Rencher, William C

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Georgia State University ScholarWorks @ Georgia State University GHPC Materials Georgia Health Policy Center 4-8-2016 Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-Regulatory Guidance to Medicaid Providers William C. Rencher Follow this and additional works at: https://scholarworks.gsu.edu/ghpc_materials Recommended Citation Rencher, William C., "Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-Regulatory Guidance to Medicaid Providers" (2016). GHPC Materials. 119. https://scholarworks.gsu.edu/ghpc_materials/119 This Article is brought to you for free and open access by the Georgia Health Policy Center at ScholarWorks @ Georgia State University. It has been accepted for inclusion in GHPC Materials by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact scholarworks@gsu.edu. 1234567 8ANDREW  YOUNG SCHOOL O F  P O L I C Y  S T U D I E SINTRODUCTIONMost state Medicaid agencies use manuals or handbooks to communicate policies to their providers. These manuals come in various formats with some states having one manual for their entire program and others using multiple manuals. How descriptive these manuals are and how often they are produced depend upon a state’s Administrative Procedure Act (APA)1, which prescribes the methods and parameters for agency rule-making. Although most state APAs are based on the Revised Model State Administrative Procedure Act,  details of the rule-making process vary widely by state, especially regarding how states define “rule” and the extent to which a state’s legislature is involved in the rule-making process. Knowing how state level Medicaid policies are made and where they can be found can assist health policy researchers in identifying appropriate policies for research, as well as better formulating policy interventions.Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-Regulatory Guidance to Medicaid Providers William C. Rencher, JD, MPHFor more information, please contact the Georgia Health Policy Center at 404.413.0314 or visit us online at www.ghpc.gsu.eduMETHODS• State scan of Medicaid manuals, state APAs, and relevant case law in seven states: Connecticut, Florida, Georgia, Iowa, South Carolina, Washington, and Wisconsin. • Special attention given to how each state’s APA defines “rule” and the extent of legislative involvement in the rule-making process. • Case law examined for judicial decisions relating to the ability of state agencies to issue manuals or other guidance outside of the rule-making process. • Findings supplemented by phone interviews with state Medicaid officials.RESULTSState Administrative Procedure ActsAll seven states’ APAs define a rule as “an agency statement of general applicability that implements, interprets, or prescribes law or policy”2 with some slight variations in wording. However, state APAs differ in the subsequently listed items that are excluded from the definition of a rule. Some state exceptions cover agency manuals and some do not. If a state’s APA does not contain an applicable exception, agency manuals are subject to the formal rule-making process, which is usually characterized by a notice and public comment period, as well as some role for the state legislature. The extent of legislative involvement varies by state. However, all states allow their full legislatures to override agency rule-making through the legislative process. Figure 1 provides an overview of the rule-making process as applied to Medicaid manuals, with state variations noted.Case LawAlthough every state studied had cases applicable to state agencies, several relating to Medicaid deserve special mention and demonstrate the different ways states view Medicaid manuals:• Coventry First, LLC v. Office of Insurance Regulator, 38 So.3d 200 (Fla. 1st DCA 2010) and Jenkins v. State, 885 So.2d 1219 (Fla. 1st DCA 2003). Florida appellate courts held that “an agency statement is generally applicable if it is intended by its own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law.” • A.R., et al. v. Florida Department of Health, Case No. 15-3735RU (State of Fla. Div. of Admin. Hearings 2015). The rationale from Coventry First and Jenkins was used to invalidate a mental health screening tool as an un-promulgated rule under the Florida APA. • Georgia Department of Medical Assistance, et al. v. Beverly Enterprises, Inc., 261 Ga. 51; 401 S.E.2d 499 (Ga. 1991). The Georgia Supreme Court held that a Medicaid provider manual was not a rule, because it falls under a Georgia APA exception, and therefore was not subject to the rule-making process. • Pruitt Corporation v. Georgia Department of Community Health, 284 Ga. 158; 664 S.E.2d 223 (Ga. 2008). The Georgia Supreme Court refused to give deference to the Medicaid agency’s interpretation of its manuals, because the manuals were not considered to be rules and had not gone through the formal rule-making process.CONCLUSIONS• State APAs and the process for creating agency manuals vary widely by state.• States, such as Georgia and Wisconsin, whose APAs exclude Medicaid manuals from their definition of “rule,” have the most flexibility to promulgate policy through their manuals. • Other states must put these policies through the formal rule-making process. This involves both a notice and comment period for the public, as well as a role for the state legislature. • The legislature’s role further affects the speed at which these states can modify or promulgate new policies. In states like Iowa, the legislature can slow down the process, while in more restrictive states like Connecticut, the legislature can stop the process entirely. • Understanding how Medicaid policies are formulated at the state level, as well as the role that a state’s APA plays in that process, can help health services researchers better identify the most relevant policies for their research, as well as formulate appropriate policy interventions.AREAS FOR FURTHER RESEARCH• Does a state’s rule-making process affect a Medicaid agency’s ability to be adaptive to policy changes? To develop more innovative policies?• Does a state’s rule-making structure for their Medicaid agency affect health outcomes?• Or do the various models of rule-making have enough “work-arounds” that their structure does not matter?Figure References1Conn. Gen. Stat. § 54-4-170 & 1712Fla. Stat. § 120.545 3Iowa Code § 17A.84Ga. Code Ann. § 50-13-2 (6)(l)5Wis. Stat. § 227.01 (13)(k)6Wisconsin uses the rule-making process for policies that affect Medicaid members. Phone Interview. Lisa Strawn, Provider Communications Coordinator, Wisconsin Medicaid. April 28, 2016.7Phone Interview. Amy Johnson, Section Manager, Office of Medicaid Eligibility and Policy, Washington Medicaid. April 27, 2016.8Phone Interview. Amanda Q. Williams, Manager for Health Services Policy, South Carolina Medicaid. April 28, 2016.Poster References1National Conference of Commissioners on Uniform State Laws, Revised Model State Administrative Procedure Act. 2010: Chicago, IL.2Ibid.

Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-Regulatory Guidance to Medicaid Providers

Georgia State University

Georgia State University 
ScholarWorks @ Georgia State University 
GHPC Materials Georgia Health Policy Center 
4-8-2016 
Medicaid Manuals: How State Administrative Procedure Laws 
Affect Agency Sub-Regulatory Guidance to Medicaid Providers 
William C. Rencher 
Follow this and additional works at: https://scholarworks.gsu.edu/ghpc_materials 
Recommended Citation 
Rencher, William C., "Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-
Regulatory Guidance to Medicaid Providers" (2016). GHPC Materials. 119. 
https://scholarworks.gsu.edu/ghpc_materials/119 
This Article is brought to you for free and open access by the Georgia Health Policy Center at ScholarWorks @ 
Georgia State University. It has been accepted for inclusion in GHPC Materials by an authorized administrator of 
ScholarWorks @ Georgia State University. For more information, please contact scholarworks@gsu.edu. 
1
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5
6
7 8
ANDREW  YOUNG SCHOOL
 O F  P O L I C Y  S T U D I E S
INTRODUCTION
Most state Medicaid agencies use manuals or handbooks to communicate policies to their providers. These manuals 
come in various formats with some states having one manual for their entire program and others using multiple manuals. 
How descriptive these manuals are and how often they are produced depend upon a state’s Administrative Procedure Act 
(APA)1, which prescribes the methods and parameters for agency rule-making. Although most state APAs are based on 
the Revised Model State Administrative Procedure Act,  details of the rule-making process vary widely by state, especially 
regarding how states define “rule” and the extent to which a state’s legislature is involved in the rule-making process. 
Knowing how state level Medicaid policies are made and where they can be found can assist health policy researchers 
in identifying appropriate policies for research, as well as better formulating policy interventions.
Medicaid Manuals: How State Administrative Procedure Laws 
Affect Agency Sub-Regulatory Guidance to Medicaid Providers 
William C. Rencher, JD, MPH
For more information, please contact the Georgia Health Policy Center at 
404.413.0314 or visit us online at www.ghpc.gsu.edu
METHODS
• State scan of Medicaid manuals, state APAs, and relevant case law in seven states: Connecticut, Florida, Georgia, 
Iowa, South Carolina, Washington, and Wisconsin. 
• Special attention given to how each state’s APA defines “rule” and the extent of legislative involvement in the rule-
making process. 
• Case law examined for judicial decisions relating to the ability of state agencies to issue manuals or other guidance 
outside of the rule-making process. 
• Findings supplemented by phone interviews with state Medicaid officials.
RESULTS
State Administrative Procedure Acts
All seven states’ APAs define a rule as “an agency statement of general applicability that implements, interprets, or 
prescribes law or policy”2 with some slight variations in wording. However, state APAs differ in the subsequently listed 
items that are excluded from the definition of a rule. Some state exceptions cover agency manuals and some do not. If 
a state’s APA does not contain an applicable exception, agency manuals are subject to the formal rule-making process, 
which is usually characterized by a notice and public comment period, as well as some role for the state legislature. The 
extent of legislative involvement varies by state. However, all states allow their full legislatures to override agency rule-
making through the legislative process. Figure 1 provides an overview of the rule-making process as applied to Medicaid 
manuals, with state variations noted.
