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Four Words Or 17 Syllables: Predicting King v. Burwell In Haiku


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost, Grace-Marie Turner, Sara Rosenbaum, and others.

The resolution of King v. Burwell boils down to a simple point. A majority of the Supreme Court is willing to interpret the language of the Affordable Care Act. It is unwilling to rewrite that language.

It is all about four words: Whether “established by the state” in one section of the ponderously long, hastily passed health reform law renders low-income residents of states that have not created their own insurance exchanges but participate in federal exchanges ineligible for federal tax credits. If this is indeed the law, many middle-class families will be unable to afford coverage, residents of states that rely on federal exchanges will pay billions to the IRS for the benefit of those living elsewhere, premiums in those exchanges will rise as enrollment of healthy individuals drops, and the ACA will be unable to achieve its undisputed core purpose of health insurance for all Americans.

In contrast to the media cacophony leading up to yesterday’s hearing in the Supreme Court, the oral arguments themselves were clear and lawyerly. They were also undramatic. Most of the Justices knew where they stood, forcing plaintiff’s counsel Michael Carvin – who spoke first – to hear answers from the bench more often than he was asked actual questions. The Court’s willingness to listen had increased by the time Solicitor General Donald Verrilli took the podium on behalf of the government, and he proved himself an organized and articulate presenter. The only jurists not revealing their positions were Justice Kennedy, who challenged both lawyers on several points, and Chief Justice Roberts, who said little except to maintain order and decorum. (Justice Thomas famously refrains from participating in oral argument, but usually votes with Justice Scalia.)

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From The Supreme Court: A Strong Endorsement Of Health Care Competition


March 2nd, 2015

The Supreme Court has spoken by a 6-3 vote, with Justice Anthony Kennedy writing an opinion for the Court joined by Chief Justice Roberts and Justices Breyer, Ginsburg, Sotomayor, and Kagan.  In a strong, clear voice, the Court upheld the enforcement of a major federal statute against a state entity that had failed to embrace federal policy with respect to health care.  Although not formally a constitutional decision, the Court’s interpretation of congressional intent played out against the backdrop of an important constitutional question: the permissible and appropriate balance between federal lawmaking and residual state authority.  And it was the federal government’s seeming disregard of state sovereignty that led what has become the Court’s conservative rump – here Justice Alito, joined by Justices Scalia and Thomas – to write bluntly in dissent.

The case is North Carolina State Board of Dental Examiners v. Federal Trade Commission, not King v. Burwell, and the major federal statute is the Sherman Antitrust Act, not the Affordable Care Act.  Oral argument in North Carolina State Board took place last October (David Hyman and I wrote about it here); the Court’s decision was issued on February 25, 2015.

North Carolina State Board has nothing to do with “Obamacare,” but it may turn out to be the most important health care (and general public law) decision of the year.  (Note to Pundits and Hypesters: King v. Burwell will only matter if the Court rules for the plaintiffs, and is unlikely to create enduring law even then. If the government wins, the case will soon be forgotten.)  The Supreme Court’s ruling will give professional licensing boards throughout the country significant pause before adopting ad hoc policies that disadvantage competing professionals or non-professionals, and it should lead to a constructive conversation (and perhaps uniform or model legislation) regarding the accountability of self-regulatory bodies to actual state government.  Its impact could be comparable to a major revamping of Joint Commission standards for health care facilities – low in visibility but dramatic in operational change.

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North Carolina Dental Board v. FTC: A Bright Line On Whiter Teeth?


October 30th, 2014

On October 14, 2014, the United States Supreme Court heard oral arguments in North Carolina Board of Dental Examiners vs. Federal Trade Commission.  The case does not involve the Affordable Care Act, but it goes to the heart of the professional self-regulatory paradigm that has governed the U.S. health care system for more than a century.  The specific legal question under review is the standard for determining when a state professional licensing board’s activities are subject to scrutiny for anticompetitive effect under the federal antitrust laws.

