HealthLawProf Blog

"Very Real Consequences" for Medicaid and Beyond

Back in January, I commented on the oral arguments in Armstrong v. Exceptional Child Center, the Medicaid reimbursement case that the Supreme Court decided yesterday.  I noted then that Justice Breyer seemed confused about Medicaid's operation; that Justice Kennedy appeared to be on the fence; and that the four dissenters from Douglas v. Independent Living Center appeared wedded their 2012 position that no private right of action is available under the Supremacy Clause.  Sure enough, the Court eliminated private enforcement of the Medicaid Act's payment adequacy provision ("30(A)") against non-compliant states.  This decision is a major victory for states, a questionable victory for the Obama Administration, and a potential defeat for access to care in the Medicaid program.

Justice Scalia authored the majority opinion (joined by Justices Thomas, Roberts, Alito, and Breyer), which began with an intentional description of Medicaid as a Spending Clause program.  Justice Scalia noted that states agree to spend federal funds "in accordance with congressionally imposed conditions."  The majority then effectively constructed a clear notice rule for the Supremacy Clause, indicating that the Supremacy Clause provides a "rule of construction" but does not "create a cause of action" unless Congress "permits the enforcement of its laws by private actors."  Although purporting to empower Congress, the majority actually limited the reach of federal legislation by requiring Congress to explicitly confer private rights of action under federal laws.  As a Brief by Former Administrators of HHS made clear (in Douglas and again in Armstrong), Congress and HHS rely on private actions to enforce the Medicaid Act, in part because the law has such a broad reach and the agency's staffing is so limited.  Contrary to the majority's bizarre characterization of private enforcement of federal laws as limiting, in the Medicaid context, private enforcement is critical for implementing the purposes of 30(A), which was written to ensure equal access to medical care for Medicaid beneficiaries.  30(A) requires on-the-ground observation for assessing states' payment adequacy, which HHS cannot do without the assistance provided by privately initiated enforcement actions.

The majority then cited Chief Justice Roberts' dissent in Douglas to support its position that Congress deliberately excluded private enforcement from the Medicaid Act.  This is simply not true. Congress did not "foreclose" or "exclude" private enforcement from the Medicaid Act, either in 1965 when Medicaid was enacted, or when 30(A) amended the Act.  In fact, Congress debated language that would have prevented providers and beneficiaries from seeking relief in federal court when states violate the Medicaid Act, but Congress never has added such language to the Medicaid Act.  Nevertheless, the majority concluded that the Secretary of HHS is solely responsible for enforcing 30(A) pursuant to her authority under 42 U.S.C. §1396c to withhold Medicaid funds from non-compliant states.  The Secretary is reluctant to withhold funds in Medicaid because such an act would harm beneficiaries, but the majority did not engage this quandary, instead deeming 30(A) judicially unmanageable, even though lower federal courts have guided states toward adequate payment decisions for years.  The majority also seems to be setting up HHS to fail; if the agency actually withheld Medicaid funding, the state might respond with a claim of coercion under NFIB v. Sebelius, thereby further undermining the program's operations.  (Justices Scalia, Thomas, Alito, and Kennedy would have struck down the Medicaid expansion in its entirety under the newly crafted doctrine of coercion in that case.)

The majority circled back to Medicaid's status as a spending program in Part IV of its opinion, which Justice Breyer did not join, and which may resurrect a theory of spending programs as being like contracts and unlike other federal laws.  Though the Court has long relied on the Pennhurst contract analogy for federal conditional spending programs, in some cases (e.g. Barnes v. Gorman), the Court has suggested that the "third party beneficiaries" of spending programs have no enforceable rights in those programs.  The majority opinion very briefly noted that "contracts between two governments" cannot be enforced by beneficiaries of those contracts - citing Justice Thomas's concurrence in PhRMA v. Walsh - as if the federal government and the states were co-equal sovereigns.  This dicta brings all Medicaid provider and patient actions into question, whether they are raised under the Supremacy Clause or section 1983, the other avenue for Medicaid private enforcement.  The majority thus opened the courthouse doors to further eroding of conditional spending statutes in the context of the Medicaid Act. [more after the jump]

