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Implementing Health Reform: King Plaintiffs Ask For Supreme Court Review


August 1st, 2014

On July 31, 2014, Michael Carvin, attorney for the plaintiffs in King v. Burwell, one of two parallel cases challenging an IRS rule allowing premium tax credits to be issued by federally facilitated exchange, filed a petition for a writ of certioriari in the United States Supreme Court. The petition asks the Court to review the Fourth Circuit decision affirming Judge James Spencer’s ruling rejecting their claim.

As was described here in detail last week, ACA opponents lost in the Fourth Circuit in a unanimous decision in King v. Burwell but won a split decision in the District of Columbia Circuit Court of Appeals in Halbig v. Burwell. Carvin is thus seeking Supreme Court review based on a split of authority between the circuits that must be resolved by the Supreme Court.

It is not the intent of this post to review the arguments in Carvin’s brief. Carvin argues that judges Griffith and Randolph made the right decision in Halbig, and that judges Gregory, Thacker and Davis in the Fourth Circuit and Edwards in the D.C. Circuit are wrong. There is really only one new argument in the petition that was not made below, namely that Congress’ intent to deny premium tax credits in states that failed to establish exchanges has now been conclusively established by statements made by Jon Gruber two years after the statute was adopted. This disregards the fact that Gruber neither drafted nor voted on the ACA and had earlier stated that premium tax credits were available in federally facilitated exchange states.

Rather than rehashing the merits, this post will discuss the timing of the petition, the basis on which it can be accepted, and the consequences if it succeeds. Nothing will happen immediately with this petition. The government has 30 days to respond, and can request additional time. The appellants then have 14 days to reply. This puts us into mid-September. It is unlikely, therefore, that the Supreme Court will decide whether or not to accept the petition until it reconvenes in October

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Individual Patient Expanded Access: Developing Principles For A Structural And Regulatory Framework


July 31st, 2014

Editor’s note: In addition to Meaghan George, Sara Bencic and Darshak Sanghavi also coauthored this post. 

Individual patient expanded access, sometimes termed “compassionate use,” refers to situations where access to a drug still in the development process is granted to patients on a case-by-case basis outside of a clinical trial, prior to completion of mandated clinical trials and approval by the Food and Drug Administration (FDA). This typically involves filing a single patient or emergency investigational new drug (IND) request with the Food and Drug Administration and voluntary release of the drug by the manufacturer.

Generally, the following criteria must be met: there is reasonable expectation of meaningful benefit despite the absence of definitive clinical trial data, the patient has a serious or life-threatening condition, there are no comparable or satisfactory treatment alternatives, and there are no suitable clinical trials for the drug available to the patient. This form of expanded access, which is the focus of this paper, is different from the situation in which a drug is discharged to a large group of needy patients in the interval between successful phase 3 trials and presumed FDA approval, a strategy often termed a “treatment” IND or protocol, which was initially used in the 1980s for releasing zidovudine to patients with acquired immune deficiency syndrome.

A Call to Action: The Importance of Expanded Access Programs

The Engelberg Center for Health Care Reform at the Brookings Institution recently invited senior leaders from several pharmaceutical companies, two bioethicists, a senior FDA representative, and a patient advocate to share experiences and discuss organizational strategies related to expanded access (see acknowledgements). A driving factor for this meeting was a recent flurry of highly public cases of desperate patients seeking access to experimental drugs, which lead to social media campaigns and media coverage.

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Implementing Health Reform: Origination Clause Challenge To ACA Dismissed (Updated)


July 30th, 2014

Another Affordable Care Act challenge bit the dust on July 29, 2014, when the District of Columbia Court of Appeals affirmed a lower court decision that dismissed Sissel v. Department of Health and Human Services. Sissel had sued claiming first that the individual mandate “is not a regulation of commerce, but purports to compel affected Americans like [himself], to engage in commerce,” and second that the “shared responsibility payment” is a tax and violates the Origination Clause because it “originated in the Senate, not the House.”

The court had little trouble disposing of Sissel’s first claim, which, the court explained, was based on a misreading of the Supreme Court’s opinion in the NFIB case. Although five justices of the NFIB Court concluded that Congress lacked the authority to enact the individual mandate as a command under the Commerce Clause, a majority of the Court also concluded that the mandate did not in fact order individuals to purchase insurance, but rather imposed a tax on those who failed to do so. The requirement was thus, as the Supreme Court had already held, constitutional.

