Executive Order Seeks to Limit Agency Guidance
Last week, President Trump signed an executive order designed to limit the effect of federal agency guidance. Historically, agencies have issued guidance to the public on how to best comply with a law or regulation, and, for many agencies, guidance documents have taken the place of policymaking. Issuing guidance can often be a much faster process than the possible years of waiting for federal regulation to be approved. The executive order makes all current and future guidance documents nonbinding, “both in law and in practice.”
The Trump Administration has previously released guidance documents that this executive order may affect. One of these was guidance issued in 2018 that loosened restrictions on Section 1332 State Innovation Waivers, which encouraged states to promote the sale of, and subsidies for, non-Affordable Care Act (ACA) compliant plans. The 1332 guidance also redefined coverage standards and made it easier for states to waive ACA provisions.
Another example of agency guidance impacted by this order are State Medicaid Director Letters. In January 2019, the Centers for Medicare and Medicaid Services (CMS) Administration wrote a letter to state Medicaid directors describing ways states can improve care and reduce burdens for people who are dually eligible for Medicare and Medicaid. This executive order has made this letter now not legally binding for state Medicaid programs.
This executive order will most likely have two effects, with mixed results:
- It will slow down agency actions, as practices that previously were pushed through quickly with guidance now must go through public comment and a lengthy policymaking process.
- It will become more difficult for agencies to work outside of the administration’s priorities, as all future actions will require review and approval from the Office of Management and Budget (OMB), which is within the Executive Office.
Each agency will be required to create and maintain a website that houses its guidance documents, with a note that those documents are not legally enforceable. Agencies will need to review all current guidance documents and post them to the website, and any documents not online will be considered to be rescinded.
Office of Management and Budget Director and acting White House Chief of Staff Mick Mulvaney will soon issue memoranda to agencies on how to implement this executive order. Following that memoranda, agencies will create their websites and review any outstanding guidance documents. Agencies must also provide a report to OMB outlining why they chose to keep the existing guidance on their websites. Within one year, agencies will finalize all regulations defining the process for developing and issuing guidance.