Challenges to PPACA Constitutionality

The Department of Justice asked the Supreme Court to expand from 60 to 90 minutes the oral arguments on whether or not the Anti-Injunction Act (AIA) precludes the court’s consideration of other arguments, that the individual mandate and Medicaid expansions are unconstitutional, until 2014 when the individual mandate penalties kick in under the PPACA.  The court will hear at least five and one-half hours of oral argument between March 26 and March 28, including whether or not the mandate penalties constitute a “tax” for AIA purposes.  In the appeal from the Eleventh Circuit, the plaintiffs (26 states, the NFIB and individuals) filed their briefs arguing that the individual mandate is “unprecedented and unbounded” under the Commerce Clause and which question why Congress would wait 220 years to exercise such authority.  All of the above parties also said that any decision relating to the AIA should not delay the court’s decision on the constitutionality of the individual mandate and Medicaid expansions.  In addition, the American Center for Law and Justice, on behalf of 119 House Republicans, filed a brief arguing that the individual mandate is unconstitutional.
House Democrats Question

HHS Decision on Essential Benefits

The ranking members of the three House committees of jurisdiction over the PPACA wrote to HHS Secretary Kathleen Sebelius expressing their serious concerns over the delegation to states of the decision as to what constitutes “essential benefits” for individual and small group plans.  Republicans previously said that, by issuing a “bulletin” rather than a regulation, the bulletin was a misapplication of the law’s rulemaking requirements.

IRS Guidance on CO-OPs

The IRS issued proposed and temporary guidance to would be sponsors of Consumer Operated and Oriented Plans (CO-OPs) on the conditions for such organizations to be deemed tax-exempt.  The IRS said that qualified nonprofit health insurers must apply to the IRS for tax-exempt status with an effective date on either the date of formation or March 23, 2010 (the DOE of the PPACA).  Although the IRS will generally rely on the criteria set by CMS as to CO-OP requirements, a revenue ruling providing additional guidance will be issued later.

Tri-Agency Final Regulations on Benefit Disclosure

HHS/CMS, DOL/EBSA and Treasury/IRS issued a final rule defining the PPACA’s “standardized, easy-to-understand” summary description of plan benefits that health insurers must provide plan participants before they enroll.  The 8-page summary must provide information on plan deductibles, out-of-pocket expenses, covered services and providers, exclusions, etc.  A 4-page glossary of health coverage and medical terms explained in plain English must accompany the plan summary.  The rule applies even to large self-insured group health plans that are already subject to ERISA plan summary and disclosure rules.  The regulations go into effect this August.

House W&Ms Hearing on SGR

The House Ways and Means Health Subcommittee held hearings last week to explore avenues to reform the Medicare physician payment “sustainable growth rate” in an affordable way.  Chairman Wally Herger said that, if a long-term solution cannot be found, the program will go bankrupt.  Witnesses described several ways to improve quality through medical homes, data-driven performance programs, incentives to form physician groups and other payment models.

CMS Makes CED Coverage Decisions

CMS said it used its Medicare “coverage with evidence development” (CED) authority to conditionally cover transcatheter aortic valve replacement (TAVR), a new technology for treating aortic stenosis, provided the beneficiary is enrolled in a national registry that tracks health outcomes.  In like manner, CMS said it will allow Medicare coverage for extracorporeal photopheresis (ECP), a procedure in which a patient’s white blood cells are exposed first to a drug and then to ultraviolet light, if the beneficiary is in a clinical trial.  Permanent coverage will be determined after further evidence is obtained in the trials.

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