backU.S. Supreme Court Upholds Affordable Care Act—On June 17, 2021, in California v. Texas, the Supreme Court rejected a challenge to the Patient Protection and Affordable Care Act (ACA) for the third time in nine years. Texas, 17 other states, and two individuals brought this challenge to the ACA following the enactment of the Tax Cuts and Jobs Act of 2017, which effectively nullified the ACA’s monetary penalty for failing to obtain minimum essential health coverage by setting the penalty to $0. The challengers to the ACA contended that absent the monetary penalty, the ACA’s minimum coverage provision, commonly referred to as the “individual mandate,” was unconstitutional, and the rest of the ACA must fall as well. The Supreme Court, in a 7-2 opinion by Justice Stephen Breyer, ruled that neither the states nor the individuals had standing to sue regarding the ACA’s individual mandate, since they were not harmed by that provision. Consequently, the Court did not reach the question of the ACA’s constitutionality.
In 2012, in National Federation of Independent Business v. Sebelius (NFIB), the Supreme Court held in a 5-4 decision that the ACA’s minimum coverage provision was justified as an exercise of Congress’ taxing power. (This provision is commonly known as the “individual mandate.” In NFIB; however, the Court held that the provision does not impose a legal requirement to purchase health insurance.) Five years later, though, Congress effectively eliminated this provision by setting the tax penalty for failing to obtain minimum essential health coverage to $0. This change led to the most recent constitutional challenge to the ACA by Texas, 17 other states, and two individuals. They argued that the provision could no longer be justified as a tax because it no longer raised revenue for the government, and that the provision must therefore instead create a legal requirement to buy insurance, which Congress lacked the authority to do under its commerce power. They further argued that the remainder of the ACA was not severable from the minimum coverage provision, and that the Act must be invalidated in its entirety. The Trump administration did not defend the mandate. It initially also argued that at least some of the ACA’s other provisions were not severable from the so-called individual mandate. The Trump administration later changed positions to argue that the entire Act was invalid. Accordingly, the U.S. House of Representatives and several states, led by California, intervened to defend the law.
A federal district court in Texas agreed with the challengers that the ACA’s individual mandate was unconstitutional once the monetary penalty was $0 and that the rest of the ACA must also fall. On appeal, the U.S. Court of Appeals for the Fifth Circuit agreed with the district court’s analysis of the individual mandate but remanded the case to the district court for further consideration of whether the rest of the ACA must fall as well. The Supreme Court granted certiorari.
In a 7-2 opinion by Justice Stephen Breyer, the Supreme Court held that none of the plaintiffs had legal standing to pursue the lawsuit as to the constitutionality of the ACA’s minimum coverage provision, as none of them had shown a link between the unenforceable individual mandate and the harms that they alleged. Justices Alito and Gorsuch dissented; they would have held that at least the state plaintiffs had standing, that the mandate was unconstitutional, and would have invalidated additional, but unspecified, provisions of the ACA.
California v. Texas will almost certainly not be the end of litigation related to the ACA. Other challenges to discrete provisions of the statute remain pending in the lower courts. This case may represent the last broad constitutional challenge to the ACA in its entirety, however. Only time will tell.
The Supreme Court’s slip opinion in California v. Texas is available here.
Reporter, Christopher C. Jew, Los Angeles, + 1 213 443 4336, cjew@kslaw.com.
PRRB Updates Rules and Mandates Electronic Filing Effective November 1, 2021—On June 16, 2021, the Provider Reimbursement Review Board (PRRB) issued proposed changes to its rules and an order requiring all submissions for new and/or pending appeals to be filed electronically using the Office of Hearings Case and Document Management System (OH CDMS) beginning November 1, 2021. The Board will no longer accept documents submitted by paper barring exceptional circumstances. Stakeholders have until July 30, 2021 to comment on the proposed changes.
OH CDMS is an online portal that providers and their counsel can use to make electronic submissions to the PRRB—from initiating appeals to filing position papers. Use of OH CDMS has been strictly optional since it went live in August 2018. The PRRB has continued to accept paper filings.
In the IPPS rule for FY 2021, CMS observed that OH CDMS has over 800 registered users, and over 75 percent of appeals have been filed electronically since it launched. On that basis, CMS amended its regulations to authorize the PRRB to mandate electronic filing as early as FY 2021, provided that stakeholders were given 120-days’ notice of the transition, and the PRRB updated its instructions to reflect the mandate. Acting on that authority, the PRRB ordered last week that “all submissions to the Board for new or pending appeals (e.g., appeal requests, correspondence, position papers) must be filed electronically” using OH CDMS starting on November 1, 2021, “unless the Board grants an exception.”
The PRRB has also proposed to update its rules to implement the transition to mandatory electronic filing. The proposed rules describe two narrow circumstances in which the PRRB will accept filings not made via OH CDMS. First, the PRRB will entertain exceptions if a disability would prevent or materially hinder electronic filing, provided that the party seeking the exception contacts the PRRB ten days in advance of the deadline. Second, a party can request an exception due to extraordinary circumstances. The request can be submitted in paper, and “[e]xcept for cases of impossibility,” must be filed within ten days of the deadline.
The PRRB’s proposed rules also address situations in which parties who miss filing deadlines due to technical difficulties with OH CDMS can request an extension. For PRRB-set deadlines (not appeals), the proposed rules state that the PRRB will entertain requests for extensions if the requests are submitted electronically within 24 hours after the technical difficulties are resolved. The request must describe the technical issue, specify when it was identified, the party’s efforts to resolve the issue, and include the OH CDMS Help Desk ticket number and the communication from the Help Desk indicating that the issue has been resolved. The request must also confirm whether there are any other registered users in the party’s organization and if so, why those users could not make the filing. For appeal deadlines, the proposed rules specify that the PRRB will only grant extensions (due to technical difficulties with OH CDMS or otherwise) if the provider was prevented from filing a timely appeal due to “extraordinary circumstances beyond its control.”
The updated rules also contain new instructions for filing schedules of providers for group appeals. If a group is fully formed, and all its participants are populated in OH CDMS, the representative will not be required to submit a paper schedule of providers. Alternatively, if any participants in a fully formed group are not populated on OH CDMS, the representative will have to submit a paper schedule of providers for all participants in the group within sixty days of informing the PRRB that the group is complete. Additionally, representatives will be required to submit a full schedule of providers if requesting expedited judicial review for a fully formed group if any of the participants are not populated in OH CDMS.
A copy of the PRRB’s order and proposed changes to its rules is available here.
Reporter, Alek Pivec, Washington D.C., +1 202 626 2914, apivec@kslaw.com.
Monthly Editors:
David Tassa and Jonathan Shin