STAYED,TYPE−C
U.S. District Court District of Columbia (Washington, DC) CIVIL DOCKET FOR CASE #: 1:18−cv−01900−JEB

GRESHAM et al v. AZAR et al Assigned to: Judge James E. Boasberg Cases: 1:18−cv−00152−JEB
1:19−cv−02848−JEB 1:19−cv−00773−JEB 1:19−cv−03526−JEB Case in other court: USCA, 19−05094
USCA, 19−05096 Cause: 05:551 Administrative Procedure Act Plaintiff
CHARLES GRESHAM

Date Filed: 08/14/2018 Jury Demand: None Nature of Suit: 890 Other Statutory Actions Jurisdiction: U.S. Government Defendant
represented by Catherine A. McKee NATIONAL HEALTH LAW PROGRAM 200 N. Greensboro Street Suite D−13 Carrboro, NC 27510 (919) 968−6308 Email: mckee@healthlaw.org ATTORNEY TO BE NOTICED
Ian Heath Gershengorn JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 639−6869 Fax: (202) 514−8071 Email: igershengorn@jenner.com ATTORNEY TO BE NOTICED
Natacha Y. Lam JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 637−6350 Email: nlam@jenner.com ATTORNEY TO BE NOTICED
Thomas J. Perrelli JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001 (202) 639−6000 Fax: (202) 661−4855 Email: tperrelli@jenner.com ATTORNEY TO BE NOTICED
Jane Perkins NATIONAL HEALTH LAW PROGRAM 200 N. Greensboro Street Suite D−13 Carrboro, NC 27510 919−968−6308 Email: perkins@healthlaw.org ATTORNEY TO BE NOTICED

Plaintiff CESAR ARDON
Plaintiff MARISOL ARDON
Plaintiff ADRIAN MCGONIGAL

represented by Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Catherine A. McKee (See above for address)

Plaintiff VERONICA WATSON
Plaintiff TREDA ROBINSON
Plaintiff ANNA BOOK

ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED

Plaintiff RUSSELL COOK
Plaintiff JAMIE DEYO
V. Defendant ALEX M. AZAR, II Secretary, United States Department of Health and Human Services in his official capacity

Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
represented by Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Catherine A. McKee (See above for address) ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham U.S. DEPARTMENT OF JUSTICE Civil Division 950 Pennsylvania Avenue, NW Washington, DC 20530 (202) 353−5049 Email: james.burnham@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Defendant SEEMA VERMA Administrator, Centers for Medicare and Medicaid Services in her official capacity
Defendant UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
Defendant CENTERS FOR MEDICARE AND MEDICAID SERVICES

Matthew Charles Skurnik U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 1100 L Street, NW Washington, DC 20005 (202) 616−8188 Email: matthew.skurnik@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Vinita B. Andrapalliyal U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 1100 L Street NW Washington, DC 20005 (202) 305−0845 Fax: (202) 616−8470 Email: vinita.b.andrapalliyal@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Vinita B. Andrapalliyal (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Vinita B. Andrapalliyal (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Movant STATE OF ARKANSAS
Amicus DEANS, CHAIRS, AND SCHOLARS

Vinita B. Andrapalliyal (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Nicholas Jacob Bronni ARKANSAS ATTORNEY GENERAL'S OFFICE 323 Center Street Suite 200 Little Rock, AR 72201 (501) 682−6203 Email: nicholas.bronni@arkansasag.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Dylan L. Jacobs ARKANSAS ATTORNEY GENERAL'S OFFICE 323 Center Street Suite 200 Little Rock, AR 72201 (501) 682−3661 Email: dylan.jacobs@arkansasag.gov ATTORNEY TO BE NOTICED
represented by Christopher J. Frisina QUARLES & BRADY, LLP 1701 Pennsylvania Ave, NW Suite 700 Washington, DC 20006 202−372−9515 Fax: 202−372−9578 Email: christopher.frisina@quarles.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Edward T. Waters FELDESMAN TUCKER LEIFER FIDELL LLP 1129 20th Street, NW Suite 400 Washington, DC 20036 (202) 466−8960 Fax: (202) 293−8103 Email: ewaters@feldesmantucker.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Phillip A. Escoriaza FELDESMAN TUCKER LEIFER FIDELL LLP 1129 20th Street, NW Suite 400 Washington, DC 20036 202−466−8960 Fax: 202−293−8103 Email: pescoriaza@ftlf.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Amicus
NATIONAL ALLIANCE ON MENTAL ILLNESS

represented by Matthew J. Higgins HOGAN LOVELLS US LLP 555 Thirteenth Street, NW Washington, DC 20004 202−637−5889 Email: matthew.higgins@hoganlovells.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 08/14/2018
08/14/2018 08/14/2018
08/14/2018 08/15/2018
08/21/2018
08/21/2018
08/21/2018 08/21/2018 08/24/2018 08/27/2018 08/27/2018 08/27/2018 08/27/2018

# Docket Text
1 COMPLAINT against All Defendants ( Filing fee $ 400 receipt number 0090−5637744) filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. (Attachments: # 1 Civil Cover Sheet, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Summons, # 9 Summons, # 10 Summons, # 11 Summons, # 12 Supplement)(Perkins, Jane) (Entered: 08/14/2018)
2 NOTICE OF RELATED CASE by All Plaintiffs. Case related to Case No. 1:18−cv−00152. (Perkins, Jane) (Entered: 08/14/2018)
3 REQUEST FOR SUMMONS TO ISSUE U.S. Department of Health and Human Services re 1 Complaint, filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. Related document: 1 Complaint, filed by MARISOL ARDON, CHARLES GRESHAM, CESAR ARDON.(Perkins, Jane) (Entered: 08/14/2018)
Case Assigned to Judge James E. Boasberg. (zsb) (Entered: 08/14/2018)
4 SUMMONS (4) Issued Electronically as to ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachment: # 1 Notice and Consent)(zsb) (Entered: 08/15/2018)
5 REQUEST FOR SUMMONS TO ISSUE U.S. Attorney General re 1 Complaint, filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. Related document: 1 Complaint, filed by MARISOL ARDON, CHARLES GRESHAM, CESAR ARDON.(Perkins, Jane) (Entered: 08/21/2018)
6 REQUEST FOR SUMMONS TO ISSUE Civil Process Clerk re 1 Complaint, filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. Related document: 1 Complaint, filed by MARISOL ARDON, CHARLES GRESHAM, CESAR ARDON.(Perkins, Jane) (Entered: 08/21/2018)
7 NOTICE of Appearance by Catherine A. McKee on behalf of All Plaintiffs (McKee, Catherine) (Entered: 08/21/2018)
8 ERRATA Complaint Corrected Exh. 4 by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM 1 Complaint, filed by MARISOL ARDON, CHARLES GRESHAM, CESAR ARDON. (Perkins, Jane) (Entered: 08/21/2018)
9 SUMMONS (2) Issued Electronically as to U.S. Attorney and U.S. Attorney General (zrdj) (Entered: 08/24/2018)
10 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. ALEX M. AZAR, II served on 8/23/2018 (Perkins, Jane) (Entered: 08/27/2018)
11 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. CENTERS FOR MEDICARE AND MEDICAID SERVICES served on 8/23/2018 (Perkins, Jane) (Entered: 08/27/2018)
12 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on United States Attorney General. Date of Service Upon United States Attorney General 8/27/2018. (Perkins, Jane) Modified on 9/6/2018 (znmw). (Entered: 08/27/2018)
13 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES served

08/27/2018 08/27/2018
08/28/2018
08/28/2018
09/05/2018 09/05/2018 09/05/2018 09/06/2018 09/06/2018 09/12/2018
09/12/2018 09/13/2018 09/13/2018 09/27/2018 09/28/2018

on 8/23/2018. (Perkins, Jane) Modified to add party served on 9/6/2018 (znmw). (Entered: 08/27/2018)
14 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. SEEMA VERMA served on 8/23/2018. (Perkins, Jane) Modified to add party served on 9/6/2018 (znmw). (Entered: 08/27/2018)
15 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the United States Attorney. Date of Service Upon United States Attorney on 8/27/2018. Answer due for ALL FEDERAL DEFENDANTS by 10/26/2018. (Perkins, Jane) (Entered: 08/27/2018)
16 NOTICE of Appearance by Vinita B. Andrapalliyal on behalf of ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Andrapalliyal, Vinita) (Entered: 08/28/2018)
17 RESPONSE 2 OF OBJECTION TO DESIGNATION OF RELATED CASES by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA re 2 Notice of Related Case (Andrapalliyal, Vinita) Modified text and linkage on 8/29/2018 (ztd). (Entered: 08/28/2018)
18 Unopposed MOTION to Intervene by STATE OF ARKANSAS (Attachments: # 1 Exhibit A − Proposed Answer, # 2 Text of Proposed Order Proposed Order)(Bronni, Nicholas) (Entered: 09/05/2018)
19 NOTICE of Appearance by Nicholas Jacob Bronni on behalf of STATE OF ARKANSAS (Bronni, Nicholas) (Entered: 09/05/2018)
20 NOTICE of Appearance by Dylan L Jacobs on behalf of STATE OF ARKANSAS (Jacobs, Dylan) (Entered: 09/05/2018)
MINUTE ORDER: The Court ORDERS that Intervenor's 18 Motion is GRANTED, and it shall abide by the same rules and deadlines applicable to Defendants. So ORDERED by Judge James E. Boasberg on 9/6/2018. (lcjeb1) (Entered: 09/06/2018)
21 RESPONSE to 17 Objection to Related Case Designation filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. (McKee, Catherine); Modified text on 9/11/2018 (tth). (Entered: 09/06/2018)
MINUTE ORDER: The Court ORDERS that Defendants' 17 Objection to Related−Case Designation is OVERRULED. Among other reasons, both cases' common factual and legal issues, many of which are quite complex, militate in favor of this Court retaining the new case in the interests of judicial economy. So ORDERED by Judge James E. Boasberg on 9/12/2018. (lcjeb2) (Entered: 09/12/2018)
22 ANSWER to Complaint by STATE OF ARKANSAS.(Bronni, Nicholas) (Entered: 09/12/2018)
MINUTE ORDER: The Court ORDERS that the parties shall meet, confer, and submit a proposed joint briefing schedule by September 27, 2018. So ORDERED by Judge James E. Boasberg on 9/13/2018. (lcjeb2) (Entered: 09/13/2018)
Set/Reset Deadlines: Joint Proposed Briefing Schedule due by 9/27/2018. (znbn) (Entered: 09/14/2018)
23 PROPOSED BRIEFING SCHEDULE (Joint) by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM. (McKee, Catherine) (Entered: 09/27/2018)
MINUTE ORDER: The Court ADOPTS the parties' 23 Joint Proposed Briefing Schedule and ORDERS that: 1) Defendants shall produce the administrative record by October 15, 2018; 2) Plaintiffs shall file their Motion for Summary Judgment and First Amended Complaint by November 5, 2018; 3) Defendants and Intervenor shall file their Oppositions to Plaintiffs' Motion and their Motions to Dismiss and/or Motions for Summary Judgment by November 30, 2018; 4) Plaintiffs shall file their Opposition to Defendants' Motion(s) and Reply in support of their Motion by December 21, 2018; 5) Defendants and Intervenor shall file their Replies in support of their Motions by January 14, 2019; and 6) Defendants' obligation to Answer the Complaint is STAYED

09/28/2018 09/28/2018 10/10/2018 10/15/2018 11/05/2018
11/05/2018
11/06/2018
11/07/2018 11/07/2018
11/07/2018 11/07/2018 11/07/2018

until resolution of these Motions. So ORDERED by Judge James E. Boasberg on 9/28/2018. (lcjeb2) (Entered: 09/28/2018)
Set/Reset Deadlines: Administrative Record due by 10/15/2018. Summary Judgment motions due by 11/5/2018. Response to Motion for Summary Judgment due by 11/30/2018. Reply to Motion for Summary Judgment due by 12/21/2018. Replies due by 1/14/2019. (znbn) (Entered: 09/28/2018)
Set/Reset Deadlines: Reply to Motion for Summary Judgment due by 12/21/2018. (znbn) (Entered: 10/01/2018)
24 NOTICE of Appearance by Matthew Charles Skurnik on behalf of ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Skurnik, Matthew) (Entered: 10/10/2018)
25 NOTICE OF FILING OF CERTIFIED INDEX TO ADMINISTRATIVE RECORD by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Certified AR Index)(Skurnik, Matthew) (Entered: 10/15/2018)
26 AMENDED COMPLAINT against ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA filed by CESAR ARDON, MARISOL ARDON, CHARLES GRESHAM, ADRIAN MCGONIGAL, VERONICA WATSON, TREDA ROBINSON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO. (Attachments: # 1 Exhibit ArWorks 1115 Waiver Amendment, # 2 Exhibit ArWorks Approval 2018, # 3 Exhibit ArWorks Implementation Plan 2018, # 4 Exhibit ArWorks Program June−Sept 2018 Reports, # 5 Exhibit Burwell Ltr Governor 4.2016, # 6 Exhibit SMD Letter)(McKee, Catherine) (Entered: 11/05/2018)
27 MOTION for Summary Judgment by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON (Attachments: # 1 Memorandum in Support, # 2 Declaration Gresham Dec, # 3 Declaration McGonigal Dec, # 4 Declaration C Ardon Dec, # 5 Declaration M Ardon Dec, # 6 Declaration Book Dec, # 7 Declaration Cook Dec, # 8 Declaration Watson Dec, # 9 Declaration Robinson Dec, # 10 Declaration Deyo Dec, # 11 Text of Proposed Order)(McKee, Catherine) (Entered: 11/05/2018)
28 ERRATA Exhibit 1 Ky. Approval by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON 27 MOTION for Summary Judgment filed by VERONICA WATSON, ADRIAN MCGONIGAL, RUSSELL COOK, CHARLES GRESHAM, CESAR ARDON, TREDA ROBINSON, ANNA BOOK, MARISOL ARDON, JAMIE DEYO. (McKee, Catherine) (Entered: 11/06/2018)
29 NOTICE of Appearance by Edward T. Waters on behalf of Scholars Amici (Waters, Edward) (Entered: 11/07/2018)
30 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Phillip A. Escoriaza, :Firm− Feldesman Tucker Leifer Fidell, LLP, :Address− 1129 20th St. N.W., Suite 400. Phone No. − 2024668960. Fax No. − 2022938103 Filing fee $ 100, receipt number 0090−5781152. Fee Status: Fee Paid. by Scholars Amici (Attachments: # 1 Declaration of Phillip A. Escoriaza, # 2 Text of Proposed Order)(Waters, Edward) (Entered: 11/07/2018)
31 NOTICE of Appearance by Christopher J. Frisina on behalf of Scholars Amici (Frisina, Christopher) (Entered: 11/07/2018)
32 Unopposed MOTION for Leave to File to file Brief of Amici Curiae by Scholars Amici (Attachments: # 1 Exhibit Proposed Scholars Amici Curiae Brief, # 2 Text of Proposed Order)(Waters, Edward) (Entered: 11/07/2018)
MINUTE ORDER GRANTING 30 Motion for Admission Pro Hac Vice of PHILLIP A. ESCORIAZA. So ORDERED by Judge James E. Boasberg on 11/7/2018. (lcjeb2)

11/08/2018 11/08/2018 11/16/2018 11/16/2018 11/26/2018 11/26/2018 11/30/2018
11/30/2018
11/30/2018 11/30/2018 12/17/2018
12/18/2018 12/21/2018
12/21/2018

(Entered: 11/07/2018)
MINUTE ORDER GRANTING 32 Motion for Leave to File Amicus Brief. So ORDERED by Judge James E. Boasberg on 11/8/2018. (lcjeb2) (Entered: 11/08/2018)
33 AMICUS BRIEF by DEANS, CHAIRS, AND SCHOLARS. (tth) Modified filed date on 11/13/2018 (znmw). (Entered: 11/09/2018)
34 NOTICE of Appearance by Matthew J. Higgins on behalf of THE NATIONAL ALLIANCE ON MENTAL ILLNESS (Higgins, Matthew) (Entered: 11/16/2018)
35 Unopposed MOTION for Leave to File Brief of Amicus Curiae by THE NATIONAL ALLIANCE ON MENTAL ILLNESS (Attachments: # 1 Exhibit Proposed Brief of Amicus Curiae, # 2 Text of Proposed Order)(Higgins, Matthew) (Entered: 11/16/2018)
MINUTE ORDER GRANTING 35 Motion for Leave to File Amicus Brief. So ORDERED by Judge James E. Boasberg on 11/26/2018. (lcjeb2) (Entered: 11/26/2018)
36 AMICUS BRIEF by NATIONAL ALLIANCE ON MENTAL ILLNESS. (tth) (Entered: 11/27/2018)
37 MOTION to Dismiss , MOTION for Summary Judgment by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Memorandum in Support, # 2 Exhibit List, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F, # 9 Exhibit G, # 10 Exhibit H, # 11 Exhibit I, # 12 Exhibit J, # 13 Exhibit K, # 14 Exhibit L, # 15 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 11/30/2018)
38 Memorandum in opposition to re 27 MOTION for Summary Judgment filed by ALEX M. AZAR, II, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 Exhibit List, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K, # 13 Exhibit L)(Andrapalliyal, Vinita) (Entered: 11/30/2018)
39 MOTION for Summary Judgment by STATE OF ARKANSAS (Attachments: # 1 Memorandum in Support Brief in Support of Motion for Summary Judgment and Response to Plaintiffs' Motion for Summary Judgment, # 2 Affidavit Franklin Declaration, # 3 Text of Proposed Order)(Jacobs, Dylan) (Entered: 11/30/2018)
40 RESPONSE re 27 MOTION for Summary Judgment filed by STATE OF ARKANSAS. (See Docket Entry 39 to view document) (tth). Modified text on 12/10/2018 (ztth). (Entered: 12/10/2018)
41 MOTION for Leave to File Single Consolidated Brief by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON (Attachments: # 1 Text of Proposed Order)(McKee, Catherine) (Entered: 12/17/2018)
MINUTE ORDER GRANTING Plaintiffs' 41 Motion for Leave to File Single Consolidated Brief. The Court ORDERS that Plaintiffs may file a consolidated brief of up to 55 pages in length. So ORDERED by Judge James E. Boasberg on 12/18/2018. (lcjeb2) (Entered: 12/18/2018)
42 REPLY to opposition to motion re 27 MOTION for Summary Judgment , filed by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON. (Attachments: # 1 Exhibit Arkansas Works Reports)(McKee, Catherine) Modified link on 1/3/2019 (znmw). (Entered: 12/21/2018)
44 Memorandum in opposition to re 39 MOTION for Summary Judgment , 37 MOTION to Dismiss MOTION for Summary Judgment filed by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON. (See Docket Entry 42 to view document) (tth) (Entered: 01/02/2019)

12/26/2018
12/26/2018 01/14/2019 01/23/2019
01/23/2019
01/23/2019
01/29/2019
01/30/2019 01/30/2019 02/08/2019 02/11/2019 02/11/2019 02/15/2019 02/15/2019 02/19/2019
02/28/2019
02/28/2019

43 MOTION to Stay Deadline for Federal Defendants' Reply Brief in Light of Lapse of Appropriations by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 12/26/2018)
MINUTE ORDER GRANTING 43 Motion to Stay Deadline for Federal Defendants' Reply Brief. So ORDERED by Judge James E. Boasberg on 12/26/2018. (lcjeb2) (Entered: 12/26/2018)
45 REPLY to opposition to motion re 39 MOTION for Summary Judgment filed by STATE OF ARKANSAS. (Attachments: # 1 Exhibit A − Franklin Declaration)(Bronni, Nicholas) (Entered: 01/14/2019)
46 NOTICE of Appearance by Thomas J. Perrelli on behalf of CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON (Perrelli, Thomas) (Entered: 01/23/2019)
47 NOTICE of Appearance by Ian Heath Gershengorn on behalf of CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON (Gershengorn, Ian) (Entered: 01/23/2019)
48 NOTICE of Appearance by Natacha Y. Lam on behalf of CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON (Lam, Natacha) (Entered: 01/23/2019)
49 NOTICE of Restoration of Appropriations by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Skurnik, Matthew) (Entered: 01/29/2019)
MINUTE ORDER ADOPTING 49 Notice of Restoration of Appropriations. The Court ORDERS that Defendants shall file their reply brief by February 19, 2019. So ORDERED by Judge James E. Boasberg on 1/30/2019. (lcjeb1) (Entered: 01/30/2019)
Set/Reset Deadlines: Reply Brief due by 2/19/2019. (znbn) (Entered: 01/30/2019)
50 Unopposed MOTION to Substitute by STATE OF ARKANSAS (Attachments: # 1 Affidavit Amended Affidavit)(Jacobs, Dylan) (Entered: 02/08/2019)
MINUTE ORDER: The Court ORDERS that the unopposed 50 Motion to Substitute is GRANTED and the amended affidavit is deemed FILED. So ORDERED by Judge James E. Boasberg on 2/11/2019. (lcjeb2) (Entered: 02/11/2019)
51 AMENDED AFFIDAVIT by STATE OF ARKANSAS. (tth) (Entered: 02/15/2019)
MINUTE ORDER: The Court ORDERS that the parties shall appear for oral argument on the pending Motions on March 14, 2019, at 10:00 a.m. So ORDERED by Judge James E. Boasberg on 2/15/2019. (lcjeb1) (Entered: 02/15/2019)
Set/Reset Hearings: Motiosn Hearing set for 3/14/2019 at 10:00 AM in Courtroom 25A before Judge James E. Boasberg. (lsj) (Entered: 02/15/2019)
52 REPLY to opposition to motion re 37 MOTION to Dismiss MOTION for Summary Judgment filed by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Skurnik, Matthew) (Entered: 02/19/2019)
MINUTE ORDER: The Court ORDERS that all parties (including amici) shall file by March 8, 2019, copies of any portion of the administrative record or extra−record material (e.g., articles, studies, or reports) upon which they rely. So ORDERED by Judge James E. Boasberg on 2/28/2019. (lcjeb1) (Entered: 02/28/2019)
Set/Reset Deadlines: Administrative Record due by 3/8/2019. (znbn) (Entered: 02/28/2019)

03/06/2019 03/07/2019 03/08/2019
03/13/2019 03/14/2019
03/27/2019 03/27/2019 03/28/2019 04/03/2019 04/04/2019
04/04/2019 04/10/2019

53 JOINT APPENDIX by CESAR ARDON, MARISOL ARDON, ANNA BOOK, RUSSELL COOK, JAMIE DEYO, CHARLES GRESHAM, ADRIAN MCGONIGAL, TREDA ROBINSON, VERONICA WATSON. (Attachments: # 1 Appendix, # 2 Appendix, # 3 Appendix, # 4 Appendix, # 5 Appendix, # 6 Appendix, # 7 Appendix, # 8 Appendix, # 9 Appendix, # 10 Appendix, # 11 Appendix)(Perkins, Jane) (Entered: 03/06/2019)
54 LARGE ADDITIONAL ATTACHMENT(S) Administrative Record Excerpts and Extra−Record Material Cited in Amicus Curiae Brief by NATIONAL ALLIANCE ON MENTAL ILLNESS 36 Amicus Brief filed by NATIONAL ALLIANCE ON MENTAL ILLNESS. (Attachments: # 1 AR Excerpts, # 2 Extra−Record Material (Part 1 of 2), # 3 Extra−Record Material (Part 2 of 2))(Higgins, Matthew) (Entered: 03/07/2019)
55 NOTICE of Compliance with Court Order by DEANS, CHAIRS, AND SCHOLARS (Attachments: # 1 Table of Contents, # 2 Volume 1 of 21, # 3 Volume 2 of 21, # 4 Volume 3 of 21, # 5 Volume 4 of 21, # 6 Volume 5 of 21, # 7 Volume 6 of 21, # 8 Volume 7 of 21, # 9 Volume 8 of 21, # 10 Volume 9 of 21, # 11 Volume 10 of 21, # 12 Volume 11 of 21, # 13 Volume 12 of 21, # 14 Volume 13 of 21, # 15 Volume 14 of 21, # 16 Volume 15 of 21, # 17 Volume 16 of 21, # 18 Volume 17 of 21, # 19 Volume 18 of 21, # 20 Volume 19 of 21, # 21 Volume 20 of 21, # 22 Volume 21 of 21)(Waters, Edward) (Entered: 03/08/2019)
56 NOTICE of Appearance by James Mahoney Burnham on behalf of All Defendants (Burnham, James) (Entered: 03/13/2019)
Minute Entry for proceedings held before Judge James E. Boasberg: Motion Hearing held on 3/14/2019 re 27 MOTION for Summary Judgment filed by VERONICA WATSON, ADRIAN MCGONIGAL, RUSSELL COOK, CHARLES GRESHAM, CESAR ARDON, TREDA ROBINSON, ANNA BOOK, MARISOL ARDON, JAMIE DEYO, 39 MOTION for Summary Judgment filed by STATE OF ARKANSAS, 37 MOTION to Dismiss MOTION for Summary Judgment filed by SEEMA VERMA, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ALEX M. AZAR, II. Oral arguments heard and motions taken under advisement. (Court Reporter Lisa Griffith) (znbn) (Entered: 03/14/2019)
57 ORDER: The Court ORDERS that: 1) Plaintiffs' 27 Motion for Summary Judgment is GRANTED; 2) Defendants' 37 , 39 Cross−Motions for Summary Judgment are DENIED; 3) The Secretary's approval of the Arkansas Works Amendments is VACATED and REMANDED to the agency; and 4) The parties shall appear for a status hearing on April 10, 2019, at 11:00 a.m. Signed by Judge James E. Boasberg on 3/27/2019. (lcjeb1) (Entered: 03/27/2019)
58 MEMORANDUM OPINION re 57 Order. Signed by Judge James E. Boasberg on 3/27/2019. (lcjeb1) (Entered: 03/27/2019)
Set/Reset Hearings: Status Conference set for 4/10/2019 at 11:00 AM in Courtroom 25A before Judge James E. Boasberg. (lsj) (Entered: 03/28/2019)
59 Joint MOTION for Entry of Final Judgment by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 04/03/2019)
60 ORDER GRANTING 59 Joint Motion for Entry of Final Judgment. The Court ORDERS that: 1) Judgment is ENTERED on Count II of Plaintiffs' First Amended Complaint; 2) The remainder of the case is STAYED, including any deadline for attorney fees, pending any appeal by Defendants of the Court's ruling on Count II; 3) The parties shall update the Court within 14 days of the appeal deadline if no appeal is filed or, if an appeal is filed, within 14 days of the mandate issuing from the appeal; and 4) The status hearing set for April 10, 2019, at 11:00 a.m. is VACATED. Signed by Judge James E. Boasberg on 4/4/2019. (lcjeb1) (Entered: 04/04/2019)
Case Stayed. (znbn) (Entered: 04/04/2019)
61 NOTICE OF APPEAL TO DC CIRCUIT COURT as to 58 Memorandum & Opinion, 57 Order on Motion for Summary Judgment,, Order on Motion to Dismiss,,,,, 60 Order

04/10/2019 04/11/2019 04/11/2019 04/11/2019
04/11/2019 04/11/2019 04/22/2019 04/22/2019 04/08/2020 04/08/2020

on Motion for Entry of Final Judgment,, by SEEMA VERMA, ALEX M. AZAR, II, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, CENTERS FOR MEDICARE AND MEDICAID SERVICES. Fee Status: No Fee Paid. Parties have been notified. (Skurnik, Matthew) (Entered: 04/10/2019)
62 NOTICE OF APPEAL TO DC CIRCUIT COURT as to 58 Memorandum & Opinion, 57 Order on Motion for Summary Judgment,, Order on Motion to Dismiss,,,,, 60 Order on Motion for Entry of Final Judgment,, by STATE OF ARKANSAS. Fee Status: No Fee Paid. Parties have been notified. (Bronni, Nicholas) (Entered: 04/10/2019)
63 Transmission of the Notice of Appeal, Order Appealed (Memorandum Opinion), and Docket Sheet to US Court of Appeals. The Court of Appeals docketing fee was not paid because the appeal was filed by the government re 61 Notice of Appeal to DC Circuit Court. (tth) (Entered: 04/11/2019)
64 Transmission of the Notice of Appeal, Order Appealed (Memorandum Opinion), and Docket Sheet to US Court of Appeals. The Court of Appeals docketing fee was not paid because the appeal was filed by the government re 62 Notice of Appeal to DC Circuit Court. (tth) (Entered: 04/11/2019)
65 TRANSCRIPT OF PROCEEDINGS before Judge James E. Boasberg held on 3−14−19; Page Numbers: 1−44. Date of Issuance:4−11−19. Court Reporter/Transcriber Lisa Griffith, Telephone number (202) 354−3247, Transcripts may be ordered by submitting the Transcript Order Form
For the first 90 days after this filing date, the transcript may be viewed at the courthouse at a public terminal or purchased from the court reporter referenced above. After 90 days, the transcript may be accessed via PACER. Other transcript formats, (multi−page, condensed, CD or ASCII) may be purchased from the court reporter.
NOTICE RE REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file with the court and the court reporter any request to redact personal identifiers from this transcript. If no such requests are filed, the transcript will be made available to the public via PACER without redaction after 90 days. The policy, which includes the five personal identifiers specifically covered, is located on our website at www.dcd.uscourts.gov.
Redaction Request due 5/2/2019. Redacted Transcript Deadline set for 5/12/2019. Release of Transcript Restriction set for 7/10/2019.(Griffith, Lisa); Modified hearing date on 4/11/2019 (tth). (Entered: 04/11/2019)
USCA Case Number 19−5094 for 61 Notice of Appeal to DC Circuit Court, filed by SEEMA VERMA, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, ALEX M. AZAR, II. (zrdj) (Entered: 04/11/2019)
USCA Case Number 19−5096 for 62 Notice of Appeal to DC Circuit Court, filed by STATE OF ARKANSAS. (zrdj) (Entered: 04/11/2019)
USCA Appeal Fees received $ 505 receipt number 4616097705 re 62 Notice of Appeal to DC Circuit Court, filed by STATE OF ARKANSAS (zrdj) (Entered: 04/22/2019)
66 Supplemental Record on Appeal transmitted to US Court of Appeals re USCA Appeal Fees, 62 Notice of Appeal to DC Circuit Court ;USCA Appeal Fees received USCA Case Number 19−5096. (zrdj) (Entered: 04/22/2019)
67 MANDATE of USCA as to 61 Notice of Appeal to DC Circuit Court, filed by SEEMA VERMA, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, ALEX M. AZAR, II, 62 Notice of Appeal to DC Circuit Court, filed by STATE OF ARKANSAS ; USCA Case Number 19−5094 Consolidated with 19−5096. (Attachments: # 1 USCA Judgment)(zrdj) (Entered: 04/08/2020)
MINUTE ORDER: Given the issuance of the mandate by the Court of Appeals, this Court ORDERS the parties to file a joint status report by April 22, 2020, setting forth proposed next steps in this litigation. So ORDERED by Judge James E. Boasberg on

04/08/2020 04/16/2020
04/27/2020

4/8/2020. (lcjeb2) (Entered: 04/08/2020)
Set/Reset Deadlines: Joint Status Report due by 4/22/2020. (nbn) (Entered: 04/09/2020)
68 Joint STATUS REPORT by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Andrapalliyal, Vinita) (Entered: 04/16/2020)
MINUTE ORDER: The Court ORDERS that the parties shall file a Notice with the Court within 7 days of the matter becoming final and non−appealable. So ORDERED by Judge James E. Boasberg on 4/27/2020. (lcjeb2) (Entered: 04/27/2020)

 
 Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 1 of 38

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Civil Action No. ____________

CHARLES GRESHAM

)

123 W. Ridge Ave., Apt. C, Harrison, AR 72601 )

)

CESAR ARDON

)

1613 E. Tahlequah St., Siloam Springs, AR 72761 )

)

MARISOL ARDON

)

1613 E. Tahlequah St., Siloam Springs, AR 72761 )

)

Plaintiffs,

)

)

v.

