Community Health Systems, Inc. v. Burwell (113 F. Supp. 3d 197, 2015)

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

Pending before the Court are cross:motions for summary judgment from the plaintiffs, a group of hospitals owned by Community Health Systems, Inc. (“CHS”), Pis.’ Mot. Summ. J. (“Pis.’ Mot.”), ECF No. 15-1, and the defendant, the Secretary of Health and Human Services (“HHS”), who is sued in her official capacity, Def.’s Mot. Summ. J. (“Defl’s Mot.”), ECF No. 19. The plaintiffs were denied $16,400,811 in reimbursements for “bad debt” incurred in the treatment of Medicare patients during fiscal years 2004 through 2006. First Am. Compl. (“FAC”) ¶¶ 5, 32, ECF No. 7; Def.’s Mem. Supp. Def.’s Mot. at 1 (“Def.’s Mem.”), ECF No. 19. The plaintiffs allege that this reimbursement denial violates the Administrative Procedure Act (“APA”), 5 U.S.C. § 706, and a Congressional moratorium, in effect from 1987 through 2012, that barred any change in HHS policy regarding reimbursement of Medicare bad debt. FAC ¶ 1; Pis.’ Corrected Mem. Supp. Pis.’ Mot. (“Pis.’ Mem.”) at 1, ECF No. 15-1. The defendant counters that the policy under which HHS denied the reimbursements is both reasonable and long-standing, having existed at the time the Medicare Bad Debt Moratorium took effect. Consequently, the defendant maintains that the challenged reimbursement denial reflects no policy change that would violate the Moratorium. Def.’s Mem. at 2. For the reasons set forth below, the defendant’s motion is granted and the plaintiffs’ motion is denied.

I. BACKGROUND

Resolving the instant motions requires a tour of the “labyrinthine world of Medicare reimbursements.” District Hosp. Partners, L.P. v. Burwell, 786 F.3d 46, 48 (D.C.Cir.2015) (internal quotation marks omitted). The relevant portions of the Medicare statute are explained first, followed by the history of the Medicare Bad Debt Moratorium, before the Court addresses the reimbursement decision challenged by the plaintiffs.

A. General Medicare Reimbursements and Appeals Therefrom

“Medicare is a federally funded medical insurance program for the elderly and disabled ... [established as part of the Social Security Act, 42 U.S.C. § 1395 et seq.” Fischer v. United States, 529 U.S. 667, 671, 120 S.Ct. 1780, 146 L.Ed.2d 707 (2000). Inpatient hospital care is generally covered under Part A of the Medicare Act. 42 U.S.C. §§ 1395C-13951-5. The Centers for Medicare and Medicaid Services (“CMS”), “formerly the Health Care Financing Administration (HCFA),.- administers the Medicare program on behalf of the Secretary” of HHS. St. Luke’s Hosp. v. Sebelius, 611 F.3d 900, 901 n. 1 (D.C.Cir.2010) (internal citation omitted).

The Secretary is required by statute to delegate most of “[t]he administration of [Part A] ... through contracts ' with [Medicare administrative contractors.” 42 U.S.C. § 1395h(a). These contractors, known as “Intermediaries,” are responsible for, inter alia, “[determining the amount of the payments required ... to be made to providers of services, suppliers and individuals,” to make those payments, and provide communication, education, and technical assistance to health care providers treating .Medicare patients. ■ Id. § 1395kk-l(a)(4). In order to receive, payment from the Medicare program, through the Intermediaries, health care providers such , as the plaintiffs must submit “cost reports ... on an' annual basis.” . 42 C.F.R. § 413.20(b). After receiving and reviewing these cost reports, Intermediaries “must within a reasonable period of time ... furnish the provider ... a written notice, reflecting the contractor’s determination of the total-amount of-reimbursement due the provider.” Id. § 405.1803(a). These notices, which “[ejxplain the [Intermediary’s] determination of total program reimbursement due the provider” .are known as notices of program -reimbursements (‘‘NPRs”). See. ■■ id. § 4Q5.1803(a)(l)(i).

When dissatisfied with an NPR, a provider may seek review of, and a hearing regarding the Intermediary’s decision before; the Provider Reimbursement Review Board. (“PRRB” or “Board”), so long as certain jurisdictional requirements, which are not at issue here, are met. 42 U.S.C. § 1395oo(a). “A decision ■ of the Board shall be final unless the Secretary, on his own motion ... reverses, affirms, or modifies - the Board’s decision.” Id. § 1395oo(f)(l). The Secretary has delegated responsibility for hearing appeals from PRRB decisions to the CMS Administrator. See 42 C.F.R. § 405.1875; Mercy Home Health v. Leavitt, 436 F.3d 370, 374 (3d Cir.2006). The dissatisfied provider, or, as in this case, a group of dissatisfied providers, may file a civil action challenging the PRRB or the Administrator’s final decision-in the “District Court of the United States for the judicial district in which the greatest number of.providers participating in both the -group appeal and the civil action are located or in” this District. 42 C.F.R. § 405.1877(e)(2).

B. Medicare Bad Debt Reimbursements

The Medicare statute provides that non-Medicare patients shall not be forced to share the cost of treatment for Medicare patients, 42 U.S.C. § 1395x(v)(l)(A)(i). This ban on cross-subsidization effectively requires that “the necessary costs of efficiently delivering covered services to individuals covered by” Medicare “will not be borne by individuals not so covered.” Id. Although .the costs incurred for most of the care provided to Medicare patients are borne by the government, individual Medicare patients are “often responsible for both deductible and coinsurance payments for hospital care;” Hennepin Cnty. Med. Ctr. v. Shalala (Hennepin County), 81 F.3d 743, 745 (8th Cir.1996). If Medicare patients fail to pay this portion of their care, Medicare allows for reimbursement of these “bad debts” so long as certain criteria are met. 42 C.F.R. § 413.89(e). The principle underlying the reimbursement of Medicare bad debt is straightforward: “This policy, adopted in 1966[,] ... was originally intended to prevent costs of beneficiary care from being shifted to non-Medicare patients,” in keeping with the statutory cross-subsidization ban in § 1395x(v)(1)(A)(i). U.S. Dep’t of Health and Human Servs., Ofc. of Inspector Gen., Semiannual Rep. to the Congress (Apr. 1, 1986-Sept.30, 1986) (“1986 OIG Report”) at2.

“Bad debts” in the Medicare context are defined as “amounts considered to be un-collectible from accounts and notes receivable that were created or acquired in providing services.” 42 C.F.R. § 413.89(b)(1). Such debts are “attributable to the deductibles and coinsurance amounts” billed to Medicare patients. Id. § 413.89(a); see also Def.’s Mot. Ex. 1 (Provider Reimbursement Manual (“PRM”), Chapter 3) § 300, ECF No. 19-1. For reimbursement of bad debt arising from nonpayment of coinsurance and deductible amounts due from Medicare patients, a hospital must satisfy the following four criteria:

(1) The debt must be related to covered services and derived from deductible and coinsurance amounts. (2) The provider must be able to establish that reasonable collection efforts were made. (3) The debt was actually uncollectible when claimed as worthless. (4) Sound business judgment established that there was no likelihood of recovery at any time in the future.

