The U.S. Supreme Court ruled that the Department of Health and Human Services (HHS) must follow informal rulemaking procedures when it changes Medicare policy. In Azar v. Allina Health Services, decided June 3, 2019, the court held that HHS had to give the public notice and an opportunity to make comments before changing the way it reimburses hospitals that serve low-income Medicare patients. At issue was whether or not the change made by HHS counted as a substantive legal change that triggered the rulemaking procedures.
Justice Neil Gorsuch wrote the majority opinion, joined by six other justices, affirming that the reimbursement rate was a substantive change subject to notice and comment rules. Justice Stephen Breyer wrote a dissent arguing that the court should have sent the case back to the D.C. Circuit for that court to decide whether the HHS action was exempt from the procedural requirements. Justice Kavanaugh wrote the lower court opinion when he was a judge on the D.C. Circuit, so he did not participate in this case.