The Department of Health and Human Services’ (HHS) recent decision to consider waivers of the welfare work requirements, in addition to drawing considerable attention from political candidates and the media, has also raised a very interesting question of administrative procedure: the definition of “rule” under the Congressional Review Act (CRA).

On July 12, 2012, HHS issued an Information Memorandum that notified states of HHS’s willingness to waive certain provisions of the Temporary Assistance for Needy Families (TANF) program that require states to ensure that TANF recipients engage in work activities.  Invoking its waiver authority under section 1115 of the Social Security Act, HHS informed states that it would allow them to test various strategies designed to improve employment outcomes for program participants.  Though HHS informally notified certain members of Congress of this change, it did not formally submit the rule to Congress pursuant to the CRA, contending that the Information Memorandum constituted a non-binding guidance document exempt from the CRA.

On July 31, 2012, Senator Orin Hatch and Congressman Dave Camp asked the Government Accountability Office (GAO) to determine whether or not the HHS Information Memorandum comprised a “rule” that must be submitted to Congress under the CRA.  Noting that the CRA’s definition of “rule” is congruent to that of section 551 of the Administrative Procedure Act (APA), GAO concluded that the Information Memorandum qualified as a rule subject to the Act.  GAO stated that the Information Memorandum was a general statement of policy with prospective application and did not qualify for any of the exclusions under the CRA.  As such, GAO concluded that the CRA required HHS to submit the Information Memorandum to Congress.

This decision highlights the very broad interpretation of “rule” the applies both to section 551 of the APA and to the CRA, with many more agency actions’ qualifying as “rules” than those that are subject to the notice-and-comment requirements of section 553 of the APA.  If you are interested in learning more about the CRA, you can find information about a project the Administrative Conference undertook to study the Act, which is available on the ACUS website at this link.  If you have any questions about this post or the work of the Conference more generally, please contact Attorney Advisor Reeve T. Bull (rbull@acus.gov).

Last December, the Administrative Conference ignited an important public policy debate when it adopted Recommendation 2011-5, Incorporation by Reference.  The discussion is set to continue with an exciting event sponsored by the American National Standards Institute (ANSI), the coordinator of the U.S. voluntary standardization system.  ANSI  has announced that incorporation by reference will be the focus of the Legal Issues Forum at World Standards Week, an annual meeting and celebration of the U.S. standard development community.

The Administrative Conference is pleased to have both staff and members participating in the Legal Issues Forum. Attorney Advisor and in-house researcher Emily S. Bremer will moderate the discussion among an impressive panel of speakers. The panelists include Government Member Esa Sferra-Bonistalli, Senior Attorney for the U.S. Coast Guard, and Senior Fellow Peter Strauss, a professor at Columbia Law School.

The event will be held from 9 a.m. to 1 p.m. on Wednesday, October 10th in Washington, DC, at the Newseum’s Knight Conference Center, 555 Pennsylvania Ave., NW. Registration information is available on ANSI’s website.

More information on the Conference’s project on incorporation by reference is available here and here.

On September 10, 2012, the Administrative Conference, in collaboration with the National Academies, will be presenting an all-day workshop on “Improving the Use of Science in the Administrative Process.”  The workshop will address current issues relating to science in the administrative process, and discuss draft Recommendations by the Conference aimed at improving federal agencies’ use and administration of regulatory science.  Pre-registration is required to attend in person.  To register for the workshop, please click here.

The workshop agenda includes opening remarks by Conference Chairman Paul R. Verkuil, followed by several panel discussions on topics ranging from enhancing the integrity and transparency of science-based regulations to improving public access to scientific evidence.  The panelists are drawn from a cross-section of scientific disciplines, academia, federal agencies, and the private sector.

This collaborative workshop is an outgrowth of the Conference’s Science in the Administrative Process Project.  In March 2011, the Committee on Regulation discussed draft Recommendations aimed at improving science in the administrative process.  These Recommendations were based on the draft report by the Conference’s consultant, Prof. Wendy Wagner, entitled, “Use of Science in the Administrative Process: A Study of Federal Agency Decision-Making.”  The workshop presents an opportunity for stakeholders, federal agencies, members of the scientific community, and the public to come together to discuss the Conference’s proposed Recommendations and, more generally, to explore other ways to improve the use of science in the administrative process.

Visit the Science in the Administrative Process Project Page for more information about this Project.

