DEPARTMENT OF HEALTH & HUMAN SERVICES

Office of the Secretary
Assistant Secretary for Public Affairs
Washington, D.C. 20201

January 29, 2018
HHS Request: 2017-00722-FOIA-OS
Legal Case 1:17-cv-01448
Mr. Austin R. Evers, Esq.
Executive Director
American Oversight
1030 15th Street NW, Suite B255
Washington, DC 20005
Dear Mr. Evers:
This letter is the Department’s third and final response to your May 4, 2017, Freedom of
Information Act (FOIA)1 request, which you sent via electronic mail to the attention of Michael
Marquis, FOIA Director, Department of Health and Human Services (HHS or Department). In
that request, you sought the following records, as quoted from your request:
1. A copy of any letter or memorandum sent on or about March 23, 2017 to
Congressional Republicans outlining potential regulatory actions related to the
Affordable Care Act. The requested record was referenced in an April 4, 2017 letter from
21 Senators to Secretary Tom Price.
2. Any other communications from HHS to any member of Congress or congressional
staff concerning potential administrative actions relating to implementation of the
Affordable Care Act. Please provide all responsive records from March 6, 2017, to the
date the search is conducted.
After receiving your request, the Department sent your request to three offices for records
search: the Office of the Secretary (IOS); the Office of the Assistant Secretary for Administration
(ASA), and; the Office of the Assistant Secretary for Legislation (ASL). In accordance with the
Court’s minute orders of November 2, 2017, and November 17, 2017, HHS must process at least
400 potentially responsive records each month in rolling responses to American Oversight’s
FOIA request. Subsequent to the filing of those orders, HHS has made two responses to your
FOIA request, on the dates of November 29, 2017 and December 29, 2017, respectively.
For this third and final response, our office has processed the remaining two (2) potentially
responsive documents, which total nine (9) pages. These records are being released to you in
full, in their entirety.

1

5 U.S.C. § 552

Evers\American Oversight: FOIA 2017-00722-FOIA-OS

Page 1 of 2

 This concludes our review and production of responsive documents located in our multiple
searches for records. Should you have questions or concerns regarding the Department’s
response and\or the processing of your request, any such issues should be communicated to your
legal counsel and Mr. Michael Baer, Trial Attorney, U.S. Department of Justice.

Sincerely,

Michael S. Marquis
Director
Freedom of Information/Privacy Acts Division

cc: Michael Baer, Esq.
Sara Creighton, Esq.
Enclosures

Evers\American Oversight: FOIA 2017-00722-FOIA-OS

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 HHS 2017-00722-00117

Potential Administrative Marketplace Reforms

The Secretary of Health and Human Services has significant authority to improve the individual and
small group markets most harmed by Obamacare. This authority includes the ability to consider and
implement changes in the following areas:

1. Special Enrollment Periods*
- Require 100% pre-enrollment verification of Special Enrollment Periods
2. Grace Periods* -
- Tighten rules around grace periods such that an issuer could require an individual to pay
unpaid back premiums when they attempt to re-enroll with the same insurer
3. Open Enrollment Periods*
0 Shorten the open enrollment period to six weeks to prevent adverse selection and better
align with employer sponsored insurance and Medicare
4. Network Adequacy*
- Return oversight authority for network adequacy to states
5. Essential Health Benefits
0 Give states the authority to select the EHB benchmark, and the primaryjurisdiction to
enforce EHB compliance and interpret EHB rules, including state EHB benchmarks
6. Section 1332 waivers* (apply to the individual and small group markets)
- HHS issued a letter to states indicating that we will be providing technical assistance and
expedited review for Alaska-style reinsurance 1332 waivers that reduce premiums
0 HHS and Treasury have the authority to set up an expedited review and approval pathway
for these waivers
7. Third Party Payment of Premiums
- Some health care providers have been counseling patients to bypass Medicaid and Medicare
coverage and steer them to Affordable Care Act marketplace plans that are more lucrative
to providers (as much as a year for some providers)
a This form of steering is not only detrimental to the patients in the individual market without
access to public health programs who bear the cost, but it can be particularly harmful for
ESRD patients because many of those plans didn?t include coverage for transplant, and put
patients at risk for mid-year disruptions in coverage
0 HHS has the authority to protect individual market enrollees by regulating this practice
8. Permit lower cost direct enrollment pathways for issuers, brokers, and states
0 Improve HHS Operational capabilities to give more flexibility to states, issuers, and web
brokers for direct enrollment
0 This would allow the free market to design better consumer tools, apps, and other
technology to enroll more people, including the young and healthy
9. Benefit Design Flexibility
0 Return authority to states for review of benefit designs and formularies and eliminate
federal outlier review
I Permit more flexibility in innovative reference-based pricing benefit designs and reduce
administrative burden on issuers 
10. Encourage states to build "skinny exchanges"
- Modify existing rules to allow more efficient, ?skinny? state exchanges that cost less and rely
more on private sector innovation

