking for litigation, or had alternative funding. Beneficiaries (or their provider representatives) could appeal adverse coverage determinations, and theoretically could obtain payment by demonstrating that an investigational device was safe and effective despite its not having received FDA premarket approval; but it is unlikely that many beneficiaries would undertake the effort and expense (even assuming they outlived the proceedings). Thus, even if the 1986 Manual Provision was merely interpretive in nature, and therefore lacked the force of law over the agency, it operated with nearly undiminished force on beneficiaries because it was binding on the fiscal intermediaries who paid for treatment.
The Secretary contends that 1986 marked no change of position, that the 1986 Manual Provision merely expressed Medicare's historical de facto practice, and that therefore nothing required explanation. According to the Secretary, Medicare coverage determinations were made on a device-by-device basis prior to 1976; however, as of that year—when Congress's enactment of the MDA conferred statutory authority on the FDA to regulate new medical devices—fiscal intermediaries were instructed to make coverage determinations for medical devices according to the FDA's premarket determinations.
This narrative seems at odds with the timeline in this case: why did ten years elapse between the conferral of authority on the FDA by the MDA (in 1976) and the promulgation of the 1986 Manual Provision? To answer that question, the Secretary moved in the district court to supplement the administrative record with declarations from senior agency officials.
Generally speaking, after-the-fact rationalization for agency action is disfavored. See SEC v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 87 L.Ed. 626 (1943) ("The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based."); Citizens to Preserve Overton Park, 401 U.S. at 419, 91 S.Ct. 814
Some tension is evident between the general principle (disfavoring the after-the-fact rationalization of agency action) and the exceptions. The District of Columbia Circuit resolves the tension by positing that "[t]he new materials should be merely explanatory of the original record and should contain no new rationalizations." Envtl. Def. Fund, 657 F.2d at 285; see also Bunker Hill Co. v. EPA, 572 F.2d 1286, 1292 (9th Cir.1977) ("[T]he augmenting materials were merely explanatory of the original record. No new rationalization of the . . . regulations was offered by the EPA. Instead, the augmenting materials clarified a dispute that we felt was less than clear from the original record and were clearly admissible."). That analysis is persuasive, and gives effect to all the precedents. We therefore hold that to the extent that an agency may supplement the record on judicial review of the validity of a rule that is interpretive, it may do so only if the proffered evidence illuminates the original record and does not advance new rationalizations for the agency's action.
True, a rule that is interpretive is subject only to the basic procedural requirements imposed by arbitrary and capricious review under § 706(2)(A) (as elucidated in State Farm), and not the more extensive procedures required by § 553 for a rule passed pursuant to notice-and-comment rulemaking. So the agency's obligation to explain its reasoning on the record is less extensive for an interpretive rule. See Ass'n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of Fed. Reserve Sys., 745 F.2d 677, 684 (D.C.Cir.1984) (observing that the requirement for "the most critical factual material that is used to
The Secretary asserts that the rationales for the 1986 Manual Provision are "clearly discernible." See also State Farm, 463 U.S. at 43, 103 S.Ct. 2856. In light of the more searching review occasioned by the Secretary's shift in course, we disagree.
We cannot clearly discern why the standard adopted by the Secretary was FDA premarket approval, given that such a standard likely excludes numerous devices that would be the most appropriate treatments for certain patients.
The Secretary argues that his reasons for relying on the FDA are sufficient because they are implicit in the nature and scope of the FDA's regulatory power. This argument has some force. The Medicare statute itself does not limit the Secretary's choice of experts, and reliance on the FDA would make sense: the FDA is within HHS, and thus subject to the Secretary's direct supervision and control, cf. Marsh v. Oregon Nat. Res. Council, 490 U.S. 360, 378, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989) ("[The] agency must have discretion to rely on the reasonable opinions of its own qualified experts. . . ."); more important, the FDA exercises exclusive regulatory authority to determine—through a process that is "rigorous"—whether Class III medical device such as the ICDs at issue in this case are sufficiently safe and effective to be permitted on the market. Medtronic, 518 U.S. at 477, 116 S.Ct. 2240 ("Before a new Class III device may be introduced to the market, the manufacturer must provide the FDA with a `reasonable assurance' that the device is both safe and effective.") (quoting 21 U.S.C. § 360e(d)(2)); see also
Moreover, Congress has shown interest in reining in Medicare's rapidly rising costs.
