HealthLawProf Blog

Editor: Katharine Van Tassel
Creighton University School of Law

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Tuesday, January 20, 2015

2012 All Over Again

In 2012, the Supreme Court heard two important Medicaid cases, one in January of 2012 pertaining to payment rates (Douglas v. ILC), and the other in March 2012 pertaining to the ACA's Medicaid expansion (NFIB v. Sebelius). In Douglas, the Court's majority deferred to HHS, allowing the agency to exercise primary jurisdiction over California's Medicaid payment rates and punting the question regarding Supremacy Clause actions by Medicaid providers against noncompliant states. And, in NFIB, the Court decided that Medicaid's modification under the ACA was not Medicaid enough for purposes of Spending Clause doctrine but was Medicaid enough for purposes of the remedy, which was to limit HHS's authority to terminate Medicaid funding for states that refused to expand Medicaid eligibility under the terms of the ACA.  Confused yet? So is the Court, and that's a potential problem. 

Fast forward to 2014, and the Court is once again hearing a Medicaid reimbursement rate case and an ACA case, in the same time frame as 2012, both of which could be very disruptive.  The Medicaid rate case is Armstrong v. Exceptional Child Center, and the weirdly confused oral arguments occurred today. The question the Court granted from the petition for certiorari was whether private parties can enforce the Medicaid Act's equal access provision ("30(a)") against a noncompliant state when HHS has not demanded compliance from the state through payment of adequate reimbursement rates. Armstrong may have far-reaching implications for the Medicaid program, for implied rights of action, and for federal courts' jurisdiction over Supremacy Clause actions, to name a few possible dimensions. Steve Vladeck, author of a very important amicus brief on behalf of former HHS officials, has posted about some of these issues.  Rather than re-hash his fine commentary, or Will Baude's pithy overview for SCOTUSblog this morning, I will quickly share some impressions of today's oral arguments.

First, the justices had no idea how Medicaid works, which matters quite a lot when it may be the vehicle for constitutional change. Justice Breyer, for example, did not appear to understand the difference between the state describing how it would set payment rates and the state actually setting the amount of money it would pay to reimburse health care providers for their services.  Here, Idaho created a methodology for rate setting that was approved by HHS, but then its legislature decided to use a different rate setting methodology tied to the state's budget. Breyer kept using the example of a doctor submitting a bill for $80 when all he could receive was $60, but the example was inapposite. Another minor example is that the prohibition against balance billing was news to the justices. Another example is Justice Alito's hypothetical about states that allow for medical marijuana being sued because feeral law does not permit possession of marijuana, which had no apparent relevance for the Medicaid preemption questions at hand.

James Piotrowski, on behalf of Exceptional Child Center tried to limit the conversation to whether the state actually followed the plan that CMS approved (which it appears Idaho did not). He also tried to explain why a broad-based Supremacy Clause/Spending Clause decision would be both unnecessary and dangerous, and he advocated for a limited ruling that would allow this set of plaintiffs to seek an injunction to force the state to abide by the reimbursement plan that HHS approved.  

The trouble is that the Solicitor General, as he did in 2012, promoted the view that no private rights of action should be permitted. Justices Sotomayor and Kagan quickly called out Mr. Kneedler on HHS’ deep disagreement with this position. Kneedler asserted that HHS does not want these private actions, even though HHS pointedly did not sign the SG's brief, and even though the amicus brief here and in Douglas on behalf of former HHS officials (of all political stripes) clearly explained that HHS both expects and needs private actions to occur. In both cases, the former HHS officials explained that the agency is so woefully understaffed and underfunded that it could never police all of the states' reimbursement rates on a claim by claim basis.

The four dissenters from Douglas were relatively quiet during oral arguments today. In 2012, the Chief Justice authored a dissent that would have denied private rights of action under 30(a) to force states to pay adequate payment rates for equal access to health care providers. I suspect that Roberts, Scalia, Alito, and Thomas remain in the same positions, unless they were convinced that Idaho should have just stuck to the plan and their legislature drove off the rails after CMS approved their rate setting methodology. The real question will be if Kennedy sees this action as some kind of affront to state sovereignty given his affinity for federalism resolutions. If so, then Supremacy Clause actions will be lost for 30(a) litigants, and states will run over Medicaid providers who cannot enforce the adequate payment language in the Medicaid Act. In the very moment that more and more states are negotiating Medicaid expansion under the power given to them by the Court in NFIB, this would be a dangerous precedent both theoretically and on the ground. More to come.

