HealthLawProf Blog

Worth Reading This Week

• Barbara Evans, Why the Common Rule is Hard to Amend, SSRN
• Ann Marie Marciarille, Let Fifty Flowers Bloom: Health Care Federalism after National Federation of Independent Business V. Sebelius, SSRN/UMKC L.Rev.
• Tim Jost, Religious Freedom and Women’s Health — The Litigation on Contraception, NEJM
• Elizabeth Sepper, Taking Conscience Seriously, SSRN/Va L Rev

[NPT]

Contraception coverage continues, for now...

From SCOTUSblog, for those following Hobby Lobby's pursuit of the ACA's requirement that insurers cover contraceptives without requiring copayments:

Supreme Court Justice Sonia Sotomayor refused on Wednesday afternoon to block enforcement of the new federal health care law’s mandate that profit-making companies begin providing free birth-control drugs and methods for their women workers, beginning next week.  In a four-page opinion, Sotomayor ruled that an Oklahoma City family and its religion-oriented businesses did not qualify for a Court order against the mandate while its court challenge goes forward.

This marked the first time that the Supreme Court has been drawn into a nationwide controversy over the contraceptives mandate.  More than forty lawsuits have been filed against that requirement by non-profit religious schools, colleges, and hospitals, and by religion-oriented, profit-making companies.   Justice Sotomayor, noting that the lower courts that have ruled so far on pleas for emergency court orders have reached mixed results, concluded that the Hobby Lobby family’s right to an injunction could not meet the rigorous standard that it be “indisputably clear.”   (The Hobby Lobby challenge was discussed in this post.)

The kind of remedy the Hobby Lobby and its owners had sought — an injunction pending appeal — can only be issued if it is necessary to protect the Supreme Court’s authority to rule ultimately on the constitutional challenge, or if the challengers’ right to such a remedy is clear without a doubt, Justice Sotomayor noted.  She stressed that she was not ruling on whether the constitutional challenge ultimately would succeed, and noted that the Court had not previously ruled on whether constitutional or other legal protection for religious rights is available for closely held, for-profit corporations and their controlling shareholder when they object as an expression of their faith to mandatory employee benefits.

Hobby Lobby, an arts and crafts retail chain, and a related chain of Christian bookstores, Mardel, Inc., have argued that they will face heavy fines, perhaps reaching $1.3 million for each day they fail to obey the contraceptives mandate.  Sotomayor noted that claim, but ruled that it was not sufficient to satisfy the requirements for an injunction.  Even without such an order, the Justice wrote, the challengers may continue with their legal claims in the lower courts and seek Supreme Court review later, if they wish.

A federal judge in Oklahoma and the Tenth Circuit Court based in Denver had previously refused the challengers’ requests to bar enforcement of the mandate.

[NH]

Worth reading this week

Andrew Solomon, Far From the Tree: Parents, Children, and the Search for Identity (Simon & Schuster 2012).  An amazing tour de force about horizontal identities, disability, and the uncertain benefits of medicalization.  (I was lucky to receive this as a Christmas present from my husband, and can't put it down!)

[LPF]

Hospital Charges for the Uninsured

A decision by the Indiana Supreme Court reminds us that the Affordable Care Act provides important help even to those who will remain uninsured. Uninsured patients had challenged the practice of hospitals charging their list prices rather than the discounted rates that they bill insured patients. Invoking principles of contract law, the plaintiffs argued that when hospitals do not specify their charges up front, courts must fill in the contract with reasonable price terms, and it would be unreasonable for patients to be charged the list price. The court rejected the claim, concluding that a contract between hospital and patient is sufficiently definite as to price terms even when the contract simply states that the patient "guarantees payment of the account." 

Fortunately for uninsured persons, the impact of this decision is limited to past hospital charges. Under the Affordable Care Act, hospitals must offer their uninsured patients discounts similar to those negotiated with insurers.

[DO]

Protecting Privacy Outside of HIPAA

HIPAA privacy protections, whatever their adequacy, apply only to a set of "covered entities," largely within the realm of health care treatment and payment for it.  The vast realms of public health data, health information entered into individually-maintained personal health records, health information shared in social networking sites or web searches, to take some of the more important examples, are outside of the protections of HIPAA, although in some cases they are at least protected by the Federal Trade Commission's prohibition of unfair or deceptive trade practices. 