42 C.F.R. § 413.89(e). While the regulations do not define key terms used in these criteria, such as “reasonable collection efforts,” “uncollectible,” “worthless,” and “likelihood of recovery,” see id. the HHS sets out interpretive instructions, policies and procedures in the PRM, see Catholic Health Initiatives (CHI) v. Sebelius, 617 F.3d 490, 491 (D.C.Cir.2010) (describing PRM as “guidelines and policies to implement Medicare regulations which set forth principles for determining the reasonable cost of provider services, but it does not have the effect of regulations”) (internal quotation marks omitted).

The opening paragraph of PRM § 310 sets out HHS’ interpretation of the phrase “reasonable collection effort” as follows:

To be considered a reasonable collection effort, a provider’s effort to collect Medicare deductible and coinsurance amounts must be similar to the effort the provider puts forth to collect comparable amounts from non-Medicare patients. It must involve the issuance of a bill on or shortly after discharge or death of the beneficiary to the party responsible for the patient’s personal financial obligations. It also includes other actions such as subsequent billings, collection letters and telephone calls or personal contacts with this party which constitute a genuine, rather than a token, collection effort. The provider’s collection effort may include using or threatening to use court action to obtain payment.

Administrative Record (“AR”) at 371 (PRM § 310), ECF No. 24-1. As this portion of PRM § 310 makes clear, a “reasonable collection effort” requires both the issuance of a bill and similar treatment of Medicare and non-Mqdicare: bills.

The second paragraph of PRM § 310, subsection A specifically addresses the use of collection agencies, stating that “[a] provider’s collection effort* may include the use of a collection-agency,” without mandating such use. Id. (PRM § 310.A). If a provider chooses to refer Medicare debt to a collection agency, HHS “expects the provider to refer all uncollected patient charges of like amount to the agency without regard to class of patient,” consistent with the policy expressed in the opening paragraph that both Medicare and non-Medicare debt be treated similarly. Id.

A “presumption of noncollectibility” applies to bad debts “[i]f after reasonable and customary attempts to collect a bill, the debt remains unpaid 'more than 120 days from the date the first bill is mailed to the beneficiary.” AR at 373 (PRM § 310.2). In such circumstances, the PRM provides that “the debt -may be deemed uncollectible.” Id. . .

If a hospital collects on a bad debt after Medicare has reimbursed the debt, procedures- are in place to prevent double recovery to' the hospital. Specifically, PRM § 316 provides that “[w]here the provider was reimbursed by the [Medicare] program for bad debts for the reporting period in which the amount recovered was included in allowable bad debts, reimbursable costs in the period of recovery' are reduced by the amounts recovered.” AR at 375 (PRM § 316). ‘ Put simply, if a provider collects on a bad debt after being reimbursed by Medicare, the provider’s At-ture - Medicare reimbursements are reduced by an identical amount. Id.

C. The Bad Debt Moratorium

Since the beginning of the Medicare program, the government has reimbursed a substantial percentage of Medicare bad debt incurred by providers in order “to prevent costs of beneficiary care from being shifted to non-Medicare patients.” 1986 OIG Report at 2. By the mid-1980s, however, elimination or radical alteration of this practice became the subject of policy debates. Id. at 3. The debate was prompted by changes to the Medicare reimbursement system made in 1983 as part of the Reagan Administration’s Social Security Act amendments, which moved from directly reimbursing hospitals for the cost of treating Medicare patients to a fixed cost per diagnosis, allowing hospitals to turn a profit on what had previously been a zero sum game. See Spencer Rich, Getting Rich Off Medicare?■ Levels of Hospital Profits Are Scrutinized as the Government Tries to Balance its Budget, The Wash. Post (Oct. 27, 1987). This shift, in the view of HHS’ Office of Inspector General (“OIG”), meant “the original intent of reimbursing hospitals for bad debts no longer seems appropriate.” 1986 OIG Report at 3. Based on this view, the 1986 OIG Report recommended modification of the bad debt reimbursement system to hospitals in two -alternative ways: “either discontinue Medicare payments to [] hospitals for beneficiary bad debts or, in coordination with [the Social Security Administration], pursue legislative authority to recover payments for beneficiaries bad debts through benefit payment offsets.” Id.

The HHS OIG proposal met with resistance in Congress and within the health care industry. See Joe Davidson, U.S. to Propose Ending Reimbursement to Hospitals of Unpaid Medicare Debts, The Wall Street J. (July 2, 1987); Joe Davidson, HHS Weighs Plan of Garnishment for Medicare Bills, The Wall Street J. (Dec. 3, 1986). In response, Congress enacted the so-called “Medicare Bad Debt Moratorium” (or the “Moratorium”) as part of‘the Omnibus Budget Reconciliation Act of 1987. Pub.L. 100-203, § 4008(c), 101 Stat. 1330,133055 (1987); Hennepin County, 81 F.3d at 747. With subsequent amendments in 1988 and 1989, Technical and Miscellaneous Revenue Act of 1988, Pub.L. No. 100-647 § 8402, 102 Stat 3342, 3798 (1988); Omnibus Budget Reconciliation Act of 1988, Pub.L. No. 101-239, § 6023, 103 Stat. 2106, 2167 (1989), the Moratorium prevented HHS from “mak[ing] any change in the policy in effect on August 1, 1987 ... relating to unrecovered costs as sociated with” Medicare bad debt; 101 Stat. 1330-55.

The Moratorium did not precisely describe the “policy” to which any “change” was prohibited. ■ Given the context and recommendations set out in the 1986 OIG Report, see supra, the initial Moratorium appeared aimed at preventing HHS from abolishing .reimbursement for Medicare bad debt or garnishing social security checks, as. the HHS OIG had recommended. ■ • ■ -

Additional nuance is provided' by the Conference Report accompanying the 1988 Amendment to the Moratorium, which report expressed “concern[] about recommendations made by theTnspector General of HHS .. .s and actions which may be taken by the Secretary in response to tliose recommendations,, .regarding bad debt collection policies followed by certain hospitals.” H.R.Rep. No. 100-1104, at 25 (1988) (Conf.Rep.), reprinted in 1988 U.S.C.C.A.N. 5048, 5337. The conferees explicitly objected to certain 016 “recommendations,” including those concerning “the provider’s responsibility regarding a decision to use a collection agency for. Medicare bad debt,” which the conferees, stated “may have the effect of violating the prohibition on changes in policy if the Secretary’s response results in the retroactive disallowance of bad debt payments claimed by the hospitals.” Id, The conferees “clar-if[ied] that the Congress intended that the actions of Fiscal Intermediaries occurring prior to August 1,1987 to approve explicit-' ly [a] hospital’s bad debt collection practices, to the extent such action by the Fiscal Intermediary was consistent with the regulations, PRRB decisions, or program manuals and issuances, are to be considered an integral part of the policy on that date, and thus not Subject to change.” Id. Significantly, at the same time, the conferees did not “intend to preclude the Secretary from disallowing bad debt payments based on regulations, PRRB decisions, manuals, and issuance[s] in effect prior to August 1,1987.” Id.-

The third amendment to the Moratorium, in 1989 further clarified the effect of the Moratorium on hospitals that had relied on'pre-1987 decisions by their Inter-' mediaries regarding bad debt reimbursements. See H.R.Rep. No. 101-247, at 918 (1989), reprinted in 1989 U.S.C;C.’ÁN. 1906, 2389. This amendment, which was made retroactive to August 1, 1987, added the following language to the Moratorium: “the Secretary would be prohibited from directing the hospital to change its policy, or collecting retroáctively from the hospital based upon the expectation of a change in the hospital’s collection policy.” Id.

