TITLE: B-316048, Applicability of the Congressional Review Act to Letter on State Children's Health Insurance Program, April 17, 2008
BNUMBER: B-316048
DATE: April 17, 2008
*****************************************************************************************************************************
B-316048, Applicability of the Congressional Review Act to Letter on State Children's Health Insurance Program, April 17, 2008

   B-316048

   April 17, 2008

   The Honorable John D. Rockefeller, IV
   Chairman
   Subcommittee on Health Care
   Committee on Finance
   United States Senate

   The Honorable Olympia Snowe
   Committee on Finance
   United States Senate

   Subject: Applicability of the Congressional Review Act to Letter on State
   Children's Health Insurance Program

   By letter of February 13, 2008, you asked whether an August 17, 2007
   letter issued by the Centers for Medicare & Medicaid Services (CMS) to
   state health officials concerning the State Children's Health Insurance
   Program is a rule for the purpose of section 251 of the Contract with
   America Advancement Act of 1996,[1] commonly referred to as the
   Congressional Review Act (the Review Act). The Review Act is intended to
   keep Congress informed of the rulemaking activities of federal agencies
   and provides that before a rule can take effect, the agency must submit
   the rule to each House of Congress and the Comptroller General.[2] For the
   reasons discussed below and more fully explained in the enclosure, we
   conclude that the August 17, 2007 letter is a rule under the Review Act.
   Therefore, it must be submitted to Congress and the Comptroller General
   before it can take effect.

   BACKGROUND

   The State Children's Health Insurance Program (SCHIP) finances health care
   to low-income, uninsured children whose family incomes exceed the eligibility
   limits under their state's Medicaid program, but who cannot afford other
   health insurance coverage.[3] To participate in SCHIP, a state must submit
   a plan that describes how its program meets applicable requirements and
   must receive approval of the plan from CMS.[4] States are required to
   amend their plans to reflect changes in federal law, regulation, or
   policy, and changes in the operation of their programs, including, for
   example, changes in eligibility criteria or benefits. [5]

   As required by law, a state plan must describe the procedures used to
   ensure that coverage under the plan does not substitute for coverage under
   group health plans, generally referred to as "crowd out."[6] Regulations
   promulgated by CMS require states to adopt "reasonable procedures" to
   prevent crowd out.[7] Since CMS promulgated the regulations in 2001,
   states have adopted a number of different measures to prevent crowd out,
   which CMS has approved.

   In its August 17 letter, CMS purports to clarify the statutory and
   regulatory requirements concerning prevention of crowd out for states
   wishing to provide SCHIP coverage to children with effective family
   incomes in excess of 250 percent of the federal poverty level (FPL) and
   identifies a number of particular measures that these states should adopt.
   The letter indicates that CMS will apply the measures to states' proposals
   to cover such children, as well as to states that already cover them.
   According to the letter, CMS may take corrective action against states
   that fail to adopt the identified measures within 12 months.

   SUMMARY OF ANALYSIS

   The definition of "rule" in the Review Act incorporates by reference the
   definition of "rule" in the Administrative Procedure Act (APA), with some
   exceptions. Our analysis of whether the August 17 letter is a rule under
   the Review Act thus entails determining whether the letter is a rule under
   the APA and whether it falls within any of the exceptions contained in the
   Review Act. [8] The APA definition of rule has been said to include
   "nearly every statement an agency may make."[9] It includes three elements
   that are relevant here: an agency statement is a rule if it is of general
   applicability; of future effect; and designed to implement, interpret, or
   prescribe law or policy.

   On its face, the August 17 letter meets these criteria. The letter is of
   general, rather than particular, applicability since it extends to all
   states that seek to enroll children with effective family incomes
   exceeding 250 percent of the FPL in their SCHIP programs, as well as to
   all states that have already enrolled such children.[10] In addition, it
   is prospective in nature since it is concerned with policy considerations
   for the future rather than the evaluation of past or present conduct.[11]
   Finally, it purports to clarify and explain the manner in which CMS
   applies statutory and regulatory requirements to states that want to
   extend coverage under their SCHIP programs to children with effective
   family incomes above 250 percent of the FPL and seeks to promote the
   implementation of statutory requirements applicable to state plans.
   Accordingly, it is designed to implement, interpret, or prescribe law or
   policy.[12]

   The history of the regulatory provision regarding substitution of coverage
   discussed in the letter lends support to our view that the letter is a
   rule. In the preamble to the proposed rule to implement SCHIP, CMS
   indicated that it could not require states to adopt any particular
   measures as part of the effort to prevent substitution of coverage,
   stating that it did not have a statutory or empirical basis for doing
   so.[13] CMS confirmed this interpretation in a final rule. [14] In its
   August 17 letter, however, CMS states that its experience and information
   derived from the operation of SCHIP programs have made it clear that the
   potential for substitution is greater at higher income levels, and states
   seeking to expand their SCHIP populations should implement specific
   strategies as "reasonable procedures" to prevent substitution of coverage
   (for example, a minimum 1-year period of uninsurance before receiving
   SCHIP coverage). Thus, the letter amounts to a marked departure from the
   agency's settled interpretation of the governing regulation, and case law
   indicates that such a change may be made only by a rule.[15] Moreover, the
   agency expressly relied on the letter to disapprove a request from the
   state of New York to amend its SCHIP plan to cover children with family
   incomes up to 400 percent of the FPL. The application of the letter to
   deny New York's proposed plan amendment only serves to confirm that the
   letter has binding effect and is, therefore, a rule.[16]

   By letter of February 20, 2008, we requested the views of the General
   Counsel of the Department of Health and Human Services on whether the
   August 17 letter is a rule for purposes of the Review Act.[17] The
   response from the Director of the Center for Medicaid and State Operations
   within CMS did not directly address that issue. CMS indicated, however,
   that the letter is a "general statement of policy that announces the
   course which the agency intends to follow in adjudications concerning
   compliance with requirements already set forth in regulations."

   As a conceptual matter, general statements of policy would appear to fit
   squarely within the definition of rule in the APA since they advise the
   public prospectively of the manner in which an agency proposes to exercise
   a discretionary power or what the agency will propose as policy,[18] and,
   in fact, courts have referred to them as rules.[19] While some cases seem
   to suggest that general statements of policy are not rules under the
   APA,[20] the better reading of these cases, in our opinion, is that
   statements of policy are not the type of rules for which the APA requires
   notice and comment procedures because they are tentative statements of
   future intent and by their nature do not have the force of law. Further,
   even if these cases are read to mean that general statements of policy are
   not rules under the APA, the August 17 letter does not have the
   characteristics of a general statement of policy identified in case law.
   Because the letter establishes a deadline by which "affected States" need
   to implement its measures or face the possibility of a corrective action
   by the agency, the letter evidences little, if any, of the tentativeness
   that is the hallmark of a policy statement.[21] Finally, as noted above,
   the agency has relied on the letter to disapprove a state plan amendment,
   treating the letter as if it were a binding rule.