Sissel’s second claim was based on article 1, section 7, clause 1 of the Constitution, the Origination Clause, an obscure provision few Americans remember from fifth grade civics. It provides that “[a]ll Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as to other bills.” Sissel argued that the individual mandate of the ACA was a bill to raise revenue but that the ACA in fact originated in the Senate, and thus the provision was unconstitutional.

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Implementing Health Reform: What Makes A State Exchange? (Updated)


July 28th, 2014

One question that has arisen in the wake of the Halbig/King decisions is what exactly is a state exchange? The D.C. Circuit in Halbig and the Fourth Circuit in King seemed unclear as to the answer to this question. The D.C. Circuit counted 14 state exchanges, the Fourth Circuit 16.

A great deal, however, may turn on the answer. Two of the eight federal judges that have ruled on the question so far have held that only state exchanges and not federally facilitated exchanges can issue premium tax credits. Were this conclusion to be adopted in the end by the Supreme Court, which exchanges would count? In other words, how exactly does a state establish an exchange?

A careful reading of the law suggests that a state “establishes” an exchange when, exercising the legal powers of the executive or legislative branch, the state government takes certain actions, discussed below. Establishing the exchange – that is, using the power of state government to enable the exchange to operate and fulfill its responsibilities – is different from the carrying out the day-to-day operations, of the exchange, which might be carried out by public officials, private contractors, or even the federal government.

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Implementing Health Reform: Senator Rebuffed In Challenge To Congressional Participation In ACA Exchanges


July 23rd, 2014

The Halbig and King cases released on July 22, 2014 dramatically overshadowed another court decision released the previous day. That case, Johnson v. U.S. Office of Personnel Management, was important in its own right, however, and is covered here.

On July 21, 2014, Judge William C. Griesbach of the United States District Court for the Eastern District of Wisconsin dismissed a case brought by Wisconsin Republican Senator Ron Johnson and one of his staff members. The plaintiffs claimed that the rule promulgated by the Office of Personnel Management that allows members of Congress and their official staff to purchase health insurance through the exchanges with federal subsidies violates the Affordable Care Act and is unconstitutional. Judge Griesbach held that the plaintiffs had not been injured by the rule and thus had no standing to challenge it. This decision not only disposes of one more ACA challenge, it also calls further into question Congressman John Boehner’s proposed lawsuit challenging other ACA implementation decisions.

The ACA provides that “the only health plans that the Federal Government may make available to Members of Congress and congressional staff” are qualified health plans and plans sold through the exchange. This provision was adopted as an amendment offered by Senator Charles Grassley (R-IA), apparently to challenge the Democrats’ willingness to participate in the same program they were creating for other Americans. This challenge was embraced by the Democrats, however, resulting in the current law.

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Implementing Health Reform: Appellate Decisions Split On Tax Credits In ACA Federal Exchange


July 23rd, 2014

July 22, 2014 was arguably the most important day in the history of the implementation of the Affordable Care Act since the Supreme Court issued its ruling in the National Federation of Independent Business case in June of 2012. As no doubt most readers of this blog know by now, shortly after 10 a.m. the United States Court of Appeals for the District of Columbia Circuit handed down its decision in Halbig v. Burwell. Two judges ruled over a strong dissent that an Internal Revenue Service rule allowing federally facilitated exchanges to issue premium tax credits to low and moderate income Americans is invalid.

Approximately two hours later the Fourth Circuit Court of Appeals in Richmond, Virginia, unanimously upheld the IRS rule in King v. Burwell. Combined, the cases contain five judicial opinions, three in the Halbig case and two in King. Four of the six judges voted to uphold the rule, two to strike it down.

The Controversy

The issue in the cases is this: The ACA authorizes the IRS to provide premium tax credits to individuals with household incomes between 100 and 400 percent of the federal poverty level who are not eligible for other minimum essential coverage (such as affordable and adequate employer coverage, Medicaid, or Medicare). Premium tax credits are, however, only available to individuals who purchase coverage through the exchanges.