In any event, "reasonable and necessary" is not obviously the same standard as "safe and effective," and the authority to determine which devices are reasonable and necessary (an inchoate and value-laden standard) is conferred by Congress upon Medicare, see 42 U.S.C. § 1395ff(a) (according Secretary authority to promulgate regulations governing benefits eligibility); 42 U.S.C. § 1395ff(f)(1)(A) (delineating scope of judicial review of Secretary's national coverage determinations for items or services), not the FDA—an agency with a separate statutory purpose and agenda. Further, as the Secretary concedes, FDA approval is required even for investigational use under an IDE, and the requirements for FDA approval of an IDE do address the safety and efficacy of the device. The FDA may disapprove an IDE application for a "significant risk device," 21 C.F.R. 812.3(m), if it determines that "[t]here is reason to believe that the risks to the subjects are not outweighed by the anticipated benefits to the subjects and the
No doubt, these inquiries are less exacting than the premarket approval process, which considers at least four factors in determining the safety and efficacy of a device: (1) the condition of the device's intended beneficiaries, (2) the circumstances of the device's use, (3) the probable risks and benefits of the device, and (4) the device's reliability, see 21 C.F.R. 860.7(b); that is unsurprising because the very purpose of the IDE is to facilitate the collection of data on safety and effectiveness. Nevertheless, successful completion of the IDE approval process could plausibly serve as the basis for Medicare coverage in certain circumstances. From time to time, the Secretary has adopted policies supported by comparable alternative rationales, as demonstrated by (i) the Secretary's policy with respect to investigational drugs and (ii) the 1995 Regulations.
The Secretary's investigational drug policy, as set out in the 1977 intermediary letter, allowed Medicare coverage for investigational drugs lacking FDA premarket approval that had been approved by a hospital committee and that were administered to inpatients as part of a course of treatment that was itself covered. The 1995 Regulations, which afforded coverage for IDE devices that are refinements or replications of approved technology, were issued in light of the "increasing recognition . . . that there are devices that are refinements of existing technologies or replications of existing technologies by other manufacturers" that "could be viewed as `reasonable' and `necessary' under Medicare." 60 Fed.Reg. 48418. We recognize that the Secretary cannot be expected to forecast "increasing recognition" of emerging trends and that the FDA classification of IDE devices into Categories A and B—upon which the 1995 Regulations rely—first became effective in September of 1995 (pursuant to an agreement between the FDA and the HCFA). See 61 Fed. Reg. 7011. Nevertheless, it seems unlikely that the Secretary was unaware in 1986 of a possible basis for affording coverage to the class of investigational devices that are refinements or replications of existing technologies. More generally, it is hard to say (in light of these alternative coverage methodologies) that the rationale for the Secretary's sole focus on FDA premarket approval, although unexpressed, should be intuited and deemed obvious.
The Secretary also fails to explain how adoption of a per se coverage standard comports with congressional purposes in enacting the Medicare Act.
It may well be that sound considerations justify the adoption of a per se approach to coverage determinations. As we reasoned in Goodman v. Sullivan, considerations of administrative convenience afford the Secretary leeway to promulgate such per se rules. 891 F.2d 449, 451 (2d Cir.1989) ("Because the government could not possibly adjudicate on a case-by-case basis
The unanswered questions raised by the 1986 Manual Provision—particularly in light of the Secretary's historical practice—demonstrate that it was not the type of self-explanatory, unremarkable application of governing law that would allow a reviewing court to exercise its limited authority to uphold an agency's action based on justifications that the court discerns for itself. See State Farm, 463 U.S. at 43, 103 S.Ct. 2856. And while an agency is obliged neither to answer all questions nor to pose them, the 1986 Manual Provision constituted the type of policy choice that Medicare—while it likely has the authority to undertake—must explain.
