Renal Physn Assn v. HHS

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 8, 2007 Decided June 12, 2007

No. 06-5133

RENAL PHYSICIANS ASSOCIATION,
APPELLANT

v.

U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET
AL.,
APPELLEES

Appeal from the United States District Court
for the District of Columbia
(No. 05cv00067)

Robert S. Plotkin argued the cause for appellant. With him
on the briefs was E. Duncan Getchell, Jr.

Jeffrey T. Green was on the brief for amici curiae American
Medical Association et al. in support of appellant.

Stephanie R. Marcus, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeffrey
A. Taylor, U.S. Attorney, and Thomas M. Bondy, Attorney.

Before: GINSBURG, Chief Judge, and GARLAND and
 2

BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The issue in this case is standing to
challenge a regulatory safe harbor where the direct cause of
injury is the independent action of a third party. The same issue
was before this court in National Wrestling Coaches Ass’n v.
Department of Education, 366 F.3d 930 (D.C. Cir. 2004)
(National Wrestling), though the factual context there was very
different. Here, relying on National Wrestling, the district court
dismissed the complaint for lack of standing. We affirm.

I

Congress first enacted the “Stark Law” as part of the
Omnibus Budget Reconciliation Act of 1989. See Pub. L. 101-
239, § 6204, 103 Stat. 2106, 2236-43 (1989). The law, which
added section 1877 to the Social Security Act, limited the ability
of a physician to refer Medicare patients to clinical laboratories
with which the physician had a “financial relationship.” 42
U.S.C. § 1395nn(a)(1). In 1993, Congress extended the law to
several other health services, id. § 1395nn(h)(6), and also
included Medicaid patient referrals within the scope of the law,
id. § 1396b(s). See Pub. L. 103-66, §§ 13562, 13624, 107 Stat.
312, 604, 636 (1993). Among other things, the law prohibits
payment for services furnished pursuant to a prohibited referral,
42 U.S.C. §§ 1395nn(a)(1)(B), 1396b(s), imposing civil
penalties in the case of a prohibited referral, id. § 1395nn(g).
The Stark Law includes several exceptions, id. § 1395nn(b)-(e),
and authorizes the Secretary of Health and Human Services to
make additional exceptions by regulation, where the “financial
relationship . . . does not pose a risk of program or patient
abuse,” id. § 1395nn(b)(4).
 3

One of the exceptions to the referral prohibition is for
“[p]ersonal service arrangements.” Id. § 1395nn(e)(3).
Essentially, this exception covers market-rate, pay-for-service
arrangements. In other words, if the physician’s only financial
interest in the clinic is receipt of agreed-upon compensation at
or below “fair market value” for “reasonable and necessary”
services, then the physician may make referrals to the clinic
without violating the law. Id. § 1395nn(e)(3)(A). The Stark
Law, however, limits the extent to which the physician’s
compensation may be based on the volume or value of patient
referrals. Id. at § 1395nn(e)(3)(B). The law defines “fair market
value” as “the value in arm[’]s length transactions, consistent
with the general market value.” Id. § 1395nn(h)(3) (emphasis
added). Obviously, this definition of “fair market value” is
critical to determining the scope of the Stark Law exception, and
the definition hinges on the term “general market value.”

The Centers for Medicare and Medicaid Services
(“CMS”)—formerly called the Health Care Financing
Administration (“HCFA”)—is the division within the United
States Department of Health and Human Services that oversees
regulatory implementation of the Stark Law. In 1998, in a
notice of proposed rulemaking, HCFA proposed a set of
regulations to clarify and implement the various provisions of
the law, including defining “general market value” as “the
compensation that would be included in a service agreement, as
the result of bona fide bargaining between well-informed parties
to the agreement . . . at the time of the service agreement.” 63
Fed. Reg. 1659, 1721 (Jan. 9, 1998). Several comments on this
proposed rule focused on how (i.e., with what sort of evidence)
a party could establish it had met this standard. 66 Fed. Reg.
856, 944 (Jan. 4, 2001). HCFA responded in 2001 by stating its
intent “to accept any method [of proof] that is commercially
reasonable and provides us with evidence that the compensation
is comparable to what is ordinarily paid for an item or service in
 4

the location at issue, by parties in arm’s-length transactions who
are not in a position to refer to one another.” Id. At the same
time, the HCFA issued a final rule defining “general market
value” in accord with its proposed rule. See 66 Fed. Reg. at 856;
42 C.F.R. § 411.351 (2006).