The ACA requests that the states establish exchanges, and sixteen states and the District of Columbia have done so. The ACA also, however, authorizes the federal government to establish exchanges in states that fail to set up their own exchanges. The federal government has done so in 34 states and is operating the individual exchange for two more. The IRS regulation allows premium tax credits to be awarded to eligible individuals in both states with state-operated exchanges and states with federal exchanges.

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The Latest Health Wonk Review


July 21st, 2014

Over at Wing of Zock, Jennifer Salopek offers some fresh thoughts in her “Polar Vortex” Health Wonk Review. Jennifer highlights Health Affairs Blog posts on the Supreme Court’s Hobby Lobby decision by Tim Jost, John Kraemer, and Sara Rosenbaum and coauthors, as well as a slew of other great posts.

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Implementing Health Reform: Hobby Lobby Response, The ACA In The Territories, And More


July 18th, 2014

July 17, 2014 was a remarkably active day in an otherwise quiet week for Affordable Care Act implementation. First, the Departments of Labor, Treasury, and Health and Human Services issued their first response to the Supreme Court’s Hobby Lobby decision —a Frequently Asked Question (FAQ) guidance requiring ERISA plans to provide notice to their participants and beneficiaries if they do not intend to cover contraceptives. Second, the Department of Health and Human Services sent letters to the territories (the Virgin Islands, Northern Mariana Islands, Guam, American Samoa, and Puerto Rico) informing them that insurers that market individual insurance policies in the territories are no longer required to comply with the ACA’s insurance market reforms.

Third, HHS released an enrollment bulletin at its REGTAP website describing how insurers in the federally facilitated exchange should handle enrollment for 2015 for individuals whose coverage was terminated in 2014 for non-payment. This post describes these issuances, as well as the May Medicaid enrollment report released on July 11, 2014 by HHS

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ACO Results And Treating Hepatitis C Most-Read Health Affairs Blog Posts For June


July 15th, 2014

In June, Matthew Petersen and David Muhlestein’s post on the cost and quality implications of the accountable care organization (ACO) model on the health care system was the most-read Health Affairs Blog post. Not too far behind was a post on Medicare’s role in treating Hepatitis C from Tricia Neuman, Jack Hoadley, and Juliette Cubanski.

Next was Tim Jost’s examination of the employer mandate and why it should be repealed and replaced, followed by Jon Gabel’s response to a Health Affairs Web First on cancelled non-group plans.

Here’s the full list:

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Recent Health Policy Brief: E-Cigarettes And Federal Regulation


July 11th, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) describes federal policy makers’ recent efforts to propose rules for e-cigarette regulation. E-cigarettes, virtually non-existent ten years ago, have skyrocketed in popularity, including among people who claim to use e-cigarettes as a tool to help them quit smoking altogether.

The 2009 Family Smoking Prevention and Tobacco Control Act gave the Food and Drug Administration (FDA) authority to oversee the manufacture, marketing, distribution, and sale of regulated tobacco products such as cigarettes, tobacco in cigarettes, roll-your-own, and smokeless tobacco. But it left unregulated other tobacco products such as cigars, pipe and hookah tobacco, nicotine gels, and e-cigarettes.

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Implementing Health Reform: A Follow-Up Supreme Court Contraceptives Decision At Odds With Hobby Lobby


July 4th, 2014

On July 3, 2014, the Supreme Court decided its second contraceptive case of the 2013-2014 term, Wheaton College v. Burwell. The decision demonstrates why more Americans now believe that the justices are doing a poor job (27 percent) than believe they are doing an excellent or good job (26 percent combined), and why 76 percent of Americans believe that the justices decides cases based on their own personal and political opinions rather than legal analysis.

The Wheaton College decision seems to contradict directly the Hobby Lobby decision the Court had entered three days earlier. The Court offered virtually no justification for its change of position. Indeed, one wonders whether the men on the Court, in their haste to get out of town even bothered to read the scathing but well-reasoned dissent filed by Justice Sotomayor for the women of the Court, with which they did not engage.

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After Hobby Lobby: How Might Policymakers Mitigate The Decision’s Impact On Women And Families?


July 3rd, 2014

Editor’s note: In addition to Sara Rosenbaum, Adam Sonfield and Rachel Benson Gold also coauthored this post. 

