Insurers, hospitals, physicians united in stance on ACA lawsuit

https://www.healthcarefinancenews.com/news/insurers-hospitals-physicians-united-stance-aca-lawsuit?mkt_tok=eyJpIjoiWldGbU16WmxOak00TmprMiIsInQiOiIzeGkycUpwcmtPUk42Z2R0b1k4RHd0NUVoY0k3UmE5TktUSkhMUzVtNVVWOWtWY3BhWkdUbjcrZndNS0tZRnA1cWFSajhWdmlZcUc4VE5DbFB4VEZNNkJyYTkyXC9XK3hxZVMwVzhSaVF2ZjZIdUFjbzZwcnF6aGE0UmowZ2w1eHcifQ%3D%3D

Hospitals, physicians and insurer groups are united in wanting to preserve the Affordable Care Act and have defended it in briefs filed with the Fifth Circuit Court of Appeals.

The American Hospital Association, the American Medical Association and America’s Health Insurance Plans are among groups that are fighting a lower court ruling in Texas that struck down the law.

On the other side is the Department of Justice, which last month reversed an earlier opinion and sided with the Texas judge who ruled that without the individual mandate, the entire ACA has no constitutional standing.

WHY THIS MATTERS

The ACA has insured millions who otherwise may not have been insured, allowing them to get care when needed instead of going to the more expensive emergency room when they have a medical crisis.

Hospitals and physicians see less uncompensated care under the ACA.

Without the ACA, patients would no longer have protections for pre-existing conditions, children would no longer have coverage under their parents’ health insurance plan until age 26, insurers would no longer be held to the 85 percent medical loss ratio, 100 percent coverage for certain preventive services would cease and individual marketplace and subsidies based on income would be eliminated.

Also, federal funding for Medicaid expansion would end.

TREND

Republicans under President Trump have tried unsuccessfully to repeal and replace the law.

The lawsuit, brought by 19 Republican governors, puts the GOP in a political bind over supporting the repeal of a law that is popular with consumers and their constituents. President Donald Trump recently said Republicans would unveil an ACA replacement after the 2020 election.

Democrats are also facing a crisis within their party over healthcare as it becomes a priority issue in the presidential election. Some of the leading candidates, such as Senator Kamala Harris, support Medicare for all. The Medicare for All Act of 2019  has been introduced in the Democratic-led House of Representatives.

Veteran politician and attorney Earl Pomeroy said he believes the Texas versus United States appeal changes the political course for 2020. The entire MFA argument will move to the back burner because of the Texas lawsuit, he said.

“The fight is going to be trying to underscore the Congressional importance of the provisions of the ACA and enhancing them,” Pomeroy said. “I do not believe that supporting Medicare for all is an advantageous position for a Democratic candidate running in a district that is not a secure Democratic seat. I believe Kamala Harris will spend much of the campaign walking back her comments on health insurance.”

Pomeroy is a former member of the U.S. House of Representatives for North Dakota’s at-large district, a North Dakota Insurance Commissioner and senior counsel in the health policy group with Alston & Bird.

“The safe political ground is defending a law people have warmed up to,” he said. “All politics is local but all healthcare is personal. There is little risk tolerance in the middle class for bold experiments in healthcare.”

BACKGROUND

The lawsuit was brought by Texas and the 19 other Republican-led states, based on the end of the individual mandate. In February, U.S. District Court Judge Reed O’Connor agreed that the federal law cannot stand without the individual mandate because if there is no penalty for not signing up for coverage, then the rest of the law is unconstitutional.

Twenty-one Democratic attorneys general appealed and the House of Representatives has intervened to defend the ACA in the case.

Either outcome in the appeals court may see the case headed to the U.S. Supreme Court.

WHAT THE PROVIDERS AND INSURERS ARE TELLING THE COURT

In a court brief filed by the AHA, the Federation of American Hospitals, The Catholic Health Association of the United States, America’s Essential Hospitals, and the Association of American Medical Colleges urged the Fifth Circuit Court of Appeals to reject a district court decision they said would have a harmful impact on the American healthcare system.

“Those without insurance coverage forgo basic medical care, making their condition more difficult to treat when they do seek care. This not only hurts patients; it has severe consequences for the hospitals that provide them care. Hospitals will bear a greater uncompensated-care burden, which will force them to reallocate limited resources and compromise their ability to provide needed services,” they said.

