Administrative Procedure Act Archives - EMPLOYEE BENEFITS BLOG

McDermott Submits Amicus Brief to the US Supreme Court in United Behavioral Health

by Charlie Seidell | Jan 23, 2024 | Employee Benefits, Health and Welfare Plans

On January 2, 2024, McDermott filed an amicus curiae brief on behalf of the ERISA Industry Committee (ERIC) and the United States Chamber of Commerce (Chamber) in United Behavioral Health v. David K., No. 23-586, in the US Supreme Court. The case presents two questions of broad public importance concerning the requirements under the Employee Retirement Income Security Act (ERISA) for denials of health benefits. But underlying the two questions is an even more fundamental Administrative Procedure Act (APA) issue: May a court, at the invitation of an agency in an amicus brief, effectively amend regulations by judicial fiat, providing the agency with an end run around the APA’s notice-and-comment rulemaking procedures?

The answer to that question should be an obvious no. But that is precisely what happened in the court of appeals in this case. After the plaintiffs filed their response brief, the US Department of Labor (DOL) filed an amicus brief urging a radically new interpretation of regulations the agency had promulgated to implement ERISA’s procedural protections. In essence, the DOL argued that its disability- and health-benefit regulations should be read to contain the same procedural requirements, despite clear regulatory language specifying that some requirements only apply in one context and not the other. The US Court of Appeals for the Tenth Circuit adopted the DOL’s position, decreeing a new regulatory requirement for health-benefit denials that the DOL, in dual 2015 and 2016 rulemakings, expressly considered and chose to adopt only for disability-benefit denials and not for health-benefit denials.

If not corrected by the Supreme Court, the decision will stand as an invitation to agencies to file amicus briefs in the courts of appeals, advocating for substantial changes to their regulations without the bother (or transparency) of APA rulemaking. When so much lawmaking today is undertaken by unaccountable federal bureaucrats, that is a deeply troubling prospect. ERIC and the Chamber supported the petition, explaining the legal and practical issues with the approach the DOL and Tenth Circuit mutually took. Agency interpretations that defy clear regulatory text are entitled to no deference because they are invalid (especially after the Court’s decision in Kisor v. Wilkie). Ignoring this basic proposition of administrative law undercuts the core values served by the APA, including transparency and accountability. Most directly, however, an agency’s decision to seek backdoor revisions to its rules through interpretations announced in litigation deprive the agency of the benefit of public comment that can provide critical data and analysis to inform the agency’s policymaking. Had the DOL engaged in notice and comment, as it should have done, commenters would have presented key distinctions between the disability- and health-benefit contexts; without that information, the DOL’s decision was not fully informed.

ERIC and the Chamber are frequent amici in cases concerning ERISA and the APA’s interpretation and requirements. While the Supreme Court grants only a tiny fraction of the petitions it receives each term, the amici are hopeful that this brief will help focus the Court’s attention on this [...]

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Texas District Court Overturns Portions of the IDR Process

by Debra Curtis, Kristen O'Brien, Priya Rathakrishnan and Erica Stocker | Sep 14, 2023 | Employee Benefits, Health and Welfare Plans

On August 3, 2023, the US District Court for the Eastern District of Texas ruled on the implementation of the No Surprises Act in Texas Medical Association, et al. v. US Department of Health and Human Services, et al. (TMA IV).

In TMA IV, the plaintiffs challenged two things:

The increased administrative fee to participate in the independent dispute resolution (IDR) process. Providers asserted that the fee made participating in IDR for small-value claims cost-prohibitive.
The US Departments of the Treasury, Labor, and Health and Human Services (the Departments) rules regarding batching, which providers claimed made it difficult to batch related claims for resolution in a single arbitration proceeding.

The court found that the Departments violated the Administrative Procedure Act when they raised the IDR administrative fee from $50 to $350 for 2023 and established batching rules that did not allow providers to batch claims together in the IDR process. The court said that the changes were substantive and should have gone through notice and comment rulemaking. Ultimately, the court vacated both policies nationwide.

As a result, the IDR fee will return to $50 (for now). The batching rules are also vacated until the Departments go through rulemaking, resulting in a temporary suspension of the IDR portal. The Departments are working on a proposed rule that will likely include some batching policies.