On June 30, the U.S. Supreme Court handed down a ruling that has the potential to undermine an important provision of the Affordable Care Act (ACA) that establishes for women a federal guarantee of coverage for their full range of contraceptive methods, services, and counseling without any out-of-pocket costs. This guarantee is administered through private health plans, whether purchased in the individual market or made available through the insurers and plan administrators that provide group coverage.

The 5-4 ruling in Burrell v. Hobby Lobby Stores, written by Justice Samuel Alito on behalf of the Court’s conservative bloc, held that closely held for-profit corporations that assert a religious objection to some or all forms of contraception cannot be required to include such coverage in the health plans they sponsor for employees and their families. As emphasized by Justice Ruth Bader Ginsburg in her dissent (joined in whole by Justice Sotomayor and in part by Justices Kagan and Breyer), the Court’s decision could have serious and widespread consequences.

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The Supreme Court And The Contraception Mandate: A Temporary Setback For Contraception Coverage


June 30th, 2014

Editor’s note: See Health Affairs Blog for more coverage of the Supreme Court’s Hobby Lobby decision.

Today, the United States Supreme Court ruled that for-profit companies may avoid providing contraception coverage to employees if the companies sincerely object on religious grounds. At its narrowest interpretation, this decision is a significant but remediable setback for women’s reproductive health. At its broadest (but least likely interpretation), the decision has the potential to wreak havoc on public health regulation.

The legal challenges to the Affordable Care Act’s (ACA’s) contraception mandate have been well described in three previous Health Affairs Blog posts. To briefly recap, though, the ACA requires preventive services to be covered without copayments or other cost sharing in most employer-supported health plans. To implement this requirement, the Department of Health and Human Services (HHS) issued regulations that include all FDA-approved contraceptives, and a company that does not provide no-cost coverage of contraception is subject to substantial penalties.

Three groups of employers are exempt from the mandate: small businesses with less than 50 employees, purely religious employers, and “grandfathered” plans that have not changed meaningfully since the ACA was passed. Additionally, religiously affiliated non-profits (such as universities and hospitals) received a special accommodation from HHS by which women can receive contraception from third-party insurers at no extra cost to employees or the organization if the organization objects to covering contraception and identifies an alternate insurer.

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Implementing Health Reform: The Supreme Court Rules on Contraception Coverage (Updated)


June 30th, 2014

On June 40, 2014, the Supreme Court issued its opinion in Hobby Lobby v. Burwell and Conestoga Wood Products v. Burwell. The Court’s decision has very important ramifications for religious liberty in the United States, for women’s access to health care, for employers’ and employees’ rights, even for corporate law. Its importance justifies its being released on the final day of the term, an honor usually reserved for only the most notable cases. But unlike the Court’s decision in National Federation of Independent Business v. Sebelius on the last day of its term two years ago, Hobby Lobby does not pose a serious threat — indeed any threat at all — to the Affordable Care Act.

From the perspective of the ACA, the case involves only the application of one particular provision of a regulation to one particular group of employers. The Court’s decision does not invalidate any provision of the ACA. It does not even fully invalidate any regulatory requirement. It simply says that the Department of Health and Human Services must extend to one group of employers an accommodation HHS has already extended to another group.

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Implementing Health Reform: Exchange Eligibility Redeterminations; Small Employer Tax Credit


June 27th, 2014

While it seems like the 2014 open enrollment period just ended, the 2015 open enrollment period, which begins on November 15, is in fact only four and a half months away. On June 26, 2014, the Department of Health and Human Services released a proposed rule addressing eligibility redeterminations for 2015. Together with the proposed rule, HHS issued a guidance describing how the federally facilitated exchange intends to redetermine eligibility, as well as draft standard notices for health plans to use when discontinuing or renewing plans in the individual and small group market and instructions for completing those notices.

On the same date, the Internal Revenue Service released final rules governing the small employer tax credit program. This post will discuss these rules and guidances, as well as another court decision rejecting a challenge to the individual mandate and another spate of FAQs on the SHOP exchange program.

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New Health Policy Brief: Risk Corridors


June 26th, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) describes the Affordable Care Act’s premium stabilization programs that encourage insurers to participate in the exchanges by eliminating some unpredictability around newly insured enrollees.

