BROWN, Circuit Judge.
In 2007, the Secretary of Health and Human Services revamped Medicare's Inpatient Prospective Payment System, updating the diagnostic weighting used to calculate reimbursements for hospitals treating the program's beneficiaries. As with most changes to complex systems, there were unintended consequences — namely in the form of overpayments to hospitals — but Congress had proactively attempted to counter unwarranted increases by adjusting the standardized base amount used to calculate reimbursement for the majority of hospitals. The Secretary thought, however, the fiscal pain should be shared and opted to temper Congress' targeted response by mixing it with an adjustment for hospitals not affected by the congressional directive. She invoked her broad-spectrum grant of authority to ensure all hospitals — not just the ones relying on the standardized amount — would share the burden.
A number of hospitals — those serving rural and otherwise underserved communities — objected to being part of the cure. They insist Congress' legislative prescription — to adjust standardized base amounts — was the only course available to the Secretary to offset overpayment. We disagree and affirm the decision of the district court.
For our purposes today, the labyrinthine world of Medicare has two types of hospitals that enjoy different reimbursement schemes. The first group is reimbursed under the "federal rate" — a formula that takes a standardized base amount (derived from national data) and multiplies it by a weight associated with a diagnosis-related group (DRG).
Congress eventually directed the Secretary of Health and Human Services to "adjust the classifications and weighting factors" associated with the DRGs "to reflect changes in treatment patterns, technology,... and other factors which may change the relative use of hospital resources." 42 U.S.C. § 1395ww(d)(4)(C)(i). But despite longstanding general authority to "provide by regulation for such other exceptions and adjustments to ... payment amounts," see, e.g., 42 U.S.C. § 1395ww(d)(5)(C)(iii) (1982), the agency demurred because it was unsure how to address the effects of such adjustments. See Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 1996 Rates, 60 Fed.Reg. 29,202, 29,247 (June 2, 1995). In response, Congress enacted 42 U.S.C. § 1395ww(d)(3)(A)(vi), which reads:
Armed with this new provision, the Secretary announced changes to the DRGs in 2007. See, e.g., Changes to the Hospital Outpatient Prospective Payment System and CY 2008 Payment Rates, 72 Fed.Reg. 66,580, 66,886 (Nov. 27, 2007). To combat the possibility of overpayments under the new system, the Secretary adjusted the standardized amount downward by 1.2% and 1.8% for fiscal years 2008 and 2009, respectively. See Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates, 72 Fed.Reg. 47,130, 47,186 (Aug. 22, 2007). But Congress intervened, halving the amount of adjustment by enacting the Transitional Medical Assistance, Abstinence Education, and QI Programs Extension Act of 2007, Pub.L. No. 110-90, § 7(a), 121 Stat. 984, 984 (2007) ("TMA"). A greater adjustment would require a determination by the Secretary that the "changes in coding and classification ... did not reflect real changes in case mix" prior to making prospective adjustments under § 1395ww(d)(3)(A)(vi) and recoupment adjustments under section 7(b)(1)(B) of the TMA.
The Secretary accordingly conducted retrospective analyses and proposed a
The Hospitals sought expedited judicial review of the Secretary's decision from the Provider Reimbursement Review Board, which disclaimed jurisdiction but noted it would have otherwise expedited review. Once the Medicare administrator reversed the Board's jurisdictional finding, the Hospitals filed suit in district court, claiming the Secretary's decision was arbitrary, capricious, and exceeded the scope of her statutory authority. The Secretary responded by filing a motion to dismiss. Finding the statutory scheme ambiguous and deferring to the Secretary's reasonable interpretation of the adjustment provisions, the district court granted the motion. See Adirondack Med. Ctr. v. Sebelius, 891 F.Supp.2d 36, 48 (D.D.C.2012).
