[Pages S4901-S4903]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AFFORDABLE CARE ACT
Mr. WYDEN. Mr. President, on October 22, 2018, the Departments of
Health and Human Services and the Treasury issued a document, entitled
State Relief and Empowerment Waivers, relating to section 1332 of the
Affordable Care Act and its implementing regulations.
Although it was not submitted to Congress for review under the
Congressional Review Act, CRA, this so-called guidance document seemed
to me to be a substantive rule that should be subject to review under
the CRA. Accordingly, I wrote a letter, along with Chairman Pallone of
the House Energy and Commerce Committee, asking the U.S. Government
Accountability Office, GAO, to determine whether the CRA applied.
This week, I received a reply, in which the GAO general counsel
concludes that the 2018 guidance ``is a rule under the CRA, which
requires that it be submitted to Congress for review.''
I ask unanimous consent that the letter from GAO, dated July 15,
2019, be printed in the Congressional Record following my remarks. The
letter I am now submitting to be printed in the Congressional Record is
the original document provided by GAO to my office. I will also provide
a copy of the GAO letter to the Parliamentarian's office.
Based on Senate precedent, my understanding is that the publication
of the GAO legal opinion in today's Record will start the ``clock'' for
congressional review under the provisions of the CRA.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Government
Accountability Office,
Washington, DC, July 15, 2019.
Subject: Department of Health and Human Services and
Department of the Treasury--Applicability of the
Congressional Review Act to State Relief and Empowerment
Waivers
Hon. Ron Wyden,
Ranking Member, Committee on Finance,
U.S. Senate.
Hon. Frank Pallone, Jr.,
Chairman, Committee on Energy and Commerce, House of
Representatives.
This responds to your request for our legal opinion as to
whether guidance issued by the Department of Health and Human
Services (HHS) and the Department of the Treasury (Treasury)
on October 22, 2018, entitled ``State Relief and Empowerment
Waivers'' (2018 Guidance), is a rule for purposes of the
Congressional Review Act (CRA). Letter from Ranking Member of
the Committee on
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Finance, United States Senate, and Chairman of the Committee
on Energy and Commerce, House of Representatives, to
Comptroller General (Feb. 6, 2019). The 2018 Guidance at
issue relates to section 1332 of the Patient Protection and
Affordable Care Act (PPACA) and its implementing regulations.
Pub. L. No. 111-148, Sec. 1332, 124 Stat. 119, 203-206 (Mar.
23, 2010) (classified at 42 U.S.C. Sec. 18052); 45 C.F.R. pt.
155. For the reasons discussed below, we conclude that the
2018 Guidance is a rule under the CRA, which requires that it
be submitted to Congress for review.
Our practice when rendering opinions is to contact the
relevant agencies and obtain their legal views on the subject
of the request. GAO, Procedures and Practices for Legal
Decisions and Opinions, GAO-06-1064SP (Washington, D.C.:
Sept. 2006), available at www.gao.gov/products/GAO-06-1064SP.
We contacted HHS and Treasury to obtain the agencies' views.
Letter from Managing Associate General Counsel, GAO, to
General Counsel, HHS (Mar. 4, 2019); Letter from Managing
Associate General Counsel, GAO, to General Counsel, Treasury
(Mar. 4, 2019). We received a response on March 22, 2019.
Letter from General Counsel, HHS, to Managing Associate
General Counsel, GAO (Mar. 22, 2019) (HHS Letter).
BACKGROUND
PPACA requires that most United States citizens and legal
residents maintain health coverage that meets minimum
requirements. 42 U.S.C. Sec. 18021. PPACA also requires the
establishment of exchanges in every state so that individuals
and small businesses can purchase such coverage and contains
requirements for exchange functions, such as maintaining web
portals for individuals and small businesses to access the
exchange and call centers to provide customer service. 42
U.S.C. Sec. 18003(a). In addition, PPACA provides for premium
tax credits and cost-sharing reductions for eligible
individuals, among other things. 26 U.S.C. Sec. 36B.
Section 1332 of the statute permits states to seek federal
approval to waive certain key requirements under the law. See
42 U.S.C. Sec. 18052. For example, section 1332 authorizes
HHS and Treasury to approve state proposals to waive PPACA
requirements related to, among other things, the maintenance
of insurance coverage for individuals, exchange functions,
and subsidies for exchange coverage. 42 U.S.C.
Sec. 18052(a)(2). PPACA requires that state 1332 proposals
meet four approval criteria. Specifically, a state proposal
must demonstrate that the waiver will result in coverage that
is at least as comprehensive, at least as affordable, and
available to at least a comparable number of residents as
would have been provided without the waiver, and that the
waiver will not increase the federal deficit. 42 U.S.C.
Sec. 18052(b)(1)(A)-(D).