   CONCLUSION

   The August 17 letter from CMS to state health officials is a statement of
   general applicability and future effect designed to implement, interpret,
   or prescribe law or policy with regard to SCHIP. Accordingly, it is a rule
   under the Congressional Review Act. Therefore, before it can take effect,
   it must be submitted to Congress and the Comptroller General.

   If you have any questions concerning this opinion, please contact Dayna K.
   Shah, Managing Associate General Counsel, at (202) 512-8208; Helen T.
   Desaulniers, Assistant General Counsel, at (202) 512-4740; or Kevin C.
   Milne, Deputy Assistant General Counsel, at (202) 512-4586.

   Gary L. Kepplinger
   General Counsel

   Enclosure

   cc: James Stansel, Esq.                                 
       Acting General Counsel                              
       Department of Health and Human Services             
                                                           
       Janice Hoffman, Esq.                                
       Associate General Counsel                           
       Centers for Medicare & Medicaid Services Division   
       Department of Health and Human Services             
                                                           
       Herb Kuhn                                           
       Acting Director                                     
       Center for Medicaid and State Operations            
       Centers for Medicare & Medicaid Services            
       Department of Health and Human Services             
                                                           
       Jennifer Luong                                      
       Counselor on Oversight to the Assistant Secretary   
       Office of the Assistant Secretary for Legislation   
       Department of Health and Human Services             

   B-316048                                                         ENCLOSURE 

           Applicability of the Congressional Review Act to Letter on
                   State Children's Health Insurance Program

   The Centers for Medicare and Medicaid Services (CMS) issued a letter dated
   August 17, 2007 to certain state agencies concerning the State Children's
   Health Insurance Program. For the reasons discussed below, we conclude
   that the August 17 letter is a "rule" for the purpose of section 251 of
   the Contract with America Advancement Act of 1996,[22] commonly referred
   to as the Congressional Review Act (the Review Act). Therefore, in
   accordance with the Review Act, the letter must be submitted to Congress
   and the Comptroller General before it can take effect.

   BACKGROUND

   The State Children's Health Insurance Program

   The State Children's Health Insurance Program (SCHIP), created in 1997,
   finances health care to low-income, uninsured children whose family
   incomes exceed the eligibility limits under their state's Medicaid
   program, but who cannot afford other health insurance coverage.[23] Like
   Medicaid, SCHIP is financed jointly by contributions from the federal
   government and the states. Under Medicaid, the federal government matches
   a portion of each state's Medicaid expenditures according to a matching
   rate that is based in part on the state's per capita income relative to
   the national average.[24] Under SCHIP, the federal government also matches
   a state's SCHIP expenditures, but at a rate that is generally higher than
   the Medicaid matching rate.[25]

   To participate in SCHIP, a state must submit a state plan and must receive
   approval of the plan from CMS.[26] A state plan is a comprehensive written
   description of the operation of the state's SCHIP program, including
   eligibility standards and benefits provided, in sufficient detail for CMS
   to determine whether the plan meets applicable requirements.[27] The plan
   also assures CMS that the state will administer its program in accordance
   with those requirements.[28] Regulations require states to amend their
   state plans whenever necessary to reflect changes in federal law,
   regulations, policy interpretations, or court decisions, as well as
   changes in the operation of their programs, including, for example,
   changes in eligibility criteria or benefits. [29]

   States have considerable flexibility under SCHIP in structuring their
   programs. They may expand their existing Medicaid programs to provide
   coverage to children who are eligible under SCHIP. Alternatively, they may
   implement separate child health programs. In addition, a state may have a
   combination of both a separate child health program and a Medicaid
   expansion.[30]

   State SCHIP programs are subject to a number of statutory provisions that
   are designed to ensure that SCHIP coverage does not become a substitute
   for other public or private coverage. For example, section 2102(b)(3)(C)
   of the Social Security Act requires that a state plan include a
   description of the procedures used to ensure that state SCHIP coverage
   does not substitute for health insurance coverage under group health
   plans.[31] Under section 2102(c)(2) of the Social Security Act, states
   also must describe in their plans the procedures used to coordinate their
   SCHIP programs with other public and private programs.[32]

   CMS has promulgated regulations designed to implement the statutory
   provisions to prevent substitution of coverage.[33] Among the regulations
   promulgated, section 457.805 of title 42, Code of Federal Regulations,
   requires that a state plan include a description of "reasonable
   procedures" to ensure that coverage provided under the state plan does not
   substitute for coverage provided under group health plans, referred to as
   "crowd out" provisions. Over time, states have proposed, and CMS has
   approved, a number of different measures to prevent substitution of
   coverage.

   The August 17, 2007 Letter

   On August 17, 2007, CMS issued a letter to state health officials (SHO
   #07-001) for the stated purpose of clarifying how CMS "applies existing
   statutory and regulatory requirements" for states that want to extend
   coverage under their SCHIP programs to children in families with effective
   family incomes above 250 percent of the federal poverty level (FPL).
   Specifically, the letter indicates that it is "clarifying that the
   reasonable procedures adopted by States to prevent crowd-out pursuant to
   42 C.F.R. 457.805 should include . . . five general crowd-out strategies
   with certain important components." The five crowd out strategies
   identified in the letter are:

     1. imposing waiting periods between dropping private coverage and
        enrollment in SCHIP;
     2. imposing cost sharing in approximation to the cost of private
        coverage;
     3. monitoring health insurance status at the time of application;
     4. verifying family insurance status through insurance databases; and
     5. preventing employers from changing dependent coverage policies that
        would favor a shift to public coverage.

   In addition, the letter indicates that CMS "will expect" that these states
   incorporate the following components into their strategies to prevent
   substitution of coverage:

     1. the cost sharing requirement under the state plan compared to the
        cost sharing required by competing private plans must not be more
        favorable to the public plan by more than 1 percent of the family
        income, unless the public plan's cost sharing is set at the 5 percent
        family cap;
     2. the state must establish a minimum of a 1-year period of uninsurance
        for individuals prior to receiving coverage; and
     3. monitoring and verification must include information regarding
        coverage provided by a noncustodial parent.

