Chevron After King v. Burwell

By Professor Adam Zimmerman

Prof. Zimmerman is guest blogging on Prawfsblawg, where this post originally appeared.

As Richard already observed today, in King v. Burwell, the Court upheld the government's interpretation of the Affordable Care Act to allow people to get subsidies on healthcare exchanges created by the federal government. Chris Walker has a nice post at JREG discussing the case.   

I agree with Chris that the way the Court reached today's outcome could have broader consequences for administrative law.  I offer some very, tentative off-the-cuff thoughts about the opinion below the fold.

 

Thoughts on King v. Burwell

By Professor Brietta Clark

Today the Supreme Court, in a 6-3 decision in King v. Burwell, held that subsidies (or tax credits) are available to help consumers buy insurance, whether they purchase insurance on a State or Federal Exchange. In upholding this critical piece of the Affordable Care Act (ACA), the Court interpreted the law in a way that is most faithful to Congress’s goals of making insurance more affordable and of ensuring the availability of meaningful insurance offerings in the market. Practically, this decision is important because consumers in states that have resisted reform efforts are already suffering from the failure of these states to expand Medicaid; by holding that the ACA authorizes subsidies on a Federal exchange, the Supreme Court has preserved at least one important avenue for increased health care access in these states. But health reform proponents are not only happy about what the Court decided; they are relieved because of how the Court came to its decision.

The issue in the case – whether subsidies would be available for consumers purchasing insurance on a Federal exchange – turned on a question of statutory interpretation. Petitioners challenged the IRS rule authorizing the subsidies as inconsistent with the Affordable Care Act. Specifically, they pointed to language in a provision in the Act, now Section 36B of the Internal Revenue Code, which defines the premium assistance credit amount by referring to an insurance plan that is enrolled in through “an Exchange established by the State….” Petitioners insisted that this text only authorizes subsidies for use on state-run exchanges, but does not authorize them for use in states that have a Federal exchange. Government officials defended the IRS rule by arguing that the relevant language must be read within the context of the statute as a whole, and that based on this, it was clear that Congress intended to make subsidies available for use on State and Federal exchanges.

Supreme Court Health Law Update: Abortion, Contraception & Gay 'Conversion Therapy'

By Professor Brietta Clark

This Supreme Court term has been another important one for health care. The Court was presented with several cases that questioned the scope of the government's power to enact laws regulating health care access or quality, when such laws are viewed as burdening religion or speech. The two cases receiving the most attention -- Burwell v. Hobby Lobby and McCullen v. Coakley -- involved challenges to laws protecting women's access to reproductive health care. But there were two other noteworthy cases -- Pickup v. Brown and Welch v. Brown -- which involved challenges to a law that bans a discredited health care practice that is harmful to the mental and physical health of sexual minorities.

Health law scholars and advocates have been watching these cases closely because of the growing number of examples of free speech or religious freedom claims being used to defeat, avoid or invalidate important health protections. For those who envision a robust regulatory role for government in protecting and promoting health -- especially for groups that have historically been the targets of health care discrimination -- this term brought some good news and some bad news.

California's Cap on Medical Malpractice Damages Needs Surgery

By Brian S. Kabateck '89, Guest Alumni Blogger

Most lawyers don't know that in 1975 Governor Brown signed a law that radically changed medical malpractice litigation in California. That law, known as MICRA (Medical Injury Compensation Reform Act), was born in a time when most doctors were in private practice and the insurance industry was largely uncontrolled and financially crushing doctors by boosting malpractice premiums. Among other reforms, MICRA capped any pain and suffering award at $250,000. In the 38 years since MICRA became law, there has been no change whatsoever in the $250,000 cap - and during the same timeframe, inflation has dramatically affected the value of $250,000. In fact, if you apply a basic cost of living factor for inflation, that same $250,000 would now approach approximately $1.1 million. While under MICRA there is no artificial cap on economic losses such as medical care, life care and lost earning, its $250,000 cap on non-economic damages intended to offset the real costs of human suffering creates an unfair situation in cases involving the loss of a child, a non-income earning spouse or a retired person. Quite simply, the life of a child lost because of medical error is only worth $250,000 in California. Outrageous!

Consider also that the entire practice of medicine has changed in the last 38 years. Most Californians who are insured get their medical care though managed care like an HMO or Kaiser. Gone are the days when private practitioners where the norm. Many patients feel like doctors are restricted in making decisions by administrators and other people who are not doctors but are often making the decisions for them. Patient safety is a serious concern in the United States today. It is estimated that more than 300,000 people die every year from medical errors. To put that number into context, medical errors are the third leading cause of death behind heart disease and cancer. It's the equivalent of two full 747s crashing every day. In California, an estimated 37,500 people die from medical errors every year. Meanwhile, doctors have a more lenient discipline system than lawyers; many doctors go unchecked while wrestling with addiction to alcohol and prescription drugs. The media seem to be reporting stories every day of serious medical errors and negligence. Michael Jackson is the most famous victim of medical negligence.

