Affordable Care Act Litigation—2012 Year in Review

On June 28, 2012, in the decision National Federation of Independent Business, et al v. Sebelius, the U.S. Supreme Court ruled that the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA) was constitutional. Accordingly, the individual mandate for nearly all Americans to secure health insurance is permissible under Congress’s taxing authority. The individual mandate imposed a penalty on individuals for refusing to buy health insurance; this amount is basically a tax, and as such is permitted. Because this mandate is Constitutional, additional parts of PPACA remained valid. However, the federal government cannot withdraw existing Medicaid funding from states that decide not to participate in a broad expansion of Medicaid eligibility.

In the wake of the Court’s decision, the implementation of the ACA continued at the federal level, and in some of the states. The legal wrangling over the law continued, with litigation focusing on the requirement that most employers provide health insurance coverage that includes various family planning benefits, and on the requirement that most Americans purchase health insurance. Below is a summary of the most significant cases.

Hobby Lobby Stores Inc. v. Sebelius, 10th Cir., December 20, 2012. A for-profit retail chain of crafting stores, along with its affiliated bookstore and owners, was not granted a preliminary injunction under the Religious Freedom Restoration Act (RFRA) (42 U.S.C. sec. 2000bb-1) against the enforcement of the preventative care coverage regulation requirement of the Affordable Care Act (45 C.F.R. sec. 147.130). The chain, its bookstore and owners did not show that they were likely to succeed on the merits of their First Amendment claims because they are secular, for-profit corporations and do not have free exercise rights, nor did they show they were likely to succeed on their RFRA claims because Hobby Lobby is not a “person” and did not show it would be substantially burdened by complying with the regulation. On December 26, 2012, the U.S. Supreme Court rejected a request from Hobby Lobby for an emergency injunction to block implementation of this regulation.

Tyndale House Publishers Inc. v. Sebelius, D.D.C., November 16, 2012. A for-profit Christian publisher was granted a preliminary injunction under the Religious Freedom Restoration Act (RFRA) (42 U.S.C. sec. 2000bb-1) against the enforcement of the contraceptive coverage requirement of the Affordable Care Act. The statute imposed a substantial burden on the exercise of religion by the publisher’s owners because the publisher was subject to lawsuits and substantial penalties if its insurance coverage for employees did not meet the requirements of the statute. The government did not show that applying the requirement to the publisher would serve a compelling interest. The protection of women’s health and the promotion of equality between men and women were not sufficiently compelling because: (1) the publisher only sought to exclude three specific birth control methods; and (2) so many workers were not covered by the law that the government did not treat its interests as compelling.

American Physicians & Surgeons, Inc. v. Sebelius, D.D.C., October 31, 2012. Every count was dismissed in a challenge by two associations questioning the validity of: (1) three provisions of the Social Security Administration’s (SSA) Program Operations Manual System; (2) CMS manuals and an interim final rule requiring physicians who do not participate in Medicare to complete forms for the National Provider Identifier and the Provider Enrollment, Chain and Ownership System (PECOS); and (3) the employer and individual mandates of the Affordable Care Act. The associations also alleged that breach of fiduciary duty by the HHS Secretary and the Commissioner of SSA resulted in the insolvency of the Social Security system. The court found that the Association of American Physicians & Surgeons and the Association for Natural Health-USA did not have standing to assert most of their claims, and the counts of the complaint for which they had standing did not state a claim on which relief could be granted.

Roman Catholic Archdiocese of New York, et al v. Sebelius, E.D. N.Y., December 4, 2012. A New York district court determined that the Roman Catholic Archdiocese of New York (Archdiocese) successfully claimed that it would sustain “certainly impending” future injuries when the contraception-related provisions of the ACA go into effect on January 1, 2014. The court rejected HHS Secretary Kathleen Sebelius’ argument that that an Advanced Notice of Proposed Rulemaking (ANPRM) that purported to exempt organizations like the Archdiocese from the requirement to offer contraceptive coverage through health insurance plans was sufficiently final to make the Archdiocese’s claims premature. The court denied Sebelius’ motion to dismiss with respect to the Archdiocese and two other Roman Catholic entities.

Zubik v. Sebelius, W.D. Pa., November 27, 2012. Claims brought by the Diocese of Pittsburgh and its various affiliated entities alleging that the contraceptive provisions promulgated pursuant to the Affordable Care Act violate the Religious Freedom Restoration Act (RFRA) (42 U.S.C. sec. 2000bb-1), the First Amendment, the Administrative Procedure Act (APA) (P.L. 79-404) and the Women’s Health Amendment of PPACA (42 U.S.C. sec. 300gg-13(a)(4)) were dismissed because the claims are not ripe for review. The court found that because HHS was taking clear and concrete steps to address the Diocese’s concerns, and has pledged not to enforce the challenged regulations while accommodations are being considered, the claims will not be ripe for review until January, 2014 at the earliest. Without alleging an injury in fact under existing law, the claims were dismissed without prejudice.

Physician Hospitals of America v. Sebelius, 5th Cir., August 16, 2012. The district court lacked the authority to determine whether a trade group and physician-owned hospital’s challenge to the constitutionality of sec. 6001 of the ACA because the plaintiffs are required, under Medicare law, to follow the administrative process. Section 6001 limits Medicare reimbursement for services furnished to a patient referred by a physician owner. The opinion was vacated and dismissed.

