By Elizabeth Jepson and Allison Shelton, Brown & Fortunato, P.C.
In 2019, the health care industry will be watching a case from the U.S. District Court for the Northern District of Texas. In Texas v. United States, Judge Reed O’Connor ruled that the Affordable Care Act (ACA) is unconstitutional and invalid. Judge O’Connor’s decision was appealed on January 3, 2019. If upheld, the decision will significantly affect the regulatory and compliance landscape as we know it.
Most people are familiar with the ACA’s so-called “Individual Mandate” which requires individuals to have health insurance. If a person failed to have insurance, then the individual was required to pay a tax penalty under the ACA. On January 1, 2019, the tax penalty was eliminated pursuant to a tax bill that passed in December of 2017.
In 2012, the Supreme Court upheld the Individual Mandate under Congress’s taxing authority in the Constitution. However, because now the ACA no longer includes a tax penalty, Judge O’Connor determined that the Individual Mandate is unconstitutional. Further, Judge O’Connor found that the Individual Mandate is a “keystone” for and essential to the ACA. As a result, Judge O’Connor concluded that the Individual Mandate could not be severed from other provisions in the ACA and that the entire act was invalid.
The ACA is much more than the Individual Mandate and insurance exchanges. Other provisions in the ACA have enabled enhanced efforts from enforcement agencies that regulate the industry. For example, the ACA provides that claims arising from kickbacks are “false claims” under the False Claims Act. As a result, the Department of Justice and whistleblowers have utilized the False Claims Act to expose and take action against arrangements that violate the Anti-Kickback Statute. Additionally, when there is a “credible allegation of fraud” against a provider, Section 6402 of the ACA provides that Medicare and Medicaid payments may be suspended during an investigation of that provider.
To assist with monitoring the industry, the ACA established the Physician Payments Sunshine Act. This act requires group purchasing organizations and manufacturers of prescription drugs and devices that are covered by Medicare, Medicaid, or CHIP to annually report (1) payments and gifts provided to physicians and teaching hospitals and (2) investment interests held by physicians or a physician’s immediate family member. Such information is then made available to the public through the Centers for Medicare and Medicaid Services’ website.
Several provisions of the ACA have shaped providers’ compliance efforts since 2010. Section 6401 provides that, in order to enroll in Medicare or Medicaid, providers and suppliers must implement compliance programs. Other provisions in the ACA have influenced the content of such compliance programs. Section 6402(a) of the ACA requires a provider to report and return an overpayment to the applicable governmental agency or contractor “by the later of – (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.” Section 9007 of the ACA requires tax-exempt, nonprofit hospitals to conduct community health needs assessments every three years. Additionally, Section 9007 requires such hospitals to develop and implement financial assistance policies.
Section 1557 of the ACA prohibits discrimination in health care on the basis of race, color, national origin, sex, age, or disability. Pursuant to Section 1557, regulations were adopted that require providers to (1) make available qualified interpreters or video remote interpreting; (2) offer text telephones, interpretation services, auxiliary aids and services for persons with impaired sensory, manual, or speaking skills; and (3) adopt grievance policies. Further, the regulations require providers to post notices and taglines regarding the entity’s nondiscrimination policy, grievance process, free auxiliary aids and interpretation services. Such notices and taglines must be translated into the top 15 non-English languages spoken in the provider’s state.
Judge O’Connor’s ruling that the ACA is invalid does not have any immediate impact on the industry. On December 30, 2018, Judge O’Connor agreed to stay his ruling pending an appeal “because many everyday Americans would otherwise face great uncertainty.” Therefore, the ACA’s provisions are currently valid and subject to enforcement. Providers should nevertheless keep an eye on the case’s development, because if Judge O’Connor’s ruling is upheld on appeal, then the health care industry as we know it may be significantly altered.