From Bad to Worse: New JFC Version of Medicaid Power Shift Compounds the Problems

Guest post by Ken Taylor and Jon Peacock of Wisconsin Council on Children and Families

Medicaid provisions in Wisconsin's Joint Finance Committee (JFC) budget are raising constitutional issues and open meetings concerns.

The Joint Finance Committee version of the budget bill incorporates provisions from the budget repair bill (Act 10) that shift the power over Medicaid and BadgerCare policymaking from the legislature to the Department of Health Services (DHS). However, it compounds the problems created by the concentration of so much lawmaking power in the executive branch because it removes requirements that the DHS policy changes –- which would be allowed to supersede 24 parts of the statutes –- have to be made by rule. The rulemaking process would have included public hearings and an opportunity for citizen participation in the process.

The transfer of Medicaid policymaking authority in the committee's budget bill raises serious constitutional concerns, just as the similar provisions in the budget repair did. By giving so much authority to an unelected official, both versions of this unprecedented transfer of lawmaking authority limit the ability of Wisconsin citizens to have a role in the process. However, in contrast to Act 10, the new bill goes much further in eliminating public involvement since it allows the sweeping grant of authority to be exercised by the DHS Secretary without so much as a single public hearing.

When the amended 2011-13 budget bill developed by the Joint Finance Committee was finally unveiled Monday, we were surprised to see the breadth of the Medicaid policymaking changes transferred from Act 10. Although a motion approved by the JFC a couple of weeks ago indicated that the committee was amending a specific portion of the budget repair bill's provisions about the Medicaid power shift, it didn't reveal that the rest of the Medicaid policymaking language in that bill was being folded into the biennial budget. Still, we had expected it to be folded into the bill at some point.

We have tracked down and posted online the June 5th "drafter's note" prepared by the attorney in the Legislative Reference Bureau who writes the Medicaid portions of the statutes. Her note relating to this part of the JFC amendment cautions that there are some potential legal problems, including the constitutional doctrine of separation of powers, which might be violated by the delegation of the legislature's Medicaid policymaking authority to the executive branch. "It is possible a court may find that the legislative language in the new provisions in this amendment does not provide adequate standards for DHS to create a policy without assuming the lawmaking function."

By allowing DHS to rewrite almost all aspects of Medicaid-related policy, the budget bill transfers to DHS the legislature's authority and responsibility to write the laws that affect more than one million Wisconsinites enrolled in Medicaid and BadgerCare. However, turning these decisions over to an unelected state official (until January 2015, when the former law would resume) doesn't just diminish the legislature's power. The budget bill would also strip away Wisconsin citizens' power to hold our legislators accountable for future changes in Medicaid and BadgerCare, including such things as who is eligible, what benefits they are eligible for, what the premiums and other cost sharing will be, and how often eligibility will be reviewed. Only the Joint Finance Committee would have the ability to review the decisions made by DHS that supersede existing state statutes.

Concern Over Constitutional Issues 

That set of constitutional issues was a concern with respect to the budget repair bill, and it is no less a problem in the Medicaid power shift now inserted into the biennial budget bill. However, as noted above, the amended budget bill goes much further in consolidating power making in DHS and in shutting out public involvement –- by eliminating the rulemaking requirement.

It is interesting to note that the reason why the Act 10 provisions are not currently in effect is because a judge concluded that the Legislature violated the open meetings law in the rush to expedite the Conference Committee vote on the budget repair bill. The amended budget now provides a very simple solution for any future open meetings challenges pertaining to the use of the sweeping new decision-making authority granted to DHS –- it simply eliminates the requirement that the department hold any meetings. (Whether that violates other statutes and case law, is an "open" question.)

The drafter's note prepared by the LRB attorney doesn't specifically mention the open meetings issue (probably because it isn't a constitutional question). However the drafter's note does raise a somewhat related issue – the fact that "there is no requirement for publication of whatever changes DHS makes to the program, including changes in benefits and eligibility for Medical Assistance programs." The drafter refers to this as potentially being a "practical problem," but she notes that she has "not researched whether there are any constitutional issues arising from lack of notice or access to information."

The changes in policymaking authority now inserted into the biennial budget bill will almost certainly generate a legal challenge on constitutional grounds, and perhaps also because the new procedures could be at odds with the case law relating to agency policymaking. How the courts might rule on those legal issues is unclear. However, what is very clear is that the power shift contained in the Finance Committee's bill would be a huge blow to the ability of Wisconsin citizens to have a role in critical policy choices relating to Medicaid and BadgerCare.