This case rests on Chevron deference. We review a district court's deference decision de novo, "employing traditional tools of statutory construction." Nat'l Ass'n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1228 (D.C.Cir.2007) (internal quotation marks omitted). The first step of this familiar inquiry is considering "the text, structure, purpose, and history of an agency's authorizing statute" to determine whether a provision reveals congressional intent about the precise question at issue. Hearth, Patio & Barbecue Ass'n v. U.S. Dep't of Energy, 706 F.3d 499, 503 (D.C.Cir.2013) (internal quotation marks omitted). If we cannot readily divine Congress' clear intent, we must defer to the agency's interpretation of the statute so long as it is "based on a permissible construction of the statute." See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
The Hospitals begin their Chevron challenge relying on the canon of expressio unius est exclusio alterius (the expression of one is the exclusion of others). In their reply brief, the Hospitals assert they "invoke expressio unius only to establish that subsection (d)(3)(A)(vi) on its own terms unambiguously authorizes adjustments solely to the standardized amount." Reply Br. at 6 n. 3. Had the Secretary attempted to promulgate the changes to the hospital-specific rates by invoking § 1395ww(d)(3)(A)(vi), the canon would have force in isolation. But the Secretary did no such thing.
Instead, the manner in which the Appellants rely on the expressio unius canon suggests they are drawing on the canon's preclusive power. In other words, the very invocation of the canon constitutes a challenge to the Secretary's broad authority. The nature of their argument
With that in mind, we turn to the Hospitals' argument. They read the grant of authority in § 1395ww(d)(3)(A)(vi) as impliedly precluding the Secretary from modifying hospital-specific rates to offset increased payments resulting from the 2008 and 2009 coding practice changes. It is clear, they say, Congress intended to shield such rates from modification by directing the Secretary to adjust only the standardized amounts in an effort to compensate for the deleterious or unwanted effects of such changes.
This may be a reasonable reading of the statute, but our inquiry at Chevron step one is not satisfied by reasonableness alone. See Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. The expressio unius canon is a "feeble helper in an administrative setting, where Congress is presumed to have left to reasonable agency discretion questions that it has not directly resolved." Cheney R.R. Co. v. I.C.C., 902 F.2d 66, 68-69 (D.C.Cir.1990) (citing Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778). It offers "too thin a reed to support the conclusion that Congress has clearly resolved an issue." Mobile Commc'ns Corp. of Am. v. FCC, 77 F.3d 1399, 1405 (D.C.Cir.1996) (quoting Tex. Rural Legal Aid, Inc. v. Legal Servs. Corp., 940 F.2d 685, 694 (D.C.Cir.1991)) (internal brackets and quotation mark omitted). And when countervailed by a broad grant of authority contained within the same statutory scheme, the canon is a poor indicator of Congress' intent. See Creekstone Farms Premium Beef, L.L.C. v. Dep't of Agric., 539 F.3d 492, 500 (D.C.Cir.2008); see also Cnty. of L.A. v. Shalala, 192 F.3d 1005, 1014 (D.C.Cir. 1999) ("Under Chevron step one we consider not only the language of the particular statutory provision under scrutiny, but also the structure and context of the statutory scheme of which it is a part." (quoting Ill. Pub. Telecomms. Ass'n v. FCC, 117 F.3d 555, 568 (D.C.Cir.1997) (internal quotation marks omitted))).
Even if the canon has some force here, nothing unambiguously suggests Congress intended to strip the Secretary of her broad grant of authority under § 1395ww(d)(5)(I)(i). Consider, for example, the language of § 1395ww(d)(3)(A)(vi): "the Secretary may adjust the average standardized amounts." The Hospitals understand this to mean the Secretary may only adjust the standardized amounts. See Reply Br. at 3. Momentarily setting aside our understanding that Congress generally knows how to use the word "only" when drafting laws, see Pub. Citizen, Inc. v. Rubber Mfrs. Ass'n, 533 F.3d 810, 817 (D.C.Cir.2008), it seems more likely that § 1395ww(d)(3)(A)(vi) was Congress' attempt "to clarify what might be
Prior to the enactment of § 1395ww(d)(3)(A)(vi), the Department expressed doubts about its ability to correct the potential for anomalously-high payments resulting from changes to how hospital cases were classified. See Changes to the Hospital Inpatient Prospective Payment Systems, 66 Fed.Reg. 39,828, 39,862 (Aug. 1, 2001) ("We have stated that, prior to implementing severity — adjusted DRGs, we would need specific legislative authority to offset any significant anticipated increase in payments attributable to changes in coding practices caused by significant changes to the DRG classification system."). Congress responded by enacting § 1395ww(d)(3)(A)(vi). See Consolidated Appropriations Act, 2001, Pub.L. No. 106-554, app. F, tit. III, § 301(e)(1), 114 Stat. 2763, 2763A493; see also Changes to the Hospital Inpatient Prospective Payment Systems, 66 Fed.Reg. at 39,862. This sequence of events gives support to the idea that Congress intended to clarify and complement the Secretary's existing authority — i.e., to "make assurance double sure," see Shook, 132 F.3d at 782 (internal quotation marks omitted) — not to extinguish or eliminate it. Confronted by two plausible readings of the statute, we cannot declare Congress' intent unambiguous. See Am. Petroleum Inst. v. U.S. EPA, 906 F.2d 729, 740 (D.C.Cir.1990) (per curiam).