In a separate friend-of-the-court brief, 24 state hospital associations also urged the Fifth Circuit to reverse, highlighting specific innovative programs and initiatives for more coordinated care.

The American Medical Association, the American College of Physicians, American Academy of Family Physicians, American Academy of Pediatrics and the American Psychiatric Association filed a brief. AMA President Dr. Barbara L. McAneny said, “The district court ruling that the individual mandate is unconstitutional and inseverable from the remainder of the ACA would wreak havoc on the entire healthcare system, destabilize health insurance coverage, and roll back federal health policy to 2009. The ACA has dramatically boosted insurance coverage, and key provisions of the law enjoy widespread public support.”

AHIP said the law impacts not only the individual and group markets, but also other programs such as Medicaid, Medicare and Part D coverage.

“Since its passage in 2010, the ACA has transformed the nation’s healthcare system,” AHIP said. “It has restructured the individual and group markets for purchasing private health care coverage, expanded Medicaid, and reformed Medicare. Health insurance providers (like AHIP’s members) have invested immense resources into adjusting their business models, developing new lines of business, and building products to implement and comply with those reforms.”

 

 

 

 

A motley crew in Texas v. Azar

https://theincidentaleconomist.com/wordpress/a-motley-crew-in-texas-v-azar/

Image result for severability

Together with Jonathan Adler, Abbe Gluck, and Ilya Somin, I’ve filed an amicus brief with the Fifth Circuit in Texas v. Azar. Those of you who’ve been closely following health-reform litigation know that Abbe and I often square up against Jonathan and Ilya. It’s a testament to the outlandishness of the district court’s decision that we’ve joined forces. Like our original district court filing, the brief focuses on severability.

In 2017, Congress zeroed out all the penalties the ACA had imposed for not satisfying the individual mandate. Yet it left everything else undisturbed, including the guaranteed-issue and community-rating provisions. That simple fact should be the beginning and end of the severability analysis. It was Congress, not a court, that made the mandate unenforceable. And when Congress did so, it left the rest of the scheme, including those two insurance reforms, in place. In other words, Congress in 2017 made the judgment that it wanted the insurance reforms and the rest of the ACA to remain even in the absence of an enforceable individual mandate.

Because Congress’s intent was explicitly and duly enacted into statutory law, consideration of whether the remaining parts of the law remain “fully operative”—an inquiry courts often use in severability analysis as a proxy for congressional intent—is unnecessary.

Nor does the district court’s incessant focus on findings that Congress made about a mandate backed by financial penalties hold water.

The 2010 Congress believed that 2010’s penalty-backed mandate was necessary to induce a significant number of healthy people to purchase insurance, and thereby “significantly reduc[e] the number of the uninsured.” 42 U.S.C. § 18091(2)(E). But because the neutered mandate of 2017 lacks a penalty, it could not have been based on those earlier findings. They are thus irrelevant. The earlier findings have been overtaken by Congress’s developing views—based on years of experience under the statute—that the individual marketplaces created by the ACA can operate without penalizing Americans who decline to purchase health insurance.

At bottom, a toothless mandate is essential to nothing. A mandate with no enforcement mechanism cannot somehow be essential to the law as a whole. That is so regardless of the finer points of severability analysis or congressional intent. The district court’s conclusion makes no sense.

There are (at least!) two other notable amicus briefs in the case.

The first is from Sam Bray, Michael McConnell, and Kevin Walsh. In a terse 1,000 words, they argue—correctly, in my view—that “Congress has not vested the federal courts with statutory subject-matter jurisdiction to opine whether an unenforceable statutory provision is unconstitutional.” In this, they sound many of the same themes that Jonathan Adler and yours truly sounded in arguing that plaintiffs lack standing under the Constitution. But Bray, McConnell, and Walsh hitch their argument not to Article III, but to the jurisdictional reach of the Declaratory Judgment Act.

