Cares Community Health v. HHS

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 21, 2019 Decided December 20, 2019

No. 18-5319

CARES COMMUNITY HEALTH,
APPELLANT

v.

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL.,
APPELLEES

Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02774)

James L. Feldesman argued the cause for appellant. With
him on the briefs were Matthew S. Freedus and David A.
Bender.

Karen Schoen, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Joseph H. Hunt, Assistant Attorney General, and Alisa B.
Klein, Attorney.

Before: TATEL, PILLARD, and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge PILLARD.
 2
PILLARD, Circuit Judge: A provision of the Medicare
statute we call the Not Less Than Provision, 42 U.S.C.
§ 1395w-27(e)(3)(A), requires that private Medicare insurance
plans’ reimbursements to a Federally Qualified Health Center
(FQHC) for government-subsidized medical services be “not
less than” what the insurers pay other healthcare providers not
receiving such subsidies. Cares Community Health, an FQHC,
claims that the Not Less Than Provision also prevents private
Medicare prescription drug plans from reimbursing an FQHC
less for dispensing pharmaceuticals than they would reimburse
a non-FQHC for dispensing the same drugs. Cares sued the
U.S. Department of Health and Human Services (HHS), the
HHS Secretary, and the Administrator of the Centers for
Medicare and Medicaid Services (CMS), claiming that they
unlawfully allowed an insurer offering Medicare prescription
drug coverage, Humana Health Plan, Inc., to pay Cares less for
drugs that Cares obtains at a discount under a separate federal
program known as Section 340B, id. § 256b, than Humana
would reimburse a non-FQHC for the same drugs. The district
court dismissed Cares’ claim, holding that the Medicare statute
does not mandate that HHS require Humana to reimburse
FQHCs for discounted pharmaceuticals at a rate “not less than”
Humana pays other providers for the same drugs. Cares Cmty.
Health v. HHS, 346 F. Supp. 3d 121, 129 (D.D.C. 2018)
(quoting 42 U.S.C. § 1395w-27(e)(3)(A)). We affirm.

BACKGROUND

To become an FQHC like Cares under the Medicare
program, 42 U.S.C. § 1395x(aa)(4), a health center must
provide “primary health services” to “medically underserved”
communities, id. § 254b(a), regardless of patients’ ability to
pay, see id. § 254b(k)(3)(G). FQHCs are a key part of the
medical safety net for low-income individuals without health
insurance. Recognizing that FQHCs’ central role in treating
 3
low-income, uninsured patients means that they provide lots of
uncompensated care, Congress has provided FQHCs various
forms of financial support. See generally Cmty. Health Care
Ass’n of N.Y. v. Shah, 770 F.3d 129, 136 (2d Cir. 2014).

The Medicare statute provides one such support through
governmental “wraparound” payments. Those payments make
up the difference between what private insurers reimburse
FQHCs for providing non-pharmacy outpatient medical
services to Medicare beneficiaries and what traditional
Medicare would reimburse a provider for the same services,
which might be higher. See 42 U.S.C. § 1395l(a)(3)(B).
Because insurers might otherwise be tempted to save money at
the government’s expense by lowering their reimbursements to
FQHCs receiving wraparound payments, Medicare’s Not Less
Than Provision prevents insurers from exploiting the
wraparound support by selectively reducing reimbursement
rates to FQHCs. See id. § 1395w-27(e)(3)(A).

The Public Health Service Act provides a second support
through Section 340B, which requires drug manufacturers
participating in Medicaid to offer pharmaceutical discounts to
FQHCs and certain other safety-net healthcare providers. See
id. § 256b. These drug discounts can produce income for
eligible providers insofar as insurers reimburse them at market
prices that exceed the 340B-discounted price. Notwithstanding
some difference in how these two supports operate, Cares
argues that the Medicare statute’s protection against insurers’
freeloading off the wraparound program also necessarily
forbids insurers from lowering their reimbursements to capture
for themselves the benefit of Section 340B discounts.

A. The “Not Less Than” Payment Mandate

“The federal Medicare program reimburses medical
providers” such as FQHCs “for services they supply to eligible
 4
patients” age 65 and older or with disabilities. Ne. Hosp.
Corp. v. Sebelius, 657 F.3d 1, 2 (D.C. Cir. 2011). The
Medicare statute is divided into five “Parts,” lettered A
through E, with Parts A through D each corresponding to a
separate benefit category under Medicare. Id. Traditional
Medicare comprises Part A, which “covers medical services
furnished by hospitals and other institutional care providers,”
and Part B, which covers outpatient care like physician and
laboratory services. Id. Congress authorized wraparound
payments to FQHCs in the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Medicare
Modernization Act or MMA), Pub. L. No. 108-173, 117 Stat.
2066, which “established the Medicare Advantage program” in
Part C, id. § 201(a), 117 Stat. at 2176 (codified as amended at
42 U.S.C. § 1395w-21 et seq.), and added prescription drug
coverage to Medicare in Part D, id. § 101, 117 Stat. at 2071
(codified as amended at 42 U.S.C. § 1395w-101 et seq.).