Section 7(b)(1) of the TMA gives us little pause. As the Hospitals point out, the provision employs more forceful language than what we see in § 1395ww(d)(3)(A)(vi): "the Secretary shall ... make an appropriate adjustment." In their view, the use of such mandatory language — paired with the non obstante clause prefacing it — demonstrates Congress' unambiguous intent to direct the Secretary to adjust only the standardized amount. These textual aids, however, do not sufficiently dispel the provision's ambiguity. We cannot say the use of the word "shall" makes much of a difference, for the broad grant of authority enshrined in § 1395ww(d)(5)(I)(i) also employs the same word. As with § 1395ww(d)(3)(A)(vi), we are thus left with two equally plausible explanations: (1) a conflictive one, rendering the provisions mutually exclusive congressional directives; and (2) a harmonious one, reading the statutory authorizations as overlapping. The dizzying array of other canons that could shift the analysis one way or another — e.g., the treatment of the non obstante clause, see Cisneros v. Alpine Ridge Grp., 508 U.S. 10, 18, 113 S.Ct. 1898, 123 L.Ed.2d 572 (1993), or the presumption against implied repeals, see Branch v. Smith, 538 U.S. 254, 273, 123 S.Ct. 1429, 155 L.Ed.2d 407 (2003), militates against finding unambiguous congressional intent here.
The hospitals next turn to the "basic principle of statutory construction that a specific statute ... controls over a general provision ... particularly when the two are interrelated and closely positioned." HCSC-Laundry v. United States, 450 U.S. 1, 6, 101 S.Ct. 836, 67 L.Ed.2d 1 (1981) (citing Bulova Watch Co. v. United States, 365 U.S. 753, 761, 81 S.Ct. 864, 6 L.Ed.2d 72 (1961)). The canon is impotent, however, unless the compared statutes are "irreconcilably conflicting." See Detweiler v. Pena, 38 F.3d 591, 596 (D.C.Cir.1994) (citing Watt v. Alaska, 451 U.S. 259, 266, 101 S.Ct. 1673, 68 L.Ed.2d 80 (1981)). Absent clearly expressed congressional intent to the contrary, it is our duty to harmonize the provisions and render
As explained above, § 1395ww(d)(3)(A)(vi) and section 7(b)(1) of the TMA can be reasonably construed as grants of authority that complement and overlap with § 1395ww(d)(5)(I)(i). Put differently, it is not unreasonable to say § 1395ww(d)(5)(I)(i) operates to the extent that § 1395ww(d)(3)(A)(vi) and section 7(b)(1) of the TMA are silent. The two provisions say nothing about adjusting the hospital-specific rate; therefore, the broad grant of authority (and the Secretary's use thereof) fills a space that the specific provisions do not occupy. Such an arrangement does not run afoul of the general/specific canon. See United States v. Chase, 135 U.S. 255, 260, 10 S.Ct. 756, 34 L.Ed. 117 (1890) ("It is an old and familiar rule that where there is, in the same statute, a particular enactment, and also a general one, which, in its most comprehensive sense, would include what is embraced in the former, the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language as are not within the provisions of the particular enactment." (citations and internal quotation marks omitted)).
Perhaps the Hospitals' argument is better characterized as one concerning superfluity. See Amoco Prod. Co. v. Watson, 410 F.3d 722, 733 (D.C.Cir.2005) ("It is a familiar canon of statutory construction that, `if possible,' we are to construe a statute so as to give effect to `every clause and word.'" (quoting United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 99 L.Ed. 615 (1955))). Their reliance on the Supreme Court's decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, ___ U.S. ___, 132 S.Ct. 2065, 182 L.Ed.2d 967 (2012), confirms this. See id. at 2071 ("[T]he canon has full application... [when] a general authorization and a more limited, specific authorization exist side-by-side. There the canon avoids not contradiction but the superfluity of a specific provision that is swallowed by the general one, `violat[ing] the cardinal rule that, if possible, effect shall be given to every clause and part of the statute.'" (quoting D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204, 208, 52 S.Ct. 322, 76 L.Ed. 704 (1932) (alteration in original))). If § 1395ww(d)(5)(I)(i)'s prescription of authority is as broad as the Secretary says it is, they argue, parts of the statutory scheme will become meaningless excess and congressional directives will either be ignored or fulfilled by unintended means.