)

)

ALEX M. AZAR II

)

SECRETARY, UNITED STATES DEPART-

)

MENT OF HEALTH AND HUMAN SERVICES )

in his official capacity

)

200 Independence Avenue, S.W.

)

Washington, DC 20201

)

)

SEEMA VERMA

)

ADMINISTRATOR, CENTERS FOR MEDI-

)

CARE AND MEDICAID SERVICES

)

in her official capacity

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

UNITED STATES DEPARTMENT OF HEALTH )

AND HUMAN SERVICES

)

200 Independence Avenue, S.W.

)

Washington, DC 20201

)

)

CENTERS FOR MEDICARE AND MEDICAID )

SERVICES

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

Defendants.

)

___________________________________________________________________

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF ____________________________________________________________________

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Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 2 of 38
PRELIMINARY STATEMENT 1. This case challenges the ongoing efforts of the Executive Branch to bypass the legislative process and act unilaterally to “comprehensively transform” Medicaid, the cornerstone of the social safety net. Purporting to invoke a narrow statutory waiver authority that allows experimental projects “likely to assist in promoting the objectives” of Medicaid, the Executive Branch has instead effectively rewritten the statute, ignoring congressional restrictions, overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country. 2. The Medicaid program provides health insurance coverage to more than 75 million low-income people in the United States. Medicaid enables states to provide a range of federally specified preventive, acute, and long-term health care services to individuals “whose income and resources are insufficient to meet the costs of necessary medical services.” As described in more detail below, the core populations covered by Medicaid include children; pregnant women; the aged, blind, or disabled; and, as added by the Affordable Care Act (“ACA”), adults with household incomes of less than 133% of the federal poverty level (currently $12,140 for an individual; $16,460 for a family of two). 3. The Medicaid program offers a deal for states. If a state chooses to participate in the program, the federal government will contribute the lion’s share of the cost of providing care. In return, the state agrees to pay the remaining portion of the costs of care and to follow all federal requirements, including those regarding the scope of coverage and eligibility for the program. States may not impose additional eligibility requirements other than those set forth in the Medicaid Act, and states cannot pick and choose among individuals within a covered population group.
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4. The Social Security Act, of which Medicaid Act is a part, does permit the Secretary of Health and Human Services (“HHS”) to waive certain federal Medicaid requirements, but only in narrow circumstances — when necessary to allow a state to carry out an experimental or pilot program that is likely to promote the objectives of the Medicaid Act.
5. In 2014, the State of Arkansas obtained such a waiver to expand its Medicaid program to cover the adults made eligible through the ACA by using private health plans. In 2016, this waiver was renewed and extended through 2021. Consistent with previous agency actions, HHS denied Arkansas’ request to impose a work requirement as a condition of eligibility, finding such a requirement was not consistent with the objectives of the Medicaid Act.
6. Early in 2017, the current HHS abruptly reversed course, signaling to states that it would revise its use of the waiver authority in Medicaid as part of President Trump’s vow to “explode” the ACA and its Medicaid expansion. On June 30, 2017, Arkansas Governor Asa Hutchinson submitted the “Arkansas Works Amendment,” a request to the Secretary of HHS to implement a work requirement as a condition of Medicaid eligibility in order to “promot[e] personal responsibility and work, encourage[e] movement up the economic ladder, and facilitate[e] transitions from Arkansas Works” to private coverage.
7. While the Arkansas Works Amendment was pending, HHS announced its new Medicaid waiver policy through a letter to State Medicaid Directors. Reversing decades of agency guidance, and consistent with the Administrator’s own expressed view of the need to “fundamentally transform Medicaid,” the letter to State Medicaid Directors announced the agency’s intention to, for the first time, approve waiver applications containing work requirements and outlining “guidelines” for states to consider in submitting such applications. On March 5,
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2018, citing the Dear State Medicaid Director Letter, the Secretary approved the Arkansas Works Amendment, and Arkansas began implementing the Amendment on June 1, 2018.
8. The Secretary’s issuance of the letter to State Medicaid Directors and approval of Arkansas’ request sharply deviate from the congressionally established requirements of the Medicaid program and vastly exceed any lawful exercise of the Secretary’s limited waiver authority. This Amendment will harm Arkansans across the state who need a range of health services, including check-ups, diabetes treatment, mental health services, non-emergency medical transportation, and vision and dental care. The letter and approval of Arkansas’ application are unauthorized attempts to re-write the Medicaid Act, and the use of the Social Security Act’s waiver authority to “transform” Medicaid is an abuse of that authority. The Defendants’ actions here thus violate both the Administrative Procedure Act and the Constitution, and they cannot survive.
JURISDICTION AND VENUE 9. This is an action for declaratory and injunctive relief for violations of the Administrative Procedure Act, the Social Security Act, and the United States Constitution. 10. The Court has jurisdiction over Plaintiffs’ claims pursuant to 28 U.S.C. §§ 1331 and 1361, and 5 U.S.C. §§ 702 to 705. This action and the remedies it seeks are further authorized by 28 U.S.C. §§ 1651, 2201, and 2202, and Federal Rule of Civil Procedure 65. 11. Venue is proper under 28 U.S.C. § 1391(b)(2) and (e).
PARTIES 12. Plaintiff Charles Gresham is a 37-year-old man who lives in Harrison, Boone County, Arkansas with his fiancé. Mr. Gresham is enrolled in the Arkansas Medicaid program. 13. Plaintiff Cesar Ardon is a 40-year-old man who lives in Siloam Springs, Benton County, Arkansas and is enrolled in the Arkansas Medicaid program.
4

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 5 of 38
14. Plaintiff Marisol Ardon is a 44-year-old woman who lives is Siloam Springs, Benton County, Arkansas with her adult daughter. Ms. Ardon is enrolled in the Arkansas Medicaid program.
15. Defendant Alex M. Azar II is the Secretary of the United States Department of Health and Human Services (“HHS”) and is sued in his official capacity. Defendant Azar (“the Secretary”) has overall responsibility for implementation of the Medicaid program, including responsibility for federal review and approval of state requests for waivers pursuant to Section 1115 of the Social Security Act.
16. Defendant Seema Verma is Administrator of the Centers for Medicare and Medicaid Services (“CMS”) and is sued in her official capacity. Defendant Verma is responsible for implementing the Medicaid program in the manner required by federal law, including as amended by the ACA.
17. Defendant HHS is a federal agency with responsibility for, among other things, overseeing implementation of provisions of the Social Security Act, of which the Medicaid Act is a part.
18. Defendant CMS is the agency within HHS with primary responsibility for overseeing federal and state implementation of the Medicaid Act.
BACKGROUND AND FACTUAL ALLEGATIONS A. The Medicaid Program 19. Title XIX of the Social Security Act establishes the cooperative federal-state medical assistance program known as Medicaid. See 42 U.S.C. §§ 1396 to 1396w-5. Medicaid’s stated purpose is to enable each state, as far as practicable, “to furnish [] medical assistance” to individuals “whose income and resources are insufficient to meet the costs of necessary medical
5

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 6 of 38
services” and to provide “rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” Id. § 1396-1.
20. The statute defines “medical assistance” to be a range of health care services that participating states must cover or are permitted to cover at state option. Id. § 1396d(a).
21. Although states do not have to participate in Medicaid, all have chosen to do so. 22. Each participating state must maintain a comprehensive state Medicaid plan for medical assistance that the Secretary has approved. Id. § 1396a. 23. The state Medicaid plan must describe the state’s Medicaid program and affirm its commitment to comply with the requirements imposed by the Medicaid Act and its associated regulations. 24. State and federal governments share responsibility for funding Medicaid. Section 1396b of the Medicaid Act requires the Secretary to pay each participating state the federal share of “the total amount expended . . . as medical assistance under the State plan.” Id. §§ 1396b(a)(1), 1396d(b). The federal reimbursement rate is based on the state’s relative per capita income. B. Medicaid Eligibility and Coverage Requirements 25. Using household income and other specific criteria, the Medicaid Act delineates who is eligible to receive Medicaid coverage. Id. §§ 1396a(a)(10)(A), (C). The Act identifies required coverage groups as well as options for states to extend Medicaid to additional population groups. Id. 26. States participating in Medicaid must provide medical assistance to individuals who meet the eligibility standards applicable to required coverage groups (so-called “mandatory populations”). Id. § 1396a(a)(10)(A)(i).
6

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 7 of 38
27. To be eligible for federal Medicaid funding, states must cover, and may not exclude from Medicaid, individuals who: (1) are part of a mandatory population group; (2) meet the minimum financial eligibility criteria applicable to that population group; (3) are residents of the state in which they apply; and (4) are U.S. citizens or certain qualified immigrants. Id. §§ 1396a(a)(10)(A), 1396a(b)(2), (3); 8 U.S.C. §§ 1611, 1641.
28. The mandatory Medicaid population groups include children; parents and certain other caretaker relatives; pregnant women; and the elderly, blind, or disabled. 42 U.S.C. § 1396a(a)(10)(A)(i).
29. In 2010, Congress passed, and the President signed, comprehensive health insurance reform legislation, the Patient Protection and Affordable Care Act (“ACA”). Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029. “The Act aims to increase the number of Americans covered by health insurance and decrease the cost of health care.” Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012).
30. As part of the effort to ensure comprehensive health insurance coverage, Congress amended the Medicaid Act to add an additional mandatory population group. Effective January 1, 2014, the Medicaid Act requires participating states to cover adults who are under age 65, not eligible for Medicare, do not fall within another Medicaid eligibility category, and have household income below 133% of the federal poverty level (“FPL”). 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII), 1396a(e)(14). This group is often called the “expansion population” or the “Section VIII population,” and it includes adults in a variety of family circumstances: parents living with children (whose incomes exceed the state-established limit for the mandatory parents/caretaker relatives population group); parents of older children who have left the home; and adults without children.
7

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 8 of 38
31. States receive enhanced federal reimbursement rates for medical assistance provided to the Medicaid expansion population: 94% federal dollars in 2019, and 90% for 2020 and each year thereafter. Id. § 1396d(y).
32. The Supreme Court’s decision in National Federation of Independent Business v. Sebelius barred HHS from terminating Medicaid funding to states that choose not to extend Medicaid coverage to the expansion population. 567 U.S. 519 (2012).
33. States that cover the expansion population submit state plan amendments electing to provide this coverage. To date, 34 states, including Arkansas, and the District of Columbia have approved state plans covering the expansion population.
34. Once a state elects to expand coverage to the expansion population, it becomes a mandatory coverage group. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII).
35. As noted above, the Medicaid Act also allows states to extend Medicaid eligibility to certain optional population groups, including children and pregnant women with incomes between 133% and 185% of FPL, see id. § 1396a(a)(10)(A)(ii)(IX), limited-income aged, blind, and/or disabled individuals receiving home and community-based services, id. § 1396a(a)(10)(A)(ii)(VI), and “medically needy” individuals who would fall within a mandatory population but for excess income, id. § 1396a(a)(10)(C).
36. The Medicaid Act requires a participating state to cover all members of a covered population group. In other words, the state may not cover subsets of a population group described in the Medicaid Act. Id. § 1396a(a)(10)(B). This requirement applies to optional and mandatory population groups: if a state elects to cover an optional group, it must cover all eligible individuals within that group. Id.
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Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 9 of 38
37. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. See id. § 1396(a)(10)(A).
38. In addition to addressing who is eligible for medical assistance, the Medicaid Act delineates how states must make and implement eligibility determinations to ensure that all eligible people who apply are served and get coverage.
39. The Medicaid Act requires states to “provide such safeguards as may be necessary to assure that eligibility . . . and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients.” Id. § 1396a(a)(19).
40. The ACA requires states to use a streamlined Medicaid eligibility process so that individuals “may apply for enrollment in, receive a determination of eligibility for participation in, and continue participation in, [Medicaid].” 42 U.S.C. § 18083(a). Individuals must be able to file streamlined eligibility forms online, in person, by mail, or by telephone. Id. § 18083(b)(1)(A); see also 42 U.S.C. § 1396w-3 (requiring participating states to streamline and simplify process for persons to remain enrolled in Medicaid); 42 C.F.R. §§ 435.907(a) (requiring states to accept applications and any documentation required to establish eligibility by internet, telephone, mail, and in person); 435.908(a) (requiring states to provide assistance with applications and renewals in person, over the telephone, and online).
41. Since its enactment, the Medicaid Act has required states to determine eligibility and provide medical assistance to all eligible individuals with “reasonable promptness.” Social Security Amendments of 1965, Pub. L. No. 89-97, § 1902(a)(8), 79 Stat. 286, 344 (codified at 42 U.S.C. § 1396a(a)(8)); 42 C.F.R. §§ 435.906 (requiring states to allow individuals to apply without delay); 435.912(c)(3) (requiring states to determine eligibility within 90 days for individuals who apply on the basis of disability and 45 days for all other individuals).
9

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 10 of 38

42. Through so-called “presumptive” eligibility, the Medicaid Act gives states a

mechanism to provide immediate, temporary coverage to individuals who appear to their health

care provider to be Medicaid eligible based on preliminary information. 42 U.S.C. § 1396a(a)(47).

Under the ACA, states must allow qualified hospitals to provide presumptive eligibility to their

patients. See Pub. L. 111-148, 124 Stat. 119, 291, § 2202 (codified at 42 U.S.C. § 1396a(a)(47)(B)

(eff. Jan. 1, 2014). See Ctrs. for Medicare & Medicaid Servs., Medicaid & CHIP FAQs:

Implementing

Hospital

Presumptive

Eligibility

Programs

(2014),

https://www.medicaid.gov/state-resource-center/faq-medicaid-and-chip-affordable-care-act-

implementation/downloads/faqs-by-topic-hospital-pe-01-23-14.pdf (noting that hospital

presumptive eligibility assures that individuals have timely access to care and promotes “ongoing

Medicaid coverage by offering additional channels through which individuals can apply”).

43. The Medicaid Act has always required states to provide retroactive coverage to

certain individuals to ensure that they can obtain timely care and avoid incurring medical debts.

Social Security Amendments of 1965, Pub. L. No. 89-97, § 1905(a), 79 Stat. 286, 351 (codified at

42 U.S.C. §§ 1396a(a)(34), 1396d(a)); see also S. Report No. 92-1230, 92nd Congress, 2nd

Session, pg. 209 (1972) (noting the purpose of retroactive coverage is to protect individuals “who

are eligible for [M]edicaid but do not apply for assistance until after they have received care, either

because they did not know about the [M]edicaid eligibility requirements or because the sudden

nature of their illness prevented their applying”). Specifically, states must provide medical

assistance for care provided in or after the third month before the month of application, as long as

the enrollee would have been eligible for Medicaid at the time the services were received. 42

U.S.C. §§ 1396a(a)(34), 1396d(a).

10

Case 1:18-cv-01900-JEB Document 1 Filed 08/14/18 Page 11 of 38
C. The Secretary’s Section 1115 Waiver Authority 44. Section 1115 of the Social Security Act, codified at 42 U.S.C. § 1315, grants the Secretary authority to waive a state’s compliance with certain requirements of the Medicaid Act under certain conditions. 45. The Secretary may grant a Section 1115 Medicaid waiver only in the case of an “experimental, pilot, or demonstration project which . . . is likely to assist in promoting the objectives” of the Medicaid Act. Id. § 1315(a). 46. The Secretary may only waive requirements of Section 1396a for Section 1115 projects relating to Medicaid. Id. § 1315(a)(1). 47. The Secretary may not waive compliance with requirements that Congress has placed outside of Section 1396a. 48. The Secretary may grant a Section 1115 waiver only to the extent and for the period necessary to enable the state to carry out the experimental, pilot, or demonstration project. Id. 49. The costs of such a project, upon approval, are included as expenditures under the State Medicaid plan. 42 U.S.C. § 1315(a)(2). 50. The Secretary must follow certain procedural requirements before he may approve a Section 1115 project. Id. § 1315(d); 42 C.F.R. §§ 431.400 to 431.416. In particular, after receiving a complete application from a state (following a state-level public comment period), the Secretary must provide a 30-day public notice and comment period. 42 U.S.C. § 1315(d); 42 C.F.R. § 431.416. 51. The Secretary does not have the authority under Section 1115 to waive compliance with other federal laws, such as the United States Constitution, the Americans with Disabilities Act, or other federal statutes.
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52. For example, the Fair Labor Standards Act (“FLSA”) requires that all individuals, including individuals receiving public benefits, be compensated at least the minimum wage in exchange for hours worked. See 29 U.S.C. § 206(a)(1)(C); Dep’t of Labor, How Workplace Laws Apply to Welfare Recipients at 2 (1997), http://nclej.org/wp-content/uploads/2015/11/ LaborProtectionsAndWelfareReform.pdf. Notably, the Supplemental Nutrition Assistance Program (“SNAP”) and Temporary Assistance for Needy Families (“TANF”) statutes specifically refer to work requirements and further describe how the benefits interact with the FLSA minimum wage protections. See 7 U.S.C. § 2029(a)(1) (SNAP); 42 U.S.C. § 607 (TANF). There is no such reference or description in the Medicaid Act. According to the Department of Labor, medical assistance, unlike SNAP and TANF cash benefits, may not be substituted for a wage. See How Workplace Laws Apply to Welfare Recipients at 4.
D. Medicaid in Arkansas 53. Arkansas, like all other states, has elected to participate in Medicaid. See Ark. Code Ann. §§ 20-77-101 to 20-77-2811, 23-61-1004 to 23-61-1009. The Department of Human Services (“DHS”) administers the program at the state level. 54. HHS typically reimburses Arkansas for over 70% of the cost of providing medical assistance through its Medicaid program. See 81 Fed. Reg. 80078-79 (Nov. 15, 2016) (70.87%, in fiscal year 2017); 82 Fed. Reg. 55383-85 (Nov. 21, 2017) (70.51% in fiscal year 2018). 55. Effective January 1, 2014, Arkansas expanded its Medicaid program to include the Medicaid expansion population – i.e., adults who are under age 65; do not fit into another Medicaid (or Medicare) eligibility category; and have household income below 133% of FPL. As noted above, the State receives enhanced federal reimbursement for medical assistance provided to this
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group: 94% federal dollars in 2019, and 90% for 2020 and each year thereafter. 42 U.S.C. § 1396d(y).
56. Arkansas implemented the Medicaid expansion through a Section 1115 project called the “Arkansas Health Care Independence Program” (“HCIP”). See Letter from Marilyn Tavenner, Admin., Ctrs. for Medicare & Medicaid Servs., to Andy Allison, Dir., Arkansas Dep’t of Human Servs. (Sept. 27, 2013) (approving HCIP through December 31, 2016), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/arprivate-option-app-ltr-09272013.pdf (last visited Aug. 8, 2018).
57. HCIP allowed the State to cover most of the expansion population through a “private option.” Under the private option, individuals receive health coverage, i.e., medical assistance, through a private health plan, and the Medicaid program covers the enrollees’ portion of the premiums and cost sharing. Id. Because the private plans do not cover all of the services that the Medicaid Act requires Arkansas to provide to the expansion population, enrollees continue to receive some services through the State on a fee-for-services basis. See id. at Special Terms and Conditions ¶ 36-37.
58. In 2014 and 2015, more than 225,000 individuals received coverage through HCIP. Arkansas Ctr. for Health Improvement, Arkansas Health Care Independence Program (“Private Option”) Section 1115 Demonstration Waiver Interim Report 16, 21 (2016), http://www.achi.net/Content/Documents/ResourceRenderer.ashx?ID=347. During that same time period, Arkansas saw “a reduction in the uninsured rate for adults from 22.5 percent to 9.6 percent, the largest reduction observed nationwide.” Id. at 20.
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59. Medicaid expansion in Arkansas has been associated with a variety of positive health outcomes, including increased utilization of preventive services, out-patient office visits, and chronic disease care; decreased reliance on emergency rooms; fewer skipped medications due to cost; better quality care; and improved self-reported health. Benjamin D. Sommers et al., Changes in Utilization and Health Among Low-Income Adults After Medicaid Expansion or Expanded Private Insurance, 176 JAMA Internal Medicine 1501, 1505-06 (2016).
60. In mid-2016, Arkansas requested permission from HHS to extend and amend HCIP, renaming the project “Arkansas Works.” Letter from Asa Hutchinson, Governor of Arkansas to Sylvia Mathews Burwell, Sec’y, U.S. Dep’t Health & Human Servs. (June 28, 2016), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/ar-works-application-07072016.pdf.
61. The Secretary extended the Section 1115 project through the end of 2021. Letter from Andrew M. Slavitt, Acting Admin., Ctrs. for Medicare & Medicaid Servs., to Cindy Gillespie, Dir., Arkansas Dep’t of Human Servs. (Dec. 8, 2016), https://www.medicaid.gov/MedicaidCHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/Health-Care-IndependenceProgram-Private-Option/ar-works-amndmnt-appvl-12292017.pdf.
62. The Secretary also approved several changes to the project. Most notably, the Secretary granted Arkansas a conditional waiver of retroactive eligibility. Before implementing this waiver, the State needed to demonstrate: (1) compliance with the requirement to provide Medicaid coverage during a reasonable opportunity period to individuals who are otherwise eligible for Medicaid and attest to eligible immigration status, consistent with 42 U.S.C. § 1320b-7(d); (2) completion of the Arkansas MAGI Backlog Mitigation Plan and written assurance that “eligibility
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determinations and redeterminations are completed on a timely basis;” and (3) implementation of the requirement to allow hospitals to make presumptive eligibility determinations. Id. at Waiver List ¶ 7).
63. Arkansas DHS has not implemented hospital presumptive eligibility. E. The Arkansas Works Amendment 64. On or about June 30, 2017, Governor Hutchinson submitted to the Secretary a request to amend Arkansas Works. Letter from Asa Hutchinson, Governor of Arkansas, to Thomas E. Hargan, Sec., U.S. Dep’t of Health & Human Servs. (June 30, 2017) (“Arkansas Works Amendment”) (attached as Exhibit 1, hereto). 65. Arkansas requested permission to implement a work and community engagement requirement and to eliminate three-month retroactive coverage. Arkansas also sought permission to phase out Medicaid coverage of individuals with household income above 100% of the FPL. Id. 66. Governor Hutchinson described the proposed Amendment as designed to “promot[e] personal responsibility and work, encourage[e] movement up the economic ladder, and facilitate[e] transitions from Arkansas Works” to private coverage. Id. The State commented that the changes would better position Arkansas Works to focus on “the most vulnerable enrollees.” Id. at App. C, p. 2. 67. The State’s request did not provide an estimate of the number of individuals who would lose coverage as a result of the work requirement. Likewise, Arkansas did not indicate the number of individuals who would incur medical costs due to the elimination of retroactive coverage or the amount of those costs.
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68. CMS held a public comment period on the proposed Amendment from July 11, 2017 to August 10, 2017. Medicaid.gov, Arkansas Works Amendment, https://public.medicaid.gov/connect.ti/public.comments/view?objectID=1891331.
69. On March 5, 2018, the Secretary issued his approval letter for the Arkansas Works Amendment, pursuant to Section 1115 and effective through the end of 2021. See Letter from Seema Verma, Admin., Ctrs. for Medicare & Medicaid Servs. to Cindy Gillespie, Dir. Ark. Dep’t of Human Servs. (March 5, 2018), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/ar-works-ca.pdf (hereinafter “Amendment Approval”) (attached as Exhibit 2, hereto).
70. The Amendment Approval granted Arkansas permission to implement the work requirement, on or after June 1, 2018.
71. The Amendment Approval also waived the retroactive coverage requirement for Arkansas, reducing the retroactive coverage period from three months to one month. Neither the State’s Amendment application nor the CMS approval explained how the State had met the three pre-conditions CMS set forth in 2016 for a waiver of the retroactive coverage requirement—that Arkansas comply with the reasonable opportunity period requirements, successfully complete the Arkansas MAGI Backlog Mitigation Plan, and implement hospital presumptive eligibility. See Amendment Approval at Ex. 2 at 4, 7, 21; Arkansas Works Amendment.
72. Arkansas’ request to reduce income eligibility for Arkansas Works to 100% of FPL was not approved. See Amendment Approval at Ex. 2 at 2.
73. In approving Arkansas’ request, HHS did not provide an estimate of the number of individuals who would lose coverage as a result of the Arkansas Work Amendment.
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Work and Community Engagement Requirements 74. As noted above, the Medicaid Act requires a participating state to furnish Medicaid to all members of covered population groups. The state may not cover only subsets of a population group described in the Medicaid Act. See 42 U.S.C. §§ 1396a(a)(10)(A)-(B). 75. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. 76. The Arkansas Works Amendment added a new condition of eligibility that is not permitted under the Medicaid Act: Arkansas Works enrollees ages 19 to 49 must engage in 80 hours of specified employment or community engagement activities every month. Amendment Approval at Ex.2 at 28. 77. The work requirement does not apply to pregnant women or medically frail individuals. Amendment Approval at Ex. 2 at 28. In addition, enrollees who meet certain other criteria are exempt from the requirement. Id. 78. If enrollees subject to the work requirement do not meet the requirement for any three months of the year, the State will terminate their coverage unless they demonstrate that one of the narrow “good cause” exceptions applies. Id. at 29-31. 79. Under the Medicaid Act, an individual may apply for and enroll in Medicaid at any time. 80. Under the Arkansas Works Amendment, the State will prohibit an individual who has been terminated from Medicaid for failure to meet the work requirements from re-enrolling in Arkansas Works for the remainder of the calendar year. Id. at 30. Only once the year begins again will a terminated enrollee be allowed to submit a new application to re-enroll. However, enrollees may end the lockout period early by showing that one of the “good cause” exceptions would have
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applied at the time of termination and their inability to fulfill the requirement “was the result of a catastrophic event or circumstances beyond [their] control.” Id.
81. According to the State, the purpose of the work requirement is to “incentivize enrollees to work and encourage personal responsibility” and “encourage individuals to climb the economic ladder.” Arkansas Works Amendment at p. 55. The State also described the goal of the work requirement as “promot[ing] independence through employment.” Id. at 15.
82. The State began implementing the requirement for individuals ages 30 to 49 on June 1, 2018. Arkansas is fully rolling out the requirement, to include individuals ages 19 to 29, during the first four months of 2019. Eligibility and Enrollment Monitoring Plan, Arkansas Works: Work and Community Engagement Amendment 8 (2018) (hereinafter “Implementation Plan”) (attached as Exhibit 3, hereto).
83. As a condition of eligibility, enrollees must report their participation activities each month, which they can only do by using an online portal. Enrollees may not report participation in-person or by telephone. Id.
84. DHS Director Cindy Gillespie stated in March 2018 that the online-only reporting requirement was more convenient for DHS, and “If you implement it in the old-fashioned way of ‘Come into our county office,’ we would have to hire so many people – and that just doesn’t make sense.” Benjamin Hardy, Medicaid Advocate Criticizes Arkansas Works’ Email-only Reporting for Work Requirements, Ark. Times, Apr. 28, 2018, https://www.arktimes.com/ArkansasBlog/archives/2018/04/28/medicaid-advocate-criticizes-arkansas-works-email-only-reporting-for-workrequirements (last visited Aug. 3, 2018).
85. To use the online portal, enrollees need an email address, a log-in and password unique to the portal, and a reference number provided in a multi-page letter sent by DHS. Enrollees
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use the reference number to link their insurance account to the reporting portal. Once the link is established, individuals must click through multiple different screens to report their work activities each month. The portal is only accessible to beneficiaries between the hours of 7 a.m. and 9 p.m. Sometimes, DHS schedules online maintenance of the portal during these operating hours. Enrollees must report work activities for a given month by the 5th of the following month, or the activities will not be counted for purposes of determining compliance. See generally Arkansas Works Information, https://ardhs.sharepointsite.net/ARWorks/default.aspx.
86. To claim an exemption, Arkansas Works beneficiaries use the online portal to make an attestation based on their understanding of the exemption. The State plans to review exemption attestations as part of a quality review process, which may result in retroactive removal of months of exemption or compliance. If the retroactive removal leaves an enrollee with three months of non-compliance in a calendar year, the individual’s Arkansas Works case will be closed and referred for investigation as potential fraud and overpayment. Implementation Plan at 13.
87. After the March 5, 2018 approval, the Arkansas Medicaid agency publicly estimated that “approximately 69,000 out of 278,734 individuals currently enrolled in Arkansas Works will be expected to participate in monthly approved work activities” once the requirement is fully implemented. This estimate did not include an estimate of Arkansans who would not be able to meet the requirement and would thus lose Medicaid coverage for the year. Implementation Plan at 1, 6.
88. The State estimates there are 125,242 Arkansas Works beneficiaries in the 30 to 49 age group. Id. at 6. The State began rolling out the work requirement to this group in June 2018, announcing that 25,815 of these enrollees needed to meet the work and community engagement
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requirement in June 2018. Almost one-third of the individuals who needed to meet the work requirements – 7,464 people – did not do so for the month. Of those who met the requirement, 15,511 were deemed to meet it through state data sources, 2,395 reported an exemption, and only 445 reported they met the 80 hours of work-related activity. See Arkansas Dep’t of Human Servs., Arkansas Works Program June 2018 Report, at 1 (attached as Exhibit 4, hereto).
89. The State estimates that 38,321 of the 125,242 Arkansas Works beneficiaries ages 30 to 49 will need to report how they met the work requirement or an exemption when the requirement is fully implemented for this age group by October 2018. Once fully implemented, the State estimates that about 69,000 of the 171,999 Arkansas Works beneficiaries in the 19 to 49 age group will need to report how they meet the work requirement or an exemption. Implementation Plan at 1, 6.
Retroactive Eligibility 90. As noted above, the Medicaid Act requires that medical assistance be provided to enrollees retroactively. States must provide that in the case of any individual who has been determined to be eligible for medical assistance . . . such assistance will be made available to him for care and services included under the plan and furnished in or after the third month before the month in which he made application . . . for such assistance if such individual was . . . eligible for such assistance at the time such care and services were furnished. 42 U.S.C. § 1396a(a)(34). 91. Separately, Section 1396d(a) defines “medical assistance” to include coverage for services received by eligible individuals during the three-month period prior to the month of application. Id. § 1396d(a). 92. There is no authority for the Secretary to grant a waiver of Section 1396d(a).
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93. Under the approved Arkansas Works Amendment, retroactive eligibility coverage as required by the statute is terminated. Instead, the State will only pay for services received during the 30 days before an individual submits an application. Amendment Approval at Ex. 2 at 11, 21.
F. Action Taken by the Defendants to Allow Work Requirements and Approve the Arkansas Works Amendment
94. Prior to 2017, CMS’s website stated that the purpose of Section 1115 waivers is to “demonstrate and evaluate policy approaches such as:
• Expanding eligibility to individuals who are not otherwise Medicaid or CHIP eligible; • Providing services not typically covered by Medicaid; or • Using innovative service delivery systems that improve care, increase efficiency, and
reduce costs.” Medicaid.gov, About Section 1115 Demonstrations, https://www.medicaid.gov/medicaid/section1115-demo/about-1115/index.html (last visited September 5, 2017). The “general criteria” for CMS to use when assessing waiver applications included whether the demonstration would:
1. increase and strengthen overall coverage of low-income individuals in the state; 2. increase access to, stabilize, and strengthen providers and provider networks available
to serve Medicaid and low-income populations in the state; 3. improve health outcomes for Medicaid and other low-income populations in the state;
or 4. increase the efficiency and quality of care for Medicaid and other low-income popula-
tions through initiatives to transform service delivery networks. Id.
95. Prior to 2017, CMS recognized that work requirements do “not support the objectives of the [Medicaid] program” and “could undermine access to care.” Letter from Andrew M. Slavitt, Acting Administrator, Ctrs. For Medicare & Medicaid Servs., HHS to Thomas Betlach, Dir. Az. Health Care Cost Containment System (Sept. 30, 2016); see Sec’y of Health & Human
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Services Sylvia Burwell, Hearing on The President’s Fiscal Year 2017 Budget, Responses to Additional Questions for the Record, U.S. House of Rep. Energy & Commerce Health Subcommittee at 35 (Feb. 24, 2016), http://docs.house.gov/meetings/IF/IF14/20160224/104521/ HHRG-114-IF14-Wstate-BurwellS-20160224-SD002.pdf.
96. In 2016, CMS denied Arkansas’ request to institute a work requirement in Medicaid, stating in part: “[C]onsistent with the purposes of the Medicaid program, we cannot approve a work requirement.” Letter from Sylvia Burwell, Sec’y of Health & Human Services, to Asa Hutchinson, Governor of Arkansas (Apr. 5, 2016) (attached as Exhibit 5, hereto).
97. The current HHS abruptly reversed course to revise its use of the Section 1115 waiver authority and to authorize work requirements in Medicaid as part of President Trump’s vow to “explode” the ACA and its Medicaid expansion. See Amy Goldstein & Juliet Eilperin, Affordable Care Act Remains “Law of the Land,” but Trump Vows to Explode It, Wash. Post, Mar. 24, 2017, https://www.washingtonpost.com/national/health-science/affordable-care-actremains-law-of-the-land-but-trump-vows-to-explode-it/2017/03/24/4b7a2530-10c3-11e7-ab0707d9f521f6b5_story.html.
98. When he took office, President Trump signed an Executive Order calling on federal agencies to undo the ACA “[t]o the maximum extent permitted by law.” Executive Order 13765, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, 82 Fed. Reg. 8351 (Jan. 20, 2017), https://www.gpo.gov/fdsys/pkg/FR-2017-0124/pdf/2017-01799.pdf.
99. On March 14, 2017, Defendant Seema Verma was sworn in as the Administrator of CMS. Defendant Verma and former Secretary Price immediately issued a letter to state Governors announcing CMS’s disagreement with the purpose and objectives of the Medicaid Act,
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stating that “[t]he expansion of Medicaid through the Affordable Care Act (‘ACA’) to nondisabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.” See Sec’y of Health and Human Servs., Dear Governor Letter, at 1, https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf.
100. Since then, Defendant Verma has made repeated public statements criticizing the expansion of Medicaid to “able-bodied individual[s],” advocating for lower enrollment in Medicaid, and outlining plans to “reform” Medicaid through agency action. See Casey Ross, Trump health official Seema Verma has a plan to Slash Medicaid rolls. Here’s how, Stat News, Oct. 26, 2017, https://www.statnews.com/2017/10/26/seema-verma-medicaid-plan/.
101. For instance, on June 27, 2017, Defendant Verma wrote an Opinion piece in the Washington Post observing that “U.S. policymakers have a rare opportunity, through a combination of congressional and administrative actions, to fundamentally transform Medicaid.” Seema Verma, Lawmakers have a rare chance to transform Medicaid. They should take it, Wash. Post, June 27, 2017, https://www.washingtonpost.com/opinions/lawmakers-have-a-rare-chanceto-transform-medicaid-they-should-take-it/2017/06/27/f8e5408a-5b49-11e7-9b7d-14576dc0f39d _story.html?utm_term=.11a4dfe727df.
102. On November 7, 2017, at a speech before the National Association of Medicaid Directors, Defendant Verma declared that the ACA’s decision to “move[] millions of workingage, non-disabled adults into” Medicaid “does not make sense,” and announced that CMS would resist that change by approving state waivers that contain work requirements. Speech: Remarks by Administrator Seema Verma at the National Association of Medicaid Directors (NAMD) 2017 Fall Conference, CMS.Gov (Nov. 7, 2017), https://www.cms.gov/newsroom/fact-sheets/speechremarks-administrator-seema-verma-national-association-medicaid-directors-namd-2017-fall.
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103. On November 10, 2017, Defendant Verma gave an interview in which she declared that one of the “major, fundamental flaws in the Affordable Care Act was putting in able bodied adults,” declaring that Medicaid was “not designed for an able bodied person,” and announcing that CMS is “trying” to “restructure the Medicaid program.” Wall Street Journal, The Future of: Health Care (Nov. 10, 2017), http://www.wsj.com/video/the-future-of-health-care/D5B767E4B2F2-4394-90BB-37935CCD410C.html.
104. In or around early November 2017, CMS revised its website to invite states to submit Section 1115 waivers that would:
1. Improve access to high-quality, person-centered services that produce positive health outcomes for individuals;
2. Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term;
3. Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals;
4. Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making;
5. Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and
6. Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.
Medicaid.gov, About Section 1115 Demonstrations, https://www.medicaid.gov/medicaid/section1115-demo/about-1115/index.html.
105. On January 11, 2018, well after the federal comment period for the Arkansas Works Amendment had closed, Defendant CMS issued a letter to State Medicaid Directors (“Dear State Medicaid Director Letter”), attached as Exhibit 6, herteo, titled “Opportunities to Promote Work and Community Engagement Among Medicaid Beneficiaries.”
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106. The nine-page document “announc[es] a new policy” that allows states to apply

