Tuesday, February 18, 2020
The D.C. Circuit last week ruled that HHS Secretary Azar's approval of Arkansas's proposed work required for Medicaid recipients was arbitrary and capricious in violation of the Administrative Procedure Act. The ruling vacates the Secretary's approval and means that the work requirements can't move forward, at least unless and until the Secretary provides an explanation for authorization that's consistent with the Medicaid Act.
We last posted on this case (and a similar case out of Kentucky) here. (After the district court ruled against Kentucky's approval, that state dropped its program and moved for voluntary dismissal.)
The case arose when Arkansas sought HHS approval for a work-requirement demonstration project for its Medicaid program. The project would mean that Medicaid recipients in the state would have to work, with some exceptions, in order to continue to receive Medicaid.
HHS Secretary Azar approved the project. State residents sued, arguing that the approval was arbitrary and capricious in violation of the APA. The district court agreed, and last week the D.C. Circuit affirmed.
Like the district court, the circuit court said that Secretary Azar's explanation for approving the project didn't square with the purpose of Medicaid, to provide medical assistance. Here's the long and short of it:
Instead of analyzing whether the demonstration would promote the objective of providing coverage, the Secretary identified three alternative objectives: "whether the demonstration as amended was likely to assist in improving health outcomes; whether it would address behavioral and social factor that influence health outcomes; and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes." These three alternative objectives all point to better health outcomes as the objective of Medicaid, but that alternative objective lacks textual support. Indeed, the statute makes no mention of that objective.
While furnishing health care coverage and better health outcomes may be connected goals, the text specifically addresses only coverage. . . . That means that Congress selected to achieve the objectives of Medicaid was to provide health care coverage to populations that otherwise could not afford it.