Health Reform WK-EDGE Top five health law developments in 2018
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Monday, February 4, 2019

Top five health law developments in 2018

By Bryant Storm, J.D.

The five most impactful health care issues from 2018 included challenges to health reform, new privacy regulations, ongoing public health challenges, and Medicaid reforms.

Last year saw several new developments in health law as well as some familiar issues: the continuation of the battle over the future of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the advent of Medicaid work requirements, the implementation of the European Union’s (E.U.) General Data Protection Regulations (GDPR), the persistence of the opioid crisis, and the issuance of final rules designed to create moral and religious exemptions to the ACA’s contraceptive requirements. This Strategic Perspective discusses these five significant health law issues from 2018.

1. The Affordable Care Act Under Fire

Blaming the previous administration for the expansion of Medicaid coverage to able-bodied adults under §2001 of the ACA, the Trump Administration announced that, for the first time in the 53-year history of the Medicaid program, states would be allowed to impose work requirements on some beneficiaries. CMS is now committed to supporting state demonstration projects that would require eligible adult beneficiaries to engage in work or community engagement activities. The agency asked in its announcement that states tailor such requirements to adults who are eligible for Medicaid on a basis other than disability and in accordance with federal civil rights laws (see Trump’s CMS endorses Medicaid work requirements, January 11, 2018).

The White House doubled down on the new CMS policy in an Executive Order signed by President Trump on April 9, 2018. The order directs relevant federal agencies to improve employment outcomes and economic independence and eliminate policies or programs that are not succeeding (see Executive Order promotes work requirements for public assistant programs to reduce poverty, April 11, 2018).

Subsequently, a group of Kentucky Medicaid beneficiaries filed a class-action lawsuit in federal district court in Washington, D.C., challenging HHS’ and CMS’ decision to grant the state a Medicaid waiver including a work requirement. The complaint sought declaratory relief declaring CMS’ letter to state medical directors and subsequent approval of the Kentucky HEALTH waiver application a violation of the Administrative Procedures Act (APA) and the Take Care Clause of the U.S. Constitution. The class sought a permanent injunction enjoining CMS and Kentucky from implementing the work requirements purportedly authorized by the letter and the Kentucky HEALTH waiver application (see Class action says ‘radical’ Kentucky Medicaid work requirement is unlawful, January 25, 2018).

A federal judge agreed with the Medicaid beneficiaries and decided that HHS stepped too far. Although the HHS Secretary is afforded significant deference to approve state demonstration projects for Medicaid, he never adequately considered whether Kentucky’s decision to impose work requirements on some recipients would promote a central objective of Medicaid, helping the state furnish medical assistance to its citizens. Without that consideration, the Secretary’s decision was arbitrary and capricious, according to the U.S. District Court for the District of Columbia, which vacated the approval and remanded the matter to HHS. The decision provides a basis for individuals in other states to challenge work requirements and provides the Secretary with a blueprint for future approvals to possibly pass judicial muster (see Kentucky’s Medicaid work requirement is invalid, July 9, 2018).

2. Putting Medicaid Beneficiaries to Work

Blaming the previous administration for the expansion of Medicaid coverage to able-bodied adults under §2001 of the ACA, the Trump Administration announced that, for the first time in the 53-year history of the Medicaid program, states would be allowed to impose work requirements on some beneficiaries. CMS is now committed to supporting state demonstration projects that would require eligible adult beneficiaries to engage in work or community engagement activities. The agency asked in its announcement that states tailor such requirements to adults who are eligible for Medicaid on a basis other than disability and in accordance with federal civil rights laws (see Trump’s CMS endorses Medicaid work requirements, January 11, 2018).

The White House doubled down on the new CMS policy in an Executive Order signed by President Trump on April 9, 2018. The order directs relevant federal agencies to improve employment outcomes and economic independence and eliminate policies or programs that are not succeeding (see Executive Order promotes work requirements for public assistant programs to reduce poverty, April 11, 2018).

Subsequently, a group of Kentucky Medicaid beneficiaries filed a class-action lawsuit in federal district court in Washington, D.C., challenging HHS’ and CMS’ decision to grant the state a Medicaid waiver including a work requirement. The complaint sought declaratory relief declaring CMS’ letter to state medical directors and subsequent approval of the Kentucky HEALTH waiver application a violation of the Administrative Procedures Act (APA) and the Take Care Clause of the U.S. Constitution. The class sought a permanent injunction enjoining CMS and Kentucky from implementing the work requirements purportedly authorized by the letter and the Kentucky HEALTH waiver application (see Class action says ‘radical’ Kentucky Medicaid work requirement is unlawful, January 25, 2018).

