• Severability merits & petitioner’s amicus briefs filed: ACA SCOTUS briefs

    The US Government Respondent’s brief on severability was filed yesterday, together with 3 supporting amici (ACA Lit Blog)

    The US Government Respondent’s brief says that if the MCP is unconstitutional, only the guaranteed issue and community rating provisions should go.  Everything else remains (ie, is severable from the unconstitutional part). The US Government also makes the argument, citing Printz, that parties need standing to try to strike down other provisions in the ACA (at 10-11, 14-25).  The Court:

    had “no business” addressing the alleged inseverability of additional provisions that did not “burden” the parties before the Court…

    An interesting argument at the intersection of standing and severability. The US them make a concession that surprised me, volunteering the Medicaid expansion as the only other potentially unseverable issue with standing:

    Applying these principles and certain statutory preclusions of review, if the Court accepts the individual petitionersí’ claim that the minimum coverage provision is unconstitutional, only the severability of the expansion of eligibility for Medicaid could properly be decided by the Court because the States are subject to that provision. The Court, however, would not be required to resolve that issue here. (at 11)

    The Blue States brief makes several interesting arguments, showing how states are already implementing the ACA and how many individuals are counting on provisions that are either already effective or will soon be. They call for all of the ACA to stand if the MCP is struck down.

    The AARP brief wants all of the Medicare changes to remain, protecting their members.

    The American Academy of Actuaries brief agrees that if MCP goes, so should community rating and guaranteed issue.

    The briefs don’t explore severability if the Medicaid expansion is struck down, but the US brief argues the converse, that the Medicaid expansions should remain if the MCP is found unconstitutional (at 34).

    KO

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  • Severability is like an old sweater: ACA SCOTUS briefs

    Did you ever pull some yarn on an old sweater and end up making it worse? Before long, you could unravel the entire sweater if you kept at it.

    That is the legal strategy of Florida and the other states challenging the ACA, according to their “severability” brief filed with SCOTUS. If the Court finds one section of the ACA unconstitutional, the Justices must then decide whether the rest of the law survives (or is “severable”).

    Florida’s starting point is the minimum coverage provision (aka the individual mandate) – and from there they start pulling the yarn. First to fall – according to Florida’s brief – will be the guaranteed issue and community rating rules, mainly because the insurance industry wouldn’t have accepted these bitter pills without the sweetener of 32 million more customers. The insurance industry makes the same argument in its briefs. The 11th Circuit agreed, but stopped here.

    Once these three provisions are gone, Florida’s brief sees no way to keep any of the private insurance reforms in the ACA:

    Simply put, without guaranteed issue and community rating, the impetus for the ACA would disappear, and the Act’s whole private insurance expansion would unravel, for insurance companies would remain free to turn away millions of the very same individuals to whom the Act promised insurance. (at 48)

    As these “core components” fall, so does every last bit of the Act:

    The ACA is a delicate balance of inextricably intertwined provisions, none of which can survive without the Act’s core components. (at 35)

    Even the clearly constitutional revenue-raising provisions should fall if the Medicaid expansions are struck down. Why? Because Congress only wanted the money to pay for Medicaid expansion:

    The massive expansion of Medicaid was a costly endeavor that Congress attempted to counterbalance with projected cost savings.  If the Medicaid expansion is invalidated directly or falls as a consequence of invalidation of the individual mandate, then these offsetting provisions cannot survive while respecting Congress’ intent. (at 26)

    The upshot (according to Florida) is if any word in the ACA is unconstitutional, all of it must burn:

    …calling into serious question whether Congress would have passed health insurance legislation at all if even a single word of the ACA was altered… (at 39)

    Meanwhile, in unrelated news, Republicans in Congress are drafting legislation just in case the Supreme Court strikes down the ACA.

    KO

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  • Hand sanitizers as Agent Orange?

    Over at CommonHealth, Aayesha rounds up the literature on the limits of hand sanitizers, but fails to mention the collateral damage to the skin microbiome. Alcohol-based hand sanitizers kill many bacteria, viruses and fungi, but they don’t selectively target pathogens. They kill a wide swath of the microbial life on your hands, including little-understood non-pathogenic species. For an ecological analogy, think of using Agent Orange to kill a couple weeds.

    A good introduction to the skin microbiome is a recent article in Nature Reviews Microbiology by Elizabeth A. Grice and Julia A. Segre (9, 244-253 (Apr. 2011)). From the abstract:

    The skin is the human body’s largest organ, colonized by a diverse milieu of microorganisms, most of which are harmless or even beneficial to their host. Colonization is driven by the ecology of the skin surface, which is highly variable depending on topographical location, endogenous host factors and exogenous environmental factors. The cutaneous innate and adaptive immune responses can modulate the skin microbiota, but the microbiota also functions in educating the immune system.

