Full Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA NEW ENGLAND DONOR SERVICES, INC., et al., Plaintiffs, Civil Action No. 25 - 4329 (SLS) v. Judge Sparkle L. Sooknanan UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants. MEMORANDUM OPINION Organ donation is a tremendous act of selflessness and a vital means of extending the lives of many critically ill patients. Tens of thousands of donations occur annually across the United States. Recognizing the need for a well-functioning system to facilitate donations, Congress established a complex scheme that relies on the federal government, nonprofits, and hospitals to work together to safely and equitably connect patients to lifesaving organs. Congress entrusted Organ Procurement Organizations (OPOs) with many responsibilities in this scheme, including the acquisition, preservation, and transportation of donated organs. This case involves a rule promulgated in 2020 (2020 Rule) by the Centers for Medicare and Medicaid Services (CMS), an arm of the Department of Health and Human Services (HHS), that changed the way that OPOs are certified to conduct their critical work. Roughly five years later, shortly before the implementation of that rule, multiple OPOs brought this Administrative Procedure Act (APA) action seeking to vacate it and set it aside. They allege that the 2020 Rule exceeds the agency’s statutory authority in several respects and is arbitrary and capricious. The Defendants—HHS, CMS, and agency heads sued in their official capacities—argue that the Court lacks jurisdiction to consider the Plaintiffs’ claims because they should be brought in the first instance through an administrative adjudicatory process. And they defend the legality of the 2020 Rule on the merits. The Court concludes that there are no bars to judicial review, but it agrees with the Defendants that the 2020 Rule is lawful under the APA. The agency acted well within its statutory authority in promulgating the rule by exercising discretion conferred by Congress. And it acted within a zone of reasonableness in its decision making, precluding any finding that the 2020 Rule is arbitrary and capricious. The Court recognizes that reasonable minds could differ with respect to some of the policy decisions reflected in the 2020 Rule. But under the APA, it is not the role of the judicial branch to substitute its judgment for that of the agency. BACKGROUND A. Statutory Background Congress passed the National Organ Transplant Act of 1984, Pub. L. No. 98-507, 98 Stat. 2339 (codified at 42 U.S.C. §§ 273 et seq.), to coordinate a safe and effective national system for organ procurement and transplantation. The Act criminalized the sale of human organs for profit, see 42 U.S.C. § 274e, and “codified a major federal public-private effort to reduce chronic shortages of donated organs urgently needed by patients awaiting transplants[,]” Adventist Health Sys./SunBelt, Inc. v. HHS, 17 F.4th 793, 796 (8th Cir. 2021). CMS oversees this system of organ procurement and transplantation. See 42 U.S.C. §§ 273–274g, 1320b-8. 1. Organ Procurement Organizations OPOs are the nonprofits at the core of this system. OPOs “acquire all useable organs from potential donors,” “arrange for the acquisition and preservation of donated organs[,]” and “provide or arrange for the transportation of donated organs to transplant centers[.]” 42 U.S.C. 2 § 273(b)(3)(B), (C), (F). OPOs do not operate on patients or decide which patients receive organs—those responsibilities are within the purview of hospitals and a specialized nonprofit entity, respectively. See Doe v. Kennedy, CIV. NO. 26-2937, 2026 WL 1412609, at *1–2 (E.D. Pa. May 20, 2026) (describing the statutory scheme). Instead, OPOs control many of the steps that other organizations cannot handle, including communicating with donors, families, hospitals, and transplant centers to effectively identify, procure, preserve, and deliver donated organs to patients in need. Medicare reimburses OPOs directly for the costs of procuring kidneys. See 42 U.S.C. § 273(b)(1)(C); 42 C.F.R. § 413.420. And it pays OPOs indirectly for the costs of procuring other organs by reimbursing hospitals for qualifying payments to OPOs. See 42 U.S.C. § 1320b-8(b)(1). OPOs bill transplant hospitals their costs to procure organs, and those hospitals submit the costs to Medicare for reimbursement. See 42 C.F.R. § 413.404(a)(3), (c); 42 C.F.R. § 413.402(b)(9). Congress granted each OPO an exclusive territory in which to operate, known as a donation service area (DSA). See 42 U.S.C. § 273(b)(1)(E) (requiring qualified OPOs to have a DSA); 42 U.S.C. § 1320b-8(b)(2) (explaining that “[t]he [HHS] Secretary may not designate more than one organ procurement organization for each service area”). The statutory scheme contemplates that OPOs will have strong relationships within their respective DSAs. See id. § 273(b)(1)(G) (requiring OPO boards to include members from their local service areas). And OPOs must serve “a substantial majority of the hospitals and other health care entities” within their DSAs that have facilities for donations. Id. § 273(b)(3)(A). As of March 2026, there were 55 certified OPOs across the country, each serving an exclusive DSA. Am. Compl. ¶ 33, ECF No. 14. CMS enforces exclusivity within DSAs by imposing conditions on hospitals. Specifically, to maintain their eligibility for Medicare reimbursements, hospitals must contract with the OPO in 3 the DSA where the hospital is located. 42 U.S.C. § 1320b-8(a)(1); 42 C.F.R. §§ 486.308(c), 482.45(a). In other words, to receive Medicare reimbursement, all hospitals that recover or transplant organs must be affiliated with their designated OPO. See 42 U.S.C. § 1320b-8(a)(1)(C). Hospitals wishing to contract with another OPO must seek a waiver from the HHS Secretary. See id. § 1320b-8(a)(2). 2. OPO Certification OPOs must meet certain requirements to be “certified or recertified” as “qualified” by the HHS Secretary. 42 U.S.C. § 273(b). Congress charged the Secretary by statute to create a framework to certify, recertify, and decertify OPOs. Id. § 273(b)(1)(D)(ii). Critically, OPOs that are not certified cannot receive federal funds and cannot sign agreements with hospitals that receive such funding. See id. § 1320b-8(b)(1)(A)(ii), (a)(1)(C); 42 C.F.R. § 486.312(e); see also 42 U.S.C. § 1320b-8(b)(1)(C) (authorizing payments to OPOs that “meet[] performance-related standards prescribed by the Secretary”). This makes certification a high-stakes process—both for the survival of OPOs and for the effectiveness of the organ transplantation system. The OPO certification process has changed over time. Before 2000, HHS required OPOs to “achieve at least 75 percent of the national mean for four of . . . five performance categories, averaged over the 2 calendar years before the year of redesignation[.]” 61 Fed. Reg. 19,722, 19,744 (May 2, 1996) (then-codified at 42 C.F.R. § 486.310(b)). These categories compared the number of donors, organs recovered, and organs transplanted to a given DSA’s population in different ways. Id. Congress later passed the Organ Procurement Organization Certification Act of 2000, Pub. L. No. 106-505, Title VII, 114 Stat. 2314, 2346–48 (Certification Act), to address shortcomings in the certification process that had “created a level of uncertainty” and impacted OPOs’ 4 effectiveness, 144 Stat. at 2346 (codified at 42 U.S.C. § 273 note). The law specifically addressed two limitations in the recertification process. Id. First, Congress was concerned that the recertification process exclusively relied on population-based performance measures that did “not permit consideration of other outcome and process standards” that would better measure OPO performance. Id. Second, Congress was troubled that OPOs who were denied recertification lacked an opportunity to appeal to the Secretary. Id. Congress codified its solutions from the Certification Act through an amendment to one statutory provision, 42 U.S.C. § 273(b)(1), which governs today. 144 Stat. at 2347. The revised statute addressed Congress’s two concerns. First, it created a certification process for OPOs to be “defined through regulations that are promulgated by the Secretary[.]” 42 U.S.C. § 273(b)(1)(D)(ii). Specifically, Congress required the Secretary to “rely on outcome and process performance measures that are based on empirical evidence, obtained through reasonable efforts, of organ donor potential and other related factors in each service area of qualified organ procurement organizations[.]” Id. § 273(b)(1)(D)(ii)(II). Congress also required that the Secretary “use multiple outcome measures as part of the certification process[.]” Id. § 273(b)(1)(D)(ii)(III). Second, the statute required the Secretary to allow for OPOs “to appeal a decertification to the Secretary on substantive and procedural grounds[.]” Id. § 273(b)(1)(D)(ii)(IV). And the law required OPOs to be recertified “not more frequently than once every 4 years[.]” Id. § 273(b)(1)(D)(ii)(I). Combined, Congress intended for these procedural changes to create “a more streamlined, sequential process” that ensures that a decertified OPO’s appeal is resolved before its DSA must be assigned to a different OPO. 71 Fed. Reg. 30,982, 30,997 (May 31, 2006). Beginning in 2006, CMS promulgated rules