The National Committee on Vital and Health Statistics (on which I should disclose that I serve) is the federal advisory committee to the Secretary of HHS on health data.  NCVHS has directed considerable efforts to developing privacy protections for health information outside of the scope of HIPAA.  For example, NCVHS issued a letter on protecting the privacy and security of information in personal health records in 2009.

Over the last year, NCVHS has been studying the ways that health information may be used to promote community health.  While these initiatives are admirable and present important opportunities for improvement, they also pose risks to individuals and communities if data are misused.  NCVHS has just issued its initial recommendations with respect to data stewardship when health information is used to promote community health.  The recommendations are in the form of a letter to the Secretary of HHS, outlining a stewardship framework for community health data uses.  This letter is a critical first step in understanding the importance of shared data protection practices, including communication with communities, specification of the purposes of data use, and attention to risks posed by integration of data sets.  NCVHS is planning much further work in the area, and I would welcome readers' thoughts about the letter.

[LPF]

The Physician-Scrooges in Congress

In the December 3 issue of Modern Healthcare, a reporter interviewed a number of the members of the new Congress who are also physicians.  They were all asked what they thought were the most important health care priorities remaining after the Affordable Care Act.  Many of the answers were shocking to me in that they were completely focused on preserving physician incomes, totally ignoring issues that were more broadly applicable to the American public or improving health care in this country.  The vast majority of the physician-legislators cited things like allowing physicians to balance-bill patients, decreasing antitrust oversight of physicians, enacting tort reform so that doctors can't be sued easily, and fixing the Medicare sustainable growth rate so that there are no cuts to physician reimbursement every year.  With a few exceptions,they failed to cite issues that might actually improve the quality and availability of health care in this country, like increasing the number of slots in medical schools to address the upcoming shortage of doctors, studying treatments to determine what really works and what is costly but does not work, or reducing medical errors and improving hospital safety. 

Although I'm not sure why I should be surprised at this unyieldingly self-serving focus in Congress, it really made me fear for the future of American health care.  If the people who have the best professional backgrounds, credibility,  and the positions to effect real change in our health care system are more interested in protecting the incomes of their cronies, what will really happen?   How very sad for us, and what a sad statement about the ethics that are taught in medical school or are acquired through political activity.  Bah Humbug!

[VJW]

Cross-Posted on Healthy Interests

Dear States, The world will not end next week...

NASA says so.  No more procrastinating on ACA compliance.  The state-based exchange extended deadline is tomorrow.  And, you better get to work on that Medicaid expansion too; Nevada has, so what are you waiting for?  Oh, right, the end of the world.  Well, no more dillydallying.

[NH]

AHRQ Advance Notice of Funding Opportunity

Of note this week:  AHRQ has published a notice of intent to publish a funding opportunity announcement for a network to develop evidence to inform comparative effectiveness decisions in patient-centered outcomes research. The network, called DEcIDE, will link together centers performing comparative effectiveness research on topics identified as critically important by stakeholders in Medicare, Medicaid, or CHIP.  There are several reasons for calling this notice to the attention of HealthLawProf readers.

First, as we all know, there are great--but highly controversial--hopes for using CER to help in modulating increases in health care costs.  Lurking under the controversy are a host of legal issues, including risks that certain cutback designs may discriminate against persons with disabilities.

Second, the AHRQ published this as a notice of intent to allow centers to assemble teams of people interested in health policy. Specifically, "applicants will need to form partnerships with stakeholders representing  multiple perspectives, including such groups as patients, providers, payers, purchasers, administrators, policymakers, consumer organizations, community groups, professional societies, State Medicaid Medical Directors and/or regional Medicare Carriers."  It seems to me anyway that healthlawprofs might have quite a bit to say about the choice of topics--and might well want to know about and participate in any proposals from their institutions or communities.

The actual notice is expected to be issued in late winter, for a proposal submission date in late spring 2013.

[LPF]

NIH and Funding Preferences for the Cautious

The National Institutes of Health spends around $30 billion per year on biomedical research around the world.  But in an article posted by Reuters last week, according to some experts, the money is not going to the scientists who have the greatest impact on research and advancement of science, but to scientists who are engaged in conventional, incremental scientific research, not the true innovators.  According to the article, only 40 percent of the 700 primary authors of the biomedical papers published since 2001 that had been cited at least 1,000 times were not serving on NIH panels.  Clearly this indicates that the NIH likes its own, rather than original thinkers who might be less well-connected to the establishment.

