Opinion ID: 503529
Heading Depth: 2
Heading Rank: 1

Heading: CAPA record requirements

Text: 46 The appellants charge that in enacting the amended rules, the State acted without a certified administrative record and a statement of basis and purpose as required by CAPA, the Colorado Administrative Procedures Act, and, that DSS, as an agency, lacked the statutory authority to enact the emergency regulations to cease the payment of the incentive allowance. Furthermore they say that the record before us is incomplete. 47 The lack of a certified administrative record or statement of basis and purpose as the foundation for noncompliance with CAPA was not raised below. We nevertheless have considered the claim and find that it lacks merit. Colorado law allows the parties to stipulate to less than the record specified under Sec. 24-4-106(6) of the CAPA. 10 The parties entered a stipulation for consolidation under Rule 65(a)(2), Fed.R.Civ.P., which stated that it is specifically understood that the Court shall consider the evidence previously received which would be admissible upon a trial on the merits, as well as any pleadings, filings or other documents which otherwise form part of the record and that the same shall be considered during the Court's ruling upon this matter. See I R. 127-128; 133-134 at p 5. The argument that the stipulations cannot excuse the State from the requirements of CAPA is untenable since the language of the statute clearly provides that parties can stipulate to less than the record described in Sec. 24-4-106(6). Id., see Harris v. District Court, Second Judicial District, 655 P.2d 398, 401 (Colo.1982) (court did not have discretion to deny a motion to supplement record where the parties had not stipulated to a record less than that required under Sec. 24-4-106(6)). 48 In any event, what was in the stipulated record shows ample justification for the State's action. After the Governor vetoed the incentive payment monies in S.B. 401, the DSS submitted its emergency rule to the legislative drafting office, in accordance with Sec. 24-4-103(8)(d). 11 See II R. 252-264. This submission included the required fiscal impact statement and a statement of basis and purpose. Id. at 253, 255. These documents, and the other materials before the court do not leave us to guess at the reasoning process of the agency. The statement of basis and purpose reveals and explains the perceived necessity for the rule: the foreseeable shortfall in the Medicaid funds. Citizens, 649 P.2d at 1062. 49 The agency provides a foundation in fact for the resulting emergency regulation. Id. Here the more relevant facts are fiscal calculations, which the State has provided. The State has repeatedly articulated that if cutbacks were not implemented in the Medicaid budget, then Medicaid patients would suffer cutbacks or a total loss of services. 12 If the state did not provide the services required by the federal statutes it would suffer the sanction of denial of federal funds which would further curtail the services to medicaid patients. 13 The State has detailed the cuts, even to their specific effect upon individual service providers. See II R. at 253-262. 50 As emergency, informal rulemaking, the procedures followed by DSS were reasonable. The appellants were given notice via newspapers, oral contact, and the copies of the proposed rules. III R. 84-85. They were not precluded from submitting materials at these hearings or during the course of litigation. The amended rules which were enacted are supported by the facts in the record, the requisite for informal rulemaking. Citizens, 649 P.2d at 1063 (citations omitted); see also Colorado Auto & Truck Wreckers v. Dept. of Revenue, 618 P.2d 646, 652 (Colo.1980) (department proposing a regulation has no affirmative duty to offer evidence in support of it so long as proposed regulation is part of the record). 51 As the district court found, the amended rules are also valid as a policy judgment. Colorado Health, 598 F.Supp. at 1409; see Plaintiffs' Exh. 8, Governor Lamm's Veto statement: It is inappropriate to pay last year's nursing home incentive when medical services are being limited because of financial constraints. At best, the appellants raise technical flaws which do not affect substantial rights. Colorado Health, 598 F.Supp. at 1408. When viewed in the light of the materials considered by DSS and the CBSS, and the breadth and judgmental or predictive nature of the policy choice inherent in the decision to suspend payment of the incentive allowance, the resulting rules were not in violation of Colorado law. Citizens, 649 P.2d at 1064-65 and n. 8 (citing FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978) and FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961)).