    As I’ve said before, our relationship with microbes should also be evaluated as an ecological issue. Completely germ-free environments are not necessarily the goal.

    KO

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  • ACA SCOTUS Briefs: Who filed on the MCP?

    Who filed supporting the ACA on the minimum coverage provision?

    • Consumer advocates who supported MA health care reform
    • Some professors
    • Democrats and some blue and purple states
    • Left of center provider associations (NPA, AMSA, DFA)
    • Other provider associations (ANA, AAP, NHMA)
    • The California Endowment
    • Patient associations (ACS, ADA, AHA, March of Dimes, etc.)
    • Alternatives to the Chamber of Commerce (SBM, MSA)
    • Hospitals (AHA)
    • Hospital unions (SEIU)
    • BCBS of Massachusetts

    Missing:

    • All other insurance companies (in the 4th Cir. case, AHIP filed on behalf of neither party, in essence on severability)
    • The vast majority of peak medical societies (AMA & most specialty societies have sat this fight out)
    • Fortune 500 (unless you count NFIB/CoC; the National Restaurant Assn filed against the ACA on severability)
    • Drug and device companies (unless you count Washington Legal Foundation, who filed below against the MCP; and the Pacific Legal Foundation, who filed below on standing)

    Hospitals and patient advocates are the most powerful amici who could have sat this out (they filed in support of the MCP below as well). Will be interesting to see if the missing stay out or file respondents briefs in February. Many of them supported the ACA back in 2009. Prior TIE coverage here

    KO

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  • ACA SCOTUS briefs – amici supporting the minimum coverage provision (MCP) [UPDATED]

    Expect at least 21 [Brad now lists 25!] amicus briefs today supporting the US Government on the MCP by today’s filing deadline.  Opposing briefs are due in February. Next week, we’ll look at the Medicaid coercion and severability amicus briefs (also due today). Some highlights for the briefs I’ve seen so far (I’ll update as more are filed).  The Center for American Progress is compiling a complete list with short descriptions as well (link to come):

    Health Care For All (Massachusetts health care reform groups)

    Many of the Massachusetts groups most involved in the Commonwealth’s historic 2006 health reforms have jointly authored a brief that supports the constitutionality of the minimum coverage provision under the Commerce Clause.  While the Massachusetts reforms have been remarkably successful, Massachusetts’s experience with health reform demonstrates that health care and health insurance are inherently interstate activities that cannot be comprehensively regulated without federal involvement.  States attempting to act on their own will face barriers such as uninsured and underinsured patients from other states, as well as federal laws such as ERISA that limit the ability of states to regulate health insurance offered within the state.

    Amici:  Health Care For All; Health Law Advocates; The Massachusetts Hospital Association; The Massachusetts League of Community Health Centers; the Greater Boston Interfaith Organization; and Community Catalyst. Counsel of Record: Wendy Parmet, Northeastern Law.

    Advocacy For Patients with Chronic Illness

    Reminds us that key ACA reforms include guaranteed issue and a form of community rating, both of which depend on the MCP.

    Jewish Alliance for Law & Social Action

    Finds the MCP to respect federalism, individual liberty and state police powers. Amici include BU Law Professor Abigail Moncrieff.

    Prescription Policy Choices

    Recharacterizes the MCP as an attempt to eliminate the market for self-insured health care, focusing on the peer-reviewed literature describing optimism bias, hyperbolic discounting and other factors which lead individuals to inadequately save for health care, absent insurance. I’m Counsel of Record.

    AARP

    Focuses on the impact on Americans aged 50-64 (ie, AARP membership not yet eligible for Medicare). Filed early, on Dec. 22. 2011.

    Health Law Professors

    Effort led by Abbe Gluck (Columbia), Wendy Mariner (BU) & Mark Hall (Wake Forest), signed by 104 health law scholars. Charles Fried is Counsel of Record.  Gives the Court important facts about the extent and distribution of health care spending and utilization across the population and over time – for both insured and uninsured people.  It also stresses the unique features of the health care and insurance market, as compared with other types of insurance or consumer goods.

    State AGs in Support of the ACA (no link yet)

    The AGs in Maryland, California, Iowa, Oregon and Vermont, supporting the constitutionality of the MCP.

    The California Endowment

    Brief by Quinn Emanual, with Kathleen Sullivan as CoR. Adds California data to the discussion of the market failures corrected by the MCP.