The 2001 rulemaking did not address several subsections of
the Stark Law, and HCFA stated it would address those
subsections “shortly” in a “Phase II” rulemaking. 66 Fed. Reg.
at 856. In addition, this Phase II rulemaking would address
comments received in response to the 2001 rulemaking (i.e.,
“Phase I”). Id. Phase II was completed in 2004, when HCFA
(by this time renamed “CMS”) issued an interim final rule,
which it planned to finalize within three years. 69 Fed. Reg.
16,054, 16,126 (Mar. 26, 2004). To a large extent, the new
rulemaking duplicated portions of the 1998 proposed
rulemaking, addressing Stark Law subsections Phase I had not
covered. Id. at 16,125. However, because a new law (effective
December 8, 2003) required the agency to finalize its proposed
rules within three years, see 42 U.S.C. § 1395hh(a)(3)(B), a
question arose about the continuing viability of the 1998
proposal. Although the agency was unsure the new law
prohibited the Secretary from finalizing rules proposed more
than three years before December 8, 2003, it took the cautious
approach of publishing the new rule as an interim final rule with
a comment period. See 69 Fed. Reg. at 16,125.

In short, CMS restarted the rulemaking process from scratch
but waived publication of a notice of proposed rulemaking,
finding the customary notice and comment period
“impracticable, unnecessary, or contrary to the public interest”
because the public had been afforded two prior opportunities to
comment and could also comment on the interim final rule. See
id. at 16,125 (quoting 5 U.S.C. § 553(b)).
 5

As part of this interim final rule, CMS created a safe harbor
provision within the existing regulatory definition of “fair
market value.” Id. at 16,092, 16,128. The agency emphasized
the safe harbor was “entirely voluntary; [health service
providers] may continue to establish fair market value through
other methods.” Id. at 16,092. Thus, CMS added the safe
harbor to give providers an easy way of proving fair market
value, but providers remain free to ignore the safe harbor, and so
long as they can show their personal service arrangements are
nevertheless at fair-market rates, they are in full compliance
with the law. The safe harbor offers two methods for showing
that a physician’s hourly rate is at fair market value: (1) by
reference to the hourly rate paid to emergency room physicians
in the same market, and (2) by averaging the hourly
compensation level for physicians in the same specialty, as
determined in several national surveys. Specifically, the safe
harbor provides as follows:

An hourly payment for a physician’s personal
services . . . shall be considered to be fair market value if
the hourly payment is established using either of the
following two methodologies:

(1) The hourly rate is less than or equal to the average
hourly rate for emergency room physician services in the
relevant physician market, provided there are at least three
hospitals providing emergency room services in the market.

(2) The hourly rate is determined by averaging the 50th
percentile national compensation level for physicians with
the same physician specialty (or, if the specialty is not
identified in the survey, for general practice) in at least four
of the following surveys and dividing by 2,000 hours. [The
regulation then lists six salary surveys.]
 6

42 C.F.R. § 411.351.

Plaintiff Renal Physicians Association (“RPA”) brought this
action in the district court, challenging the safe-harbor provision
as violating the notice-and-comment requirements of the
Administrative Procedure Act (“APA”) and as arbitrary and
capricious agency action. RPA is “a national, nonprofit
specialty society” whose “membership consists of nephrologists,
advance practice nurses, and physician assistants specializing in
the treatment of patients with kidney disease.” RPA’s complaint
adds that “[m]any RPA members are medical directors of
outpatient dialysis facilities.” The RPA alleges that a majority
of nephrologists serve as medical directors of dialysis providers
that own clinical laboratories. If these physicians refer patients
to these in-house laboratories for services covered by Medicare
or Medicaid, they violate the Stark Law, unless an exception
applies. See 42 U.S.C. §§ 1395nn(a)(1)(A), 1395nn(h)(6)(A).
Similarly, where a nephrologist has a financial relationship with
a hospital-based dialysis facility, the physician may not refer
patients to the hospital for hospital services covered by
Medicare or Medicaid, unless an exception applies. Id.
§§ 1395nn(a)(1)(A), 1395nn(h)(6)(K). As noted, health service
providers that receive referrals in violation of the Stark Law face
civil penalties, in addition to nonpayment for services furnished
pursuant to the referral. Id. §§ 1395nn(a)(1)(B), 1395nn(g),
1396b(s).