1. Medicare Part C Services and Wraparound
Payments

Under Medicare Advantage (Part C), private insurance
companies—known as Medicare Advantage organizations—
contract with CMS to offer Medicare beneficiaries a similar
range of medical coverage to what traditional Medicare funds
directly under Parts A and B. See Ne. Hosp. Corp., 657 F.3d
at 2; see also MSPA Claims 1, LLC v. Tenet Fla., Inc., 918 F.3d
1312, 1316 (11th Cir. 2019). CMS pays those insurers (the
Medicare Advantage organizations) a fixed amount for each
eligible Medicare beneficiary they enroll, and the insurers in
turn negotiate agreements with healthcare providers to
reimburse them for services they provide to the insurers’
enrolled beneficiaries. See Ne. Hosp. Corp., 657 F.3d at 3.
Part C imposes certain requirements on CMS’ contracts with
insurers, e.g., 42 U.S.C. § 1395w-27, some of which CMS
 5
must require insurers to implement in their agreements with
providers, e.g., id. § 1395w-27(e)(3)(A).

Relevant here, the Medicare Modernization Act includes
three interlocking requirements regarding Medicare Advantage
organizations’ relationship with FQHCs, each of which we
give a shorthand name for ease of reference. See MMA
§ 237(a)-(c), 117 Stat. at 2212-13.

First, the Wraparound Payment Provision, codified in
Medicare Part B, authorizes wraparound payments from the
Federal Supplementary Medical Insurance Trust Fund, a funder
of outpatient services that beneficiaries receive under Part B.
42 U.S.C. § 1395l(a)(3)(B); see also Schweiker v. McClure,
456 U.S. 188, 190 (1982). Wraparound payments make up the
difference between the reimbursement amount Medicare
Part B sets for “[FQHC] services,” 42 U.S.C.
§ 1395k(a)(2)(D)(ii), and what insurers and beneficiaries
actually pay FQHCs for those services under Part C. See id.
§ 1395l(a)(3)(B). That shortfall occurs because insurer and
patient payment methodologies under Part C yield payment
amounts that do not always match what FQHCs are due under
Part B. Id. Wraparound payments thus help to meet FQHCs’
costs of providing outpatient medical services. The parties
agree that the Wraparound Payment Provision’s reference to
“[FQHC] services”—a term that Medicare defines as
outpatient services provided under Medicare Part B, id.
§ 1395x(aa)(3)—does not encompass prescription drugs, so
wraparound payments top up payments for outpatient services
provided by FQHCs, but not their pharmacy services.

Second, the Written Agreement Provision, codified in
Part C under the heading “Payment rule for [FQHC] services,”
helps to implement the Wraparound Payment Provision by
specifying which transactions count for wraparound payments
 6
as well as when and where the Trust Fund must make such
payments. Id. § 1395w-23(a)(4). The Written Agreement
Provision requires a wraparound payment “directly” to an
FQHC whenever a Medicare beneficiary “who is enrolled with
[a Medicare Advantage] plan under [Part C] receives a service
from a[n FQHC] that has a written agreement with the
[Medicare Advantage] organization that offers such plan for
providing such a service.” Id.

Third, recognizing that wraparound payments could
encourage insurers to reduce their reimbursements to FQHCs
because they know the Trust Fund is on the hook for any
shortfall, Part C’s Not Less Than Provision compels CMS to
police insurers’ reimbursements to FQHCs. Specifically, it
mandates that CMS’ contracts with Medicare Advantage
organizations require the agreements identified in the Written
Agreement Provision to stipulate that payments “to the
[FQHC] for services provided by such” FQHC are “not less
than the level and amount of payment that the [Medicare
Advantage] plan would make for such services if the services
had been furnished by” a non-FQHC. Id.
§ 1395w-27(e)(3)(A). The Not Less Than Provision thereby
prevents private insurers participating in Medicare Advantage
from reducing their reimbursements in order to save money at
the Trust Fund’s expense.