This means that much of the innovative and creative biomedical research being done today is privately funded.  Sometimes, the private funding comes from a reputable, responsible institution, like the Howard Hughes Medical Institute, but sometimes it doesn't.  If creative and innovative research is not being funded by the public, then the public will have trouble getting the benefit of the breakthroughs and controlling the risks  inherent in novel biomedical research.

Although NIH recently established new grants for "pioneering" research, clearly more needs to be done to persuade the NIH to take greater research risks.  NIH should not be falling into the trap that so many private businesses fall into when doing their hiring--wanting to hire somebody who is just like the boss.

[VJW]

Cross-Posted on Healthy Interests

Worth Reading This Week

• Efthimios Parasidis, Justice and Beneficence in Military Medicine and Research, SSRN/Ohio State LJ
• Sara Rosenbaum, Threading the Needle — Medicaid and the 113th Congress, NEJM
• David Orentlicher, NFIB v. Sibelius: Proportionality in the Exercise of Congressional Power, SSRN
• Karen Rothenberg & Lynn Wein Bush, Manipulating Fate: Medical Innovations, Ethical Implications, Theatrical Illuminations, SSRN/Houston J.Health L. P'cy
• Sallie Thieme Sanford, Designing Model Homes for the Changing Medical Neighborhood: A Multi-Payer Pilot Offers Lessons for ACO and PCMH Construction, SSRN/Seton Hall L. Rev.

[NPT]

No partial Medicaid expansion

Yesterday CMS issued a memorandum to states answering a series of frequently asked questions regarding implementation of the ACA.  Secretary Sebelius answered one of the more high-profile questions to emerge from NFIB v. Sebelius: whether states could receive the ACA's increased federal match for partial Medicaid expansion.  The answer is no:

Can a state expand to less than 133% of FPL and still receive 100% federal matching funds? No. Congress directed that the enhanced matching rate be used to expand coverage to 133% of FPL. The law does not provide for a phased-in or partial expansion. As such, we will not consider partial expansions for populations eligible for the 100 percent matching rate in 2014 through 2016. If a state that declines to expand coverage to 133% of FPL would like to propose a demonstration that includes a partial expansion, we would consider such a proposal to the extent that it furthers the purposes of the program, subject to the regular federal matching rate. For the newly eligible adults, states will have flexibility under the statute to provide benefits benchmarked to commercial plans and they can design different benefit packages for different populations. We also intend to propose further changes related to cost sharing.

In 2017, when the 100% federal funding is slightly reduced, further demonstration opportunities will become available to states under State Innovation Waivers with respect to the Exchanges, and the law contemplates that such demonstrations may be coupled with section 1115 Medicaid demonstrations. This demonstration authority offers states significant flexibility while ensuring the same level of coverage, affordability, and comprehensive coverage at no additional costs for the federal government. We will consider section 1115 Medicaid demonstrations, with the enhanced federal matching rates, in the context of these overall system demonstrations.    

[nh]

ACA and Federal-State Partnerships

Historically, public benefit programs have fared better when provided through a federal program rather than a federal-state partnership. Medicare has been a better program than Medicaid for recipients in part because the federal government imposes a uniform standard for eligibility on all states. Under pre-ACA law, adults might lose Medicaid eligibility at income levels below 50 percent of the federal poverty level in some states while retaining Medicaid eligibility at income levels above the federal proverty level in other states. Similarly, when states set eligibility standards for food stamps during the first decade of that program, income thresholds varied from state to state, and residents in many counties were not eligible at all for the program.

ACA does much to address the uniformity problem with the Medicaid expansion that offers Medicaid to all persons with a family income up to 138 percent of the federal proverty level. However, as states are defining their essential benefits packages for plans sold on health insurance exchanges, we are starting to see the expected problems from the parts of ACA that retain a federal-state partnership model. When HHS decided that states would determine the specifics of their essential health benefit packages, it made state-to-state variation inevitable. And as the New York Times reported last week,coverage for acupuncture, hearing aids, infertility treatment, weight loss surgery and other services will vary from state to state.