Case Law
Although every state studied had cases applicable to state agencies, several relating to Medicaid deserve special mention 
and demonstrate the different ways states view Medicaid manuals:
• Coventry First, LLC v. Office of Insurance Regulator, 38 So.3d 200 (Fla. 1st DCA 2010) and Jenkins v. State, 885 
So.2d 1219 (Fla. 1st DCA 2003). Florida appellate courts held that “an agency statement is generally applicable 
if it is intended by its own effect to create rights, or to require compliance, or otherwise to have the direct and 
consistent effect of law.” 
• A.R., et al. v. Florida Department of Health, Case No. 15-3735RU (State of Fla. Div. of Admin. Hearings 2015). 
The rationale from Coventry First and Jenkins was used to invalidate a mental health screening tool as an un-
promulgated rule under the Florida APA. 
• Georgia Department of Medical Assistance, et al. v. Beverly Enterprises, Inc., 261 Ga. 51; 401 S.E.2d 499 (Ga. 
1991). The Georgia Supreme Court held that a Medicaid provider manual was not a rule, because it falls under a 
Georgia APA exception, and therefore was not subject to the rule-making process. 
• Pruitt Corporation v. Georgia Department of Community Health, 284 Ga. 158; 664 S.E.2d 223 (Ga. 2008). The 
Georgia Supreme Court refused to give deference to the Medicaid agency’s interpretation of its manuals, because 
the manuals were not considered to be rules and had not gone through the formal rule-making process.
CONCLUSIONS
• State APAs and the process for creating agency manuals vary widely by state.
• States, such as Georgia and Wisconsin, whose APAs exclude Medicaid manuals from their definition of “rule,” have 
the most flexibility to promulgate policy through their manuals. 
• Other states must put these policies through the formal rule-making process. This involves both a notice and 
comment period for the public, as well as a role for the state legislature. 
• The legislature’s role further affects the speed at which these states can modify or promulgate new policies. In 
states like Iowa, the legislature can slow down the process, while in more restrictive states like Connecticut, the 
legislature can stop the process entirely. 
• Understanding how Medicaid policies are formulated at the state level, as well as the role that a state’s APA plays 
in that process, can help health services researchers better identify the most relevant policies for their research, as 
well as formulate appropriate policy interventions.
AREAS FOR FURTHER RESEARCH
• Does a state’s rule-making process affect a Medicaid agency’s ability to be adaptive to policy changes? To develop 
more innovative policies?
• Does a state’s rule-making structure for their Medicaid agency affect health outcomes?
• Or do the various models of rule-making have enough “work-arounds” that their structure does not matter?
Figure References
1Conn. Gen. Stat. § 54-4-170 & 171
2Fla. Stat. § 120.545 
3Iowa Code § 17A.8
4Ga. Code Ann. § 50-13-2 (6)(l)
5Wis. Stat. § 227.01 (13)(k)
6Wisconsin uses the rule-making process for policies that affect Medicaid members. Phone Interview. Lisa Strawn, Provider Communications Coordinator, Wisconsin Medicaid. April 28, 2016.
7Phone Interview. Amy Johnson, Section Manager, Office of Medicaid Eligibility and Policy, Washington Medicaid. April 27, 2016.
8Phone Interview. Amanda Q. Williams, Manager for Health Services Policy, South Carolina Medicaid. April 28, 2016.
Poster References
1National Conference of Commissioners on Uniform State Laws, Revised Model State Administrative Procedure Act. 2010: Chicago, IL.
2Ibid.


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Medicaid Manuals: How State Administrative Procedure Laws Affect Agency Sub-Regulatory Guidance to Medicaid Providers

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