The merits of RPA’s challenge to the safe harbor provision
are not before us, because the district court dismissed the
complaint for lack of standing. The complaint includes several
paragraphs of allegations related to standing, though not the
redressability aspect of standing. Specifically, RPA alleges:

[O]nly by complying with the safe harbor can a dialysis
provider ensure that it will avoid investigation or
 7

prosecution relating to compensation paid to medical
directors. Thus, in an effort to obtain the protection of the
safe harbor, dialysis providers are likely to limit
compensation for medical director services to the amount
“allowed” under the safe harbor.

. . . [If this occurs,] a significant number of
nephrologists, including RPA members, will experience a
substantial reduction in medical director compensation.

....

. . . On the other hand, if nephrologists demand and are
paid reasonable compensation, both parties run the risk that
HHS will later allege, based upon the safe harbor, that the
compensation paid is “excessive” and that the medical
director arrangement violates the Stark Law.

. . . In fact, dialysis providers have already begun to
insist upon strict compliance with the fair market value safe
harbor. RPA members have advised RPA that in
negotiating the renewal of a medical director agreement,
certain dialysis providers have required reduction of
medical director compensation to safe-harbored levels. In
at least one instance, that position has resulted in an
executed agreement which provides for significantly
reduced compensation to an RPA member.

....

. . . If interested parties had been accorded their
statutory right to comment on the fair market value safe
harbor, the RPA would have demonstrated that . . . based
upon the use of the safe harbor, the compensation paid to
nephrologists for the provision of medical director services
 8

will significantly and unfairly decrease, causing RPA
members direct economic injury and negatively affecting
patient care.

....

. . . The Stark Law did not empower the Secretary to set
“fair market value” compensation rates . . . . The Stark Law
did not authorize the Secretary to reduce arbitrarily the
compensation currently paid to physicians, in the free
market, for personal services. The fair market value safe
harbor in effect does both, and does so without benefit of
any meaningful record.

. . . The fair market value safe harbor, now fully
effective, poses the threat of imminent economic harm to
RPA members and other medical directors of dialysis
facilities who will not be compensated at fair market value.
Although the safe-harbored compensation rates are well
below the current market rate for medical director services
furnished to dialysis providers, dialysis providers are
insisting upon compensating medical directors in
accordance with the safe harbor so as to avoid a
governmental investigation or enforcement action.

(Emphases added.)

Despite these allegations regarding direct injury, the district
court found RPA failed to meet the three-part test for standing
set forth in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992), requiring (1) injury in fact, (2) causation, and (3)
redressability. The district court focused on the third prong,
concluding RPA could not show its alleged injury would be in
any way ameliorated by the relief it was seeking. Renal
Physicians Ass’n v. Dep’t of Health & Human Servs., 422 F.
 9

Supp. 2d 75, 83-85 (D.D.C. 2006). Because the safe harbor was
merely an available option for proving fair market value, the
direct cause of the alleged injury was not the safe harbor but
rather the actions the clinics decided to take independently. Id.

