Opinion ID: 4507755
Heading Depth: 2
Heading Rank: 2

Heading: The Approvals Were Arbitrary and Capricious

Text: 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 17 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). 18 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 19 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.