“work and community engagement” requirements to certain Medicaid recipients—specifically,

“non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis

other than disability.” Dear State Medicaid Director Letter at 1, https://www.medicaid.gov/federal-

policy-guidance/downloads/smd18002.pdf.

107. The Dear State Medicaid Director Letter acknowledges that allowing states to

implement work requirements “is a shift from prior agency policy.” Id. at 3.

108. The Dear State Medicaid Director Letter outlines the “guidelines” for states to

consider in submitting applications containing work requirements.

109. The Dear State Medicaid Director Letter was not submitted for notice and public

comment and was not published in the Federal Register.

110. The same day CMS issued the Dear State Medicaid Director Letter, it received

several letters critical of this novel policy position, including from members of Congress and

nonprofit organizations. The National Health Law Program (“NHeLP”) noted that by announcing

the policy change after the Arkansas Works comment period had closed, CMS had not given the

public the ability to comment meaningfully on the pending Arkansas Amendment. NHeLP further

noted that the Dear State Medicaid Director Letter “entirely ignore[d] the wealth of literature

regarding the negative health consequences of work requirements, which was repeatedly cited by

NHeLP and others in those state-specific comments.” Letter from Jane Perkins, Legal Director,

Nat’l Health Law Program, to Brian Neale, Dir., Ctrs. For Medicare & Medicaid Servs. (Jan. 11,

2018),

http://www.healthlaw.org/component/jsfsubmit/showAttachment

?tmpl=raw&id=00P0W00000ozROSUA2.

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111. NHeLP requested that CMS re-open public comment on the Arkansas Works

project to allow the public a meaningful opportunity to comment. Defendants ignored this request.

112. On or about January 18, 2018, CMS further emphasized that it disagrees with the

legislative expansion of Medicaid under the ACA and that it had announced the “new policy

guidance” to support state implementation of work requirements intended to target that expansion

population. CMS, Community Engagement Initiative Frequently Asked Questions,

https://www.medicaid.gov/medicaid/section-1115-demo/community-engagement/index.html

(last visited August 13, 2018).

113. When Defendant Verma announced approval of the Arkansas Works Amendment

on March 5, 2018, she tied it to the Dear State Medicaid Director Letter, tweeting,

“#ArkansasWorks is the 3rd community engagement demonstration we’ve approved since

releasing guidance in January. @CMSgov has 9 pending applications with similar demonstration

applications and several states have expressed interest in exploring these reforms.

#TransformingMedicaid.” Seema Verma, Administrator, Ctrs. for Medicare & Medicaid Servs.

(@SeemaCMS),

Twitter

(Mar.

5,

2018,

9:45

AM),

https://twitter.com/SeemaCMS/status/970716905379123205.

114. In approving the Arkansas work and community engagement requirement, CMS

cited the Dear State Medicaid Director Letter and imposed a number of terms and conditions on

the State. Amendment Approval at Ex. 2 at 3-4. Several of those terms and conditions require that

Arkansas follow requirements set out in the Dear State Medicaid Director Letter. See, e.g., id. at

27 (exempting from work requirement enrollees with an acute medical condition that would

prevent compliance); id. (exempting enrollees participating in substance use disorder treatment);

id (exempting enrollees who are exempt from SNAP/TANF work requirements); id. at 20-21

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(requiring reasonable modifications for enrollees with ADA-protected disabilities, including

exemption from participation); id. at 32 (promising that Arkansas will assess areas with limited

economies and/or educational activities or higher barriers to participation to determine whether

further exemptions or modifications are needed to the work requirement).

115. Each waiver approval including work requirements that has come after the Dear

State Medicaid Director Letter—Kentucky, Arkanasas, Indiana, and New Hampshire—invokes

the Dear State Medicaid Director Letter and reflects its requirements.

116. In July 2018, Defendant Azar stated: “We are undeterred. We are proceeding

forward… We’re fully committed to work requirements and community participation in the

Medicaid program… we will continue to litigate, we will continue to approve plans, we will

continue to work with states. We are moving forward.” Colby Itkowitz, The Health 202: Trump

administration ‘undeterred’ by court ruling against Medicaid work requirements, Wash. Post, July

25,

2018,

https://www.washingtonpost.com/news/powerpost/paloma/the-health-

202/2018/07/27/the-health-202-trump-administration-undeterred-by-court-ruling-against-

medicaid-work-requirements/5b5a10bb1b326b1e64695577/?utm_term=.7ba76e8a0719.

G. The Constitution’s Take Care Clause

117. The United States Constitution provides that “All legislative Powers herein granted

shall be vested in a Congress of the United States.” U.S. Const., art. I, § 1. Congress is authorized

to “make all laws which shall be necessary and proper for carrying into Execution” its general

powers. Id. §§ 1, 8.

118. After a federal law is duly enacted, the President has a constitutional duty to “take

Care that the Laws be faithfully executed.” Id. art. II, § 3.

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119. The Take Care Clause is judicially enforceable against presidential action that undermines statutes enacted by Congress and signed into law. See, e.g., Angelus Milling Co. v. Comm’r, 325 U.S. 293, 296 (1945) (“Insofar as Congress has made explicit statutory requirements, they must be observed and are beyond the dispensing power of [the Executive Branch].”); Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 612-13 (1838).
120. The Take Care Clause limits the President’s power and ensures that he will faithfully execute the laws that Congress has passed.
121. Under the Constitution, the President lacks the authority to rewrite congressional statutes or to direct federal officers or agencies to effectively amend the statutes he is constitutionally required to execute.
122. The Administrator of CMS has expressed the need to “fundamentally transform Medicaid.”
123. The power to “transform” a congressional program is a legislative power vested in Congress. An effort to “transform” a statute outside that legislative process is at odds with the President’s constitutional duty to take care that the laws be faithfully executed.
124. The Medicaid population targeted by the Arkansas Works Amendment is the socalled “expansion population,” which Congress added to Medicaid in the Affordable Care Act. The Executive Branch has repeatedly expressed its hostility to the Affordable Care Act and its desire to undermine its operation. An effort to undermine the Affordable Care Act by undoing the extension of Medicaid to the expansion population is at odds with the President’s duty to take care that the laws be faithfully executed.
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H. Effects of the Arkansas Works Amendment on the Plaintiffs 125. By approving the Arkansas Works Amendment, the Secretary has enabled the State to impose requirements and procedures that punish Plaintiffs by prohibiting them from obtaining and retaining Medicaid coverage. 126. By approving the Arkansas Works Amendment, the Secretary has allowed the State to ignore ACA requirements to streamline Medicaid enrollment and continued program participation. Plaintiffs should be able to submit information to Arkansas online, in-person, by mail, or by telephone. However, under the Secretary’s approval of the Arkansas Works Amendment, they are restricted to only online submission of work requirement and exemption documentation—a difficult, if not impossible task for Plaintiffs on a regular basis due to lack of internet access, trouble using computers, and problems working with the online portal. Instead of simplifying the Medicaid system for individuals, the Secretary’s approval to disregard these ACA requirements for the primary purpose of making things simpler and cheaper for Arkansas, results in harm to those who rely on Arkansas Works for health coverage. 127. By approving the Arkansas Works Amendment, the Secretary has permitted Arkansas to eliminate the three months of retroactive coverage required under the Medicaid Act and instead provide only one month of coverage prior to the month of application. If a Plaintiff loses coverage and then reapplies, the Plaintiff will not have retroactive coverage for health services received during the gap in coverage. Plaintiffs who lose coverage after three months of non-compliance with the work requirement and then re-enroll the following year will lose two months of retroactive coverage they would have otherwise had during the gap in coverage. 128. Continuous and adequate health insurance coverage is fundamental for each Plaintiff’s ability to stay as healthy as possible and to work.
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129. The Secretary’s action approving the Arkansas Works Amendment will cause harm to Plaintiffs. Specifically:
130. Plaintiff Charles Gresham is a 37-year-old man who lives with his fiancé in Harrison, Arkansas. Mr. Gresham’s fiancé works at a fast food restaurant earning about $9 an hour with a gross income of about $1100 per month. She currently supports Mr. Gresham financially and is his source of transportation.
131. Mr. Gresham has his GED and has largely worked in the food service industry. In 2015, he went to work as a labor hand with a local construction company but was let go after about a year because he began having seizures on the job. Mr. Gresham went back to the food service industry and other service jobs, but has lost those jobs due to issues related to his seizures, including missing work.
132. Although Mr. Gresham would like to work, he is not working at this time because he has had trouble finding and keeping a job. Despite his health conditions, he can do some types of work but needs a flexible schedule because he may not be able to work all day and he needs times for doctors’ appointments.
133. Mr. Gresham has medical conditions that need to be monitored and treated. He has a seizure disorder, extreme social anxiety, and asthma. With Medicaid coverage through Arkansas Works, he has been able to the get the treatment and services he needs, including doctors and therapists.
134. Mr. Gresham has been covered by Medicaid through Arkansas Works since 2015. When he has questions or needs help in renewing his coverage, Mr. Gresham has gone to the local Arkansas Department of Human Services office in Boone County. He is not comfortable with computers and generally requires help from other people when going online, especially to fill
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something out or send in information. Mr. Gresham recently tried to navigate the Access Arkansas website and could not report his work activities online without assistance from his fiancé and Legal Aid of Arkansas. Up until recently, Medicaid coverage has been mostly easy for him to obtain, but the Arkansas Works notices and materials he has received in the past few months have been confusing and difficult to understand.
135. In May 2018, Mr. Gresham received a notice that he would be subject to the work requirement for Arkansas Works. He was unable to meet the work requirement in June and July 2018 because he has been unable to find and maintain a job. He cannot meet the requirement through volunteering or searching for jobs consistently because he does not have his own transportation, is not comfortable with computers, and may not be able to do an activity as scheduled.
136. Mr. Gresham received a letter from DHS stating he was exempt from the work requirements due to receiving unemployment benefits. He is no longer receiving unemployment benefits and has notified DHS that his situation has changed. Mr. Gresham does not currently have an exemption to the work requirement and does not expect his situation to change in the coming months such that he will be able to meet the requirements.
137. Mr. Gresham has previously had gaps in health care coverage that caused him to go without the care he needed. In April 2018, he had a month-long gap that caused him to miss a therapist visit and three doctors’ appointments. Although during that gap he had enough medications to get him through, if he were immediately cut off from his medications, his seizure disorder would be much worse and potentially harmful to him.
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138. The threat of losing his health coverage has increased Mr. Gresham’s anxiety as he worries that without medical coverage his conditions will get worse and that he may suffer irreversible harm or die before he has an opportunity to figure out what is causing his seizures.
139. Plaintiff Cesar Ardon is a 40-year-old man who lives in Siloam Springs, Arkansas. 140. Mr. Ardon worked as a welder for fifteen years until he had a tumor surgery in May 2017. Currently, Mr. Ardon works in construction as a self-employed handyman doing mostly outdoor work. His income and hours fluctuate greatly from month to month. He earned about $1,200 in July 2018 but typically earns less during other times of year. 141. As a self-employed handyman, Mr. Ardon’s work hours change from week to week based on the type of work he gets. Sometimes he is able to work 20 hours a week; other times, especially in the fall and winter when work is slower, he works less. 142. Prior to receiving Medicaid in 2017, Mr. Ardon often did not get the medical care that he needed. For example, he did not get treatment for carpal tunnel, arthritis, and vision issues because he could not afford it. 143. In 2017, Mr. Ardon had major surgery to remove a baseball-sized tumor on his side. He also currently has medical conditions that require monitoring, such as high cholesterol. With Medicaid, he is able to get the treatment and services he needs, as well as annual check-ups. 144. In May 2018, Mr. Ardon received a notice stating he would have to work at least 80 hours a month to keep his Medicaid coverage. Mr. Ardon did not have enough hours to meet the work requirement in June 2018 and received a notice from DHS in July 2018 that he failed to comply with the work requirements for June. 145. In July 2018, Mr. Ardon was able to work enough hours to meet the work requirement. Although he met the hours requirement, Mr. Ardon had trouble accessing the online
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portal to report his hours. He has not received confirmation that his online report for July 2018’s work activities was accepted.
146. Mr. Ardon does not expect to always be able to get 80 hours of month of work, such that he will be able to meet the requirements. Mr. Ardon is concerned that he will lose his Medicaid coverage because he will not be able to meet the work requirements or because of problems reporting on the online portal. Mr. Ardon worries about getting sick, being unable to work, and losing access to health care if he loses his Medicaid coverage.
147. Mr. Ardon fears what will happen because he cannot predict his future or health. He depends on Medicaid to help him get through the ups and downs of life, especially if he has trouble finding work.
148. Plaintiff Marisol Ardon is a 44-year-old woman who lives in Siloam Springs, Arkansas with her adult daughter. She is separated from her husband, Mr. Ardon, but he rents a room with a separate entrance to her home.
149. Ms. Ardon previously worked answering phones and connecting people to social service agencies and other community resources. In 2013, her job changed slightly and for the next four years she continued to do the same type of work but she did not have the same health care coverage. Ms. Ardon had a gap in health care coverage from about 2013 until 2015 when she started receiving health care coverage from Arkansas Works. During that gap, she paid for basic health care out of her pocket, such as when she had the flu, but she did not go to the doctor for an annual physical, get any blood work, or receive other services.
150. Ms. Ardon has several medical conditions that need to be treated and monitored. She has a hernia in her stomach, thyroid problems, asthma, anxiety attacks, and chronic back pain.
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Her back pain is associated with a 25-pound non-cancerous tumor in her midsection that she had removed in July 2017.
151. Ms. Ardon uses her Medicaid coverage to get her four daily medications, regular doctor visits with her primary care doctor and specialists, and to get annual checkups.
152. Ms. Ardon has not worked since about March 2017 because of her health issues at the time. She does not currently have income from work and relies on her adult daughter to pay rent and other household expenses.
153. Ms. Ardon confirmed with DHS that she needs to meet the work requirement and is not exempt. She has not met the requirements in June and July of 2018, and she does not expect to meet the requirement in August.
154. Ms. Ardon tried to create her account on the online portal, but had difficulty with the website. The portal rejected her attempts to create an account several times. Ms. Ardon found the long letters from DHS confusing and does not fully understand the requirements and exemptions. She telephoned DHS for assistance and submitted a paper about not working because of her back, but she has not heard back from DHS.
155. Ms. Ardon does not expect her situation to change and is worried about meeting the requirements either through work or an exemption. She needs her health care coverage to address her health issues. The uncertainty around her Medicaid coverage and the work requirements has increased her anxiety, including having more panic attacks per day because of her concerns about her health care coverage.
COUNT ONE: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (DEAR STATE MEDICAID DIRECTOR LETTER)
156. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
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157. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D)
158. The approval of the Arkansas Works Amendment was explicitly based in substantial part on the policy announced in the Dear State Medicaid Director Letter. Amendment Approval at Ex. 2 at 2.
159. The Dear State Medicaid Director Letter was required to be, but was not, issued through notice and comment rulemaking. See 5 U.S.C. § 553.
160. In issuing the Dear State Medicaid Director Letter, the Defendants purported to act pursuant to Section 1115 of the Medicaid Act.
161. Authorization of work and community engagement requirements is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
162. In the Dear State Medicaid Director Letter, the Defendants relied on factors that Congress has not intended them to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for their decision that runs counter to the evidence.
163. The Defendants’ issuance of the Dear State Medicaid Director Letter exceeded the Secretary’s Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT TWO: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (ARKANSAS WORKS AMENDMENT APPROVAL)
164. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
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165. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
166. The Secretary’s decision to approve the Arkansas Works Amendment as described herein exceeded his authority under 42 U.S.C. § 1315, otherwise violated the Medicaid Act, was arbitrary and capricious and an abuse of discretion, and ran counter to the evidence in the record.
167. Plaintiffs will suffer irreparable injury if the Secretary’s actions approving the Arkansas Works Amendment are not declared unlawful because those actions have harmed and will continue to harm Plaintiffs.
168. Plaintiffs are in danger of suffering irreparable harm and have no adequate remedy at law.
COUNT THREE: VIOLATION OF THE TAKE CARE CLAUSE, ARTICLE II, SECTION 3, CLAUSE 5
169. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
170. Plaintiffs have a non-statutory right of action to enjoin and declare unlawful official action that is ultra vires.
171. The United States Constitution provides that “All legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Const., art. I, § 1. Congress is authorized to “make all laws which shall be necessary and proper for carrying into Execution” its general powers. Id. §§ 1, 8.
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172. The Defendants’ actions, as described herein, seek to undermine the ACA, including its expansion of Medicaid, and represent a fundamental alteration to those statutes.
173. Accordingly, the Defendants’ actions are in violation of the Take Care Clause and are ultra vires.
174. Plaintiffs will suffer irreparable injury if the Secretary’s actions following the President’s Executive Orders are not declared unlawful and unconstitutional because those actions have injured or will continue to harm Plaintiffs.
175. Plaintiffs are in danger of suffering irreparable harm and have no adequate remedy at law.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectfully ask that this Court: 1. Declare that Defendants’ issuance of the Dear State Medicaid Director Letter
violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 2. Declare that Defendants’ approval of the Arkansas Works Amendment violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 3. Preliminarily and permanently enjoin Defendants from implementing the practices purportedly authorized by the January 11, 2018 Dear State Medicaid Director Letter and the Arkansas Works Amendment. 4. Award Plaintiffs their reasonable attorneys’ fees and costs pursuant to 28 U.S.C. § 2412; and 5. Grant such other and further relief as may be just and proper.
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August 14, 2018
Respectfully submitted,
By: /s/ Jane Perkins Jane Perkins Elizabeth Edwards Catherine McKee National Health Law Program 200 N. Greensboro Street, Suite D-13 Carrboro, NC 27510 Phone: 919-968-6308 (x101) perkins@healthlaw.org mckee@healhtlaw.org edwards@healthlaw.org
/s/ Kevin De Liban Kevin De Liban Trevor Hawkins Legal Aid of Arkansas 310 Mid-Continent Plaza, Suite 420 West Memphis, AR 72301 Phone: 870-732-6370 (x2206) kdeliban@arlegalaid.org thawkins@arlegalaid.org
/s/ Samuel Brooke Samuel Brooke Neil K. Sawhney Southern Poverty Law Center 400 Washington Avenue Montgomery, AL 36104 Phone: 334-956-8200 samuel.brooke@splcenter.org neil.sawhney@splcenter.org
Counsel for Plaintiffs
38

 
 Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 1 of 53

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Civil Action No. 1:18-cv-01900

CHARLES GRESHAM

)

123 W. Ridge Ave., Apt. C, Harrison, AR 72601 )

)

ADRIAN MCGONIGAL

)

7105 Parkview Pl., Bentonville, AR 72717

)

)

CESAR ARDON

)

1613 E. Tahlequah St., Siloam Springs, AR 72761 )

)

MARISOL ARDON

)

1613 E. Tahlequah St., Siloam Springs, AR 72761 )

)

ANNA BOOK

)

1111 W. 7th St., Little Rock, AR 72201

)

)

RUSSELL COOK

)

1111 W. 7th St., Little Rock, AR 72201

)

)

VERONICA WATSON

)

6288 Hwy. 238, Moro, AR 72368

)

)

TREDA ROBINSON

)

2909 E. Moore Ave., Bldg. 10 Apt. 4, Searcy, AR )

72143

)

)

JAMIE DEYO

)

21 Windwood Cove Ward, AR 72176

)

)

Plaintiffs,

)

)

v.

)

)

ALEX M. AZAR II

)

SECRETARY, UNITED STATES DEPART-

)

MENT OF HEALTH AND HUMAN SERVICES )

in his official capacity

)

200 Independence Avenue, S.W.

)

Washington, DC 20201

)

)

SEEMA VERMA

)

ADMINISTRATOR, CENTERS FOR MEDI-

)

CARE AND MEDICAID SERVICES

)

Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 2 of 53

in her official capacity

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

UNITED STATES DEPARTMENT OF HEALTH )

AND HUMAN SERVICES

)

200 Independence Avenue, S.W.

)

Washington, DC 20201

)

)

CENTERS FOR MEDICARE AND MEDICAID )

SERVICES

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

Defendants, and

)

)

STATE OF ARKANSAS

)

323 Center Street, Ste. 200

)

Little Rock, AR 72201

)

)

Defendant-Intervenor.

)

__________________________________________________________________

FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF1
____________________________________________________________________

PRELIMINARY STATEMENT

1. This case challenges the ongoing efforts of the Executive Branch to bypass the

legislative process and act unilaterally to fundamentally transform Medicaid, the cornerstone of

the social safety net. Purporting to invoke a narrow statutory waiver authority that allows

experimental projects “likely to assist in promoting the objectives” of Medicaid, the Executive

Branch has instead effectively rewritten the statute, ignoring congressional restrictions,

overturning a half-century of administrative practice, and threatening irreparable harm to the health

1 Plaintiffs submit this first amended complaint pursuant to the minute entry from September 28, 2018 adopting the Joint Proposed Briefing Schedule and ordering the Plaintiffs to file their Motion for Summary Judgment and First Amended Complaint by November 5, 2018.

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and welfare of the poorest and most vulnerable in our country. The result has been catastrophic for the people of Arkansas. More than 8,400 individuals, including Plaintiffs Adrian McGonigal and Jamie Deyo, have lost access to vital health care over the span of just two months, and thousands more are at significant risk of losing the same.
2. The Medicaid program provides health insurance coverage to more than 75 million low-income people in the United States. Medicaid enables states to provide a range of federally specified preventive, acute, and long-term health care services to individuals “whose income and resources are insufficient to meet the costs of necessary medical services.” As described in more detail below, the core populations covered by Medicaid include children; pregnant women; the aged, blind, or disabled; and, as added by the Affordable Care Act (“ACA”), adults with household incomes of less than 133% of the federal poverty level (“FPL”) (currently $12,140 for an individual; $16,460 for a family of two).
3. The Medicaid program offers a deal for states. If a state chooses to participate, the federal government will contribute the lion’s share of the cost of providing care. In return, the state agrees to pay the remaining portion of the costs of care and to follow all federal requirements, including those regarding the scope of coverage and eligibility for the program. States may not impose additional eligibility requirements other than those set forth in the Medicaid Act, and states cannot pick and choose among individuals within a covered population group.
4. The Social Security Act, of which the Medicaid Act is a part, does permit the Secretary of Health and Human Services (“Secretary” or “HHS”) to waive certain federal Medicaid requirements, but only in narrow circumstances — when necessary to allow a state to carry out an experimental or pilot program that is likely to promote the objectives of the Medicaid Act.