Our tort system does act as a deterrent. We know that cars are safer because of product liability cases, insurance companies are held accountable when they fail to pay legitimate claims, Big Pharma is responsible for bad and dangerous drugs - the list goes on and on. There are no caps on those other industries. In fact, no profession has artificial caps in place except the medical field. Eliminating the cap entirely and letting juries decide the level of damages would be the best approach, but at a minimum the cap should be adjusted to account for inflation and then adjusted regularly to keep up with the cost of living. Even the original rationale for the cap no longer applies. Shortly after the current California insurance commissioner took office, he forced all admitted malpractice insurance firms to refund premiums because medical malpractice coverage is the most profitable line of insurance in the state. Beyond such administrative steps, the notion of caps is fundamentally contrary to our legal system, the Seventh Amendment and the entire idea that one group shouldn't receive special treatment over others.

We teach a tort system in law schools across the country that is free of artificial limitations on damages. In fact, our entire constitutional civil justice system is based on the notion that juries are best equipped to determine the value of a plaintiff's claim. We need to reconsider the MICRA caps.

Brian S. Kabateck is the founding and managing partner of Kabateck Brown Kellner LLP and president of the Consumer Attorneys of California.

Election Results through a Healthcare Lens

By Professor Brietta Clark

Since election night people have been preoccupied with what the post-election polling reveals about America's electorate, particularly its shifting values and priorities and what this will mean for future elections. A recurring theme among commentators is that growing diversity played an important role for Democratic wins in the Presidential and Congressional races. According to a report by the Pew Research Center, Obama received the support of African Americans, Latinos, and Asian Americans by a wide margin. Women also played a prominent role in this election: they not only supported Obama by a wide margin, but were also instrumental in Democratic wins in the House and Senate. And a Gallup survey showed that voters who identify as gay, lesbian, or bisexual overwhelmingly supported President Obama.

Read the complete post on Professor Clark's Health Care Justice Blog.

Health reform survives legal challenge!

By Professor Brietta Clark

Today, the Supreme Court upheld the most controversial part of the Patient Protection and Affordable Care Act - the individual mandate. The mandate requires citizens to purchase health insurance by 2014 or pay a tax, unless they qualify for an exemption. The mandate was held to be a constitutional exercise of Congess's tax and spend power. Because the mandate was held constitutional, there was no need to consider whether the other private insurance reforms would survive: they do.

The court also considered a challenge to the Medicaid expansion provision: this provision expands eligibility to all adults who fall below a certain income level. Many states like this expansion because it is generously funded by the federal government - 100% in the beginning. Other states challenged it because states that refuse to comply with these new eligibility requirements risk losing existing Medicaid funding. The court seemed to create a compromise in this case. It upheld the expansion program (and importantly the opportunity to get new federal funding to subsidize the expansion for states that want to participate), but it held that states must be given a "genuine choice" to decide whether or not to participate. This means that the federal government cannot take away states' existing funding if they do not want to participate in the expansion. Unfortunately, this means that there will be even more inconsistency among the different states in terms of the quality of and access to health care for our most vulnerable citizens.

This Supreme Court's opinion is very long, and it will likely take legal scholars some time to understand and debate the full implications of this decision for the federal government's power to create and regulate social welfare programs, as well as for constitutional law more generally. For now, though, I think the significant practical implications of this decision for health policy are clear. The Affordable Care Act is the most comprehensive attempt to increase health care access through insurance expansion, and to try to reduce health inequity for women, people with disabilities, and racial and ethnic minorities, that we have seen in decades. I also think it is safe to say that in this polarized environment this could be our last chance to try to fix the healthcare system in a meaningful way for many more decades. No one can say for sure whether this reform will work, but because of the court's decision, we will at least get the chance to find out.

That said, I will continue to follow health reform closely, as will other health care advocates and legal scholars, because there are still many questions to be answered. President Obama's health reform law offers promises of affordability, meaningful health benefits, accessibility to quality providers, and fairness in how benefits are allocated, but whether such promises will be realized depends on how public programs are administered and how closely private insurers are regulated. To follow progress on implementation, check out my blog. For the full Supreme Court opinion, click here.

The (In)Decision of Douglas v. ILC: The Relevance of CMS Approval in Challenges to Medicaid Payment Cuts

By Professor Brietta Clark

Recently, the U.S. Supreme Court issued an odd decision in the case of Douglas v. Independent Living Center. Douglas is the consolidation of three suits challenging cuts in California's Medicaid (Medi-Cal) reimbursement for a wide range of health care services. The Ninth Circuit affirmed lower court decisions halting the cuts because they were found to violate a provision of the Medicaid Act that requires rates be sufficient to ensure equal access to quality care. This provision, 42 USC 1396a(a)(30(A), is commonly known as the "Equal Access" or "30A" Requirement. The Supreme Court did not take up the issue of whether the cuts actually violated this requirement.

Read the complete piece on Professor Brietta Clark's Health Care Justice Blog.