PPACA required that the Secretaries of HHS and Treasury
promulgate regulations relating to waivers under section 1332
of PPACA. 42 U.S.C. Sec. 18052(a)(4)(B). The regulations were
required to include processes for (1) public notice and
comment at the state level sufficient to ensure a meaningful
level of public input, (2) the submission of an application
that ensures the disclosure of the provisions of law that the
state involved seeks to waive, (3) additional public notice
and comment after the application is received, (4) a process
for the submission of periodic reports concerning
implementation of the program under the waiver, and (5)
periodic evaluation of the program under the waiver. Id. HHS
and Treasury issued such regulations on February 27, 2012.
Application, Review, and Reporting Process for Waivers for
State Innovation, 77 Fed. Reg. 11700 (Feb. 27, 2012)
(codified at 45 C.F.R. pt. 155).
On December 16, 2015, HHS and Treasury issued guidance
prescribing what a state needs to demonstrate for a waiver
proposal to meet the statutory criteria under section 1332 of
PPACA and how the proposed waiver will be evaluated. Waivers
for State Innovation, 80 Fed. Reg. 78131 (Dec. 16, 2015)
(2015 Guidance). For example, the 2015 Guidance provided that
assessment of whether the proposal meets the coverage and
affordability criteria must take into account effects across
different groups of state residents, such that even if a
state could demonstrate that the waiver would provide
coverage to a comparable number of residents overall, it
would not be approved if it reduced coverage for vulnerable
groups, like low-income or elderly individuals. Id. at 78132.
In 2018, the Departments issued new guidance superseding
the 2015 Guidance. 83 Fed. Reg. 53575 (Oct. 24, 2018).
According to HHS and Treasury, the Departments reviewed the
2015 Guidance in accordance with Executive Order 13765 issued
in January 2017, which, among other things, called for
executive branch agencies with responsibilities under PPACA
to ``exercise all authority and discretion available to them
to provide greater flexibility to states and cooperate with
them in implementing healthcare programs.'' Id. at 53584
(citing Exec. Order No. 13765, Minimizing the Economic Burden
of the Patient Protection and Affordable Care Act Pending
Repeal, 82 Fed. Reg. 8351 (Jan. 24, 2017)). As a result of
this review, HHS issued updated guidance revising the
agency's policies implementing the statutory criteria for a
section 1332 waiver. In particular, the 2018 Guidance changed
the analysis of comprehensiveness and affordability
articulated in the 2015 Guidance. For example, as noted
above, the 2015 Guidance prohibited approval of a section
1332 waiver of a state plan that made coverage less
comprehensive or affordable for vulnerable groups of
residents; whereas, the 2018 Guidance provides that while
analysis will continue to consider effects on all categories
of residents, the revision gives states more flexibility to
decide that improvements in comprehensiveness and
affordability for state residents as a whole offset any small
detrimental effects for particular residents. 83 Fed. Reg. at
53578. In addition to providing new interpretations for
certain provisions of the 1332 waiver criteria, like the 2015
Guidance, the 2018 Guidance explains how the Departments will
evaluate each of the statutory requirements for a section
1332 waiver and what a state must include and demonstrate in
its waiver proposal to comply with each criterion.
CRA, enacted in 1996 to strengthen congressional oversight
of agency rulemaking, requires all federal agencies,
including independent regulatory agencies, to submit a report
on each new rule to both Houses of Congress and to the
Comptroller General before it can take effect. 5 U.S.C.
Sec. 801 (a)(1 ). The report must contain a copy of the rule,
``a concise general statement relating to the rule,'' and
the rule's proposed effective date. 5 U.S.C. Sec. 801
(a)(1 )(A). In addition, the agency must submit to the
Comptroller General a complete copy of the cost-benefit
analysis of the rule, if any, and information concerning
the agency's actions relevant to specific procedural
rulemaking requirements set forth in various statutes and
executive orders governing the regulatory process. 5
U.S.C. Sec. 801 (a)(1 )(8).
CRA adopts the definition of rule under the Administrative
Procedure Act (APA), 5 U.S.C. Sec. 551(4), which states that
a rule is ``the whole or a part of an agency statement of
general or particular applicability and future effect
designed to implement, interpret, or prescribe law or policy
or describing the organization, procedure, or practice
requirements of an agency.'' 5 U.S.C. Sec. 804(3). CRA
excludes three categories of rules from coverage:
(1) rules of particular applicability;
(2) rules relating to agency management or personnel; and
(3) rules of agency organization, procedure, or practice
that do not substantially affect the rights or obligations of
non-agency parties. 5 U.S.C. Sec. 804(3).
Neither HHS nor Treasury sent a CRA report on the 2018
Guidance to Congress or the Comptroller General.
ANALYSIS
To determine whether the 2018 Guidance is a rule subject to
review under CRA, we first address whether the Guidance meets
the APA definition of a rule. As explained below, we conclude
that it does. The next step, then, is to determine whether
any of the CRA exceptions apply. We conclude that they do
not.