The parties have cited to no legislative history for the Moratorium that' references any “policy” as of August 1, 1987 regarding the allowance, or disallowance, of bad debt reimbursement for accounts still active at collection agencies, and the Court has located no such reference. The two amendments to the Moratorium focused almost exclusively on the relationship between hospitals and their Fiscal Intermediaries, effectively requiring Intermediaries to continue their pre-1987 policies regarding bad debt reimbursement, provided such policies were both (1) explicitly stated by the Intermediary and (2) “consistent with the regulations, PRRB decisions, or program manuals and issuances” made by HHS prior to August 1, 1987. See 42 U.S.C. § 1395f note. As the Eighth Circuit noted in Hennepin County, “Congress was motivated” in passing the Moratorium “to prevent unexpected consequences to providers from the [HHS] inspector general’s proposed changes in the.criteria for bad debt reimbursement.” 81 F.3d at 750-51. “It appears Congress merely sought to freeze a moment in time, forbidding the Secretary to change the criteria” for bad debt reimbursement after August 1, 1987, “but allowing full’ enforcement of the policies in place before it.” Id. at 751. This' conclusion is bolstered by the 1988 Conference Réport, which- stated that Congress did not intend to stop the Secretary from prohibiting bad debt reimbursements so long as such denials were consistent with the policies in place when the Moratorium took effect. See H.R.Rep. No. 100-1104, at 25. ■ ■ ■

The Moratorium was repealed by Middle Class Tax Relief and Job Creation Act of 2012, Pub.L. 112-96, § 3201(d), 126 Stat. 156, 192-3 (2012), for “cost reporting periods beginning on or after' October 1,2012.”

,D. The Plaintiffs’ Collection Practices

The relevant facts in this matter are undisputed. The parties stipulated before the -PRRB that during the cost years, at issue, some of the plaintiffs were owned by CHS, while “certain hospitals in the [case] were owned by Triad Hospitals, Inc. and were later acquired by CHS.” AR at 10 (Challenged PRRB Decision). The parties also stipulated that (1) all of the “bad debts at issue ... are related to covered services and derived from deductible and coinsurance amounts,” (2) the plaintiffs maintained a “policy to actively pursue all debts for at least 120 days prior to writing them off as bad debt” and (3) the plaintiffs complied with their policy. Id. Additionally, the parties do not dispute that after “at least 120 days of in-house collection activities,” the plaintiffs “forwarded uncollected accounts to outside collection agencies, and wrote the accounts off as ‘bad debts.’ ” Id. at 11. Any amounts recovered by the collection agencies were offset, pursuant to PRM § 316, and the collections efforts engaged in by the plaintiffs “were similar for all patients regardless of’ whether the patients were using Medicare. Id. The plaintiffs “concede that the bad debts at issue ... were claimed while such debts were being worked by an outside collection agency after more than 120 days of in house collection efforts.” Id. In turn, the Intermediaries concede that “[t]he sole bases for the [] disallowance of the bad debts at issue is that the provider wrote the accounts off as worthless even though there was no evidence that the delinquent accounts were recalled by the provider or that the collection efforts ceased by the collection agency.” Id.

The parties do not dispute that in 2002, the Intermediary for the CHS plaintiffs— though not for the Triad plaintiffs — ”reviewed CHS’ collection practices and issued a letter” noting that “[t]he regulations state the provider can presume [bad] debt uncollectable and write it off after 120 days, assuming they have made consistent collection efforts (Medicare vs. Non-Medicare/Private Pay) as noted” in 42 C.F.R. § 413.89(e). AR at 11 (PRRB Decision); see also AR at 2053 (Letter, dated Oct. 8, 2002, from Regional Manager-Central Region, Medicare Audit and Reimbursement, Mutual of Omaha Ins. Co. to CHS). The Intermediary observed in the 2002 letter, which was issued fifteen years after the effective date of the Moratorium, that “[t]he [Medicare] regulations do not state that a provider cannot continue collection efforts (with a related party or-unrelated party) after being written off’ and, based on this regulatory silence, opined that “[w]e see no reason why the related party relationship [between CHS and the collection agency] should interfere ■with or obscure the determination of the allowability of the Bad Debt claim.” AR at 2053. This letter does not otherwise reference or describe the Intermediary's or the plaintiffs’ pre-Moratorium practices regarding reimbursement of Medicare bad debt referred to a collection agency. See id. at 2052-53.

In a subsequent 2006 letter, “the Intermediary informed CHS that the Medicare program will not reimburse deductible and coinsurance amounts while they are being worked by a collection agency.” Id. at 11 (internal quotation marks omitted). According to the plaintiffs, the 2006 Intermediary letter disallowing reimbursement for Medicare bad debt still referred to a collection agency was a “complete surprise” and reflected a policy that “hadn’t been applied in the audit experiences that [CHS] had.” Pis.’Mem. at 33. The plaintiffs claim that they “formulated their bad debt collection policies based on the presumption of noncolleetability [sic]” in PRM § 310.2, and in collaboration “with the Intermediary,” which “specifically confirmed the adequacy of that policy” reflected in the earlier 2002 letter. AR at 13. . The plaintiffs’ practice is to “continue in-house collections even after the minimum time (ie., 120 days) has passed until the business office manager” for each hospital “personally reviews and signs of on each debt prior ,to writing off that debt” as bad debt. Id. Once written off, the debt is sent to a collection agency and the plaintiffs “are not involved with the debts after they are written-off unless there is a successful collection effort by the collection agency.” Id.