    American Nurses Association

    Adds to the discussion with an anti-broccoli/camel’s nose argument (“A decision upholding the MCP would preserve existing limits on congressional power and need not authorize hypothetical laws requiring consumers to purchase other products”) and notes that federal public health laws have long regulated “individuals who are not presently engaged in commerce.” h/t to Brad @ ACA Litgation Blog for the brief

    State Legislators from all 50 States, DC and Puerto Rico

    Pro-federalism brief supporting the MCP, with quotations from the Federalist Papers and similar sources.  h/t to Brad @ ACA Litgation Blog for the brief

    Health Care Policy History Scholars

    The health care system is not the exclusive purview of states, but has long been strongly regulated and financed by the federal government.  The MCP is not a fundamental change.  Also notes (as did the USG merits brief, but here in more detail) that the MCP idea came from The Heritage Foundation, and cites prior support by Gingrich, Frist and Romney, among others.  Finally, the ACA builds upon the public-private health care system we have today; it is not a radical new system.  h/t to Brad @ ACA Litgation Blog for the brief

    UPDATED to add The California Endowment, Nurses, State Legislators, and HC Policy History Scholars; and to add links.

    KO

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  • SCOTUS Briefs: Is the minimum coverage provision a tax?

    If the MCP (individual mandate) is a tax described in the Constitution, then Congress had authority to enact it, without regard to the Commerce Clause.  A related but distinct argument is whether it is a tax for purposes of the Anti-Injunction Act; if it satisfies this second definition, then injunctions are improper and this litigation will be delayed until after the first person pays the MCP penalty in 2015 and sues for a refund. (prior TIE coverage here and discussion of the 4th Circuit opinion agreeing with this argument here)

    Nevertheless, the Government and the plaintiffs have all agreed that the MCP isn’t a tax under the Anti-Injunction Act. The Obama Justice Department isn’t running from this fight; nor are they willing to simply kick the can down the road a couple years. Health care markets need to know the constitutional landscape now, not in 2015.  (Court-appointed amici argue otherwise, saying the Court doesn’t have jurisdiction over the MCP in this brief)

    On the Constitutional issue, in addition to the Commerce Clause, the Taxing Power is an independent source of Congressional power under Article I, Section 8. If it is a constitutional tax, forget about broccoli and inactivity – the MCP is constitutional.

    So the Supreme Court asked for briefing on whether the MCP is constitutional under Article I.  Yesterday, I posted on the Commerce Clause sections of the US Government merits brief. Today, let’s look at the tax issue.

    The brief takes a strong stance on the tax issue, starting with the sacred ground of the Question Presented at the beginning of the brief, where they describe the MCP thusly:

    “…nonexempted federal income taxpayers who fail to maintain a minimum level of health insurance for themselves or their dependents will owe a penalty, calculated in part on the basis of the taxpayer’s household income and reported on the taxpayer’s federal income tax return, for each month in which coverage is not maintained in the taxable year. 26 USCA 5000a.”

    The brief sets the MCP in the larger context of the many special tax breaks given to health insurance, especially employer-provided health insurance and the new tax credits under the ACA. The brief does a particularly good job of describing the negative tax consequences imposed on people who self-insure, a point that will be developed further in an amicus brief that will be filed on Friday by Prescription Policy Choices.

    The USG brief proclaims that the MCP “is fully integrated into the tax system, will raise substantial revenue, and triggers only tax consequences for non-compliance.” While Plaintiffs have made much of President Obama’s attempts to hide from the tax label, the brief reminds the Court that in the Congress it was clearly understood as derived under the Taxing Power.  In short:

    “The Court has never held that a revenue-raising provision bearing so many indicia of taxation was beyond Congress’s taxing power, and it should not do so here.”

    For more, see Tim Jost in Health Affairs blog and Brad at ACALitigationBlog

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  • New series on the ACA SCOTUS briefs

    I’ve been on a break from TIE, celebrating my 25th wedding anniversary.

    But now I’m back, and the Supreme Court briefs on the ACA are rolling in.  The Court accepted argument on 3 issues:

    • Whether the minimum coverage provision (MCP) (aka the individual mandate) is a valid exercise of Congress’ powers under Article I of the Constitution (ie, under either the Tax or Commerce Clause);
    • Whether the Medicaid expansion was coercive to states (the Spending Power coercion issue);
    • If some provisions of ACA are found to be unconstitutional, how much of the law should be struck down (the “severability” issue).

    Today, I’ll just look at the U.S. merits brief for the petitioners, filed last Friday.

    The brief is a clear, fact-based description of the need for health care reform.  It’s the sort of explanation that has been absent from political discussion for a while.  The brief is filled with quotes from Justices Scalia and Kennedy, potential swing votes on the MCP. It also deploys some traditionally conservative themes, such as judicial restraint and law & economics. The brief also embraces the argument that the MCP is a tax, but that will require another post. Some highlights:

    1. The individual mandate was a Republican idea:

    … based on recommendations by the Heritage Foundation and a group of health care economists and lawyers associated with the American Enterprise Institute, both of which supported the mandatory purchase of private insurance so that the sale of insurance and delivery of health care would take advantage of private-sector market efficiencies.