Together, the Wraparound Payment and Written
Agreement Provisions mandate and spell out implementation
of subsidies for FQHCs providing “[FQHC] services” to
Medicare Advantage beneficiaries. The Not Less Than
Provision is applied through the Written Agreement
Provision’s “written agreement” to protect the wraparound
payment regime’s fiscal sustainability. The Written
Agreement Provision identifies which transactions are subject
to the Not Less Than Provision; if the benefit in question is not
 7
covered by the “written agreement described in” the Written
Agreement Provision, there is nothing through which the “not
less than” mandate can apply.

2. Medicare Part D Prescription Drug Coverage

Like Medicare Advantage, Medicare Part D’s prescription
drug benefit program “operates as a public-private partnership
between [CMS] and . . . private insurance companies called
‘Sponsors’ that administer prescription drug plans.” United
States ex rel. Spay v. CVS Caremark Corp., 875 F.3d 746, 749
(3d Cir. 2017). The Part C and D public-private insurance
programs are in many ways parallel. Prescription drug
coverage need not be provided in combination with coverage
of non-pharmacy outpatient services, but it may be. When
Medicare Advantage plans also offer prescription drug
coverage under Medicare Part D, those dual-purpose plans are
known as MA-PD plans. See 42 U.S.C. § 1395w-101(a)(3).

Reflecting their parallelism, the Part D statute imports
various Part C provisions. As relevant here, it does so through
two additional provisions we dub the Part D Contract Provision
and the Part D Rewording Provision. First, the Part D Contract
Provision applies “section 1395w-27(e)”—which includes the
Not Less Than Provision, id. § 1395w-27(e)(3)(A)—to CMS’
Medicare contracts with insurers sponsoring prescription drug
coverage. Id. § 1395w-112(b)(3)(D). Second, the Part D
Rewording Provision requires that wherever Part C provisions
like the Not Less Than Provision apply in Part D, those
“provisions shall be applied as if” any reference to a Medicare
Advantage plan “included a reference to a prescription drug
plan;” any reference to a Medicare Advantage organization
“included a reference to a” prescription drug plan sponsor; and
“any reference to a contract under section 1395w-27” in Part C
“included a reference to a contract under
 8
section 1395w-112(b)” in Part D. Id. § 1395w-151(b)(1)-(3).
Notably, the parties identify nothing in the Medicare statute
that applies the Wraparound Payment Provision or the Written
Agreement Provision to Part D or revises for purposes of
Part D the Not Less Than Provision’s reference to a “written
agreement described in” the Written Agreement Provision. Id.
§ 1395w-27(e)(3)(A).

The Part D Contract Provision thus would appear to apply
the Not Less Than Provision to CMS’ contracts with insurers
offering prescription drug coverage, while the Part D
Rewording Provision dictates how to read the Not Less Than
Provision in the Part D context.

B. Section 340B Drug Discounts

Section 340B’s drug discount program, enacted in 1992
within the Public Health Service Act, see Veterans Health Care
Act of 1992, Pub. L. No. 102-585, § 602, 106 Stat. 4943,
4967-71 (codified as amended at 42 U.S.C. § 256b), and
administered by the Health Resources and Services
Administration, is statutorily and administratively separate
from Medicare. See Astra USA, Inc. v. Santa Clara Cty., 563
U.S. 110, 113 (2011). “Section 340B requires a manufacturer
of ‘covered outpatient drugs’ to enter into a contract with the
Secretary of HHS—a condition for eligibility for Medicaid
matching funds—under which the manufacturer agrees to
provide these drugs to certain ‘covered entities’ at discounted
prices.” Univ. Med. Ctr. of S. Nev. v. Shalala, 173 F.3d 438,
439 (D.C. Cir. 1999) (quoting 42 U.S.C. § 256b(a)(1)). The
“covered entities” entitled to pharmaceutical discounts from
drug manufacturers comprise some sixteen types of healthcare
providers, including FQHCs and various other types of clinics
and hospitals, many of which supply “safety-net services to the
poor.” Astra USA, 563 U.S. at 113; see 42 U.S.C. § 256b(a)(4).
 9
For the quarter century it has been in place, Section 340B
has aided eligible hospitals and clinics in two ways: It has
directly afforded FQHCs and other healthcare safety-net
providers savings on drugs, and it has indirectly benefitted
those providers when insurance reimbursements exceed
discounted pharmaceutical prices. The class of eligible
hospitals and clinics that provides drugs for free or at reduced
cost to qualifying patients saves billions of dollars per year by
obtaining those drugs at discount under Section 340B. See
Medicare Payment Advisory Comm’n, Report to the Congress:
Overview of the 340B Drug Pricing Program 6 (May 2015)
(MedPAC Report); see also 340B Drug Pricing Program
Ceiling Price and Manufacturer Civil Monetary Penalties
Regulation: Final Rule, 82 Fed. Reg. 1,210, 1,227 n.1 (Jan. 5,
2017). In addition to those savings, eligible providers garner
income as a result of the 340B discounts when they furnish
340B drugs to insured patients, because the insurers’ standard-
rate “reimbursements for the [discounted] drugs exceed the
340B prices [providers] pay for the drugs.” MedPAC Report
at 8. A congressionally mandated study of how eligible
providers use this “income from the 340B program,” Patient
Protection and Affordable Care Act, Pub. L. No. 111-148,
§ 7103(b)(3), 124 Stat. 119, 828 (2010), found that the above-
cost insurance reimbursements help safety-net providers fund
the uncompensated care they supply and expand the services
they offer. See U.S. Gov’t Accountability Office,
GAO-11-836, Drug Pricing: Manufacturer Discounts in the
340B Program Offer Benefits, But Federal Oversight Needs
Improvement 17 (Sept. 2011) (GAO Report).