 

January 20, 2015 in Affordable Care Act, Constitutional, Health Care Costs, Health Care Reform, Health Law, Health Reform, HHS, Medicaid, Policy, State Initiatives, States | Permalink | Comments (0) | TrackBack (0)

Saturday, May 3, 2014

Why Sen. Elizabeth Warren's Memoir is of Special Interest to Health Profs

I'm a guest over at prawfsblog this month--come visit-and my posting today was about why law professors should be interested in Sen. Elizabeth Warren's new memoir.  You can read the whole pitch below--it includes that it's a funny, warm, well-written and interesting account of a remarkably successful career.  I also noted how important her efforts at fixing student loan debt are as a platform on which to build needed change in higher education.  Finally, she has very interesting things to say about balancing work and family as well as going beyond the classroom to help the individuals affected by the law she studied.   At a recent executive board meeting of the AALS Section on Law, Medicine and Health Care, current chair Dr. Ani Satz noted that there are not many mechanisms for recognizing that kind of service.  (side note--consider yourself warmly invited to the terrific panels our chair elect, Dr. Thad Pope, has organized for us to present and co-sponsor, more information to come).

But for a health prof audience, I'd also point out that she discusses her empirical work (with a team of top social scientists--she didn't do the math herself) that finally demonstrated the major flaw in our employer based health insurance system.  Medical bills turned out to be the leading cause of bankruptcy--and very often among families already insured.  Either their insurance was inadequate (maybe we should get these folks together with the people who are upset they can't keep their "old" plans) or, worse, their illness meant they could no longer work.  Whether the debt came directly from medical bills or from using credit cards and home equity loans to pay the bills--the results were equally catastrophic.

That this actually happens--that medical bills are a leading cause of bankruptcy--is as far as I know not currently disputed.  But I'd be remiss in this context not to point out that as part of the opposition research arising from her running to Senate-the Breitbart blog has made available a series of angry accusations from the 1990's of misconduct about that study.

 It will be a while before we see if the Affordble Care Act is going to do much to fix this problem--and predictions are mixed.  See this as opposed to this.   There's a federal study finding bankruptcies down in Massachusetts following Romneycare.   Common sense suggests that changes like no exclusions for pre-existing conditions and the lift of lifetime caps will make things better (for people with plans bound by those provisions).

But although certainly not usually described as such, Sen. Warren is, if not a Health Law Prof, certainly one whose work is very important to us. 

 

May 3, 2014 in Affordable Care Act, Blog, Consumers, Coverage, Employer-Sponsored Insurance, Health Care Reform, Insurance, PPACA, Proposed Legislation, Reform, Research, Research Ethics, State Initiatives, Workforce | Permalink | Comments (0) | TrackBack (0)

Friday, April 25, 2014

FDA Regulation of E-Cigarettes—A Gateway to Teaching Administrative Law

 

It’s likely that most readers of this blog already know that the FDA just announced its intent to extend its regulatory powers to E-Cigarettes.   E-Cigarettes have proven to be a "high interest" topic in both my "Constitutional Issues in Health Law" and "Legal Issues in Human Subject Research Classes."  The struggle between the FDA and those it wishes to regulate raise questions about the powers of all three branches of Government.  It can serve as a proxy for all administrative agencies in an Admin Class or as a direct source of study in a public health, environmental or (of course) food & drug law class.

The FDA's current struggles include energy drinks, body building supplements and truth in calorie reporting (no more hiding calories by assuming unrealistic serving sizes).

But back to E-Cigarettes.  

Here is the text of the proposed rule.  And here is the Campaign for Tobacco-Free Kids’ list of reasons why the FDA is justified—and should—be able to do this.

The FDA’s relationship with regulating tobacco products has been a complicated one.  This book review by Margaret Gilhooley can bring you up to date on the history of FDA’s failed attempts to obtain jurisdiction.  It was not until June 22, 2009 that the FDA finally did get regulatory power when President Obama signed the Family Smoking Prevention and Tobacco Control Act (FSPTCA) that the FDA got any authority to regulate tobacco products—and that only through the filter (sorry) of protecting children.   And that still remains the outer limit—protecting children. 

So any regulation of E-Cigarettes has to be along the lines of making them less available to minors.  That’s why what sounds like a relatively weak reason—“even if they are harmless, they are a gateway for children to real cigarettes” is important because that is the statutory basis of the FDA’s power.  It’s not surprising that the FDA’s announcement has been met with immediate protest from Vapers.  New York’s ban (and remember, all the FDA’s done is to announce it intends to assert its authority to look into the product’s safety) has sparked considerable push-back based on issues of “personal liberty.” Apparently this anti-regulation movement is not restricted to the U.S.

   Vapers have had little success persuading cities to exempt e-cigarettes from public spaces, but they have been able to prevent outright bans and to allow the creation of “vaping lounges” –-the English majors among you know these better as modern day equivalent of a legal opium den—perhaps inhabited by today’s Keats, Shelleys and Coleridges.  We even have them in Lubbock.  

The FDA’s goal is to build on the actions of the cities that are equating e-cigarettes with “old style” tobacco to keep e-cigarettes as an “adults only” product.