Moreover, concluded the court, invalidating the safe harbor
would not relieve the RPA’s alleged injury. At the time of the
Phase I rulemaking, the agency clearly announced its intent “to
accept any method [of proof] that is commercially reasonable
and provides us with evidence that the compensation is
comparable to what is ordinarily paid for an item or service in
the location at issue, by parties in arm’s-length transactions who
are not in a position to refer to one another.” 66 Fed. Reg. at
944. The safe harbor merely identified two “presumptively
reasonable” methods of proof, without restricting parties from
relying on other methods of proof. Renal Physicians Ass’n, 422
F. Supp. 2d at 84. And, in any event, once the agency had
expressed its approval of those two methods, it could not
“unring the bell.” Id. at 85 (quoting Maness v. Meyers, 419 U.S.
449, 460 (1975)). Therefore, even if the safe harbor was
invalidated, the two methods of proof would still be available to
providers and they would still enjoy the implicit approval of the
agency, absent a rulemaking expressly disapproving these
methods. Id. at 84-85. The relief sought in RPA’s complaint
thus would not redress its alleged injury. Id. In reaching these
conclusions, the district court relied on this court’s decision in
National Wrestling, a standing decision that likewise involved
the independent action of a third party in response to a safe
harbor and turned on the question of redressability. 366 F.3d at
933.

The district court granted the government’s motion to
dismiss, 422 F. Supp. 2d at 86, and RPA filed this appeal.
 10

II

We review a dismissal for lack of standing de novo. Nat’l
Wrestling Coaches Ass’n, 366 F.3d at 937. “As the Supreme
Court explained in [Lujan], the burden of production a plaintiff
must bear in order to show it has standing to invoke the
jurisdiction of the district court varies with the procedural
context of the case. At the pleading stage, ‘general factual
allegations of injury resulting from the defendant’s conduct may
suffice,’ and the court ‘presum[es] that general allegations
embrace the specific facts that are necessary to support the
claim.’” Sierra Club v. EPA, 292 F.3d 895, 898-99 (D.C. Cir.
2002) (quoting Lujan, 504 U.S. at 561).

The government emphasizes that the safe harbor is
voluntary and that, even if the safe harbor were rescinded, the
fair market value requirement would still remain. Therefore, the
clinics might take the same action even without the safe harbor.
Standing, however, surely cannot be so easily defeated solely on
the basis that the challenged regulation creates a voluntary safe
harbor. Voluntary or not, a safe harbor must achieve some
useful purpose or an agency would not bother to create it, which
suggests that every safe harbor has at least some substantive
impact. The extent of this substantive impact turns on the scope
of the risk associated with not using the safe harbor; the higher
the risk, the more likely the safe harbor will attract regulated
entities into its calm (litigation free) waters. If an agency uses
a safe harbor to coerce parties toward a substantive result the
agency prefers, and the safe harbor is voluntary in name only,
then the agency is making substantive law.

Here, however, the alleged impact of the safe harbor on
RPA members is indirect, the result of the actions of third
parties. In Lujan, 504 U.S. 555, the Supreme Court emphasized
the heightened showing required of a plaintiff alleging injury
 11

from the government’s regulation of a third party:

When . . . a plaintiff’s asserted injury arises from the
government’s allegedly unlawful regulation (or lack of
regulation) of someone else, much more is needed. In that
circumstance, causation and redressability ordinarily hinge
on the response of the regulated (or regulable) third party to
the government action or inaction—and perhaps on the
response of others as well. . . . [I]t becomes the burden of
the plaintiff to adduce facts showing that . . . choices [of the
independent actors] have been or will be made in such
manner as to produce causation and permit redressability of
injury. Thus, when the plaintiff is not himself the object of
the government action or inaction he challenges, standing
is not precluded, but it is ordinarily substantially more
difficult to establish.

504 U.S. at 562 (internal quotation marks and citations omitted;
second emphasis added).

We grappled with these competing considerations in
National Wrestling, a case involving a challenge to a 1979
“Policy Interpretation” of the Department of Education (“DOE”)
addressing how colleges could comply with Title IX’s ban on
sex discrimination in intercollegiate athletics. Nat’l Wrestling
Coaches Ass’n, 366 F.3d at 933. The 1979 Policy Interpretation
established what became known as the “Three-Part Test,” under
which Title IX compliance can be demonstrated in any one of
three ways: (1) strictly by the numbers (i.e., athletic
opportunities for men and women in proportion to male and
female enrollment at the college); (2) by showing that the
college has been (and is) expanding programs that serve the
underrepresented sex; or (3) by showing that the interest and
abilities of the underrepresented sex are fully served by the
existing program. Id. at 935. The first of the three
 12

options—which was the easiest to objectively demonstrate—was
in essence a safe harbor.