   The letter also indicates that CMS will seek a number of assurances from
   states, including an assurance that the state has enrolled at least 95
   percent of the children in the state with family incomes below 200 percent
   of the FPL who are eligible for SCHIP or Medicaid.

   According to the August 17 letter, CMS will expect states that seek to
   amend their SCHIP state plans and section 1115 demonstrations[34] to cover
   children with effective family incomes above 250 percent of the FPL to
   include these specific measures. Furthermore, the letter indicates that
   CMS will apply the "review strategy" described in the letter to instances
   in which SCHIP plans and section 1115 programs already include these
   children. The letter indicates that states will be expected to amend their
   SCHIP plans or section 1115 demonstration programs in accordance with the
   provisions of the review strategy within 12 months or CMS "may pursue
   corrective action."

   DISCUSSION

   The Review Act is intended to keep Congress informed about the rulemaking
   activities of federal agencies and to allow for congressional review of
   rules.[35] The Review Act provides that before a rule can take effect, the
   agency promulgating the rule must submit to each House of Congress and the
   Comptroller General a report containing a copy of the rule; a concise
   general statement concerning the rule, including whether it is a major
   rule; and the proposed effective date of the rule.[36] Among other things,
   the Review Act sets forth a procedure for congressional disapproval of
   agency rules, specifically a joint resolution of disapproval effective
   upon signature by the President. The Review Act provides that no
   determination, finding, action, or omission under the Review Act shall be
   subject to judicial review.[37]

   The definition of the term "rule" in the Review Act incorporates by
   reference the definition in the Administrative Procedure Act (APA), with
   some exceptions. Our analysis of whether the August 17 letter is a rule
   under the Review Act thus entails determining whether it is a rule under
   the APA and whether it falls within any of the exceptions contained in the
   Review Act.[38] The APA definition of rule has been said to include
   "nearly every statement an agency may make."[39] This definition is as
   follows:

     [T]he 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 and includes the approval or
     prescription for the future of rates, wages, corporate or financial
     structures or reorganizations thereof, prices, facilities, appliances,
     services or allowances therefor or of valuations, costs, or accounting,
     or practices bearing on any of the foregoing[.][40]

   Agency statements that create binding legal norms--those that, for
   example, grant rights, impose obligations, or affect private
   interests--are rules under the APA.[41] These rules--usually called
   legislative rules--generally must be promulgated through notice and
   comment rulemaking procedures under 5 U.S.C. sect. 553. Courts have found
   that other agency pronouncements also are rules as defined in 5 U.S.C.
   sect. 551, even if they do not create binding legal norms and are not
   subject to notice and comment rulemaking requirements under section 553.
   For example, agency guidance documents and manuals have been held to be
   rules.[42] Agency documents that clarify or explain existing legal
   requirements also have been held to be rules.[43] Whether a particular
   agency pronouncement is a rule under section 551, therefore, does not turn
   on whether the rule is subject to notice and comment rulemaking
   requirements under section 553.

   Legislative history of the Review Act confirms that the Review Act is
   intended to include within its purview almost all rules that an agency
   issues and is not limited to those rules that must be promulgated
   according to the notice and comment requirements in section 553 of the
   APA. In his floor statement during final consideration of the bill,
   Representative McIntosh, a principal sponsor of the legislation, pointed
   out that rules subject to congressional review are not just those rules
   subject to APA notice and comment requirements:

     Although agency interpretive rules, general statements of policy,
     guideline documents, and agency policy and procedure manuals may not be
     subject to the notice and comment provisions of section 553(c) of title
     5, United States Code, these types of documents are covered under the
     congressional review provisions of the new chapter 8 of title 5.

     Under section 801(a), covered rules, with very few exceptions, may not
     go into effect until the relevant agency submits a copy of the rule and
     an accompanying report to both Houses of Congress. Interpretive rules,
     general statements of policy, and analogous agency policy guidelines are
     covered without qualification because they meet the definition of a
     `rule' borrowed from section 551 of title 5, and are not excluded from
     the definition of a rule.[44]

   Our prior opinions on the status of agency pronouncements under the Review
   Act reflect the breadth of the term "rule," applying a definition of the
   term that reaches pronouncements beyond those that require notice and
   comment rulemaking.[45]

   The APA definition of rule includes three elements relevant to our
   consideration of whether the August 17 letter is a rule: an agency
   statement is a rule if it is of general applicability; of future effect;
   and designed to implement, interpret, or prescribe law or policy. An
   examination of the text of the letter itself indicates that it meets these
   criteria. The letter is of general, rather than particular, applicability
   since it extends to all states that seek to enroll children with effective
   family incomes exceeding 250 percent of the FPL in their SCHIP programs,
   as well as to all states that have already enrolled such children.[46] In
   addition, it is of future effect since it concerns policy considerations
   for the future rather than the evaluation of past and present conduct.[47]
   Further, by its own terms, the letter purports to clarify and explain
   statutory and regulatory requirements. The very first sentence explains
   that the letter "clarifies how [CMS] applies existing statutory and
   regulatory requirements" with regard to requests from states to extend
   coverage under SCHIP to children with effective family incomes above 250
   percent of the FPL. The letter also purports to explain the requirements
   under 42 C.F.R. sect. 457.805 regarding state efforts to prevent
   substitution of coverage and the measures that states seeking to cover
   these populations should take to prevent substitution of coverage. In
   addition, the letter indicates that the requested assurances help ensure
   the coordination of SCHIP coverage with other coverage, thus indicating
   that the assurances promote the implementation of one of the statutory
   objectives for state plans.[48] In particular, it indicates that states
   that already have included coverage under their SCHIP programs for
   children with effective family incomes above 250 percent of the FPL are
   expected to adjust their state plans accordingly. Because the letter
   purports to provide an explanation of statutory and regulatory
   requirements and to explain how the provisions adopted effectuate both
   legal requirements and policy choices attendant to administration of
   SCHIP, the document on its face is designed to implement, interpret, or
   prescribe law or policy within the meaning of section 551(4) of the APA.