defining these new performance measures for OPO certification. See id. at 30,982. Consistent with the statute, the CMS rules measured 5 performance based on both process and outcomes. The process performance measures—which are not at issue here—have remained largely unchallenged and unchanged since 2006. See 42 C.F.R. §§ 486.320−360. For example, OPOs must participate in the Organ Procurement and Transplantation Network, id. § 486.320, have written agreements with 95% of qualifying hospitals in their DSA, id. § 486.322, and have written protocols to manage and evaluate potential donors, id. § 486.344. As for the outcome measures, the 2006 CMS rule employed three metrics: (1) donation rate, (2) observed donation rate, and (3) yield. 71 Fed. Reg. at 31,000 (then-codified at 42 C.F.R. § 486.318(a)). First, the donation rate measured the conversion of potential to actual donors in a DSA, and potential donors were measured by “eligible deaths[.]” Id. An OPO’s donation rate could not fall more than 1.5 standard deviations below the national mean. Id. at 31,050. Second, an OPO’s observed donation rate could not be significantly lower than their expected donation rate— derived from a complex formula—by a statistically significant amount. Id. at 31,002–03. Third, an OPO had to meet certain “yield” measures—which assessed the number of organs transplanted or used for research per donor—within a maximum number of standard deviations below the national mean. Id. at 31,050−51. CMS eventually modified its rule to require OPOs to meet only two of these outcome measures, instead of all three. See 78 Fed. Reg. 74,826, 75,144 (Dec. 10, 2013). During the 2022 recertification cycle, CMS further modified the rule to require OPOs to meet only one of the donation rate and yield measures. See 84 Fed. Reg. 61,142, 61,434−35 (Nov. 12, 2019). 3. Challenged Rulemaking In 2019, President Donald J. Trump issued an Executive Order, Advancing American Kidney Health, which set a goal of “modernizing the organ recovery and transplantation systems 6 and updating outmoded and counterproductive regulations.” Exec. Order No. 13879, 84 Fed. Reg. 33,817, 33,817 (July 10, 2019). To that end, he directed the HHS Secretary to “revis[e] [OPO] rules and evaluation metrics to establish more transparent, reliable, and enforceable objective metrics for evaluating an OPO’s performance.” Id. at 33,818. In response to that Executive Order, CMS proposed a new rule later that year. Revisions to the Outcome Measure Requirements for Organ Procurement Organization, 84 Fed. Reg. 70,628 (Dec. 23, 2019). As its title reflects, the proposed rule focused primarily on changing the outcome measures. CMS acknowledged that its 2006 outcome measures were “not sufficiently objective and transparent” and could be improved. Id. at 70,628–29. For example, as one large OPO pointed out, the then-existing metrics relied heavily on unaudited and self-reported data from OPOs themselves, which led to inconsistent interpretations. Id. at 70,630 (citing RR 31711). CMS found that other measurements, such as the “yield” metric, could incentivize OPOs to “‘walk away from cases in which the donor only has one organ viable for transplant’” and thus waste transportable organs. Id. (quoting RR 3039). To solve these issues, CMS proposed to replace its three outcome performance metrics with two new metrics: donation rate and transplantation rate. Id. at 70,628–29. The donation rate would measure the number of actual donors compared to the number of potential donors, while the transplantation rate would measure the number of organs transplanted compared to that same number of potential donors. Id. at 70,631. Under the proposed rule, CMS would automatically decertify any OPO falling outside the top 25% of those metrics based on a single year of data. Id. at 70,634–35. The proposed rule generated over 800 public comments from OPOs, hospitals, donor families, and others. 85 Fed. Reg. 77,898, 77,900. 1 When a source cited in the Federal Register is also part of the Administrative Record (RR), the Court cites to the Administrative Record for ease of access. 7 The HHS Secretary promulgated the final rule in 2020. See 85 Fed. Reg. at 77,898. That rule adopts the two categories of metrics from the proposed rule: donation rate and transplantation rate. Both metrics are measured based on a final assessment period using 12 months of data. Id. at 77,916. • First, the donation rate captures “the number of donors in the DSA as a percentage of the donor potential.” 