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5. In 2014, Arkansas obtained such a waiver to expand its Medicaid program to cover the adults made eligible through the ACA by using private health plans. In 2016, this waiver was renewed and extended through 2021. Consistent with previous agency actions, HHS denied Arkansas’ request to impose a work requirement as a condition of eligibility, finding such a requirement was not consistent with the objectives of the Medicaid Act.
6. Early in 2017, the current HHS abruptly reversed course, signaling to states that it would revise its use of the waiver authority in Medicaid as part of President Trump’s vow to “explode” the ACA and its Medicaid expansion. On June 30, 2017, Arkansas Governor Asa Hutchinson submitted the “Arkansas Works Amendment,” a request to the Secretary of HHS to implement a work requirement as a condition of Medicaid eligibility in order to “promot[e] personal responsibility and work, encourag[e] movement up the economic ladder, and facilitat[e] transitions from Arkansas Works” to private coverage.
7. While the Arkansas Works Amendment was pending, HHS announced a new Medicaid waiver policy through a letter to State Medicaid Directors in January 2018. (“State Medicaid Director Letter”). Reversing decades of agency guidance, and consistent with the Administrator’s own expressed view of the need to “fundamentally transform Medicaid,” the State Medicaid Directors announced the agency’s intention to, for the first time, approve waiver applications containing work requirements and outlined “guidelines” for states to consider in submitting such applications. On March 5, 2018, citing the State Medicaid Director Letter, the Secretary approved the Arkansas Works Amendment, and Arkansas began implementing the Amendment on June 1, 2018.
8. Plaintiffs are among the many people who are affected by the Arkansas Works Amendment. Plaintiffs have worked throughout their lives in a range of jobs, such as janitor, dish

Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 5 of 53
washer, restaurant server, landscaper, factory worker, and handyman. Plaintiffs need health coverage to access treatment for serious medical conditions like chronic obstructive pulmonary disease, iron deficiency anemia, seizures, mental health disorders, rheumatoid arthritis, thyroid disorders, and asthma. Without access to Medicaid coverage, Plaintiffs will be forced to forgo treatment for these conditions, or will incur significant medical debt when their conditions become so severe that they have no choice but to seek treatment in the emergency department.
9. The State Medicaid Director Letter and subsequent approval of Arkansas’ application are unauthorized attempts to re-write the Medicaid Act, and the use of the Social Security Act’s waiver authority to “transform” Medicaid is an abuse of that authority. The Defendants’ actions here thus violate both the Administrative Procedure Act and the Constitution, and they cannot survive.
JURISDICTION AND VENUE 10. This is an action for declaratory and injunctive relief for violations of the Administrative Procedure Act, the Social Security Act, and the United States Constitution. 11. The Court has jurisdiction over Plaintiffs’ claims pursuant to 28 U.S.C. §§ 1331 and 1361, and 5 U.S.C. §§ 702 to 705. This action and the remedies it seeks are further authorized by 28 U.S.C. §§ 1651, 2201, and 2202, and Federal Rule of Civil Procedure 65. 12. Venue is proper under 28 U.S.C. §§ 1391(b)(2) and (e).
PARTIES 13. Plaintiff Charles Gresham is a 37-year-old man who lives in Harrison, Boone County, Arkansas, with his fiancé. Mr. Gresham is enrolled in the Arkansas Medicaid program.

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14. Plaintiff Adrian McGonigal is a 40-year-old man who lives in Pea Ridge, Benton County, Arkansas, with his brother. Mr. McGonigal was recently disenrolled from the Arkansas Medicaid Program for failing to comply with work requirements.
15. Plaintiff Cesar Ardon is a 40-year-old man who lives in Siloam Springs, Benton County, Arkansas, and is enrolled in the Arkansas Medicaid program.
16. Plaintiff Marisol Ardon is a 45-year-old woman who lives in Siloam Springs, Benton County, Arkansas, with her adult daughter. Ms. Ardon is enrolled in the Arkansas Medicaid program.
17. Plaintiff Anna Book is a 38-year-old woman who lives in Little Rock, Pulaski County, Arkansas. Ms. Book is enrolled in the Arkansas Medicaid program.
18. Plaintiff Russell Cook is a 26-year-old man who lives in Little Rock, Pulaski County, Arkansas. He is currently homeless. Mr. Cook is enrolled in the Arkansas Medicaid Program.
19. Plaintiff Veronica Watson is a 36-year-old woman who lives in Moro, Lee County, Arkansas. Ms. Watson is enrolled in the Arkansas Medicaid Program.
20. Plaintiff Treda Robinson is a 42-year-old woman who lives in Searcy, White County, Arkansas. Ms. Robinson is enrolled in the Arkansas Medicaid Program.
21. Plaintiff Jamie Deyo is a 38-year-old woman who lives in Lonoke, Lonoke County, Arkansas, with her parents. Ms. Deyo is currently enrolled in the Arkansas Medicaid Program.
22. Defendant Alex M. Azar II is the Secretary of the United States Department of Health and Human Services (“HHS”) and is sued in his official capacity. Defendant Azar (“the Secretary”) has overall responsibility for implementation of the Medicaid program, including

Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 7 of 53
responsibility for federal review and approval of state requests for waivers pursuant to Section 1115 of the Social Security Act.
23. Defendant Seema Verma is Administrator of the Centers for Medicare and Medicaid Services (“CMS”) and is sued in her official capacity. Defendant Verma is responsible for implementing the Medicaid program in the manner required by federal law, including as amended by the ACA.
24. Defendant HHS is a federal agency with responsibility for overseeing implementation of provisions of the Social Security Act, of which the Medicaid Act is a part.
25. Defendant CMS is the agency within HHS with primary responsibility for overseeing federal and state implementation of the Medicaid Act.
26. Defendant-Intervenor, the State of Arkansas, filed an unopposed motion for intervention, which was granted on September 6, 2018.
BACKGROUND AND FACTUAL ALLEGATIONS A. The Medicaid Program 27. Title XIX of the Social Security Act establishes the cooperative federal-state medical assistance program known as Medicaid. See 42 U.S.C. §§ 1396 to 1396w-5. Medicaid’s stated purpose is to enable each state, as far as practicable, “to furnish [] medical assistance” to individuals “whose income and resources are insufficient to meet the costs of necessary medical services” and to provide “rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” Id. § 1396-1. 28. The statute defines “medical assistance” to be a range of health care services that participating states must cover or are permitted to cover. Id. § 1396d(a). 29. Although states do not have to participate in Medicaid, all have chosen to do so.

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30. Each participating state must maintain a comprehensive state Medicaid plan for medical assistance that the Secretary has approved. Id. § 1396a.
31. The state Medicaid plan must describe the state’s Medicaid program and affirm its commitment to comply with the requirements imposed by the Medicaid Act and its associated regulations.
32. State and federal governments share responsibility for funding Medicaid. Section 1396b requires the Secretary to pay each participating state the federal share of “the total amount expended . . . as medical assistance under the State plan.” Id. §§ 1396b(a)(1), 1396d(b). The federal reimbursement rate is based on the state’s relative per capita income.
B. Medicaid Eligibility and Coverage Requirements 33. Using household income and other specific criteria, the Medicaid Act delineates who is eligible to receive Medicaid coverage. Id. §§ 1396a(a)(10)(A), (C). The Act identifies required coverage groups as well as options for states to extend Medicaid to additional population groups. Id. 34. To be eligible for federal Medicaid funding, states must cover, and may not exclude from Medicaid, individuals who: (1) are part of a mandatory population group; (2) meet the minimum financial eligibility criteria applicable to that population group; (3) are residents of the state in which they apply; and (4) are U.S. citizens or certain qualified immigrants. Id. §§ 1396a(a)(10)(A), 1396a(b)(2), (3); 8 U.S.C. §§ 1611, 1641. 35. The mandatory Medicaid population groups include children; parents and certain other caretaker relatives; pregnant women; and the elderly, blind, or disabled. 42 U.S.C. § 1396a(a)(10)(A)(i).

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36. In 2010, Congress passed, and the President signed, comprehensive health insurance reform legislation, the Patient Protection and Affordable Care Act (“ACA”). Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029. “The Act aims to increase the number of Americans covered by health insurance and decrease the cost of health care.” Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012).
37. As part of the effort to ensure comprehensive health insurance coverage, Congress amended the Medicaid Act to add an additional mandatory population group. Effective January 1, 2014, the Medicaid Act requires participating states to cover adults who are under age 65, not eligible for Medicare, do not fall within another Medicaid eligibility category, and have household income below 133% FPL. 42 U.S.C. §§ 1396a(a)(10)(A)(i)(VIII), 1396a(e)(14). This group is often called the “expansion population” or the “Section VIII population,” and it includes adults in a variety of family circumstances: parents living with children (whose incomes exceed the stateestablished limit for the mandatory parents/caretaker relatives population group); parents of older children who have left the home; and adults without children.
38. States receive enhanced federal reimbursement rates for medical assistance provided to the Medicaid expansion population: 94% federal dollars in 2019, and 90% for 2020 and each year thereafter. Id. § 1396d(y).
39. The Supreme Court’s decision in National Federation of Independent Business v. Sebelius barred HHS from terminating Medicaid funding to states that choose not to extend Medicaid coverage to the expansion population. 567 U.S. 519 (2012).

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40. States that cover the expansion population submit state plan amendments electing to provide this coverage. To date, 34 states, including Arkansas, have approved state plans covering the expansion population.
41. Once a state elects to expand coverage to the expansion population, it becomes a mandatory coverage group. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII).
42. As noted above, the Medicaid Act allows states to extend Medicaid eligibility to certain optional population groups, including children and pregnant women with incomes between 133% and 185% of FPL, see id. § 1396a(a)(10)(A)(ii)(IX), limited-income aged, blind, and/or disabled individuals receiving home and community-based services, id. § 1396a(a)(10)(A)(ii)(VI), and “medically needy” individuals who would fall within a mandatory population but for excess income, id. § 1396a(a)(10)(C).
43. The Medicaid Act requires a participating state to cover all members of a covered population group. In other words, the state may not cover subsets of a population group described in the Medicaid Act. Id. § 1396a(a)(10)(B). This requirement applies to optional and mandatory population groups: if a state elects to cover an optional group, it must cover all eligible individuals within that group. Id.
44. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. See id. § 1396(a)(10)(A).
45. In addition to addressing who is eligible for medical assistance, the Medicaid Act delineates how states must make and implement eligibility determinations to ensure that all eligible people who apply are served and get coverage.

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46. The Medicaid Act requires states to “provide such safeguards as may be necessary to assure that eligibility . . . and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients.” Id. § 1396a(a)(19).
47. The ACA requires states to use a streamlined Medicaid eligibility process so that individuals “may apply for enrollment in, receive a determination of eligibility for participation in, and continue participation in, [Medicaid].” Id. § 18083(a). Individuals must be able to file streamlined eligibility forms online, in person, by mail, or by telephone. Id. § 18083(b)(1)(A); see also 42 U.S.C. § 1396w-3 (requiring states to streamline and simplify process for persons to remain enrolled in Medicaid); 42 C.F.R. §§ 435.907(a) (requiring states to accept applications and any documentation required to establish eligibility by internet, telephone, mail, and in person); 435.908(a) (requiring states to provide assistance with applications and renewals in person, over the telephone, and online).
48. Since its enactment, the Medicaid Act has required states to determine eligibility and provide medical assistance to all eligible individuals with “reasonable promptness.” Social Security Amendments of 1965, Pub. L. No. 89-97, § 1902(a)(8), 79 Stat. 286, 344 (codified at 42 U.S.C. § 1396a(a)(8)); 42 C.F.R. §§ 435.906 (requiring states to allow individuals to apply without delay); 435.912(c)(3) (requiring states to determine eligibility within 90 days for individuals who apply on the basis of disability and 45 days for all other individuals).
49. Through so-called “presumptive” eligibility, the Medicaid Act gives states a mechanism to provide immediate, temporary coverage to individuals who appear to their health care provider to be Medicaid eligible based on preliminary information. 42 U.S.C. § 1396a(a)(47). Under the ACA, states must allow qualified hospitals to provide presumptive eligibility to their patients. See Pub. L. 111-148, § 2202, 124 Stat. 119, 291 (codified at 42 U.S.C. § 1396a(a)(47)(B)

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(eff. Jan. 1, 2014). See Ctrs. for Medicare & Medicaid Servs., Medicaid & CHIP FAQs: Implementing Hospital Presumptive Eligibility Programs (2014), http://bit.ly/2OwBCn6 (noting that hospital presumptive eligibility assures that individuals have timely access to care and promotes “ongoing Medicaid coverage by offering additional channels through which individuals can apply.”).
50. The Medicaid Act has always required states to provide retroactive coverage to certain individuals to ensure that they can obtain timely care and avoid incurring medical debts. Social Security Amendments of 1965, Pub. L. No. 89-97, § 1905(a), 79 Stat. 286, 351 (codified at 42 U.S.C. §§ 1396a(a)(34), 1396d(a)); see also S. Report No. 92-1230, 92nd Congress, 2nd Session, pg. 209 (1972) (noting the purpose of retroactive coverage is to protect individuals “who are eligible for [M]edicaid but do not apply for assistance until after they have received care, either because they did not know about the [M]edicaid eligibility requirements or because the sudden nature of their illness prevented their applying.”). Specifically, states must provide medical assistance for care provided in or after the third month before the month of application, as long as the enrollee would have been eligible for Medicaid at the time the services were received. 42 U.S.C. §§ 1396a(a)(34), 1396d(a).
C. The Secretary’s Section 1115 Waiver Authority 51. Section 1115 of the Social Security Act, codified at 42 U.S.C. § 1315, grants the Secretary authority to waive a state’s compliance with certain requirements of the Medicaid Act under certain conditions. 52. The Secretary may grant a Section 1115 Medicaid waiver only in the case of an “experimental, pilot, or demonstration project which . . . is likely to assist in promoting the objectives” of the Medicaid Act. Id. § 1315(a).

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53. The Secretary may only waive requirements of Section 1396a for Section 1115 projects relating to Medicaid. Id. § 1315(a)(1).
54. The Secretary may not waive compliance with requirements that Congress has placed outside of Section 1396a.
55. The Secretary may grant a Section 1115 waiver only to the extent and for the period necessary to enable the state to carry out the experimental, pilot, or demonstration project. Id.
56. The costs of such a project, upon approval, are included as expenditures under the State Medicaid plan. Id. § 1315(a)(2).
57. The Secretary must follow certain procedural requirements before he may approve a Section 1115 project. Id. § 1315(d); 42 C.F.R. §§ 431.400 to 431.416. In particular, after receiving a complete application from a state (following a state-level public comment period), the Secretary must provide a 30-day public notice and comment period. 42 U.S.C. § 1315(d); 42 C.F.R. § 431.416.
58. The Secretary does not have the authority under Section 1115 to waive compliance with other federal laws, such as the United States Constitution, the Americans with Disabilities Act, or other federal statutes.
59. For example, the Fair Labor Standards Act (“FLSA”) requires that all individuals, including individuals receiving public benefits, be compensated at least the minimum wage in exchange for hours worked. See 29 U.S.C. § 206(a)(1)(C); Dep’t of Labor, How Workplace Laws Apply to Welfare Recipients at 2 (1997), http://bit.ly/2QlKnC7. Notably, the Supplemental Nutrition Assistance Program (“SNAP”) and Temporary Assistance for Needy Families (“TANF”) statutes specifically refer to work requirements and further describe how the benefits interact with the FLSA minimum wage protections. See 7 U.S.C. § 2029(a)(1) (SNAP); 42 U.S.C. § 607

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(TANF). There are no such references or descriptions in the Medicaid Act. According to the Department of Labor, medical assistance, unlike SNAP and TANF cash benefits, may not be substituted for a wage. See How Workplace Laws Apply to Welfare Recipients at 4.
D. Medicaid in Arkansas 60. Arkansas, like all other states, has elected to participate in Medicaid. See Ark. Code Ann. §§ 20-77-101 to 20-77-2811, 23-61-1004 to 23-61-1009. The Department of Human Services (“DHS”) administers the program at the state level. 61. HHS typically reimburses Arkansas for over 70% of the cost of providing medical assistance through its Medicaid program. See 81 Fed. Reg. 80078-79 (Nov. 15, 2016) (70.87%, in fiscal year 2017); 82 Fed. Reg. 55383-85 (Nov. 21, 2017) (70.51% in fiscal year 2018). 62. Effective January 1, 2014, Arkansas expanded its Medicaid program to include the Medicaid expansion population, i.e., adults who are under age 65; do not fit into another Medicaid (or Medicare) eligibility category; and have household income below 133% of FPL. As noted above, Arkansas receives enhanced federal reimbursement for medical assistance provided to this group: 94% federal dollars in 2019, and 90% for 2020 and each year thereafter. 42 U.S.C. § 1396d(y). 63. Arkansas implemented the Medicaid expansion through a Section 1115 project called the “Arkansas Health Care Independence Program” (“HCIP”). See Letter from Marilyn Tavenner, Admin., Ctrs. for Medicare & Medicaid Servs., to Andy Allison, Dir., Arkansas Dep’t of Human Servs. (Sept. 27, 2013) (approving HCIP through December 31, 2016), http://bit.ly/2SLRJQV (last visited Aug. 8, 2018). 64. HCIP allowed the State to cover most of the expansion population through a “private option.” Under the private option, individuals receive medical assistance through a private

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health plan, and the Medicaid program covers the enrollees’ portion of the premiums and cost sharing. Id. Because the private plans do not cover all of the services that the Medicaid Act requires Arkansas to provide, enrollees continue to receive some services directly through DHS on a feefor-services basis. See id. at Special Terms and Conditions ¶ 36-37.
65. In 2014 and 2015, more than 225,000 individuals received coverage through HCIP. Arkansas Ctr. for Health Improvement, Arkansas Health Care Independence Program (“Private Option”) Section 1115 Demonstration Waiver Interim Report 16, 21 (2016), http://bit.ly/2qpPNjU. During that time, Arkansas saw “a reduction in the uninsured rate for adults from 22.5 percent to 9.6 percent, the largest reduction observed nationwide.” Id. at 20.
66. Medicaid expansion in Arkansas has been associated with a variety of positive health outcomes, including increased useof preventive services, outpatient office visits, and chronic disease care; decreased reliance on emergency rooms; fewer skipped medications due to cost; better quality care; and improved self-reported health. Benjamin D. Sommers et al., Changes in Utilization and Health Among Low-Income Adults After Medicaid Expansion or Expanded Private Insurance, 176 JAMA Internal Medicine 1501, 1505-06 (2016).
67. In mid-2016, Arkansas requested permission from HHS to extend and amend HCIP, renaming the project “Arkansas Works.” Letter from Asa Hutchinson, Governor of Arkansas, to Sylvia Mathews Burwell, Sec’y, U.S. Dep’t Health & Human Servs. (June 28, 2016), http://bit.ly/2JGWwij.
68. The Secretary extended the Section 1115 project through the end of 2021. Letter from Andrew M. Slavitt, Acting Admin., Ctrs. for Medicare & Medicaid Servs., to Cindy Gillespie, Dir., Arkansas Dep’t of Human Servs. (Dec. 8, 2016), http://bit.ly/2OpcDSs.

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69. The Secretary also approved several changes to the project. Most notably, the Secretary granted Arkansas a conditional waiver of retroactive eligibility, which permitted the State to implement the waiver if it demonstrated compliance with the following three conditions: (1) provide Medicaid coverage during a reasonable period to individuals who are otherwise eligible for Medicaid and attest to eligible immigration status, while they verify their immigration status, as required under 42 U.S.C. § 1320b-7(d); (2) complete a Mitigation Plan to address backlogs in processing Medicaid applications and provide written assurance to the Secretary that “eligibility determinations and redeterminations are completed on a timely basis;” and (3) allow qualified hospitals to enroll their patients in Medicaid through presumptive eligibility, as required under 42 U.S.C. § 1396a(a)(47)(B)). Id. at Waiver List ¶ 7.
70. Arkansas DHS did not implement hospital presumptive eligibility. E. The Arkansas Works Amendment 71. On or about June 30, 2017, Governor Hutchinson submitted a request to the Secretary to amend Arkansas Works. Letter from Asa Hutchinson, Governor of Arkansas, to Thomas E. Hargan, Sec’y, U.S. Dep’t of Health & Human Servs. (June 30, 2017) (“Arkansas Works Amendment”) (attached as Exhibit 1, hereto). 72. Arkansas requested permission to implement a work and community engagement requirement, to limit individuals to online reporting, and to eliminate three-month retroactive coverage. Arkansas also sought permission to phase out Medicaid coverage of individuals with household income above 100% of the FPL. Id. 73. Governor Hutchinson described the proposed Amendment as designed to “promot[e] personal responsibility and work, encourage[e] movement up the economic ladder, and facilitate[e] transitions from Arkansas Works” to private coverage. Id. The State commented that

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the changes would better position Arkansas Works to focus on “the most vulnerable enrollees.” Id. at App. C, p. 2.
74. The State’s request did not provide an estimate of the number of individuals who would lose coverage as a result of the work requirement. Likewise, Arkansas did not indicate the number of individuals who would incur medical costs due to the elimination of retroactive coverage or the amount of those costs.
75. CMS held a public comment period on the proposed Amendment from July 11, 2017 to August 10, 2017. Medicaid.gov, Arkansas Works Amendment, http://bit.ly/2Qhq88x.
76. On March 5, 2018, the Secretary issued his approval letter for the Arkansas Works Amendment, pursuant to Section 1115 and effective through the end of 2021. See Letter from Seema Verma, Admin., Ctrs. for Medicare & Medicaid Servs. to Cindy Gillespie, Dir. Ark. Dep’t of Human Servs. (March 5, 2018), http://bit.ly/2Oprpsn (hereinafter “Amendment Approval”) (attached as Exhibit 2, hereto).
77. The Amendment Approval granted Arkansas permission to implement the work requirement, on or after June 1, 2018.
78. The Amendment Approval also permitted Arkansas to require individuals to electronically report their qualifying activities or exemption only through an online portal. See Ex. 2, Amendment Approval, at 1, 20. The approval specifically stated that Arkansas was approved to require this online only reporting “in a manner inconsistent with” the ACA’s requirements that individuals be allowed to submit information via the internet, telephone, or in-person. Id. at 1 (citing the ACA § 1943 and 42 C.F.R. § 435.907(a)).
79. The Amendment Approval also waived the retroactive coverage requirement for Arkansas, reducing the coverage period from three months to one month. Neither the State’s

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Amendment application nor the CMS approval explained how the State had met the three preconditions CMS set forth in 2016 for a waiver of the retroactive coverage requirement—that Arkansas comply with the reasonable opportunity period requirements, successfully complete the Backlog Mitigation Plan, and implement hospital presumptive eligibility. See Ex. 2, Amendment Approval, at 4, 7, 21; Ex. 1, Arkansas Works Amendment.
80. Arkansas’ request to reduce income eligibility for Arkansas Works to 100% of FPL was not approved. See Ex. 2, Amendment Approval, at 2.
81. In approving Arkansas’ request, HHS did not provide an estimate of the number of individuals who would lose coverage as a result of the Arkansas Work Amendment.
Work and Community Engagement Requirements 82. As noted above, the Medicaid Act requires a participating state to furnish Medicaid to all members of covered population groups. The state may not cover only subsets of a population group described in the Medicaid Act. See 42 U.S.C. §§ 1396a(a)(10)(A)-(B). 83. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. 84. The Arkansas Works Amendment added a new condition of eligibility that is not permitted under the Medicaid Act: Arkansas Works enrollees ages 19 to 49 must engage in 80 hours of specified employment or community engagement activities every month. Ex. 2, Amendment Approval, at 28. 85. The work requirement does not apply to pregnant women or medically frail individuals. Id. In addition, enrollees who meet certain other criteria are exempt from the requirement. Id.

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86. If enrollees subject to the work requirement do not meet the requirement for any three months of the year, the State will terminate their coverage unless they demonstrate that one of the narrow “good cause” exceptions applies. Id. at 29-31.
87. Under the Medicaid Act, an individual may apply for and enroll in Medicaid at any time.
88. Under the Arkansas Works Amendment, the State will prohibit an individual who has been terminated from Medicaid for failure to meet the work requirements from re-enrolling in Arkansas Works for the remainder of the calendar year. Id. at 30. Only once a new calendar year begins will a terminated enrollee be allowed to submit a new application to re-enroll. However, enrollees may end this lockout period early by showing that one of the narrow “good cause” exceptions would have applied at the time of termination and that their inability to meet the work requirement “was the result of a catastrophic event or circumstances beyond [their] control.” Id.
89. According to the State, the purpose of the work requirement is to “incentivize enrollees to work and encourage personal responsibility” and “encourage individuals to climb the economic ladder.” Ex. 1, Arkansas Works Amendment, at 55. The State also described the goal of the work requirement as “promot[ing] independence through employment.” Id. at 15.
90. The State began implementing the requirement for individuals ages 30 to 49 on June 1, 2018. Arkansas is scheduled to phase in individuals ages 19 to 29 during the first four months of 2019. Eligibility and Enrollment Monitoring Plan, Arkansas Works: Work and Community Engagement Amendment 8 (2018) (hereinafter “Implementation Plan”) (attached as Exhibit 3, hereto).

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91. As a condition of eligibility, enrollees must report their participation activities each month. They can only report using an online portal. Enrollees may not report participation by mail, in-person, or by telephone to DHS. Id.
92. DHS Director Cindy Gillespie stated in March 2018 that the online-only reporting requirement was more convenient for DHS, and “[i]f you implement it in the old-fashioned way of ‘Come into our county office,’ we would have to hire so many people – and that just doesn’t make sense.” Benjamin Hardy, Medicaid Advocate Criticizes Arkansas Works’ Email-only Reporting for Work Requirements, Ark. Times, Apr. 28, 2018, http://bit.ly/2PHKU40 (last visited Nov. 5, 2018).
93. To use the online portal, enrollees need an email address, a log-in and password unique to the portal, and a reference number provided in a multi-page letter sent by DHS. Enrollees use the reference number to link their insurance account to the reporting portal. Once the link is established, individuals must click through multiple different screens to report their work activities each month. The portal is only accessible to beneficiaries between the hours of 7 a.m. and 9 p.m. Sometimes, DHS schedules online maintenance of the portal during these operating hours. Enrollees must report work activities for a given month by the fifth of the following month, or the activities will not be counted for purposes of determining compliance. See generally Arkansas Works Information, https://ardhs.sharepointsite.net/ARWorks/default.aspx.
94. To claim a good cause exemption, Arkansas Works beneficiaries use the online portal to make an attestation based on their understanding of the exemption. The State plans to review exemption attestations as part of a quality review process, which may result in retroactive removal of months of exemption or compliance. If the retroactive removal leaves an enrollee with three months of non-compliance in a calendar year, the individual’s Arkansas Works case will be

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closed and referred for investigation as potential fraud and overpayment. Implementation Plan at 13.
95. After the March 5, 2018 approval, the Arkansas Medicaid agency publicly estimated that approximately 69,000 out of 278,734 individuals currently enrolled in Arkansas Works will have to take some action — report work activity or request an exemption — to comply with the requirement once it is fully implemented. The State did not estimate the number of Arkansans who would not be able to meet the requirement and would thus lose Medicaid coverage for the year. Ex. 3, Implementation Plan, at 1, 6.
96. Arkansas began rolling out the work requirement to individuals between the ages of 30 and 49 in June 2018, phasing in individuals in four separate cohorts based on the month of their next Medicaid eligibility renewal. The State used its own data sources to identify individuals whose income indicates they are working at least 80 hours per month or that they are exempt. These individuals do not have to report or take other action to meet the work requirement unless their circumstances change. Id. at 6. From June to September 2018, the number of beneficiaries subject to the work requirement rose from 25,815 to 73,266. In each of these months, between 20 and 30 percent of those subject to the work requirement did not meet the work requirement. See Arkansas Dep’t of Human Servs., Arkansas Works Program June-September 2018 Reports (attached as Exhibit 4, hereto).
97. For example, in September, the most recent month for which the State has provided data, approximately 23 percent of beneficiaries subject to the work requirements—16,757 people—did not comply. Approximately three percent (2,263 people) self-reported an exemption. Only approximately two percent (1,532 people) reported completing 80 hours of work or workrelated activities. Id. Approximately 72 percent (52,714) did not have to report because the State

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deemed them to have an exemption or to have satisfied the work requirement on the basis of State data sources. This data shows that 82 percent of individuals who were required to report their hours or seek an exemption in September did not do so.
98. In total, 8,462 people — 4,353 in August and 4,109 in September — have already lost Medicaid coverage for failure to comply with the work requirements for three months. Another 4,841 people are on the brink of losing insurance in the October reporting period because they have accumulated two months of non-compliance. Id.
Retroactive Eligibility 99. As noted above, the Medicaid Act requires that medical assistance be provided to enrollees retroactively. States must provide that in the case of any individual who has been determined to be eligible for medical assistance . . . such assistance will be made available to him for care and services included under the plan and furnished in or after the third month before the month in which he made application . . . for such assistance if such individual was . . . eligible for such assistance at the time such care and services were furnished. 42 U.S.C. § 1396a(a)(34). 100. Separately, Section 1396d(a) defines “medical assistance” to include coverage for services received by eligible individuals during the three-month period prior to the month of application. Id. § 1396d(a). 101. There is no authority for the Secretary to grant a waiver of Section 1396d(a). 102. Under the approved Arkansas Works Amendment, retroactive eligibility coverage as required by the statute is terminated. Instead, the State will only pay for services received during the 30 days before an individual submits an application. Ex. 2, Amendment Approval, at 11, 21.

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F. Action Taken by the Defendants to Allow Work Requirements and Approve the Arkansas Works Amendment
103. Prior to 2017, CMS’s website stated that the purpose of Section 1115 waivers is to “demonstrate and evaluate policy approaches such as:
• Expanding eligibility to individuals who are not otherwise Medicaid or CHIP eligible; • Providing services not typically covered by Medicaid; or • Using innovative service delivery systems that improve care, increase efficiency, and
reduce costs.” Medicaid.gov, About Section 1115 Demonstrations, https://www.medicaid.gov/medicaid/section1115-demo/about-1115/index.html (last visited September 5, 2017). The “general criteria” CMS used when assessing waiver applications included whether the demonstration would:
1. increase and strengthen overall coverage of low-income individuals in the state; 2. increase access to, stabilize, and strengthen providers and provider networks available
to serve Medicaid and low-income populations in the state; 3. improve health outcomes for Medicaid and other low-income populations in the state;
or 4. increase the efficiency and quality of care for Medicaid and other low-income popula-
tions through initiatives to transform service delivery networks. Id.
104. Prior to 2017, CMS recognized that work requirements do “not support the objectives of the [Medicaid] program” and “could undermine access to care.” Letter from Andrew M. Slavitt, Acting Administrator, Ctrs. For Medicare & Medicaid Servs., HHS to Thomas Betlach, Dir. Az. Health Care Cost Containment System (Sept. 30, 2016); see Sec’y of Health & Human Services Sylvia Burwell, Hearing on The President’s Fiscal Year 2017 Budget, Responses to Additional Questions for the Record, U.S. House of Rep. Energy & Commerce Health Subcommittee at 35 (Feb. 24, 2016), http://bit.ly/2QcKnEi.