   The history of 42 C.F.R. sect. 457.805, the regulation that the August 17
   letter purports to clarify, supports our view that the letter is a rule.
   In the preamble to the proposed rule to implement SCHIP, CMS considered
   whether to require states to adopt a set of particular measures to prevent
   substitution of coverage and expressly declined to impose such a
   requirement. CMS concluded that, based on its interpretation of the
   governing statute and evidence, it did not have a basis upon which to
   require such measures. CMS explained its position as follows:

     The other option that we considered was to require a set of specific
     procedures that each State would have to use to address substitution [of
     coverage]. We rejected this option because the statute authorizes States
     to design approaches to prevent substitution, not the Federal
     government. We also recognized that there is not substantial evidence
     favoring any specific approach to reduce the potential for
     substitution.[49]

   CMS confirmed this interpretation in a final rule.[50] The August 17
   letter, however, explains that CMS's experience and information derived
   from the operation of SCHIP programs have made it clear that the potential
   for substitution is greater at higher income levels. The letter further
   states that CMS will expect states to undertake five specific measures,
   include three components as part of those measures, and make three
   additional assurances in order to cover children with effective family
   incomes above 250 percent of the FPL under SCHIP. In this respect, the
   letter amounts to a marked departure from the agency's interpretation of
   the regulation regarding substitution of coverage in the preambles to the
   proposed and final rules. Accordingly, because of this new regulatory
   interpretation and because an agency may only change a settled
   interpretation of its own rules through the promulgation of an amending
   rule, the letter serves the same purpose as a rule.[51]

   CMS's application of the August 17 letter only serves to confirm that the
   letter has binding effect and is, therefore, a rule. In April 2007, the
   state of New York requested permission from CMS to amend its SCHIP plan to
   provide coverage to children with family incomes up to 400 percent of the
   FPL. CMS expressly relied on the August 17 letter to deny the request. In
   a letter dated September 7, 2007 to the state of New York, CMS stated, in
   part, the following:

     New York has not demonstrated that its program operates in an effective
     and efficient manner with respect to the core population of targeted
     low-income children. Specifically, it has failed to provide assurances
     that the State has enrolled at least 95 percent of the children in the
     core targeted low-income child population, those with family incomes
     below 200 percent of the FPL. As outlined in an August 17, 2007, letter
     to State Health Officials, such assurances are necessary to ensure that
     expansion to higher income populations does not interfere with the
     effective and efficient provision of child health assistance.

   In explaining the applicable requirements under 42 C.F.R. sect. 457.805,
   CMS went on to state additional grounds for its denial of New York's
   request to amend its SCHIP plan:

     At the high proposed family income eligibility levels, reasonable
     procedures [to prevent substitution of coverage] should include a full
     range of procedures to discourage substitution. New York's proposal does
     not include procedures to prevent such substitution that include a
     1-year period of uninsurance for populations over 250 percent of the
     FPL. Additionally, New York's proposed cost sharing has not met the
     requirement that cost sharing under the State plan compared to cost
     sharing required by competing private plans not be more favorable to the
     public plan by more than 1 percent of the family income, nor has the
     State proposed to set its cost sharing at the 5 percent family cap. . .
     .

     For these reasons . . . I am unable to approve this [State Plan
     Amendment] for expanding coverage. This disapproval is consistent with
     the August 17, 2007 letter to State Health Officials discussing how
     these existing statutory and regulatory requirements should be applied
     to all States expanding SCHIP effective eligibility levels above 250
     percent of the FPL.

   CMS's action demonstrates that the letter represents the agency's decision
   to bind itself to the application of the letter's terms and to give the
   letter present and binding effect.[52]

   By letter of February 20, 2008, we requested the views of the General
   Counsel of the Department of Health and Human Services (HHS) on whether
   the August 17 letter is a rule for purposes of the Review Act.[53] The
   written response from the Director of the Center for Medicaid and State
   Operations within CMS did not address this issue. The response stated that
   it would be inappropriate to address legal issues related to the August 17
   letter because the letter is the subject of a number of lawsuits.[54]
   Nevertheless, CMS indicated that the August 17 letter is a "general
   statement of policy that announces the course which the agency intends to
   follow in adjudications concerning compliance with requirements already
   set forth in regulations." The agency also referred us to a document
   prepared by the Department of Justice, which asserted that the August 17
   letter was a general statement of policy.

   The agency's characterization of the August 17 letter as a general
   statement of policy raises one issue relevant to our consideration:
   whether a general statement of policy is a rule under section 551(4) of
   the APA.[55] The term "general statements of policy" is not defined in the
   APA or in its legislative history. The Attorney General's Manual on the
   Administrative Procedure Act, which the United States Supreme Court has
   frequently referred to as an authoritative source for interpreting
   provisions of the APA,[56] defines the term as "statements issued by an
   agency to advise the public prospectively of the manner in which the
   agency proposes to exercise a discretionary power."[57] A statement of
   policy, therefore, as the U.S. Court of Appeals for the District of
   Columbia Circuit has stated, announces the agency's tentative intentions
   for the future, and "what the agency seeks to establish as policy."[58] In
   this way, the general statement of policy serves a number of useful
   functions, including the facilitation of long range planning within the
   regulated industry and the promotion of uniformity in areas of national
   concern.[59]

   Section 551(4) includes within the meaning of rule a statement of general
   or particular applicability and future effect designed to implement,
   interpret, or prescribe law or policy. As a device that provides
   information on the manner in which an agency will exercise its authority
   or what the agency will seek to propose as policy, a general statement of
   policy would appear to fit squarely within this category. Further, in
   discussing policy statements under the APA, courts have referred to them
   as rules.[60]

   Nevertheless, some court decisions seem to suggest that general statements
   of policy are not rules under the APA, which would raise, of course, the
   question whether they are rules under the Review Act.[61] The holdings of
   these cases did not address whether the agency pronouncements were rules
   for the purpose of section 551, but, instead, whether they were rules that
   should have been promulgated according to notice and comment rulemaking
   requirements under section 553 or whether they were subject to review. The
   better reading of these cases, in our opinion, is not that general
   statements of policy are not rules under 551, but that statements of
   policy are not legislative rules because they are tentative statements of
   future intent and by their nature do not have the force of law.

   Even if general statements of policy are not rules for purposes of section
   551, however, the August 17 letter does not qualify as a general statement
   of policy. In determining whether a particular agency pronouncement is a
   general statement of policy, courts begin with the language of the
   document itself and the agency's own characterization of the
   pronouncement.[62] Although courts give deference to an agency's
   characterization, the label that an agency puts on the exercise of its
   administrative power is not conclusive. [63] In general, if the language
   of the pronouncement indicates that the agency's views are tentative or
   simply a guide as to how the agency may exercise its authority, and the
   agency in fact does not treat the statement as a binding norm, then the
   document may be a policy statement. If, however, the document, either by
   its terms or as applied by the agency, imposes requirements or
   obligations, it would not be considered a general statement of policy.

