102
O'Connor, J., dissenting
policy here to deny respondent's claim for full reimbursement of its defeasance loss in 1985.
The judgment of the Court of Appeals is reversed.
It is so ordered.
Justice O'Connor, with whom Justice Scalia, Justice Souter, and Justice Thomas join, dissenting.
Unlike the Court, I believe that general Medicare reporting and reimbursement regulations require provider costs to be treated according to "generally accepted accounting principles." As a result, I would hold that contrary guidelines issued by the Secretary of Health and Human Services in an informal policy manual and applied to determine the timing of reimbursement in this case are invalid for failure to comply with the notice and comment procedures established by the Administrative Procedure Act, 5 U. S. C. § 553. Because the Court holds to the contrary, I respectfully dissent.
I
It is undisputed, as the Court notes, ante, at 90, that respondent, Guernsey Memorial Hospital (Hospital), is entitled to reimbursement for the reasonable advance refunding costs it incurred when it refinanced its capital improvement bonds in 1985. The only issue here is one of timing: whether reimbursement is to be made in a lump sum in the year of the refinancing, in accordance with generally accepted accounting principles (known in the accounting world as GAAP), or in a series of payments over the remaining life of the original bonds, as the Secretary ultimately concluded after applying § 233 of the Medicare Provider Reimbursement Manual (PRM). The Hospital challenged the Secretary's reimbursement decision under the Medicare Act, 42 U. S. C. § 1395oo(f), which incorporates the Administrative Procedure Act, 5 U. S. C. § 551 et seq. (1988 ed. and Supp. V), by reference. Under the governing standard, reviewing courts are to "hold
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