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

Heading: Risk to Coverage

Text: 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 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 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 , 103 S.Ct. 2856 . 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 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, 110 S.Ct. 2668 , 110 L.Ed.2d 579 (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 administrative-law 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.