Opinion ID: 8312801
Heading Depth: 3
Heading Rank: 1

Heading: Seriousness of Deficiencies

Text: 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 Op. at 182. 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 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.