The ACA created health insurance Marketplaces and premium subsidies to make insurance more affordable, and the ACA completely changed the way insurance is priced and sold in the individual market. As of 2014, insurers (both those participating in the exchanges and those selling on the individual market outside the exchange) face a number of new restrictions.

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Health Affairs Web First: Shifting Open Enrollment Could Increase Participation


June 25th, 2014

On November 15, state and federal health Marketplaces will open their portals and phone lines for the 2015 open enrollment season, which runs through next February 15. While the end of the year is traditionally “open season” for health insurance, a new study being released today as a Web First by Health Affairs, recommends shifting open enrollment to the period between February 15 and April 15.

The suggestion from authors John Graves, Harvard School of Public Health and Katherine Swartz, Vanderbilt University’s School of Medicine, is based on insights from psychology and behavioral economics, which indicate that people make better decisions when they are not stressed by financial worries — as they often are during the end-of-year holiday season.

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Implementing Health Reform: Employer Orientation Periods; Risk Corridor Payments


June 21st, 2014

It has long been apparent to those of us who follow Affordable Care Act regulatory activity that the implementing agencies have a penchant for releasing rules on Friday afternoons in the 4:15 Federal Register post. True to form, at 4:15 on June 20, the Departments of Labor, Treasury, and Health and Human Services released a final rule clarifying the effect of orientation periods on a provision of the ACA that prohibits employer-sponsored health plans from imposing a waiting period of more than 90 days before the beginning of coverage for full-time employees.

Section 2708 of the Public Health Services Act, enacted through the ACA, forbids group health plans and insurers that cover groups from imposing waiting periods on new enrollees that exceed 90 days. The provision, enforced by all three agencies, is incorporated by the ACA into ERISA and the Internal Revenue Code and thus applies to all employers; it does not apply to individual plans. The agencies had released a guidance on waiting periods in 2012 and and published a final rule in 2014 The penalty for violating this prohibition is $100 per employee per day of violation.

The earlier final rule clarified that a “waiting period” is the period that may elapse before an employer must cover an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan. To be otherwise eligible to enroll the employee must meet the plan’s substantive eligibility conditions (for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan’s terms, or being a full-time employee), but such requirements cannot be mere subterfuges for the passage of time. One such legitimate requirement specified in the final rule is completing a reasonable and bona fide employment-based orientation period.

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Thoughts On The VA Scandal And The Future


June 13th, 2014

For eight years, until May 2013, I directed the Department of Veterans Affairs (VA) medical research program from its Central Office and became familiar with the operations of the Veterans Health Administration (VHA). It was my only VA job and I felt honored to be part of the VA’s vital mission, as did most VA employees I met. Based on this experience, I have some ground level observations on the state of the VA and its future planning in light of the present scandal.

VA’s Scope and Assets

VA has three components: a large health system (VHA), a benefit center (Veterans Benefits Administration, or VBA), and the highly regarded National Cemetery Administration. All report to the VA Secretary but have different missions, issues, and management requisites. For example VHA was a pioneer in the Electronic Health Record (EHR), while VBA has had a more recent painful conversion to information technology (IT). VHA is run by the Undersecretary for Health, on whom VA Secretaries almost totally rely given their general lack of experience in health care.

VHA is divided into 21 networks and has 8.9 million enrollees (out of the 22 million U.S. veterans). It cares for 6.4 million veterans annually at over 1,700 sites of care, including 152 hospitals, about 820 clinics, 130 long-term care facilities, 300 Vet Centers for readjustment problems, and a suicide hotline, as well as homelessness and other programs. It has partly trained two-thirds of U.S physicians and made groundbreaking medical research contributions. These assets create strong constituencies for VA both within and outside the veterans’ community.

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Wynne, Jost Posts Lead Health Affairs Blog Most-Read List For May


June 10th, 2014

Billy Wynne’s post on the 340B Rx Drug Discount program was the most-read Health Affairs Blog post in May. The top-15 list also featured several contributions from Tim Jost; his posts on the final 2015 Exchange and Insurance Market Standards rule (part 1 and part 2) and COBRA/ACA interaction made the top five. Also in the top five was James Rickert’s look at patient satisfaction and perceptions of care.

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