Statute, Regulation, and Guidance

Federal value-based care policy is not made in one place or one way. It is made at three levels, statute, regulation, and sub-regulatory guidance, each with a different process, a different degree of force, and a different path for public influence. Knowing which level a given policy lives at is the first skill of anyone who wants to understand or shape it.

The three levels

• Statute. Law written by Congress. It sets the broad authorities and requirements, and only Congress can change it. Section 1115A, which created the Innovation Center, is statute.
• Regulation. Rules written by agencies (here, CMS) to implement statute. Regulations generally go through formal rulemaking, notice-and-comment (Module 3), and once final they carry the force of law.
• Sub-regulatory guidance. An agency’s interpretation and operational detail: bulletins, manuals, fact sheets, model announcements, and participation agreements. Guidance can be issued quickly, does not require notice-and-comment, and does not carry the same legal force, though in practice it shapes how programs actually run.

Why the level matters

The level determines both how a policy is made and how you can influence or challenge it.

Worth remembering: the same idea has a very different life depending on where it lives. A requirement in statute can only be changed by Congress. A requirement in regulation can be changed by the agency, but only through notice-and-comment, which gives the public a formal voice. A requirement in guidance can be issued, revised, or rescinded quickly and with less process, which makes it flexible but also less stable. When you read that “CMS did X,” your first question should be: at which level, because that tells you how durable it is and how you can respond.

The recurring pattern in value-based care

This course keeps returning to the pattern. Some CMMI models are launched and governed through formal rulemaking; others are set up largely through sub-regulatory means like model announcements and participation agreements. The Medicaid course’s health-related-social-needs example showed the instability of guidance directly: a framework issued as sub-regulatory guidance in 2023 was rescinded in 2025, precisely because guidance can move fast in both directions. Recognizing the level is how you make sense of a landscape that otherwise looks chaotic.

Key takeaways

• Federal health policy is made at three levels: statute (Congress), regulation (agencies, with force of law), and sub-regulatory guidance (agency interpretation, faster and less binding).
• The level determines how a policy is made, how stable it is, and how the public can influence it.
• Value-based care models use both formal rulemaking and sub-regulatory means; identifying the level is the first analytic step.