E. The Challenged Decision

The plaintiffs challenge the PRRB’s decision upholding the Intermediaries’ denial of bad debt reimbursement, totaling $16,400,811, to six hospitals in 2004, fifty-four hospitals in 2005, and fifty-eight hospitals in 2006. AR at 10; Pis.’ Mem. at 8. Each of the hospitals involved had their bad debt reimbursement denied “because the Providers’ debts were still at a collection agency.” AR at 10. The PRRB ruled that the Intermediaries’ “adjustments to remove the Medicare bad debts ... while the debts were still at the collection agency were proper.” Id. at 15. In reaching this conclusion, the PRRB considered both prongs of the Moratorium barring the Secretary from (1) changing HHS’ bad debt reimbursement policy in effect on August 1, 1987; and (2) requiring “a provider to change its bad debt collection policy when the Intermediary had accepted that policy prior to August 1,1987.” Id.

The PRRB determined that only the first prong was at issue since “there [was] nothing in the record to document or confirm what the [plaintiffs’] policy was prior to August 1, 1987,” and, therefore, no evidence had been presented regarding whether the Secretary had required the plaintiffs to change their policy after prior acceptance by an Intermediary. Id. Specifically, the PRRB noted that at the evi-dentiary hearing, the plaintiffs’ “witness testified ... that he had no knowledge as to what the [plaintiffs] were reimbursed by the Intermediary prior to August 1, 1987” and, further, “there is nothing in the record to document or confirm what the Provider’s policy was prior to August 1,1987.” Id. As a result, the PRRB found that the second prong of the Moratorium was not implicated in this case. M

While acknowledging the “presumption of noncollectibility” in PRM § 310.2, on which the plaintiffs assert they based their bad debt collection practices, AR at 13, the PRRB noted that this section “does not create an automatic presumption after the passage of 120 days” allowing a provider to be reimbursed for any bad debts still pending at that time, id. at 19. Instead, “it is a discretionary presumption and does not foreclose the possibility that a debt may still be deemed collectible after 120 days,” citing the section’s permissive language that after 120 days a debt “may be deemed” uncollectible. Id. (emphasis added). The PRRB noted that PRM. § 310.2 “does not. excuse a provider from satisfying the other criteria specified in” the HHS regulations governing reimbursement of bad debt. Id. at 20. . In other words, the four criteria identified in 42 C.F.R. § 413.89(e) must still be satisfied before a provider is entitled to reimbursement for bad debt, including bad debt older than 120 days and still at a collection agency. Thus, “the provider must first determine that the debt is ‘uncollectible’ by which it must exhaust what it has established as its reasonable and customary collection efforts,” and, “[i]f a provider chooses to utilize a collection agency, these efforts must be exhausted before the debt can be determined to be uncollectable and, therefore, worthless.” Id.

In reaching this conclusion, the PRRB focused on the structure and text of PRM § 310.2, which states, in full that “[i]f after reasonable and customary attempts to collect a bill, the debt remains unpaid more than 120 days from the date the first bill is mailed to the beneficiary, the debt may be deemed uncollectible.” Id. at 9. The PRRB determined that the prepositional phrase “[i]f after reasonable and customary attempts to collect a bill,” means that “reasonable and customary attempts to collect a bill” must occur regardless of the time elapsed since a bill is first mailed. Id. at 20 (emphasis in original). Otherwise, the words “remained unpaid more than” would be rendered superfluous, since any other reading would mean that the debt could be “deemed uncollectible” after 120 days regardless of whether the provider had completed its reasonable and customary attempts to collect. Id. Thus, the PRRB opined that the presumption of non-collectibility applies “only if (1) the provider has completed its customary collection attempts for that debt; (2) the actual collection attempts for the bad debt being claimed are ‘reasonable’; and (3) the collection, attempts for the debt are completed more than 120. days from the date the first bill [was] sent to the patient for that debt.” Id.

Based on this construction of the regulatory provision, the PRRB concluded that “the policy of not allowing providers to claim bad debts until they are returned from a collection agency is consistent with the Regulations and Manual sections in effect on August 1, 1987.” Id. Accordingly, the PRRB found that the disallowance of the plaintiffs’ reimbursement requests was not a violation of the Moratorium’s first prong, and upheld the Intermediaries’ decisions. Id. at 26. The PRRB’s holding was narrow, ruling only that the Intermediaries “properly disallowed the [plaintiffs’] claimed Medicare bad debts solely on the ground that accounts related to such bad debts were still pending at outside collection agencies.” Id. The CMS Administrator declined to review the decision of the PRRB. Id. at 1.

The plaintiffs timely filed this lawsuit, pursuant to the APA and the judicial review of Medicare decisions provision in 42 U.S.C. § 1395oo, challenging the PRRB’s decision as “inconsistent with and unauthorized by the governing Medicare statute, regulations, and manual provisions, [ ] arbitrary and capricious, [ ] not supported by evidence in the record, and violat[ive of] the APA and the Medicare program’s publication requirements.” FAC ¶ 38.

II. LEGAL STANDARD

A. Summary Judgment Standard Under Federal Rule of Civil Procedure 56

Pursuant to Federal Rule of Civil Procedure 56, summary judgment may be granted when the court finds, based upon the pleadings, depositions, affidavits, and other factual materials in the record, “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a), (c); see Tolan v. Cotton, —U.S. -, 134 S.Ct. 1861, 1866, 188 L.Ed.2d 895 (2014) (per curiam); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “A genuine issue of material fact exists if the evidence, ‘viewed in a light most favorable to the nonmoving party,’ could support a reasonable jury’s verdict for the non-moving party.” Muwekma Ohlone Tribe v. Salazar, 708 F.3d 209, 215 (D.C.Cir.2013) (quoting McCready v. Nicholson, 465 F.3d 1, 7 (D.C.Cir.2006)).

In APA cases such as this one, involving cross-motions for summary judgment, “the district judge sits as an appellate tribunal. The ‘entire case’ on review is a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C.Cir.2001) (collecting cases). Thus, this Court need not and ought not engage in lengthy fact finding, since “[generally speaking, district courts reviewing agency action under the APA’s arbitrary and capricious standard do not resolve factual issues, but operate instead as appellate courts resolving legal questions.” James Madison Ltd. by Hecht v. Ludwig, 82 F.3d 1085, 1096 (D.C.Cir.1996); see also Lacson v. U.S. Dep’t of Homeland Sec., 726 F.3d 170, 171 (D.C.Cir.2013) (noting, in APA case, that “determining the facts is generally the agency’s responsibility, not ours”); Sierra Club v. Mainella, 459 F.Supp.2d 76, 90 (D.D.C.2006) (“Under the APA ... the function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.”) (quotation marks and citation omitted)). Judicial review is limited to the administrative record, since “[i]t is black-letter administrative law that in an APA case, a reviewing court should have before it neither more nor less • information than did the agency when it made its decision.” CTS Corp. v. EPA, 759 F.3d 52, 64 (D.C.Cir.2014) (internal citations and quotation marks omitted; alteration in original); see 5 U.S.C. § 706 (“[T]he Court shall review the whole record or those parts of it cited by a party.,..”); Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985) [noting when applying arbitrary- and capricious standard under- the APA, “ ‘[t]he focal point for -judicial review should be the administrative record already in existence .... ‘ “ (quoting Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973)).

