[Congressional Record Volume 165, Number 120 (Wednesday, July 17, 2019)]
[Senate]
[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

[[Page S4902]]

     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

[[Page S4903]]

     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.

                          ____________________