C. Factual & Procedural History

The issue on appeal arises at the intersection of Medicare
and Section 340B. Cares contends that the Not Less Than
Provision, 42 U.S.C. § 1395w-27(e)(3)(A), precludes
 10
prescription drug plans from paying less for pharmaceuticals
dispensed by FQHCs—including 340B-discounted drugs—in
the same way it precludes insurers from paying less for
“[FQHC] services” to prevent exploitation of governmental
subsidies paid under the Wraparound Payment Provision, id.
§ 1395l(a)(3)(B).

In September 2009, Cares executed a Pharmacy Provider
Agreement with Humana to provide prescription drug services
under Humana’s MA-PD plan. Five years later, shortly after
Cares became an FQHC, Humana sent Cares an amendment to
the Agreement that set reimbursement rates for what Humana
refers to as “340B pharmacy services” at about two-thirds the
rate Humana pays other types of providers for “Retail
Pharmacy Services.” Am. Compl. ¶ 37 (A. 23). “340B
pharmacy services” are the same as “Retail Pharmacy
Services” except that “340B pharmacy services” cover drugs
discounted under Section 340B, while “Retail Pharmacy
Services” do not.

Apparently, Cares’ experience with Humana is not unique;
other 340B-eligible providers report that insurers sponsoring
Medicare Part D coverage recently have “reduc[ed] contracted
reimbursement rates for drugs based on the [provider’s] status
as a 340B provider” entitled to the 340B discount. GAO
Report at 14. Essentially, Humana’s Pharmacy Provider
Agreement amendment lowered the reimbursement it paid
Cares to account for the discount Cares receives under Section
340B, which resulted in Cares receiving less reimbursement
than non-FQHCs for the same medications. As of May 2018,
Cares had recovered some $3 million less—nearly $5,000 per
working day—than it would have recovered absent the
amendment lowering Humana’s reimbursements for “340B
pharmacy services.” Am. Compl. ¶ 41 (A. 24). (HHS itself
decided in November 2017 to reduce Medicare
 11
reimbursements for 340B pharmacy services to some eligible
hospitals on the ground that 340B-eligible hospitals “are able
to buy covered drugs at amounts significantly below the
average sales price.” Am. Hosp. Ass’n v. Azar, 895 F.3d 822,
824 (D.C. Cir. 2018).)

After disputing the amended reimbursement rates before
an arbitrator who refused to decide the rates’ lawfulness, Cares
filed this lawsuit claiming that Humana’s differential
reimbursement rates resulted from HHS’ unlawful failure to
enforce the Not Less Than Provision against Humana, in
violation of the Medicare statute and the Administrative
Procedure Act (APA), 5 U.S.C. § 706. Cares asserts two
alternative APA theories: First, HHS unlawfully withheld
required agency action by failing to apply the Not Less Than
Provision’s FQHC payment requirement to Humana’s
Pharmacy Provider Agreement with Cares, see id. § 706(1);
and, second, HHS’ inaction is arbitrary and capricious, see id.
§ 706(2)(A). The HHS defendants moved to dismiss, arguing
that the Not Less Than Provision does not apply to prescription
drug plans’ reimbursement of pharmacy services, so there is no
unlawfully withheld action or arbitrary and capricious inaction.
In response, Cares argued that the Not Less Than Provision
covers pharmacy services because it applies to all “services
provided by [an FQHC],” 42 U.S.C. § 1395w-27(e)(3)(A), not
the narrower, Medicare-defined category of “[FQHC]
services,” id. § 1395x(aa)(3), which excludes prescription
drugs; that Part D applies the Not Less Than Provision to
Medicare prescription drug plans’ agreements with FQHCs;
and that Congress intended savings from the Section 340B
program to remain with FQHCs.