   One case in particular, cited by the Department of Justice in the
   memorandum included in CMS's response to our request for the agency's
   views, provides a useful explanation of the type of language typically
   found in an agency general statement of policy. In Pacific Gas and
   Electric Co. v. Federal Power Commission,[64] the United States Court of
   Appeals for the District of Columbia Circuit determined that a Federal
   Power Commission pronouncement was a general statement of policy exempt
   from notice and comment rulemaking requirements. The pronouncement, styled
   a "statement of policy," expressed the Commission's view of how deliveries
   of natural gas should be prioritized during periods of shortage. The
   pronouncement stated that the Commission intended to follow this priority
   schedule unless a particular pipeline company demonstrated that a
   different curtailment plan (governing allocation of available supply among
   customers) better served the public interest. After the statement was
   issued, a number of parties objected to the Commission's statement, most
   of whom were the natural gas customers that had been assigned a low
   priority under the priority schedule. Among their objections was the claim
   that the statement was in effect a substantive rule, and not a statement
   of policy.

   In reaching its conclusion that the statement was indeed a statement of
   policy, the court noted the tentative nature of the statement, as well as
   the Commission's acknowledgment that any particular decisions on
   curtailment could only be made in further proceedings. Specifically, the
   court found it significant that the statement indicated it was the
   curtailment policy that the Commission "proposes to implement" and the
   "plan preferred by the Commission," which "will serve as a guide in other
   proceedings." The Commission itself intended the statement only "to state
   initial guidelines as a means of facilitating curtailment planning and the
   adjudication of curtailment cases." In addition, the statement also
   indicated that, although it informed the public of the types of plans the
   Commission might approve, there was no assurance that any such plan would
   be approved. Finally, the court noted that the statement indicated that
   during subsequent proceedings to determine particular curtailments,
   affected parties would have an opportunity not only to challenge the
   merits of the proposed plan, but to demonstrate that the plan was
   inappropriate in particular circumstances. In effect, the Commission
   statement was a starting point to frame consideration of future proposals.

   If we analyze CMS's August 17 letter using the criteria used by the court
   to determine that the Commission's pronouncement was simply a statement of
   policy, we conclude that the letter does not meet the criteria. The August
   17 letter evidences little, if any, language of tentativeness or
   inconclusiveness. The specific measures are not characterized as
   "proposals" or measures that are under development or to be implemented or
   adopted by later action. On the contrary, the letter sets forth specific
   strategies that states seeking to expand their SCHIP populations should
   implement as "reasonable procedures" to prevent substitution of coverage.
   While states previously identified and adopted one or more of the
   specified strategies, the August 17 letter indicates that all of them
   should be included as "reasonable procedures." There is no indication that
   the strategies are only guidelines that may or may not be applied in
   subsequent proceedings. In addition, the letter contains no express
   mention that exceptions will be considered in particular instances.
   Finally, the time frame specified in the letter for states to conform to
   the CMS "review strategy" evidences the agency's intention to give the
   letter present and binding effect:

     CMS will apply this review strategy to SCHIP state plans and section
     1115 demonstration waivers that include SCHIP populations, and will work
     with States that currently provide services to children with effective
     family incomes over 250 percent of FPL. We expect affected States to
     amend their SCHIP state plan (or 1115 demonstration) in accordance with
     this review strategy within 12 months, or CMS may pursue corrective
     action.

   If the letter were simply precatory or tentative in nature, then there
   would be no need to establish a deadline by which states would need to
   implement the measures in the letter or face the possibility of a
   corrective action by the agency.[65] The inference to be drawn from the
   letter, therefore, is that states that do not conform to or adopt the
   measures described in the letter will likely be found to be not in
   compliance with SCHIP requirements.

   In addition to the particular language of a statement, courts look to an
   agency's actions in relation to the statement to determine whether it is a
   general statement of policy. As a number of courts have noted, a critical
   test of whether a rule is a general statement of policy is its practical
   effect in a subsequent administrative proceeding. In subsequent
   proceedings, if the agency relies solely on the pronouncement itself to
   determine rights and obligations of others, the agency has treated the
   policy statement as if it were a binding rule, not a general statement of
   policy.[66] As we explained above, CMS's express reliance on the August 17
   letter to deny the state of New York's request to amend its SCHIP plan
   leads us to conclude that the letter is not a policy statement. Our
   conclusion that the August 17 letter is not a general statement of policy
   is reinforced by our observation that it reflects a significant change in
   the agency's settled interpretation of 42 C.F.R. sect. 457.805, which
   policy statements by their nature do not do.[67]

   CONCLUSION

   Based on our analysis of the August 17, 2007 letter to state health
   officials, it is our opinion that the letter is a rule for the purpose of
   the Review Act. The letter, as discussed above, is a statement of general
   applicability and future effect designed to implement, interpret, or
   prescribe law or policy with regard to the SCHIP program. Furthermore, we
   do not believe that the August 17 letter comes within any of the
   exceptions to the definition of rule contained in the Review Act.

   We express no opinion on the applicability of any other legal
   requirements, including, but not limited to, notice and comment rulemaking
   requirements under the APA, or whether the August 17 letter would be a
   valid interpretation of statutes or regulations. As a legal matter, the
   resolution of such issues is not necessary to our determination whether
   the August 17 letter is a rule for purposes of the Review Act.

   Accordingly, given our conclusions above, and in accordance with the
   provisions of 5 U.S.C. sect. 801(a)(1), the letter must be submitted to
   Congress and the Comptroller General before it can take effect.

   ------------------------

   [1] Pub. L. No. 104-121, sect. 251, 110 Stat. 847, 868-74, codified at 5
   U.S.C. sections 801-808.

   [2] 5 U.S.C. sect. 801(a)(1).

   [3] See 42 U.S.C. sect. 1397aa.

   [4] 42 U.S.C. sect. 1397aa(b). The authority vested in the Secretary of
   Health and Human Services to approve and disapprove SCHIP state plans and
   plan amendments has been delegated to the Administrator of CMS. State
   Child Health; Implementing Regulations for the State Children's Health
   Insurance Program, 64 Fed. Reg. 60882, 60895 (Nov. 8, 1999) (proposed
   rule).

   [5] 42 C.F.R. sect. 457.60.

   [6] 42 U.S.C. sect. 1397bb(b)(3)(C).

   [7] 42 C.F.R. sect. 457.805.

