CMS can't enact new policies on website without public comment period, judge rules

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A Frequently Asked Question section of a website addressing Medicaid reimbursement did not meet federal standards, a federal judge has ruled, giving a victory to hospitals that challenged the Centers for Medicare & Medicaid Services.

The Administrative Procedure Act requires that that a legislative rule has to be made public before it goes into effect and allow an open comment period. Long-term care providers and other stakeholders often use the comment period to give feedback and list concerns to CMS.

Certain law experts argue that CMS is using non-Administrative Procedure Act Processes to set new policies rather than clarifying existing regulations. In this case, as well as other similar cases recently, judges have agreed.

CMS is not allowed to create policies via answers to the agency's FAQ page, Judge Tom Lee of the U.S. District Court from the Southern District of Mississippi ruled on Monday. Some Mississippi hospitals, include Baptist Memorial Hospital-Golden Triangle, had challenged the agency this month, saying that information from CMS regarding Medicaid on the agency website was invalid.

At issue was a “FAQ” page posted in 2010 by CMS that included answers with new policies, Lee wrote. Those policies didn't have official notice-and-comment period under the APA, Lee wrote.

While the specifics relate to acute care and the disproportionate share hospital program, the judge's decision makes it clear that CMS must follow the Administrative Procedure Act's note-and-comment requirement related rules on its website. Other courts, such as the U.S. Court of Appeals for the First Circuit, have also come down in favor of following the APA's notice-and-comment procedure.