Last updated on January 3rd, 2022 at 01:07 pm
This Medicaid and Medicare vaccine mandates legal review was written by Dorit Rubinstein Reiss, Professor of Law at the University of California Hastings College of the Law (San Francisco, CA), who is a frequent contributor to this and many other blogs, providing in-depth, and intellectually stimulating, articles about vaccines, medical issues, social policy, and the law.
Professor Reiss writes extensively in law journals about the social and legal policies of vaccination. Additionally, Reiss is also a member of the Parent Advisory Board of Voices for Vaccines, a parent-led organization that supports and advocates for on-time vaccination and the reduction of vaccine-preventable disease. She is also a member of the Vaccines Working Group on Ethics and Policy.
Staying this mandate is more surprising than staying the OSHA mandate we have discussed before because while a vaccine mandate is new (but not other broad workplace regulations), and OSHA Emergency Temporary Standards require a high bar rarely met, there is a long history of extensive, broad funding conditions under Medicaid and Medicare.
I have decided to do this as an overview rather than a full analysis of each of the Medicare and Medicaid vaccine mandates decisions, simply because I want to get it out promptly. I will say that my view is that the strongest argument against the rule is that it was enacted without notice and comment, and that, itself, is not a very strong argument.
The Medicare and Medicaid vaccine mandates rule
On November 5, 2021 – about two months after President Biden announced his plan to do this – the Centers for Medicare and Medicaid Services (CMS) posted an interim final rule that required most providers who take Medicare or Medicaid funding to impose a vaccine mandate. An interim final rule is an administrative tool agencies use when they decide not to hold notice and comment before issuing a rule and want to soften the impact of that.
Generally, to pass a rule an agency has to, at the least, publish a notice in the federal register, give an opportunity to comment, and publish a concise and general statement with the basis of the rule. Agencies do not, however, have to follow these procedures if there is good cause to dispense with them – for example, in an emergency. Interim final rules are rules where the agency finds good cause not to go through the notice and comment process, and simply publishes the final rule which is then operational but offers an opportunity to submit comments after the fact and announces that it will consider the comments and make changes where appropriate. That’s what CMS did here.
The rule itself is pretty straightforward. After finding that it’s “necessary to help protect the health and safety of residents, clients, patients, PACE participants, and staff,” CMS changed the conditions for providing funds to require COVID-19 vaccination for staff in the relevant facilities. The rule acknowledges the potential that staff will be eligible for medical or religious exemptions, but refers to other laws for that.
The rule is accompanied by a detailed discussion of the facts supporting Medicare and Medicaid vaccine mandates – see more on that later.
Like the OSHA rule, the CMS rule on Medicare and Medicaid vaccine mandates was challenged in court, but unlike the OSHA rule, these cases were not consolidated. Right now, multiple cases are before different courts in different circuits. The ones that so far reached a decision are:
- A case brought by the states of Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota, and New Hampshire in a district court in Missouri; that case led to a stay (putting the rule on hold) in those states, and the stay was upheld by their relevant court of appeals, the Court of Appeals for the Eighth Circuit.
- A case brought by the states of Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina and Utah. The district court stayed the rule nationwide, and the Fifth Circuit upheld the stay but limited it to the plaintiff states.
- A case brought by the state of Florida against the rule. The district court there refused to grant a stay, and their court of appeals – the Eleventh Circuit Court of Appeals – upheld that refusal.
- A case brought by Texas, and a district court granted a stay on that.
Altogether, these decisions mean that the Medicare and Medicaid vaccine mandates is currently on hold in 25 states, and operational in the other 25. The Biden administration appealed the stay to the Supreme Court, asking that Court to allow the rule to go into effect while litigation is going on. I have no idea how the Court will rule.
The arguments about Medicare and Medicaid vaccine mandates
Although these are clearly several different cases, the arguments against the Medicare and Medicaid vaccine mandates – the arguments accepted by the courts that granted a stay – are fairly similar across the cases, and the responses are, too. So I will go by argument rather than the case. There are basically four arguments opponents raise against the rule:
- The rule is illegal – it’s beyond the powers delegated to Medicare and Medicaid to set funding conditions.
