CMS' ACA Guidance, Oversight Under Scrutiny

February 7, 2019

Top Congressional Democrats sent a request to the Government Accountability Office (GAO) asking it to determine if guidance issued by CMS in October 2018 in relation to the Section 1332 waivers states can pursue is subject to legislative oversight. Meanwhile, a report said none of the 8 states that have approval to create a work requirement for their Medicaid expansion pool of beneficiaries have plans to track whether enrollees find jobs or improve their health.

Top Congressional Democrats Wednesday sent a request to the Government Accountability Office (GAO) asking it to determine if guidance issued by CMS in October 2018 in relation to the Section 1332 waivers states can pursue is subject to legislative oversight.

Also on Wednesday, The Los Angeles Times reported that none of the 8 states that have approval to create a work requirement for their Medicaid expansion pool of beneficiaries have evaluation plans to track whether enrollees find jobs or improve their health, which is required under Obama-era federal rulemaking.

The revised guidance issued last fall relaxes the standards that states must meet in order to receive federal approval for waivers under Section 1332 of the Affordable Care Act (ACA). At the time, Trump administration officials said they wanted to do away with “one-size-fits-all rules and regulations imposed by the Affordable Care Act.” The guidance changed how the administration evaluates coverage available in each state, measuring it against the 4 “guardrails” that all state waiver applications must meet, including:

  • Providing coverage that is at least as comprehensive
  • Providing coverage that is at least as affordable
  • Providing coverage to at least a comparable number of residents
  • Not increasing the federal deficit

Under the new guidance, states are encouraged to use association health plans and limited-duration, short-term health plans, and they can use premium tax credit subsidies to do so, even though those plans do not include the 10 essential health benefits set forth in the ACA, nor are they prohibited from discriminating against patients with pre-existing conditions.

Two critics of the administration, House Energy and Commerce Chairman Frank Pallone Jr, D-New Jersey, and Senate Finance Ranking Member Ron Wyden, D-Oregon, want to know if October’s move is subject to the Congressional Review Act (CRA). The CRA was passed as part of the Contract with America Advancement Act of 1996, and creates a streamlined way for Congress to disapprove and nullify federal regulations; it requires that all rules be reported to Congress. However, what is and is not a rule has come under the spotlight since 2017, as the Trump administration sought to undo many regulations from the Obama administration.

Is the guidance issued by CMS a rule? In their letter, Pallone and Wyden explained why they believe it is, based upon the definition of the term “rule” as defined by the Administrative Procedure Act.

“The CRA excludes rules of particular applicability, rules relating to agency management or personnel, and rules that do not substantially affect the rights or obligations of non-agency parties. The 2018 guidance is a statement of general applicability and affects the substantive rights of all states and of their residents enrolled in health insurance coverage under the ACA,” the letter said.

If GAO finds that the 2018 guidance qualifies as a rule, then it could be subject to the CRA, and Congress could theoretically overrule the revised guidance.

Separately, an analysis of federal and state documents by The Los Angeles Times shows that 2012 regulations telling states to estimate effects on coverage before starting a program, and then having an independent program evaluation afterwards to make sure that goals are being met, is not happening. The issue is gaining more attention as Arkansas, the first state to implement work requirements, has reported that thousands of people have lost health coverage for failing to report work requirements.

In a written response to the paper, a CMS spokesperson said the agency does not believe states must do enrollment calculations.

If implemented nationwide, the Center on Budget and Policy Priorities has said work requirements could cause 1.4 million to 4 million people among the 23.5 million adult Medicaid enrollees who are younger than 65 and not receiving disability benefits to lose their health coverage.

Late last year, in a letter to HHS Secretary Alex Azar, the Medicaid and CHIP Payment and Access Commission expressed concern about the Arkansas program and asked CMS to pause the program. The Los Angeles Times said Wednesday Azar has not yet responded to the letter.