B. Standards of Review Under Administrative Procedure Act

1. Chevron Deference

The familiar two-step process set out in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (Chevron), 467 U.S. 837, 845, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), applies to judicial review of claims that an agency has acted “in excess of statutory jurisdiction, authority or limitations, or short of statutory right” under the APA, when the agency is interpreting a statute. See Am. Fed’n of Gov’t Emps. Local 3669 v. Shinseki, 709 F.3d 29, 33 (D.C.Cir.2013). At the first step of the inquiry, a court must , “ask whether Congress has directly addressed the precise question at issue.” Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44, 131 S.Ct. 704, 711, 178 L.Ed.2d 588 (2011) (internal citations omitted). “ ‘If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.’” City of Arlington, Tex. v. FCC, — U.S. -, 133 S.Ct. 1863, 1868, — L.Ed.2d (2013) (quoting Chevron, 467 U.S. at 842- 43, 104 S.Ct. 2778).

On the other hand, if “Congress has not directly addressed the precise [interpretative] question at issue ... the agency is charged with filling the ‘gap left open’ by the ambiguity.” EPA v. EME Homer City Generation, L.P. (EME Homer), — U.S.-, 134 S.Ct. 1584, 1603, 188 L.Ed.2d 775 (2014) (quoting Chevron, 467 U.S. at 843, 866, 104 S.Ct. 2778) (first alteration in original). Thus, if the statute is silent'or ambiguous with respect to the specific- issue under consideration, the analysis' shifts to Chevron step two, where “the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” City of Arlington, Tex., 133 S.Ct. at 1868; see CSX Transp., Inc. v. Surface Transp. Bd., 754 F.3d 1056, 1063 (D.C.Cir.2014) (same).

When Congress has delegated to the agency authority to make rules carrying the force of law, and the challenged agency interpretation was promulgated in the exercise of that authority, then the agency’s rule is entitled to deference “as long as it is a permissible construction of the statute, even if it differs from how the court would have interpreted the statute in the absence of an agency regulation.” Sebelius v. Auburn Reg’l Med. Ctr., — U.S. -, 133 S.Ct. 817, 826, 184 L.Ed.2d 627 (2013); see also EME Homer, 134 S.Ct. at 1606 (determining if agency’s interpretation of ambiguous phrase is “permissible construction of statute” as second step of Chevron analysis); Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) (“If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the cqurt believes is the best statutory interpretation.”). Courts “routinely accord dis-positive effect to an agency’s reasonable interpretation of ambiguous statutory language.” EME Homer, 134 S.Ct. at 1603 (citation omitted). “Deference is appropriate even if the agency’s interpretation first appears during litigation, unless the interpretation conflicts with prior interpretations or amounts to nothing more than a convenient litigating position.” Shieldalloy Metallurgical Corp. v. Nuclear Regulatory Comm’n, 768 F.3d 1205, 1208-09 (D.C.Cir.2014) (internal quotation marks and citations omitted). A court “need not conclude that the [agency’s] interpretation of the [s]tatute is the only one it permissibly could have adopted or even the interpretation deemed most reasonable by the courts,” so long as it is reasonable. Nat’l Treasury Emps. Union v. Fed. Labor Relations Auth., 754 F.3d 1031, 1042 (D.C.Cir.2014) (internal quotation marks and citations omitted; emphasis in original).

2. Auer Deference

An agency’s interpretation of its own regulations commands substantial judicial' deference. See Auer v. Robbins, 519 U.S. 452, 463, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997); Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 415-17, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945); Drake v. F.A.A., 291 F.3d 59, 68 (D.C.Cir.2002). “When an agency interprets its own regulation, the Court, as a general rule,' defers to it-‘unless that interpretation is ‘plainly erroneous or inconsistent with the regulation.’ ” Decker v. Nw. Envtl. Def. Ctr., — U.S. -, 133 S.Ct. 1326, 1337, 185 L.Ed.2d 447 (2013) (quoting Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 208, 131 S.Ch 871, 178 L.Ed.2d 716 (2011)); see also Christopher v. SmithKline Beecham Corp., — U.S. -, 132 S.Ct. 2156, 2166, 183 L.Ed.2d 153 (2012) (holding that agency’s interpretation controls unless it is plainly erroneous or inconsistent with the regulation); Seminole Rock, 325 U.S. at 414, 65 S.Ct. 1215 (noting that a regulation “becomes ... controlling weight unless it is plainly erroneous or inconsistent with the regulation.”); Huerta v. Ducote, No. 14-1023, 792 F.3d 144, 153, 2015 WL 3952264, at *6 (D.C.Cir. June. 30, 2015) (“To the extent the agency has interpreted its own ... regulation, that interpretation is to be accorded deference ... unless it is clearly contrary to the plain and sensible meaning of the regulation.” (internal quotation marks omitted; second alteration in original)); Texas v. EPA, 726 F.3d 180, 194 (D.C.Cir.2013) (finding agency interpretation of its regulation is “controlling because the interpretation is neither plainly erroneous [n]or inconsistent with the regulation, and there is no reason to suspect that it does not reflect the agency’s fair and considered judgment on the matter in question”) (internal quotations and citations omitted; brackets in original).

Thus, a plaintiff challenging an agency’s interpretation of its own regulations carries a “heavy burden in advancing [that] claim” because an “agency’s interpretation of its own regulations ‘must be given controlling weight unless it is plainly erroneous.’” In re Polar Bear Endangered Species Act Listing & Section 4(d) Rule Litig. — MDL No.1993 (In re Polar Bear Litig.), 709 F.3d 1, 11 (D.C.Cir.2013) (internal citations omitted); see Auer, 519 U.S. at 461- 62, 117 S.Ct. 905; Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (“[W]e must defer to the [agency]’s interpretation unless an ‘alternative reading is compelled by the regulation’s plain language or by other indications of the Secretary’s intent at the time of the regulation’s promulgation.”). “Although an agency is ‘entitled to significant deference in interpreting its own regulation — perhaps even more than an agency gets in interpreting a statute under Chevron’-it is unlikely we would defer to an unreasonable agency interpretation of an ambiguous regulation.’ ” Menkes v. U.S. Dep’t of Homeland Sec., 637 F.3d 319, 343 (D.C.Cir.2011) (Brown, J. dissenting in part) (quoting Kidd Commc’ns v. FCC, 427 F.3d 1, 4 (D.C.Cir.2005)).

3. Substantial Evidence

When an agency’s adjudicatory decision is challenged under the APA, such adjudications are overturned only upon a finding that the “agency action, findings, and conclusions” are “unsupported by substantial evidence ... on the record of an agency hearing.” 5 U.S.C. § 706(2)(E); see Kaufman v. Perez, 745 F.3d 521, 527 (D.C.Cir.2014) (noting that agency factual findings may be “set aside ... ‘only if unsupported by substantial evidence on the record as a whole.’ ” (quoting Chippewa Dialysis Servs. v. Leavitt, 511 F.3d 172, 176 (D.C.Cir.2007)); Dillmon v. NTSB, 588 F.3d 1085, 1089 (D.C.Cir.2009) (noting that agency’s factual findings may be adopted “as conclusive if supported by substantial evidence ... even though a plausible alternative interpretation of the evidence would support a contrary view” (internal,citation and quotation marks omitted)).

