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Health Law and Policy Update: Appeals court strikes down challenge to health law

This week's updates


Headlines of the week

Appeals court strikes down challenge to health law
The U.S. Court of Appeals for the Fourth Circuit on Thursday struck down two cases attempting to have the Patient Protection and Affordable Care Act (PPACA) declared unconstitutional. In both cases, the court determined the plaintiffs lacked standing to sue and did not address the substantive arguments in the case. It is the fifth time a federal appeals court has ruled on the health reform law. Only the 11th Circuit has ruled the individual mandate portion of PPACA is unconstitutional. Other circuits have either upheld the law or determined the plaintiffs lacked standing.

In one of the cases decided Thursday, Commonwealth of Virginia ex rel. Cuccinelli v. Sebelius, the Fourth Circuit Court of Appeals found Virginia lacked standing to sue. Virginia argued the law's individual mandate conflicted with a recently enacted state statute, which seeks to prevent application of federal health insurance requirements to Virginia residents. The Fourth Circuit determined the state statute, while announcing "general opposition of Virginia's leadership to the individual mandate ... fails to create any sovereign interest in the judicial invalidation of that mandate." The court did not address the constitutionality of the individual mandate. The Fourth Circuit is known to take a hard look at the requirements for standing, and the decision had been predicted by some court watchers.

In the second case, Liberty Univ. v. Geithner, the majority of judges in the Fourth Circuit found Liberty University could not bring an action against enforcement of the individual mandate as it would violate the Federal Anti-Injunction Act. That law prohibits pre-enforcement challenges to the assessment or collection of "taxes" (broadly defined) imposed by the Internal Revenue Code. In a concurring opinion, Judge James Wynn agreed with the ruling regarding the Anti-Injunction Act but added that, had he considered the underlying substantive question, he would have concluded PPACA is constitutional based on Congress' broad power to tax. In a dissenting opinion, Judge Andre Davis said the Anti-Injunction Act does not strip jurisdiction from the court, but went further to say that had the court considered the constitutionality of the statute, he would have found PPACA constitutional under Congress's Commerce Clause power.

The National Health Law Program maintains a website for tracking PPACA litigation.

Attorney general to hold public hearings on HealthONE hospital transaction
Colorado Attorney General John Suthers has scheduled public hearings to review the proposed acquisition by affiliates of HCA Holdings, Inc. (HCA) of the Colorado Health Foundation's interest in HCA-HealthONE LLC. Since 1995, Nashville-based HCA and the Colorado Health Foundation have jointly owned the LLC, one of Colorado's largest health care systems. Under a deal announced in June, HCA would buy the foundation's share for $1.45 billion.

The Colorado Center on Law and Policy had called for hearings in a June 30 letter to the attorney general. The Office of the Attorney General announced the hearings Thursday, finding the transaction does not fall under the Colorado Hospital Transfer Act but does warrant review under the attorney general's common-law authority over charitable organizations. The grounds for those conclusions are detailed in a letter from the Office of the Attorney General to attorneys for the Colorado Health Foundation. The letter concludes the foundation may retain the proceeds of the transaction and announces a financial firm has been retained to evaluate the sale price. It makes clear the common law review will be conducted using criteria adapted from the Hospital Transfer Act.

The public hearings are scheduled for Sept. 26 and 27. Anyone may attend. Details are in a news release.

The deal calls for hospitals in the HCA-HealthONE system to maintain participation in Medicare and Medicaid for at least 10 years, and to continue to host large medical graduate residency programs for at least five years, according to a Thursday report in The Denver Post.

CCLP receives funding from the Colorado Health Foundation.

Colorado to launch Medicaid expansion in March 2012
The Colorado Department of Health Care Policy and Finance announced this week that it would extend Medicaid coverage to 10,000 adults without dependent children who have income up to 10 percent of the federal poverty level (FPL) beginning in March 2012.

