RFK Jr.'s Limits on Rule Comments Have Risk for Medicaid, Grants

Robert F. Kennedy Jr.'s decision to abandon a 54-year-old policy that allowed public comment on a variety of health department decisions stands to open the door to sweeping policy changes but will likely face legal challenges.

The Department of Health and Human Services’ plan abandons the “Richardson Waiver,” a policy adopted in 1971 that allowed for notice-and-comment rulemaking despite an exemption from the process in the Administrative Procedure Act for “rules and regulations relating to public property, loans, grants, benefits, or contracts.”

Kennedy’s Feb. 28 policy statement said the waiver—which had never been formally adopted as rulemaking—was “contrary to the clear text” of the APA and imposed obligations on the HHS that were “beyond the maximum procedural requirements specified” in the law.

The health secretary’s policy rescission prompted outrage among advocates for open government who say the policy halts public participation, which has been a longtime staple of HHS decision making.

The Association for Professionals in Infection Control and Epidemiology called for the policy to be reversed. Others say Kennedy has reneged on his promise of “radical transparency” at the HHS by imposing the new policy and canceling or postponing meetings of outside experts to advise the agency.

“This really puts the lie to the whole idea of transparency, because there’s nothing more important to transparent and accountable government than notice and comment for major policy changes. It really is the sunshine of administrative law,” said Lawrence O. Gostin, faculty director of the O’Neill Institute for National and Global Health Law at Georgetown University.

“It’s basically major public policy making in the dark,” Gostin said.

A legal challenge against the update is inevitable, said both Gostin and fellow Georgetown University legal scholar David Super.

“They will put out a lot of regulations that are almost certainly illegal under federal law, and rather than being warned about that and given a chance to change them, they will simply impose those policies and force people to sue them,” said Super, a professor of law and economics whose research focuses on administrative and constitutional law.

‘Benefits’ at Risk

A broad interpretation and application of the policy change relating to “benefits” could make it easier for Kennedy and the Trump administration to make wholesale changes to Medicaid, said Gostin and Super.

Even though decades of administrative rules and congressional legislation have shaped the Medicaid program, “what the HHS is saying here is that ‘we can get rid of all of that with a stroke of the pen and turn Medicaid into something dramatically different—no opportunity for any public input,’” said Super.

The scope of the change on the Medicaid program remains to be seen, according to Andrew Tsui, a former litigator at the HHS Office of General Counsel.

But Tsui pointed to programs like Medicaid Section 1115 waiver demonstration projects as potentially falling under the umbrella of “grants” under the HHS’s current interpretation of the APA. “Those processes don’t involve notice and comment rulemaking in the first place,” he said.

Absent clear guidance from the HHS, stakeholders will be left in the dark over exactly how broad the agency’s interpretation could reach, said Alex Hontos, a partner at Dorsey & Whitney LLP.

Looking at the directive, “it seems to me to be exceptionally broad,” he said. “Can it really mean Medicaid is encompassed within the definition of the word ‘benefit’ for purposes of this memo?’”

“I think that’s a great question that people want to know about,” Hontos said.

The HHS didn’t immediately respond to a request for comment.

NIH Grants

The new policy’s implication for grants could impact agencies like the National Institutes of Health, the world’s largest public funding source for biomedical research, said Linda Malek, a partner in Crowell & Moring’s health-care practice.

Last year, the NIH spent $35 billion on research grants, with $9 billion of it going for “indirect costs” like facilities and administration costs. On Feb. 7, the NIH announced it would reduce grant funding for indirect expenses to a flat 15%, saving more than $4 billion a year. That move is currently paused by a federal judge.

Malek said it’s unclear whether the policy change would affect the review process for current grants. But, “I do think that it could certainly affect changes in rules around grant awards, or other grant-making processes, such that there wouldn’t be a requirement any longer to provide a notice-and-comment period,” she said.

That would be significant, Malek said, because the public comment period is an “iterative” and educational process that often results in changes of mutual benefit to the government and affected stakeholders.

“If that process is removed or is delayed, you lose” the ability and the opportunity to produce a “more informed” policy change, Malek said.

Organizations’ ability to prepare for policy changes would also be impacted if the notice-and-comment period is eliminated, Malek said. “That can have a very significant effect” on their “budgeting, planning and day-to-day operations,” she said.

Removing public participation in agency decisions could have “dangerous consequences,” the Association for Professionals in Infection Control and Epidemiology said in a statement.

“Infection prevention experts, clinicians, and the broader healthcare community must have the opportunity to weigh in on policies affecting outbreak response, antimicrobial stewardship, and healthcare-associated infections,” the group said.

“Silencing public input weakens our ability to adapt to emerging threats, reduces transparency in critical health initiatives, and erodes public trust in the government’s role in safeguarding public health.”