We can readily conclude that the 2018 Guidance meets the
APA definition of a rule upon which the CRA relies. First,
the 2018 Guidance is an agency statement, as it was issued by
HHS and Treasury announcing supplementary information about
the requirements that must be met for the approval of a State
Innovation Waiver. Second, the Guidance is of future effect,
as the Departments state in the 2018 Guidance that the
document will be in effect on the date of publication and
will be applicable for section 1332 waivers submitted after
the publication date of the 2018 Guidance. Finally, the
Guidance is designed to implement, interpret, or prescribe
law or policy as it provides interpretations of the section
1332 criteria, sets forth what states need to provide to
demonstrate that a waiver proposal meets these statutory
criteria, and how the proposed waiver will be evaluated.
In 2012, we examined a substantially similar issue to the
one presented here and concluded that an Information
Memorandum issued by HHS concerning the Temporary Assistance
for Needy Families (TANF) program was a rule for purposes of
CRA. 8-323772, Sept. 4, 2012. The TANF program was
established by section 402 of the Social Security Act, and
provides federal funding to states for both traditional
welfare case assistance as well as a variety of other
benefits and services to meet the needs of low-income
families and children. 42 U.S.C. Sec. 601. Section 1115 of
the Social Security Act provides HHS with the authority to
waive compliance with the requirements of section 402 in
cases of experimental, pilot, or demonstration projects that
HHS determines are likely to assist in promoting the
objectives of TANF. 42 U.S.C. Sec. 1315. The HHS Information
Memorandum at issue in our 2012 opinion sets forth
requirements that must be met for a waiver request to be
considered by HHS. We held that the HHS Information
Memorandum was concerned with authorizing demonstration
projects in the future, rather than evaluation of past or
present demonstration projects, and thus was prospective in
nature. We also found that because the Information Memorandum
stated that HHS will use its statutory authority to consider
waiver requests and set out requirements that waiver requests
must meet, it was designed to implement, interpret, or
prescribe law or policy. Like the HHS Information Memorandum
at issue in our 2012 decision, the 2018 Guidance at issue
here meets the definition of a rule.
We next consider whether the 2018 Guidance falls within one
of the exceptions enumerated in CRA. 5 U.S.C. Sec. 804(3)(A)-
(C). In this case, the 2018 Guidance is clearly a rule of
general and not particular applicability, as it applies to
all states. Additionally, the
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Guidance is not a rule relating to agency management or
personnel. In that regard, our 2012 opinion regarding HHS's
Information Memorandum is instructive. See B-323772, at 4.
There, we found that the Information Memorandum did not
relate to agency management or personnel since it applied to
the states.
With respect to the final exception--for rules of agency
organization, procedure, or practice that do not
substantially affect the rights or obligations of non-agency
parties--the Guidance issued by HHS and Treasury provides
requirements that a state must meet for a waiver proposal to
be approved. For that reason, these requirements affect the
obligations of states, which are non-agency parties. Our 2012
opinion is again instructive. There, we determined that
because the Information Memorandum set out the criteria by
which states may apply for waivers from certain obligations
of the states, the Information Memorandum affected the rights
and obligations of third parties and therefore did not fall
under CRA's third exception. We similarly find here that the
2018 Guidance does not fall under CRA's third exception.
We requested the views of the General Counsels of HHS and
Treasury on whether the 2018 Guidance is a rule for purposes
of CRA. Treasury deferred to HHS's response. HHS responded by
letter dated March 22, 2019, stating that the 2018 Guidance
is not a rule under CRA because it is not binding and if it
were rescinded, it would not alter or affect the rights and
obligations of any state or other stakeholder under PPACA.
HHS also noted that it informally notified member offices,
the Senate Health, Education, Labor, and Pensions and Senate
Finance Committees, and the House Ways and Means and
Education and Labor Committees of the 2018 Guidance. See HHS
Letter at 1.
HHS provided a similar response when we requested its views
on its Information Memorandum concerning the TANF program.
See B-323772, at 5. As we noted in our 2012 opinion, the
definition of rule is expansive and specifically includes
documents that implement or interpret law or policy, whether
or not the agency characterizes the document as non-binding.
Id. (citing B-281575, January 20, 1999). Finally, as we have
stated previously, informal notification does not meet the
reporting requirements of CRA. 5 U.S.C. Sec. 801 (a)(1); B-
323772, at 5.
CONCLUSION
The 2018 Guidance sets forth what a state needs to provide
to demonstrate that its proposal meets the four criteria for
a waiver under section 1332 of PPACA and how the proposals
will be evaluated. The 2018 Guidance meets the APA definition
of a rule and does not fall under an exception as provided in
CRA. Accordingly, given our conclusions above, and in
accordance with the provisions of 5 U.S.C. Sec. 801(a)(1),
the 2018 Guidance is subject to the requirement that it be
submitted to both Houses of Congress and the Comptroller
General before it can take effect.
If you have any questions about this opinion, please
contact Shirley A. Jones, Managing Associate General Counsel,
or Janet Temko-Blinder, Assistant General Counsel.
Sincerely yours,
Thomas H. Armstrong,
General Counsel.
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