 

April 25, 2014 in Constitutional, Drug and Device, Environmental Health, FDA, Food, Obama Administration, Policy, Proposed Legislation, Public Health, Public Opinion, State Initiatives | Permalink | Comments (0) | TrackBack (0)

Monday, October 7, 2013

Federal-State Tensions in Fulfilling the ACA's Promises

[Cross posted today at Constitution Daily:]

The Affordable Care Act expresses many goals, but its heart is the desire to create a health insurance home for all Americans.  The American healthcare system historically exists at the pleasure of a number of stakeholders and is not a coherent whole. This lack of system is reflected in the consistent tensions that underlie American healthcare, most notably federal power versus state power; the collective versus the individual; and the individual versus the state.  In creating near-universal health insurance, the ACA has resolved one of those tensions, individual versus the collective, in favor of the collective.  To that end, the ACA eliminated many of the practices health insurers used to cherry pick policyholders, which excluded people who need medical care from their risk pools.  In so doing, the ACA represented a federal choice to make all people insurable, whatever their wealth, age, medical history, sex, race, or other distinguishing factor. 

Despite the redirection this leveling of the health insurance playing field represents, the ACA did not craft a coherent whole out of the American healthcare system.  Instead, the ACA remodels the preexisting, unstable healthcare system.  In building on the old foundation rather than starting anew, the law retained the historic role of the states in regulating medical matters.  To that end, the ACA urged the states to implement two key aspects of its insurance modifications: Health Insurance Exchanges and the expansion of the Medicaid program.  The federal government has the power under the Spending Clause to create a federally-run insurance mechanism, but it chose instead to employ cooperative federalism to keep states engaged in healthcare policymaking.  The trouble is that some states have not been cooperating with these central legislative goals.

 The Exchanges, or Marketplaces, are an instrument through which qualified private health insurance plans can be purchased by individuals or small businesses.  The states were offered federal funding to create their own state-run Exchanges, which were operative as of October 1, 2013 (Tuesday last week).  Many states created Exchanges, but many rejected them as an expression of their distaste for the ACA.  Predictably, many of the states that have refused to create their own Exchanges were the same states that challenged the constitutionality of the ACA.  While there is value in dissent, the states that refused to create Exchanges invited more federal power into the state, because rejecting the federal offer for funding to create a state-run Exchange did not halt Exchanges from coming into existence. Instead, the ACA tasked the federal government with operating Exchanges in states that did not create their own.  While expressing a desire to protect their state sovereignty, these states have invited federal authority into their borders.  Though the Exchanges at both the state and federal levels have experienced some technical glitches this week, it appears that many people are eager to purchase insurance through them and that they have been successful at doing so.  The states that rejected Exchanges have not stopped implementation of the law, but their actions have other notable ramifications.

The Medicaid expansion was designed to catch childless adults under age 65 and below 133% of the federal poverty level in Medicaid’s safety net.  As with other modifications to the Medicaid program over the years, the expansion added a new element to the Medicaid Act that states could reject, but they could lose all of their funding if they made that choice.  The day the ACA was signed into law, states challenged the expansion of the Medicaid program as unconstitutionally coercive.  They succeeded on this claim in NFIB v. Sebelius, and the Court rendered the expansion optional for states. Immediately pundits began to question whether the states would participate in the Medicaid expansion. 

Though national media tallies make it appear that just over half of the states are participating in the Medicaid expansion, in reality the number is and will be much higher.  In almost every state reported as “leaning toward not participating,” and in many states reported as “not participating,” some significant act has occurred to explore implementation of the Medicaid expansion.  Some states have special commissions or task forces researching expansion; some state governors have indicated a desire to participate and have included the expansion in the budget; some legislatures have held debate or scheduled it for the next session; and so on.  Though some states will not have their Medicaid expansions running by January 1, 2014, it seems very likely that most if not all states will participate in the expansion in the relatively near future.

 In the meantime, state non-cooperation will have a direct effect on some of the nation’s poorest citizens.  People from 100% to 400% of the federal poverty level are eligible to receive tax credits for purchasing insurance in the Exchanges.  In states with no expansion, people above 100% of the federal poverty level who would have qualified for Medicaid will still be able to obtain insurance through federal subsidies in the Exchanges.  But, people who are below 100% of the federal poverty level will be too poor for tax-credits and living in states that have not yet expanded their Medicaid programs, therefore they will not be able to enroll in Medicaid either.  These very low income people will not be penalized for failing to carry health insurance, but they will not have health insurance either.  These individuals will get caught in a health insurance black hole that exists in part because the Court allowed states to refuse Medicaid expansion and in part because of state resistance to partnering in the implementation of the ACA.   

State cooperation in the Medicaid expansion is even more important than state participation in the Exchanges, because many thousands of people may not get the access to health insurance that is the promise of the ACA.  The debate over the meaning of federalism that swirls around political and academic circles will have a direct and important effect on the people who can least afford it.  The good news for them is that Medicaid’s history indicates that all states eventually participate in the program and its amendments, but this week’s implementation of the Exchanges keeps access to medical care through health insurance tantalizingly out of reach.

October 7, 2013 in Affordable Care Act, Constitutional, Health Care, Health Care Reform, Health Law, Health Reform, Medicaid, Obama Administration, PPACA, Private Insurance, Spending, State Initiatives | Permalink | Comments (0) | TrackBack (0)