Today the D.C. Circuit held that the Secretary of Health and Human Services acted in an arbitrary and capricious manner in approving work rules for Medicaid recipients. In both form and substance, this was a smackdown. As to form: The opinion is very short—the entirety of the reasoning occupies 10 pages, which is about as brisk as these things get. As to substance, the court clearly doesn’t see this as a close question. It begins its analysis by stating that “The district court is indisputably correct that the principal objective of Medicaid is providing health care coverage.” This is important, because, as the court notes, HHS justified the work rules as assisting health outcomes, “but that alternative objective lacks textual support. Indeed, the statute makes no mention of that objective.” Thus the court states:
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.
Then, in just three even brisker pages, the court holds that HHS failed arbitrary and capricious review because it had only a few conclusory sentences in response to concerns about the work rule reducing health care coverage. The court concludes: “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.”
I guess this was the best that HHS could do, but clearly the D.C. Circuit found it totally wanting. I would love to see the back-and-forth among the HHS and DOJ lawyers on this. Maybe some higher-ups in the Administration thought that they could persuade conservative judges. If so, it is worth noting that the opinion was written by Judge Sentelle, who is definitely conservative. It is always a bit depressing to see courts line up strictly along party lines, and a bit refreshing when they don’t.
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