Notably, “an agency’s refusal to consider evidence bearing on the issue before it constitutes arbitrary agency action within the meaning of § 706,” as does ignoring “evidence contradicting its position.” Butte Cnty., Cal. v. Hogen, 613 F.3d 190, 194 (D.C.Cir.2010). As the D.C. Circuit has explained, an agency decision “would be arbitrary and capricious” if is not “supported by substantial evidence” because “ ‘it is impossible to conceive of a ‘nonarbitrary factual judgment supported only by evidence that is not substantial in the APA sense.’ ” Safe Extensions, Inc. v. FAA, 509 F.3d 593, 604 (D.C.Cir.2007) (quoting Ass’n of Data Processing Serv. Org. v. Bd. of Governors of Fed. Reserve Sys. (ADPSO), 745 F.2d 677, 684 (D.C.Cir.1984)). Consequently, when assessing whether agency action is arbitrary or capricious, “in their application to the requirement of factual support!,] the substantial evidence test and the arbitrary or capricious test are one and the same.” ADPSO, 745 F.2d at 683; accord CTS Corp., 759 F.3d at 59 n. 1.

The scope of review under the “arbitrary and capricious standard is ‘highly deferential,’ ” Am. Trucking Ass’ns, Inc. v. Fed. Motor Carrier Safety Admin., 724 F.3d 243, 245 (D.C.Cir.2013) (quoting Am, Wildlands v. Kempthorne, 530 F.3d 991, 997 (D.C.Cir.2008)); Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275, 283 (D.C.Cir.1981) (same), and “narrow,” such that “a court is not to substitute its judgment for that of the agency,” Judulang v. Holder, — U.S. -, 132 S.Ct. 476, 483, 181 L.Ed.2d 449 (2011); see also Fogo De Chao (Holdings) Inc. v. U.S. Dep’t of Homeland Sec., 769 F.3d 1127, 1135 (D.C.Cir.2014) (same); Agape Church, Inc. v. FCC, 738 F.3d 397, 408 (D.C.Cir.2013) (same). Particularly when “an agency has acted in an area in which it has ‘special expertise,’ the court must be particularly deferential to [the agency’s] determinations.” Sara Lee Corp. v. Am. Bakers Ass’n Ret. Plan, 512 F.Supp.2d 32, 37 (D.D.C.2007) (quoting Bldg. & Constr. Trades Dep’t, AFL-CIO v. Brock, 838 F.2d 1258, 1266 (D.C.Cir.1988)). Yet, “courts retain a role, and an important one, in ensuring that agencies have engaged in reasoned decisionmaking.” Judulang, 132 S.Ct. at 483-484. Simply put, “the agency must explain why it decided to act as it did.” Butte Cnty., 613 F.3d at 194.

In evaluating agency actions under the “arbitrary and capricious” standard, courts “must consider whether the [agency’s] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Marsh v. Ore. Natural Res. Council, 490 U.S. 360, 378, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989) (citation and internal quotation marks omitted); Citizens to Preserve Overton Park, Inc. v. Volpe (Overton Park), 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), overruled on other grounds by Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977); Blue Ridge Envtl. Def. League v. Nuclear Regulatory Comm’n, 716 F.3d 183, 195 (D.C.Cir.2013). When an agency “ ‘fail[s] to provide a reasoned explanation, or where the record belies the agency’s conclusion, [the court] must undo its action.’ ” Cnty. of Los Angeles v. Shalala, 192 F.3d 1005, 1021 (D.C.Cir.1999) (quoting BellSouth Corp. v. FCC, 162 F.3d 1215, 1222 (D.C.Cir.1999)); see Select Specialty Hosp.-Bloomington, Inc. v. Burwell, 757 F.3d 308, 312 (D.C.Cir.2014) (noting that when “‘an agency’s failure to state its reasoning or to adopt an intelligible decisional standard is [] glaring [.] we can declare with confidence that the agency-action was arbitrary and capricious’” (quoting Checkosky v. SEC, 23 F.3d 452, 463 (D.C.Cir.1994))). At the very least, the agency must have reviewed relevant data and articulated a satisfactory explanation establishing a “rational connection , between the facts found and the .choice made.” See. Am. Trucking Ass’ns, Inc., 724 F.3d at 249 (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co. (State Farm), 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)); see also EME Homer, 134 S.Ct. at 1602 (holding that agency “retained discretion, to alter its course [under a regulation] provided it gave a reasonable explanation for doing so”); Amerijet Int’l, Inc. v. Pistole, 753 F.3d 1343, 1350 (D.C.Cir.2014) (“[A] fundamental requirement of administrative law is that an agency set forth .its reasons for decision; an agency’s failure to do so constitutes arbitrary and capricious agency action.” (internal quotation marks and citation omitted)). “[C]onclusory statements .will not do; an agency’s statement must be one of reasoning.” Amerijet Int’l Inc., 753 F.3d at 1350 (internal quotation marks omitted; emphasis in original).

III. DISCUSSION

The plaintiffs challenge the PRRB decision on multiple grounds, arguing that the HHS policy underlying this decision of not reimbursing Medicare bad debt retained by collection agencies is' (1) inconsistent with the plain language of the applicable regulation; (2) violative of the Medicare Bad ’ Debt Moratorium; and (3) issued without appropriate ndtice-and-comment rulemaking or fair notice to the plaintiffs. For the reasons detailed below, the Court concludes that the defendant’s interpretation of its regulations is reasonable and in accord with the Moratorium and the requirements. of the APA-. Consequently, the challenged decision must be. upheld.

A. Ttie Agency’s Interpretation Of The Applicable Regulation Is. Reasonable

The rationale supporting the HHS policy disallowing reimbursement of Medicare bad debt retained by collection agencies is explicated at length in the challengéd PRRB decision. See AR at 6-31. The PRRB found that the agency’s policy is reasonably dictated by both the criteria set out in the relevant regulation, 42 C.F.R. § 413.89(e), iand the presumption of noncollectibility in PRM -§ 310.2. Id. In short, to be reimbursed for bad debt, a provider must meet each, of the four criteria set forth in 42 C.F.R. § 413.89(e), regardless of how long the bill is .overdue and unpaid. AR at 15-16. Moreover, a provider seeking reimbursement of bad debt pending at a collection agency cannot satisfy all four criteria, rendering the bad debt in question non-reimbursable. Id.