The district court held that Cares failed to state a claim
“because the proposition that the [Not Less Than Provision’s]
payment requirement must be included in Part D contracts or
 12
that the payment requirement applies to Part D drugs is wrong
as a matter of law.” Cares Cmty. Health, 346 F. Supp. 3d
at 129. First, acknowledging that the Not Less Than Provision
uses the phrase “services provided by such [FQHC],” not the
defined term, “[FQHC] services,” the court nonetheless
“conclude[d] that the slight variation in phrasing cannot”
justify reading “services provided by such [FQHC]” to include
pharmacy services not counted as “[FQHC] services.” Id.
Next, the court declined to read Part D to apply the Not Less
Than Provision to prescription drug plans’ reimbursement of
pharmaceuticals, reasoning that no Part D provision “alter[ed]
the statutory definition of [FQHC] services, which excludes
Part D drugs.” Id. at 130 (emphasis omitted). Recognizing that
reading the Part D Contract Provision to have no practical
effect on the Not Less Than Provision presents “the possibility
of some amount of surplusage,” the district court nevertheless
concluded that possible surplusage “is not enough to defeat the
plain text of the” statute. Id. Finally, the court rejected Cares’
“statutory purpose argument,” finding no unambiguous textual
“hook” for the contention that “Congress intended FQHCs, not
[insurers], to internalize the benefit of discounted prescription
drugs.” Id.

Cares timely appealed the dismissal under 28 U.S.C.
§ 1291. On de novo review of the district court’s order granting
the motion to dismiss, we assume the truth of all plausibly
pleaded allegations and draw all reasonable inferences in
Cares’ favor. Agnew v. District of Columbia, 920 F.3d 49, 53
(D.C. Cir. 2019).

ANALYSIS

To review Cares’ claim that the Medicare statute precludes
HHS from approving prescription drug plans that reimburse
FQHCs less than they reimburse other healthcare providers, we
 13
first “look to the ‘traditional tools of statutory interpretation—
text, structure, purpose, and legislative history.’” In re Sealed
Case, 932 F.3d 915, 928 (D.C. Cir. 2019) (quoting Tax
Analysts v. IRS, 350 F.3d 100, 103 (D.C. Cir. 2003)). Our
analysis begins with discerning “whether the language at issue
has a plain and unambiguous meaning with regard to the
particular dispute in the case.” Roberts v. Sea-Land Servs.,
Inc., 566 U.S. 93, 100 (2012) (quoting Robinson v. Shell Oil
Co., 519 U.S. 337, 340 (1997)). We read statutory text in light
of the “fundamental canon of statutory construction that the
words of a statute must be read in their context and with a view
to their place in the overall statutory scheme.” Id. at 101
(quoting Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809
(1989)).

HHS has not requested judicial deference to its
interpretation of the Medicare statute. Cf. Chevron, U.S.A.,
Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843-45
(1984). We need not decide the significance (if any) of that
omission because Cares does not ask us to “impose a particular
reading of” an ambiguous statute on HHS, Am. Ass’n of Retired
Persons v. EEOC, 823 F.2d 600, 605 (D.C. Cir. 1987), but only
that we follow the statute’s plain meaning, which Cares
contends “require[s]” HHS to ensure that Part D prescription
drug plans reimburse FQHCs for dispensing drugs at a rate “not
less than” those plans reimburse other providers for the same
drugs, Appellant’s Br. 16. Cares never asserts that it prevails
even if the statute permits HHS’ reading, instead resting its
APA claim on the statute’s “unambiguous[]” directive. Am.
Compl. ¶ 49 (A. 25). Under its own framing, Cares must show
that the statute not only permits but requires HHS to enforce
the Not Less Than Provision against prescription drug plans; if
we decide that the statute is ambiguous and permits HHS’
inaction, we need not resolve the ambiguity or definitively
interpret the statute. As Cares acknowledges, Oral Arg.
 14
Rec. 13:35-46, the statute—with its inconsistent language and
many cross-references—is not a model of clarity, so any
argument that it clearly forecloses HHS’ interpretation has an
uphill climb.

Cares’ contention that the Not Less Than Provision
unambiguously applies to prescription drug plans’
reimbursement of FQHC pharmacy services hinges on two
arguments: First, that the “services” to which the Not Less
Than Provision applies include pharmacy services and, second,
that the Part D Rewording Provision, 42 U.S.C.
§ 1395w-151(b), rewrites the Not Less Than Provision—
including its internal cross-reference to the Written Agreement
Provision specifying Part C written agreements—to apply to
prescription drug plans. Cares must succeed on both arguments
in order to prevail, showing that each of its interpretations is
not only “possible” but “inevitable.” Regions Hosp. v. Shalala,
522 U.S. 448, 460 (1998).