A federal judge agreed with the Medicaid beneficiaries and decided that HHS stepped too far. Although the HHS Secretary is afforded significant deference to approve state demonstration projects for Medicaid, he never adequately considered whether Kentucky’s decision to impose work requirements on some recipients would promote a central objective of Medicaid, helping the state furnish medical assistance to its citizens. Without that consideration, the Secretary’s decision was arbitrary and capricious, according to the U.S. District Court for the District of Columbia, which vacated the approval and remanded the matter to HHS. The decision provides a basis for individuals in other states to challenge work requirements and provides the Secretary with a blueprint for future approvals to possibly pass judicial muster (see Kentucky’s Medicaid work requirement is invalid, July 9, 2018).

3. The GDPR

The international data privacy industry came to full attention this year over the new GDPR, which went into effect on May 25, 2018. GDPR grants citizens of the E.U. more control over their personal data and provides a uniform set of rules to which businesses must abide. Compliance with this law stretches far beyond the borders of the E.U., yet many companies are completely unaware of whether GDPR applies to them or how the law affects its business and the handling of personal data. The GDPR imposed new recordkeeping requirements, data protection rules, and includes an "extraterritorial reach." Thus, prudent U.S. health care organizations need to expand their data privacy knowledge beyond the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules to include the new E.U. regulations (see The clock is ticking…Does your organization need to worry about GDPR compliance?, February 23, 2018; Experts offer GDPR action plan, HIPAA privacy and security insights, and ransomware attack strategies, May 18, 2018).

4. The Ongoing Opioid Crisis

The opioid crisis continues to dominate headlines and impact providers and patients nationwide. While the causes are systemic, fingers were pointed this year at prescribers, drug manufacturers, illegal actors, and inadequate state action (see Opioids and the organization—‘a system-wide failure’, September 14, 2018; States fail to fully use telemedicine to fight public health crises, September 28, 2018).

Putting the blame aside, the federal government is taking steps to wind down the crisis. President Trump signed the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act) (H.R. 6) into law on October 24, 2018. SUPPORT, which is the latest legislative attempt to curb the opioid crisis, is a combination of several smaller pieces of opioid legislation that authorize grants to fund existing treatment programs and support demonstrations to test new solutions to the crisis. The Senate passed the bill in September (see Opioid legislation package passes Senate—but is it enough?, September 19, 2018; Trump signs wide-reaching opioid bill, October 24, 2018).

5. New Moral and Religious Exemptions to the ACA

In a carve-out of federal requirements under the ACA that essential health benefits must include coverage of contraception at no charge to consumers, the Trump Administration issued new regulations that would exempt nonprofit organizations, small businesses, and individuals with nonreligious moral convictions opposed to contraceptive services from offering employees health plans with those services. Another set of regulations finalizes, with technical and clarifying changes, an interim final rule expanding protections for sincerely held religious objections of certain entities and individuals. Notably, the final rule extends the exemption to publicly held for-profit entities. The rule also maintains a previously created accommodation process permitting entities with certain religious objections to voluntarily continue to object while covered persons receive contraceptive coverage or payments arranged by their health issuers or third party administrators (see Updated moral, religious exemptions permit some employers to deny ACA contraception coverage, November 15, 2018).

The U.S. Court of Appeals for the Ninth Circuit affirmed part of the preliminary injunction barring interim rules for the religious and moral exemption to contraceptives under the ACA in five states. However, the appeals court found that the district court improperly issued a nationwide injunction. The Ninth Circuit found that the federal district court in Oakland, California abused its discretion in granting a nationwide injunction. While the appeals court upheld the injunction barring enforcement of the interim rules in the plaintiff states—California, Delaware, Maryland, New York, and Virginia—the court vacated the portion of the injunction in other states (see Nationwide injunction barring religious exemption interim rules for contraceptives ruled improper, December 14, 2018).

Conclusion

As we move into the new year, many of these issues will remain focal points for 2019. For example, the fate of the ACA may be determined within the calendar year. Medicaid programs will continue to evolve, as courts wrestle with the legitimacy of work requirements. Hopefully, some additional progress will be made to limit the harm of the opioid crisis. Throughout it all, health care organizations will have to remain vigilant to stay abreast of new and changing regulations like the GDPR..

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