   [8] The Review Act excepts the following from its definition of rule: (1)
   rules of particular applicability, including a rule that approves or
   prescribes for future application rates, wages, prices, services, or
   allowances therefor, corporate or financial structures, reorganizations,
   mergers, or acquisitions thereof, or accounting practices or disclosures
   bearing on any of the foregoing; (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. sect. 804(3). As discussed below, the letter is not a
   statement of particular applicability; rather, it substantially affects
   all states that seek to cover children with effective family incomes in
   excess of 250 percent of the FPL, as well as those states that already
   cover these children. The letter does not relate to agency management or
   personnel, and it does not relate to "agency organization, procedure, or
   practice" with no substantial effect on non-agency parties. Accordingly,
   we do not believe that any of these three exceptions applies to the August
   17 letter.

   [9] Batterton v. Marshall, 648 F.2d 694, 700 (D.C. Cir. 1980) (citing 5
   U.S.C. sect. 551(4)). Section 551(4) of title 5, United States Code,
   defines the term "rule" in relevant part as "[t]he 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 . . .
   ."

   [10] Cf. U.S. Dep't of Justice, Attorney General's Manual on the
   Administrative Procedure Act 13 (1947) (the term "rule" includes
   statements of particular applicability applying either to a class or to a
   single person).

   [11] See Bowen v. Georgetown University Hospital, 488 U.S. 204, 216 (1988)
   (Scalia, J., concurring) ("future effect" means that agency statement will
   have legal consequences for the future); see also U.S. Dep't of Justice,
   Attorney General's Manual on the Administrative Procedure Act at 14
   (rulemaking regulates the future conduct of either groups of persons or a
   single person and is essentially legislative in nature because it operates
   in the future and is primarily concerned with policy considerations, while
   adjudication is concerned with the determination of past and present
   rights and liabilities).

   [12] See A.D. Transport Express, Inc. v. United States, 290 F.3d 761, 768
   (6th Cir. 2002) (order explaining agency regulation is an interpretative
   rule under the APA); Guardian Federal Savings and Loan Ass'n v. Federal
   Savings and Loan Insurance Corp., 589 F.2d 658, 664 (D.C. Cir. 1978)
   (agency statements that clarify laws or regulations are rules under the
   APA).

   [13] 64 Fed. Reg. at 60921-22.

   [14] See  State Child Health; Implementing Regulations for the State
   Children's Health Insurance Program, 66 Fed. Reg. 2490, 2601-05 (Jan. 11,
   2001) (final rule).

   [15] See SBC Inc. v. Federal Communications Commission, 414 F.3d 486, 498
   (3d Cir. 2005) (if agency's present interpretation of regulation is a
   fundamental modification of previous interpretation, the modification can
   only be accomplished through notice and comment rulemaking); Shell
   Offshore Inc. v. Babbitt, 238 F.3d 622, 629 (5th Cir. 2001) (settled
   policy of an agency is binding on the agency and may be changed only
   through a rule); Alaska Professional Hunters Ass'n v. Federal Aviation
   Administration, 177 F.3d 1030, 1033-34 (D.C. Cir. 1999) (an agency is
   bound by settled interpretation given to its own regulation that agency
   can change only by rulemaking).

   [16]See Appalachian Power Co. v. Environmental Protection Agency, 208 F.3d
   1015, 1020-21 (D.C. Cir. 2000) (if an agency treats a pronouncement as if
   it were controlling, if it bases enforcement actions on the policies in
   the document, and if it leads private parties or states to believe it must
   comply with the pronouncement's terms, it is a substantive rule, not a
   general statement of policy); Guardian Federal Savings and Loan Ass'n, 589
   F.2d at 666 (in subsequent administrative proceeding, agency cannot claim
   that prior statement of policy itself resolves contested issues).

   [17] In documents filed in related litigation, the Department of Justice
   has characterized the August 17 letter as a rule. See New York v. United
   States Dep't of Health and Human Services, No. 07 Civ. 08621 (S.D.N.Y.
   filed Oct. 4, 2007) (Def's Mem. Supp. Mot. Dismiss, p. 33).

   [18] See U.S. Dep't of Justice, Attorney General's Manual on the
   Administrative Procedure Act at 30, n.3.

   [19] See, e.g., Chrysler v. Brown, 441 U.S. 281, 301 (1979) ("the central
   distinction among agency regulations found in the APA is that between
   `substantive rules' on the one hand and `interpretive rules, general
   statements of policy, or rules of agency organization, procedure, or
   practice' on the other"); Noel v. Chapman, 508 F.2d 1023, 1030 (2d Cir.
   1975) (general statement of policy is a rule directed at agency staff on
   how it will perform discretionary function); Guardian Federal Savings and
   Loan Ass'n, 589 F.2d at 666 (describing test for determining whether "a
   rule is a general statement of policy").

   [20] See, e.g., Sugar Cane Growers Cooperative of Florida v. Veneman, 289
   F.3d 89, 95 (D.C. Cir. 2002) (some agency pronouncements lack the firmness
   of a prescribed standard to be considered rules); Syncor International
   Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997) (the primary
   distinction between a rule and a general statement of policy is whether
   the agency intends to bind itself to a legal position); Pacific Gas and
   Electric Co. v. Federal Power Commission, 506 F.2d 33, 37 (D.C. Cir. 1974)
   (suggesting that policy statements are not rules under the APA).

   [21] See Pacific Gas and Electric Co., 506 F.2d at 36-45 (discussing the
   language of a "statement of policy" and noting that such a statement
   announces tentative intentions for the future); cf. Community Nutrition
   Institute v. Young, 818 F.2d 943, 947 (D.C. Cir. 1987) (agency prescribed
   standard from which regulated entities could obtain "exception" or risk
   enforcement action indicated standard was binding).

   [22] Pub. L. No. 104-121, sect. 251, 110 Stat. 847, 868-74, codified at 5
   U.S.C. sections 801-808.

   [23] See 42 U.S.C. sect. 1397aa. Medicaid finances health care for certain
   low-income families, children, pregnant women, elderly persons, and
   persons with disabilities. In general, under SCHIP, a state is allowed to
   cover children in families with incomes up to 200 percent of the federal
   poverty level or 50 percentage points above the state's Medicaid income
   eligibility limit as of March 31, 1997. See 42 U.S.C. sections1397jj(b)(1)
   and (c)(4).

   [24] 42 U.S.C. sections 1396b(a), 1396d(b).

   [25] See 42 U.S.C. sect. 1397ee(a).

