Judges: W.A. DREW EDMONDSON, Attorney General of Oklahoma
Filed Date: 8/16/1995
Status: Precedential
Modified Date: 7/6/2016
Dear Representative Crocker,
¶ 0 This office has received your request for an Attorney General Opinion. You asked, in effect, the following question:
Does the Oklahoma Administrative Procedures Act require that theOklahoma Health Care Authority promulgate rules prior to theformulation and submission for federal approval of a Section1115(a) Research and Demonstration project waiver application anda Section 1915(b) Freedom of Choice waiver application?
¶ 1 Essential to this opinion is a general discussion of the federal Medicaid program. The federal Medicaid program was created in 1965 "for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons." Harris v. McRae,
¶ 2 The federal statutes governing the state Medicaid programs require each state to submit to the Health Care Financing Agency (HCFA) a "state Medicaid plan" describing how the state intends to administer its program to ensure compliance with the federal regulations.
¶ 3 Although requirements under the Act are mandatory upon the states, the Act provides a mechanism for waiver of such requirements under certain circumstances. Waivers permitting exceptions to State Plan requirements allow a state "to implement innovative programs or activities on a time-limited basis, and subject to specific safeguards for the protection of recipients and the program."
¶ 4 The 1115(a) waiver, or any experimental, pilot or demonstration project waiver, is contained in Section 1115 of the Act, as amended,
(a) In the case of any [Section 1115] experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives of [the public assistance titles of the Act] in a State or States —
(1) the Secretary may waive compliance with any of the [State Plan] requirements of section . . . 1396(a) . . . to the extent and for the period he finds necessary to enable such State or States to carry out such project. . . .
¶ 5 This statute was enacted to enable states to "`test out new ideas and ways of dealing with the problems of public welfare recipients.' S.Rep. No. 1589, 87th Cong., 2d Sess. 20, reprintedin 1962 U.S.C.C.A.N. 1943, 1961." Beno v. Shalala,
¶ 6 The second category of waiver to be described is often termed a "freedom of choice" waiver. Pursuant to Section 1902(a)(23) of the Act, as amended,
¶ 7 Furthermore,
¶ 8 To fully answer your question it is also important to examine certain State statutes relevant to the powers and duties of the Oklahoma Health Care Authority (OHCA). The first is 56O.S.Supp. 1994, § 1010.3[
On and after July 1, 1993, there shall be a state entity designated by law to assume responsibility for preparations for converting the present system of delivery of the Oklahoma Medicaid Program to a managed care system. In the event such state entity is not designated by law for such purpose, the Commission for Human Services or the Department of Human Services shall assume such responsibility.
¶ 9 Subsection D of Section 1010.3 further provides that the "designated state Medicaid agency shall apply for any and all federal Medicaid waivers necessary to implement the [Oklahoma Medicaid Healthcare Options] System. The application made pursuant to this subsection shall be designed to qualify for federal funding primarily on a prepaid capitated basis."
¶ 10 Accordingly, pursuant to 63 O.S.Supp. 1994, § 5009[
¶ 11 Thus, as the single State entity designated by law not only to administer the Oklahoma Medicaid State Plan, but also to convert the traditional fee-for-service Oklahoma Medicaid State Plan to a managed care system, the OHCA prepared and submitted for approval two federal waiver applications to the Secretary of HHS through HCFA, an agency within the Department of HHS. See
¶ 12 In essence, these statutorily mandated waiver applications submitted by OHCA are requests asking authorization for Oklahoma to be prospectively "waived" or exempted from some of the usual policies and rules applicable to the current Oklahoma Medicaid State Plan in order to implement a managed care system, utilizing capitated, prepaid principles with either full or partial capitation. See 63 O.S.Supp. 1994, § 5009[
¶ 13 Pursuant to its statutory directive to prepare "any and all" necessary federal Medicaid waivers and to ensure compliance with State law requiring Oklahoma to begin operation of its managed care system by July 1, 1995, the OHCA prepared an additional application requesting a 1915(b) freedom of choice waiver.
¶ 14 Absent waiver approval, Oklahoma must continue to comply with the requirements outlined in its Medicaid State Plan and cannot implement a managed care system. Until Oklahoma obtains final approval from the Secretary of HHS for either waiver application, Oklahoma will continue to operate its longstanding traditional Title XIX fee-for-service Medicaid program in all areas of the State. Any requirements of the Medicaid statute and regulations not expressly waived continue in effect. J.K. By andThrough R.K. v. Dillenberg,
¶ 15 In regard to the waiver applications and rulemaking under the Oklahoma Administrative Procedures Act (OAPA), a rule is defined as "any agency statement or group of related statements of general applicability and future effect that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of the agency." 75 O.S.Supp.1994, § 250.3[
¶ 16 Lacking approval by the Secretary of HHS, the formulation and submission of the waiver applications seeking federal approval to alter the existing traditional fee-for-service Oklahoma Medicaid program did not meet the OAPA threshold standard of "general applicability and future effect." 75O.S.Supp. 1994, § 250.3[
¶ 17 Finally, the pervasive federal statutes and regulations governing the waiver process would appear to preempt the promulgation of any State rules and regulations prior to the formulation and submission of the waiver applications for federal approval. Guschke v. City of Oklahoma City,
¶ 18 It is, therefore, the official Opinion of the AttorneyGeneral that:
The Oklahoma Health Care Authority was not required topromulgate rules pursuant to the Oklahoma AdministrativeProcedures Act, 75 Ohio St. 1991, § 250[
If waiver is granted, appropriate rules must be promulgatedpursuant to the Oklahoma Administrative Procedures Act forimplementation of the managed care system.
W.A. DREW EDMONDSON ATTORNEY GENERAL OF OKLAHOMA
REBECCA PASTERNIK-IKARD ASSISTANT ATTORNEY GENERAL
Phoenix Baptist Hospital & Medical Center v. United States , 728 F. Supp. 1423 ( 1989 )
JK by and Through RK v. Dillenberg , 836 F. Supp. 694 ( 1993 )
Phoenix Baptist Hospital and Medical Center, Inc. v. United ... , 937 F.2d 452 ( 1991 )
43-socsecrepser-359-medicaremedicaid-guide-p-42065-marion-skandalis , 14 F.3d 173 ( 1994 )
Charles M. Guschke v. City of Oklahoma City , 763 F.2d 379 ( 1985 )
deanna-beno-susan-wiseman-jody-baker-janese-denise-bland-reina-weight-susan , 30 F.3d 1057 ( 1994 )
State Ex Rel. Villines v. Freeman , 370 P.2d 307 ( 1962 )
Grand River Dam Authority v. State , 645 P.2d 1011 ( 1982 )
Harris v. McRae , 100 S. Ct. 2671 ( 1980 )