The Departments can appeal this decision, as they did for TMA II.

District Court Vacates Provisions of No Surprises Act Final Rule

by Debra Curtis, Kristen O'Brien and Erica Stocker | Mar 10, 2023 | Employee Benefits, Health and Welfare Plans

On February 6, a US district court in Texas vacated provisions of the No Surprises Act final rule related to the independent dispute resolution (IDR) process for determining payment for out-of-network services.

The district court granted summary judgment to the Texas Medical Association, which had brought suit against the US Departments of Health and Human Services (HHS), Labor and the Treasury over the IDR process. The district court held that provisions of the final rule were contrary to law and therefore in violation of the Administrative Procedure Act. The order vacated the provisions of the final rule that require IDR entities to look at the qualifying payment amount first and consider other factors only if those other factors are not already accounted for in the qualifying payment amount.

The departments have not yet filed a notice of appeal or amended their sub-regulatory guidance to align with the district court’s order.

ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit

by Andrew Liazos, Michael B. Kimberly and Charlie Seidell | Apr 28, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

McDermott Will & Emery’s Andrew C. Liazos, Michael B. Kimberly and Charlie Seidell recently filed an amicus brief in the US Court of Appeals for the 10th Circuit on behalf of the ERISA Industry Committee (ERIC). McDermott filed the brief in response to a US Department of Labor (DOL) amicus brief that advanced a novel interpretation of its regulations which, if adopted through litigation, would change longstanding procedures for benefit determinations under self-funded medical plans sponsored by large employers. The amicus brief focuses on key arguments against the DOL’s attempted regulatory reinterpretation, including that:

DOL may not rewrite its regulations outside of notice-and-comment rulemaking;
DOL’s interpretation of its own regulations is inconsistent with the plain text of the regulations;
There are good policy reasons underlying differential treatment of healthcare and disability benefits determinations; and
DOL’s interpretation of the regulations in its amicus brief is not entitled to deference under the Supreme Court decision in Kisor.

Read ERIC’s amicus brief here.

Read ERIC’s statement here.

UPDATE: CMS Issues COVID-19 Vaccination Interim Final Rule for Healthcare Facilities

by Sandra M. DiVarco, Gregory Fosheim, Lauren Knizner and Kristen O'Brien | Dec 2, 2021 | Employee Benefits, Employment, Health and Welfare Plans, Labor

On November 16, 2021, 12 states—Montana, Alabama, Arizona, Georgia, Idaho, Indiana, Louisiana, Mississippi, Oklahoma, South Carolina, Utah and West Virginia—filed a complaint in the US District Court for the Western District of Louisiana requesting that the Interim Final Rule with comment period (IFR) that put in place the vaccination mandate applicable to certain covered healthcare facilities and staff be declared arbitrary and capricious, contrary to law and in excess of the Centers for Medicare and Medicaid Services’ (CMS) statutory authority. CMS published an IFR on November 5, 2021, that implements the Biden administration’s previously announced vaccine mandate for healthcare facilities. The expansive IFR applies to more than a dozen types of healthcare providers and suppliers (facilities), affects more than 10 million healthcare staff and carries an anticipated potential price tag in excess of $1.3 billion dollars for the first year of implementation.

SDNY Vacates Portion of DOL Final Rule on Families First Coronavirus Response Act

by Lindsay Ditlow | Sep 9, 2020 | Employee Benefits, Employment

On August 3, 2020, the US District Court for the Southern District of New York struck down four parts of the US Department of Labor’s (DOL) Final Rule implementing the Families First Coronavirus Response Act (FFCRA). A copy of the court’s ruling is available here. The FFCRA provides COVID-19-related sick leave and family leave to employees of businesses with fewer than 500 employees.

Access the article.

Overtime Exemptions for White-Collar Jobs May Soon Require Higher Salary

by Joseph K. Mulherin | Mar 28, 2019 | Employment

Proposed regulations will alter which white-collar employees remain overtime exempt. Staying vigilant on Fair Labor Standards Act compliance is critical; read on to learn more on proposed increases to the minimum salary necessary to qualify for the executive, administrative or professional exemptions.

Access the full article.