In particular, the PRRB concluded, reasonably, that if a provider sends a debt to a collection agency, and that debt remains in active collection at the agency, the debt cannot be “worthless,” within the meaning of the third criterion, under’ 42 C.F.R. § 413.89(e)(3). AR at 20. The PRRB also concluded that a debt pending at a collection agency cannot satisfy the fourth criterion, under 42 C.F.R. § 413.89(e)(4), that there is “no likelihood of recovery at any time in the future,” since the provider exercised “sound business judgment” to send the debt to a collection agency in the first instance, rather than write-off the debt. See AR at, 18-20. The provider must believe in some likelihood of recovery, and that the debt is not “worthless,” if the provider’s sound business judgment requires the submission of a debt to a collection agency rather than ceasing all efforts to collect the debt. See id. Consequently, though a provider is not required to send debts to a collection agency to demonstrate “reasonable collection efforts” for the purposes of 42 U.S.C. § 413.89(e)(2), see AR 371 (PRM § 310.A) (“A provider’s collection effort may include the use of a collection agency ... ”), choosing to do so means that the third and fourth criteria cannot be met until the collection agency ceases efforts to collect on the debt, AR at 20. Only at that time can the debt be considered “worthless” and as having “no likelihood of recovery at any time in the future,” when all collection efforts have unsuccessfully concluded. See id.

PRM § 310.2, the presumption of noncollectibility, is easily reconciled with the regulatory criteria in 42 C.F.R. § 413.89(e) for reimbursable Medicare bad debt. The presumption of noncollectibility clarifies that “after reasonable and customary attempts to collect a bill” a “debt may be deemed uncollectible” if it “remains unpaid more than 120 days from the date the first bill is mailed to the beneficiary.” AR at 373. (PRM § 310.2). The PRRB concluded that PRM § 310.2 interprets 42 C.F.R. § 413.89(e)(3), under which a provider must show that the bad debt at issue “was actually uncollectible when claimed as worthless.” AR at 20. If the presumption applies, a provider satisfies the third criterion for reimbursement after 120 days have elapsed without other evidence of the debt’s uncollectible status. Id. The presumption does not, however, “excuse a provider from satisfying the other criteria specified” in the regulation, including that there is “no likelihood of recovery at any time in the future,” as defined by the “sound business judgment” of the provider. Id.; see 42 C.F.R. § 413.89(e)(4). The PRRB reasoned that a provider turns a debt over to a collection agency based upon a belief in some likelihood of recovery and, so long as the collection agency is allowed to pursue the account, the provider is therefore unable to meet all four criteria for reimbursement, regardless of whether the presumption of noncollectibility would otherwise apply. See AR at 20-21; Lakeland Reg’l Health Sys. v. Sebelius (Lakeland), 958 F.Supp.2d 1, 7 (D.D.C. 2013).

The PRRB’s determination that the presumption of noncollectibility is discretionary and does not trump the provider’s obligation to meet the four criteria of 42 C.F.R. § 413.89(e), is consistent with the only pre-Moratorium PRRB decision “that considered the presumption of noncollecti-bility.” AR at 20 n.54 (citing Davie County Hospital v. Blue Cross Blue Shield Association (Davie County), PRRB Dec. NO.1984-D89 (Mar. 22, 1984)). In Davie County, the PRRB upheld an intermediary’s disallowance of a bad debt reimbursement even though, for the debts at issue, more than six months had elapsed since the first bill had been sent to the patient. Id. The provider admitted to sending non-Medicare debts to a collection agency but did not do the same for Medicare debts. Id. The PRRB held that the provider’s collection.efforts were not “reasonable” since the provider did not engage in collection efforts that were equivalent to the collection agency’s efforts to collect non-Medicare debt, even though the Medicare debts had been pending for longer than 120 days. Davie County, PRRB Dec. No.l984-D89. Specifically, the PRRB found that the provider could have used “other in-house collection efforts, such as writing letters, and making telephone calls” that could have rendered the provider’s in-house efforts similar to those engaged in by the collection agency that handled non-Medicare accounts. Id. The provider failed to do so, making its treatment of Medicare and non-Medicare accounts sufficiently different so as to justify the disal-lowance of reimbursement, regardless of the length of time the Medicare debt remained unpaid. Id.

The plaintiffs dispute the reasonableness of the PRRB’s interpretation of the regulation on both textual and policy grounds. First, the plaintiffs contend that the agency’s interpretation of the third criterion in 42 C.F.R. § 418.89(e)(3), which requires establishment that “[t]he débt was actually uncollectible when claimed as worthless,” has a “fundamental flaw” due to “oversimplification.” Pis.’ Reply Def.’s Opp’n Pis.’ Mot. (“Pis.’ Reply”) at 15, EOF No. 21. Under the agency’s interpretation of the third criterion, “a provider that continues to attempt collection of a beneficiary’s debt, either through in-house efforts or through a collection agency account cannot have been determined to be uncollectible or worthless if a provider believes it has sufficient worth for referral to a collection agency.” Def.’s Mem. at 12. According to the plaintiffs, this interpretation “fails to distinguish between the individual provider’s determination.of.whether, or not an account is collectible and the separate and independent determination of a collection agency.” Pis.’ Reply at 15.

Essentially, the plaintiffs are critical of applying the third criterion in a holistic fashion,to the collection process in toto and, instead, urge that .this criterion focus solely on in-house efforts and ignore the efforts of collection agencies. See id. The “upshot” is that the plaintiffs believe a provider’s decision to refer an account to the collection agency, standing alone, is all that is required to satisfy 42 C.F.R. § 413.89(e)(3), and the evaluation by a collection agency “whether the account has worth to the collections agency,” is irrelevant to meeting this criterion. Pis.’ Reply at 17 (emphasis in original). The plain-: tiffs’ logic is, at best, tenuous. If a provider believes that a debt is “actually uncol-lectible” and “worthless,” under the third criterion, sound business judgment would presumably counsel against engaging in the useless exercise of referring that debt to a collection agency and incurring concomitant service charges. ' As the Lake-land court pointed out, “what provider exercising sound 'business judgment would spend his precious resources on the fool’s errand of pursuing an uncollectible debt with no i likelihood of future recovery?” 958 F.Supp.2d at 7. On the contrary, this analysis supports the agency’s interpretation of .42 C.F.R. § 413.89(e)(3) and (4): sound business judgment requires that a debt have some likelihood of future recovery to send the debt to a collection agency — otherwise; sending the-debt to a collection agency is,- as the Lakeland court observed, a “fool’s errand.” Id. Thus, the agency’s interpretation of the regulation to mean that sending a debt to a collection agency disqualifies that debt from reimbursement so long as the provider persists in that referral, is reasonable and, until all collection efforts have ceased, the debt is not “worthless” under 42 C.F.R. § 413.89(e)(3).

