Whether an agency may receive Chevron deference when it erroneously denies that its current interpretation marks a change in position

QUESTIONS PRESENTED Because of Medicaid’s low reimbursement rates, hospitals with large Medicaid patient populations have a statutory right to supplemental “Disproportionate Share Hospital” payments. Each year, those payments are capped based on a formula set by Congress: as relevant here, that cap equals the amount of costs the hospital incurred serving Medicaid-eligible patients (as determined by the Secretary of Health and Human Services) minus the payments the hospital received from Medicaid. For years, the Centers for Medicare and Medicaid Services (CMS) followed this formula, subtracting only Medicaid payments from the hospital’s costs. But then CMS changed course to also subtract the amount of private insurance payments the hospital receives from treating Medicaid-eligible patients. After its initial attempt to change the policy was enjoined for being inconsistent with existing regulations, CMS promulgated a new regulation—but continued to insist this policy was the same as the prior regulation’s policy. The court below, like every court to address the question, rejected CMS’s claim of consistency. Yet it upheld CMS’s new regulation under Chevron. The questions presented are: 1. Whether an agency may receive Chevron deference when it erroneously denies that its current interpretation marks a change in position. ii QUESTIONS PRESENTED—Continued 2. Whether the Medicaid Act permits CMS to reduce disproportionate share hospitals’ supplemental payment cap based on private insurance payments.