ACA sur­vives an­other close call in the Supreme Court

Modern Healthcare - - NEWS - By Lisa Schencker

2015 will be re­mem­bered as the year the U.S. Supreme Court nar­rowly saved the Af­ford­able Care Act for the sec­ond time. But there were other court rul­ings that also will have a lin­ger­ing im­pact on health­care.

In their June opin­ion in Kingv. Bur­well, Chief Jus­tice John Roberts and five other jus­tices up­held the le­gal­ity of the law’s in­sur­ance pre­mium sub­si­dies in all states, avert­ing an in­sur­ance mar­ket melt­down.

But health­care providers were far less pleased with the Supreme Court’s 5-4 rul­ing in Arm­strong v. Ex­cep­tional Child Cen­ter Inc., in which the court held that providers can­not sue state Med­i­caid agen­cies over low pay­ment rates. Now it’s up to the fed­eral gov­ern­ment to make sure the states are pay­ing providers enough to en­sure ad­e­quate pa­tient ac­cess to care, said Ni­cholas Ba­gley, a Univer­sity of Michi­gan law pro­fes­sor.

In a third sig­nif­i­cant health­care rul­ing, the Supreme Court ruled in Fe­bru­ary in North Carolina Board of Den­tal Ex­am­in­ers v. Fed­eral Trade Com­mis­sion that state li­cens­ing boards com­posed of ac­tive mem­bers of the pro­fes­sions they reg­u­late, such as prac­tic­ing doc­tors and den­tists, are not im­mune from an­titrust law un­less they are ac­tively su­per­vised by their states. That may prompt state boards to shake up their mem­ber­ships, or spur states to tighten their over­sight of li­cens­ing boards.

In a ma­jor an­titrust rul­ing, the 9th U.S. Cir­cuit Court of Ap­peals up­held a lower court rul­ing or­der­ing St. Luke’s Health Sys­tem in Idaho to un­wind its ac­qui­si­tion of a large physi­cian prac­tice. That sent a warn­ing shot to providers about the an­titrust risks of merg­ers in the name of im­prov­ing care and ef­fi­ciency. The ap­peals panel said that promis­ing bet­ter pa­tient out­comes wasn’t enough to side­step an­titrust con­cerns.

“It seemed to set a pretty high bar­rier for merg­ing par­ties to de­fend a merger on ef­fi­cien­cies,” said Robert Leiben­luft, a part­ner at Ho­gan Lovells and for­mer head of the health­care di­vi­sion in the FTC’s Bureau of Com­pe­ti­tion.

In July, a dif­fer­ent fed­eral ap­pel­late court up­held a $237 mil­lion False Claims Act ver­dict against Tuomey Health­care Sys­tem in Sumter, S.C., based on al­le­ga­tions that Tuomey paid doc­tors above fair mar­ket value and re­warded them for re­fer­ring pa­tients to the hos­pi­tal, in vi­o­la­tion of the Stark law.

Tuomey ended up set­tling for $72.4 mil­lion. It was one of a string of large hos­pi­tal set­tle­ments this year in Stark/False Claims Act cases in­volv­ing physi­cian com­pen­sa­tion ar­range­ments. The Tuomey case “has had a chilling ef­fect through­out the in­dus­try, caus­ing com­pli­ance of­fi­cers and the lawyers who ad­vise them to de­mand much more ver­i­fi­ca­tion of fair-mar­ket value,” said Peter Pavarini, co-leader of Squire Pat­ton Boggs’ health­care prac­tice group.

At year-end, le­gal ob­servers were closely watch­ing an­other ACA chal­lenge that could reach the Supreme Court. In Septem­ber, a fed­eral dis­trict judge in Wash­ing­ton granted le­gal stand­ing to House Repub­li­cans in a case seek­ing to block fed­eral fund­ing to re­duce cost-shar­ing for low-in­come ex­change-plan mem­bers. The judge is now con­sid­er­ing that case, House of Rep­re­sen­ta­tives v. Bur­well, on the mer­its. Ex­perts say it could be a close case with a sig­nif­i­cant im­pact on the ACA.


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