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105. In 2016, CMS denied Arkansas’ request to impose a work requirement in Medicaid, stating in part: “[C]onsistent with the purposes of the Medicaid program, we cannot approve a work requirement.” Letter from Sylvia Burwell, Sec’y of Health & Human Services, to Asa Hutchinson, Governor of Arkansas (Apr. 5, 2016) (attached as Exhibit 5, hereto).
106. The current HHS abruptly reversed course to authorize work requirements in Medicaid as part of President Trump’s vow to “explode” the ACA and its Medicaid expansion. See Amy Goldstein & Juliet Eilperin, Affordable Care Act Remains “Law of the Land,” but Trump Vows to Explode It, Wash. Post, Mar. 24, 2017, https://wapo.st/2Do6m8v.
107. When he took office, President Trump signed an Executive Order calling on federal agencies to undo the ACA “[t]o the maximum extent permitted by law.” Executive Order 13765, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, 82 Fed. Reg. 8351 (Jan. 20, 2017), http://bit.ly/2qtdVCf.
108. On March 14, 2017, Defendant Seema Verma was sworn in as the Administrator of CMS. Defendant Verma and former Secretary Price immediately issued a letter to state Governors announcing CMS’s disagreement with the purpose and objectives of the Medicaid Act, stating that “[t]he expansion of Medicaid through the Affordable Care Act (‘ACA’) to nondisabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.” See Sec’y of Health and Human Servs., Dear Governor Letter, at 1, http://bit.ly/2zvx2zV.
109. Since then, Defendant Verma has made repeated public statements criticizing the expansion of Medicaid to “able-bodied individual[s],” advocating for lower enrollment in Medicaid, and outlining plans to “reform” Medicaid through agency action. See Casey Ross,

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Trump health official Seema Verma has a plan to Slash Medicaid rolls. Here’s how, Stat News, Oct. 26, 2017, http://bit.ly/2DnaFRy.
110. For instance, on June 27, 2017, Defendant Verma wrote an Opinion piece in the Washington Post observing that “U.S. policymakers have a rare opportunity, through a combination of congressional and administrative actions, to fundamentally transform Medicaid.” Seema Verma, Lawmakers have a rare chance to transform Medicaid. They should take it, Wash. Post, June 27, 2017, https://wapo.st/2yQ9XIE.
111. On November 7, 2017, at a speech before the National Association of Medicaid Directors, Defendant Verma declared that the ACA’s decision to “move[] millions of workingage, non-disabled adults into” Medicaid “does not make sense,” and announced that CMS would resist that change by approving state waivers that contain work requirements. Speech: Remarks by Administrator Seema Verma at the National Association of Medicaid Directors (NAMD) 2017 Fall Conference, CMS.Gov (Nov. 7, 2017), https://go.cms.gov/2PELxLW.
112. On November 10, 2017, Defendant Verma gave an interview in which she declared that one of the “major, fundamental flaws in the Affordable Care Act was putting in able bodied adults,” declaring that Medicaid was “not designed for an able bodied person,” and announcing that CMS is “trying” to “restructure the Medicaid program.” Wall Street Journal, The Future of: Health Care (Nov. 10, 2017), https://on.wsj.com/2AMeGMW.
113. In or around early November 2017, CMS revised its website to invite states to submit Section 1115 waivers that would:
1. Improve access to high-quality, person-centered services that produce positive health outcomes for individuals;
2. Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term;

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3. Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals;
4. Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making;
5. Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and
6. Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.
Medicaid.gov, About Section 1115 Demonstrations, http://bit.ly/2SNWYQ8. 114. On January 11, 2018, well after the federal comment period for the Arkansas Works
Amendment had closed, Defendant CMS issued the State Medicaid Director Letter, attached as Exhibit 6, hereto, titled “Opportunities to Promote Work and Community Engagement Among Medicaid Beneficiaries.”
115. The nine-page document “announc[es] a new policy” that allows states to apply “work and community engagement” requirements to certain Medicaid recipients—specifically, “non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability.” Id. at 1.
116. The State Medicaid Director Letter acknowledges that allowing states to implement work requirements “is a shift from prior agency policy.” Id. at 3.
117. The State Medicaid Director Letter outlines the “guidelines” for states to consider in submitting applications containing work requirements.
118. The State Medicaid Director Letter was not submitted for notice and public comment and was not published in the Federal Register.
119. The same day CMS issued the State Medicaid Director Letter, it received several letters critical of this novel policy position, including from members of Congress and nonprofit

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organizations. The National Health Law Program (“NHeLP”) noted that, by announcing the policy change after the Arkansas Works comment period had closed, CMS had not given the public the ability to comment meaningfully on the pending Arkansas Amendment. NHeLP further noted that the State Medicaid Director Letter “entirely ignore[d] the wealth of literature regarding the negative health consequences of work requirements, which was repeatedly cited by NHeLP and others in those state-specific comments.” Letter from Jane Perkins, Legal Dir., Nat’l Health Law Prog., to Brian Neale, Dir., Ctrs. For Medicare & Medicaid Servs. (Jan. 11, 2018), http://bit.ly/2Par8Pf.
120. NHeLP requested that CMS re-open public comment on the Arkansas Works project to allow the public a meaningful opportunity to comment. Id. Defendants ignored this request.
121. On or about January 18, 2018, CMS further emphasized that it disagrees with the legislative expansion of Medicaid under the ACA and that it had announced the “new policy guidance” to support state implementation of work requirements intended to target that expansion population. CMS, Community Engagement Initiative Frequently Asked Questions, http://bit.ly/2D03OfX (last visited Nov. 5, 2018).
122. When Defendant Verma announced approval of the Arkansas Works Amendment on March 5, 2018, she tied it to the State Medicaid Director Letter, tweeting, “#ArkansasWorks is the 3rd community engagement demonstration we’ve approved since releasing guidance in January. @CMSgov has 9 pending applications with similar demonstration applications and several states have expressed interest in exploring these reforms. #TransformingMedicaid.” Seema Verma, Administrator, Ctrs. for Medicare & Medicaid Servs. (@SeemaCMS), Twitter (Mar. 5, 2018, 9:45 AM), https://twitter.com/SeemaCMS/status/970716905379123205.

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123. In approving the Arkansas work and community engagement requirement, CMS cited the State Medicaid Director Letter and imposed a number of terms and conditions on the State. Ex. 2, Amendment Approval, at 3-4. Several of those terms and conditions require that Arkansas follow requirements set out in the State Medicaid Director Letter. See, e.g., id. at 27 (exempting from work requirement enrollees with an acute medical condition that would prevent compliance); id. (exempting enrollees participating in substance use disorder treatment); id (exempting enrollees who are exempt from SNAP/TANF work requirements); id. at 20-21 (requiring reasonable modifications for enrollees with ADA-protected disabilities, including exemption from participation); id. at 32 (promising that Arkansas will assess areas with limited economies and/or educational activities or higher barriers to participation to determine whether further exemptions or modifications are needed to the work requirement).
124. Each waiver approval including work requirements that has come after the State Medicaid Director Letter — Kentucky, Arkansas, Indiana, and New Hampshire — invokes the State Medicaid Director Letter and reflects its requirements.
125. In July 2018, Defendant Azar stated: “We are undeterred. We are proceeding forward. . . . We’re fully committed to work requirements and community participation in the Medicaid program. . . . we will continue to litigate, we will continue to approve plans, we will continue to work with states. We are moving forward.” Colby Itkowitz, The Health 202: Trump administration ‘undeterred’ by court ruling against Medicaid work requirements, Wash. Post, July 25, 2018, https://wapo.st/2Oqn5Jt.
G. The Constitution’s Take Care Clause 126. The United States Constitution provides that “All legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Const., art. I, § 1. Congress is authorized

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to “make all laws which shall be necessary and proper for carrying into Execution” its general powers. Id. §§ 1, 8.
127. After a federal law is duly enacted, the President has a constitutional duty to “take Care that the Laws be faithfully executed.” Id. art. II, § 3.
128. The Take Care Clause is judicially enforceable against presidential action that undermines statutes enacted by Congress and signed into law. See, e.g., Angelus Milling Co. v. Comm’r, 325 U.S. 293, 296 (1945) (“Insofar as Congress has made explicit statutory requirements, they must be observed and are beyond the dispensing power of [the Executive Branch].”); Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 612-13 (1838).
129. The Take Care Clause limits the President’s power and ensures that he will faithfully execute the laws that Congress has passed.
130. Under the Constitution, the President lacks the authority to rewrite congressional statutes or to direct federal officers or agencies to effectively amend the statutes he is constitutionally required to execute.
131. The Administrator of CMS has expressed the need to “fundamentally transform Medicaid.”
132. The power to “transform” a congressional program is a legislative power vested in Congress. An effort to “transform” a statute outside that legislative process is at odds with the President’s constitutional duty to take care that the laws be faithfully executed.
133. The Medicaid population targeted by the Arkansas Works Amendment is the expansion population, which Congress added to Medicaid in the Affordable Care Act. The Executive Branch has repeatedly expressed its hostility to the Affordable Care Act and its desire to undermine its operation. An effort to undermine the Affordable Care Act by undoing the

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extension of Medicaid to the expansion population is at odds with the President’s duty to take care that the laws be faithfully executed.
H. Effects of the Arkansas Works Amendment on the Plaintiffs 134. By approving the Arkansas Works Amendment, the Secretary has enabled the State to impose requirements and procedures that punish Plaintiffs by prohibiting them from obtaining and retaining Medicaid coverage. 135. The approved Arkansas Works Amendment allows the State to ignore ACA requirements for streamlined Medicaid enrollment to ease application and continued program participation. The Secretary’s approval of the Arkansas Works Amendment restricts enrollees to only online submission of work requirement and exemption documentation. This task is difficult, and for some impossible, due to lack of internet access, trouble using computers, and problems working with the online portal. 136. The Secretary’s approval of the Arkansas Works Amendment permits Arkansas to eliminate the three months of retroactive coverage required under the Medicaid Act and provide only one month of coverage prior to the month of application. If a Plaintiff loses coverage and then reapplies, the Plaintiff will not have retroactive coverage for health services received during the gap in coverage. Plaintiffs who lose coverage after three months of non-compliance with the work requirement and then re-enroll the following year will lose two months of retroactive coverage they would have otherwise had during the gap in coverage. 137. Continuous and adequate health insurance coverage is fundamental for each Plaintiff’s ability to stay as healthy as possible and to work. 138. The Secretary’s action approving the Arkansas Works Amendment will cause harm to Plaintiffs. Specifically:

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139. Plaintiff Charles Gresham is a 37-year-old man who lives with his fiancé in Harrison, Arkansas. Mr. Gresham’s fiancé works at a fast food restaurant earning about $9 an hour with a gross income of about $1100 per month. She currently supports Mr. Gresham financially and is his source of transportation.
140. Mr. Gresham has his GED and has largely worked in the food service industry. In 2015, he worked as a labor hand with a local construction company but was let go after about a year because he began having seizures on the job. Mr. Gresham went back to the food service industry and other service jobs, but has lost those jobs due to issues related to his seizures, including missing work.
141. Mr. Gresham can work and would like to work. He is not working at this time because he has had trouble finding and keeping a job. He needs a flexible schedule because he may not be able to work all day, and he needs time for doctors’ appointments.
142. Mr. Gresham has medical conditions that require monitoring and treatment. He has a seizure disorder, asthma, and extreme social anxiety. His anxiety attacks, which occur on average three times per month, bring on shortness of breath, chest pains, a tingling sensation in his arms, and migraines. Some of these symptoms can last for days after the attack. With Medicaid coverage through Arkansas Works, he has been able to get the treatment and services he needs, including visits with doctors and therapists, as well as his prescription medications and inhalers. He has tests scheduled for November that he hopes will help confirm a diagnosis for his seizure disorder.
143. Mr. Gresham has been covered by Medicaid through Arkansas Works since 2015. When he has had questions or needed help in renewing his coverage, Mr. Gresham has gone to the local Department of Human Services office in Boone County. He is not comfortable with

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computers and generally requires help from other people when going online, especially to fill something out or submit information.
144. Until recently, Medicaid coverage has been mostly easy for him to obtain. However, the Arkansas Works notices and materials he has received in the past few months have been confusing and difficult to understand.
145. In May 2018, Mr. Gresham received a notice that he would be subject to the work requirement. He is not working right now, and he cannot meet the requirement through volunteering or searching for jobs consistently because he does not have his own transportation, is not comfortable with computers, and may not be able to do an activity as scheduled due to his health conditions.
146. Around the same time Mr. Gresham received notice of the work requirement, he received a letter from DHS stating he was exempt from the work requirement until September 2018 because he was receiving unemployment benefits. However, Mr. Gresham’s unemployment benefits terminated on May 31, 2018. He initially believed that DHS would automatically adjust his exemption status. However, in August 2018 he learned from Legal Aid that he should report changes in exemptions to DHS. With the help of Legal Aid and his fiancé, he did so through the Access Arkansas website, and DHS revoked his exemption.
147. Towards the end of August 2018, his fiancé helped him report an exemption for short-term incapacity, which lasted until October 31, 2018. Recently, with help from Legal Aid, he learned that he also has an exemption because he is enrolled in SNAP and is exempt from that program’s work requirement. Mr. Gresham is confused because the dates on the SNAP exemption do not match his understanding of his SNAP benefits. In late October, Mr. Gresham again reported an exemption for short-term incapacity, which is scheduled to expire on December 31, 2018. Mr.

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Gresham has difficulty keeping up with these different reporting requirements. He would not be able to navigate the website, report work activities or exemptions, or keep track of his compliance status on his own.
148. Mr. Gresham has previously had gaps in health care coverage that caused him to go without the care he needed. In April 2018, he had a month-long gap that caused him to miss a visit with his therapist and three doctors’ appointments. Although during that gap he had enough medications, if he were immediately cut off from his medications, his seizure disorder would be much worse and potentially harmful to him.
149. Even with the exemptions, the threat of losing health coverage because of the work requirement has increased Mr. Gresham’s anxiety. In August 2018, when he was dealing with reporting issues, he had more anxiety attacks than normal. He discusses the work requirements and potential loss of coverage at each appointment with his therapist. He worries that without medical coverage, his conditions will get worse and he may suffer irreversible harm or die.
150. Plaintiff Adrian McGonigal is a 40-year-old man who lives with his brother in Pea Ridge, Arkansas.
151. Mr. McGonigal has primarily worked in the food service industry. In August 2018, he left his job at McDonald’s to work in the processing department at Southwest Poultry. Exposure to chemicals there aggravated his chronic obstructive pulmonary disease (COPD), causing him chest pressure, shortness of breath, and fatigue. The flare-ups eased when he moved to the shipping department. Though he continued to experience problems associated with his COPD and had to take frequent breaks, he could do his job and not miss much work as long as he had his medications. Mr. McGonigal worked between 30 and 40 hours per week in the shipping department and earned approximately $1200 per month before taxes. However, he lost his job in late October 2018.

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152. Mr. McGonigal enrolled in Medicaid when he was hospitalized for a medical emergency in 2014. He did not have insurance at the time, so hospital staff helped him sign up for Arkansas Works.
153. Mr. McGonigal has several medical conditions that require monitoring and treatment, including COPD, degenerative disc disease, depression, and an anxiety disorder. In the past, Medicaid coverage allowed him to access vital medical care, including the eight prescription medications he currently takes and regular visits to a primary care doctor and pulmonologist.
154. When Mr. McGonigal received notice that the work requirement would apply to him beginning in June 2018, he had trouble understanding the new requirements. He tried to report his work activity by calling the local DHS office, but was told he could only report online.
155. Mr. McGonigal is not comfortable with computers and has very little experience going online. He does not own a computer or smartphone. Because he has no driver’s license or access to public transportation that will take him where he needs to go, he has no reliable way to get to the nearest library.
156. Mr. McGonigal’s family ultimately helped him report his work activities in June 2018. It was his understanding that this one report was all he needed to maintain his coverage.
157. On October 5, 2018, Mr. McGonigal went to the pharmacy to refill his prescriptions, only to learn that he no longer had Medicaid coverage and would have to pay $800 just to fill his COPD medications. He could not afford to pay this, so he went without his medicine.
158. Mr. McGonigal has called DHS multiple times to understand why his insurance was terminated. At first, DHS could not provide an explanation and told him to call his insurance company; the insurance company, in turn, told him to call DHS.

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159. On October 19, 2018, Mr. McGonigal again called DHS with the help of Legal Aid. After waiting on hold for about an hour, Mr. McGonigal was informed by a DHS caseworker that he lost his coverage for failing to meet work requirements for three months, and that he would not be eligible for Medicaid coverage until January 2019.
160. When Mr. McGonigal explained to DHS that he thought he was in compliance and even received a letter confirming that he reported hours in June, the DHS caseworker explained that reporting was an ongoing, monthly requirement. When Mr. McGonigal explained that he had not understood the requirement and had trouble with computers and the Access Arkansas website, the caseworker responded that she could not help him. She told him that a good cause exemption was only available if he was in the hospital and unable to report. Nevertheless, with the help of Legal Aid, Mr. McGonigal continued to pursue a good cause exemption. DHS granted a good cause exemption on October 31, 2018 citing his lack of permanent address and extenuating health circumstances, despite these reasons not being listed as possible “good causes” in the approval or DHS written policies.
161. When Mr. McGonigal lost his insurance due to the work requirement, he could not get his medications and then his COPD flared up. Since he no longer had health coverage, he had to go to the emergency room for treatment and missed several days of work. He had no choice but to recover at home because the hospital would not permit him to remain there without insurance. He expects to receive a bill for his hospital stay.
162. Pursuant to Southwest Poultry’s absence policy, Mr. McGonigal accrued a demerit for every day of work he missed. Mr. McGonigal’s supervisor previously informed him that missing days could get him fired and that they might not be able to hold is position for him. On October 22, 2018 his employer fired him because of his absences.

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163. Although Mr. McGonigal is now in the process of restoring his Medicaid through the good cause exemption and filing income verification paperwork, Mr. McGonigal lost his coverage and his job. He could not get his medications and has been in the hospital twice for breathing treatments. Since losing coverage, his health conditions and anxiety have worsened. He struggles with the COPD, sleeps only two to three hours per night, and has more back pain.
164. Mr. McGonigal believes there is no way that he can continue to work or to be productive without the medical assistance that Medicaid provides. He has already experienced the short-term outcomes of not having coverage. He is unsure how he will keep his coverage given that he no longer has a job and does not know how he will be able to meet the work or reporting requirements.
165. Plaintiff Cesar Ardon is a 40-year-old man who lives in Siloam Springs, Arkansas. 166. Mr. Ardon worked as a welder for 15 years until he had a tumor surgery in May 2017. Currently, Mr. Ardon works in construction as a self-employed handyman doing mostly outdoor work. His income and hours fluctuate greatly from month to month. He earned about $1,200 in July 2018 but typically earns less during other times of the year. 167. As a self-employed handyman, Mr. Ardon’s work hours change from week to week based on the type of work he gets and the weather. Sometimes he is able to work 20 hours a week; other times, especially in the fall and winter when work is slower, he works significantly fewer hours. 168. Prior to enrolling in Medicaid in 2017, Mr. Ardon often did not get the medical care that he needed because he could not afford it. With Medicaid, he is able to get treatment and care, as well as annual check-ups. In 2017, Medicaid covered a major operation to remove a baseball-

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sized tumor on his side. He also receives treatment and monitoring for other medical conditions, such as high cholesterol, carpal tunnel syndrome, arthritis, and vision issues.
169. In March 2018, Mr. Ardon received a notice stating he would have to work at least 80 hours a month to keep Medicaid coverage. In May 2018, Mr. Ardon received a letter informing him that the work requirements would apply to him starting in June. Even though Mr. Ardon worked enough hours in June 2018 to meet the requirement, he was unable to report his hours online because he had trouble figuring out the website. In July 2018, he received a notice from DHS that he failed to comply with the work requirements for June.
170. In July and September 2018, Mr. Ardon was able to work enough hours to meet the work requirement, but he did not report his hours online. Mr. Ardon submitted other paperwork regarding his income and work activities to DHS and believed that had met the requirement.
171. Specifically, as part of his eligibility redetermination in July 2018, Mr. Ardon submitted income information to DHS by filling out an “odd jobs form” asking him how much money he earned from odd jobs during July. During this process, Mr. Ardon went to the DHS office in Bentonville and believes he tried to use the reporting website. The website was difficult for him to use, and he had to go back and forth with the DHS workers to try to figure out how to use the site. Although Mr. Ardon believes he created an account, he thinks he submitted his work information on the odd jobs form related to his redetermination and does not think he reported his work hours on the website. He has not received confirmation that the work reported on this form rendered him compliant with the work requirement in July. He does not know his August compliance status.
172. In September 2018, Mr. Ardon received a notice stating that his redetermination was complete, that he was approved for Arkansas Works, and that he is subject to the work

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requirements. For September, he submitted another DHS form for odd jobs showing $800 earned for 80 hours of work. He did not report his work online and does not know if the work reported on this form rendered him compliant.
173. In October 2018, Mr. Ardon worked fewer than 80 hours. 174. Mr. Ardon does not expect to be able to get 80 hours of work every month, such that he will be able to meet the requirements. Mr. Ardon is concerned that he will lose his Medicaid coverage because he will not be able to meet the work requirements or because of problems reporting using the online portal. Mr. Ardon has struggled with the reporting website, as he has not always been able to log onto it when he tries. In addition, Mr. Ardon has a computer, but often does not have internet access. 175. Mr. Ardon worries about getting sick, being unable to work, and losing access to health care if he loses his Medicaid coverage. He fears what will happen because he cannot predict his future or health. He depends on Medicaid to help him get through the ups and downs of life, especially when he has trouble finding work. 176. Plaintiff Marisol Ardon is a 45-year-old woman who lives in Siloam Springs, Arkansas with her adult daughter. She is separated from her husband, Cesar Ardon, but he rents a room with a separate entrance to her home. 177. Ms. Ardon previously worked answering phones and connecting people to social service agencies and other community resources. In 2013, her job changed slightly, and for the next four years she continued to do the same type of work, but she no longer had health care coverage. Ms. Ardon had a gap in health care coverage from about 2013 until 2015, when she started receiving Medicaid coverage from Arkansas Works. During that gap, she paid for basic

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health care out of her pocket, such as when she had the flu. She did not go to the doctor for an annual physical, get any blood work, or receive other services.
178. Ms. Ardon has several medical conditions that need to be treated and monitored. She has a hernia in her abdomen, thyroid problems, asthma, anxiety attacks, and chronic back pain. Her back pain is associated with a 25-pound non-cancerous tumor that she had removed from her midsection in July 2017.
179. Ms. Ardon uses her Medicaid coverage for four daily medications, regular visits with her primary care doctor and specialists, and annual checkups.
180. Ms. Ardon has not worked since her health issues caused her to quit work in or about March 2017. She does not currently have income from work and relies on her adult daughter to pay rent and other household expenses.
181. Ms. Ardon confirmed with DHS that she needed to meet the work requirement starting in June and was not exempt.
182. Ms. Ardon tried to create her account on the online portal but had difficulty navigating the website. The portal rejected her attempts to create an account several times. Ms. Ardon found the long letters from DHS confusing and does not fully understand the requirements and exemptions. In July 2018, she went to the DHS office for assistance and submitted a paper about not working because of her back, but she did not hear back from DHS about that submission.
183. Ms. Ardon did not meet the work requirement in June and July 2018. Because she was concerned about whether she would keep her health coverage under these work requirements, Ms. Ardon began to have multiple panic attacks a day throughout July and August 2018. During these attacks, Ms. Ardon has great difficulty breathing and loses control of her emotions.

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184. After Ms. Ardon secured legal representation, she filed for and was granted a shortterm incapacity exemption in late August or early September that lasted until October 31, 2018
185. Around October 9, 2018, Ms. Ardon received a letter from DHS stating that her annual Medicaid eligibility redetermination was approved and that her exemption would expire on October 31, 2018. Because her health has not improved, she tried to go online to file for an exemption, but she could not log onto the website or see her account. She went to the local DHS office in Bentonville for help but the DHS employee told her that she could not help her and that Ms. Ardon would have it do it herself online.
186. Ms. Ardon plans to try again to file for the short-term incapacity exemption for November and December before the December 5th reporting deadline. Ms. Ardon is worried, and the prospect of losing coverage weighs on her mind. If Ms. Ardon loses her Medicaid, she will not be able to get the care she needs for her health conditions.
187. Plaintiff Anna Book is a 38-year-old woman who lives in Little Rock, Arkansas. She has been homeless for most of the last eight years. Since August 2018, she has been renting a room in an apartment.
188. In July 2018 Ms. Book began working as a dishwasher at a restaurant in July 2018. Ms. Book’s wages cover her rent, child support, and basic necessities. Prior to her dishwashing job, Ms. Book had been unemployed for two years. Her previous employment includes being a manager of a fast food restaurant.
189. Ms. Book signed up for Medicaid in 2014 or 2015 with the help of a pastor when she was homeless.
190. For several months, she has been experiencing a respiratory condition that makes it difficult for her to breathe. With Medicaid coverage through Arkansas Works, Ms. Book was

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able to see a doctor and obtain prescription medications in September 2018. Because the condition persists and could develop into pneumonia, she will continue to seek treatment. In the past, Ms. Book also used Medicaid to cover surgery and overnight hospitalization to treat a tooth abscess.
191. Ms. Book is currently scheduled to work four 6-hour shifts per week. In August 2018, she had to miss work when she was sick, which nearly caused her to fall below 80 hours.
192. In August 2018, Ms. Book received notice that she had not complied with the work requirement for the month of July. She believes she met the requirement in August and September.
193. Ms. Book does not have reliable access to the internet. Because she does not have a data plan, she can only access the internet on her cellphone using a wifi connection, which she does not have at home. When she has used the internet on her cell phone, she found it difficult to see and navigate government websites. She does not own a computer or a tablet.
194. Ms. Book relies on a pastor — the same one who helped her enroll online in Arkansas Works when she was homeless — to document her work hours online. She visits his church each month to report her hours. Because she does not have a car, transportation is difficult, and it is a challenge to maintain the check-ins with the pastor.
195. Because she already has one month of noncompliance, even a brief time without a job or the ability to report hours will cause her to lose medical assistance. While Ms. Book hopes to keep her dishwashing job, she is uncertain how long it will last. Even if she is working, she fears that unforeseen circumstances will cause her to dip below 80 hours a month. Furthermore, she is concerned that she might not be able to visit the pastor each month to report her works hours. She does not believe she is entitled to claim any exemption from the work requirement.

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196. Ms. Book frequently talks with people who are homeless, trying to help them. She thinks the work requirement is harmful to her and, based on her conversations with others, that the requirements are hurting other homeless people who are worse off than she is.
197. Plaintiff Russell Cook is a 26-year-old man who lives in Little Rock, Arkansas. He is homeless and lives in a camp when he cannot stay with a family member. He has been homeless several other times in his life.
198. When he moved to Little Rock in November 2016, Mr. Cook began working as a landscaper. He could not work on days when it had rained or even recently rained because yards were too wet. As a result, he worked only 40 to 50 hours in rainy months, sometimes earning less than $300 per month. In months with better weather, he would work full-time.
199. While Mr. Cook worked as a landscaper, he was denied SNAP benefits because he did not meet that program’s work requirements.
200. Mr. Cook is currently unemployed. He lost his job as a landscaper in August 2018, when the foreclosure of his apartment complex and a family emergency forced him to move to De Queen, Arkansas. Unable to find work in De Queen, he returned to Little Rock in October 2018 but was not able to get his landscaping job back. His former boss informed him that no positions would be available for at least a few months. Mr. Cook has no other job prospects.
201. Mr. Cook has been covered by Medicaid since he was a child. Until he was 26 years old, he received coverage for being in foster care as a child. He believes his coverage transitioned to Arkansas Works in March 2018.
202. In the past, Mr. Cook has primarily used Medicaid coverage to access dental care for several cavities and damage to the roots and nerves of his teeth. He has taken prescription antibiotics for tooth infections and related inflammation. In September 2018, Mr. Cook was in the

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hospital for four days to be treated for a torn Achilles tendon and microfracture to his ankle sustained in an accident.
203. Without Medicaid, Mr. Cook will go without the dental care he needs, including the removal of a wisdom tooth that is lacerating his mouth. He will miss general check-ups. He will not be able to pay for emergency medical services, such as those he needed following his recent leg injuries. He needs to see a doctor about problems keeping his weight up but will not be able to do so without Medicaid coverage.
204. Beginning on January 1, 2019, Mr. Cook will be subject to the work requirement. He believes he will not be able to comply with the requirement because he is unemployed and not eligible for an exemption. Even if he can get his landscaping job back, that job does not provide a steady 80 hours of work per month throughout the year. It is difficult for Mr. Cook to find other work because he has no home, phone number, or clean clothing.
205. Mr. Cook is also concerned he will not be able to consistently report his work hours. He has a cell phone but no functioning phone number or data plan. If an open wifi network is available, he can use his phone to access the internet. He does not have a computer or tablet. He sometimes accesses the internet at the library.
206. The loss of health insurance could be catastrophic for Mr. Cook, as he is presently living on the streets, where deteriorating health can have especially severe consequences.
207. Plaintiff Veronica Watson is a 36-year-old woman who lives alone in Moro, Arkansas. She inherited her home. She pays around $100 a month in utilities.
208. Since 2013, Ms. Watson’s primary job has been cleaning motel rooms and homes. When she was cleaning homes most recently, from December 2017 to June 2018, she found only three hours of work per week. She briefly worked on a factory assembly line, leaving after one

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month because she lacked the physical strength to perform the job. Though she returned to the same factory as a janitor in June and July 2018, she ultimately could not afford the 90-mile roundtrip commute. Ms. Watson was unemployed for most of August 2018.
209. In late August, Ms. Watson started working at a shirt factory closer to Moro. She is currently under a three-month probationary period through early December 2018. Her weekly income before taxes is $340.
210. Ms. Watson suffers from gastroesophageal reflux disease, which causes burning and sharp pains in her chest. She sees a gastrointestinal specialist for treatment and monitoring and is prescribed a generic form of Prilosec. She also gets annual check-ups.
211. Since Ms. Watson enrolled in 2014, Medicaid has covered these medical services. Before she had Medicaid, Ms. Watson went without necessary care. She paid out of pocket for acid reflux medication and doctor’s appointments when she was sick. She could not afford regular check-ups, bloodwork, or other medical care.
212. Ms. Watson has confirmed with DHS that she is subject to the work requirement and does not meet any exemptions. She did not complete 80 hours of work activities in August.
213. Because Ms. Watson does not have a home computer or internet access, she was not able to create an Access Arkansas account to report her work hours for August. Her cell phone has a limited, pre-paid data plan, but cell reception is often unreliable. The nearest library or DHS office where she can access a computer is a 40-mile round-trip from her home.
214. The uncertainty around the work requirement causes Ms. Watson stress. She already has one month of noncompliance. She worries that she will lose Medicaid coverage if she is not able to maintain her job at the shirt factory. Without insurance, Ms. Watson will not get the

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treatment she needs for her gastroesophageal reflux disease, including the daily medication necessary to manage her condition so she can work and live a normal life.
215. Plaintiff Treda Robinson is a 42-year-old woman who lives in Searcy, Arkansas. 216. Ms. Robinson has iron deficiency anemia that causes her to have fatigue, weakness, and heavy menstrual bleeding. In addition to seeing a hematologist, Ms. Robinson is prescribed ferrous sulfate, polyethylene glycol, and vitamin C tablets. Medicaid covers all of her treatments and annual check-ups. 217. Complications from her iron deficiency anemia forced Ms. Robinson to leave her job as a data entry clerk at the end of 2015. Since April 2016, she has worked as a scoring assessment rater for Educational Testing Service. This job permits her to work from home and earn an income even when anemia leaves her too weak to leave home. 218. Ms. Robinson’s work hours vary according to the volume of work available. Her employer may provide her with only 24-hour notice of the reduction or cancellation of scheduled work hours. Recently, she has been able to work 80 hours per month, but the inevitable fluctuation in hours means there is no guarantee that she will complete 80 hours of work every single month. 219. Ms. Robinson’s income, when she is able to work, ranges from $150 to $300 per week, at $15 an hour. Her rent, utilities, and other living expenses amount to $725 per month. 220. In September 2018, Ms. Robinson had surgery to remove tumors. She took September and October off from work to recover. Although she requested to work in November, she will not know her preliminary schedule until the end of October. She worries that November may be a slow month or that she may not receive daily assignments because of her recent extended absence.

