Notice & Comment

Midnight Waivers: Can They Be Revoked Through the Congressional Review Act?, by Matthew B. Lawrence

The Trump Administration has effectuated a number of controversial health policy changes by approving state “waiver” requests in Medicaid and the Affordable Care Act. The Biden Administration can seek to undo these waivers, but the process for doing so may be legally fraught, as states could seek to challenge any waiver revocation or amendment in the administrative process and in court. Indeed, the Supreme Court has agreed to hear a major waiver case involving community engagement requirements (aka “work requirements”), Azar v. Gresham. The result of that case could have implications for the terms on which the Biden Administration might revoke waivers approved by President Trump, including “midnight waivers” approved in the Administration’s waning days.

Democratic control of the Senate may offer more expeditious and final means to revoke the Trump Administration’s midnight waivers—and moot Azar v. Gresham. The means is the filibuster bypass in the Congressional Review Act. This post provides a very brief overview of waivers in health policy and their potential eligibility for CRA revocation, ultimately concluding that the question warrants further consideration.

Medicaid and ACA waivers are creatures of statute, so Congress has the power to change them. Ordinarily new law must overcome the threat of a filibuster in the Senate, which requires 60 votes—far more than Democrats have. Congress has created expedited procedures that bypass the filibuster, however, in certain categories of cases. Reconciliation is one; I have not thought about whether budget reconciliation might be used to revoke a waiver (an interesting question given that waivers are as much about money as they are about regulatory changes). The Congressional Review Act is another, and it seems like a possible—though far from certain—route.

The Congressional Review Act, 5 U.S.C. § 801 et seq., creates expedited procedures by which the House and Senate can disallow “rule[s],” as long as they act within 60 days of receiving notice of their promulgation from the agency. If an agency fails to submit such a CRA notice, then the 60-day clock is tolled until they do.

So first, can a Medicaid or ACA waiver be a “rule” within the meaning of the Congressional Review Act? That is a tough question. The definition of “rule” in the CRA, to quote Professor Bridget Dooling’s invaluable piece on the law, “is technical and encompasses more than rules promulgated using notice-and-comment rulemaking under the APA.” As the Congressional Research Service explains, the CRA begins with the definition of “rule” in the APA, then modifies it slightly (excluding rules “of particular applicability,” rules “relating to agency management or personnel,” and rules “of agency, organization, procedure, or practice that do[] not substantially affect the rights or obligations of non-agency parties”).

At first blush, waivers look like an exercise of enforcement discretion that would not normally count as a rule—HHS “waives” a statutory requirement and promises not to enforce it, right? First blush is misleading, though. As I write in a forthcoming piece in the William & Mary Law Review, waivers in health care are as much about changing the substantive standards for reimbursement and eligibility under federal health care programs as they are about forgiving noncompliance with regulatory provisions. For example, community engagement (work requirement) waivers impose new, substantive, prospective, generalized eligibility requirements on participation in Medicaid. Other waivers set terms on which states might be reimbursed for different sets of services than those set in statute, like the Trump Administration’s “healthy adult opportunity” initiative (see a great summary here). The Supreme Court recently emphasized that substantive changes in Medicare reimbursement are “rules.” Why should analogous changes in Medicaid or the ACA not be? Indeed, Medicaid waivers are required by statute to go through not just one, but two rounds of notice-and-comment—the classic procedure for rulemaking.

It might be argued that the exclusion in the Congressional Review Act of “any rule of particular applicability” excludes waivers even if they are rules. But that depends on what rule “of particular applicability” means. The CRA itself includes a lengthy list of ten decisions it sees as rules of particular applicability. Waivers don’t make the list. And while a waiver itself may seem like a decision “of particular applicability” from the perspective of the state that seeks it, the requirements some put in place—like requiring that enrollees maintain employment—certainly looks like a general standard from the perspective of the people subject to them in the years after the waiver’s promulgation.

I do not mean to say that all waivers are clearly rules for purposes of the CRA. What I mean to say is that some waivers may well be rules for purposes of the CRA, and that the question warrants further exploration.

This leads to a second question. Who decides whether a Medicaid or ACA waiver is a “rule” within the meaning of the Congressional Review Act? That is straightforward, thanks to Professor Dooling’s draft article. The Congressional Review Act simply provides expedited procedures in Congress—a way around the filibuster and other congressional obstacles that Congress itself created. It is therefore administered and enforced ultimately by Congress, not by courts. Each chamber ultimately must interpret its own procedures—including the CRA—according to its own policies for doing so.

In practice, the House and Senate parliamentarians are key deciders on CRA issues. They, in turn, tend to defer to the Government Accountability Office if it has opined on whether a particular decision is a “rule” for CRA purposes. Professor Dooling explains that members of Congress often ask GAO for such opinions, and it has issued 28 of them over the last 25 years, usually saying “yes.” One interesting wrinkle she points out: Often, GAO has held an action was a “rule” even though the agency disagreed, and so had never submitted a CRA report to Congress. Such actions are then eligible for revocation through the CRA many months or years after their original promulgation.

That leads to a conclusion, and prescription. Legislative measures revoking certain waivers may well be eligible for expedited consideration—and a filibuster bypass—by virtue of the CRA. This may be a very desirable route through which the new Congress can undo important Trump Administration health policies. Whether this route is truly open is a question of statutory interpretation for Congress, which Congress would likely look to the parliamentarians and/or GAO to answer. One route, then, would be for members of Congress to move quickly to ask the GAO for an opinion up or down on whether waivers might be eligible for revocation through the Congressional Review Act. I suggest they do so.

Matthew B. Lawrence is an associate professor of law at the Emory University School of Law.

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