The second is from the Republican attorneys general of Ohio and Montana. They agree that the mandate is unconstitutional, but they have no truck with the argument that all or part of the Affordable Care Act should be struck down. “At the same time that Congress made the mandate inoperative, it left in place the remainder of the Affordable Care Act. As a result, the application of the severability doctrine in this case requires no ‘nebulous inquiry into hypothetical congressional intent.’ … To the contrary, the Court can see for itself what Congress wanted by looking to what it did.” Their participation suggests deep fractures in the down-with-the-ACA-at-all-costs coalition.

So, by my count, the parties and amici have pressed at least four independent reasons for getting rid of this case. First, because plaintiffs lack standing. Second, because the courts lack jurisdiction under the Declaratory Judgment Act. Third, because there is no “mandate” and thus no constitutional problem (as Marty Lederman has rightly argued). And fourth, because even if there is a mandate and it’s unconstitutional, it’s fully severable.

This isn’t a federal case. It’s a choose-your-own-adventure book where all the adventures lead to the end of this misbegotten litigation.

 

 

 

DOJ supports striking entire ACA: 5 things to know

https://www.beckershospitalreview.com/legal-regulatory-issues/doj-supports-striking-entire-aca-5-things-to-know.html

Image result for severability

In a March 25 court filing, the Department of Justice said it supports a judge’s ruling that the entire Affordable Care Act should be invalidated, according to CNN.

Five things to know:

1. In December, a federal judge in Texas held that the ACA is unconstitutional. He sided with the Republican-led states that brought the lawsuit, Texas v. United States, calling for the entire ACA to be struck down because Congress eliminated the healthcare law’s individual insurance mandate penalty.

2. The case is now pending in the 5th Circuit Court of Appeals. In a filing with the appellate court on March 25, the Justice Department said it supports the federal judge’s ruling that invalidated the ACA.

3. “The Department of Justice has determined that the district court’s judgment should be affirmed,” lawyers for the Justice Department wrote to the 5th Circuit Court of Appeals, according to Politico. “[T]he United States is not urging that any portion of the district court’s judgment be reversed.”

4. The filing signals a major shift in the Justice Department’s position. When Jeff Sessions was attorney general, the administration argued only certain parts of the ACA, like protections for people with pre-existing conditions, should be struck down, but the rest of the law could stand, according to CNN.

5. A coalition of Democratic-led states is challenging the Texas ruling. Regardless of the outcome, the 5th Circuit’s ruling is likely to be appealed to the Supreme Court, according to Politico.

Access the full CNN article here.

Access the full Politico article here.

 

 

Trump admin now backs elimination of ACA in court

https://www.healthcaredive.com/news/trump-admin-now-backs-elimination-of-aca-in-court/551319/

UPDATED: AHA blasted the decision, calling it “unprecedented and unsupported” by law or facts and warned it would lead to repeal of Medicaid expansion and gut protections for those with pre-existing conditions.

Dive Brief:

  • The Trump administration has reversed its stance on the Affordable Care Act, arguing in a court filing Monday that the entire law should be eliminated instead of just removing provisions protecting people with preexisting conditions.
  • The move came hours after Democratic attorneys general defending the ACA filed their brief arguing that the landmark law is still constitutional even without an effective individual mandate penalty. Both filings are in the Fifth Circuit following an appeal of a Texas judge’s decision from December declaring the law unconstitutional after Congress set the mandate penalty to zero in tax overhaul legislation. That decision was stayed pending appeal.
  • Industry groups lambasted the administration’s about-face. America’s Health Insurance Plans CEO Matt Eyles said in a statement the decision was, like the Texas ruling, “misguided and wrong.” He added the payer lobby “will continue to engage on this issue as it continues through the appeals process so we can support and strengthen affordable coverage for every American.” Federation of American Hospitals CEO Chip Kahn said in a statement the decision is “unfortunate but not unexpected considering [the administration’s] long-held views on the health law.”

Dive Insight:

Elimination of the ACA would be a particular blow for some payers that have found increasing profitability in the individual market. Centene and Molina have found success with the exchanges and have expanded their footprints.

It would also put major hospital chains in a bad spot. Companies like HCA, Tenet and Community Health Systems have exposure that could subject them to reduced patient volumes and more bad debt, Leerink analyst Ana Gupte said when the Texas ruling first came down.

Public support for the ACA has gradually increased over the years, and the latest polling from the Kaiser Family Foundation shows about 53% of respondents giving a favorable view and 40% unfavorable. Individual components of the law are even more popular.