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221. Before Ms. Robinson enrolled in Medicaid in 2014, she frequently did not seek needed medical care. She paid out of pocket for anemia medications and doctor’s visits when she was sick but could not afford regular visits to monitor her condition or to receive annual physicals, blood tests, or other care.
222. Ms. Robinson became subject to the work requirement in September 2018. She qualified for the short-term incapacity exemption in September and October due to her surgery. However, the exemption expired on October 31, 2018, and she no longer qualifies for an exemption to the work requirement.
223. Even though Ms. Robinson has computer skills, she was unable to make her Access Arkansas account work at home. Despite being ill, she drove to a local Arkansas Department of Workforce Services to report her exemption for September and October.
224. Ms. Robinson worries she will lose Medicaid if she cannot maintain 80 hours of work per month due to her fluctuating schedule. Because her anemia often makes her too weak to leave her home, she has found it difficult to find work or do other activities. The effects of her anemia could also make it difficult for her to go out to report work activities or request an exemption.
225. Without Medicaid, Ms. Robinson will not be able to afford to treat her health conditions. If she is not able to take her daily anemia medication, she will not be able to work at all. Untreated, her anemia could progress into a life-threatening condition.
226. Plaintiff Jamie Deyo is a 38-year-old woman who lives in Lonoke, Arkansas, with her parents.
227. Ms. Deyo’s last regular job was at a daycare in 2011. Thereafter, she was a stay-athome spouse until her divorce in 2014. She is currently unemployed.

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228. Ms. Deyo’s parents provide her with financial support and transportation. She has no driver’s license, and there is no public transportation where she lives.
229. In 2013, Ms. Deyo seriously injured her back in a car accident. Surgeons had to implant several rods and screws to repair her back.
230. Ms. Deyo did not have health insurance before enrolling in Arkansas Works with the assistance of her insurance company, Ambetter, in 2017. Before enrolling in Arkansas Works, she incurred over $30,000 in medical debt and often went without health care when she needed it.
231. Ms. Deyo has several medical conditions that must be monitored and treated. She has a broken screw in her back that interferes with a nerve. She also has fibromyalgia and rheumatoid arthritis.
232. Ms. Deyo’s Medicaid coverage has allowed her to obtain treatment through visits to a primary care physician, a physical therapist, and a surgeon. The surgeon is evaluating options for fixing the broken screw in her back. She currently takes three prescription medications.
233. On September 17, 2018, Ms. Deyo went to the pharmacy to fill her prescriptions and was told that her coverage had ended. She left without her medications.
234. Ms. Deyo changed addresses during the last year and informed her insurance company for Arkansas Works, Ambetter, about the change. She believes that Ambetter did not transmit her address change to DHS. She never received any notices from DHS that she was subject to work requirements or had failed to comply with them. When she called Ambetter to inquire about her coverage ending, Ambetter told her to call DHS. This confused her, because she had never before dealt with DHS concerning her health insurance.
235. When Ms. Deyo called DHS in September, staff told her that she had been terminated as of August 31, 2018 because she did not comply with the work requirements.

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However, because DHS found that Ms. Deyo had not received notice of the work requirements, it granted her a good cause exemption to reinstate coverage as of November 1, 2018. DHS did not explain whether the good cause exemption cleared all three months of her non-compliance. Also, DHS did not explain whether Ms. Deyo would have coverage for September and October 2018.
236. Around October 8, 2018, Legal Aid assisted Ms. Deyo in calling DHS to request Medicaid coverage before November 1, 2018. DHS gave her a Medicaid number for the state’s traditional Medicaid program. This coverage differs from her Arkansas Works coverage, which is scheduled to resume on November 1, 2018.
237. Between September 1 and October 8, 2018, Ms. Deyo had no active health insurance. She could not fill any prescriptions and suffered more pain and slept less as a result. She had to miss an appointment with the back surgeon, who would not see her without insurance, thus delaying her possible back surgery. For the first time since she had enrolled in Arkansas Works, her physical therapist charged her directly for services performed, totaling $543.
238. Between October 8, 2018 and November 1, 2018, Ms. Deyo was able to get some of her medications covered by Medicaid. However, because her coverage was not through Arkansas Works, she had to pay $108 out of pocket. Her parents covered these costs because she has no income, but they cannot afford to do that regularly.
239. Because Ms. Deyo cannot currently work or volunteer, she worries it is only a matter of time before she loses her Medicaid coverage again as a result of the work requirement. Experiencing two months without insurance has only heightened this fear. Without access to her doctors and medications, Ms. Deyo has little hope she will recover and work again.

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COUNT ONE: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (STATE MEDICAID DIRECTOR LETTER)
240. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
241. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
242. The approval of the Arkansas Works Amendment was explicitly based in substantial part on the policy announced in the January 11, 2018 State Medicaid Director Letter. Ex. 2, Amendment Approval, at 2.
243. The State Medicaid Director Letter was required to be, but was not, issued through notice and comment rulemaking. See 5 U.S.C. § 553.
244. In issuing the State Medicaid Director Letter, the Federal Defendants purported to act pursuant to Section 1115 of the Medicaid Act.
245. Authorization of work and community engagement requirements is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
246. In the State Medicaid Director Letter, the Federal Defendants relied on factors that Congress has not intended them to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for their decision that runs counter to the evidence.
247. The Federal Defendants’ issuance of the State Medicaid Director Letter exceeded the Secretary’s Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.

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COUNT TWO: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (ARKANSAS WORKS AMENDMENT APPROVAL)
248. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
249. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
250. The Secretary’s decision to approve the Arkansas Works Amendment as described herein exceeded his authority under 42 U.S.C. § 1315, otherwise violated the Medicaid Act, was arbitrary and capricious and an abuse of discretion, and ran counter to the evidence in the record.
251. Plaintiffs will suffer irreparable injury if the Secretary’s actions approving the Arkansas Works Amendment are not declared unlawful because those actions have harmed and will continue to harm Plaintiffs.
252. Plaintiffs are in danger of suffering irreparable harm and have no adequate remedy at law.
COUNT THREE: VIOLATION OF THE TAKE CARE CLAUSE, ARTICLE II, SECTION 3, CLAUSE 5
253. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
254. Plaintiffs have a non-statutory right of action to enjoin and declare unlawful official action that is ultra vires.
255. The United States Constitution provides that “All legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Const., art. I, § 1. Congress is authorized

Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 51 of 53
to “make all laws which shall be necessary and proper for carrying into Execution” its general powers. Id. §§ 1, 8.
256. The Defendants’ actions, as described herein, seek to undermine the ACA, including its expansion of Medicaid, and represent a fundamental alteration to those statutes.
257. Accordingly, the Defendants’ actions are in violation of the Take Care Clause and are ultra vires.
258. Plaintiffs will suffer irreparable injury if the Secretary’s actions following the President’s Executive Orders are not declared unlawful and unconstitutional because those actions have injured or will continue to harm Plaintiffs.
259. Plaintiffs are in danger of suffering irreparable harm and have no adequate remedy at law.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectfully ask that this Court: 1. Declare that Defendants’ issuance of the January 11, 2018 State Medicaid Director
Letter violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 2. Declare that Defendants’ approval of the Arkansas Works Amendment violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 3. Enjoin Defendants from implementing the practices purportedly authorized by the January 11, 2018 State Medicaid Director Letter and the Arkansas Works Amendment.

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4. Award Plaintiffs their reasonable attorneys’ fees and costs pursuant to 28 U.S.C.

§ 2412; and

5. Grant such other and further relief as may be just and proper.

November 5, 2018

Respectfully submitted,

Thomas J. Perrelli (D.C. Bar No. 438929)
Ian Heath Gershengorn (D.C. Bar No. 448475)
Natacha Y. Lam (D.C. Bar No. 1030168)
Jenner & Block LLP 1099 New York Avenue, N.W. Suite 900, Washington, DC 20001 Phone: 202 639 6004 TPerrelli@jenner.com IGershengorn@jenner.com NLam@jenner.com Counsel to National Health Law Program

By: /s/ Jane Perkins Jane Perkins Elizabeth Edwards Catherine McKee National Health Law Program 200 N. Greensboro Street, Suite D-13 Carrboro, NC 27510 Phone: 919-968-6308 (x101) perkins@healthlaw.org mckee@healhtlaw.org edwards@healthlaw.org
/s/ Kevin De Liban Kevin De Liban Trevor Hawkins Legal Aid of Arkansas 310 Mid-Continent Plaza, Suite 420 West Memphis, AR 72301 Phone: 870-732-6370 (x2206) kdeliban@arlegalaid.org thawkins@arlegalaid.org

/s/ Samuel Brooke Samuel Brooke Emily C.R. Early Neil K. Sawhney Ellen Degnan Southern Poverty Law Center 400 Washington Avenue Montgomery, AL 36104 Phone: 334-956-8200 samuel.brooke@splcenter.org neil.sawhney@splcenter.org

Counsel for Plaintiffs

Case 1:18-cv-01900-JEB Document 26 Filed 11/05/18 Page 53 of 53
CERTIFICATE OF SERVICE
I hereby certify that on November 5, 2018, I electronically filed the foregoing with the
Clerk of Court by using the CM/ECF system, which will send an electronic notice to the author-
ized CM/ECF filer listed below:
Vinita B. Andrapalliyal U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch P.O. Box 883 Washington, D.C. 20530 (202) 305-0845 vinita.b.andrapalliyal@usdoj.gov
Matthew Charles Skurnik U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 1100 L. Street, NW Washington, DC 20005 (202) 616-8188 matthew.skurnik@usdoj.gov
Counsel for Defendants
Nicholas Jacob Bronni Dylan L. Jacobs ARKANSAS ATTORNEY GENERAL’S OFFICE 323 Center Street Suite 200 Little Rock, AR 72201 (501) 682-6203 nicholas.bronni@arkansasag.gov dylan.jacobs@arkansasag.gov
Counsel for the State of Arkansas
By: /s/ Catherine McKee__ CATHERINE MCKEE

 
 Case 1:18-cv-01900-JEB Document 58 Filed 03/27/19 Page 1 of 35

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

CHARLES GRESHAM, et al., Plaintiffs, v.
ALEX M. AZAR II, et al., Defendants.

Civil Action No. 18-1900 (JEB)

MEMORANDUM OPINION Adrian McGonigal is 40 years old and lives with his brother in Pea Ridge, Arkansas. He used to have a job working in the shipping department of Southwest Poultry, a food-service company located nearby, although he received no medical insurance through his employer. Like many Americans, he has several serious medical conditions. Beginning in 2014, McGonigal was able to receive medical care — including regular doctor visits and numerous prescription drugs — through the state’s expanded Medicaid program. In mid-2018, however, McGonigal learned that he would be subject to new work requirements, which he would have to report online, as a condition of receiving health benefits. These were imposed by the Arkansas Works Amendments (AWA), approved by the U.S. Secretary of Health and Human Services in March 2018. Despite his lack of access to, and difficulty working with, computers, he was able to report his employment in June 2018, but he did not know he needed to continue to do so each month. As a result, when he went to pick up his prescriptions in October, the pharmacist told him that he was no longer covered, and his medicines would cost him $800. In the absence of Medicaid, he could not afford the cost of the prescriptions and so did not pick them up. His

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health conditions then flared up, causing him to miss several days of work, and Southwest Poultry fired him for his absences. He thus lost his Medicaid coverage and his job.
Anna Book is 38 years old and lives in Little Rock. She currently rents a room in an apartment but was homeless for most of the last eight years. In July 2018, she got a job as a dishwasher in a restaurant, for which she works about 24 hours each week. Before that, she was unemployed for two years. She nevertheless also had health care provided through Arkansas’s Medicaid program, which a local pastor helped her sign up for in 2014. Book learned last August that, pursuant to AWA, she would have to report 80 hours each month of employment or other activities to keep that coverage. While she reported her compliance in August and September with the pastor’s help — she does not have reliable internet access — Book has several health conditions and worries that she will not maintain sufficient hours at her job to keep her coverage.
Russell Cook is 26 and also lives in Little Rock. He is currently homeless. While he has spent time working as a landscaper, he is not presently employed and has minimal job prospects. The state’s Medicaid program has previously given him access to health care for various health conditions, including a torn Achilles tendon and serious dental problems. Cook, however, does not believe he will be able to comply with the new AWA work requirements, which began applying to him in January 2019. Lacking access to the internet or a phone, he also worries that he will be unable to report compliance with those requirements. He thus expects to lose his Medicaid coverage.
These are three of the ten Arkansans who come to this Court seeking to undo the work requirements the state added in 2018 to its Medicaid program. They sued the Secretary of Health
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and Human Services in August 2018, arguing that the federal government’s approval of the state’s new requirements violated the Administrative Procedure Act and the Constitution.
Plaintiffs’ suit does not offer an issue of first impression. Indeed, this Court just last summer considered a challenge to the Secretary’s approval of very similar changes to Kentucky’s Medicaid program — including work or “community engagement” requirements — in Stewart v. Azar, 313 F. Supp. 3d 237 (D.D.C. 2018) (Stewart I). There, it vacated the agency’s decision because it had not adequately considered whether the program “would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.” Id. at 243. Plaintiffs point to the identical deficiency in the record in this case. Despite the protestations in its (and intervenor Arkansas’s) briefing, HHS conceded at oral argument that the administrative decision in this case shares the same problem as the one in Stewart I. See Oral Argument Transcript at 6–7. The Court’s job is thus easy in one respect: the Secretary’s approval cannot stand.
Yet a separate question remains: what is the proper remedy? In Stewart I, the Court vacated the approval and remanded to the Secretary. Here, however, the Government argues that vacatur is improper both because, unlike Kentucky, AWA is already active and halting it would be quite disruptive, and because any error is easily fixed, just as it has been for Kentucky. The challengers disagree, positing that the deficiency in the approval is substantial and that any resulting disruption is outweighed by the ongoing harms suffered by the more than 16,000 Arkansans who have lost their Medicaid coverage. Given the seriousness of the deficiencies — which, as this Court explains in a separate Opinion issued today, the remand in Kentucky did not cure — and the absence of lasting harms to the Government relative to the significant ones
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suffered by Arkansans like Plaintiffs, the Court will vacate the Secretary’s approval and remand

for further proceedings.

I.

BACKGROUND

As it did in Stewart I, the Court begins with an overview of the relevant history and

provisions of the Medicaid Act. See 313 F. Supp 3d. at 243–44. It then turns to Arkansas’s

challenged plan before concluding with the procedural history of this case.

Legal Background

1. The Medicaid Act

Since 1965, the federal government and the states have worked together to provide

medical assistance to certain vulnerable populations under Title XIX of the Social Security Act,

commonly known as Medicaid. See 42 U.S.C. § 1396-1. The Centers for Medicare and

Medicaid Services (CMS), a federal agency within the Department of Health and Human

Services, has primary responsibility for overseeing Medicaid programs. Under the cooperative

federal-state arrangement, participating states submit their “plans for medical assistance” to the

Secretary of HHS. Id. To receive federal funding, those plans — along with any material

changes to them — must be “approved by the Secretary.” Id.; see also 42 C.F.R. § 430.12(c).

Currently, all states have chosen to participate in the program.

To be approved, state plans must comply with certain minimum parameters set out in the

Medicaid Act. See 42 U.S.C. § 1396a (listing 83 separate requirements). One such provision

requires state plans to “mak[e] medical assistance available” to certain low-income individuals.

Id. § 1396a(a)(10)(A). Until recently, that group included pregnant women, children, and their

families; some foster children; the elderly; and people with certain disabilities. Id. In 2010,

however, Congress enacted the Patient Protection and Affordable Care Act (ACA), colloquially

