In a 2-1 decision published on December 18, 2019, a 5th Circuit panel upheld the Texas District Court’s decision ruling that the ACA individual mandate tax which, since January 2019, has had no monetary consequence, is unconstitutional. Citing the Supreme Court’s 2012 NFIB v. Sebelius opinion, the panel explained that the key feature of the individual mandate –the critical tax attributes that once saved the mandate from unconstitutionality- no longer exist, and therefore it can no longer be classed under Congress’ taxing power. Despite definitively ruling on this key issue, the panel remanded the case to the District Court to take a closer look at whether the individual mandate’s unconstitutionality is severable, or whether the entire ACA now must be struck down.Continue reading…
We previously reported that District Court Judge Reed O’Connor of the Northern District of Texas declared on December 14, 2018 (1) that the Affordable Care Act’s (ACA) individual mandate is unconstitutional and (2) that the remaining provisions of the ACA are “inseverable” and therefore invalid.
Following the Order, commenters largely believed that the Order had no immediate effect. Supporting this view, the U.S. Department of Health and Human Services (HHS) said that the Order does not have any impact on 2019 enrollment or coverage and that the Order does not have any immediate effect on its enforcement of any portion of the ACA. Continue reading…
Last Friday, in Texas v. United States, Judge Reed O’Connor of the Northern District of Texas (1) declared the Affordable Care Act’s (ACA) individual mandate to be unconstitutional. In so doing, the Judge, a President George W. Bush appointee, also (2) declared the remaining provisions of the ACA to be “inseverable” and therefore invalid.
Individual Mandate. As you might recall, the Supreme Court’s 2012 NFIB v. Sebelius decision held that the individual mandate and the shared-responsibility penalty (when viewed as a whole) were constitutional because they fell within Congress’ power to tax. The provision at the time was found to be a “tax” because, among other things, it produced revenue for the government. (Under the shared responsibility penalty, non-exempt individuals without health insurance had to pay this tax.). The Tax Cuts and Jobs Act of 2017 subsequently amended the ACA by reducing the shared-responsibility payment to zero, starting in 2019. According to the District Judge, when the shared-responsibility payment becomes zero, the individual mandate and the shared-responsibility payment together can no longer be classified as a “tax” and therefore lacks a constitutional hook. Continue reading…
The sweeping Republican tax reform bill, H.R. 1 (115), was passed by Congress on Wednesday afternoon, and signed by President Trump today. Although the President said on Wednesday that, “ObamaCare has been repealed in this bill,” due to the bill’s elimination of the Individual Mandate, it remains to be seen whether this will truly strike the final blow to ObamaCare (the Affordable Care Act, or “ACA”) as envisioned by the President.
If the ACA manages to survive, it will not be for lack of trying on the Trump administration’s part. On top of the elimination of the Individual Mandate, the Trump administration has removed some subsidies, halved the insurance enrollment period, destroyed the Obamacare marketing campaign, and has permitted skimpy new health plans that will inflict even more damage on the ACA. All together, these add up to an incremental corrosion of the law.
However, although the ACA is weakened, it has so far survived the assault, even if in a diminished form. In fact, numerous polls have found that the ACA is increasingly popular with the American public. And several factors indicate that the ACA may be able to weather the storm. Continue reading…
In moves that stunned and alarmed insurers, providers, and consumers alike, on October 12, the White House issued an announcement and an Executive Order that appear to be purposefully designed to decimate the Exchanges under the ACA:
- The White House announced that the government will stop making cost-sharing reduction payments to insurance companies under Obamacare. According to the White House, there is no appropriation for such payments. As the Exchange plans will still be obligated to bear the costs of the cost-sharing reductions, premiums for Exchange plans that remain in the market would be expected to rise dramatically. Many Exchange plans have termination provisions which allow them to terminate their 2018 contracts if the cost-sharing subsidies stop. On October 13, eighteen states and the District of Columbia sued the administration to restore the funding.
- The President also issued an Executive Order requiring the relevant agencies to consider regulations or guidance (1) allowing more employers to form association health plans (AHPs) and (2) expanding the availability of short-term, limited-duration insurance (STLDI). If the regulations come to fruition, younger and healthier people are expected to be siphoned from Exchange products and into cheaper AHPs and STLDI plans (that potentially offer skimpier coverage), creating adverse selection. Premiums will rise for those left in the Exchanges.
Is the ultimate goal of these moves the total destruction of the Exchanges? Are they bargaining chips designed to bring Congress back to the table to fix the “problems” with the ACA? If the latter, will Medicaid spending cuts sought by many Republicans be part of that discussion? Stay tuned.
A recent telemedicine industry benchmark survey published by REACH Health provides great insight into where the industry has been and where it is headed. The survey was conducted among U.S. healthcare executives, physicians, nurses and other professionals. Organizations represented in the survey were diverse and included representatives from organizations with a $1 billion or more in revenue (about a third of respondents), and almost half with revenues under $50 million.
In reviewing the survey report, there were some significant takeaways:
- Telemedicine is evolving from a specialty offering to a mainstream service.
- More than half of respondents consider telemedicine to be a top or high priority.