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HHS 2017-00722-00118

U.S. Department of Health & Human Services

HHS Actions to Lower
Premiums and Increase Choices
Obamacare’s 2,400 pages of federal mandates, on top of existing federal healthcare
regulations, have reduced Americans’ coverage choices and sent their premiums skyrocketing.
HHS has taken regulatory action to relieve the burdens and costs imposed on Americans by
these mandates. This document highlights:
1.
2.
3.
4.
5.
6.

Areas of HHS authority to offer relief and Congress’ ability to expand that authority
Actions HHS has already taken to offer relief
Other areas where HHS has authority to offer relief
Progress made on reviewing Obamacare burdens
Areas outside of Obamacare where HHS can act to protect doctors and patients
Areas where further legislation could offer relief to patients

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 HHS 2017-00722-00119

HHS Relief Authority vs. Need for Congressional Action
The Administration recognizes that States are the primary regulators of health insurance, and it
remains imperative for the Executive Branch to empower States with more flexibility and control.
The table below outlines where Congress and the Executive Branch can use their authority to
repeal Obamacare and replace it with a freer and more open healthcare market that works for
the American people.
Current HHS Role

Congress’s Role

HHS has some authority under current law to give
states more control over the EHB rules.

Under proposed legislation, states will be able
to seek broader waivers of EHB, giving them
even greater authority over setting EHB
requirements.

Risk-sharing Pools
to Lower Premiums

HHS has some authority to use Section 1332 waivers
as vehicles to assist states in premium relief.

Under proposed legislation HHS will have the
authority to partner with a State to operate a
risk-sharing pool on behalf of the State until it
wishes to take over the operation of the
program. This would allow premiums to come
down as soon as calendar year 2018.

State Innovation
Waivers

HHS has some authority under Section 1332 to
waive some requirements for states that propose
their own ways of cutting premiums. The Secretary
recently issued a letter to governors in support of this
Innovation Waiver program as well as a checklist to
assist states in pursuing waivers.

Proposed legislation would offer a range of
funding opportunities and areas of flexibility
for states to pursue innovative solutions with
high risk pools, premium and cost-sharing
subsidies, waivers from, regulations including
exchange requirements, and actuarial value
rules.

Essential Health
Benefits (EHB) and
Benefit Design

Shifting Authority to
States to Manage
and Design their
own Exchanges

HHS can provide more flexibility for states to use
private sector options to help consumers purchase
Obamacare insurance.

Proposed legislation allows tax credits for a
broad array of plans a consumer may choose.

Medical Loss Ratio
Limitations and
Federal Audits

HHS has some authority to provide administrative
relief for medical loss ratio adjustments and good
faith safe harbors, for states, insurers, and webbrokers in areas such as rate filing and audits.

Proposed legislation provides significant
flexibility for states in administering federal
requirements; additional opportunities exist
for future legislative action.

The Market Stability Rule tightened special
enrollment periods, made it more difficult for
enrollees to skip premium payments, adjusted the
open enrollment period to align with other healthcare
markets, lifted one-size-fits-all requirements
regarding network access, and widened the pricing
bands within which insurers can offer plans to
patients.

Proposed legislation would encourage
individuals to enroll in and maintain
continuous coverage throughout the year,
improving the risk pool and limiting adverse
selection.