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known as Obamacare, “to increase the number of Americans covered by health insurance.” Nat’l Fed. of Indep. Business v. Sebelius, 567 U.S. 519, 538 (2012). Under that statute, states can expand their Medicaid coverage to include additional low-income adults under 65 who would not otherwise qualify. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII).
Generally, a state must cover all qualified individuals or forfeit its federal Medicaid funding. Id. § 1396a(a)(10)(B). That was originally so for the ACA expansion population as well. See 42 U.S.C. § 1396c. In NFIB, however, the Supreme Court held that Congress could not, consistent with the Spending Clause of the Constitution, condition previously appropriated Medicaid funds on the state’s agreeing to the expansion. See 567 U.S. at 584–85. The result was that states could choose not to cover the new population and lose no more than the funds that would have been appropriated for that group. Id. at 587. If, however, the state decided to provide coverage, those individuals would become part of its mandatory population. Id. at 585– 87 (explaining that Congress may “offer[] funds under the Affordable Care Act to expand the availability of health care, and requir[e] that States accepting such funds comply with the conditions on their use”). In that instance, the state must afford the expansion group “full benefits” — i.e., it must provide “medical assistance for all services covered under the State plan” that are substantially equivalent “in amount, duration, or scope . . . to the medical assistance available for [other] individual[s]” covered under the Act. See 42 U.S.C. § 1396d(y)(2)(B); 42 C.F.R. § 433.204(a)(2).
The Medicaid Act, in addition to defining who is entitled to coverage, also ensures what coverage those enrolled individuals receive. Under § 1396a, states must cover certain basic medical services, see 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a), and the statute limits the amount and type of premiums, deductions, or other cost-sharing charges that a state can impose on such
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care. Id. § 1396a(a)(14); see also id. § 1396o. Other provisions require states to provide three months of retroactive coverage once a beneficiary enrolls, see id. § 1396a(a)(34), and to ensure that recipients receive all “necessary transportation . . . to and from providers.” 42 C.F.R. § 431.53. Finally, states must “provide such safeguards as may be necessary to assure” that eligibility and services “will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients.” 42 U.S.C. § 1396a(a)(19).
2. Section 1115 of Social Security Act Both before and after the passage of the ACA, a state is not entirely locked in; instead, if it wishes to deviate from the Medicaid Act’s requirements, it can seek a waiver from the Secretary of HHS. See 42 U.S.C. § 1315. In enacting the Social Security Act (and, later, the Medicaid program within the same title), Congress recognized that statutory requirements “often stand in the way of experimental projects designed to test out new ideas and ways of dealing with the problems of public welfare recipients.” S. Rep. No. 1589, 87th Cong., 2d Sess. 19, reprinted in 1962 U.S.C.C.A.N. 1943, 1961–62. To that end, § 1115 of the Social Security Act allows the Secretary to approve “experimental, pilot, or demonstration project[s]” in state medical plans that would otherwise fall outside Medicaid’s parameters. The Secretary can approve only those projects that “in [his] judgment . . . [are] likely to assist in promoting the [Act’s] objectives.” 42 U.S.C. § 1315(a). As conceived, demonstration projects were “expected to be selectively approved by the Department and to be those which are designed to improve the techniques of administering assistance.” Supra S. Rep. No. 1589 at 1962. Once the Secretary has greenlighted such a project, he can then waive compliance with the requirements of § 1396a “to the extent and for the period . . . necessary to enable [the] State . . . to carry out such project.” Id. § 1315(a)(1).
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While the ultimate decision whether to grant § 1115 approval rests with the Secretary, his discretion is not boundless. Before HHS can act on a waiver application, the state “must provide at least a 30-day public notice[-]and[-]comment period” regarding the proposed program and hold at least two hearings at least 20 days before submitting the application. See 42 C.F.R. §§ 431.408(a)(1), (3). Once a state completes those prerequisites, it then sends an application to CMS. Id. § 431.412 (listing application requirements). After the agency notifies the state that it has received the waiver application, a federal 30-day public-notice period commences, and the agency must wait at least 45 days before rendering a final decision. Id. §§ 431.416(b), (e)(1).
Factual Background 1. Arkansas Works Amendments
Arkansas’s Medicaid program dates back to 1970. For most of the program’s history, the state maintained among the most stringent eligibility thresholds in the nation for adults, covering only the aged, disabled, and parents with very low incomes. See ECF 53-6, Exh. 54 (Ark. Health Care Independence Program Interim Report) at 16. That changed with the passage of the ACA. While states had a choice after NFIB not to expand Medicaid, Arkansas was one of those that opted to do so. Under its expansion program, which began January 1, 2014, Medicaid-eligible persons were given the opportunity to enroll in private insurance plans financed by the state. See AR 71. In its first two years, the program provided health coverage to more than 278,000 newly eligible individuals, helping to lower the uninsured rate from 19% to 11%. See AR 1274. The program became known as Arkansas Works in January 2017.
That month featured another significant change in the political landscape, as the Trump administration took over from President Obama. In March 2017, then-Secretary Thomas Price and CMS Director Seema Verma sent a letter to all 50 governors announcing the
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administration’s view that the ACA’s expansion of Medicaid was “a clear departure from the core, historical mission of the program.” See AR 85. They thus alerted states of the agency’s “intent to use existing Section 1115 demonstration authority” to help revamp Medicaid. See AR 86. Together they promised to find “a solution that best uses taxpayer dollars to serve” those individuals they deemed “truly vulnerable.” Id. Heeding HHS’s call, Governor Asa Hutchinson proposed three substantial amendments to Arkansas Works under Section 1115. See AR 2057. First, he proposed to shift income eligibility for the expansion population from 133% to 100% of the Federal Poverty Line. Id. Second, he proposed to “institute work requirements as a condition” of continued Medicaid coverage. Id. Third, he proposed to eliminate retroactive health coverage. Id. The state did not estimate the effects these amendments would have on Medicaid coverage. CMS held a public-comment period from July 11 to August 10, 2017, and numerous organizations offered their views and analysis of the changes.
On March 5, 2018, the Secretary approved the work requirements and limits to retroactive coverage, concluding that they were “likely to assist in improving health outcomes” and “incentivize beneficiaries to engage in their own health care.” AR 2–4. Under the new work requirements, most able-bodied adults in the Medicaid expansion population ages 19 to 49 must complete each month 80 hours of employment or other qualifying activities — or earn income equivalent to 80 hours of work. Id. Compliance was required to be reported monthly through an online portal. See AR 29. Various groups of persons are exempt, including the medically frail, pregnant women, full-time students, and persons in drug- or alcohol-treatment programs. See AR 28. Nonexempt individuals who do not report sufficient qualifying hours for any three months in a plan year are disenrolled from Medicaid for the remainder of that year and not permitted to re-enroll until the following plan year. See AR 14, 30–31. The work requirements
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took effect for persons age 30 to 49 on June 1, 2018, and for persons age 20 to 29 on January 1, 2019. See ECF No. 26-3 (Arkansas Works Eligibility and Enrollment Monitoring Plan) at 7–8. As to retroactive coverage, the Secretary approved a reduction from the three months required by the Act to one month; the more drastic proposal of eliminating such coverage entirely was abandoned, as was the Governor’s request to reduce eligibility down to 100% of the FPL. See AR 12, 22.
According to Arkansas’s Department of Human Services, only a small percentage of the persons required to report compliance with the work requirements actually did so during the first six months of the program. In October, for example, only 12.3% (1687 out of 13653) of persons not exempt from the requirements reported any kind of qualifying activity. See ECF No. 42-1 (Arkansas Works Reports June–November 2018) at 47, 52. Since the program began, more than 16,900 individuals have lost Medicaid coverage for some period of time for not reporting their compliance. Id. at 18, 27, 36, 45. It is not known what percentage of these individuals completed the work requirements but did not report versus those who did not engage in the work itself.
2. Kentucky HEALTH Arkansas was not the only state interested in the new administration’s proposal to rethink the Medicaid Expansion. The Commonwealth of Kentucky proposed a demonstration project  called Kentucky HEALTH — with similar community-engagement requirements and cutbacks to retroactive coverage. (It also contained other elements not relevant here.) Kentucky, unlike Arkansas, did estimate the coverage effects of its project, explaining that thousands of persons would lose their Medicaid benefits over the course of the project; indeed, their estimate corresponded to about 95,000 persons losing Medicaid for one full year. As it did in Arkansas,
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the Secretary approved that project on the ground that it was likely to “improv[e] health outcomes” and “increas[e] individual engagement in health care decisions.” Stewart I, 313 F. Supp. 3d at 258 (quoting AR 7).
Before the project took effect, several Medicaid recipients challenged the Secretary’s approval in this Court. They argued, among other things, that the agency had failed to adequately explain why Kentucky HEALTH promoted the objectives of Medicaid and that approval of the project exceeded HHS’s statutory authority. The Court concluded that the plaintiffs were right in one central and dispositive respect: “[T]he Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.” Id. at 243. It therefore vacated the Secretary’s approval and remanded the matter to the agency for further consideration. Id. at 273.
HHS has since reopened the comment period and subsequently reapproved Kentucky’s project, offering additional explanation for why the project advances the objectives of the Medicaid Act. The parties have now come back to the Court and filed cross-motions for summary judgment in that case. The Court issues a separate Opinion today resolving those motions, which it will refer to as Stewart II.
Procedural History Several Arkansas residents filed this lawsuit in August 2018. They assert that the Secretary’s approval of the Arkansas Works Amendments was arbitrary and capricious, in excess of his statutory authority, and in violation of the Take Care Clause of the Constitution. Because it was designated as related to Stewart I, see ECF No. 2, the case was directed to this Court. While Defendants objected to the related-case designation, see ECF No. 17, the Court determined that the cases’ common legal and factual issues militated in favor of its retaining the
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matter. See Minute Order of Sept. 12, 2018. The State of Arkansas has since intervened as a Defendant, and numerous amici have also joined the fray. Dueling Cross-Motions for Summary Judgment are now ripe. II. LEGAL STANDARD
The parties have cross-moved for summary judgment on the administrative record. The summary-judgment standard set forth in Federal Rule of Civil Procedure 56(c), therefore, “does not apply because of the limited role of a court in reviewing the administrative record.” Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006); see also Bloch v. Powell, 227 F. Supp. 2d 25, 30 (D.D.C. 2002), aff’d, 348 F.3d 1060 (D.C. Cir. 2003). “[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.” Sierra Club, 459 F. Supp. 2d. at 90 (quotation marks and citation omitted). “Summary judgment is the proper mechanism for deciding, as a matter of law, whether an agency action is supported by the administrative record and consistent with the [Administrative Procedure Act] standard of review.” Loma Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52 (D.D.C. 2010) (citation omitted).
The Administrative Procedure Act “sets forth the full extent of judicial authority to review executive agency action for procedural correctness.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009). It requires courts to “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2). Agency action is arbitrary and capricious if, for example, the agency “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency
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expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
In other words, an agency is required to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Id. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)) (internal quotation marks omitted). Courts, accordingly, “do not defer to the agency’s conclusory or unsupported suppositions,” United Techs. Corp. v. Dep’t of Def., 601 F.3d 557, 562 (D.C. Cir. 2010) (quoting McDonnell Douglas Corp. v. Dep’t of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004)), and “agency ‘litigating positions’ are not entitled to deference when they are merely [agency] counsel’s ‘post hoc rationalizations’ for agency action, advanced for the first time in the reviewing court.” Martin v. Occupational Safety & Health Review Comm’n, 499 U.S. 144, 156 (1991) (citation omitted). Although a reviewing court “may not supply a reasoned basis for the agency’s action that the agency itself has not given,” a decision that is not fully explained may, nevertheless, be upheld “if the agency’s path may reasonably be discerned.” Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86 (1974) (citation omitted). III. ANALYSIS
The Court, as it must, first addresses whether there is subject-matter jurisdiction before proceeding to the merits of Plaintiffs’ challenges.
Jurisdiction Unlike in Stewart I, Defendants do not contest Plaintiffs’ standing to challenge the Secretary’s approval of the Arkansas Works Amendments as a whole. The Court, nevertheless, has an independent duty to assure that it has subject-matter jurisdiction in this case. See Kaplan
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v. Cent. Bank of Islamic Repub. of Iran, 896 F.3d 501, 509 (D.C. Cir. 2018). To establish standing under Article III, Plaintiffs must show that they have suffered a concrete injury that is fairly traceable to the challenged conduct and that is likely to be redressed by a favorable judicial decision. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 590 (1992). On review, the Court easily concludes that at least one Plaintiff has established all three elements. Consider, for example, Adrian McGonigal, whom we encountered in this Opinion’s opening paragraph. He attests that he has lost his Medicaid coverage as a result of the community-engagement requirement and has thus been unable to pay for certain medical bills and prescription drugs. See ECF No. 27-3 (McGonigal Declaration). Or look to Russell Cook, also mentioned in the introduction, who avers that he will be unable to meet the community-engagement requirement once it applies to him and thus believes that loss of his health-care coverage is imminent. See ECF No. 27-7 (Cook Declaration). From these declarations and others submitted with Plaintiffs’ Motion, there is little doubt that at least one Plaintiff has suffered an injury (or will suffer an injury in the future) — the loss of Medicaid coverage — that is attributable to the Secretary’s approval of AWA, and that a favorable decision from the Court would redress it. See NB ex rel. Peacock v. District of Columbia, 682 F.3d 77, 82–83 (D.C. Cir. 2012).
While standing is thus easily established for their claim challenging the project as a whole, the state of Arkansas attacks Plaintiffs’ standing to make one of their arguments. It specifically says that no Plaintiff may challenge Arkansas Works’ online-only reporting requirements because the state changed its policy before this suit so as to allow reporting by phone or in person. See ECF No. 39 (Arkansas MSJ) at 34. There is no need for the Court to weigh in here. Because it resolves this case based on the challenge to the Arkansas Works
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Amendments writ large, the Court declines to decide whether certain Plaintiffs have standing to challenge this particular part of the project.
Merits With that threshold issue easily dispatched, the Court turns to the merits. Plaintiffs’ central position is identical to that of the challengers in Stewart I: the Arkansas Works Amendments “fundamentally alter the design and purpose of Medicaid.” ECF No. 27 (MSJ) at 13. They thus assail the Secretary’s approval of the Amendments on similar fronts. First, with regard to the project as a whole, Plaintiffs assert that HHS did not sufficiently consider whether it would promote the objectives of Medicaid, including how it would affect the provision of medical assistance to the needy. Second, they maintain that the Secretary lacked statutory authority to approve numerous aspects of AWA. Finally, Plaintiffs posit that a letter CMS issued in January 2018 violates the APA because it did not go through notice and comment. As in Stewart I, the Court only needs to consider the first of these contentions: “whether the Secretary acted arbitrarily or capriciously in concluding that [Arkansas Works] was ‘likely to assist in promoting the objectives’ of the Medicaid Act.” Stewart I, 313 F. Supp. 3d at 259 (quoting 42 U.S.C. § 1315(a)). Under that deferential standard, the Court “is not empowered to substitute its judgment for that of the agency.” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). Nor can it “presume even to comment upon the wisdom of [Arkansas’s] effort at [Medicaid] reform.” C.K. v. N.J. Dep’t of Health & Human Servs., 92 F.3d 171, 181 (3d Cir. 1996). Still, it is a fundamental principle of administrative law that “agencies are required to engage in reasoned decisionmaking.” Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015) (internal quotation marks omitted). This means that an agency must “examine all relevant factors and
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record evidence.” Am. Wild Horse Pres. Campaign v. Perdue, 873 F.3d 914, 923 (D.C. Cir. 2017). At minimum, the Secretary cannot “entirely fail[] to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Rather, he must “adequately analyze . . . the consequences” of his actions. See Am. Wild Horse, 873 F.3d at 932. In doing so, “[s]tating that a factor was considered . . . is not a substitute for considering it.” Getty v. Fed. Savs. & Loan Ins. Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986). The agency must instead provide more than “conclusory statements” to prove it “consider[ed] [the relevant] priorities.” Id. at 1057.
With that framework in mind, Plaintiffs’ position is simple: “The purpose of [] Medicaid” is to enable states “to furnish health care coverage to people who cannot otherwise afford it.” MSJ at 1, 15. Yet the Secretary, just as in Stewart I, “failed to consider adequately” the impact of the proposed project on Medicaid coverage. See Am. Wild Horse, 873 F.3d at 923. Indeed, he neither offered his own estimates of coverage loss nor grappled with comments in the administrative record projecting that the Amendments would lead a substantial number of Arkansas residents to be disenrolled from Medicaid. Those omissions, they urge, make his decision arbitrary and capricious.
Plaintiffs are correct. As Opening Day arrives, the Court finds its guiding principle in Yogi Berra’s aphorism, “It’s déjà vu all over again.” In other words, as the Secretary’s failures here are nearly identical to those in Stewart I, the Court’s analysis proceeds in the same fashion. It begins with the basic deficiencies in the Secretary’s approval in this case and then examines Defendants’ counterarguments.
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1. The Secretary’s Consideration of Medicaid’s Objectives Before approving a demonstration or pilot project, the Secretary must identify the objectives of Medicaid and explain why the project is likely to promote them. As it did in Stewart I, the Court assumes that the Secretary’s identification of those objectives is entitled to Chevron deference. That is, in reviewing his interpretation, the Court must first ask whether “Congress has directly spoken to the precise question at issue,” and, if not, whether “the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A., Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). According such deference is not of much practical significance here, however, because the Secretary agrees with the Court’s understanding of a “core objective” of the Medicaid Act. See ECF No. 52 (HHS Reply) at 5. In Stewart I, the Court explained that “one of Medicaid’s central objectives” is to “furnish medical assistance” to persons who cannot afford it. See 313 F. Supp. 3d at 243, 261, 266, 273. That conclusion followed ineluctably from § 1396-1 of the Act, which provides that Congress appropriated Medicaid funds “[f]or the purpose of enabling each State, as far as practicable under the conditions in such State, to furnish (1) medical assistance . . . [to] individuals[] whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” Case law discussing the program’s objectives confirms as much. See, e.g., Schweiker v. Hogan, 453 U.S. 569, 571 (1982) (explaining that Congress established Medicaid “for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons”); W. Va. Univ. Hosps. Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989) (“[T]he primary purpose of
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[M]edicaid is to achieve the praiseworthy social objective of granting health care coverage to those who cannot afford it.”).
Defendants, as mentioned, agree that providing health coverage to the needy is a purpose of the Act. See ECF No. 37 (HHS MSJ) at 12; Ark. MSJ at 13. In Arkansas’s words, “[T]hat Medicaid coverage is a Medicaid objective is readily apparent from the substantive provisions of the statute.” Ark. MSJ at 13. The Secretary, in fact, refers to the provision of medical care to eligible persons as “Medicaid’s core objective.” HHS Reply at 5 (emphasis added). HHS nevertheless did not consider whether AWA would advance or impede that objective.
In his approval letter, the Secretary explained that he considered the following objectives of the Medicaid Act: (1) “whether the demonstration as amended was likely to assist in improving health outcomes”; (2) “whether it would address behavioral and social factors that influence health outcomes”; and (3) “whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.” AR 4. Those are substantially the same objectives HHS considered when it first approved the Kentucky program. See Stewart I, 313 F. Supp. 3d at 261–62. What the Court said in that case thus holds true here: “While those may be worthy goals, there [i]s a notable omission from the list” — namely, whether the project would “help or hurt [Arkansas] in ‘funding . . . medical services for the needy.’” Id. (quoting Alexander v. Choate, 469 U.S. 287, 289 n.1 (1985)). By his own description, the Secretary “entirely failed to consider” this question. See State Farm, 463 U.S. at 43.
The Government conceded as much at oral argument, stating that HHS’s Arkansas approval letter no more addresses the program’s effects on Medicaid coverage than the Kentucky approval letter before the Court in Stewart I. See Tr. at 6–7. Because this is a separate administrative decision on review in a separate case, however, a brief assessment of the
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deficiency is instructive. To “adequately analyze” the issue of coverage, Am. Wild Horse, 873 F.3d at 932, the Secretary needed to consider whether the demonstration project would be likely to cause recipients to lose coverage and whether it would cause others to gain coverage. He did neither.
a. Risk to Coverage The Secretary’s approval letter did not consider whether AWA would reduce Medicaid coverage. Despite acknowledging at several points that commenters had predicted coverage loss, the agency did not engage with that possibility. For example, after mentioning that commenters had “expressed concerns that these requirements would . . . create barriers to coverage,” the Secretary responded that “[t]he state has pledged to do beneficiary outreach and education on how to comply” and has created an “easy” online reporting system. See AR 6. He also pointed to exemptions built into the project and to Arkansas’s assurances that it will allow for “reasonable modifications” for beneficiaries unable to meet the requirements. Id. But those statements did not grapple with the coverage issue. Not only did they fail to address whether coverage loss would occur as predicted, but they also ignored that commenters had projected that such loss would happen regardless of the exemptions and the education and reporting processes; indeed, some comments pinpointed online-only reporting as a source of coverage loss. See, e.g., AR 1272, 1287. Later, HHS noted again many commenters’ view that community-engagement requirements would “create barriers to coverage for non-exempt people who might have trouble accessing care.” AR 6. Instead of addressing that issue, however, it merely said: “We believe that the community engagement requirements create appropriate incentives for beneficiaries to gain employment.” Id. That position says nothing about the risk of coverage loss those
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requirements create. The bottom line: the Secretary did no more than acknowledge — in a conclusory manner, no less — that commenters forecast a loss in Medicaid coverage. But “[s]tating that a factor was considered . . . is not a substitute for considering it.” Getty, 805 F.2d at 1055. His decision thus falls short of the kind of “reasoned decisionmaking” the APA requires. See Michigan, 135 S. Ct. at 2706.
Defendants argue that the Secretary did not need to  and perhaps was not even able to  provide a numeric estimate of coverage loss. See HHS MSJ at 21; Ark. MSJ at 24. While producing an empirical prediction of coverage loss does not seem like too much to ask of the expert agency tasked with supervising Medicaid programs in all 50 states, the Court does not need to decide whether such an estimate is required. Here, numerous commenters predicted that substantial coverage loss would occur; a table cataloguing the relevant comments is included at the end of this Opinion in an Appendix. See, e.g., AR 1269 (Arkansas Advocates noting that requirement “will increase the rate of uninsured Arkansans”); AR 1277 (American Congress Obstetricians and Gynecologists explaining that “[t]he experience of the TANF program . . . demonstrates that imposing work requirements on Medicaid beneficiaries would . . . lead to the loss of health care coverage for substantial numbers of people who are unable to work or face major barriers to finding and retaining employment.”); see also ECF No. 33 (Amicus Brief of Deans, Chairs, and Scholars) at 14. Under these circumstances, the agency must grapple with the risk of coverage loss. See Nat’l Lifeline Assoc. v. FCC, 915 F.3d 19, 30-31 (D.C. Cir. 2019).
The Secretary should explain, for example, whether it agrees with the commenters’ coverage predictions. If so, it might elucidate whether it expects the loss to be minor or substantial, and how that weighs against the advancement of other Medicaid objectives. Nothing close to this appears in the Secretary’s approval letter. That does not mean that the Government
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must “recit[e] and refut[e] every objection submitted in opposition to the proposed demonstration.” HHS MSJ at 22. It just means that, at a minimum, the agency cannot “entirely fail[] to consider an important aspect of the problem,” repeatedly raised in the comment period. See State Farm, 463 U.S. at 43.
Arkansas maintains that the Secretary did not need to consider any reduction in coverage because it  unlike Kentucky  did not predict that the project would even cause coverage loss. See Ark. MSJ at 24. But the state’s failure in that respect does not alter HHS’s inquiry. Under the Medicaid Act, the Secretary may approve only those demonstration projects that are “likely to assist in promoting the objectives of [Medicaid],” and the parties agree that the provision of health coverage is a “central” objective of the Act. See 42 U.S.C. § 1315(a); HHS MSJ at 12– 13; Ark. MSJ at 13. Whether a state gives the Secretary excellent data or no data at all about coverage, his duty remains the same: to determine whether the proposed project will promote the objectives of the Act, including whether it advances or hinders the provision of health coverage to the needy. If it were otherwise, HHS could approve a project that would decimate Medicaid coverage without so much as addressing the issue where the state did not submit its own estimate of coverage loss. Even putting to one side the agency’s affirmative obligation to address coverage loss, however, the Secretary unquestionably has a duty to consider that issue where multiple commenters provide credible forecasts that it will occur. See, e.g., AR 1269, 1277, 1285, 1294–95. Here, as has been said, the agency had and neglected that duty.
In a last attempt to resist this conclusion, the Secretary says that he did not need to consider coverage because he had no obligation to offer any explanation of his decision to approve a demonstration project. See HHS MSJ at 22–23; see also Tr. at 9. For support, HHS points to the regulations governing its approval of demonstration projects, which do not
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explicitly require the Secretary to respond to comments or articulate the basis for his decision. See HHS MSJ at 22 (discussing 42 C.F.R. § 431.416). The APA, however, requires more. Where an agency decision is judicially reviewable, as the Court has already held this one is, see Stewart I, 313 F. Supp. 3d at 254–56, the Government “must give a reason that a court can measure . . . against the ‘arbitrary or capricious’ standard of the APA.” Kreis v. Sec’y of Air Force, 866 F.2d 1508, 1514–15 (D.C. Cir. 1989); see also Coburn v. McHugh, 679 F.3d 924, 934 (D.C. Cir. 2012) (“At the very least, the Board must ‘provide an explanation that will enable the court to evaluate the agency’s rationale at the time of decision.’”) (quoting Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654 (1990)). HHS’s regulations — which require CMS to maintain and publish an administrative record of public comments, any CMS responses, and a written approval or disapproval letter — are fully consonant with this axiomatic administrativelaw requirement. See 42 C.F.R. § 431.416(f). The argument that no explanation for the Secretary’s decision is required thus does not save it.
b. Promote Coverage At the same time that he failed to consider the risk to coverage, the Secretary identified only one element of the Amendments that might promote health coverage. In a single sentence, he noted that “a more limited period of retroactive eligibility will encourage beneficiaries to obtain and maintain health coverage, even when they are healthy.” AR 8. Little needs to be said on this score. It is well established that “conclusory or unsupported suppositions” do not satisfy the agency’s obligation to engage in reasoned decisionmaking. See McDonnell Douglas Corp. v. U.S. Dep’t of Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004). That is particularly so in the face of numerous comments taking the opposite position. As the American Congress of Obstetricians and Gynecologists, among others, explained, limiting retroactive coverage may
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lead “Medicaid-eligible persons [to] wait even longer to have their conditions treated to avoid incurring medical bills they cannot pay.” AR 1279. And when they do eventually arrive for treatment, they will be covered for less time than they would have been before AWA took effect, by definition reducing their Medicaid coverage. See AR 1338 (National Health Law Program describing this risk). HHS’s brief reference to the potential coverage-promoting effects of the changes to retroactive eligibility thus does not get it across the line.
2. Counterarguments Defendants offer two separate reasons for the Court to overlook the Secretary’s failure to consider coverage, neither of which is persuasive. They say first that the Arkansas Works Amendments promote several other important objectives of Medicaid, including the health of Medicaid-eligible persons. Second, Defendants maintain that any deficiency in the administrative record in this case is cured by the agency’s subsequent approval of Kentucky’s similar project on remand from the Court’s decision in Stewart I.
a. Other Objectives Defendants justify the proposed demonstration project on the ground that, regardless of its effect on Medicaid coverage, it advances other objectives of the Act. HHS specifically insists, as it did in Stewart I, that the Secretary was on solid ground in finding that the project would improve health outcomes, thereby advancing the goals of Medicaid. See HHS MSJ at 17– 18. Faced with this argument previously, this Court expressed skepticism that health, generally construed, was properly considered an objective of the Act. See Stewart I, 313 F. Supp. 3d at 266. It ultimately held that the agency’s “focus on health is no substitute for considering Medicaid’s central concern: covering health costs” through the provision of free or low-cost health coverage. Id. The Court reached the same conclusion in response to assertions that
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Kentucky HEALTH promoted independence and self-sufficiency. Id. at 271–72. HHS has offered no argument here that calls those conclusions into question.
Arkansas presses the point in a somewhat different way, asserting that the provision of Medicaid coverage is (1) the purpose only of Medicaid appropriations, not Medicaid, (2) in “irreconcilable tension” with other purposes of the Act, and (3) not applicable to the Medicaid expansion population. See Ark. MSJ at 10–22. At the same time, it concedes, seemingly in conflict with its other contentions, that it is “readily apparent” that providing “Medicaid coverage for Medicaid-eligible people” is “an objective of Medicaid.” Id. at 13. The Court has said this before and will say it again: if, as Arkansas and HHS admit (and this Court has found), ensuring Medicaid coverage for the needy is a key objective of the Act, the Secretary’s failure to consider the effects of the project on coverage alone renders his decision arbitrary and capricious; it does not matter that HHS deemed the project to advance other objectives of the Act.
While the Court might stop there, a brief foray into Arkansas’s arguments is nevertheless worthwhile. As to the first, Medicaid is an appropriations statute enacted pursuant to “Congress’s power under the Spending Clause.” NFIB, 567 U.S. at 542. What better place could the purpose of a spending program be found than in the provision that sets up the “purpose” of its appropriations? Arkansas’s second objection is even more puzzling. The Court does not understand how the objectives of a statute all agree was designed to provide free or lowcost medical care to the needy could nevertheless stand in “irreconcilable tension” with the goal of providing free or low-cost medical care to that population. The third sits on more comprehensible ground, though it yields Arkansas no more success. Addressing the purpose of the Medicaid expansion in Stewart I, the Court explained that “the Medicaid statute — taken as a whole — confirms that Congress intended to provide medical assistance to the expansion
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population.” 313 F. Supp. 3d at 269. HHS conceded as much in that case. Id. Neither party has offered any reason to retreat from that determination.
Defendants’ attempts to find refuge in other purposes of the Act and the propriety of Chevron deference as to those purposes are thus all hat, no cattle. Because they agree that the provision of low-cost medical care to Medicaid-eligible persons is a “core” purpose of the Act, see HHS Reply at 5, there is no legally significant dispute over the meaning of the Medicaid Act. What matters, instead, is the question addressed above: whether the Secretary adequately considered this issue. As has been made abundantly clear, he did not. Perhaps understanding as much, HHS largely attempts to justify its approval of the project in this case not on the Arkansas record but on another record entirely.
b. Kentucky Remand This brings the Court to the argument that leads off the Secretary’s Reply Brief: that his approval of AWA “is amply justified by the reasoning in his November 20, 2018, approval of Kentucky’s materially similar project.” HHS Reply at 1. In particular, HHS argues that the project on review here will, like the one approved on remand in Kentucky, help adults “transition from Medicaid to financial independence,” thereby enhancing “the fiscal sustainability of Arkansas’s Medicaid program”  an objective of the Act. Id. at 6. The Government clarified at oral argument that this is not merely a contention against vacatur  although it was principally offered as such  but also an argument in favor of sustaining the Secretary’s approval entirely. See Tr. at 8–10. The Court addresses the latter position here, leaving the remedy question for the end. In short, three weighty and independent rationales require rejecting HHS’s assertion that the Amendments should be approved based on the record in the Kentucky remand proceeding.
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First, it runs headlong into the “fundamental rule of administrative law” that a reviewing court “must judge the propriety of such action solely by the grounds invoked by the agency.” SEC v. Chenery Corp., 332 U.S. 194, 196 (1947). Nowhere in the Secretary’s approval letter does he justify his decision based on concerns about the sustainability of Arkansas’s Medicaid program, or on a belief that the project will help Medicaid-eligible persons to gain sufficient financial resources to be able to purchase private insurance. And the Court “may not accept [] counsel’s post hoc rationalizations for agency action.” State Farm, 463 U.S. at 50; see also Burlington Truck Lines, 371 U.S. at 168–69 (“Chenery requires that an agency’s discretionary order be upheld, if at all, on the same basis articulated in the order by the agency itself.”). The Government responded at oral argument that the Secretary did not need to provide any basis for his decision approving Arkansas’s proposed project, so it does not matter on what justification his decision is judicially upheld. See Tr. at 9–10. The Court has already explained why that assertion is inconsistent with the APA, see supra at 20–21, and it will not spill more ink on the matter here.
HHS’s argument suffers from a second and equally significant flaw. The demonstration project under consideration in Kentucky involves different considerations from the Arkansas project, and the rationales in favor of approving one may well not apply to approving the other. The Secretary said as much in opposing this case’s designation as related to the Kentucky one. See ECF No. 17 (“The two cases involve two separate approvals of two distinct projects in two different States.”). Consider the principal arguments the Secretary relies upon on remand in Kentucky. First, he says that the project promotes coverage because in its absence, the expansion population would have no Medicaid coverage. See Stewart v. Azar, No. 18-152, ECF No. 108 (HHS MSJ) at 18–20. A necessary ingredient of this argument appears to be that the
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Kentucky Governor has conditioned the Commonwealth’s continued expansion of Medicaid on the Secretary’s approval of the proposed project. Id. at 19. There is no suggestion that Arkansas’s Governor has made any similar kind of threat with regard to the Arkansas Works Amendments. Second, the Secretary justifies the Kentucky program on the ground that it advances the fiscal sustainability of the state’s Medicaid program, which is at risk due to Kentucky’s dire budgetary situation. Id. at 15–18. Yet there is no assertion that Arkansas is suffering from similar fiscal problems. The Government’s argument that the Kentucky approval justifies the decision on review in this case is particularly unpersuasive considering these significant differences.
The final reason to reject this argument is the simplest: the justification the Secretary has given for sustaining Kentucky’s program on remand is insufficient and the Court today rejects it in its latest Opinion in Stewart. See Stewart v. Azar, No. 18-152, Slip Opinion at 3 (Mar. 27, 2019) (Stewart II). If the explanation does not even justify affirmance of Kentucky’s project, it cannot support upholding a different administrative decision approving a different state’s project.
* * * In sum, the Secretary’s approval of the Arkansas Works Amendments is arbitrary and capricious because it did not address  despite receiving substantial comments on the matter  whether and how the project would implicate the “core” objective of Medicaid: the provision of medical coverage to the needy. Neither his consideration of other Medicaid Act objectives nor his subsequent approval of Kentucky’s separate demonstration project cure that deficiency. This failure infected the Secretary’s approval of AWA as a whole, such that those Amendments are invalid. The Court will thus grant Plaintiffs full relief on their arbitrary-and-capricious claim,
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removing any need to address their separate statutory-authority, APA notice-and-comment, and constitutional arguments.
Remedy That leaves only the question of the proper remedy, which in these circumstances is not small beer. When a court concludes that agency action is unlawful, “the practice of the court is ordinarily to vacate the rule.” Ill. Pub. Telecomms. Ass’n v. FCC, 123 F.3d 693, 693 (D.C. Cir. 1997); Reed v. Salazar, 744 F. Supp. 2d 98, 119 (D.D.C. 2010) (“[T]he default remedy is to set aside Defendants’ action.”); Sierra Club v. Van Antwerp, 719 F. Supp. 2d 77, 78 (D.D.C. 2010) (“[B]oth the Supreme Court and the D.C. Circuit Court have held that remand, along with vacatur, is the presumptively appropriate remedy for a violation of the APA.”). “[A]lthough vacatur is the normal remedy, [courts] sometimes decline to vacate an agency’s action.” Allina Health Servs. v. Sebelius, 746 F.3d 1102, 1110 (D.C. Cir. 2014). That decision depends on the “seriousness of the order’s deficiencies (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim change.” Allied-Signal, Inc. v. U.S. Nuclear Reg. Comm’n, 988 F.2d 146, 150-51 (D.C. Cir. 1993) (citation omitted); see also Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 282 F. Supp. 3d 91, 103 (D.D.C. 2017) (declining to vacate when agency “largely complied” with statute and could likely substantiate prior conclusions on remand). In Stewart I, the Court concluded that both factors supported vacatur. The Government’s failure to consider an objective of Medicaid was a “major shortcoming” going “to the heart” of his decision. See 313 F. Supp. 3d at 273. And vacatur was not overly disruptive because the project had “yet to take effect” and the plaintiffs could suffer “serious harm[s]” were Kentucky
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HEALTH allowed to be implemented pending further proceedings. Id. While the journey is somewhat different in this case, the Court arrives at the same destination.
1. Seriousness of Deficiencies The first factor does not favor the Government. For starters, in Stewart I, the Court concluded that the same legal error was a “major shortcoming” going “to the heart of the Secretary’s decision.” 313 F. Supp. 3d at 273. It explained that the D.C. Circuit has “repeatedly vacated agency actions with that flaw.” Id. Defendants respond that the Secretary has cured the error identified in Stewart I on remand, so it will assuredly be able to cure this one upon remand, too. See HHS MSJ at 28-29; see also Ark. MSJ at 37-38. Not so. As explained at length in Stewart II, the Court finds that the remand has not cured this “major shortcoming.” See Slip Op. at 3, 14–45. Because the agency failed to provide a legally sufficient rationale upon remand from Stewart I, the Court is even less sanguine that it will be able to do so in this case than when it vacated the Secretary’s Kentucky approval the first time. This does not mean it will be impossible for the agency to justify its approval of a demonstration project like this one. The Court’s decision does not go that far. But after at least two attempts for Kentucky, it has yet to do that analysis. Indeed, HHS may find it more difficult to offer a sufficient rationale in its second attempt in this case than in Kentucky. Arkansas does not appear to face the kind of fiscal issues asserted in Kentucky; instead, the state’s data suggest that the Medicaid expansion has reduced the amount Arkansas will spend on health care for this population between 2017 and 2021. See ECF No. 53-6, Exh. 55 (Final Report of Arkansas Health Reform Legislative Task Force) (explaining that if Arkansas rejects Medicaid expansion, “the negative impact to the state budget is approximately $438 [million]” during this time frame). It stands to reason that the state will have an uphill climb making the case that the
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expansion has pressed its annual budget, such that eligible persons should be pushed off the rolls. Such fiscal considerations would, in any event, need to be balanced against the more than 16,000 persons who have already lost their coverage because of the new requirements. See Arkansas Works Reports at 18, 27, 36, 45. The upshot is that the road to cure the deficiency in this case is, at best, a rocky one, strongly weighing in favor of vacatur.
2. Seriousness of Disruption The second factor is a closer call. Arkansas began implementing its demonstration project in June 2018, imposing work requirements on adults ages 30–49 and implementing the changes to retroactive coverage; it began enforcing work requirements as to adults ages 19–29 in January 2019. HHS and Arkansas assert that any interruption in the project would be enormously disruptive because it would interfere with the “State’s data collection efforts,” HHS Reply at 22, and “undermine” its “extensive efforts to educate Arkansas Works beneficiaries” on the work requirements. See Ark. MSJ at 38–39. They emphasize that, because the Kentucky program had not yet taken effect at the time of its vacatur, these concerns were not present in Stewart I. Id. The Court is not insensitive to the practical concerns Defendants raise about pausing enforcement of the Amendments, nor does it take lightly the effect of its ruling upon the state today. For the reasons that follow, however, it finds that the probable disruptions are not so significant as to require deviation from the ordinary rule of vacatur. Consider first the nature and extent of the disruptions. If the Court vacates the Secretary’s approval of AWA, the state would no longer condition certain Medicaid recipients’ coverage on reporting 80 hours of qualifying activities each month and would restore the number of months of retroactive coverage to three. In other words, vacatur would return matters to the way they were before the project was approved. Both changes, HHS asserts, will disrupt the
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state’s data-collection efforts. See HHS MSJ at 29. If Arkansas — as the party responsible for collecting and analyzing data from the project — has concerns about data collection in the event of vacatur, it does not say as much. See Ark. MSJ at 38–40 (mentioning only disruptive effects on education and outreach); ECF No. 45 (Ark. Reply) (same). Indeed, one amicus points out that the Secretary approved this project without “a proposed evaluation design.” See Amicus Brief of Deans, Chairs, and Scholars at 19–20.
The Court assumes, however, that vacatur would interrupt the state’s efforts to collect data on the effects of the work requirements and changes to retroactive coverage. While such concerns are not insignificant, they are tempered in the context of this case. Experimental projects are intended to help states like Arkansas “test out new ideas” for providing medical coverage to the needy, thereby influencing the trajectory of the federal-state Medicaid partnership down the line. See supra S. Rep. No. 1589 at 1961. If, after further consideration or after prevailing on appeal, the Secretary and Arkansas wish to move ahead with work requirements, they will remain able to do so in the future. And if they are dissatisfied with the data gathered from the initial months of the project because of the interruption caused by vacatur, Defendants could extend the project for an additional period of time to collect more information. This is not to minimize the importance of data collection in the context of an experimental project; it is just to say that vacatur will have little lasting impact on HHS’s or Arkansas’s interests. That distinguishes this case from others in which the D.C. Circuit has declined to vacate on account of irreversible harms that such a remedy would inflict on the status quo. See Allied-Signal, 988 F.2d at 151.
Defendants also maintain that vacatur will harm “Arkansas’s education and outreach efforts.” Ark. MSJ at 39. In that regard, they explain that a decision invalidating the work
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requirements will be confusing to Medicaid recipients who have just recently been informed that they have to meet those requirements. Id. at 38–39. The Court grants that vacatur of work requirements that have already been implemented may send mixed messages. But any disruption in this respect is not sufficiently significant to avoid vacatur. For one thing, Defendants have expressed confidence throughout this case that they can communicate with Medicaid recipients regarding the terms of the work requirements. See HHS MSJ at 8; Ark MSJ at 27, 34–35. If that is so, they should be able to inform them that the requirements are paused for now and, if later reapproved, that they are put back into effect. It bears mentioning here, however, that the State’s outreach efforts may well be falling severely short. Notably, only 12.3% of persons not exempt from the requirements reported any kind of qualifying activity. See Arkansas Works Reports June–November 2018 at 47, 52. The numbers are even lower for several other months. Id. Arkansas might use the time while the program is paused to consider whether and how to better educate persons about the requirements and how to satisfy them. Admittedly, vacatur could make such outreach complicated. Ultimately, however, the Court finds that the harms to prior and ongoing education do not tip the scales against vacatur.
In fact, the structure of the Amendments, considered with the timing of this Opinion, renders vacatur less disruptive that might be expected. As mentioned before, Arkansas Works recipients only lose coverage after three months of non-compliance with the work requirements. See AR 31. And the three-month clock starts over at the beginning of the calendar year. Id. Because fewer than three months have elapsed in 2019, the work requirements have not yet resulted in anyone’s being disenrolled, as such actions cannot take place until April 1. As a consequence, vacatur of the Amendments will not require Arkansas to re-enroll persons who have lost their coverage, with the administrative and communication-related headaches that
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might entail. Instead, it just requires them to communicate to providers that they should not disenroll persons moving forward on account of the requirements. The bottom line: “This is not a case in which the ‘egg has been scrambled,’ and it is too late to reverse course.” Allina Health, 746 F.3d at 1110–11 (quoting Sugar Cane Growers Co-op of Fla. v. Veneman, 289 F.3d 89, 97 (D.C. Cir. 2002)).
Finally, the Court emphasizes that the disruptions to Arkansas’s administration of its Medicaid program must be balanced against the harms that Plaintiffs and persons like them will experience if the program remains in effect. Cf. A.L. Pharma, Inc. v. Shalala, 62 F.3d 1484, 1492 (D.C. Cir. 1995) (explaining that vacatur inappropriate because “nothing in the record suggests that significant harm would result from allowing the approval to remain in effect pending the agency’s further explanation”); see also Tr. at 13 (conceding that court should consider harms to Plaintiffs as part of equitable inquiry into vacatur). Arkansas’s own numbers confirm that in 2018, more than 16,000 persons have lost their Medicaid. Defendants offer no reason to think the numbers will be different in 2019; indeed, once the requirements apply to persons aged 19–29, they seem likely to rise. See Arkansas Works Reports at 18, 27, 36, 45. Weighing the harms these persons will suffer from leaving in place a legally deficient order against the disruptions to the State’s data-collection and education efforts due to vacatur renders a clear answer: the Arkansas Works Amendments cannot stand.
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Case 1:18-cv-01900-JEB Document 58 Filed 03/27/19 Page 33 of 35 IV. CONCLUSION
For the foregoing reasons, the Court will grant Plaintiffs’ Motion for Summary Judgment and deny Defendants’ Cross-Motions. A separate Order consistent with this Opinion will issue this day, remanding the matter to HHS.
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge Date: March 27, 2019
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APPENDIX A

Arkansas Health Plan Component CommunityEngagement Requirement

Comments
AR 1269 (Arkansas Advocates for Children & Families) (noting that the requirement “will increase the rate of uninsured Arkansans” based on comparable effect in TANF program) AR 1277 (American Congress of Obstetricians and Gynecologists, et al.) (“The experience of the TANF program . . . demonstrates that imposing work requirements on Medicaid beneficiaries would . . . lead to the loss of health care coverage for substantial numbers of people who are unable to work or face major barriers to finding and retaining employment.”); AR 1285 (Families USA) (“The presence of the requirement itself will be a barrier to enrollment, causing some eligible working individuals to forego applying for coverage, and will make it more difficult for some statutorily eligible individuals to maintain coverage.”); AR 1291 (AARP) (expressing concern that requirements would “present an unnecessary barrier to health coverage for a sector of Arkansas’s population for whom coverage is critical”); AR 1294 (Cystic Fibrosis Foundation) (“We are concerned that this definition [of medically unfit] does not specify what will qualify an individual for exemption, and that people with cystic fibrosis may lose coverage because they are unable to satisfy the requirement due to health status.”); AR 1308 (Arkansas Hospital Association) (“These proposed changes . . . will likely lead to increases in churn, gaps in coverage, uninsurance and uncompensated care for hospitals and other providers.”); AR 1326 (Legal Aid of Arkansas) (noting that the requirement “would exclude individuals . . . who are partially employable but suffer due to chronic health conditions”); AR 1337 (National Health Law Program) (“The end result of this policy will likely be fewer people with Medicaid coverage and more uninsured people delaying treatment.”); AR 1341 (Nat’l Alliance on Mental Illness) (“NAMI Arkansas is concerned that the implementation of mandatory work requirements could cause substantial numbers of people with mental illness to lose health coverage, making it difficult to access mental health care.”); AR 1364–65 (Urban Institute Study) (detailing “coverage losses” as consideration for pending Medicaid work-related requirements nationwide and noting “potential adverse impacts on enrollees who have high health care needs but who do not qualify for disability benefits”); AR 1402 (Medicaid and CHIP Payment and Access Commission) (listing an impact on coverage as implication of Medicaid work requirement and noting almost every state proposing requirement had estimated a coverage loss). AR 1421 (Kaiser Family Foundation Issue Brief) (arguing that based on the TANF experience, “a work requirement might result in eligible people losing coverage”).