The ACA, which just days ago marked its ninth anniversary, brought forth massive change in American healthcare. A repeal of the law would do the same, stripping insurance coverage for as many as 17 million people.

The Trump administration’s new stance presents an intensely stark contrast with the growing field of Democratic presidential contenders, who have shifted the healthcare conversation to the left as the 2020 field shapes up. Candidates have proposed various forms of Medicare for all as well as scaled back versions that still greatly expand government coverage.

It moves the DOJ away from even some Republicans. During last year’s midterms a few GOP candidates said they approved of the ACA’s most popular element — protection for people with preexisting conditions (although voting records didn’t necessarily back them up).

Most Democrats in Congress aren’t fully backing any single-payer model at the moment, but their support for the ACA is strong. Democrats in the House of Representatives are expected to announce a legislative package Tuesday that would strengthen the ACA by eliminating short-term health plans that don’t comply with the law and increasing subsidies for exchange plans.

Since the GOP’s quite public failure to repeal the law two years ago, efforts to do so through Congress have sputtered to nearly a halt. Instead, the Trump administration started chipping away at the law’s provisions. It cut the open enrollment period for ACA plans, as well as the advertising budget for promoting sign-ups, and stopped cost-sharing reduction payments to insurers.

More recently, HHS has bolstered short-term and association health plans that offer cheap but skimpy coverage not in line with ACA requirements. Analysts fear proliferation of these plans could draw young and healthy people away from the exchanges, jeopardizing the stability of the risk pool.

A Democratic-led House panel launched an investigation into short-term plans and is requesting documents from Anthem and UnitedHealth Group, among other companies.

The legal issue at hand is known as severability — the question of whether a single provision of the law, in this case the individual mandate, becoming unenforceable invalidates the entire statute. The mandate was also the key question in the original U.S. Supreme Court ruling allowing the ACA to move forward.

The high court has since lurched to the right, which is notable if the appeal on the Texas ruling reaches that stage, although that would likely be far down the road.

 

 

 

An unexpected twist in the ACA case

https://www.axios.com/newsletters/axios-vitals-20db892f-3887-47d7-8a2f-075e3afc8bc0.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Image result for unexpected twist

A Florida man is capitalizing on the Trump administration’s sudden legal reversal in an attempt to get off the hook for accusations of Medicare fraud.

Philip Esformes, who operated about 20 nursing homes in the Miami area, was arrested in 2016 and charged with committing $1 billion in Medicare fraud through a complex kickback scheme.

  • But Esformes’s lawyers now argue the charges should be dismissed because of the Justice Department’s new position on the Affordable Care Act. ThinkProgress’ Ian Millhiser was the first to flag this creative argument.

How it works: Some of the specific charges against Esformes stem from parts of the Affordable Care Act. They are, his lawyers say, among the specific sections of law that Judge Reed O’Connor invalidated when he threw out the entire ACA.

  • Esformes’s lawyers acknowledge that those statutes are still on the books.
  • But the Justice Department has said it agrees with all of the O’Connor’s decision — which means it has said that “the very statutes it is seeking to enforce in this trial are unenforceable,” his brief argues.
  • The government shouldn’t be able to prosecute Esformes using legal authorities that it’s simultaneously saying are invalid, the lawyers argue.

My thought bubble: This seems like the kind of thing a good prosecutor will probably find a way to wriggle out of. It also seems like the kind of thing career lawyers at DOJ would have caught, if they had been allowed to shape DOJ’s position in the ACA case.

 

 

Judge rules Trump AHP expansion unlawful ‘end-run’ around ACA

https://www.healthcaredive.com/news/judge-rules-trump-ahp-expansion-unlawful-end-run-around-aca/551601/

Image result for association health plans

Dive Brief:

  • A federal judge on Thursday struck down a Trump administration expansion of association health plans, which aren’t bound by the requirements of the Affordable Care Act. U.S. District Judge John Bates said the June rule from the Department of Labor that loosened restrictions on what groups could band together to offer AHPs “is clearly an end-run around the ACA.”
  • The ruling stems from a lawsuit 11 states and the District of Columbia filed to challenge the DOL rule. It comes the same week the Trump administration stepped up its attacks against the ACA, arguing in a court filing Monday the law should be eliminated in its entirety following a Texas judge’s decision the act is unconstitutional without the individual mandate penalty.
  • The judge had strong language condemning the administration’s attempt to allow for easier creation and use of AHPs, calling the regulatory change a “magic trick” that allowed for “absurd results” undermining the intent of Congress.

