00-3707 Paragon Health Network, Inc. v. Thompson

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“Paragon’s argument does have a degree of merit – terms like ‘operate[ ]’ and ‘provider’ suggest that one should look to whether a group of attributes making up the institution have changed such that the SNF may be described as new, rather than just focusing on a single characteristic, such as CON rights. Nevertheless, we conclude that the Secretary’s interpretation is not so much at variance with the language of the regulation as to be deemed plainly erroneous or inconsistent with the text. Medicare is a highly complex and technical program, and so deference to the Secretary’s determinations in the course of administering the system is especially warranted. Thomas Jefferson, 512 U.S. at 512. Furthermore, an agency need not adopt the most natural reading of the regulation, but only a reasonable one. Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 702 (1991). The Secretary explains that a transfer of CON rights does not result in the provision of any new services. Even though the transferee might have new equipment, staff, etc., it will provide the same kind of services as the transferor of the CON rights, just at a different location. We cannot say that the Secretary’s interpretation that because no new services are being provided there is not a new provider is unreasonable.”