- The rule is unconstitutional – agencies cannot use longstanding powers in new major contexts without explicit Congressional authorization.
These first two questions are discussed together by courts that have struck down the mandate, because the argument is that Congress needs to expressly authorize the vaccine mandate, and did not (using a doctrine that some courts dubbed the major questions doctrine). Without such authorization, these courts will not interpret the statute to allow the mandate.
- The rule is procedurally flawed — CMS did not have good cause to do away with notice and comment.
- The rule is arbitrary and capricious.
Let’s take these one at a time. This discussion is going to be as short as I can make it, which means I will not go as thoroughly into the legal issues as I could.
Is the Rule illegal or unconstitutional? (A&B above)
Both the Medicaid and the Medicare statute authorize the secretary to set standards that are “necessary in the interest of the health and safety” of patients in the relevant facilities (see, e.g., 42 U.S.C. § 1395x (e)(9)). But courts that stayed the rule concluded that that authorization is not enough. Using a doctrine they refer to as the “major questions” doctrine, these courts have concluded that if something the agency wants to do is a new and significant measure Congress has to clearly delegate to the agency the specific power in question.
This doctrine is problematic. It has a weak legal basis – it draws on decisions that do not match what the courts addressing the CMS standard are doing – and is not well developed or principled. For example, some of the decisions used here were cases where agencies did not have the specific power (e.g. La. Pub. Serv. Comm’n v. FCC, cited by the Missouri case, where the FCC concluded it had the power to regulate certain in-state practices in the face of an express clause saying it did not have the power to act on in-state charges. The Supreme Court interpreted the clause to prohibit federal preemption. This was not a case examining whether Congress delegated the specific power to the agency, but whether an express provision by Congress barred an action).
It’s also not well defined – it’s not clear which actions by an agency would trigger this requirement of direct Congressional authorization. In the context of the CMS rule, it’s especially strange since there is a long history of broad conditions attached to Medicaid and Medicare funding, and the authorization is openly broad. For example, CMS requires that hospitals have procedures for appointment and oversight of medical staff. CMS requires shielding for radiology services and inspection of equipment. There are many more general, broad requirements. Which new requirement would require specific Congressional approval?
The Missouri decision, for example, suggests that the reason it sees the mandate as exercising vast powers is that the cost of compliance “is around 1.38 billion dollars.” But details matter here. The CMS rule explains that this cost is spread across healthcare facilities and that a significant cost would be a 3-5% increase in cost. In this case, the costs are based on per-employee cost, and “[s]pread over 10.4 million full-time equivalent employees, this is about $125 per employee. Assuming a fully loaded average wage per employee of $90,000, the first-year cost does not approach the 3 percent threshold.”
If this cost is vast, what does that mean to the many other detailed requirements under the Medicaid/Medicare act?
One of the troubling things in the decisions that stayed the rule was ignoring the fact that this is a condition attached to funding from the federal government. The spending power of the federal government allows it to decide how to spend its money, and there is a long history of courts deferring to the federal government in setting spending conditions.
Generally speaking, the federal government gets to attach strings to its spending – within relatively loose limits. Prohibiting it from setting a condition like this on constitutional grounds is unusual. This is why, in examining the CMS rule before its publication, Prof. Jonathan Adler, who had real doubts about the OSHA rule, thought that this rule is likely to be upheld.
Prof. Adler pointed to Sabri v. United States “in which a unanimous Supreme Court held that the federal government may place reasonable conditions on the receipt of federal funds that are designed to ensure that the funds are not misspent or do not otherwise undermine federal purposes.
Under Sabri‘s logic, I doubt courts would question whether the federal government can ensure that recipients of health care funds take measures to ensure their facilities are safe and effectively manage health risks. Put more simply, the federal government does not have to fund health care services that make people sick.
This view was echoed in the decision of the majority in the 11th Circuit decision that refused to stay the mandate.
Did CMS wrongly skip notice and comment?