The plaintiffs in National Wrestling were “several
membership organizations that represent the interests of
collegiate men’s wrestling coaches, athletes, and alumni.” Id. at
933. The organizations claimed injury “from decisions by
educational institutions to eliminate or reduce the size of men’s
wrestling programs,” allegedly to comply with the first prong of
the Three-Part Test. Id. at 935. The district court concluded the
plaintiffs lacked standing, and we affirmed. Id. at 949.

We reasoned that the “direct causes of appellants’ asserted
injuries—loss of collegiate-level wrestling opportunities for
male student-athletes—are the independent decisions of
educational institutions . . . . Appellants offer nothing but
speculation to substantiate their claim that a favorable decision
from this court will redress their injuries by altering these
schools’ independent decisions.” Id. at 936-37. In our
discussion, id. at 933, 938-39, we relied on Lujan as well as
several other Supreme Court decisions holding that standing to
challenge a government policy cannot be founded merely on
speculation as to what third parties will do in response to a
favorable ruling. See Allen v. Wright, 468 U.S. 737, 758-59
(1984) (speculative whether change in tax exemption for private
schools would lead to a change in school policies); Simon v.
E. Ky. Welfare Rights Org., 426 U.S. 26, 42-43 (1976)
(speculative whether change in tax rules governing nonprofit
hospitals would improve services for indigents); cf. Warth v.
Seldin, 422 U.S. 490, 504 (1975) (plaintiffs claiming a local
zoning ordinance excluded low income residents failed to show
they would be able to buy or rent homes in the town if the court
granted their requested remedy).

In National Wrestling, we also relied on our earlier holding
 13

in Freedom Republicans, Inc. v. Federal Election Commission,
13 F.3d 412 (D.C. Cir. 1994). In Freedom Republicans, an
independent, multiracial organization of Republicans sought to
challenge the Federal Election Commission’s funding of the
Republican National Convention, arguing the party’s delegate-
selection processes discriminated against minority groups. Id.
at 413-14. We found that, although the level of government
funding was “substantial,” the alleged injury was “not fairly
traceable to any encouragement on the part of the government,”
and “we cannot begin to predict . . . what impact withdrawal [of
government funding] might have on Party decisionmaking as
to . . . delegate-allocation.” Id. at 419.

The same deficiency that defeated standing in these cases
doomed the plaintiffs in National Wrestling. Specifically, the
plaintiffs had not “suggest[ed] that any particular school
necessarily would forego elimination of a wrestling team or
reinstate a previously disbanded program in the absence of [the
Three-Part Test’s safe harbor].” Nat’l Wrestling Coaches Ass’n,
366 F.3d at 939. Referencing a comment at oral argument that
the plaintiff organizations would have “better odds” of retaining
their wrestling programs if the court invalidated the Three-Part
Test, we explained that “a quest for ill-defined ‘better odds’ is
not close to what is required to satisfy the redressability prong
of Article III.” Id. We continued:

Even if appellants prevailed on the merits in their challenge
to the Three-Part Test, Title IX and the 1975 Regulations
would still be in place. Federally funded schools would still
be required to provide athletic opportunities in a manner
that equally accommodated both genders. . . . Schools
would remain free to eliminate or cap men’s wrestling
teams and may in some circumstances feel compelled to do
so to comply with the statute and the 1975 Regulations.
This is particularly so since Title IX itself permits evidence
 14

of disproportion in the distribution of benefits between
sexes to be considered in enforcement proceedings against
recipients of federal funding. Moreover, other reasons
unrelated to the challenged legal requirements[, such as a
desire to do what is morally right,] may continue to
motivate schools to take such actions.

Id. at 939-40 (citations omitted).