Kinder v. Geithner, 8th Cir., October 4, 2012. The court affirmed a district court ruling in a case where seven plaintiffs challenged various provisions of the ACA. The district court dismissed the suit for lack of standing. The lawsuit challenged, among other things, the ACA’s individual mandate. On appeal, plaintiffs pursued two claims that were raised in their amended complaint: (1) that Congress exceeded its authority under the Commerce Clause and the taxing power when it promulgated the mandate, and (2) that the mandate violates the Due Process Clause of the Fourteenth Amendment by abrogating their rights under the Missouri Health Care Freedom Act. Because plaintiffs did not plead sufficient facts to establish an injury-in-fact, they lacked standing to sue.

Walters v. Holder, S.D. Miss., August 23, 2012. Summary judgment was granted to the government in a case involving the individual mandate of the ACA as the court did not have jurisdiction to hear the case. The individuals bringing the case could not demonstrate that the individual mandate would result in hardship if their right to privacy of their medical and financial information were violated. In addition, their claims were not ripe for adjudication as they could present no particular facts demonstrating privacy violations specific to the individuals.

As CRE Spreads, the CDC’s Toolkit Offers Helpful Containment Strategies

In about 1992, evidence first appeared that bacteria from the Enterobacteriaceae family (known to cause pneumonia and kidney, bladder and bloodstream infections) had become resistant to carbapenem antibiotics (antibiotics developed to treat bacteria resistant to most other antibiotics). These bacteria are called Carbapenem-Resistant Enterobacteriaceae or CRE.

As Peter Eisler reminds us in his recent USA Today article, “Deadly ‘Superbugs’ Invade U.S. Health Care Facilities,” four years ago CRE attacked and ultimately killed a middle-aged patient at the University of Virginia Medical Center (UVMC).  According to Eisler, “in the months that followed, it [CRE] struck again and again at the same hospital [UVMC], in various forms, as doctors raced to decipher the secret to its spread.”

More recently, NBC Nightly News reported that a strain of CRE struck at one of the premier health centers in the nation, the National Institutes of Health Clinical Center near Washington, D.C., reportedly infecting 18 patients and resulting in 11 deaths.

Today, the Centers for Disease Control and Prevention (CDC) admits that CRE

  1. has spread throughout much of the United States (up to 41 states);
  2. has the potential to spread even more widely;
  3. is insusceptible to doripenem, meropenem, or imipenem, all carbapenems, and resistant to all of the following third-generation cephalosporins that were tested: ceftriaxone, cefotaxime, and ceftazidime; and
  4. has been associated with mortality rates of up to 40 to 50 percent in some studies.

Facility-Level Prevention 

The CDC’s 2012 CRE Toolkit, entitled “Guidance for Control of Carbapenem-resistant Enterobacteriaceae (CRE),” provides facility-level prevention strategies, which include:

  • hand hygiene;
  • contact precautions;
  • healthcare personnel education;
  • minimizing the use of devices with high risk of device-associated infections, such as central venous catheters, endotracheal tubes, and urinary catheters;
  • housing patients colonized or infected with CRE in single patient rooms;
  • rapid notification of appropriate staff by laboratories whenever CRE are identified;
  • antimicrobial stewardship, i.e., ensuring that antimicrobials are used for appropriate indications and duration, and that the narrowest spectrum is used; and
  • screening to identify unrecognized CRE colonization among epidemiologically linked contacts of known CRE colonized or infected patients.

Supplemental Toolkit measures for healthcare facilities with CRE transmission include: (1) active surveillance testing of high-risk patients at admission or at admission and periodically during their stay, and (2) bathing of patients with 2 percent chlorhexidine.

Regional CRE Surveillance

In addition to strategies for facility-level prevention, CDC’s CRE Toolkit sets forth recommendations for public health department engagement to prevent regional or inter-facility transmission of CRE. This recommended engagement includes options for “regional CRE surveillance,” including making CRE a laboratory-reportable event or surveying infection preventionists and laboratory directors by telephone or email.

Regional CRE Prevention Strategies 

In regions with no CRE identified, the CDC’s CRE Toolkit recommends an aggressive approach to future CRE detection, such as making CRE a laboratory-reportable event. If reporting is not possible, health departments should periodically survey healthcare facilities for the presence of CRE and provide feedback to increase awareness. Health departments should also increase awareness through healthcare facility education in the area of recommended prevention measures and the importance of timely recognition of any CRE colonized or infected patients.

According to the Toolkit, regions with few CRE identified are most in need of increased awareness regarding which facilities in the region are being most impacted by CRE.  In these regions, surveillance results should be shared with facilities, including facility administrators, to allow nearby facilities to take appropriate preventive actions. To reduce inter-facility transmission, all facilities should be encouraged to routinely complete inter-facility transfer forms whenever a patient is transferred to another facility. The transfer form should indicate whether the patient has ever been colonized or infected with CRE or other multi-resistant drug organisms (MRDOs), whether the patient has any open wounds or indwelling devices, and whether the patient is currently being administered antimicrobials.

Finally, in regions where CRE are common, the Toolkit recommends a broad public health approach. To effectively coordinate regional infection prevention, public health departments should have dedicated personnel assigned to the task. Public health departments should engage healthcare facilities by communicating the CRE prevalence in the region and the importance of a regional approach to prevention. Reinforcement of the core prevention measures and additional supplemental measures may be necessary. Public health departments should periodically (e.g., monthly) access facility compliance with recommended practices.  This can be done based on reporting by facility infection preventionists or through site visits to facilities. As described above, an inter-facility transfer form should be completed whenever a patient is transferred to another facility.