   [26] 42 U.S.C. sect. 1397aa(b). The authority vested in the Secretary of
   Health and Human Services to approve and disapprove SCHIP state plans and
   plan amendments has been delegated to the Administrator of CMS. State
   Child Health; Implementing Regulations for the State Children's Health
   Insurance Program, 64 Fed. Reg. 60882, 60895 (Nov. 8, 1999) (proposed
   rule).

   [27] 42 C.F.R. sect. 457.50.

   [28] Id.

   [29] 42 C.F.R. sect. 457.60.

   [30] 42 U.S.C. sect. 1397aa(a); 42 C.F.R. sect. 457.70.

   [31] 42 U.S.C. sect. 1397bb(b)(3)(C). CMS explained in the preamble to a
   final rule implementing SCHIP that the potential for substitution of SCHIP
   coverage for private coverage exists because SCHIP coverage may be less
   expensive than private coverage or provide better coverage than some
   individuals or employers could purchase with their own funds. See  State
   Child Health; Implementing Regulations for the State Children's Health
   Insurance Program, 66 Fed. Reg. 2490, 2602 (Jan. 11, 2001) (final rule).

   [32] 42 U.S.C. sect. 1397bb(c)(2).

   [33] See 64 Fed. Reg. at 60921-23; 66 Fed. Reg. at 2601-2610.

   [34] Section 1115 of the Social Security Act authorizes the Secretary of
   Health and Human Services to conduct demonstration programs likely to
   assist in promoting the objectives of specified programs. 42 U.S.C. sect.
   1315; 42 U.S.C. sect. 1397gg(e).

   [35] See 142 Cong. Rec. H3005 (daily ed. Mar. 28, 1996) (statement of Rep.
   McIntosh); see also New York v. American Electric Power Service Corp.,
   Nos. 2:04 CV 1098, 2:05 CV 360, 2006 WL 1331543, at *13 (S.D. Ohio Mar.
   21, 2006); United States v. Southern Indiana Gas and Electric Co., No.
   IP99-1692-C-M/S, 2002 WL 31427523, at *3 (S.D. Ind. Oct. 24, 2002); Texas
   Savings & Community Bankers Ass'n v. Federal Housing Finance Board, No. A
   97 CA 421 SS, 1998 WL 842181, at *7 (W.D. Tex. June 25, 1998).

   [36] 5 U.S.C. sect. 801(a)(1). On the date the report is submitted, the
   agency also must submit to the Comptroller General and make available to
   each House of Congress certain other documents, including a cost-benefit
   analysis, if any, and agency actions relevant to the Regulatory
   Flexibility Act and the Unfunded Mandates Reform Act of 1995, and any
   other relevant information or requirements under any other legislation or
   any relevant executive orders. 5 U.S.C. sect. 801(a)(1)(B)(i)-(iv). For
   rules that federal agencies identify as major rules, the Comptroller
   General is required under the Review Act to provide a report to the
   committees of jurisdiction in each House on whether the agency complied
   with certain procedural requirements. 5 U.S.C. sect. 801(a)(2)(A).

   [37] 5 U.S.C. sect. 805. A number of federal courts have concluded that an
   agency's failure to submit a rule in accordance with the Review Act is not
   reviewable. See American Electric Power Service Corp., 2006 WL 1331543, at
   *13; United States v. American Electric Power Service Corp., 218 F. Supp.
   2d 931, 949 (S.D. Ohio 2002); Texas Savings & Community Bankers Ass'n,
   1998 WL 842181, at *7. One court has ruled that the Review Act does not
   preclude review of the agency's failure to submit a rule as required by
   the Review Act. See Southern Indiana Gas and Electric Co., 2002 WL
   31427523, at *5-*6.

   [38] The Review Act excepts the following from its definition of rule: (1)
   rules of particular applicability, including a rule that approves or
   prescribes for future application rates, wages, prices, services, or
   allowances therefor, corporate or financial structures, reorganizations,
   mergers, or acquisitions thereof, or accounting practices or disclosures
   bearing on any of the foregoing; (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. sect. 804(3). As discussed below, the letter is not a
   statement of particular applicability; rather, it substantially affects
   all states that seek to cover children with effective family incomes in
   excess of 250 percent of the FPL, as well as those states that already
   cover these children. The letter does not relate to agency management or
   personnel, and it does not relate to "agency organization, procedure, or
   practice" with no substantial affect on non-agency parties. Accordingly,
   we do not believe that any of these three exceptions applies to the August
   17 letter.

   [39] Batterton v. Marshall, 648 F.2d 694, 700 (D.C. Cir. 1980).

   [40] 5 U.S.C. sect. 551(4).

   [41] Batterton, 648 F.2d at 700-02.

   [42] See Reno v. Koray, 515 U.S. 50, 60-61 (1995) (internal agency
   guideline was a rule under the APA); Shalala v. Guernsey Memorial
   Hospital, 514 U.S. 87, 99-100 (1995) (provision of the Medicare Provider
   Reimbursement Manual was a rule under the APA); Appalachian Power Co. v.
   Environmental Protection Agency, 208 F.3d 1015, 1021-22 (D.C. Cir. 2000)
   (agency guidance document can be rule under the APA); Professionals and
   Patients for Customized Care v. Shalala, 56 F.3d 592, 601-02 (5th Cir.
   1995) (FDA Compliance Policy Guide was a rule, but was exempt from notice
   and comment procedures as a statement of policy or interpretative rule).

   [43] See, e.g., A.D. Transport Express, Inc. v. United States, 290 F.3d
   761, 768 (6th Cir. 2002) (order explaining agency regulation is an
   interpretative rule under the APA); Guardian Federal Savings and Loan
   Ass'n v. Federal Savings and Loan Insurance Corp., 589 F.2d 658, 664 (D.C.
   Cir. 1978) (agency statements that clarify laws or regulations are rules
   under the APA).

   [44] 142 Cong. Rec. H3005 (daily ed. Mar. 28, 1996) (statement of Rep.
   McIntosh).

   [45] See, e.g., B-287557, May 14, 2001 ("record of decision" issued by the
   Fish and Wildlife Service of the Department of Interior in connection with
   a federal irrigation project was a rule); B-274505, September 16, 1996
   (memorandum issued by Secretary of Agriculture in connection with the
   Emergency Salvage Timber Sale Program was a rule).

   [46]Cf. U.S. Dep't of Justice, Attorney General's Manual on the
   Administrative Procedure Act 13 (1947) (the term "rule" includes
   statements of particular applicability applying either to a class or to a
   single person).

