’ access to Medicaid funds. The States further argue that HHS's incorporation of ASOP 49 in the Certification Rule violated the APA in two respects: (1) the rule exceeded HHS's statutory authority, and (2) HHS adopted the rule without notice and comment.
The United States contends that we lack jurisdiction because the States lack standing to challenge the Certification Rule and because their APA claims were barred by the statute's six-year statute of limitations. On the merits, the United States argues that the States’ Certification Rule challenges are premised on a misunderstanding of Section 9010 and the Certification Rule. It claims that the Board did not change the definition of actuarial soundness, but instead HHS permissibly chose to incorporate the Board's guidance on the subject.
Thus, at issue here are two jurisdictional questions: whether the States have standing and, if so, whether their APA claims are time-barred. If we have jurisdiction, we must next address the parties’ merits claims: whether the Certification Rule violates the nondelegation doctrine, and whether HHS violated the APA. We hold that the States have standing for their Certification Rule claims but that their APA claims are time-barred which, in this context, is a jurisdictional issue. We therefore address the merits of only the States’ nondelegation argument and hold that the Certification Rule is constitutional.
To satisfy Article III's standing requirement, plaintiffs must demonstrate (1) an injury that is (2) fairly traceable to the defendant's allegedly unlawful conduct and that is (3) likely to be redressed by the requested relief. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). “The party invoking federal jurisdiction bears the burden of establishing these elements.” Id. at 561, 112 S.Ct. 2130 (citations omitted). At the summary judgment stage, plaintiffs “must set forth by affidavit or other evidence specific facts, which ․ will be taken to be true,” to support each element. Id. (internal quotation marks and citation omitted). If one plaintiff has standing for a claim, then Article III is satisfied as to all plaintiffs. Rumsfeld v. Forum for Acad. & Institutional Rights, Inc., 547 U.S. 47, 52 n.2, 126 S.Ct. 1297, 164 L.Ed.2d 156 (2006) (citations omitted). We review standing issues de novo. Nat'l Rifle Ass'n of Am., Inc. v. McCraw, 719 F.3d 338, 343 (5th Cir. 2013) (citation omitted).
Accepting their factual allegations, summarized above, as true, we hold that the States satisfy the three requirements for standing. First, the States alleged a particular injury in fact: having to pay millions of dollars in Provider Fees despite the ACA's explicit exemption for governmental entities. Second, the States’ injury is arguably traceable to the Certification Rule. They contend that before the Board published ASOP 49, which is applied to the States via the Certification Rule, actuaries were advised that their capitation rate analysis must comport with state and federal law and that before Congress enacted the ACA, federal taxes were minor and not separately considered. ASOP 49, the States say, required them to pay the Provider Fee as part of their actuarially sound capitation rates. Though the facts underlying this argument of how the capitation rates worked under the Certification Rule before and after ASOP 49 are contested, we assume the States’ view of the facts to be true for purposes of standing. See Lujan, 504 U.S. at 561, 112 S.Ct. 2130. The attacks on ASOP 49, which have been applied to the States through the Certification Rule, are the core of this argument. Third, the States have alleged that their injury is likely to be redressed by invalidating the Certification Rule. They allege that before ASOP 49's adoption and application to the States via the Certification Rule, states still had the legal option to exclude the Provider Fee from capitation rates in their contracts with MCOs. Thus, they argue that in the rule's absence, states could not lose Medicaid funding for refusing to pay the Provider Fee “by virtue of that rule.” See Larson v. Valente, 456 U.S. 228, 242, 102 S.Ct. 1673, 72 L.Ed.2d 33 (1982) (holding that setting aside an allegedly unlawful statutory provision that compels plaintiffs to register and report redresses the plaintiffs’ alleged injury of registering and reporting because, even though the plaintiffs could be compelled to register and report through another statutory provision, they will no longer be compelled to do so under the statutory provision at issue). Were we to rule in their favor, the Certification Rule would be invalidated and ASOP 49's explicit requirement to pay the Provider Fee would be removed.
However, we lack jurisdiction to address the States’ APA claims because they are time-barred. APA challenges are governed by 28 U.S.C. § 2401(a), which provides that “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” The United States enjoys sovereign immunity unless it consents to suit, “and the terms of its consent circumscribe our jurisdiction.” Dunn-McCampbell Royalty Interest, Inc. v. Nat'l Park Serv., 112 F.3d 1283, 1287 (5th Cir. 1997) (citation omitted). “The applicable statute of limitations is one such term of consent,” so, unlike the ordinary world of statutes of limitations, here the failure to sue the United States within the limitations period deprives us of jurisdiction. Id.
HHS published the Certification Rule in 2002, thirteen years before the States filed their complaint. See 2002 Final Rule, 67 Fed. Reg. at 40,989. However, a plaintiff may “challenge ․ a regulation after the limitations period has expired” if the claim is that the “agency exceeded its constitutional or statutory authority. To sustain such a challenge, the claimant must show some direct, final agency action involving the particular plaintiff within six years of filing suit.” Dunn-McCampbell, 112 F.3d at 1287. An agency's action is direct and final when two criteria are satisfied. “First, the action must mark the ‘consummation’ of the agency's decisionmaking process.” Bennett v. Spear, 520 U.S. 154, 177–78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (citation omitted). “[S]econd, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.” Id. at 178, 117 S.Ct. 1154 (quotation omitted). These rights, obligations, or legal consequences must be new. Nat'l Pork Producers Council v. U.S. E.P.A., 635 F.3d 738, 756 (5th Cir. 2011).
The district court concluded that HHS took three “direct, final agency actions” in 2015 against the States and that those actions triggered a new six-year statute of limitations period. Texas I, 300 F. Supp. 3d at 839 (citation omitted). But, as the United States argues, none of these actions were direct and final.
First, the district court pointed to a 2015 letter sent by HHS to the Texas Medicaid Director approving Texas's amended MCO contract, which included Provider Fees in the capitation rates for additional groups of Medicaid beneficiaries. Id. This letter does not show that HHS was issuing a new ruling requiring Texas to include Provider Fees in its capitation rates. Further, Texas paid costs associated with Provider Fees for the 2013 calendar year even though the 2015 letter applied only from May 1, 2015 to August 31, 2015. Thus, even before the letter, Texas accounted for the Provider Fee in its capitation rates. The letter did not mark a change to Texas's obligation under the Certification Rule.
Second, the district court stated that the government's collection of the Provider Fee through the States’ 2015 capitation rate constituted direct, final agency action. Id. But, as explained above, the IRS does not collect the Provider Fee directly from states. The government's decision to collect from MCOs is not a “direct ․ action involving the [States].” See Dunn-McCampbell, 112 F.3d at 1287. As such, this argument does not support the district court's conclusion.
Third, the district court stated that HHS's 2015 guidance document “for use in setting [capitation] rates ․ for any managed care program subject to the actuarial soundness requirements” obligated the States to include the cost of the Provider Fee in their capitation rate calculations in 2015. Texas I, 300 F. Supp. 3d at 839–40 (citation omitted). Once again, the guidance document did not create any new obligations or consequences; it restated that for capitation rates to be actuarially sound, they had to be consistent with ASOPs, including ASOP 49. But this requirement has existed since HHS promulgated the Certification Rule. See 2002 Final Rule, 67 Fed. Reg. at 41,097 (requiring that capitation rates be “certified ․ by actuaries who ․ follow the practice standards established by the Actuarial Standards Board”). The publication of ASOP 49 in 2015 did not create any new obligation or legal consequence either. Actuarially sound capitation rates have consistently required that all reasonable, appropriate, and attainable