We identified two categories of cases where standing exists
to challenge government action though the direct cause of injury
is the action of a third party. First, standing exists where the
challenged government action authorized conduct that would
otherwise have been illegal. Id. at 940. In such cases, if the
authorization is removed, the conduct will become illegal and
therefore very likely cease. Hence, “[c]ausation and
redressability . . . are satisfied in this category of cases, because
the intervening choices of third parties are not truly independent
of government policy. . . . [T]hey could only preclude redress
if those third parties took the extraordinary measure of
continuing their injurious conduct in violation of the law.” Id.
at 940-41.

Second, standing has been found “where the record
presented substantial evidence of a causal relationship between
the government policy and the third-party conduct, leaving little
doubt as to causation and the likelihood of redress.” Id. at 941.
As examples we cited Tozzi v. United States Department of
Health & Human Services, 271 F.3d 301 (D.C. Cir. 2001), and
Block v. Meese, 793 F.2d 1303 (D.C. Cir. 1986). In Tozzi, we
found a manufacturer had standing to challenge the
government’s classification of dioxin as a carcinogen, because
there was “little doubt” the government’s authoritative statement
would affect demand for the manufacturer’s products. 271 F.3d
at 309. Similarly, in Block, we found a film distributor had
 15

standing to challenge the government’s classification of certain
films as “political propaganda,” because the distributor
submitted several declarations and affidavits detailing specific
instances in which potential customers declined to take a film
because of the classification. 793 F.2d at 1308.

In other words, to establish redressability at the pleading
stage, we required more than a bald allegation; we required that
the facts alleged be sufficient to demonstrate a substantial
likelihood that the third party directly injuring the plaintiff
would cease doing so as a result of the relief the plaintiff sought.
Nat’l Wrestling Coaches Ass’n, 366 F.3d at 942-44. We did not
find such allegations in National Wrestling, because a school’s
decision whether to keep a men’s wrestling program might
depend on factors having nothing to do with the Three-Part Test,
not the least of which was the school’s independent desire to
shift more resources to women’s sports. Nat’l Wrestling
Coaches Ass’n, 366 F.3d at 939-40. The plaintiffs “offered
nothing but ‘unadorned speculation’ to suggest that the schools
covered by Title IX would change their decisions if appellants
were to prevail in this case.” Id. at 943. We continued:

There is nothing in Tozzi and Block indicating that the third
parties whose conduct injured the plaintiffs would have had
reason to continue their injurious conduct unaltered in the
absence of the challenged government action. In this case,
by contrast, the continued vitality of Title IX itself and the
1975 Regulations means that schools must continue to take
gender equity into account when designing their athletic
programs. And appellants have offered nothing to indicate
that the schools will act any differently than they have in
the past regarding decisions to comply with Title IX.

Id.
 16

“In sum,” we concluded, “[t]he problem here is that
appellants have failed completely to satisfy the redressability
prong of Article III standing, for there is nothing to support
appellants’ claim that a favorable ruling would alter the schools’
conduct.” Id. at 944.

III

Here, as in National Wrestling, an agency has created a
voluntary safe-harbor provision; various regulated entities have
independently chosen to take advantage of the safe harbor; and
a party that is indirectly affected by the safe harbor has brought
a law suit, challenging it. Under National Wrestling, RPA needs
to show that the decision of clinics to reduce the hourly wage of
medical directors is linked to the continuing existence of the
safe-harbor provision such that invalidating the provision will be
reasonably likely to cause the clinics to raise the hourly wage.
Moreover, it is not enough simply to plead this causative link.
National Wrestling makes clear that, even at the pleading stage,
a party must make factual allegations showing that the relief it
seeks will be likely to redress its injury.

RPA claims standing as the representative of its members,
who allegedly suffered injury as a result of the safe harbor. See
Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343
(1977) (“an association has standing to bring suit on behalf of its
members when: (a) its members would otherwise have standing
to sue in their own right; (b) the interests it seeks to protect are
germane to the organization’s purpose; and (c) neither the claim
asserted nor the relief requested requires the participation of
individual members in the lawsuit”). RPA has made detailed
allegations regarding some elements of standing, but none
regarding redressability. Although RPA alleges that its
members were injured, and that the safe harbor was the cause,
it does not allege facts showing that even a single hospital or
 17

dialysis center would pay a medical director more if the court
held the safe-harbor provision invalid.