Antitrust law applies to private anticompetitive conduct.  Congress did not intend to interfere with state regulation that limits or even eliminates competitions.  As long as states do so using public agencies and officials, they are on safe ground.  If a state empowers private parties to administer such regulation, however, it not only must “clearly articulate” its intent to diminish competition, but also must “actively supervise” the conduct of the private parties.  In previous cases, the Supreme Court developed and elaborated this two-part test, which is called the “state action doctrine.”

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FTC v. Watson Pharmaceuticals: Another Piece Of The Puzzling Marketplace For Health Care Innovation


December 21st, 2012

It is too soon to tell whether deciding the fate of national health reform last year in National Federation of Independent Business v. Sebelius has generally emboldened the U.S. Supreme Court to resolve legal uncertainties affecting the health care system. Nonetheless, 2012-2013 will be a busy year on this front for the Justices, who have already heard or agreed to hear seven relevant cases, including three involving the pharmaceutical industry. The first six cases are FTC v. Phoebe Putney Health System, Inc. (hospitals and the “state action” exemption from antitrust liability); Sebelius v. Auburn Regional Medical Center (Medicare reimbursement for hospitals); Association for Molecular Pathology v. Myriad Genetics, Inc. (patenting of human genes), on which we wrote earlier at Health Affairs Blog; Mutual Pharmaceutical Co. v. Bartlett (state tort liability for drug injury), Sebelius v. Cloer (the National Vaccine Injury Compensation Program), and U.S. Airways, Inc. v. McCutchen (ERISA and insurance companies’ rights to recover tort settlements).

On December 7, the Supreme Court announced its decision to review the seventh and latest addition to the list, FTC v. Watson Pharmaceuticals. The Court will look to resolve a disagreement between federal appeals courts over the legality of so-called “pay for delay” or “reverse payment” settlements, in which a settlement payment flows from a patent holder to an accused infringer rather than, as might normally be expected, the other way around. Specifically, the Supreme Court will receive briefs and hear arguments regarding “[w]hether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the court below held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit has held).”

In answering this question, the Court will influence a much larger debate over innovation in health care markets. Watson Pharmaceuticals’ piece of that puzzle will lie at the intersection of patent law, antitrust law, food and drug law, and civil procedure. We hope that the Court’s review and judgment will improve our collective capacity to apply these legal tools, but we also think it very unlikely that the Court will rule definitively on any of them.

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A Cure For Patent Pathology? The Supreme Court Reviews The Patentability Of Human Genes


December 7th, 2012

“Are human genes patentable?” On November 30, 2012, the U.S. Supreme Court agreed to answer this single question in Association for Molecular Pathology v. Myriad Genetics. Of course, the petitioners, including health care providers, professional associations, and patients, worded the question to favor the answer they want: “No, human genes are not patentable.” For Myriad Genetics, the patent owner who would like its patent rights upheld, the question is better phrased as whether one can patent “isolated molecules of deoxyribonucleic acid that were identified and defined by human inventors.”

The practical stakes in the Court’s decision, which should come in the first half of 2013, are enormous. The U.S. Patent and Trademark Office (USPTO) has issued tens of thousands of patents on genetic sequences over the past few decades, and the U.S. Court of Appeals for the Federal Circuit, the appellate court entrusted with hearing virtually all U.S. patent appeals, has never declared such sequences to be non-patentable subject matter. For more than a century, patents have issued on isolated versions of naturally occurring substances other than DNA.

Many believe that gene patents are crucial to the modern biotechnology industry. On the other hand, many researchers and clinicians feel that gene patents, particularly human gene patents, are commonly unnecessary to spur innovation and in fact interfere significantly with scientific and technological progress, whether by slowing or diverting research, impeding the provision of diagnostic tests, or generally increasing costs for clinical and scientific work.