42 C.F.R. § 486.318(d)(1)(i). Though the 2006 metrics also measured donation rates, the Secretary tweaked the rate’s numerator and denominator to better capture OPOs’ effectiveness. As to the numerator, the rule defines “donors” as patients from whom “at least one vascularized organ . . . is transplanted[,]” instead of anyone from whom an organ was “recovered.” 85 Fed. Reg. at 77,903 (codified at 42 C.F.R. § 486.302). This change was intended to discourage OPOs from discarding procured organs or only seeking cases in which donors have multiple organs viable for transplant. 84 Fed. Reg. at 70,631. As to the denominator, the agency moved away from its previous practice of measuring donors per “eligible death,” since that measurement relied on unreliable self- reported data. See RR 3171. Instead, the 2020 Rule uses “donor potential” as a denominator, as measured by certain inpatient deaths where the primary cause of death is “consistent with organ donation” based on statistics from the Centers for Disease Control and Prevention’s Multiple Cause of Death (MCOD) data set. See 42 C.F.R. § 486.318(d)(1)(iv); 85 Fed. Reg. at 77,906. • Second, an OPO’s transplantation rate is calculated as the total “number of organs transplanted from donors in a DSA as a percentage of the donor potential.” 42 C.F.R. § 486.318(d)(1)(ii). Responding to commenters’ concerns about age-related disparities across OPOs, the 2020 Rule calculates an adjusted transplantation rate for each OPO based 8 on the age of their potential organ donors. Id.; 85 Fed. Reg. at 77,910. By using the donation rate and transplantation rate together, the Secretary sought to incentivize OPOs to both obtain more donors and place more organs. Id. at 77,928−29. The 2020 Rule also takes a different approach to certification. It abandons the proposed rule’s automatic decertification of any OPO falling outside the top 25% of these new metrics. Instead, the 2020 Rule adopts a new three-tiered system to determine whether OPOs should be recertified, decertified, or forced to compete to retain their DSA. See 42 C.F.R. § 486.318(e). First, OPOs whose donation and transplantation rates are at or above the top 25% of OPOs’ rates from the prior year will be assigned to Tier 1. Id. § 486.318(e)(4). If a Tier 1 OPO also meets the process measures, they will be recertified and keep their DSA for the following four years. Id. § 486.316(a)(1). Next, OPOs will be assigned to Tier 2 if their donation and transplantation rates are at or above the median rate (i.e., top 50%) of OPOs from the prior year, but they have at least one of two metrics not within the top 25%. Id. § 486.318(e)(5). Tier 2 OPOs are not recertified or decertified—instead, their DSA becomes “open for competition” from other OPOs. Id. § 486.316(a)(2). Finally, OPOs with donation or transplantation rates under the median rate will be assigned to Tier 3 and decertified. Id. §§ 486.318(e)(6), 486.316(a)(3). Tier 3 OPOs may appeal their decertification, id. § 486.314, but Tier 2 OPOs may not appeal their non-renewal, 85 Fed. Reg. at 77,918. To ensure statistical significance, the OPOs are not placed into tiers based on their raw donation and organ transplantation rates; rather, CMS calculates an OPO’s tier based on the upper limit of the one-sided 95% confidence interval for each metric. 42 C.F.R. § 486.318(e). Due to data availability, CMS will measure OPOs’ performance for certification based on lagging data. During the 2022–2026 certification period, CMS will establish the threshold rate based on 2023 data, and the final assessment period will utilize OPOs’ performance data from 9 2024. See 85 Fed. Reg. at 77,916. In preparation for this first upcoming cycle, CMS has published a series of interim reports to make OPOs aware of their status. For example, in 2025, a Tier 1 OPO’s 2023 donation rate had to exceed 14.11, and its transplantation rate had to exceed 45.67. See Ctr. for Medicare & Medicaid Servs., Public 2024 & 2025 OPO Report, https://qcor.cms.gov/OPOs [https://perma.cc/53ND-CHAT] (2025) (“OPO Public Performance Report” Link, then “2025 Assessment” Tab). These donation and transplantation rate thresholds were based on 2022 data. The 2025 assessment placed 30 OPOs in Tier 1, 16 OPOs in Tier 2, and 10 OPOs in Tier 3. Id. CMS’s assessments are somewhat volatile year-over-year. For example, two years prior, CMS placed 15 OPOs in Tier 1, 18 OPOs in Tier 2, and 24 OPOs in Tier 3. Id. B. Factual and Procedural Background The Plaintiffs in this case are three OPOs operating across nine states and territories.2 Am. Compl. ¶ 14. • New England Donor Services, Inc. (NEDS) operates in six northeastern states and Bermuda. Decl. of Alexandra K. Glazier (Glazier Decl.) ¶ 3, ECF No. 14-1. NEDS expects to be assigned to Tier 2 for the performance cycle ending in 2026. Id. ¶ 13. • We Are Sharing Hope SC (SHSC) serves the state of South Carolina. Decl. of David DeStefano (DeStefano Decl.) ¶ 5, ECF No. 14-3. SHSC expects to be assigned to Tier 3 for the performance cycle ending in 2026. Id. ¶ 10. • Donor Network of Arizona (DNA) serves the state of Arizona. Declaration of Katharine Mills (Mills Decl.) ¶ 4, ECF No. 14-4. DNA expects to be assigned to Tier 2 for the performance cycle ending in 2026. Id. ¶ 14. 