Market Stability

U.S. Department of Health & Human Services

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 HHS 2017-00722-00120

HHS Actions Already Taken to Provide Relief from Obamacare
Since January 20, 2017, HHS has issued 18 rules and guidances to improve the current
healthcare market for consumers. Actions include:
February 15: More Insurance Choices, More Market Stability
Less than a month into the new administration, HHS proposes a broad set of solutions to
increase choices for patients and help stabilize insurance markets. Two measures would loosen
restrictions on the type of plans that can be sold while others aim to discourage gaming the
system and improve the health of the risk pool.
February 17: More Calendar Flexibility
HHS simplifies the filing calendar for insurers and pushes back several deadlines, allowing
insurers maximum time to offer the widest array of choices possible.
February 23: More Plans That Work for You
HHS announces that people will continue to be allowed to keep their pre-Obamacare plans if
they like them, ensuring lower premiums and real choices for millions of Americans. (Since
Obamacare went into effect, HHS permitted renewal of noncompliant individual and small-group
plans, but that policy was set to expire this year.)
March 13: More State Innovation
Secretary Price sends a letter to states encouraging them to apply for Innovation Waivers under
Section 1332 of Obamacare, which offers relief from some of the law’s burdens if states show
they have a better way to protect patients and lower costs.
March 14: More Medicaid Flexibility
Secretary Price and CMS Administrator Verma send a letter to America’s governors laying out a
policy vision for Medicaid innovation to give states flexibility to develop solutions that work for
them.
April 13: More Insurance Choices, More Market Stability
HHS finalizes the market stabilization rule just two months after the proposal was released.
May 15: More Options for Small Businesses
HHS announces it will provide small businesses with more healthcare choices by allowing them
to use the small-business tax credit offered under Obamacare to purchase coverage for their
employees through the agent or broker of their choice. (Very few small businesses have bought
insurance under the mechanism Obamacare created, the SHOP exchange.)
May 16: More Assistance for State Innovation
HHS releases a State Innovation Waiver Checklist to assist states applying for 1332 waivers.
May 17: More Enrollment Options
HHS announces a plan to make it easier for Americans to sign up for insurance through privatesector web brokers instead of being forced to purchase coverage through Healthcare.gov.
June 8: More Input from You
HHS issues a Request for Information seeking input from the public about how to improve the
regulation of the individual and small group insurance markets.

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 HHS 2017-00722-00121

Other Potential Opportunities for Administrative Relief
We have confirmed that HHS has significant authority, with other agencies where appropriate,
to meet the Administration’s goal of creating a freer and more open health insurance market, as
illustrated below:
Qualified Health Plan (QHP) Certification (decrease costs for issuers)
HHS has already issued guidance describing a number of key areas in which the Federallyfacilitated Exchange will rely on States to review plans for compliance with QHP certification
standards, including network adequacy, issuer service areas, and drug formulary outlier review.
HHS has authority to give States more control over the certification of plans for sale in their
markets by streamlining or, in some cases, entirely eliminating certain review requirements.
Proxy Direct Enrollment Pathway for Issuers and Web-brokers (decrease long-term costs
for federal taxpayers, and potentially decreases costs for states)
HHS has authority to allow additional private sector options for enrolling in subsidized coverage,
without redirecting consumers to the federal HealthCare.gov website. Private sector partners,
including issuers and web-brokers that meet specified standards and privacy and security
requirements, will be able to use the new pathway to greatly streamline and improve the
consumer experience, including enabling the development of innovative tools to assist
consumers in finding the most affordable coverage options for themselves and their families.
Benefit Design (decrease costs for issuers and consumers)
HHS has authority to defer more to States in the review of benefit design and reduction of
administrative burden.
Third Party Payment of Premiums (increase price transparency to lower costs over time)
HHS has authority to protect individual market enrollees as well as Medicare and Medicaideligible individuals by ensuring that this practice is properly regulated and only permitted where
appropriate.
Increasing Exchange Efficiency (decrease costs for taxpayers, issuers, and consumers)
HHS has authority to allow more efficient State Exchange operations that cost less and rely
more on private sector innovation, including Exchange web platform, plan selection, and
enrollment.
Rate Filing, Audits, and Medical-Loss Ratio Requirements (decrease costs for issuers)
HHS has authority to provide administrative relief, including good faith safe harbors and other
flexibility, for private entities such as issuers, web-brokers, and State-based Exchanges in areas
such as rate filing, audits, and medical loss ratio requirements.
Streamlining Small Business Exchanges to Reduce Burdens (decrease costs for federal
taxpayer)
HHS announced its intent to propose in future rulemaking that small employers in states
currently using HealthCare.gov for enrollment for SHOP plans may sign up for SHOP plans
directly through an agent or broker, a web-broker, or their issuer of choice. This will reduce
administrative burden and promote flexibility for issuers and small employers.