The surplusage canon is neither inviolable nor insurmountable. See Lamie v. U.S. Tr., 540 U.S. 526, 536, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). This is particularly true when agency authority is at stake. See DeNaples v. Office of Comptroller of Currency, 706 F.3d 481, 487 (D.C.Cir.2013) ("That there is overlap among the various enforcement provisions is not surprising.... Congress could reasonably hand the agencies a palette sufficiently sophisticated to capture the full spectrum of enforcement possibility." (citing RadLAX, 132 S.Ct. at 2072)).
The canon is particularly unhelpful when both interpretive outcomes lead to some sort of surplusage — either § 1395ww(d)(3)(vi)(A) and section 7(b)(1) of the TMA must give way to the broad grant of authority in § 1395ww(d)(5)(I)(i), or the last must be declared a nullity. While it is possible to give the first two provisions full effect without gutting § 1395ww(d)(5)(I)(i) in its entirety, we would need to engage in a statutory rewrite to do so — e.g., insert the word "only" here and there, insert a limiting clause to the Secretary's otherwise broad grant of
We cannot divine the precise reasons for the manner of Congress' enactments. Perhaps, to build on the Bard's turn of phrase, the legislature sought "to make assurance triple sure." Despite the potential for statutory redundancy, Congress may have decided to clarify — not once, but twice — what the Secretary was permitted to do, thereby handing her "a palette sufficiently sophisticated to capture the full spectrum of ... possibility." See DeNaples, 706 F.3d at 487. At the very least, we remain unconvinced the statutory scheme is unambiguous in evincing Congress' intent.
Finally, the Hospitals point to the American Taxpayer Relief Act of 2012, which states "the Secretary of Health and Human Services shall not have authority to fully recoup past overpayments related to documentation and coding changes from fiscal years 2008 and 2009." Pub.L. No. 112-240, § 631(a)(2), 126 Stat. 2313, 2353 (2013). Acknowledging that their argument with respect to the Act is legally futile, the Hospitals instead cite it in an appeal to sound policy and judicial prudence. It would make "little sense," they argue, for Congress to constrain the Secretary's authority with respect to recoupment adjustments, while leaving untouched her authority to make prospective adjustments. See Reply Br. at 17-18.
We need not dwell on this point too long, as "[s]uch policy arguments are more properly addressed to legislators or administrators, not to judges." See Chevron, 467 U.S. at 864, 104 S.Ct. 2778. And in any event, the Secretary offers a plausible explanation: as there was nothing left to recoup with respect to FY 2008 and FY 2009, Congress decided to close that particular tap. See Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2013 Rates, 77 Fed.Reg. 53,258, 53,276 (Aug. 31, 2012) ("Because these adjustments, in effect, balanced out, there was no year-to-year change in the standardized amount due to this recoupment adjustment for FY 2012.... [A]ll overpayments made in FY 2008 and FY 2009 have been fully recaptured with appropriate interest, and the standardized amount has been returned to the appropriate baseline.").
The only certainty that we can discern from the statutory scheme is that it is unclear. We must therefore turn to step two of the Chevron inquiry: the reasonableness of the Secretary's interpretation. The Secretary determined there was an artificial increase unrelated to any actual change in the severity of illnesses treated. She therefore made a downward adjustment to the rate paid to rural and sole community hospitals in order to ameliorate the increasing rate paid to all hospitals due to the revamping of the diagnosis coding system. In so doing, the Secretary reasonably exercised her authority under § 1395ww(d)(5)(I)(i) to provide "for such other exceptions and adjustments to [IPPS] payment amounts ... as the Secretary deems appropriate."
The Hospitals contend our inquiry ends at the first Chevron step. Our analysis suggests otherwise. We agree with the district court's conclusion that the statutory scheme was ambiguous and unclear. Its decision, therefore, is