This is probably opponents’ strongest argument because as the courts granting the stay point out, the standard for doing away with notice and comment is pretty high (though in practice, it can be more common than the jurisprudence makes it seem). As quoted by the Missouri court, the exemption used here – skipping notice and comment for “good cause” – should be “narrowly construed and only reluctantly countenanced.” But exemptions from the process can be valid. And as the majority in the Eleventh Circuit’s decision found, there is at least an argument for that here.
In this case, judges seeking to stay the rule used two arguments against it:
- First, that the agency delayed acting. CMS did not act when the vaccines were initially available, and even after President Biden’s announcement that it will act – in September – took until November.
- Second, that CMS did not provide good enough justification to skip notice and comment here – the courts (rightly) point out that public safety alone is not always a good arguments to skip notice and comment, and that this rule was known to be controversial, making notice and comment even more important.
These are valid arguments, but even here, CMS argues on the other side. The 11th Circuit majority said that:
…the Secretary provided a detailed explanation for why there was good cause for dispensing with the notice-and-comment requirement. The Secretary discussed the urgency presented by the ongoing pandemic, the outbreaks associated with the Delta variant, and the oncoming influenza season. … Given these circumstances, the Secretary determined, a further delay “would endanger the health and safety of additional patients and be contrary to the public interest.” … (estimating that “total lives saved under this rule may well reach several hundred a month”). We agree with the district court that the Secretary set forth a sufficient basis to dispense with the notice-and-comment requirement.
I would add one more thing. Not acting sooner seems a valid issue to raise; if CMS waited nine months would holding a 30-day or even 60-day comment period make such a difference? But the reality is that it wouldn’t be just that.
To hold notice and comment, CMS would have to draft as detailed and elaborate a notice as it did the rule because to be valid, notice needs to provide parties the essence of the planned action and the data it is based on. That would take at least the two months in question; two months is very fast to put together something like the rule that CMS put out here.
Then it would require waiting the comment period, and then working through the comments – which could be many, given the debates around the issue, summarizing and revising them. In reality, notice and comment here would realistically have required at least six months. By then, the benefits would probably not accrue; I really hope that in six months, we will be in a much better place than we are now. At the least, it would mean that we are going into the winter – with cases raising and a flu season of unknown severity coming – with a lot fewer healthcare workers vaccinated. I think there’s a good argument that if anything is an emergency that gives good cause to not going through notice and comment, a pandemic in a moment of crisis, when many people are dying daily and influenza season is looming, is it.
This is probably the strongest claim opponents have, because our administrative law is unfriendly to skipping notice and comment, but even here, there is an argument for the rule.
Was the rule arbitrary and capricious?
Under our administrative law, courts should “Hold unlawful and set aside agency action, findings, and conclusions found to be… arbitrary, capricious, an abuse of discretion…”
Arbitrary and capricious is the standard used to assess the substance of agency action. It’s hard to apply, and one of the problems is that the leading cases have conflicting language on how closely courts should scrutinize agency action. Courts can review agency action more or less aggressively, which led leading scholar Jerry Mashaw to describe administrative law, in this context, as “oscillat[ing] continuously between irrelevance and impertinence” – either being too deferential, leaving itself irrelevant, or having the judges aggressively step into areas they don’t understand.
Historically, arguments that would lead agencies to fail this test include not addressing an important issue, drawing conclusions not supported by the data, not explaining their choices (or not explaining a change from the previous policy), or relying on factors beyond what Congress intended.
In this case, the top arguments by opposing judges for seeing this rule as arbitrary and capricious were:
- CMS did not provide evidence about the impact of the mandate on each type of covered facility. Instead, it extrapolated from data about longterm care facilities. I don’t think that’s accurate. The agency addressed data about healthcare workers – vaccinated or not – generally. It did use the longterm care facilities data, but it also used a study from Yale New Haven Hospital, Israel, and data about healthcare associated transmission. The agency openly said that there is no such data for every facility, but it’s not clear why it needs it, if it has enough data about transmission from healthcare workers generally.