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The Fifth Circuit, Federalism, and Undue Burdens on Abortion

On July 29, 2014, the U.S. Court of Appeals for the Fifth Circuit issued an as-applied ruling in a case involving Mississippi’s statute requiring that all physicians affiliated with a Jackson clinic providing abortion services have admitting and staff privileges at local hospitals.  All local hospitals were unwilling to grant privileges to two of the clinic’s physicians who were involved most directly in abortion services because of the nature of their practices.  Had the state’s statute been enforced, the clinic—Mississippi’s only facility offering abortion services—would have been ordered to close.

Mississippi’s argument was that ordering the clinic to close would not impose an undue burden on Mississippi women’s constitutional rights because women would be able to travel to nearby states for abortion services.  The Fifth Circuit reasoned to the contrary: “Mississippi may not shift its obligation to respect the established constitutional rights of its citizens to another state. Such a proposal would not only place an undue burden on the exercise of the constitutional right, but would also disregard a state's obligation under the principle of federalism—applicable to all fifty states—to accept the burden of the non-delegable duty of protecting the established federal constitutional rights of its own citizens.”  Jackson Women’s Health Organization v. Currier, 2014 WL 3730467 (July 29, 2014).

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US v. Windsor: Some Constitutional Uncertainty, Many Healthcare Implications

The Court's decision striking down section 3 of DOMA in United States v. Windsor was unsurprising, yet still a relief to many.  Section 3 defined marriage for federal statutory purposes to mean only marriage between one man and one woman.  Based on the late March oral arguments in Windsor, as well as Justice Kennedy's majority opinions in Lawrence v. Texas and Romer v. Evans, the common wisdom was that federalism would be the prevailing reasoning because the states historically have governed family law matters, including marital status.  One of Justice Kennedy's projects has been revitalization of the Court's enforcement of federalism to protect the states, especially as a method to protect individual liberties (see, e.g., Bond v. United States). 

And so it was.  Justice Kennedy provided both structural and substantive reasons for striking down section 3 of DOMA.  From a structural perspective, Justice Kennedy's majority emphasized traditional state dominion over marriage, writing: "By history and tradition, the definition and regulation of marriage ... has been treated as being within the realm of the separate States."  Though the opinion walked right up to the federalism line, it stopped short of holding that DOMA exceeded congressional authority or violated the Tenth Amendment.  Instead, the majority moved forward on substance and held that the federal government cannot take away the marriage right and its attendant societal status once conferred by the states.  To do so was a violation of gay couples' liberty and dignity.  The Court also hinted at an equal protection analysis, condemning Section 3 as creating second class marriages in states that recognize same-sex unions.  The majority applied only rational basis review, rather than heightened scrutiny, holding that DOMA was motivated by anti-gay animus and served no legitimate governmental purpose. 

Neither the federalism, nor the equal protection, nor the due process analysis was either complete or clear cut, and each opens more questions than it closes.  For example, Justice Kennedy views the experiment of the states to protect individual liberty, and here, it happens that twelve states do protect liberty, more than the federal government.  But, this view of federalism's aspirational work does not address the 37 or so states that do not protect the liberty interests of their gay citizens from state discrimination let alone the federal government's limited view of gay rights.  And, this reversion to assessing traditional state law domains does not advance modern conceptions of federalism that acknowledge most state law is ineffibly intertwined with federal law by virtue of statutory interconnectedness, conditional spending, or other cooperative federalism mechanisms.  Instead, Justice Kennedy seemed to be reaching back to the dual sovereign model of doctrinal federalism.