Administrative Implications of the Affordable Care Act

*This article is not an official communication from the Administrative Conference of the United States, nor does the Conference express any views  on the Affordable Care Act or any of the ACA provisions referenced in this article.

By Blair Druhan, ACUS Legal Intern

The Patient Protection and Affordable Care Act (ACA) enacts the largest expansion of Medicaid in the program’s history by expanding access to Medicaid to all adults under age 65 who are U.S. citizens and have incomes at or below 133 percent of the Federal Poverty Line.[1] The Congressional Budget Office estimated that this expansion would add an additional 17 million citizens to the Medicaid program.[2] The Administrative Conference’s historic Recommendation 90-8, Rulemaking and Policymaking in the Medicaid Program,[3] may be of continuing relevance to this modern expansion.

In Recommendation 90-8, the Conference suggested that Congress consider the challenges of Medicaid service expansion for States when mandating changes to Medicaid and when setting statutory deadlines associated with those changes. The Conference also encouraged the Health Care Financing Administration, which formerly oversaw Medicaid and Medicare, to act promptly when responding to a legislative change in Medicaid services and to make the associated regulations and guidance publically available to the States. These steps were viewed as necessary for States to have an adequate opportunity to respond to Congressional mandates in a timely manner. These steps are also important where agencies are required to develop new administrative structures to implement Congressional mandates, as under the ACA.

After Congress passed the ACA, multiple administrative agencies began implementing the ACA through rulemaking, policymaking, and administrative transformations. The Department of Health and Human Services (HHS) is the agency most responsible for its implementation: from implementing the individual mandate to developing several healthcare related programs and grants, overseeing state healthcare exchanges, and developing standards regulating private insurance companies. The Centers for Medicare and Medicaid Services (CMS), a sub-agency within HHS, is responsible for implementing and overseeing the ACA Medicaid expansion. CMS has already undertaken rulemaking and policymaking that affects each State under the ACA.

CMS responded to the passage of the ACA with guidance and rulemaking in order to prepare for the 2014 deadline well before the Supreme Court decided National Federation of Independent Business v. Sebelius.[4] After proposed rules, regulatory impact analyses, and public input, CMS issued a final rule, Medicaid Program; Eligibility Changes Under the Affordable Care Act of  2010, on March 16, 2012 in order to assist States with the Medicaid expansion.[5] In addition to addressing the enrollment provisions of the ACA, this rule “simplifies the current eligibility rules and systems in the Medicaid and CHIP programs.” This document was publicly issued twenty months before the statutory deadline. CMS also issued multiple director letters offering guidance on Medicaid eligibility and enrollment to state health officials in response to the expansion.

CMS is not the only agency within HHS that will be affected by the ACA, as the Secretary of HHS also has to develop an administrative structure that will allow it to oversee and enforce the ACA individual mandate, which requires every individual to have minimal essential coverage health insurance by January 1, 2014.[6] The Secretary of HHS also has the authority to determine whether an individual is exempt from the individual-mandate penalty. An individual can be exempt from the penalty on multiple grounds, including on the grounds that the individual has “suffered a hardship with respect to the capability to obtain coverage under a qualified health care plan.”[7]  However, Congress did not provide the agency with guidance on how to implement this exemption, and the agency has not publicly spoken on how it will administer the exemption process. For example, the agency might choose to create a formal hearing process where independent Administrative Law Judges would hear requests for exemptions or appeals if a request is denied. HHS will have to address the implementation of this exemption in the near future, because the Secretary recently announced that this exemption would be applied to the estimated 3 million individuals who may not get coverage in the event that a State declines to implement the Medicaid expansion. On July 10, the Secretary wrote a letter to each Governor and stated that if a State chooses to opt out of the Medicaid expansion, then the individuals who would have been eligible for Medicaid coverage under the expansion would be exempt from the individual-mandate penalty under the hardship exemption. [8]

The individual mandate also directly impacts the Internal Revenue Service (IRS), which must collect and enforce the penalty associated with violating the individual mandate.[9] In response to these new responsibilities, the IRS plans to increase its workforce by more than an estimated 6,500 employees.[10] As IRS and HHS work together to implement and enforce their shared responsibilities under the individual-mandate provisions of the ACA, they may need to develop appropriate policies or procedures for facilitating and documenting their coordination of these efforts. The Conference encourages such coordination in Recommendation 2012-5, Improving Coordination of Related Agency Responsibilities, another recommendation that promises continued relevance in the future of federal agencies.[11]