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 HHS 2017-00722-00122

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 HHS 2017-00722-00123

Further Opportunities to Protect Patients and Doctors
HHS is also working on rolling back a number of government imposed burdens that negatively
impact patients’ access to quality care.
We are taking a comprehensive look at every aspect of the Department’s work to identify
regulations that are particularly burdensome for healthcare providers and their ability to deliver
the highest quality care to their patients.
More than 170 regulatory burdens are under review, with more being added every day.
They include:
 Offering a MIPS low-volume adjustment to provide more flexibility to small providers.
 Enacting Medicare audit contractor (MAC) reform to lower audit and payment burdens
for providers.
 Reconsidering nursing home mandatory arbitration requirements that limit patient
choice.
 Lifting Consumer Assessment of Health Care Providers Survey (CAHPS) requirements
that impose unnecessary costs on small practices.
 Lifting the Medicare Advantage/Part D Medicare enrollment requirement for nonMedicare providers, which imposes unnecessary mandates on providers.
 Addressing underpaid claims due to CMS errors, which make it more expensive to see
Medicare patients.
 Reviewing CMS 96-hour rule for critical access hospitals that limit physician choice for
patient treatment.
 Ending community health center and CMS facility certification duplication.
 Shifting a number of demonstration projects in Medicare from mandatory to voluntary.
(CMS has already delayed compulsory requirements for providers to participate in
cardiac and joint-replacement bundles.)
 Ending Skilled Nursing Facility (SNF) and Veterans Administration (VA) facility
certification duplication to improve choices for veterans.
 Reviewing mandatory conditions that home health agencies must meet before they are
eligible to participate in Medicare and Medicaid.
 Loosening restrictions around electronic health record system certification updates.
 Examining Accrediting Organization mandates on several healthcare providers to post
survey results and plans of corrections.

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 HHS 2017-00722-00124

 Simplifying and clarifying physician documentation requirements.
 Having CMS more efficiently address underpaid claims to providers.
 Simplifying Life and Safety Code and consider deferring more to state and local safety
boards.
 Exploring options to expand tele-health services.
 Reviewing outpatient direct supervision rule for small hospitals that reduce access to
therapy.
 More transparency in Medicare Coverage Determination process.
 Exploring necessity of certain face-to-face requirements.
 Clarifying CMS’s conflicting guidance allowing physicians to permanently opt-out of
Medicare.
 Expanding services to patients in lower cost settings

U.S. Department of Health & Human Services

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 HHS 2017-00722-00125

Future Legislative Opportunities
Congress has a range of options for reducing the burdens of Obamacare beyond what is
contained in the AHCA.
It could:
 Make more structural changes to the 1332 Innovation Waiver program that would allow
for a more streamlined and faster approval process.
 Allow enrollees to receive tax credits and enroll in suitable coverage outside of the
Exchanges, including Medicaid Managed Care Organizations (MCO), transitional or
grandfathered plans, and possibly interstate health plans.
 Promote additional flexibility by expanding the use of Health Savings Accounts.
 Repeal the Independent Payment Advisory Board (IPAB).
 Allow for small businesses to pool together to lower costs through Association Health
Plans (AHPs) and Individualized Health Plans (IHPs).
 Allow patients and families to purchase health insurance across state lines.
 Repeal insurance mandates to allow issuers to diversify their products and offer
consumers more choices.
 Restore opportunities for large and small employers to create innovative wellness
programs.
 Empower physicians to put the patients and families at the center of healthcare
decisions by enacting meaningful malpractice reform.
 Maximize Secretarial Authority, in the form of waivers or more general flexibility, to
relieve States from federal mandates and lower premiums.

U.S. Department of Health & Human Services

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