- CMS did not address the effect of loss of healthcare workers who do not want to vaccinate on the facilities or the effect of loss of funding. This is especially problematic, since CMS did address this. CMS pointed out that in practice, providers who mandated vaccines saw high vaccination rates and low rates of resignation, and community support as they became the provider with high rates. The courts may not like this argument, but the agency made it, and historically, in assessing agency arguments within their expertise, courts are expected to defer to agencies. In the Florida case, Florida submitted declaration from several people who thought there would be mass resignation, but the district court and the 11th circuit found this “speculative”. Which it likely is. In assessing this kind of uncertainty, again, courts usually – though not always – defer to the expert judgment of the agency in charge of implementing the law.
- CMS did not address alternatives to the rule, including daily or weekly testing or natural immunity. The agency did, however, actually consider this. In relation to natural immunity, the agency said:
There remain many uncertainties about as to the strength and length of this immunity compared to people who are vaccinated, and—in recognizing that—the CDC recommends that previously infected individuals get vaccinated. Exempting previously infected individuals would have potentially reduced benefits while reducing costs, both roughly in proportion to the number affected. It would have also, complicated administration and likely require standards that do not now exist for reliably measuring the declining levels of antibodies over time in relation to risk of reinfection. Because of current CDC guidance and understanding of relevant scientific findings, we found that it was not warranted to exempt previously infected individuals.
In countering this, courts opposing the mandate quoted several problematic experts. The Louisiana court quoted Dr. Peter A. McCullough, who has a history of anti-vaccine misinformation, and Dr. Jay Bhattacharya, who is one of the creators of the problematic Great Barrington Declaration, advocating for letting people die of COVID-19 and be harmed by it without trying to prevent it, and has made other problematic statements, like opposing vaccinating the population in India just before deaths and harms exploded there and opposing mask mandates.
In essence, this court rejected the agency’s expert opinion and accepted the view of highly problematic experts at the stage of a preliminary injunction, before the facts have been litigated. That is highly problematic.
The opinions arguing for this also argued that the agency contradicted itself by, on one hand, mentioning there are uncertainties about previous infections but in another place counting those recovering from infection as “no longer sources of future infections,” but I’m not sure the courts are reading the agency correctly in that latter paragraph. The agency said:
Moreover, among the general population more than 600,000 persons a day are currently being vaccinated with the first or second shot and about 100,000 a day have recovered from infection and are only in very rare cases still infectious. These changes reduce the risk to both health care staff and patients substantially, likely by about 20 million persons a month who are no longer sources of future infections.
This suggests uncertainty, but the agency acknowledged the uncertainty and explained why it is not using natural immunity as an alternative.
As to testing, the agency said that it found vaccines to be “a more effective infection control measure”, but nothing prevents “a provider from exercising testing precautions voluntarily in addition to vaccination.” This is short but is not ignoring the alternative. I have not seen the court provide a good counter here.
- The agency applied the mandate to various healthcare facility types and variety of staff, regardless of patient contact: The agency did provide some evidence that there can be issues across a variety of settings, but again, it’s not clear it needed to explain its choice to the level the decisions suggest. If the risk is less in some settings, that does not mean it’s not there, and if there is some risk that this reduces, it would achieve increased health and safety. Here, again, it really matters how aggressive courts review the agency’s decision. The 11th Circuit did not find the decision arbitrary and capricious; other judges did.
- CMS did not explain its change from prior voluntary policy. This is problematic because the CMS did explain it. It said that a “failure to achieve sufficiently high levels of vaccination based on voluntary efforts and patchwork requirements, potential harm to patients from unvaccinated health-care workers, and continuing strain on the health care system and known efficacy and safety of available vaccines, have persuaded us that a vaccine mandate for health care workers is an essential component of the nation’s COVID-19 response.” In fact, the Missouri decision that raised that pointed out that CMS explained it.
There are some more, but this is getting already too long, and likely gives a flavor.
In short, courts are split on whether the CMS rule should or should not be stayed; but in my view, the courts awarding the stay have, for the most part, provided problematic arguments. Their constitutional argument is not in line with existing precedent, which provides CMS broad leeway to set funding conditions for institutions receiving federal funding, their arbitrary and capricious arguments in several places ignore the agency’s explanation. Their case is strongest for the lack of notice and comment, but even there, there is a good argument the other way.