2 After briefing on the instant cross-motions concluded, the Parties stipulated to the dismissal of a fourth Plaintiff, Gift of Life Michigan. 10 In December 2025, the Plaintiffs sued to stop CMS’s 2020 Rule. See Compl., ECF No. 1. The operative Amended Complaint brings four claims under the APA. Am. Compl. ¶¶ 128–163. The Plaintiffs allege that CMS exceeded its statutory authority under 5 U.S.C. § 706(2)(C) by forcing OPOs to compete for certification (Count I), forcing OPOs to compete for DSAs (Count II), and attaching impermissible conditions to federal funds (Count III). Am. Compl. ¶¶ 128–150. In addition, the Plaintiffs allege that the 2020 Rule is arbitrary and capricious under 5 U.S.C. § 706(2)(A) (Count IV). Am. Compl. ¶¶ 151–163. In March 2026, the Plaintiffs moved for summary judgment, seeking to vacate the 2020 Rule. Pls.’ Mot. Summ. J. (Pls.’ Mot.), ECF No. 15. The Defendants then cross-moved for summary judgment. Defs.’ Opp’n & Cross-Mot. Summ. J., (Defs.’ Cross-Mot.), ECF No. 17. Both motions are now ripe for review.3 See Pls.’ Reply & Opp’n (Pls.’ Opp’n), ECF No. 18; Defs.’ Cross-Reply, ECF No. 21. LEGAL STANDARD A court “shall grant summary judgment if the movant shows 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). In the context of an APA challenge, summary judgment “serves as a mechanism for deciding, as a matter of law, whether the administrative record supports the agency action and whether the agency action is consistent with the APA standard of review.” Int’l Swaps & Derivatives Ass’n v. U.S. Commodity Futures Trading Comm’n, 887 F. Supp. 2d 259, 266 (D.D.C. 2012) (citing Richards v. INS, 554 F.2d 1173, 1177 & n.28 (D.C. Cir. 1977)). 3 The Court notes that the Middle District of Florida recently addressed a similar challenge to the 2020 Rule and resolved the case in CMS’s favor. See LifeLink Found. v. Kennedy, No. 8:25-cv-2042, 2026 WL 2914221 (M.D. Fla. Sep. 29, 2026). 11 DISCUSSION This opinion proceeds in three parts. First, the Court assesses whether the Medicare Act or the Certification Act requires the Plaintiffs to channel their claims to an administrative process before seeking judicial review. Next, the Court considers whether CMS exceeded its statutory authority in promulgating the 2020 Rule. Finally, the Court determines whether the rule is arbitrary or capricious. Ultimately, the Court concludes that it has jurisdiction to consider the Plaintiffs’ claims, which fail on the merits. A. Claim Channeling At the threshold, the Defendants argue that the Plaintiffs’ challenge is premature. They first contend that the Medicare statute expressly requires the Plaintiffs to channel their claims through the agency. In the alternative, they argue that the Certification Act implicitly created a special statutory review scheme that the Plaintiffs must follow before bringing an APA challenge.4 The Court disagrees with both arguments and finds that judicial review is available. 1. Medicare Act By statute, claims “arising under” the Medicare Act must first be channeled through the agency’s administrative adjudicatory process before a plaintiff is entitled to judicial review. See 42 U.S.C. § 405(h); see also id. § 405(g); id. § 1395ii; Am. Hosp. Ass’n v. Azar, 895 F.3d 822, 825–26 (D.C. Cir. 2018) (explaining how these three provisions combine to require channeling under the Medicare Act). As the Supreme Court has explained, claims arise under the Medicare Act “where ‘both the standing and the substantive basis for the presentation’ of a claim is the Medicare Act[.]” Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 12 (2000) 4 The Parties refer to 42 U.S.C. § 273 as the Certification Act. As explained above, Congress codified the Certification Act in 42 U.S.C. § 273(b)(1). But the Court follows the Parties’ lead in referring to the changes to this subsection as the Certification Act. 12 (quoting Heckler v. Ringer, 466 U.S. 602, 615 (1984)). This may include, for example, “[c]laims for money, claims for other benefits, claims of program eligibility, and claims that contest a sanction or remedy” under the Medicare Act. Id. at 14. Here, the Defendants argue that Section 405(h)’s claim channeling applies because the Medicare Act provides both the substantive basis and standing for the Plaintiffs’ claims. See Defs.’ Cross-Mot. at 19; Defs.’ Cross-Reply at 1–2. They point out that the Plaintiffs challenge the Secretary’s outcome performance standards, which the Plaintiffs must meet to maintain eligibility for Medicare funding. See 42 U.S.C. § 1320b-8(b)(1)(C), (F); 85 Fed. Reg. at 77,899. And they contend that the Plaintiffs’ standing is partially rooted in the fact that they would lose Medicaid funding if they are decertified. See Pls.’ Mot. at 15 (stating that decertification would “cut [them] off from being able to work with any hospital that wishes to receive federal funding” and they “simply could not survive” the attendant losses). According to the Defendants, whether this is described as a “claim[] of program eligibility” to Medicare or a “claim[] that contest[s] [the] sanction or remedy” of decertification or reassignment, it is one that Supreme Court precedent places in the agency’s administrative review process in the first instance. Defs.’ Cross-Mot. at 19 (quoting Ill. Council, 529 U.S. at 14). The Defendants are wrong for three reasons. First, the substantive basis for this case is Section 273 of the Public Health Services Act, not the Medicare Act. The Plaintiffs’ theory of the case “derive[s] from the fact that CMS has mandated competition between OPOs in violation of limited delegated authority under Section 273.” Pls.’ Mot. at 16 (citing Am. Compl. ¶¶ 136–163). Although this alleged competition may impact OPOs’ eligibility for Medicare funding down the road, that downstream effect is not the “substantive basis” for the Plaintiffs’ claims. See Nat’l Infusion Ctr. Ass’n v. Becerra, 116 F.4th 488, 505 (5th Cir. 2024) (“We cannot see how the Medicare Act could supply the substantive 13 basis for [the plaintiff’s] challenges to the [statute] if those same challenges could be brought without reference to the Medicare Act.”); cf. Avon Nursing & Rehab. v. Becerra, 995 F.3d 305, 312–13 (2d Cir. 2021) (holding that a challenge “independently rooted” in the Medicaid Act was not subject to channeling, even if it simultaneously arose under the Medicare Act). Rather than litigating any entitlement to Medicare funding, the Plaintiffs challenge the Secretary’s authority under Section 273 of the Public Health Services Act to adopt the certification scheme.5 Second, and relatedly, even the relevant provision governing eligibility for Medicare funding, 42 U.S.C. § 1320b-8, is not in the Medicare Act. Section 1320b-8 is located in Subchapter XI of the Social Security Act, and the Medicare Act is located in Subchapter XVIII. Unlike some other provisions of Subchapter XI, Section 1320b-8 does not incorporate the claim channeling provision in Section 405(h). This is a hint that Congress did not intend to channel claims under this section. See Regeneron Pharms., Inc. v. HHS, 510 F. Supp. 3d 29, 43 (S.D.N.Y. 2020) (noting that, unlike Subchapter XVIII, Subchapter XI does not fully incorporate § 405(h)); Ass’n of Cmty. Cancer Ctrs. v. Azar, 509 F. Supp. 3d 482, 491 (D. Md. 2020) (finding that Medicare Act channeling did not apply to other Subchapter XI claims). 5 The Plaintiffs point out that their Amended Complaint does not cite the Medicare Act at all. Pls.’ Mot. at 17. True, but that is not dispositive. See Row 1 Inc. v. Becerra, No. 22-cv-0718, 2023 WL 183687, at *2 (D.D.C. Jan. 12, 2023) (explaining that “the channeling requirement does not vary based on how a claim is characterized” (citing Ill. Council, 529 U.S. at 13–14)), aff’d, 92 F.4th 1138 (D.C. Cir. 2024). For example, a case that is “plainly about eligibility for reimbursement” under the Medicare Act must be channeled even if “the question turned on the interpretation of” a different statute. Nat’l Infusion Ctr., 116 F.4th at 506; see also Weinberger v. Salfi, 422 U.S. 749, 760–61 (1975) (Medicare Act channeling applies to claims brought under the Constitution); Cmty. Oncology All., Inc. v. OMB, 987 F.3d 1137, 1142–43 (D.C. Cir. 2021) (Medicare Act channeling applies to a claim brought under the Balanced Budget and Emergency Deficit Control Act of 1985). But as explained, that is not the case here. 14 Third, the Plaintiffs’ theory of standing is broader than a loss of Medicare payments.6 For example, the Plaintiffs allege that they are “injured by the very prospect of having to compete for recertification and for their service areas.” Pls.’ Mot. at 14 (citing Glazier Decl. ¶¶ 13–15; DeStefano Decl. ¶¶ 12–14; Mills Decl. ¶¶ 15–17). Further, they allege that competition causes reputational harms and requires the Plaintiffs to expend resources that they would otherwise devote to their primary mission. Id. (citing Glazier Decl. ¶¶ 13–15; DeStefano Decl. ¶ 14; Mills Decl. ¶¶ 16–17); see also TransUnion LLC v. Ramirez, 594 U.S. 413, 417 (2021) (explaining that reputational harm is cognizable for standing); People for the Ethical Treatment of Animals v. USDA, 797 F.3d 1087, 1097 (D.C. Cir. 2015) (explaining that the expending of resources to counteract alleged unlawful conduct in this circumstance is cognizable for standing).7 For these reasons, the Court is satisfied that the Plaintiffs’ claims are not subject to claim channeling under the Medicare Act. 2. Certification Act In the alternative, the Defendants argue that “the Certification Act impliedly prohibits pre- enforcement review.” Defs.’ Cross-Mot. at 21; see also Defs.’ Cross-Reply at 6. The Supreme Court has recognized that a “special statutory review scheme . . . may preclude district courts from 6 The Court is satisfied that the Plaintiffs have Article III standing to bring this case, which the Defendants do not challenge. See State Nat’l Bank of Big Spring v. Lew, 795 F.3d 48, 53 (D.C. Cir. 2015) (“There is ordinarily little question that a regulated individual or entity has standing to challenge an allegedly illegal statute or rule under which it is regulated.” (cleaned up)). 7 In Illinois Council, the Supreme Court explained that Medicare Act channeling does not apply when it “would not simply channel review through the agency, but would mean no review at all.” 529 U.S. at 19. Relying on this line of cases, the Plaintiffs argue that even if their claims arose under the Medicare Act, channeling would not apply because the 2020 Rule bars Tier 2 OPOs from appealing their non-renewal decisions, thus precluding ultimate judicial review for those Plaintiffs. The Court need not reach that argument given its holding that the Plaintiffs’ claims do not arise under the Medicare Act. 15 exercising jurisdiction over challenges to federal agency action.” Axon Enter., Inc. v. FTC, 598 U.S. 175, 185 (2023) (citing Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994)). Congress may do so “explicitly, providing in so many words that district court jurisdiction will yield[,]” or “implicitly, by specifying a different method to resolve claims about agency action.” Id. “Under Thunder Basin’s framework, courts determine that Congress intended that a litigant proceed exclusively through a statutory scheme of administrative and judicial review when (i) such intent is fairly discernible in the statutory scheme, and (ii) the litigant’s claims are of the type Congress intended to be reviewed within [the] statutory structure.” Arch Coal, Inc. v. Acosta, 888 F.3d 493, 498 (D.C. Cir. 2018) (cleaned up). The Supreme Court has provided three factors to guide the latter inquiry when a statutory scheme evinces Congressional intent to displace federal court jurisdiction: (1) whether “a finding of preclusion could foreclose all meaningful judicial review,” (2) whether the claim is “wholly collateral to a statute’s review provisions,” and (3) whether the claim lies “outside the agency’s expertise.” Thunder Basin, 510 U.S. at 212–13 (cleaned up). Here, neither consideration supports the conclusion that Congress intended the Certification Act to supplant judicial review. Starting with the first Thunder Basin inquiry, it is not “fairly discernable” in the Certification Act that Congress intended to provide an exclusive channel to administrative review. Arch Coal, Inc., 888 F.3d at 498. Nothing in the Act even hints at such an intention. And the Defendants’ briefing skips this part of the inquiry altogether, so they do not identify specific statutory language to advance their cause. See Defs.’ Cross-Mot. at 21–23 (arguing only under the second Thunder Basin inquiry that Congress intended these claims to be reviewed within the Certification Act); Defs.’ Cross-Reply at 6–7 (same). Reading between the lines, the Defendants seem to rely on the provision referencing administrative appeals of decertification decisions. 