Fortunately, this regressive model of federalism does not seem to hinder the work that Windsor is likely to do with regard to DOMA's far-reaching effects on healthcare.  For example, marital status influences not only access to affordable private health insurance (which is usually easier and cheaper through marriage), but also qualification for the Federal Employees Health Benefits Program as well as Social Security, the gateway for Medicare at age 65.  Section 3 also affected Medicaid enrollment and spend-down requirements for the elderly entering nursing homes.  The Medicaid/DOMA issue was presented to the Court in a petition for certiorari that the Court has not granted or denied yet.  Back in October, I highlighted the First Circuit's decision in Massachusetts v. Department of Health and Human Services, which was mentioned in passing by Justice Kennedy as a case that would suffer vacatur if the Court dismissed for lack of standing.  It seems fair to read approval of the First Circuit's decision into Kennedy's cite, which makes me think the Court will not grant the petition.

In addition to public and private health insurance issues, some healthcare delivery issues are likely to be resolved by Windsor as well.  For example, many stories have detailed how hospitals have turned away same-sex partners under the guise of HIPAA privacy.  Other tales have highlighted how substituted decision-making at the end of life can devolve to estranged family members when same-sex partnerships are not recognized as giving the gay spouse decisional authority that would ordinarily be given without a second thought to a heterosexual spouse.  Doctors' offices have refused to recognize same-sex spouses as parents of children who need medical attention.  And, care for infants of same-sex couples may become easier now that the Family Medical Leave Act will apply to same-sex marriages.  It seems that the federal recognition of gay marriage that will flow from Windsor will be beneficial in many healthcare situtations, even in states that do not recognize same-sex marriage.  Federal agencies have much work to do interpreting the word marriage in the coming days, but it seems that these decisions will facilitate a more functional approach to families' experiences in the healthcare system.

[NH]

Conditional spending for the cause of public health

The Supreme Court decided Agency for International Development v. Alliance for Open Society International yesterday, a lower-profile case about unconstitutional conditions placed on federal funding.  My initial reaction is that the opinion can be read in at least two ways.  On the surface, this decision reads like the long line of First Amendment unconstitutional conditions cases such as Rust v. Sullivan and Legal Services Corp. v. Velazquez.  Chief Justice Roberts' majority opinion held that the "Leadership Act" could offer federal funding to eradicate HIV/AIDS throughout the world, and that funding can express discouragement of prostitution by refusing to allow the funds to be used for the promotion of prostitution, but the Court held that the conditions on the funds cannot go so far as to require the organizations using the federal funds to explicitly oppose prostitution.  (Fund recipients had expressed the fear that taking an overt stance against prostitution would harm their public health efforts by scaring those in the sex trade away from their doors.)  The majority's opinion is a non-controversial read of that line of cases and even attempts to make sense of the somewhat inconsistent application of the doctrine by describing the difference between "conditions that define the limits of the government spending program" and "conditions that seek to leverage funding to regulate speech outside of the contours of the program itself."  I don't necessarily buy this distinction.  After all, conditions by necessity define the contours of a program - unless they are nongermane, which seems to underly the Chief Justice's leveraging concept but was never explicitly stated.  But, it is one way to describe the differing outcomes in this line of cases that is worth considering.

But then I come to a second possible take: this case reiterates the Roberts Court's willingness to rein in congressional exercises of the spending power.  On the heels of NFIB v. Sebelius, the spending aspect of this case is notable, given that this is the second case in two years to express disapproval of conditions on federal spending.  Unlike NFIB, which created a novel coercion doctrine without contours, this decision tread familiar ground in its conclusion that conditions on spending cannot violate First Amendment rights.  However, even during oral arguments, there were shadows of the ACA controversy from last term.  And, although NFIB was not cited in the opinion, both the majority and the dissent (authored by Justice Scalia) contained familiar language about leveraging, coercion, and offers that can't be refused.  It is unclear why Justices Scalia and Thomas would uphold this condition on federal funding when they so readily and forcefully rejected the Medicaid expansion last year.  The simplest answer is probably that these justices have long rejected the unconstitutional conditions doctrine.  (Another possibility is that the dissenting justices agree with the policy of rejecting prostitution (see Justice Scalia's bizarre "free love" comparison) but disagreed with the policy of universal health coverage.)  

