Supreme Court term has mixed re­sults for health­care in­dus­try

Modern Healthcare - - NEWS - By Lisa Schencker

Last year, health­care lead­ers had their eyes trained on one big case— King v. Bur­well— and they cel­e­brated when the Supreme Court up­held a key pro­vi­sion of the Af­ford­able Care Act.

The court’s term that ended late last month wasn’t nearly so straight­for­ward for the in­dus­try. At least half a dozen no­table cases left some peo­ple cheer­ing and oth­ers wring­ing their hands. And the midterm death of Jus­tice An­tonin Scalia ap­pears to have af­fected some of the out­comes.

Abor­tion and con­tra­cep­tion

One of the most talked-about cases, Whole Woman’s Health v. Heller­st­edt, was over a Texas abor­tion law that the plain­tiffs said lim­ited women’s ac­cess to abor­tion. The jus­tices voted 5-3 to strike pro­vi­sions re­quir­ing doc­tors per­form­ing abor­tions to have ad­mit­ting priv­i­leges at lo­cal hos­pi­tals and re­quir­ing clin­ics to meet the same stan­dards as am­bu­la­tory sur­gi­cal cen­ters.

That de­ci­sion could lead to lit­i­ga­tion over sim­i­lar laws in dozens of other states. Many de­clared the de­ci­sion the court’s most sig­nif­i­cant one on abor­tion in decades.

Tim Jost, a pro­fes­sor who fo­cuses on health law at Wash­ing­ton and Lee Univer­sity in Vir­ginia, won­dered whether the de­ci­sion might have gone the other way had Scalia lived. Scalia very likely would have sided with Texas and might have per­suaded Jus­tice An­thony Kennedy to join him, Jost said. “He was pretty per­sua­sive.”

An­other case that grabbed the pub­lic’s in­ter­est was Zu­bik v. Bur­well, a case over how re­li­gious not-for-prof­its must re­spond to the ACA’s re­quire­ment that em­ploy­ers of­fer work­ers birth con­trol cov­er­age. An Obama ad­min­is­tra­tion work­around re­quires re­li­gious not-for-prof­its that want to opt out of con­tra­cep­tion cov­er­age to no­tify their third-party ad­min­is­tra­tors or pro­vide in­for­ma­tion to HHS so the gov­ern­ment can ar­range for other cov­er­age—which the not-for-prof­its ar­gued vi­o­lates their re­li­gious be­liefs by mak­ing them com­plicit.

The jus­tices punted the mat­ter to lower courts to reach com­pro­mise de­ci­sions.

Data ac­cess

The abor­tion and con­tra­cep­tion cases were strik­ing but per­haps not as rel­e­vant to health­care busi­ness as an­other de­cided this term, Gobeille v. Lib­erty Mu­tual In­sur­ance Co. The jus­tices’ 6-2 de­ci­sion in that case was a win for in­sur­ers and a loss for states try­ing to re­form health­care.

The court de­cided that the fed­eral Em­ployee Re­tire­ment In­come Se­cu­rity Act, known as ERISA, pro­tects self-funded in­sur­ers and their third­party ad­min­is­tra­tors from hav­ing to share cer­tain data with states. Ver­mont ar­gued it needed the data— such as on claims and mem­ber el­i­gi­bil­ity—for an all-payer data­base de­vised to im­prove the cost and ef­fec­tive­ness of health­care. But in­surer Lib­erty Mu­tual said it didn’t have to share that data un­der ERISA.

Busi­ness and in­sur­ance in­dus­try advocates praised the de­ci­sion, say­ing it would keep in­sur­ers from get­ting tan­gled in con­flict­ing patch­works of state laws and re­quire­ments.

False Claims Act

The Supreme Court of­ten takes one False Claims Act case per term, said Larry Freedman, a mem­ber at Mintz Levin Cohn Fer­ris Glovsky and Popeo. This term, that case was Uni­ver­sal Health Ser­vices v. United States ex rel Es­co­bar.

Providers watched the case closely be­cause it had the po­ten­tial to al­low more or fewer False Claims Act suits against them.

The jus­tices chose a mid­dle path. They unan­i­mously up­held a le­gal the­ory known as im­plied cer­ti­fi­ca­tion that makes providers li­able for sub­mit­ting false claims to gov­ern­ment pro­grams if they fail to fol­low cer­tain reg­u­la­tions— even if the gov­ern­ment never ex­plic­itly stated that fol­low­ing the reg­u­la­tions was a con­di­tion of payment and even if the provider never ex­plic­itly vouched that it had com­plied with the reg­u­la­tions.

But the high court also tried to limit when the the­ory can be in­voked. Un­der the rul­ing, an or­ga­ni­za­tion’s lack of com­pli­ance would have to ren­der its rep­re­sen­ta­tions about its goods or ser­vices mis­lead­ing.

The high court’s term left some in the in­dus­try cheer­ing, oth­ers wring­ing their hands.


Scalia’s ab­sence also made a big dif­fer­ence in Friedrichs v. Cal­i­for­nia Teach­ers As­so­ci­a­tion. The court dead­locked 4-4 on whether pub­lic em­ployee unions can con­tinue to charge dues to non­mem­bers who ben­e­fit from their col­lec­tive bar­gain­ing ac­tiv­i­ties. The tie vote au­to­mat­i­cally af­firmed a lower court’s rul­ing that they can.

Though the case in­volved teach­ers’ unions, it will af­fect unions at pub­lic hos­pi­tals as well. About one-fifth of U.S. hos­pi­tals are owned by fed­eral, state or lo­cal gov­ern­ments.

Jost said the case “may be one of the most im­por­tant for health­care in the long run” be­cause many of those fa­cil­i­ties are union­ized.

“Scalia’s ab­sence there made a huge dif­fer­ence be­tween mak­ing a dra­matic change in the law and leav­ing the law the way it is.”

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