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Retroactive Eligibility

AR 1292 (AARP) (warning lack of retroactive coverage would increase debt obligations on previous beneficiaries and would “increase the burden of uncompensated care on providers”); AR 1297 (Human ARC) (“Gaps of time without medical coverage for the lowincome population that are eligible and applying for Medicaid will be significant.”); AR 1307 (Arkansas Hospital Association) (“AHA is concerned that the waiver of retroactive eligibility will result in unanticipated and avoidable gaps in coverage and healthcare debt.”); AR 1320 (Cancer Action Network) (stating waiver of retroactive eligibility “could place a substantial financial burden on enrollees and cause significant disruptions in care”); AR 1338 (National Health Law Program) (“The entirely predictable result will be . . . more individuals experiencing gaps in coverage when some providers refuse to treat them.”).

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 USCA Case #19-5094 Document #1828589

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 11, 2019

Decided February 14, 2020

No. 19-5094

CHARLES GRESHAM, ET AL., APPELLEES

v.

ALEX MICHAEL AZAR, II, SECRETARY, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES IN HIS
OFFICIAL CAPACITY, ET AL., APPELLANTS

STATE OF ARKANSAS, APPELLEE

Consolidated with 19-5096

Appeals from the United States District Court for the District of Columbia (No. 1:18-cv-01900)

Alisa B. Klein, Attorney, U.S. Department of Justice, argued the cause for federal appellants. With her on the briefs

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were Mark B. Stern, Attorney, Robert P. Charrow, General Counsel, U.S. Department of Health and Human Services, and Brenna E. Jenny, Deputy General Counsel.
Leslie Rutledge, Attorney General, Office of the Attorney General for the State of Arkansas, Nicholas J. Bronni, Solicitor General, Vincent M. Wagner, Deputy Solicitor General, and Dylan L. Jacobs, Assistant Solicitor General, were on the brief for appellant State of Arkansas.
Ian Heath Gershengorn argued the cause for plaintiffappellees. With him on the brief were Jane Perkins, Thomas J. Perrelli, Devi M. Rao, Natacha Y. Lam, Zachary S. Blau, and Samuel Brooke.
Kyle Druding was on the brief for amici curiae American College of Physicians, et al. in support of plaintiffs-appellees.
Edward T. Waters, Phillip A. Escoriaza, and Christopher J. Frisina were on the brief for amici curiae Deans, Chairs, and Scholars in support of plaintiffs-appellees.
Judith R. Nemsick, Jon M. Greenbaum, and Sunu Chandy were on the brief for amici curiae Lawyers Committee for Civil Rights Under Law, et al. in support of appellees and affirmance.
Before: PILLARD, Circuit Judge, and EDWARDS and SENTELLE, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge SENTELLE.
SENTELLE, Senior Circuit Judge: Residents of Kentucky and Arkansas brought this action against the Secretary of

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Health and Human Services. They contend that the Secretary acted in an arbitrary and capricious manner when he approved Medicaid demonstration requests for Kentucky and Arkansas. The District Court for the District of Columbia held that the Secretary did act in an arbitrary and capricious manner because he failed to analyze whether the demonstrations would promote the primary objective of Medicaid—to furnish medical assistance. After oral argument, Kentucky terminated the challenged demonstration project and moved for voluntary dismissal. We granted the unopposed motion. The only question remaining before us is whether the Secretary’s authorization of Arkansas’s demonstration is lawful. Because the Secretary’s approval of the plan was arbitrary and capricious, we affirm the judgment of the district court.
I. Background
Originally, Medicaid provided health care coverage for four categories of people: the disabled, the blind, the elderly, and needy families with dependent children. 42 U.S.C. § 1396-1. Congress amended the statute in 2010 to expand medical coverage to low-income adults who did not previously qualify. Id. at § 1396a(a)(10)(A)(i)(VIII); NFIB v. Sebelius, 567 U.S. 519, 583 (2012). States have a choice whether to expand Medicaid to cover this new population of individuals. NFIB, 567 U.S. at 587. Arkansas expanded Medicaid coverage to the new population effective January 1, 2014, through their participation in private health plans, known as qualified health plans, with the state paying premiums on behalf of enrollees. Appellees’ Br. 14; Gresham v. Azar, 363 F. Supp. 3d 165, 171 (D.D.C. 2019).
Medicaid establishes certain minimum coverage requirements that states must include in their plans. 42 U.S.C. § 1396a. States can deviate from those requirements if the

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Secretary waives them so that the state can engage in “experimental, pilot, or demonstration project[s].” 42 U.S.C. § 1315(a). The section authorizes the Secretary to approve “any experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives” of Medicaid. Id.
Arkansas applied to amend its existing waiver under § 1315 on June 30, 2017. Arkansas Administrative Record 2057 (“Ark. AR”). Arkansas gained approval for its initial Medicaid demonstration waiver in September 2013. In 2016, the state introduced its first version of the Arkansas Works program, encouraging enrollees to seek employment by offering voluntary referrals to the Arkansas Department of Workforce Services. Dissatisfied with the level of participation in that program, Arkansas’s new version of Arkansas Works introduced several new requirements and limitations. The one that received the most attention required beneficiaries aged 19 to 49 to “work or engage in specified educational, job training, or job search activities for at least 80 hours per month” and to document such activities. Id. at 2063. Certain categories of beneficiaries were exempted from completing the hours, including beneficiaries who show they are medically frail or pregnant, caring for a dependent child under age six, participating in a substance treatment program, or are full-time students. Id. at 2080–81. Nonexempt “beneficiaries who fail to meet the work requirements for any three months during a plan year will be disenrolled . . . and will not be permitted to re-enroll until the following plan year.” Id. at 2063.
Arkansas Works included some other new requirements in addition to the much-discussed work requirements. Typically, when someone enrolls in Medicaid, the “medical assistance under the plan . . . will be made available to him for care and

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services included under the plan and furnished in or after the third month before the month in which he made application.” 42 U.S.C. § 1396a(a)(34). Arkansas Works proposed to eliminate retroactive coverage entirely. Ark. AR 2057, 2061. It also proposed to lower the income eligibility threshold from 133% to 100% of the federal poverty line, meaning that beneficiaries with incomes from 101% to 133% of the federal poverty line would lose health coverage. Id. at 2057, 2060–61, 2063. Finally, Arkansas Works eliminated a program in which it used Medicaid funds to assist beneficiaries in paying the premiums for employer-provided health care coverage. Id. at 2057, 2063, 2073. Arkansas instead used Medicaid premium assistance funds only to help beneficiaries purchase a qualified health plan available on the state Health Insurance Marketplace, requiring all previous recipients of employersponsored coverage premiums to transition to coverage offered through the state’s Marketplace. Id. at 2057, 2063, 2073.
On March 5, 2018, the Secretary approved most of the new Arkansas Works program via a waiver effective until December 31, 2021, but with a few changes. He approved the work requirements but under the label of “community engagement.” Id. at 2. The Secretary authorized Arkansas to limit retroactive coverage to thirty days before enrollment rather than a complete elimination of retroactive coverage. Id. at 3, 12. He also approved Arkansas’s decision to terminate the employer-sponsored coverage premium assistance program. Id. at 3. The Secretary did not, however, permit Arkansas to limit eligibility to persons making less than or equal to 100% of the federal poverty line. Id. at 3 n.1, 11. Instead, the Secretary kept the income eligibility threshold at 133% of the federal poverty line. Id. at 3 n.1, 11.
In the approval letter, the Secretary analyzed whether Arkansas Works would “assist in promoting the objectives of

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Medicaid.” Id. at 3. The Secretary identified three objectives that he asserted Arkansas Works would promote: “improving health outcomes; . . . address[ing] behavioral and social factors that influence health outcomes; and . . . incentiviz[ing] beneficiaries to engage in their own health care and achieve better health outcomes.” Id. at 4. In particular, the Secretary stated that Arkansas Works’s community engagement requirements would “encourage beneficiaries to obtain and maintain employment or undertake other community engagement activities that research has shown to be correlated with improved health and wellness.” Id. Further, the Secretary thought the shorter timeframe for retroactive eligibility would “encourage beneficiaries to obtain and maintain health coverage, even when they are healthy,” which, in turn, promotes “the ultimate objective of improving beneficiary health.” Id. at 5. The letter also summarized concerns raised by commenters that the community engagement requirement would “caus[e] disruptions in care” or “create barriers to coverage” for beneficiaries who are not exempt. Id. at 6–7. In response, the Secretary noted that Arkansas had several exemptions and would “implement an outreach strategy to inform beneficiaries about how to report compliance.” Id.
The new work requirements took effect for those aged 30 to 49 on June 1, 2018, and for those aged 20 to 29 on January 1, 2019. Gresham, 363 F. Supp. 3d at 172. Charles Gresham along with nine other Arkansans filed an action for declaratory and injunctive relief against the Secretary on August 14, 2018. The district court on March 27, 2019, entered judgment vacating the Secretary’s approval, effectively halting the program. Gresham, 363 F. Supp. 3d at 176–85. In its opinion supporting the judgment, the district court relied on Stewart v. Azar, 313 F. Supp. 3d 237 (D.D.C. 2018) (Stewart I), which is the district court’s first opinion considering Kentucky’s similar demonstration, Gresham, 363 F. Supp. 3d at 176. In Stewart I,

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the district court turned to the provision authorizing the appropriations of funds for Medicaid, 42 U.S.C. § 1396-1, and held that, based on the text of that appropriations provision, the objective of Medicaid was to “furnish . . . medical assistance” to people who cannot afford it. Stewart I, 313 F. Supp. 3d at 260–61.
With its previously articulated objective of Medicaid in mind, the district court then turned to the Secretary’s approval of Arkansas Works. First, the district court noted that the Secretary identified three objectives that Arkansas Works would promote: “(1) ‘whether the demonstration as amended was likely to assist in improving health outcomes’; (2) ‘whether it would address behavioral and social factors that influence health outcomes’; and (3) ‘whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.’” Gresham, 363 F. Supp. 3d at 176 (quoting Ark. AR 4). But “[t]he Secretary’s approval letter did not consider whether [Arkansas Works] would reduce Medicaid coverage. Despite acknowledging at several points that commenters had predicted coverage loss, the agency did not engage with that possibility.” Id. at 177. The district court also explained that the Secretary failed to consider whether Arkansas Works would promote coverage. Id. at 179. Instead, the Secretary considered his alternative objectives, primarily healthy outcomes, but the district court observed that “‘focus on health is no substitute for considering Medicaid’s central concern: covering health costs’ through the provision of free or low-cost health coverage.” Id. (quoting Stewart I, 313 F. Supp. 3d at 266). “In sum,” the district court held:
the Secretary’s approval of the Arkansas Works Amendments is arbitrary and capricious because it did not address—despite receiving substantial comments on the matter—whether and how the

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project would implicate the “core” objective of Medicaid: the provision of medical coverage to the needy.
Id. at 181. The district court entered final judgment on April 4, 2019, and the Secretary filed a notice of appeal on April 10, 2019.
This case was originally a consolidated appeal from the district court’s judgment in both the Arkansas and Kentucky cases. The district court twice vacated the Secretary’s approval of Kentucky’s demonstration for the same failure to address whether Kentucky’s program would promote the key objective of Medicaid. Stewart v. Azar, 366 F. Supp. 3d 125, 156 (D.D.C. 2019) (Stewart II); Stewart I, 313 F. Supp. 3d at 274. On December 16, 2019, Kentucky moved to dismiss its appeal as moot because it “terminated the section [1315] demonstration project.” Intervenor-Def.-Appellant’s Mot. to Voluntarily Dismiss Appeal 1–2 (Dec. 16, 2019), ECF No. 1820334. Neither the government nor the appellees opposed the motion. Gov’t’s Resp. (Dec. 18, 2019), ECF No. 1820655; Appellees’ Resp. (Dec. 20, 2019), ECF No. 1821219.
Although the Secretary has considerable discretion to grant a waiver, we reject the government’s contention that such discretion renders his waiver decisions unreviewable. The Administrative Procedure Act’s (APA) exception from judicial review for an action committed to agency discretion is “very narrow,” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971); see also Dep’t of Commerce v. New York, 139 S. Ct. 2551, 2568 (2019), barring judicial review only in those “rare instances” where “there is no law to apply,” Overton Park, 401 U.S. at 410 (internal quotation marks and citation omitted). The Medicaid statute provides the legal standard we apply here: The Secretary may only approve

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“experimental, pilot, or demonstration project[s],” and only insofar as they are “likely to assist in promoting the objectives” of Medicaid, 42 U.S.C. § 1315(a). Section 1315 approvals are not among the rare “categories of administrative decisions that courts traditionally have regarded as committed to agency discretion.” Dep’t of Commerce, 139 S. Ct. at 2568.
Additionally, the government asked that we address “the reasoning of the district court’s opinion in Stewart and the underlying November 2018 HHS approval of the Kentucky demonstration,” and second that we vacate the district court’s judgment against the federal defendants in the Kentucky case Stewart II, 66 F. Supp. 3d 125. Gov’t’s Resp. 1–2. The appellees opposed both of those additional requests. Appellees’ Resp. 1–4. We granted the motion to voluntarily dismiss but declined to vacate the district court’s judgment against the federal defendants in Stewart II. As to the government’s first request, we do not rely on the Secretary’s reasoning in the November 2018 approval of Kentucky’s demonstration when considering the Secretary’s approval of Arkansas’s demonstration.
“We review de novo the District Court’s grant of summary judgment, which means that we review the agency’s decision on our own.” Castlewood Prods., L.L.C. v. Norton, 365 F.3d 1076, 1082 (D.C. Cir. 2004). Therefore, we will review the Secretary’s approval of Arkansas Works in accordance with the Administrative Procedure Act and will set it aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see also C.K. v. New Jersey Dep’t of Health & Human Servs., 92 F.3d 171, 181–82 (3d Cir. 1996) (applying the arbitrary and capricious standard of review to a waiver under § 1315); Beno v. Shalala, 30 F.3d 1057, 1066–67 (9th Cir. 1994) (same); Aguayo v. Richardson, 473 F.2d 1090, 1103–08 (2d Cir. 1973) (same).

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An agency action that “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise” is arbitrary and capricious. Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
II. DISCUSSION
A. Objective of Medicaid
The district court is indisputably correct that the principal objective of Medicaid is providing health care coverage. The Secretary’s discretion in approving or denying demonstrations is guided by the statutory directive that the demonstration must be “likely to assist in promoting the objectives” of Medicaid. 42 U.S.C. § 1315. While the Medicaid statute does not have a standalone purpose section like some social welfare statutes, see, e.g., 42 U.S.C. § 601(a) (articulating the purposes of the Temporary Assistance for Needy Families program); 42 U.S.C. § 629 (announcing the “objectives” of the Promoting Safe and Stable Families program), it does have a provision that articulates the reasons underlying the appropriations of funds, 42 U.S.C. § 1396-1. The provision describes the purpose of Medicaid as
to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.

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Id. In addition to the appropriations provision, the statute defines “medical assistance” as “payment of part or all of the cost of the following care and services or the care and services themselves.” 42 U.S.C. § 1396d(a). Further, as the district court explained, the Affordable Care Act’s expansion of health care coverage to a larger group of Americans is consistent with Medicaid’s general purpose of furnishing health care coverage. See Stewart I, 313 F. Supp. 3d at 260 (citing Pub. L. No. 111-148, 124 Stat. 119, 130, 271 (2010)). The text consistently focuses on providing access to health care coverage.
Both the First and Sixth Circuits relied on Medicaid’s appropriations provision quoted above in concluding that “[t]he primary purpose of Medicaid is to enable states to provide medical services to those whose ‘income and resources are insufficient to meet the costs of necessary medical services.’” Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir. 2001) (quoting 42 U.S.C. § 1396 (2000)), aff’d, 538 U.S. 644 (2003); Price v. Medicaid Dir., 838 F.3d 739, 742 (6th Cir. 2016). Similarly, the Ninth Circuit relied on both the appropriations provision and the definition of “medical assistance” when describing Medicaid as “a federal grant program that encourages states to provide certain medical services” and identifying a key element of “medical assistance” as the spending of federally provided funds for medical coverage. Univ. of Wash. Med. Ctr. v. Sebelius, 634 F.3d 1029, 1031, 1034–35 (9th Cir. 2011).
Beyond relying on the text of the statute, other courts have consistently described Medicaid’s objective as primarily providing health care coverage. For example, the Third Circuit succinctly stated, “We recognize, of course, that the primary purpose of medicaid is to achieve the praiseworthy

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social objective of granting health care coverage to those who cannot afford it.” W. Va. Univ. Hosps., Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989), aff’d, 499 U.S. 83 (1991). Likewise, the Supreme Court characterized Medicaid as a “program . . . [that] provides joint federal and state funding of medical care for individuals who cannot afford to pay their own medical costs.” Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 275 (2006); see also Virginia ex rel. Hunter Labs., L.L.C. v. Virginia, 828 F.3d 281, 283 (4th Cir. 2016) (quoting Ahlborn in the section of the decision explaining the important aspects of Medicaid).
The statute and the case law demonstrate that the primary objective of Medicaid is to provide access to medical care. There might be secondary benefits that the government was hoping to incentivize, such as healthier outcomes for beneficiaries or more engagement in their health care, but the “means [Congress] has deemed appropriate” is providing health care coverage. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 231 n.4 (1994). In sum, “the intent of Congress is clear” that Medicaid’s objective is to provide health care coverage, and, as a result, the Secretary “must give effect to [that] unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984).
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 factors that influence health outcomes; and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.” Ark. AR 4. These three alternative objectives all point to better health outcomes

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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. 42 U.S.C. § 1396-1. The Supreme Court and this court have consistently reminded agencies that they are “bound, not only by the ultimate purposes Congress has selected, but by the means it has deemed appropriate, and prescribed, for the pursuit of those purposes.” MCI Telecomms., 512 U.S. at 231 n. 4; see also Waterkeeper All. v. EPA, 853 F.3d 527, 535 (D.C. Cir. 2017); Colo. River Indian Tribes v. Nat’l Indian Gaming Comm’n, 466 F.3d 134, 139– 40 (D.C. Cir. 2006). The means that Congress selected to achieve the objectives of Medicaid was to provide health care coverage to populations that otherwise could not afford it.
To an extent, Arkansas and the government characterize the Secretary’s approval letter as also identifying transitioning beneficiaries away from governmental benefits through financial independence or commercial coverage as an objective promoted by Arkansas Works. Ark. Br. 14, 37–42; Gov’t Br. 24–25, 32. This argument misrepresents the Secretary’s letter. The approval letter has a specific section for the Secretary’s determination that the project will assist in promoting the objectives of Medicaid. Ark. AR 3–5. The objectives articulated in that section are the health-outcome goals quoted above. That section does not mention transitioning beneficiaries away from benefits. The district court’s discussion of the Secretary’s objectives confirms our interpretation of this letter. It identifies the Secretary’s alternative objective as “improv[ing] health outcomes.” Gresham, 363 F. Supp. 3d at 179. There is no reference to commercial coverage in the Secretary’s approval letter, and

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the only reference to beneficiary financial independence is in the section summarizing public comments. In response to concerns about the community engagement requirements creating barriers to coverage, the Secretary stated, “Given that employment is positively correlated with health outcomes, it furthers the purposes of the Medicaid statute to test and evaluate these requirements as a means to improve beneficiaries’ health and to promote beneficiary independence.” Ark. AR 6. But “[n]owhere in the Secretary’s approval letter does he justify his decision based . . . on a belief that the project will help Medicaid-eligible persons to gain sufficient financial resources to be able to purchase private insurance.” Gresham, 363 F. Supp. 3d at 180–81. We will not accept post hoc rationalizations for the Secretary’s decision. See State Farm, 463 U.S. at 50.
Nor could the Secretary have rested his decision on the objective of transitioning beneficiaries away from government benefits through either financial independence or commercial coverage. When Congress wants to pursue additional objectives within a social welfare program, it says so in the text. For example, the purpose section of TANF explicitly includes “end[ing] the dependence of needy parents on government benefits by promoting job preparation, work, and marriage” among the objectives of the statute. 42 U.S.C. § 601(a)(2). Also, both TANF and the Supplemental Nutrition Assistance Program (SNAP) condition eligibility for benefits upon completing a certain number of hours of work per week to support the objective of “end[ing] dependence of needy parents on government benefits.” 42 U.S.C. §§ 601(a)(2), 607(c) (TANF); 7 U.S.C. § 2015(d)(1) (SNAP). In contrast, Congress has not conditioned the receipt of Medicaid benefits on fulfilling work requirements or taking steps to end receipt of governmental benefits.

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The reference to independence in the appropriations

provision and the cross reference to TANF cannot support the

Secretary’s alternative objective either. The reference to

“independence” in the appropriations provision is in the

context of assisting beneficiaries in achieving functional

independence through rehabilitative and other services, not

financial independence from government welfare programs.

42 U.S.C. § 1396-1. Medicaid also grants states the “[o]ption”

to terminate Medicaid benefits when a beneficiary who

receives both Medicaid and TANF fails to comply with

TANF’s work requirements.

See 42 U.S.C.

§ 1396u-1(b)(3)(A). The provision gives states, therefore, the

ability to coordinate benefits for recipients receiving both

TANF and Medicaid. It does not go so far as to incorporate

TANF work requirements and additional objectives into

Medicaid.

Further, the history of Congress’s amendments to social welfare programs supports the conclusion that Congress did not intend 42 U.S.C. § 1396u-1(b)(3)(A) to incorporate TANF’s objectives and work requirements into Medicaid. In 1996, SNAP already included work requirements to maintain eligibility. 7 U.S.C. § 2015(d)(1) (1994). Also in 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which replaced Aid to Families with Dependent Children with TANF and added work requirements. Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, sec. 103, § 407, 110 Stat. 2105, 2129–34. At the same time, it added 42 U.S.C. § 1396u-1(b)(3)(A) to Medicaid. Id. at sec. 114, § 1931, 110 Stat. at 2177–80. The fact that Congress did not similarly amend Medicaid to add a work requirement for all recipients—at a time when the other two major welfare programs had those requirements and Congress was in the process of amending welfare statutes—demonstrates that

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Congress did not intend to incorporate work requirements into Medicaid through § 1396u-1(b)(3)(A).

In short, we agree with the district court that the alternative objectives of better health outcomes and beneficiary independence are not consistent with Medicaid. The text of the statute includes one primary purpose, which is providing health care coverage without any restriction geared to healthy outcomes, financial independence or transition to commercial coverage.

B. The Approvals Were Arbitrary and Capricious

With the objective of Medicaid defined, we turn to the Secretary’s analysis and approval of Arkansas’s demonstration, and we find it wanting. In order to survive arbitrary and capricious review, agencies need to address “important aspect[s] of the problem.” State Farm, 463 U.S. at 43. In this situation, the loss of coverage for beneficiaries is an important aspect of the demonstration approval because coverage is a principal objective of Medicaid and because commenters raised concerns about the loss of coverage. See, e.g., Ark. AR 1269–70, 1277–78, 1285, 1294–95.

A critical issue in this case is the Secretary’s failure to

account for loss of coverage, which is a matter of importance

under the statute. The record shows that the Arkansas Works

amendments resulted in significant coverage loss. In Arkansas,

more than 18,000 people (about 25% of those subject to the

work requirement) lost coverage as a result of the project in just

five months. Ark. Dep’t of Human Servs., Arkansas Works

Program

8

(Dec.

2018),

https://humanservices.arkansas.gov/images/uploads/011519_

AWReport.pdf. Additionally, commenters on the Arkansas

Works amendments detailed the potential for substantial

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coverage loss supported by research evidence. Ark. AR 1269– 70, 1277–78, 1285, 1294–95, 1297, 1307–08, 1320, 1326, 1337–38, 1341, 1364–65, 1402, 1421. The Secretary’s analysis considered only whether the demonstrations would increase healthy outcomes and promote engagement with the beneficiary’s health care. Id. at 3–5. The Secretary noted that some commenters were concerned that “these requirements would be burdensome on families or create barriers to coverage.” Id. at 6. But he explained that Arkansas would have “outreach and education on how to comply with the new community engagement requirements” and that Centers for Medicare and Medicaid Services could discontinue the program if data showed that it was no longer in the public interest. Id. The Secretary also concluded that the “overall health benefits to the [a]ffected population . . . outweigh the health-risks with respect to those who fail to” comply with the new requirements. Id. at 7. While Arkansas did not have its own estimate of potential coverage loss, the estimates and concerns raised in the comments were enough to alert the Secretary that coverage loss was an important aspect of the problem. Failure to consider whether the project will result in coverage loss is arbitrary and capricious.
In total, the Secretary’s analysis of the substantial and important problem is to note the concerns of others and dismiss those concerns in a handful of conclusory sentences. Nodding to concerns raised by commenters only to dismiss them in a conclusory manner is not a hallmark of reasoned decisionmaking. See, e.g., Am. Wild Horse Pres. Campaign v. Perdue, 873 F.3d 914, 932 (D.C. Cir. 2017) (critiquing an agency for “brush[ing] aside critical facts” and not “adequately analyz[ing]” the consequences of a decision); Getty v. Fed. Savs. & Loan Ins. Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986) (analyzing whether an agency actually considered a concern rather than merely stating that it considered the concern).

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True, the Secretary’s approval letter is not devoid of analysis. It does contain the Secretary’s articulation of how he thought the demonstrations would assist in promoting an entirely different set of objectives than the one we hold is the principal objective of Medicaid. In some circumstances it may be enough for the agency to assess at least one of several possible objectives. See Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 971 (D.C. Cir. 1999). But in such cases, the statute lists several objectives, some of which might lead to conflicting decisions. Id.; see also Melcher v. FCC, 134 F.3d 1143, 1154 (D.C. Cir. 1998). For example, in both Fresno Mobile Radio and Melcher, the statute at issue included five separate objectives for FCC to consider when creating auctions for licenses, including “the development and rapid deployment of new technologies,” “promoting economic opportunity and competition,” and the “efficient and intensive use of the electromagnetic spectrum.” 47 U.S.C. § 309(j)(3). In Fresno Mobile Radio, we recognized that these objectives could point to conflicting courses of action, so the agency could give precedence to one or several objectives over others without acting in an arbitrary or capricious manner. Fresno Mobile Radio, 165 F.3d at 971; see also Melcher, 134 F.3d at 1154; Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1101–03 (D.C. Cir. 2009) (explaining that an agency may not “depart from” statutory principles “altogether to achieve some other goal”). The crucial difference in this case is that the Medicaid statute identifies its primary purpose rather than a laundry list. The primary purpose is
to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation

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and other services to help such families and individuals attain or retain capability for independence or self-care.
42 U.S.C. § 1396-1. Importantly, the Secretary disregarded this statutory purpose in his analysis. While we have held that it is not arbitrary or capricious to prioritize one statutorily identified objective over another, it is an entirely different matter to prioritize non-statutory objectives to the exclusion of the statutory purpose.
III. CONCLUSION
Because the Secretary’s approval of Arkansas Works was arbitrary and capricious, we affirm the district court’s judgment vacating the Secretary’s approval.