Cares’ first argument would appear to have merit, given
that the Medicare statute does not define the specific phrase the
Not Less Than Provision uses—“services provided by such
[FQHC].” 42 U.S.C. § 1395w-27(e)(3)(A). That undefined
phrase’s “ordinary meaning” encompasses pharmacy services,
FCC v. AT&T Inc., 562 U.S. 397, 403 (2011), not least because
Congress authorizes FQHCs to provide such services, see
42 U.S.C. § 254b(b)(1)(A)(i)(V). To be sure, the phrase
“services provided by such [FQHC]” closely resembles the
term “[FQHC] services,” and the Medicare statute’s definitions
section specifies that “[FQHC] services” exclude prescription
drugs. Id. § 1395x(aa)(3). But “we have repeatedly held that
where different terms are used in a single piece of legislation,
the court must presume that Congress intended the terms to
have different meanings” even if they “can be used
interchangeably.” Vonage Holdings Corp. v. FCC, 489 F.3d
 15
1232, 1240 (D.C. Cir. 2007) (alteration omitted). We thus
diverge from the district court in holding that the statutory
phrase “services provided by such [FQHC]” does not
necessarily equate to the defined term, “[FQHC] services,” so
cannot alone defeat Cares’ position that the Not Less Than
Provision covers prescription drugs.

On the other hand, the fact that the Written Agreement
Provision’s heading contains the narrower, defined term
“[FQHC] services” even as that Provision’s text refers to
“services from a[n FQHC],” 42 U.S.C. § 1395w-23(a)(4),
lends support to HHS’ position that the subtly different
descriptions of “services” in the wraparound payment scheme
may all be read as equivalent to “[FQHC] services.” The
Written Agreement Provision’s interchangeable use of
“[FQHC] services” and “services from a[n FQHC]”—an
arguably broader, undefined term closely resembling the Not
Less Than Provision’s “services provided by such [FQHC],”
id. § 1395w-27(e)(3)(A)—“suggests an inadvertent drafting
inconsistency” in how the three Medicare Modernization Act
provisions describe the “services” to which wraparound
payments apply. Montana v. Clark, 749 F.2d 740, 751 (D.C.
Cir. 1984). Contrary to Cares’ position, the different wording
thus may not after all reflect “a deliberate policy choice” to
expand the range of services that the Not Less Than Provision
covers. Id.

With various textual clues supporting and undermining
Cares’ first argument, it is not readily apparent that the
“services provided by such [FQHC]” subject to the “not less
than” mandate necessarily encompasses a broader range of
services than the “[FQHC] services” term that Medicare
defines to exclude prescription drugs. We need not ultimately
decide whether “services provided by such [FQHC]” must
mean something more than “[FQHC] services,” however,
 16
because Cares does not clear a second obstacle. It fails to
establish that the Not Less Than Provision necessarily applies
to Part D prescription drug plans’ reimbursements to FQHCs.
Spelling out the revisions that the Part D Rewording Provision
dictates, see 42 U.S.C. § 1395w-151(b), the version of the Not
Less Than Provision that would apply to Part D is as follows:

A contract under [the Part D Contract Provision, id.
§ 1395w-112(b)] with [a prescription drug plan
sponsor] shall require the [prescription drug plan
sponsor] to provide, in any written agreement
described in [the Written Agreement Provision, id.
§ 1395w-23(a)(4)] between the [prescription drug plan
sponsor] and a[n FQHC], for a level and amount of
payment to the [FQHC] for services provided by such
health center that is not less than the level and amount
of payment that the [prescription drug plan] would
make for such services if the services had been
furnished by a[n] entity providing similar services that
was not a[n FQHC].

Id. § 1395w-27(e)(3)(A). As Cares reads it to apply in
Medicare Part D, the Not Less Than Provision requires CMS
to ensure that the agreements referenced in the Written
Agreement Provision—which, again, are contracts between
FQHCs and Medicare Advantage insurers for Part C
coverage—stipulate that prescription drug plans’ payments for
drugs supplied by FQHCs to their patients are “not less than”
payments to non-FQHCs for the same drugs, regardless of the
340B discount. Cares’ Part D version of the Not Less Than
Provision raises the question whether a prescription drug plan
sponsor and an FQHC providing prescription drug services
have the “written agreement” described in Part C that is the sole
vehicle through which the “not less than” payment requirement
applies. The Not Less Than Provision would have to appear in
 17
a qualifying written agreement in order to bar prescription drug
plans like Humana’s from reimbursing FQHCs like Cares less
for 340B discounted drugs than the plans would reimburse non-
FQHCs for the same drugs obtained without that discount.