Loyola hosts debate on healthcare mandate

On Wednesday, March 9, Loyola hosted a debate about the constitutionality of the individual mandate in the Patient Protection and Affordable Care Act ("Affordable Care Act"). It featured two renowned constitutional law scholars: Adam Winkler, professor of law at UCLA, and Robert Pushaw, the James Wilson Endowed professor of law at Pepperdine Law School.

The debate focused on the question of whether the individual mandate is a constitutional exercise of Congress' Article I power to "regulate commerce among the several States" and to "make all Laws which shall be necessary and proper" pursuant to this power. The individual mandate is the part of the Affordable Care Act that has drawn the most attention and controversy, legally and politically. Although challenges to the mandate have been raised on numerous legal grounds, the commerce clause issue seems to have the greatest legal traction so far. And Congress expressly relied on this power in enacting the law.

This issue has led to a split in the courts: Of the five district courts that have considered challenges on the merits so far, three have upheld the Affordable Care Act, while two have ruled that the mandate is unconstitutional. The most recent decision came on March 8th by a Florida District, which struck down the entire Affordable Care Act because of its finding that the mandate was unconstitutional and could not be severed from the rest of the law. Appeals are pending in the Fourth, Sixth, Eleventh, and District of Columbia Circuits. Everyone expects the issue to ultimately reach the U.S. Supreme Court for final resolution.

In the meantime, the issue has also generated a great deal of scholarly debate. Prof. Pushaw has argued that the mandate is not a constitutional exercise of the commerce power because the individuals being regulated have not voluntarily engaged in "commerce" even in its broadest sense. Prof. Winkler, on the other hand, has argued that the mandate is a "necessary and proper" part of Congress' larger scheme for effectively regulating health insurance under the Affordable Care Act; and regulating health insurance has long been understood to be a legitimate exercise of the commerce power. During the debate, Professors Pushaw and Winkler presented two very different visions of the commerce clause power, as well as coming to very different legal conclusions about the constitutionality of the mandate. They seemed to agree on one thing, though: the unpredictability of the Supreme Court on this issue. No one wants to make any firm predictions - we'll all just have to wait and see. To view a recording of the debate, click here (RealPlayer required).

The panel was moderated by Brietta Clark, professor of law at Loyola Law School, Los Angeles. The event was co-sponsored the student chapters of the American Constitution Society and the Federalist Society, and organized by student leaders Jason Campbell, Elian Dashev and Billy Tanenbaum.

The big health care story of 2011: Will we get to keep health care reform?

By Professor Brietta Clark

Certainly the biggest health care story of 2010 was the passage of health care reform--the Patient Protection and Affordable Care Act (the "Care Act"). This reform was considered an historic feat--numerous presidents and legislators have tried and failed to overhaul the private health care system to guarantee universal access. While the Care Act likely will not achieve universal access, it is certainly the closest we've come and the most dramatic step toward this goal since creation of the Medicare and Medicaid programs in the 1960s.

So what could top that in 2011? Nothing. Health care reform will still be the No. 1 health care story of the year, except this time the question is: Will we get to keep it?

The president's signature on the Care Act was hardly dry before people began attacking the new legislation. The two most high-profile attacks are coming from Republicans in Congress, emboldened by their recent gains in the House, and constitutional challenges to the law in federal courts. While Republican threats to repeal the Care Act makes for great political theater, there is a pretty strong consensus that such a repeal would never make it to President Obama's desk. The constitutional challenges pose a more credible threat to reform because they present a novel question about the federal government's power to require citizens to purchase private goods. However, the long history of federal government regulation in the area of health care spending and insurance means that challengers will have an uphill battle in the courts as well.

A number of lawsuits have been filed challenging the reform law by states and private individuals. These suits attack the three most important parts of the Care Act that expand health care access: (1) the expansion of Medicaid to cover all adults who fall below a certain income by 2014 (existing law only mandates coverage for children, pregnant women and people with disabilities); (2) creation and regulation of state health care exchanges (the mechanism to ensure that consumers can buy insurance plans that comply with benefits, affordability, and nondiscrimination protections); and (3) the individual mandate (which requires the purchase of insurance that satisfies minimum requirements).

States cannot ignore federal role in Medicaid administration

By Professor Brietta Clark

For the past few years, the California legislature has been trying to deal with its fiscal crisis by cutting Medi-Cal spending dramatically. Medi-Cal is California's version of Medicaid -- it is a joint federal-state program that benefits significantly from federal funding, and is also subject to federal law. Health care providers and beneficiaries have used federal law to challenge recent state cuts in federal courts, pretty successfully so far.

The latest round in this battle between providers and the state occurred a few weeks ago, in California Association of Rural Health Clinics v. Maxwell-Jolly (CARHC). CARHC challenged a law enacted last year that eliminated coverage for certain services, including adult dental, podiatry and chiropractic serivces, provided by Rural Health Centers (RHCs) and Federally Qualified Health Centers (FQHCs) to Medi-Cal beneficiaries. RHCs and FQHCs are located in medically underserved areas, and they are required to treat people without regard to their ability to pay.

Read more at Prof. Clark's Health Care Justice Blog.