Monthly Archives: January 2017

Trump Takes First Step Toward Dismantling ACA and Buys Time with an Executive Order: Is it Substantive or Merely Symbolic?

Posted by Chris Raphaely on January 23, 2017
ACA, HHS / No Comments

Hours after taking the oath of office President Donald Trump signed a broadly worded executive order (“Order”) intended to minimize if not eliminate the impact of the ACA’s least popular provisions. With the Order President Trump can claim immediate action towards fulfilling a major campaign pledge while giving his administration and the Republican led Congress time to come up with a replacement plan.

The Order directs the secretary of HHS and other agency heads to, among other directives:

[E]xercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [ACA] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications. [And] [t]o . . . exercise all authority and discretion available to them to provide greater flexibility to States and cooperate with them in implementing healthcare programs. [And] [t]o . . . encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

The Order makes it clear that any agency actions under the order must be within the confines of the law and its existing regulations, both of which remain in place at least for now. The agencies still have the option of amending or repealing ACA regulations but the Order gives them the authority to take some action before going through the regulatory approval process.

Apparently, the agencies will decide which stakeholders’ costs and “burdens” under the ACA will be reduced. This presents them with an interesting challenge given the opposing interests inherent in the broad group of stakeholders expressly targeted for relief under the Order. For example, if the scope of the individual mandate (likely the prime target of the Order) were reduced relieving some individuals of the cost of buying health insurance, it would likely skew the risk pool of the exchange plans to less healthy participants increasing the cost and burden on the exchange’s insurers and those individuals who want to purchase insurance through the exchanges. That action could also end up reducing overall insurance coverage increasing the uncompensated care hospitals and other providers would be required to deliver.

Perhaps the most interesting aspect to watch, however, will be whether the Order ultimately has any significant substantive effect or simply ends up being a symbolic gesture. Some observers have contended that significant delays to, or gutting of, a portion of the ACA’s tightly woven and inter-related pieces mid-year 2017 would create chaos in the affected programs, like the health insurance exchanges, which are already underway this year. Therefore, there has been speculation that actions under the Order are not likely to be effective until 2018. The question is whether any actions under the Order, which are expressly limited to those that are permissible under the ACA, will mean anything in 2018 when it is almost certain that the ACA will have already been repealed.

Whether substantive or symbolic, clearly the first step in the ACA’s dismantling has been taken and we will be watching very closely as the administration and Congress take many more.

 

 

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Pennsylvania Issues Grower/Processor and Dispensary Permit Applications for Medical Marijuana Program

Posted by Chris Raphaely on January 23, 2017
PA Medical Marijuana Program, Pennsylvania Department of Health / No Comments

filling out applicationOn January 17, 2017, the Pennsylvania Department of Health (“DOH”) released grower/processor and dispensary permit applications (“Applications”), which can be found on Pennsylvania’s Medical Marijuana Program website. DOH will accept Applications from February 20 – March 20, 2017, and will begin taking questions about the Applications on February 8, 2017. Other highlights regarding the application process are set forth below.

  • 12 grower/processor permits will be issued.
  • 27 dispensary permits will be issued.
  • Two grower/process permits will be issued in each of the six regions in the Commonwealth.
  • The maximum number of dispensary locations in each region (by county) is set forth in the Applications’ instructions on page two.
  • Each applicant will receive a weighted score out of a maximum number of 1,000 points.
  • The Applications require information regarding, among other items, an applicant’s diversity plan, background information about principals, financial backers, operators and employees, capital sufficiency, an applicant’s plan of operation and an operational timetable, and an applicant’s anticipated community impact.
  • Principals means “an officer, director or person who directly or beneficially owns securities of an applicant or permittee, or a person who has a controlling interest in an applicant or permittee or who has the ability to elect the majority of the board of directors of an applicant or permittee or otherwise control an applicant or permittee, other than a financial institution.”
  • Financial backers means “an investor, mortgagee, bondholder, note holder, or other source of equity, capital or other assets other than a financial institution.”
  • Financial institution means “a bank, a National banking association, a bank and trust company, a trust company, a savings and loan association, a building and loan association, a mutual savings bank, a credit union or a savings bank.”
  • The non-refundable application fee for growers/processors is $10,000, and the initial permit fee for growers/processors is $200,000 (both payable with the Application).
  • The non-refundable application fee for dispensaries is $5,000, and the initial permit fee for dispensaries is $30,000 per dispensary location, for up to $90,000 (both payable with the Application).
  • A rejected Application would be returned to an applicant with the initial permit fee.
  • DOH may reject an Application that is received after March 20, 2017 or without a U.S. Postal Form 3817, which is required as proof of an applicant’s mailing date.
  • The DOH will post FAQs regarding the Applications on its website.

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Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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