APA now the main control over new PPACA rules

August 1, 2012

Health reform provisions must be deemed lawful by the Administrative Procedure Act.

CHECKS ON AUTHORITY

Most PPACA regulations are, or will be, subject to section 553 of the APA, which prescribes the fundamental requirement of "notice and comment" for most "rule-making." Among other requirements, agencies must publish notice of proposed rules and solicit comments before issuing any final rule.

Final rules must generally be published at least 30 days before the rule becomes effective. Regulations violating these procedures are subject to challenge under APA Section 706.

Moreover, any regulation that is arbitrary, capricious, an abuse of discretion, unlawful, contrary to constitutional right, or in excess of statutory jurisdiction or authority is subject to challenge in court. Indeed, ensuring that regulations satisfy these core requirements is an important check against agency actions in excess of their authority and will help ensure that PPACA is implemented properly and in accordance with the law.

Recently, the Eternal World Television Network (EWTN) and Legatus filed complaints against the Department of Health and Human Services (HHS), the Department of Labor and the Department of the Treasury. These plaintiffs contend that the agencies violated Section 553 of the APA in promulgating regulations to implement PPACA.

The complaints specifically challenge an interim final rule promulgated by HHS, Labor and Treasury, which required all group health plans and insurers offering group or individual plans to provide certain contraceptives, forcing individuals to violate deeply held religious beliefs. In addition to challenging these regulations on constitutional grounds, the plaintiffs' allege the regulations were illegal for violating the APA by failing to provide sufficient prior notice and time for public comment.

Other similar challenges are likely to follow. Given the outcome of the Supreme Court challenge, the APA now becomes the critical means by which the nature and reach of regulatory actions can be controlled. Thus, the regulations being promulgated to implement PPACA are a fertile battleground for disputes on how the United States' healthcare system should actually function on a day-to-day basis.

The cases discussed above are the beginning of what is very likely to be an extended struggle.

This column is written for informational purposes only and should not be construed as legal advice.

Phillip R. Seckman is a partner with McKenna Long & Aldridge LLP.

Amy Siadak is an associate with McKenna Long & Aldridge LLP.