Because the Secretary acted arbitrarily and capriciously under § 706(2)(A) in promulgating the 1986 Manual Provision, we conclude that it is invalid and unenforceable. In adjudicating Yale's claims, the Secretary stated that the 1986 Manual Provision was "entitled to deference," and then concluded simply that Yale's services were not covered "because they were related to the implantation of investigational device[s] which had not been approved for marketing by the FDA." Appeals Council Decision at 6. The Secretary thus relied on an invalid and unenforceable rule—and in the absence of that rule the Secretary's decision appears "seriously contestable," NLRB v. Wyman-Gordon, 394 U.S. 759, 766 n. 6, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969) (plurality opinion). The decision therefore must be vacated.
We remand to the district court with instructions to remand to the Secretary for proceedings consistent with this opinion. On remand to the Secretary, Yale's claims must be adjudicated under the rules and procedures in place at the time Yale submitted those claims, without reference to the 1986 Manual Provision.
* * *
The judgment of the district court is vacated, and the case is remanded to the district court with instructions to remand to the Secretary for proceedings consistent with this opinion.
POOLER, Circuit Judge, concurring.
I concur in the judgment and in the analysis of the majority opinion with the exception of its basis for holding that the district court properly excluded declarations of former Health and Human Services officials. See Majority op. 82-83. I believe the holding on this issue—that extra-record materials may be admitted only if they "illuminate the original record and do not advance new rationalizations for the agency's action"—creates an unnecessary tension with Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).
There are no formal findings explaining the Secretary's adoption of the 1986 Manual Provision. Therefore, Overton Park would give the district court discretion to admit and consider the declarations even if the declarants urge reasons for promulgating the provision that are not in the administrative record. Thus, I believe that the majority's reason for upholding the district court's evidentiary ruling is incorrect.
However, the district court did not abuse its discretion by excluding the declarations at issue in this case. See Nat'l Audubon Soc'y, 132 F.3d at 16 ("We review a district court's consideration of matters outside the administrative record under an abuse of discretion standard."). In the case of the 1986 Manual Provision, the agency had not one but three opportunities to make its reasoning public: (1) in conjunction with the promulgation of the 1986 Manual Provision; (2) before the administrative law judge in the adjudicatory proceedings relevant to plaintiffs; and (3) before the Appeals Council in the same proceedings. Although defendant argues that he had no cause to believe the reasons for his change in position were at issue in those proceedings, his argument is belied by the record. The Secretary argued before the Appeals Council as he argues here that the 1986 Manual Provision is a simple implementation of "long-standing policy" not to cover experimental and investigational devices. The Secretary therefore had ample reason to submit to the administrative adjudicators the declarations that he attempted to submit to the district court.
Further, the declarations are somewhat conclusory; the declarants contend that the Health Care Financing Administration, before 1986, notified its intermediaries that devices would not be covered if they were not approved for marketing by the Food and Drug Administration but fail to indicate when the notices were made, to whom they were made, or by whom they were made. Because the declarations could and should have been offered at an earlier juncture and because they are too conclusory to be probative of the Secretary's policy prior to the 1986 Manual Provision, the district court did not abuse its discretion by excluding them. See Overton Park, 401 U.S. at 419, 91 S.Ct. 814 (disapproving the use of litigation affidavits on administrative review); Cf. Parker v. Reda, 327 F.3d 211, 215 (2d Cir.2003) (indicating that better practice under Federal Rules of Evidence would be to exclude conclusory statements); Hillside Amusement Co. v. Warner Bros. Pictures Distrib. Corp., 224 F.2d 629, 630 (2d Cir.1955) (holding that district court did not abuse its discretion under Federal Rules of Evidence by excluding conclusory statements).
Because the district court's decision not to admit the declarations was not an abuse
60 Fed.Reg. 48418 (emphasis added). Since the 1986 Manual Provision would not have bound the Secretary, the Secretary could (if he liked) characterize the superseded rule as a mere presumption against coverage for investigational devices. However, the Secretary has brought to our attention no instance in the period 1986-95 in which a beneficiary or provider successfully challenged an adverse coverage decision "with respect to a device covered by an IDE. Moreover, in denying Yale's reimbursement claim, the Secretary invoked the 1986 Manual Provision without conducting any independent assessment of the safety and efficacy of the devices at issue. The Secretary's ruling in the alternative, which accepted arguendo that the 1986 Manual Provision is invalid, engaged in some individual assessment; but that assessment was said to require remand to the ALJ for further fact-finding, and thus does not support rejection of the claims (the ruling under review on this appeal).