Dive Insight:

The ruling is a blow to the Trump administration’s efforts to circumvent the ACA, which ramped up significantly with the administration’s filing this week seeking complete repeal of the law. Another hit to those efforts came down Wednesday when a different federal judge struck down Medicaid work requirements in Arkansas and Kentucky.

The renewed fight comes as Democrats lining up for a 2020 presidential run are pushing for more progressive policies than have previously gained public traction. Some Democratic contenders are making Medicare for all and other single-payer models a central part of their platforms as healthcare shapes up to be a major issue for the next presidential election.

Experts have argued extended use of AHPs could siphon away young and healthy people looking for minimum coverage at a lower cost. If they choose AHPs they upset the balance on risk pools for more comprehensive coverage. Also, many consumers don’t understand the tradeoff and could be surprised by what isn’t covered when they are in need.

But even though the plans aren’t required to meet ACA standards, some that have formed have been adamant they provide adequate coverage, including the 10 essential ACA benefits. The plans are less obstructive to the regulatory environment than short-term health plans, which have also been granted more leeway under the Trump administration.

Land O’Lakes, for example, which said it was the first to offer an AHP under the more relaxed rules, said its plan covered essential benefits and pre-existing conditions, as well as “broad network coverage.”

The Society of Actuaries has said as many as 10% of people in ACA plans could leave for AHPs, which would also drive up premiums for plans in the individual market. Avalere predicted about 3.2 million people would shift and premiums would rise by 3.5%.

Supporters of AHPs decried the judge’s decision Thursday. Kev Coleman, founder of AssocationHealthPlans.com, said in a statement the ruling will hurt small businesses throughout the country.

“Thousands of employees and family members within the small business community have already enrolled in association health plans — which help lower health care costs — since they first became available last fall,” he said. “They have provided a means by which broad benefits may be accessed at more economical prices. While I do not believe today’s ruling will survive appeal, I believe Judge Bates’ decision is an unnecessary detour on small businesses’ path toward more affordable health coverage.”

 

 

Trump’s all-or-nothing gamble

https://www.axios.com/newsletters/axios-vitals-2bc1069a-f66e-4a33-8406-763284c3a0e1.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The Trump administration’s new legal argument against the Affordable Care Act is a political risk. It may also be a liability in court.

How it works: The legal issue here is “severability” — if the ACA’s individual mandate is unconstitutional, can it be struck down in isolation? Or is it too intertwined with other parts of the law?

Flashback: We’ve seen this movie before — in 2012, at the Supreme Court.

  • According to behind-the-scenes reporting from the 2012 ACA case, four conservative justices wanted to strike down the entire law. Chief Justice John Roberts reportedly wanted to strike down the mandate and protections for pre-existing conditions while leaving the rest intact.
  • But the other conservatives wouldn’t budge, and faced with a choice between upholding or striking down the whole thing, Roberts chose the former.

The Justice Department has now forced that same all-or-nothing decision into the case now pending before the 5th Circuit Court of Appeals.

“There’s no way they were getting Roberts’ vote anyway … but this won’t help,” said Jonathan Adler, a law professor at Case Western Reserve University who helped spearhead a different challenge to the ACA.

  • “It’s contrary to everything he’s ever said and done on severability,” Adler argues.

It may not get that far. “I think the states ultimately lose,” Adler said. “I think the most likely outcome is they lose in the 5th Circuit. If they don’t lose at the 5th Circuit, they will lose at the Supreme Court.”

If that’s what happens, adopting this riskier legal strategy may ultimately be the only thing that saves Republicans from the political nightmare of wiping out 20 million people’s health care coverage with no strategy on how to replace it.

  • I’ll spare you a long list of quotes from President Trump’s trip to Capitol Hill yesterday. Suffice it to say that no, Republicans still do not have a plan for what happens next if they finally succeed in killing the ACA. Some things never change.