[DO]

A new straw man argument for challenging the ACA

Two of the architects of the original challenge to the individual mandate have just published an op-ed in the Wall Street Journal that promotes a new theory by which they would challenge the ACA's constitutionality.  The meat of their argument is as follows:

If the mandate is an indirect tax, as the Supreme Court held, then the Constitution's "Uniformity Clause" (Article I, Section 8, Clause 1) requires the tax to "be uniform throughout the United States." The Framers adopted this provision so that a group of dominant states could not shift the federal tax burden to the others. It was yet another constitutional device that was simultaneously designed to protect federalism and safeguard individual liberty.

The Supreme Court has rarely considered the Uniformity Clause's reach, but it cannot be ignored. The court also refused to impose meaningful limits on Congress's power to regulate interstate commerce for decades after the 1930s, until justices began to re-establish the constitutional balance in the 1990s with decisions leading up to the ObamaCare ruling this summer. And although the court has upheld as "uniform" taxes that affect states differently in practice, precedent makes clear that a permissible tax must "operate with the same force and effect in every place where the subject of it is found," as held in the Head Money Cases (1884). The ObamaCare tax arguably does not meet this standard.

ObamaCare provides that low-income taxpayers, who are nevertheless above the federal poverty line, can discharge their mandate-tax obligation by enrolling in the new, expanded Medicaid program, which serves as the functional equivalent of a tax credit. But that program will not now exist in every state because, as a matter of federal law, states can opt out. The actual tax burden will not be geographically uniform as the court's precedents require.

Thus, having transformed the individual mandate into a tax, the court may face renewed challenges to ObamaCare on uniformity grounds. The justices will then confront a tough choice. Having earlier reinterpreted the mandate as a tax, they would be hard-pressed to approve the geographic disparity created when states opt out of the Medicaid expansion. But that possibility is inherent in a scheme that imposes a nominally uniform tax liability accompanied by the practical equivalent of a fully off-setting tax credit available only to those living in certain states. To uphold such a taxing scheme would eliminate any meaningful uniformity requirement—a result that the Constitution does not permit.

Just a little unpacking shows how specious these arguments are.  Article I, section 8, clause 1 is an enumerated power for Congress to raise taxes so that it would not be as powerless as the Confederation had been (the Articles of Confederation did not give the fledgling national government the ability to raise its own money by taxes or otherwise).  It is an empowering clause.  The clause's minor limitation, designed to prevent "undue preferences of one state over another" (US v. Ptasynski, 462 U.S. 74, 80-84 (1983)) states "all Duties, Imposts and Excises shall be uniform throughout the United States" - the "Uniformity Clause."  About this clause, the Court wrote in 1983: "The one issue that has been raised repeatedly is whether the requirement of uniformity encompasses some notion of equality. It was settled fairly early that the Clause does not require Congress to devise a tax that falls equally or proportionately on each State. Rather, as the Court stated in the Head Money Cases, 112 U.S. 580 (1884), a “tax is uniform when it operates with the same force and effect in every place where the subject of it is found.” Id. at 594."

Congress has created a uniform tax penalty on individuals who fail to carry health insurance - Congress has not varied this tax by state, only by individual income.  Any 'geographic disparity' is created by the states themselves, not by Congress.  And, whether or not the Medicaid expansion existed, low-income individuals would be exempted from the tax penalty by virtue of their low income status -- just like other such exceptions that exist in the tax code.  Finally, Medicaid is not a tax credit.  Medicaid is a welfare-type program by which the federal government helps to pay for medical care by giving money to the states.  Individuals cannot count Medicaid benefits as income, Medicaid payments are not a taxable benefit, and welfare programs have never been deemed to be tax credits.  The Medicaid program is simply not "the functional equivalent of a tax credit;" Congress created tax credits for the exchanges, and they don't look like Medicaid...

Charging the federal government with 'disuniformity' when states always seek more flexibility within conditional spending programs seems hypocritical. Nevertheless, the ACA's challengers have a lot of money to fight their cause, so the new theory is worth noting.