Next, the plaintiffs argue that agency’s interpretation of the fourth criterion in 42 C.F.R. § 413.89(e)(4), requiring “[s]ound business judgment established that there was no likelihood of recovery at any time in the future,” effectively re-writes “the regulation’s requirement that there be no ‘likelihood ’ of recovery With a requirement that there be no ‘possibility ’ of recovery.” Pis.’ Mem. at 27 (emphasis in original). In the plaintiffs’ view, “it can hardly be considered likely, or probable, that a patient who has made no payments on an account for more than 120 days ... will end up making payment on his/her debt.” Id. (emphasis in original). The plaintiffs are correct .that the agency construes the phrase of “no likelihood of recovery” in the fourth criterion of the regulation as amounting to no possibility’ of recovery. See Def.’s Mem. at 14 n. 4 (agreeing that “this is precisely how the Secretary interprets this provision”). Given the emphasis in the regulation that the bad debt be likely unrecoverable “at any time in the future,” 42 C.F.R. § 413.89(e)(3), and that this deht be “actually uncollectible” and “worthless,” 42 C.F.R. § 413.89(e)(3), the agency’s interpretation that “no likelihood” is contextually equivalent to “no possibility,” is reasonable.

By contrast, adoption of the plaintiffs’ interpretation would effectively rewrite the regulation to eliminate the third and fourth criteria. If, as the plaintiffs urge, the presumption of noncollectibility is absolute and, after 120 days of collection efforts, a debt automatically becomes reimbursable, the regulatory criteria that a debt be “actually uncollectible,” “worthless,” and have “no likelihood of recovery at any time in the future” would become nullities. See 42 C.F.R. § 413.89(e). This proposition echoes the finding the Sixth Circuit made in Battle Creek Health System v. Leavitt (Battle Creek), 498 F.3d 401, 411-12 (6th Cir.2007). In that case, the court held that' the Secretary’s interpretations of “§ 413.89(e) [was] eminently reasonable” and of PRM § 310.2 “is consistent with, and most effectively enforces, all of the criteria” of the regulation. Id. The plaintiffs’ alternative view that the presumption of noncollectibility applies regardless of a debt’s status at a collection agency, would render “the third and fourth criteria of 42 C.F.R. § 413.89(e) ... nugatory.” Id. at 411.

Finally, the plaintiffs challenge the agency’s interpretation as “unreasonable” on policy grounds, contending that this interpretation of the criteria for Medicare bad debt reimbursement in 42 C.F.R. § 413.89(e) “actually financially harms Medicare as well.” Pis.’ Reply at 18. The plaintiffs reason that debts pending at a-collection agency may eventually be collected, with any collected amounts returned to Medicare, pursuant to PRM § 316. Id. “[B]y prohibiting a collection agency from continuing to hold and monitor an account already paid by CMS, the agency is foregoing possible recoupments of monies already paid out.” Id. This argument actually cuts against the plaintiffs’ position that Medicare bad debts active at collection agencies meet the requirements of 42 C.F.R. §,413.89(e). The only way Medicare could be harmed by .failing to allow efforts at a collection agency to continue after reimbursement is if the debt actually had some likelihood of being recovered, in which circumstance the debt should not have been reimbursed in the first instance. Construing the regulatory criteria as the plaintiffs’ suggest — and permitting reimbursement to a provider upon referral of Medicare debt to a collection agency — -would invite premature reimbursement and essentially absolve the plaintiffs from complying with 42 C.F.R. § 413.89(e)(4), since the plaintiffs would not, presumably, send to a collection agency any debt that the plaintiffs believed had “no likelihood of recovery at any time in the future.” See Lakeland, 958 F.Supp.2d at 7. Thus, the plaintiffs’ policy argument, predicated on the rationale that debt pending at a collection agency retains some value and has some-likelihood of recovery, is not persuasive. The agency’s interpretation of 42 C.F.R. § 413.89(e), in contrast, gives effect to all four criteria in 42 C.F.R. § 413.89(e).

This Court joins the other courts to have considered this issue and finds that the agency’s policy is a reasonable interpretation of 42 C.F.R. § 413.89. See Battle Creek, 498 F.3d at 412; Lakeland, 958 F.Supp.2d at 8-9; Mesquite Cmty. Hosp. v. Levitt, No. 3-07-CV-1093, 2008 WL 4148970, at *4 (N.D.Tex. Sept. 5, 2008). Moreover, the PRRB’s application of that policy in the challenged decision to the plaintiffs’ bad debt reimbursement is not, standing alone, arbitrary and capricious. This -finding is- highly probative, but not determinative, of how long the agency’s policy has been in effect. The Court turns next to the question whether the -agency’s bad-debt reimbursement policy was in-existence at the time the Moratorium took effect and the plaintiffs’ claim that • the policy violates the Moratorium. •

B, The Agency’s Interpretation Does Not Violate The Moratorium

As previously noted, the text and legislative history for the Moratorium and its amendments make no explicit reference to, .the agency’s specific policy disallowing reimbursement of Medicare bad debt accounts pending at collection agencies. The Moratorium merely bars any change in agency policy regarding bad debt reimbursement generally. Thus, the Moratorium, itself sheds,no light on the critical question whether the agency applied .a policy in the challenged PRRB decision that was in effect in August 1987 or, as the plaintiffs assert, violated the statutory command in the Moratorium.

The language of the Moratorium conditions a violation on a change in HHS “policy.” See 42 U.S.C. § 1395f note. The 1988 Conference Report clarified that the “policy” was defined by HHS’. regulations, manuals, and issuances as well as PRRB decisions. H.R.Rep. No. 1001104, at 25. The bad debt reimbursement regulations, of which 42 U.S.C. § 413.89 is the most relevant here, are. part of the agency’s efforts to give effect to the statutory prohibition on cross-subsidization in 42 UJ3.C. § 1395x(v)(1)(A)(i). Thus, in prohibiting a change in “the policy” of HHS regarding bad debt reimbursement, the Moratorium froze the agency’s implementing regulations for this aspect of the Medicare program. As such, the question at issue can best - be understood as determining the meaning of the relevant- HHS regulations when the Moratorium took effect. In this context, the agency’s interpretation of its own regulation must be deferred to “unless an ‘alternative reading is compelled by the regulation’s plain language or by other indications of the Secretary’s intent at the time of the regulation’s promulgation.’ ” Thomas Jefferson Univ., 512 U.S. at 512, 114 S.Ct. 2381 (quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S.Ct. 1306, 99 L.Ed.2d 515 (1988)).

This interpretive problem is complicated by the relative dearth of pre-Moratorium agency decisions or specific written policy statements articulating exactly what the agency’s policy was regarding reimbursement of Medicare bad debt pending at collection agencies. See Pis.’ Mem. at 13 (noting that “[t]here are no agency statements prior to August 1,1987 expressing a policy that patient accounts pending at a collection agency are presumed to be collectible and therefore cannot be reimbursed as Medicare bad debt”). The reason for the lack of such evidence, prior to August 1, 1987, may be attributable to the fact that, for cost years prior to January 1, 1983, providers were prohibited by regulation from using legal action or the “threat of legal action to collect Medicare deductible and coinsurance amounts.” AR at 23 n. 65. Since using threats of legal action is a tactic often associated with collection agencies, providers may ha