16 42 U.S.C. § 273(b)(1)(D)(ii)(IV) (stating that the certification process should “provide for a qualified [OPO] to appeal a decertification to the Secretary on substantive and procedural grounds”). But that statutory provision neither clarifies the specifics of the appeal process, nor does it reference judicial review at all. United States v. Fausto, 484 U.S. 439, 443, 455 (1988); see also Axon, 598 U.S. at 185 (explaining that Congress “typically chooses” to preclude district court review by establishing an agency review process followed by “review in a court of appeals”). And in any event, an appeals process for certification decisions does not reflect Congressional intent to generally displace judicial review of other challenges like the one before the Court. Indeed, it is a far cry from the statutory schemes that the Supreme Court has blessed in the past. See, e.g., Thunder Basin, 510 U.S. at 207 (describing a complex statutory scheme with deadlines to challenge agency action, processes for appellate review, and more). Even if the Defendants were correct about the first Thunder Basin prong, the Plaintiffs’ claims are not “of the type Congress intended to be reviewed within the statutory structure” under the second. Arch Coal, Inc., 888 F.3d at 498 (cleaned up). The Court must consider whether (1) preclusion of the Plaintiffs’ claims could “foreclose all meaningful judicial review,” (2) the Plaintiffs’ claims are “wholly collateral” to the Certification Act’s review provisions, and (3) the Plaintiffs’ claims are “beyond the expertise of the agency.” Arch Coal, Inc, 888 F.3d at 500 (quoting Free Enter. Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 489 (2010)). If “the answer to all three questions is yes,” the Court “presume[s] that Congress does not intend to limit jurisdiction.” Axon, 598 U.S. at 186 (quoting Free Enter. Fund, 561 U.S. at 489). “But the same conclusion might follow if the factors point in different directions.” Id. Starting in reverse with the third consideration, whatever expertise that CMS might possess with respect to OPO certification within the organ transplantation scheme, the Plaintiffs’ APA 17 claims belong “squarely within the judicial ken.” Vape Cent. Grp., LLC v. FDA, No. 24-cv-3354, 2025 WL 637416, at *8 (D.D.C. Feb. 27, 2025); see also Loper Bright Enters. v. Raimondo, 603 U.S. 369, 400–01 (2024) (“[A]gencies have no special competence in resolving statutory ambiguities. Courts do.”). On the second, the Plaintiffs’ claims are collateral to the Certification Act’s review provision; they challenge the 2020 Rule, not any decertification decision. The Defendants contend otherwise, pointing out that the Certification Act established an “expedited administrative appeals process” regarding recertification that would be superfluous if OPOs first sought judicial review. Defs.’ Cross-Mot. at 22. But nothing about this action challenging the Secretary’s authority under Section 273 renders any proceedings regarding decertification superfluous. Finally, the first consideration is closer. It is not clear that a finding of preclusion would foreclose all meaningful judicial review given the administrative appeals process. But even the Defendants seem to acknowledge that “some issues might not be addressed by the agency itself in an adjudication.” Defs.’ Cross-Mot. at 23. In the end, the Court need not decisively resolve the first consideration because all three need not point in the same direction: “The ultimate question is how best to understand what Congress has done—whether the statutory review scheme, though exclusive where it applies, reaches the claim in question.” Axon, 598 U.S. at 186 (cleaned up). Collectively, the three considerations point against a limitation on judicial review. And, as discussed above, the first Thunder Basin inquiry already falls decisively against the Defendant. So the Court declines to yield its jurisdiction on the basis of the Certification Act. * * * In the end, the Court is mindful that “[t]he APA . . . creates a ‘presumption favoring judicial review of administrative action[.]’” Sackett v. EPA, 566 U.S. 120, 128 (2012) (quoting Block v. Cmty. Nutrition Inst., 467 U.S. 340, 349 (1984)). Here, Congress expressed no intent in the 18 Certification Act to upset that presumption and preclude the Plaintiffs’ claims. Because neither Medicare Act channeling nor the Certification Act bars immediate judicial review, the Court will proceed to the merits. B. Statutory Authority On the merits, the Plaintiffs first argue that the 2020 Rule exceeds the statutory authority set out in Section 273. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Loper Bright, 603 U.S. at 412. In some instances, “the statute’s meaning may well be that the agency is authorized to exercise a degree of discretion.” Id. at 394. For example, a statute may “expressly delegate to an agency the authority” to define a particular term, “empower an agency” to “fill up the details” of a statute, or “regulate subject to the limits imposed by a term or phrase.” Id. at 394–95 (cleaned up). In such a case, “the role of the reviewing court under the APA is, as always, to independently interpret the statute and effectuate the will of Congress subject to constitutional limits.” Id. a