The patents at issue in Myriad make such concerns particularly poignant. These patents relate to BRCA1 and BRCA2, genes associated with a predisposition to breast cancer. The obvious public interest in ready access to cancer diagnosis helps account for the fact that petitioners’ lead lawyers are not the normal high-priced advocates for a private company accused of patent infringement. Instead, those lawyers work for the American Civil Liberties Union Foundation, an organization more commonly associated with battles for civil rights than rights in technological innovations.

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Preserving The Republic: Chief Justice Roberts’ Affordable Care Act Opinion


June 30th, 2012

Chief Justice John Roberts did right by America.  Thursday’s ruling by the U.S. Supreme Court upheld the constitutionality of the law’s minimum coverage provision and allowed the Affordable Care Act to move forward.  Health reform is often simpler than it looks, and so was the Court’s decision.  In practical terms, a majority of Justices ruled […]

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William Sage On The Last Day Of Supreme Court Arguments: Enough Frivolity For A While


March 29th, 2012

It’s finally over.  After nearly six hours of oral argument over the course of three days, the two cases challenging the constitutionality of the Affordable Care Act have been officially submitted to the Justices for decision.

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William Sage On The Supreme Court ACA Arguments Day Two: Where No Law Has Gone Before?


March 28th, 2012

The much-anticipated argument over the constitutionality of the Affordable Care Act’s insurance centerpiece, the minimum coverage requirement or “individual mandate,” took place Tuesday morning.   It was an entertaining but messy affair, with several individuals often speaking at once and answers to questions frequently getting lost in subsequent comments and inquiries.   Analogies buzzed dangerously around the […]

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The Supreme Court Health Reform Arguments: William Sage On The Lessons Of Day One


March 27th, 2012

Day One of the oral arguments in the constitutional challenge to the Affordable Care Act put the Supreme Court’s many strengths on display.  Everyone came prepared, including the nine Justices, and presented their cases and questions cogently and persuasively.  Tim Jost’s outstanding blog post provides a detailed description and in-depth analysis of the Court’s discussion […]

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CMS’s Essential Benefits Guidance: Brush-Clearing Or Can-Kicking?


December 28th, 2011

The recent CMS bulletin on the essential benefits package (EBP) required for certain types of coverage under the Affordable Care Act has been described in greater detail in earlier Health Affairs Blog posts by Tim Jost and Kavita Patel.  The bulletin is a pragmatic document, seemingly driven by the overall exigency of implementing the ACA […]

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Of Wands, Pens, And Fries: How The Essential Benefits Report Advances Reform


October 19th, 2011

Significant steps are being taken to implement the Affordable Care Act (ACA) even as the challenges to its constitutionality make their way through the federal courts.  For example, the Institute of Medicine recently released its much-anticipated report to the Secretary of Health and Human Services on the principles and methods that should guide the design […]

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Common Sense And Malpractice Reform


September 26th, 2011

Having both medical and law degrees typecasts me.  New acquaintances ask if I have ever sued myself.  Within the health policy community, colleagues assume I study medical malpractice. So I have let it become a self-fulfilling prophecy.  I worked on medical malpractice in the Clinton White House, and devoted my first scholarly efforts to analyzing […]

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Health Reform In The Fourth Circuit: The Politics Strike Back


September 9th, 2011

One of my own professors, Lawrence Friedman, was fond of quoting Finley Peter Dunne’s rough-hewn character “Mr. Dooley,” who delighted early 20th century readers with his blunt commentary on current events.  Mr. Dooley once observed that, no matter whether Americans “follow th’ flag” or not, “th’ Supreme Coort follows th’ election returns.” We’re likely to […]

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The Legal Battle Over Health Reform: Analyzing The 11th Circuit Opinions


August 16th, 2011

Editor’s Note: Below, William Sage analyzes Friday’s federal appellate court decision regarding the Affordable Care Act. See Timothy Jost’s earlier post for more on this decision. On August 12, a divided three-judge panel of the US Court of Appeals for the Eleventh Circuit ruled in State of Florida v. Sibelius that the individual mandate contained […]

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