[NH]

Some thoughts on the ACA and Women's Health

The ACA benefits women in insurance markets through such mechanisms as elimination of preexisting condition clauses, prohibitions on rescission, open access to ob/gyn services, and prohibiting lifetime caps on insurance coverage.  In addition, the Institute of Medicine recommended that contraception be covered as a preventive health service, making it so that millions of women can access key preventive care without cost-prohibitive co-payments (assuming ongoing litigation does not eliminate this essential health benefit.)  These access-enhancing elements of the ACA help women, who statistically are poorer, need more medical care, and live longer than men, to gain access to preventive and regular healthcare and to keep the insurance that they have.  On the other hand, the most common surgical procedure for women in the United States may become more unsafe (especially for poor women), because the ACA prevents insurance payment for abortions through both public and private insurance. 

The Hyde Amendment has attached as a rider to DHHS funding since 1977, and it limits Medicaid and the Children’s Health Insurance Program to paying for abortions when the woman's life (or girl's life) is in danger and in instances of incest and rape.  Thus, poor women have always had a three-front war in reproductive health: they have less access to contraceptives and therefore are more likely to have unintended pregnancies; they are less likely to be able to obtain an abortion because Medicaid almost never pays for the procedure; and few doctors participate in Medicaid, reducing poor women’s ability to find physicians to provide their healthcare.  The ACA helps to address the first problem, but the second and third are complicated by the ACA’s strictures.

State restrictions on private insurance coverage of abortion have existed for a number of years but have not been prevalent.  For example, some states have prevented private health insurers from providing abortion coverage through their general policies; enrollees have to pay separately for an abortion rider on their policies.  Other states refuse to allow abortion coverage for state employees.  And, federal law has facilitated opting out for reasons of conscience that have affected women with private insurance.  The ACA appears to take these private insurance restrictions farther by requiring riders on policies obtained through the health insurance exchanges regardless of whether the exchange is established by the federal government or the states.

The paradox of the ACA is that it creates new obstacles to reproductive health at the same moment that it attempts to improve women’s health.  Treating women’s medical care as a political trading card diminishes the status of women in the polity and has actual ramifications for their health.  This is especially true for the poor and low-income women who rely on Medicaid and who will be relying on the tax subsidies available for purchasing private insurance in the exchanges.   Thus, while the ACA addresses some of the payment problems that have plagued low-income women, it also exacerbates existing access problems.

[NH]

ACA NPRM: Essential Benefits

 

HHS published the NPRM concerning essential health benefits (EHBs) for qualified insurance plans on November 26, 2012. Comments must be submitted within 30 days of November 26--that is, on December 26, 2012.  HHS has already received about 11,000 comments in response to an earlier bulletin about its planned approach to defining EHBs.

Several important features of the proposed rule might be particularly noteworthy for blog readers.

    --State-mandated benefits enacted before December 31, 2011, will count as part of the EHB for that state--so states will not have to pick up additional costs associated with these benefits.

    --States may select a "base-benchmark" plan from among the following options, a design chosen to enable ease of transmission from current market conditions but with the risks of allowing continuing gaps in coverage and considerable variation among states:

        --The largest plan by enrollment in any of the three largest small group insurance products in the state's small group market

        --any of the three state employee plans with the largest enrollment

        --any of the three national federal employee plans with the largest enrollment

        --the commercial non-Medicaid HMO with the largest enrollment in the state 

    --States are encouraged (but not required) to seek public input before selecting a benchmark plan, and to have a selection process that is open and transparent.

    --There are provisions for supplementing base benchmark plans that do not include coverage for any one or more of the 10 categories of benefits required by ACA; an example is pediatric vision services.  There are also some uniform definitions of categories; for example, pediatric care includes all care up to age 19. Mental health and substance abuse treatment benefits must be provided at parity as required under the 2008 Mental Health Parity and Addiction Equity Act.

    Plans may provide a variety of pharmacy benefits.  However, plans must cover at least the greater of one drug in every category and class, or the number of drugs in each category and class as the EHB benchmark plan.

    --Appendix A to the NPRM lists benchmarks selected by states to date, and indicates what a default benchmark would look like for states that have not selected a benchmark plan. The default will be the largest plan by enrollment in the largest product in the state's small group market. States have until the closing of the comment period (Dec. 26, 2012) to make or change their benchmark selection.

