By WK Editorial Staff
This Strategic Perspective details the top developments for December 2019.
In the last month of 2019, the Firth Circuit ruled that the individual mandate is unconstitutional and remanded the suit for further study on whether the mandate is severable from the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), and the Northern District of California held invalid the HHS rule allowing those with religious objections to refuse to provide abortions and other medical services. The FDA also eliminated the need for paper medical device premarket submissions. Check out these and other important developments from December 2019.
In an effort to ensure that taxpayer dollars are going only to eligible enrollees and services, CMS announced in an advance release that its stepping up oversight of state-based exchanges and implementing new requirements for coverage of certain abortion services. The final rule enhances program reporting requirements to ensure that states are correctly identifying eligible enrollees, including those who are qualified for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs). The rule also modifies the requirements for invoicing and collecting payments for coverage of certain abortion services to be more in line with the original intent of the ACA (Final rule, 84 FR 71674, December 27, 2019).
As part of its ongoing efforts to update and replace outdated regulations, the FDA has issued a new final rule eliminating the need for paper and multiple copies in medical device premarket submissions. According to the FDA, the final rule should improve the efficiency of the review process by allowing immediate availability of an electronic version for review, rather than relying solely on the paper version. Further, the rule will benefit the public by limiting any burdens and expenses to submitters caused by requiring additional copies (Final rule, 84 FR 68334, December 16, 2019).
The Fifth Circuit, in a 2-1 opinion, has upheld the Texas federal district court’s ruling that the individual mandate in the ACA was unconstitutional. The Fifth Circuit also, however, remanded the case to the district court for a more detailed analysis of whether the individual mandate was severable from the ACA without declaring the entire law invalid (State of Texas v. U.S., December 18, 2019, Elrod, J.).
Named plaintiffs in a class action suit against medical records provider Ciox Health, LLC (Ciox) for allegedly overcharging for its services were unable to prove all elements of their common-law claims, and Tennessee law’s fee limits do not apply to providers of medical records to patients, the U.S. Court of Appeals for the Sixth Circuit has determined. The named plaintiffs attempted to evade the fact that HIPAA does not provide for private rights of action by couching HIPAA-based claims as common-law claims of negligence, breach of implied contract, and unjust enrichment, but the claims failed because "Tennessee common law is no substitute for the private right of action that Congress refused to create in HIPAA." Although the court affirmed the district court’s grant of summary judgment to Ciox, the decision was binding only as to the named plaintiffs and not the class (Faber v. Ciox Health, LLC, December 5, 2019, Nalbandian, J.).
According to the Sixth Circuit, CMS incorrectly interpreted the phrase "primary specialty designation" to impose additional limitations beyond those in the provision of the ACA that it was intended to enact. The appellate court held that a statute’s terms are not ambiguous simply because the statute itself does not define them. The Sixth Circuit affirmed the lower court decision finding that the Medicaid Final Payment Rule was inconsistent with the applicable provision of the ACA and was therefore invalid (Averett v. HHS, November 25, 2019, Kethledge, R.).
On December 10, 2019, the U.S. Court of Appeals for the District of Columbia rejected a First Amendment challenge by vaping companies, including Nicopure Labs, LLC (Nicopure), of the 2016 "Deeming Rule," which subjected e-cigarettes to FDA review under the federal Family Smoking Prevention and Tobacco Control Act (TCA) (P.L. 111-31). According to the court, the First Amendment does not bar the FDA from preventing e-cigarette manufacturers from marketing them as "safer" than existing products until the manufacturers can show that they are actually safer. The circuit court judges unanimously agreed with the FDA’s argument that the public health standard for e-cigarette pre-marketing approval "entirely rational and nonarbitrary." The appellate court found that the Deeming Rule is constitutional, and that "FDA is not authorized to deviate from this statutory standard." The appeals court reiterated the District Court’s finding that any e-cigarette that contains nicotine is subject to federal regulation (Nicopure Labs, LLC v. FDA, December 10, 2019, Pillard, C.).
The Massachusetts district court denied a motion to reconsider a proposed class in connection with a lawsuit brought by an assignee of a Medicare Advantage (MA) plan under the Medicare Second Payer Act (MSPA), reiterating an earlier decision that the proposed class is untimely and fail-safe. The court noted that new software to screen settlements between insurers and plans would not address concerns regarding individualized and fact specific inquiries needed to identify members of the class (MSP Recovery Claims v. Plymouth Rock Assurance Corporation, Inc., December 12, 2019, Burroughs, A).
An HHS rule allowing those with religious objections to refuse to provide abortions and other medical services, such as those provided to transgender persons, was invalidated in its entirety as "saturated with error" because it improperly upset the balance Congress sought to establish in its conscientious objector laws between protecting conscientious objections and effective delivery of healthcare, a California federal district court has ruled. The rule’s definitions "make the mischief," the court said, by improperly expanding (1) "assist in the performance," which originally meant only those directly involved in the medical procedure, to include ambulance drivers, scheduling clerks, those who set up the surgical room, and those who provide post-operative care, (2) "health care entity," which originally meant entities that provided the service, to include pharmacies, medical labs, biomedical researchers, health insurers, and third-party administrators, and (3) "referral," which originally meant medical referrals for the actual abortions, to include referrals of any type, such as telling a patient where the surgery was to be performed. In addition, the court added, nothing in the original statutes conferred on HHS any explicit or implicit rulemaking authority, thus rendering the rule completely invalid (City and County of San Francisco v. Azar, November 19, 2019, Alsup. W.).
After analyzing several statutes, including the ACA, the court sided with Washington State, granting summary judgment setting aside the HHS final rule (State of Washington v. Azar II, November 21, 2019, Bastian, S).
A case that has billions of dollars on the line for certain health insurers was argued before the Supreme Court on Tuesday, December 10, 2019. According to the insurers, payments by the government are overdue and are required as part of the ACA "risk corridor" provision that allows health insurers to recoup losses in the first three years of health law marketplaces. The case before the court, Maine Community Health Options v. U.S., was consolidated with two other cases, Moda Health Plan, Inc. v. United States and Land of Lincoln Mutual Health Insurance Company. The original petition for writ of certiorari was filed February 4, 2019.
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