In support of standing, RPA supplemented the factual
allegations in its complaint with a single affidavit of one of its
members: Dr. Joseph Anzalone, a nephrologist, who was the
medical director for the dialysis facility at Central Washington
Hospital in Washington state. Affidavit of Joseph Anzalone,
M.D. (June 9, 2005), Joint Appendix 83. In 2005, after the safe
harbor was created, the facility where Dr. Anzalone performed
services (and to which he made referrals) reduced his hourly
wage, stating its “hands were tied” by a “new federal law.” Id.
at 84-85. Rather than accept this reduction in his wage, Dr.
Anzalone left his post as medical director of the facility, losing
$35,000 in income as a result. Id. Since that time, he has not
been able to obtain a similar post at another facility, because he
has not identified an opening for a medical director position in
his area. Id. at 85.

Assuming, for purposes of argument, that Dr. Anzalone
adequately asserts an injury, causation remains uncertain and
redressability is not addressed at all. The affidavit does not even
mention the safe-harbor provision in specific terms. Instead, it
refers vaguely to a “new federal law,” which might be a
reference to the Stark Law in general. Therefore, we really have
no way of knowing why the dialysis facility at Central
Washington Hospital reduced Dr. Anzalone’s hourly wage, and
we cannot assume the safe-harbor provision was a critical factor.
Nor do we have even an allegation that vacating the safe harbor
would lead to an increase in Dr. Anzalone’s compensation.

Nor does the logic of Dr. Anzalone’s allegations regarding
injury and causation make it “likely,” rather than “speculative,”
that, if the safe harbor were invalidated or rescinded, the Central
Washington Hospital dialysis facility would, in response, raise
 18

the hourly wage it pays its medical director. Ctr. for Law &
Educ. v. Dep’t of Educ., 396 F.3d 1152, 1157 (D.C. Cir. 2005)
(quoting Lujan, 504 U.S. at 560-61) (internal quotation marks
omitted). It is at least as plausible that, having established the
market will easily bear the lower wage, the clinic will maintain
the lower wage. See E. Ky. Welfare Rights Org., 426 U.S. at 43
(holding, in a challenge to an IRS revenue ruling allowing
favorable tax treatment to nonprofit hospitals that offered
indigents only emergency room service, that the plaintiffs failed
to establish redressability where, if such treatment were
rescinded, it was “just as plausible that the hospitals to which
[the plaintiffs] may apply for service would elect to forgo
favorable tax treatment to avoid the undetermined financial
drain of an increase in the level of uncompensated services” as
it was that the “suit would result in the availability to [the
plaintiffs] of such services”) (quoted in Nat’l Wrestling Coaches
Ass’n, 366 F.3d at 938). If one effect of the safe harbor has been
to lower wages for medical directors, a secondary effect has
been to demonstrate to dialysis facilities that they can pay lower
wages and still function effectively. Thus, it is “speculative,”
rather than “likely,” that invalidating the safe harbor will
somehow cause these facilities to pay more. The effect (if any)
of the safe harbor cannot be simply undone.

There is a related point that the trial court found particularly
persuasive, as do we. Even if a court invalidated the safe
harbor, dialysis facilities would remain obligated under the Stark
Law to pay no more than fair market value for medical director
services, and CMS policy makes clear, in this regard, that a
facility can offer any method of proof “that is commercially
reasonable and provides [the agency] with evidence that the
compensation is comparable to what is ordinarily paid . . . in the
location at issue, by parties in arm’s-length transactions who are
not in a position to refer to one another.” 66 Fed. Reg. at 944.
The effect of the safe-harbor provision has been to identify one
 19