[LPF]  

 

 

Medical Loss Ratio Data Analysis

With SCOTUS and the election behind us we are starting to see not only major regulatory packages but also some data on the impact of ACA provisions. Michael McCue and Mark Hall have important data and analysis on the impact of the Medical Loss Ration rule, here. From their conclusion:

[O]verall changes in financial measures that appear related to the MLR rule benefitted consumers in 2011 by reducing insurers’ total overhead—both profit and administrative costs—by $350 million. The individual market contributed the largest component of this decrease in total overhead, with a decline of $560 million. However, the small- and large-group markets offset a third of this decrease by increases in total overhead of $36 million and $174 million, respectively, in 2011…

Initially, the new minimum loss ratios appear to be producing important consumer benefits in the indi- vidual market, but much less so in the group markets. Although insurers have reduced their administrative costs and paid substantial rebates in all three market segments, the rule has not reduced total overhead mar- ket-wide in the small- and large-group segments. For that to occur, stronger measures may be needed, either in the form of rate regulation, tighter loss ratio rules, or enhanced competitive pressures.

[NPT]

First Amendment & Pharma: Taking Freedom of Information Seriously

Back in 2011, the AJLM had a symposium issue anticipating major issues in 1st Amendment limits on FDA restrictions on off-label marketing. It was a prescient move. Just as it did in Sorrell, the Second Circuit is using free speech jurisprudence to significantly expand pharmaceutical companies' freedom of action to promote drugs: 

The ruling, in United States v. Caronia, involved the conviction of Alfred Caronia, a former sales representative for Orphan Medical, which was later acquired by Jazz Pharmaceutical. Mr. Caronia was selling Xyrem, a drug approved for excessive daytime sleepiness, known as narcolepsy. He was accused of promoting it to doctors as a treatment for insomnia, fibromyalgia and other conditions. . . .

 “The government clearly prosecuted Caronia for his words — for his speech,” the majority wrote, concluding later “the government cannot prosecute pharmaceutical manufacturers and their representatives under the F.D.C.A. for speech promoting the lawful, off-label use of an F.D.A.-approved drug.”

The lone dissenting judge, Judge Debra Ann Livingston, vigorously disagreed, arguing that by throwing out Mr. Caronia’s conviction “the majority calls into question the very foundations of our century-old system of drug regulation.” She argued that if drug companies “were allowed to promote F.D.A.-approved drugs for nonapproved uses, they would have little incentive to seek F.D.A. approval for those uses.”

Judge Livingston also dissented in Sorrell, but her concerns were dismissed by a Supreme Court that (at least according to this essay) "declared 'information is speech,' a holding so broad and potentially far-reaching that the Court could not possibly have literally meant what it said."  

How will pharma firms use their new freedom of maneuver? They have sponsored a great deal of research, and are sure to use many forms of information and advocacy to promote more off label uses.  But cases like Caronia may end up a Pyrrhic victory, given a growing crisis of confidence about the validity of drug marketing strategies.  As the Washington Post reported last week, "Doctors have grown deeply skeptical of research funded by drug companies."  It's far too easy for firms to promote their rosiest results, while keeping negative outcomes out of the public eye.

As the First Amendment continues to undermine the extant FDA model of information control, it's time for the agency to take the logic of decisions like Sorrell and Caronia seriously, and to engage in more information dissemination.  Make full clinical study reports available publicly, or, at the very least, to groups like the Cochrane Collaboration, whose analyses of Tamiflu are raising major concerns about its maker's efforts to promote its prophylactic purchase.  The best way to deal with an off-label promotion "free for all" is to make critical information about drug effectiveness free, for all.  

PS: For more background on the issue of biased research, check out the excellent video by Ben Goldacre below: 

 

 [FP]

Evading Cost Containment

In its effort to contain health care costs, the Affordable Care Act includes an important initiative to test bundled payments for hospital care. Instead of separate payments to hospitals, physicians and other providers, Medicare and Medicaid will employ a single global payment that the different providers then can allocate among themselves. (Under some versions of bundled payments, there will be partial bundling of payments.)

While a promising way to reduce health care costs, we need to worry whether providers will compensate for the lower income from bundled payments by increasing the number of patients admitted to the hospital for care. Indeed, as 60 Minutes reported last night, hospitals already may overhospitalize people to pad profits.

[DO]