While the spending power is still robust, I am not sanguine about the conversation the Court is trying to have with Congress about the Spending Clause.  It will be interesting to see how the Court furthers this project in the same-sex marriage cases that are sure to be handed down next week.  If the cases turn on the doctrine of federalism, then read in combination, the Roberts Court may be continuing its adventures in the Federalism Revolution, once thought done and gone, and now revived through the spending power.

[NH]

Looking Ahead to the Supreme Court's Remaining Health Law Related Cases

 Although it's probably true that with some imagination every Supreme Court decision could be related back to some aspect of Health Law, today's Post (which, yes, was supposed to be up Friday) is intended to highlight the as yet unreleased Supreme Court decisions of particular interest to Health Law.  We don't know exactly which cases will be announced but Scotus believes this will
happen on Thursday June 13th--and they will be "live-blogging" starting "shortly before" 10 AM EST in anticipation of the announcements-- but we do know which ones are left.

Below is an email I sent out today to both our Health Law Certificate Students here at Texas Tech School of Law and to the students enrolled in my new class Constitutional Issues in Health Law.  As a side note, I would certainly be interested in hearing from anyone who is/has taught this particular class.  My model for it is the one taught by Mary Anne Bobinski when she was at the University of Houston Law Center. 

Here, in relevant part, is what I sent out:

" Unlike last year where everyone was a health care lawyer and had something to say about National Federation of Independent Business v. Sebelius (the Affordable Care Act decision) (me included), the cases yet to be decided are not all waving the banner "Health Law"--but are likely to have significant impact in the practice of health law.    There are so many sources of information about these cases and what they mean that it would almost be impossible to give a complete list. 

Each decision will be posted almost immediately to the Supreme Court's website--and what I recommend is that you read it yourself--and then compare it to the press coverage!  CNN will long remember this episode and Jon Stewart's take on it!

Also, it is never possible to avoid the "spin" that anyone describing an issue inevitably puts on it.  I've included information when  an organization or media outlet has created clarifying material but at this point.  Here's an NPR Overview and one from Fox News.

 Here are the cases (with parentheticals from Scotus): 

Association for Molecular Pathology v. Myriad Genetics Inc.("whether human genes are patentable")

Agency for International development v. Alliance for Open

Society;

("Whether the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of

2003, 22 U.S.C. § 7631(f), which requires an organization to have a policy explicitly

opposing prostitution and sex trafficking in order to receive federal funding to provide HIV

and AIDS programs overseas, violates the First Amendment. (Kagan, J., recused.)")

  Mutual Pharmaceutical Co. V. Bartlett 

("Whether the First Circuit Court of Appeals erred when it created a circuit split and held – in

clear conflict with this Court’s decisions in PLIVA v. Mensing, Riegel v. Medtronic, and

Cipollone v. Liggett Group – that federal law does not preempt state law design-defect

claims targeting generic pharmaceutical products because the conceded conflict between

such claims and the federal laws governing generic pharmaceutical design allegedly can be

avoided if the makers of generic pharmaceuticals simply stop making their products.")

 The press is most interested in Hollingsworth v. Perry “gay marriage” and  Fisher v. University of Texas (“affirmativeaction” )cases—and we should be interested too.  In Hollingsworth because it is possible (although not certain) that the court will add to our understanding of the Constitutionality of statutes (like the one in Texas) which only allow a married couple consisting of a man and a woman to enter into a binding contract with a surrogate mother.  It may also change the ability of physicians in states to refuse to treat patients on the basis of sexual orientation, gender identity or any other factor not currently required by Federal Law or a previous decision of the Supreme Court.  LAMBDA Legal has put together an infographic for those wanting to get up to speed quickly. 

And in Fisher because it may well affect medical school admissions even though it is a case about undergraduates.

 

There are also some cases involving important employment law  issues—which are often the biggest part of a health lawyer’s case load.

You may not want to be poised at your computer 10 AM Thursday EST to hear what decisions the court is releasing—but you will certainly want to read them for yourself when they are available online.

JSB