relatively simple method of proof CMS finds persuasive, and
there is no reason to think CMS will find this method of proof
any less persuasive if the safe harbor is invalidated. See Renal
Physician Ass’n, 422 F. Supp. 2d at 84-85. Indeed, the
gravamen of RPA’s complaint is that the safe harbor sets
compensation rates below market, and there thus can be no
doubt that a dialysis facility or hospital complies with the Stark
Law if its compensation rates are set in accordance with the safe
harbor methodologies. See 42 U.S.C. § 1395nn(e)(3)(A)
(approving of compensation rates that “do[] not exceed fair
market value” (emphasis added)). In short, the word is already
out, and therefore it is too late to reverse course. Even if a court
were to declare the safe harbor invalid, the same dialysis
facilities that have opted to rely on the safe harbor will be likely
to continue to rely on the safe-harbor method of proof, knowing
with some assurance that the agency will be likely to accept this
proof as indicative of fair market value. Indeed, the only way to
prevent this result would be for a court not only to invalidate the
safe harbor but also to repudiate the safe harbor as an acceptable
method of proof, but RPA does not suggest any legal basis for
such relief, nor does it seek such relief.

In sum, RPA has not satisfied the redressability prong of the
standing requirement, because it has not alleged any facts
showing that an order invalidating the safe harbor will likely
cause dialysis facilities to increase the wages of RPA members.
Specifically, RPA failed to allege facts showing that even a
single hospital or dialysis center would pay a medical director
more, or would forgo a planned pay cut, if the court held the
safe-harbor provision invalid.

In reaching this conclusion, we do not read National
Wrestling more broadly than is warranted by the facts of that
case. We see National Wrestling as standing for two simple
points, neither of which constitutes a shift in the law of standing,
 20

but both of which doom RPA’s claim of standing here. First,
although less is required to survive a motion to dismiss than a
motion for summary judgment, National Wrestling makes clear
that a bald allegation of standing is not enough to survive even
a motion to dismiss where neither the factual allegations nor
their logic establish redressability. See Nat’l Wrestling Coaches
Ass’n, 366 F.3d at 938, 941-43. Second, National Wrestling
confirms that causation does not inevitably imply redressability.
See id. at 937, 942-43. There might be some circumstances in
which governmental action is a substantial contributing factor in
bringing about a specific harm, but the undoing of the
governmental action will not undo the harm, because the new
status quo is held in place by other forces. That was the case in
National Wrestling, where the independent desire of colleges to
balance their athletic programs worked to hold in place changes
that might have been influenced at the outset by the Department
of Education’s policies. Id. at 939-40. Likewise, that is the case
here, where the independent choice of the dialysis facilities,
seeking to keep costs down and avoid the risks of litigation, will
hold in place the alleged effect of the safe harbor even if a court
were to invalidate the safe harbor.

IV

RPA argues a lesser showing of redressability suffices here
because it is alleging an injury to procedural rights. See Lujan,
504 U.S. at 572 n.7. This argument also fails, however.

The point of the lower standard for redressability in a
procedural-injury case is that the injury in such a case is not
associated only with the substantive decision the agency reached
but also with the agency’s failure to follow proper procedures in
reaching that decision. Therefore, in a procedural-injury case,
a plaintiff need not show that better procedures would have led
to a different substantive result. See Nat’l Parks Conservation
 21

Ass’n v. Manson, 414 F.3d 1, 5 (D.C. Cir. 2005); Sugar Cane
Growers Coop. v. Veneman, 289 F.3d 89, 94-95 (D.C. Cir.
2002). Nevertheless, to have standing to bring a procedural-
injury case, the procedure at issue must be one designed to
protect a threatened interest of the plaintiff. Lujan, 504 U.S. at
573 n.8; Nat’l Parks Conservation Ass’n, 414 F.3d at 5; Fla.
Audubon Soc’y v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996).
Moreover, though the plaintiff in a procedural-injury case is
relieved of having to show that proper procedures would have
caused the agency to take a different substantive action, the
plaintiff must still show that the agency action was the cause of
some redressable injury to the plaintiff. Ctr. for Law & Educ.,
396 F.3d at 1157, 1160. Therefore, here, RPA must show the
safe harbor inflicted on it or its members a redressable injury.
For the reasons already stated, it has failed to do so.

V

We agree with the district court that RPA lacks standing to
bring its case because it has not shown that a ruling in its favor
will redress the injury it alleges. The dismissal for lack of
subject matter jurisdiction is therefore

Affirmed.