Cite as: 514 U. S. 87 (1995)
O'Connor, J., dissenting
calculated. If § 413.20 does not incorporate GAAP as the basic method for determining cost reimbursement in the absence of a more specific regulation, then there is no regulation that specifies an overall methodology to be applied in the cost determination process. Given that the regulatory scheme could not operate without such a background method, and given that the statute requires the Secretary to make reimbursement decisions "in accordance with regulations establishing the method or methods to be used," 42 U. S. C. § 1395x(v)(1)(A), I find the Secretary's interpretation to be unreasonable and unworthy of deference.
Unlike the Court, therefore, I would hold that § 413.20 requires the costs incurred by Medicare providers to be reimbursed according to GAAP in the absence of a specific regulation providing otherwise. The remainder of my decision flows from this conclusion. PRM § 233, which departs from the GAAP rule concerning advance refunding losses, does not have the force of a regulation because it was promulgated without notice and comment as required by the Administrative Procedure Act, 5 U. S. C. § 553. And, contrary to the Secretary's argument, PRM § 233 cannot be a valid "interpretation" of the Medicare regulations because it is clearly at odds with the meaning of § 413.20 itself. Thus, I would conclude that the Secretary's refusal, premised upon an application of PRM § 233, to reimburse the Hospital's bond defeasement costs in accordance with GAAP was invalid.
II
The remaining arguments advanced by the Court in support of the Secretary's position do not alter my view of the regulatory scheme. The Court suggests that a contrary decision, by requiring the Secretary to comply with the notice and comment provisions of the Administrative Procedure Act in promulgating reimbursement regulations, would impose an insurmountable burden on the Secretary's administration of the Medicare program. I disagree. Congress obviously
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