    2. The brief is another example of law & econ at SCOTUS, a discussion that assumes some basic micro:

    In sum, the uninsured as a class presently externalize the risks and costs of much of their health care; the minimum coverage provision will require that they internalize them (or pay a tax penalty).  This is classic economic regulation of economic conduct.

    And:

    They also shift present risk to other market participants, which in monetized in the form of higher insurance premiums now, not later, for those with insurance.  The point of obtaining insurance is to internalize risk, which occurs when the insurance is obtained and the premium paid.  Conversely, the failure to obtain insurance externalizes risk, and that externalization occurs at the time the insurance is not obtained.

    3. Warning SCOTUS against substituting their own policy preferences:

    Congress enacted the Affordable Care Act, and chose to include the minimum coverage provision, after years of careful consideration and after a vigorous national debate.  That was a policy choice the Constitution entrusts the democratically accountable branches to make, and the Court should respect it.

    And:

    Instead of deferring to Congress’s judgments, the Court of Appeals made its own de novo assessment and concluded that, in its view, the minimum coverage provision will not adequately accomplish Congress’s objectives because of its exemptions and enforcement mechanisms.  Pet. App. 151A-152A.  That analysis was “startlingly like strict scrutiny review” and has no place in review of an Act of Congress under the Commerce Power. Id. At 218A (Marcus, J).  It is for Congress, not the courts, to decide how to balance its legislative goals with other concerns.

    Finally, congrats to health law professors Mark Hall & Wendy Mariner for their citations in this brief. They plan to file an amicus brief on Friday.

    KO

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  • Antibiotics as neglected medicines

    On the frequently interesting E-drug listserve last week, the moderator asked whether antibiotics are neglected essential medicines and reports on GSK’s new campaign to ask for higher reimbursement prices for antibiotics. (Bioworld article here, via e-drug)

    We have substantial evidence that antibiotics are indeed too cheap – that the private value is far less than the social value (shorter Health Affairs version here; much longer Yale J Health Policy Law & Ethics version here).

    The most important proviso – any new incentives must be conditioned on companies meeting antibiotic conservation targets.  Otherwise, we are just boosting incentives to quickly exhaust a precious resource. Unlike all other intellectual property, antibiotic IP is exhaustible.  Unlike every other drug class in history, for anti-infectives we want carefully sequenced innovation.

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  • 11th Circuit hands FTC another hospital merger defeat

    The Phoebe Putney decision is here.  Prior TIE coverage of this case here. From the 11th Circuit opinion Dec 9:

    Memorial’s (and thus PPHS’s and PPMH’s) only real competitor is Palmyra Park Hospital, Inc. (“Palmyra”), a subsidiary of HCA, Inc. established in Albany in 1971. Palmyra consists of 248 beds and provides essentially the same services as Memorial. Memorial controls 75 percent and Palmyra 11 percent of their geographic market.

    Nevertheless, the merger was approved under the “state action” doctrine – which exempts states from antitrust law when they act in a sovereign capacity. In this case, the state actor was the local hospital authority rather than the State of Georgia.

    This is an important and unfortunate decision, allowing local hospital districts to facilitate state action mergers. The state action doctrine makes more sense if the state’s residents are paying the bills for monopolies, but in health care, many of the bills are paid by CMS and the rest by private health plans.

    The 11th Circuit simply assumed that Georgia knew what it was doing when it authorized local hospital authorities:

    [T]he Georgia legislature must have anticipated anticompetitive harm when it authorized hospital acquisitions by the authorities…  The legislature could hardly have thought that Georgia’s more rural markets could support so many hospitals that acquisitions by an authority would not harm competition. We therefore conclude that, through the Hospital Authorities Law, the Georgia legislature clearly articulated a policy authorizing the displacement of competition.

    Our hospital antitrust system is broken – every year we have effective competition in fewer geographic areas.

    h/t to Karen Chueng at Fierce Healthcare

    KO

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  • The Grinch almost stole Christmas

    The original briefing schedule for the PPACA Supreme Court cases had many of the parties filing their Petitioner’s briefs in the week between Christmas and New Year’s, with amici due the week after. I’m working on some of these briefs, so I wanted to know what my work commitments would look like in late December. My kids were already expecting the Grinch.

    Happy to report that the primary parties and appointed amici wrote a letter and the Court agreed to delay the briefing blizzard by a week.  See the order for the full details on who files when.

    Nice to see everyone getting along, at least on a procedural matter.

    h/t to Richard Taffe, my BU press guru

    KO

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