Critically, Cares never explains how the “written
agreement described in” Part C’s Written Agreement
Provision, id. § 1395w-23(a)(4), covers Part D prescription
drugs or even exists between prescription drug plans and
FQHCs. Instead, Cares seems to assume that the Written
Agreement Provision refers to contracts between Medicare
Advantage insurers and FQHCs for “FQHC services” that, as
already discussed, the Medicare statute defines to exclude
prescription drugs. Reply Br. 6. Cares’ argument is thus
missing a necessary link—that the “written agreement”
required for implementation of the “not less than” payment
floor covers prescription drug plans’ reimbursements to
FQHCs under Medicare Part D. Perhaps the Pharmacy
Provider Agreement between Cares and Humana could be the
same “agreement” referenced in the Written Agreement
Provision between a Medicare Advantage “organization” and
an FQHC for “[FQHC] services,” but Cares does not so
contend, nor does it identify any other agreement between
insurers and providers through which the “not less than”
FQHC-payment requirement applies in the Part D context.

Rather than grapple with the Not Less Than Provision’s
reference to Part C’s “written agreement,” Cares argues that the
Part D Contract and Rewording Provisions, 42 U.S.C.
§§ 1395w-112(b)(3)(D), 1395w-151(b), implicitly remove (for
purposes of Part D) that cross-reference. Cares notes in support
that neither the Part D Contract Provision, which applies the
Not Less Than Provision to Part D, nor the Part D Rewording
Provision, which explains how to read certain language in
Part C provisions when they apply to Part D, expressly
 18
connects the Not Less Than Provision to the Written
Agreement Provision. Reply Br. 6-7. That fact cannot help
Cares because Part D’s failure to address the Not Less Than
Provision’s reference to the Written Agreement Provision
leaves intact duly enacted statutory language linked only to
Part C. Even Cares’ own description of how Part D revises the
Not Less Than Provision retains the Part C “written agreement”
cross-reference. See Appellant’s Br. 26-27; Reply Br. 1.

If anything, Cares’ argument cuts the other way: Part D’s
failure to revise the Not Less Than Provision’s reference to a
“written agreement” contrasts with the Part D Rewording
Provision’s revision of any reference to a “contract” between
CMS and a Part C Medicare Advantage organization to also
encompass a contract between CMS and a Part D prescription
drug plan sponsor. 42 U.S.C. § 1395w-151(b)(3). And Cares
identifies no Part D provision that applies the Written
Agreement Provision to Part D as the Part D Contract Provision
at least appears to do for the Not Less Than Provision itself. Id.
§ 1395w-112(b)(3)(D). Because “Congress include[d]
particular language” to expand the meaning of “contract” for
Part D purposes, we must “presume[] that Congress act[ed]
intentionally and purposely” in not revising the Not Less Than
Provision’s neighboring use of “written agreement” or
otherwise adapting the Written Agreement Provision to Part D.
Gozlon-Peretz v. United States, 498 U.S. 395, 404 (1991). In
short, Cares cannot “require us to read words out of the statute,”
Barber v. Thomas, 560 U.S. 474, 490 (2010), and ignore the
Not Less Than Provision’s unaltered, limiting reference to a
“written agreement described in” the Written Agreement
Provision.

Cares also invokes the canon against surplusage to argue
that, unless we read the Part D Contract and Rewording
Provisions to expand the Not Less Than Provision’s
 19
application, we impermissibly render those provisions “void
and inoperative.” Appellant’s Br. 24. An important guide to
interpreting statutes, the canon against surplusage ensures “that
effect is given to all [statutory] provisions, so that no part will
be inoperative or superfluous, void or insignificant.” Rubin v.
Islamic Republic of Iran, 138 S. Ct. 816, 824 (2018) (quoting
Corley v. United States, 556 U.S. 303, 314 (2009)). The Part D
Contract Provision expressly states that the Part C subsection
(section 1395w-27(e)) that includes the Not Less Than
Provision “shall apply” to CMS’ contracts with Part D insurers,
42 U.S.C. § 1395w-112(b)(3)(D), yet HHS acknowledges that
the “not less than” requirement has no “practical” effect on
reimbursements paid under Part D, Medicare Program;
Medical Loss Ratio Requirements for the Medicare Advantage
and the Medicare Prescription Drug Benefit Programs, 78 Fed.
Reg. 31,284, 31,285 (May 23, 2013). While HHS’s reading
raises surplusage concerns, those concerns are somewhat
reduced because the Part D Contract Provision indisputably has
“practical effect” on other provisions within the named
subsection, including on both provisions that predate Part D’s
enactment. See 42 U.S.C. § 1395w-27(e)(1)-(2); MMA
§§ 101(a)(2), 237(c), 117 Stat. at 2100, 2213. Those
preexisting provisions may have been the intended target of the
Contract Provision, and its effect on the contemporaneously
enacted Not Less Than Provision may have been overlooked.

