Fourth, the Texas State Petitioners argue the EPA failed to provide them with “fair notice” of its requirements. Even assuming the fair notice doctrine applies, cf. Ark. Dep't of Human Servs. v. Sebelius, 818 F.Supp.2d 107, 120–21 (D.D.C.2011), the EPA did not violate it. The fair notice doctrine, which is couched in terms of due process, provides redress only if an agency's interpretation is “so far from a reasonable person's understanding of the regulations that they could not have fairly informed the regulated party of the agency's perspective.”

Under the "fair notice" doctrine, before an agency's interpretation can operate as a penalty, the affected party must have "fair notice" of that interpretation before its application. See Howmet Corp. v. EPA, 614 F.3d 544, 553-54 (D.C. Cir. 2010); Ark. Dep't of Human Servs. v. Sebelius, 818 F. Supp. 2d 107, 120-22 (D.D.C. 2011). Finally, Plaintiff advances two process challenges to the Administrator's decision. Plaintiff maintains that the Administrator lacked the power to overturn the Hearing Officers' decision, because the Medicare Act does not expressly provide for such review.

See id. at 31–39. Rooted in the Fifth Amendment's Due Process clause, the "fair notice" doctrine requires that, when an agency's interpretation would operate as a penalty, the affected party must have "fair notice" of that interpretation before it can be applied. SeeHowmet Corp. v. EPA , 614 F.3d 544, 553–54 (D.C. Cir. 2010) ; Ark. Dep't of Human Servs. v. Sebelius , 818 F.Supp.2d 107, 120–22 (D.D.C. 2011). Plaintiff's contention that the "fair notice" doctrine applies here rests on the 19 years for which Defendant approved Plaintiff's reimbursement requests, even though, as with the 2006 to 2009 cost reports at issue here, Plaintiff had included carrier-paid claims in its calculations.

The Fair Notice Doctrine may not even be applicable to this case. See Arkansas Dept. of Human Serv. V. Sebelius, 818 F. Supp. 2d 107, 120-21 (D.D.C. 2011) (noting that a disallowance of federal matching funds provided by CMS to a state for some outpatient hospital services "is categorically different from the kinds of sanctions courts have found sufficiently grave to merit the application of the fair notice doctrine"). However, even assuming that the Fair Notice Doctrine applies, Wills Eye does not meet its requirements here. --------

The Fair Notice Doctrine may not even be applicable to this case. See Arkansas Dept. of Human Serv. v. Sebelius, 818 F.Supp.2d 107, 120–21 (D.D.C. 2011) (noting that a disallowance of federal matching funds provided by CMS to a state for some outpatient hospital services "is categorically different from the kinds of sanctions courts have found sufficiently grave to merit the application of the fair notice doctrine"). However, even assuming that the Fair Notice Doctrine applies, Wills Eye does not meet its requirements here.

But DMI makes only cursory feints toward an argument of this sort. It cites none of the (extensive) case law concerning "fair notice" in administrative law. See, e.g., Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618, 628 (D.C. Cir. 2000); Gen. Elec. Co., 53 F.3d at 1328-29; Gates & Fox Co. v. Occupational Safety & Health Review Comm'n, 790 F.2d 154, 156 (D.C. Cir. 1986); Arkansas Dep't of Human Servs. v. Sebelius, 818 F. Supp. 2d 107, 120-22 (D.D.C. 2011). Nor does it develop an argument that the SBA's size determination is a deprivation of property or is otherwise "a sufficiently grave sanction such that the duty to provide notice is triggered."

The Court shares the concern, articulated by a judge of this district, that “[i]f an agency were prevented on notice grounds from enforcing its interpretation of a regulation against any party who proffered a reasonable alternative interpretation and suffered monetary loss, the practice of deferring to an agency's reasonable interpretation of its regulations would be rendered essentially meaningless.” Ar. Dept. of Human Servs. v. Sebelius, 818 F.Supp.2d 107, 122 (D.D.C.2011) (internal citation omitted). In the administration of a program of Medicare's size, it would not be fair to require the Secretary to anticipate any possible ambiguity in her regulations on every issue, no matter how small, and provide crystalline interpretative guidance in advance eliminating all ambiguity.

No such statutory provisions are in place here, and we conclude that the prospective financial impact on CMP does not alone render the accounting adjustment penal for purposes of applying the fair notice doctrine. Cf. Arkansas Dep't of Human Servs. v. Sebelius, 818 F.Supp.2d 107, 120–22 (D.D.C.2011) (holding that not all economic impacts are “sufficiently grave” to merit the application of the fair notice doctrine). [¶ 34] We recognize that the ordered correction will result in a significant increase in the amount of bad debt that CMP will carry.