   [47] See Bowen v. Georgetown University Hospital, 488 U.S. 204, 216 (1988)
   (Scalia, J., concurring) ("future effect" means that statement will have
   legal consequences for the future); see also U.S. Dep't of Justice,
   Attorney General's Manual on the Administrative Procedure Act at 13-14
   (rulemaking regulates the future conduct of either groups of persons or a
   single person and is essentially legislative in nature because it operates
   in the future and is primarily concerned with policy considerations, while
   adjudication is concerned with the determination of past and present
   rights and liabilities.)

   [48] Among the statutory provisions that the letter expressly refers to is
   section 2101(a) of the Social Security Act, which provides, in pertinent
   part:

     Purpose.-The purpose of this title [XXI] is to provide funds to States
     to enable them to initiate and expand the provision of child health
     assistance to uninsured, low-income children in an effective and
     efficient manner that is coordinated with other sources of health
     benefits coverage for children.

   42 U.S.C. sect. 1397aa(a).

   [49] 64 Fed. Reg. at 60921-22.

   [50] See 66 Fed. Reg. at 2601-05.

   [51] See SBI Inc. v. Federal Communications Commission, 414 F.3d 486, 498
   (3d Cir. 2005) (if an agency's present interpretation of a regulation is a
   fundamental modification of a previous interpretation, the modification
   must be accomplished through notice and comment rulemaking); Shell
   Offshore Inc. v. Babbitt, 238 F.3d 622, 629 (5th Cir. 2001) (a settled
   policy of an agency is binding on the agency and may be changed only
   through a rule); Alaska Professional Hunters Ass'n v. Federal Aviation
   Administration, 177 F.3d 1030, 1033-34 (D.C. Cir. 1999) (an agency is
   bound by settled interpretation given to its own regulation that the
   agency can change only by rulemaking).

   [52] See Appalachian Power Co., 208 F.3d at 1020-21 (if an agency treats a
   pronouncement as if it were controlling, if it bases enforcement actions
   on the policies in the document, and if it leads private parties or states
   to believe it must comply with the pronouncement's terms, it is a rule);
   Public Citizen, Inc. v. United States Nuclear Regulatory Commission, 940
   F.2d 679, 682 (D.C. Cir. 1991) (where language and context of a statement
   are inconclusive, court will turn to agency's actual application to
   determine nature of agency pronouncement); McLouth Steel Products Corp. v.
   Thomas, 838 F.2d 1317, 1321 (D.C. Cir. 1988) (because agency used policy
   statement to determine regulated entities' obligations, policy statement
   is, therefore, a rule); Guardian Federal Savings and Loan Ass'n, 589 F.2d
   at 666 (form of a regulation is not controlling; substance and effect will
   determine whether agency statement is a rule).

   [53] See GAO, Procedures and Practices for Legal Decisions and Opinions,
   GAO-06-1064SP (Washington, D.C.: Sept. 2006), available at
   www.gao.gov/legal/resources.html.

   [54] In documents filed in litigation, the Department of Justice has
   characterized the letter as an interpretative rule. See New York v. United
   States Dep't of Health and Human Services, No. 07 Civ. 08621 (S.D.N.Y.
   filed Oct. 4, 2007) (Def's Mem. Supp. Mot. Dismiss, p. 33).

   [55] "General statements of policy" are expressly excepted from notice and
   comment rulemaking requirements under section 553 of the APA. In court
   filings submitted by the Department of Justice in separate litigation, HHS
   contends that the August 17 letter is not subject to notice and comment
   rulemaking requirements.

   [56] See, e.g., Guernsey Memorial Hospital, 514 U.S. at 99; Georgetown 
   University  Hospital, 488 U.S. at 218.

   [57] U.S. Dep't of Justice, Attorney General's Manual on the
   Administrative Procedure Act at 14.

   [58] See Pacific Gas and Electric Co. v. Federal Power Commission, 506
   F.2d 33, 38 (D.C. Cir. 1974).

   [59] Id.

   [60] See, e.g., Chrysler v. Brown, 441 U.S. 281, 315 (1979) ("the central
   distinction among agency regulations found in the APA is that between
   `substantive rules' on the one hand and `interpretive rules, general
   statements of policy, or rules of agency organization, procedure, or
   practice' on the other"); Professionals and Patients for Customized Care,
   56 F.3d at 596 (discussing whether policy statement at issue is
   interpretative rule or legislative rule); Noel v. Chapman, 508 F.2d 1023,
   1030 (2d Cir. 1975) (general statement of policy is a rule directed at
   agency staff on how it will perform discretionary function); Guardian
   Federal Savings and Loan Ass'n, 589 F.2d at 666 (describing test for
   determining whether "a rule is a general statement of policy").

   [61] See, e.g., Sugar Cane Growers Cooperative of Florida v. Veneman, 289
   F.3d 89, 95 (D.C. Cir. 2002) (some agency pronouncements lack the firmness
   of a prescribed standard to be considered rules); Syncor International
   Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997) (the primary
   distinction between a rule and a general statement of policy is whether
   the agency intends to bind itself to a legal position); Pacific Gas and
   Electric Co., 506 F.2d at 37 (suggesting that policy statements are not
   rules under the APA).

   [62] Professionals and Patients for Customized Care, 56 F.3d at 596.

   [63] See id. (what the agency in fact does in relation to an agency
   statement is dispositive); United States Gypsum Co. v. Muszynski, 209 F.
   Supp. 2d 308, 309-10 (S.D.N.Y. 2002) (an advisory memorandum that was
   applied by agency as a rule was a rule).

   [64] 506 F.2d 33 (D.C. Cir. 1974).

   [65] Cf. Community Nutrition Institute v. Young, 818 F.2d 943, 947 (D.C.
   Cir. 1987) (agency prescribed standard from which regulated entities could
   obtain "exception" or risk enforcement action indicated standard was
   binding).

   [66]See Public Citizen, Inc., 940 F.2d at 682-83 (courts look to agency's
   actual application of statement to determine its nature if language and
   context of agency statement are not conclusive); Guardian Federal Savings
   and Loan Ass'n, 589 F.2d at 666 (in subsequent administrative proceeding,
   agency cannot claim that prior statement of policy itself resolves
   contested issues).

   [67] See Syncor International Corp., 127 F.3d at 94 (a general statement
   of policy does not impose, elaborate, or interpret a legal norm, but
   explains the agency's manner of enforcing the existing legal norm).