- Patient-oriented objectives—including improving patient outcomes, improving patient convenience, and increasing patient engagement and satisfaction—are the three top objectives for telemedicine programs.
- There is an emphasis on better leveraging specialists with a large majority of respondents ranking this a top or high priority.
- Nearly half of hospital and integrated delivery network respondents who began their telemedicine programs/initiatives with a departmental approach are transitioning to an enterprise approach.
- The maturity of telemedicine programs varies widely among service lines and settings of care. Generally, settings requiring highly specialized treatment continue to be more mature than those requiring generalized treatment.
- Telemedicine technology, reporting and analytics, as well as in-house physicians are viewed as highly important to the success of a program, whereas outsourced physician coverage services less so.
With the House GOP pulling the American Health Care Act (AHCA) due to lack of sufficient support even within its own party, Obamacare is not out of the woods.
The ACA’s two pillars, the individual marketplaces and Medicaid expansion, remain vulnerable and could be used as political bargaining chips in Washington as the battle over “health care reform” plays out in the coming months and years.
In response to the House’s failure to pass the AHCA, the President and House Speaker have expressly said that Obamacare will “implode” and the administration has many ways to see to it that it does sooner rather than later. On the other hand, the administration and Congress could also move on to on tax reform and other items while changes to the marketplaces are implemented by regulation. The administration already has proposed regulations on the table that has been characterized as a “good faith” effort to implement minor changes to prop up the marketplaces. Reportedly, however, many insurers will want more in the form of funding for cost sharing reductions and reinsurance to keep sufficient numbers of insurers in the marketplaces long term. Continue reading…
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.
ACA, Affordable Care Act, False Claims Act, Final Rule, Fraud and Abuse / No Comments
After four years and 200 comments, CMS finalized the much‑awaited “60‑Day Rule” for reporting and repaying Medicare Part A and B overpayments (CMS issued a Final Rule related to Medicare part C and D overpayments in the May 23, 2014 Federal Register, 79 FR 29844, and will address Medicaid overpayments in future rulemaking). The 60-Day Rule is part of CMS’s efforts to reduce fraud, waste, and abuse in the Medicare program.
Section 6402(d) of the Affordable Care Act (ACA), created section 1128J(d) of the Social Security Act (codified at 42 U.S.C. 1320a-7k(d)), requiring a person or entity who has received an overpayment to report and return the overpayment to the appropriate entity by the later of: (1) 60 days after the date on which the overpayment was “identified”; or (2) the date any corresponding cost report is due (if applicable). Importantly, the ACA also made reporting and repaying overpayments within 60 days an “obligation” under the False Claims Act (FCA), and therefore subject to FCA liability. Proof of specific intent to defraud the government is not required for a person or entity to be liable under the 60-Day Rule.
The Final Rule slightly relaxes some of the onerous requirements in the 2012 Proposed Rule:
Six Year Lookback Period: CMS responded to numerous comments and concerns that the proposed 10-year look back period for identifying overpayments was too long. The 60-Day Rule changed the lookback period to 6 years, consistent with the statutory limitations for the FCA.
Definition of Identify: CMS acknowledged the numerous comments submitted on what it means to “identify” an overpayment and said, “We agree and have revised the language … to clarify that part of identification is quantifying the amount, which requires a reasonably diligent investigation.” According to CMS, “[t]he Final Rule clarifies that a person has identified an overpayment when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” CMS warned Medicare providers and suppliers not to use the “ostrich defense”; reasonable diligence includes both proactive compliance activities conducted in good faith by qualified individuals, and good faith investigation of credible information conducted in a timely manner by qualified individuals. Quantification of the amount of the overpayment may be determined using statistical sampling and extrapolation methodologies.
How to Report and Return Overpayments: The Final Rule states that providers and suppliers must use an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process to satisfy the obligation to report and return overpayments.
The Final 60-Day Rule is available at: https://federalregister.gov/a/2016-02789. By way of comparison, the February 16, 2012 Proposed Rule is available at: https://www.gpo.gov/fdsys/pkg/FR-2012-02-16/pdf/2012-3642.pdf
To learn more about reporting or making repayments under the Final Rule, please contact Ryan Blaney, Dana Petrillo or any member of Cozen O’Connor’s Health Law team.
ACA, Affordable Care Act, False Claims Act, Medicaid, Medicare / No Comments
On August 3, 2015, a federal judge in the Southern District of New York ruled that the United States’ and state of New York’s complaints in intervention can move forward against a group of hospitals, under the federal False Claims Act (“FCA”) and New York’s FCA corollary. The hospitals allegedly failed to report and return Medicaid overpayments that were brought to their general attention over two years before all of the relevant repayments were made.
The judge’s opinion denying the defendants’ motions to dismiss in Kane v. Health First, et al. and U.S. v. Continuum Health Partners Inc. et. al., should be of particular note to providers because it contains extensive discussion and guidance as to how at least one federal judge interprets the Affordable Care Act’s (“ACA”) “60 day rule.” Specifically, the ACA’s rule requires any provider who receives an overpayment from Medicare or Medicaid to repay such overpayment within 60 days of the “date on which the overpayment was identified.” Further, retention of such an overpayment beyond the sixty-day period can result in liability under the FCA.