The expansion of Medicaid, which was initiated by 2009's House Bill 1293, was originally intended to provide coverage to adults with incomes of less than 100 percent of FPL. However, updated projections showed the population of uninsured adults without dependent children at that income level is much higher than previously thought, and that due to their health needs the program would cost significantly more than anticipated, necessitating a scale back in the number of new Medicaid enrollees.

"This is a group of very needy people who have not had access to adequate medical care. We wish it were possible to cover more people now, but understand why we cannot," Colorado Center on Law and Policy Health Care Program Director Elisabeth Arenales told The Denver Post.

Due to the complex chronic conditions and behavioral health issues facing many adults whose incomes are less than 10 percent of FPL, the state officials decided to offer a full Medicaid benefits package to a smaller number of people as opposed to offering reduced benefits to a larger group.

Analysis on Colorado's population of adults without dependent children is available from the Colorado Health Institute.

Enrollment will be on a first-come, first-served basis, with applicants who do not make the initial cut being placed on a waiting list. All adults without dependent children whose incomes are up to 133 percent of FPL will still be enrolled in Medicaid in 2014 with the implementation of national health reform.

Electronic verification eases paperwork burden for Medicaid and CHP+ recipients
Applicants for Medicaid and Child Health Plan Plus (CHP+) should have less paperwork to deal with under electronic verification processes the Colorado Department of Health Care Policy and Financing announced Aug. 29. Among the new policies:

  • Applicants may self-report employment income, eliminating the need to present paper paystubs. State workers verify the information using data from the Colorado Department of Labor and Employment.
  • Applicants no longer need to prove identity or citizenship with documents such as a birth certificate. State workers are now able to verify that information using data from the Social Security Administration.
  • No renewal paperwork is necessary for Medicaid recipients who've had no change in income or household size. Reenrollment will be automatic.

The department's new agency letter provides additional detail of the new policies.

New rule requires hospitals to permit patients to designate visitors, including same-sex partners
Hospitals must permit patients to choose who may visit them during an inpatient stay without restrictions on the type of visitors, including same-sex partners, according to a rule the Department of Health and Human Services announced Wednesday. The rules apply to hospitals participating in the Medicare and Medicaid programs, including patients who do not use those programs.

"Couples take a vow to be with each other in sickness and in health and it is unacceptable that, in the past, some same-sex partners were denied the right to visit their loved ones in times of need," Health and Human Services Secretary Kathleen Sebelius said in a news release. "We are releasing guidance for enforcing new rules that give all patients, including those with same-sex partners, the right to choose who can visit them in the hospital as well as enhancing existing guidance regarding the right to choose who will help make medical decisions on their behalf."

What's new

CCLP seeks health policy attorney
The Colorado Center on Law and Policy seeks a health policy attorney to work with its Health Care Program. Details are in a job announcement posted Wednesday. Initial review of applications will begin Sept. 23. Application instructions are in the job announcement. No phone calls, please.

Boomers Leading Change upcoming volunteer orientation
The advocacy group Boomers Leading Change is calling on baby boomers who want to become involved in health care access issues to attend an orientation session set for 1 p.m. Sept. 17. The session will be followed by a presentation on the impact of poverty on health care access by Tracey Stewart, program manager of the Colorado Center on Law and Policy's Family Economic Security Program. Details are on an event flier.

What you can do

Schedule a presentation on health reform
The experts on our health team are ready to help community associations and other groups sort out the complexities of health reform. A key issue now is creating the Colorado Health Benefit Exchange, and structuring it in a way that benefits consumers and small businesses. To schedule a presentation, contact Health Care Program Director Elisabeth Arenales.

Health Law and Policy Update is issued weekly by the health staff of the Colorado Center on Law and Policy. Subscribe by e-mail or read previous editions.

Health Care Director
Elisabeth Arenales  

Health Care Attorney
Adela Flores-Brennan  

Special Counsel
Ed Kahn

Rice Fellow
Danny Rheiner

Communications Director
Perry Swanson

Released Sept.9 , 2011