Even assuming that Cares has identified a superfluity
problem, the canon against surplusage changes our analysis
only if Cares offers a “competing interpretation [that] gives
effect to every clause and word of [the] statute.” Marx v. Gen.
Revenue Corp., 568 U.S. 371, 385 (2013) (quoting Microsoft
Corp. v. i4i LP, 564 U.S. 91, 106 (2011)). As already
discussed, however, Cares’ interpretation requires omitting the
phrase “in any written agreement described in” the Written
Agreement Provision from the Not Less Than Provision.
 20
42 U.S.C. § 1395w-27(e)(3)(A). Accordingly, the canon
against surplusage—which, after all, “is not an absolute rule,”
Marx, 568 U.S. at 385—does not unambiguously require
Cares’ reading of the statute.

To complement its textual arguments, Cares reasons that
unless the Not Less Than Provision applies to prescription drug
plans’ reimbursements to FQHCs, insurers may capture
through lower reimbursement rates the discounts that Congress
required pharmaceutical manufacturers to provide FQHCs (and
other eligible providers) under Section 340B. From a policy
perspective, Cares’ position is “intuitive enough,” Cares Cmty.
Health, 346 F. Supp. 3d at 130: If Congress enacted both
Medicare wraparound payments and Section 340B drug
discounts to help fund FQHCs’ provision of uncompensated
care to low-income, uninsured patients, then Congress may
have intended that both benefits remain with FQHCs rather
than redound to insurers’ benefit in the form of lower
reimbursements. Even as it opposes Cares’ reading of the Not
Less Than Provision, HHS acknowledges that the savings that
prescription drug plans extract by paying less for 340B
pharmacy services do not appear to pass through to CMS. Oral
Arg. Rec. 20:47-21:29.

It may be, as Cares contends, that FQHCs are underfunded
relative to insurers offering Medicare prescription drug plans
and that FQHCs’ service mission in medically underserved
communities significantly relies on the funding stream they get
from full-price insurance reimbursements for their provision of
discounted drugs. But “[e]ven if we were persuaded that
[Cares] had the better of the policy arguments, those arguments
could not overcome the statute’s plain language, which is our
primary guide to Congress’ preferred policy.” Sandoz Inc. v.
Amgen Inc., 137 S. Ct. 1664, 1678 (2017). At bottom, Cares
never offers an interpretation of the Medicare statute that
 21
unambiguously protects the revenue FQHCs generate from
combining manufacturers’ pharmaceutical discounts under
Section 340B with insurance reimbursements pegged to market
prices.

Because the statute does not require Cares’ reading, it
permits HHS to interpret the Not Less Than Provision as
preventing insurers from exploiting the wraparound subsidy
payments, but not protecting FQHCs’ ability to generate
revenue from market-price reimbursements for dispensing
drugs they acquire at a discount under Section 340B. Part D
does not alter the directive that the “not less than” requirement
be “provide[d] in any written agreement described in the”
Part C Written Agreement Provision. 42 U.S.C.
§ 1395w-27(e)(3)(A). Without explaining how the “written
agreement” that implements the Part C wraparound payment
scheme applies in the Part D context, Cares cannot carry its
burden to show that the Not Less Than Provision
unambiguously applies to prescription drug plans’
reimbursement of the pharmacy services that FQHCs provide
to Medicare beneficiaries.

* * *

The Medicare statute does not preclude HHS from
approving prescription drug plans that lower reimbursements
for FQHC pharmacy services based on whether the FQHC
obtained the pharmaceuticals at a discount under Section 340B.
We need not and do not decide whether the statute permits the
contrary interpretation Cares advances or whether, as a matter
of policy, HHS might promulgate regulations requiring
Medicare prescription drug plans to include a “not less than”
term in their agreements with FQHCs to secure to FQHCs
broader financial benefits from 340B drug discounts.
Whatever the merits of Cares’ preferred method of distributing
 22
the savings FQHCs enjoy under Section 340B, Cares has not
shown that the statute requires that approach.

For the foregoing reasons, the judgment of the district
court is affirmed.

So ordered.