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Dream Team Pushes HHS Policy Envelope With High Risk of Lawsuits (1)

Aug. 28, 2019, 9:45 AMUpdated: Aug. 28, 2019, 5:35 PM

The power center of the Department of Health and Human Services in the Trump administration turns out to be an office full of attorneys that people may have not heard of.

The Office of the General Counsel—which has been in existence for more than half a century—has added more than 100 lawyers since President Donald Trump took office and become more willing to risk lawsuits to push through policy changes under HHS Secretary Alex Azar, an alumnus of that office. The newly aggressive approach emulates legal strategies employed by the Labor Department and Environmental Protection Agency among other agencies.

The additions include attorneys from top law firms like Akin Gump Strauss Hauer & Feld, Alston & Bird, Crowell & Moring, and Sidley Austin.

The office’s new approach has sent clear signals to health-care industry leaders that the administration won’t back off plans to implement policies like tying Medicare reimbursements to foreign countries’ drug prices just because of a threat of litigation.

The OGC evolves to the management style of the secretary and how aggressive that secretary wants to be, former HHS Secretary Tommy Thompson said in an interview. Azar is a “very passionate, aggressive secretary,” so the office is working to be as aggressive as possible within the bounds of what is legal, he said.

The approach helped the administration get an important win with a recent court ruling allowing the sale of short-term health insurance policies that don’t meet the standards of the Affordable Care Act. But it also has sustained some self-inflicted wounds, including dealing with the aftermath of the Trump administration’s policy that led to parents being separated from their children at the U.S. southern border and trying to block migrant girls from accessing abortions.

The OGC was actively involved in crafting the now-defunct rule that would have ended the rebates that drug manufacturers pay to pharmacy liaisons and figured out the legal pathway for the administration to import prescription drugs, a former administration official familiar with those deliberations said.

The OGC played a critical role in adjustments to the physician self-referral law and the anti-kickback statute that are expected to be released in September after Labor Day, two sources familiar with the matter said.

The OGC also crafted a strategy with the Justice Department to work with the courts in the Ms. L v ICE lawsuit when the Department of Homeland Security didn’t want to work with the courts, the former official said. The judge in that case ordered the Trump administration to stop separating migrant parents and their children and reunite those who had already been separated.

There need to be people in the OGC who can “help advise a secretary or a deputy secretary or a division head how to get the job done, otherwise you would be completely paralyzed” in making policy, Thompson said.

Shaping Policy From the Start

General counsels typically represent an organization in lawsuits. But at the HHS, the OGC has been involved with shaping policy for years. It’s not that the office is gaining power now; the leadership at HHS is just more willing to face lawsuits.

Political appointees in the OGC, mainly in the immediate office of the general counsel, coordinate legal policy and strategy across the numerous HHS agencies, David Ault, a career OGC attorney during the Obama administration and an official at the Centers for Medicare & Medicaid Services until earlier this year, said.

They also “harmonize” policy priorities coming down from the White House and up from agency staff, Ault said. That means reconciling plans when they contradict or differ and helping to steer the agency away from potential legal landmines, like making arguments inconsistent with prior regulations or conflicts with statutory or regulatory language.

Agency staffs are communicating with the OGC on a daily basis to discuss things like the underlying policy objective of a regulation and what trade-offs the agency is willing to make to make that policy happen, an administration official who has worked closely with the OGC said.

The OGC’s ability to see developments and issues across departments made it invaluable to policy development after the Sept. 11, 2001, terrorist attacks and the wave of mailings containing anthrax, said Stewart Simonson, deputy general counsel during the George W. Bush administration.

OGC attorneys also have to make judgments around whether agencies need to go through the notice and comment process when making policy, said Ladd Wiley, principal deputy general counsel during the George W. Bush administration. The process can be time-intensive and cumbersome, but it’s a decision that could be the difference in whether the policy survives a legal challenge.

The office also helps shape policy by preparing officials to testify before Congress, determining what information the department will share with Congress, and reviewing documents that are going to be released through the Freedom of Information Act to make sure they can’t hurt a potential legal case, according to the former administration official who asked not to be identified.

“The department is constantly facing novel policy challenges,” Wiley said.

Willing to Risk Litigation

Though the office has been busier than in past administrations because of all the legal challenges, the HHS’s total of approximately 3,800 federal cases pending isn’t materially different from other administrations, said a senior OGC official who asked not to be named in order to discuss policy.

One of the administration’s most prominent court victories was a recent decision that upheld a rule allowing short-term health insurance policies that don’t meet the standards of the Affordable Care Act. The policy has been touted by the administration as providing more choice and condemned by Democrats as weakening the individual market exchanges.

The OGC’s efforts to defend challenges to the administration’s policies that are more socially conservative haven’t been as successful, the former administration official said.

Court cases stemming from the unaccompanied minors policy and former Office of Refugee Resettlement Director Scott Lloyd’s efforts to persuade pregnant unaccompanied teens not to have abortions took up a lot of the office’s bandwidth, the former official said.

Those cases were argued in the courts by a Justice Department attorney with assistance from former OGC attorney Matthew Bowman, a longtime anti-abortion activist before joining the HHS, the former administration official said. Bowman has since moved to the HHS Office for Civil Rights, where much of the department’s socially conservative policy is being crafted. Bowman didn’t respond to a request for comment.

Priority in Staffing

General Counsel Robert Charrow plans to make this job the last of his career, so he doesn’t feel the need to make nice with everyone, the former administration official said. That gives him the freedom to take more risks and go head to head with the White House and other agencies to get them to do what the HHS wants.

To boost staff in both numbers and experience, Charrow requested and got approval from HHS leadership to add about 100 career and political attorneys to the OGC, an individual with knowledge of the move said.

That came after the CMS division of the OGC roughly doubled in size from the end of the Bush administration to the end of the Obama administration, a former OGC attorney who was with the department through several administrations said. This was in part due to the expansion of the Medicare program and the passage of the Affordable Care Act.

Lawyers in this administration’s OGC bring a deep practical experience in the field that other administrations haven’t had because of their time at big law firms, said Christopher White, general counsel for medical device group AdvaMed.

They bring heavily annotated versions of the statutes to meetings, and meeting with them feels like going to a top law firm, White said. The meetings feature discussions on highly technical aspects of the law, he said—a useful focus given that health-care law comes from statutes that are amended frequently and often are decades old.

Political appointees in the OGC have experience managing large cases, whether that’s from working in a big law firm or at the Justice Department, which helps in handling the complicated litigation portfolio of the department, said another senior OGC official who asked not to be named in order to discuss policy. Many of the cases are large and involve multiple jurisdictions simultaneously and multiple agencies.

It takes an “extremely talented lawyer to serve in OGC,” White said.

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Bernie Kohn at bkohn@bloomberglaw.com