Religious nonprofits argue that the government can provide contraception without their help

In the continuing fight against the contraception mandate imposed by sections 1001 and 1004 of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148), the Little Sisters of the Poor Home for the Aged, Denver, Colorado (Little Sisters) and other organizations have filed a merits brief before the U.S. Supreme Court. According to the brief, if the Supreme Court does not provide the requested relief, the Little Sisters will be subject to millions of dollars in fines for failing to comply with the ACA’s mandate. The brief asserts that the government has other ways to provide contraception coverage without requiring the ministry to violate its sincerely held Catholic beliefs.

Opt-out form and accommodation

Due to objections from some religious nonprofits, HHS decided to offer an opt-out form allowing these nonprofits to notify their insurers or the government to their objection to offering contraceptive coverage. Administrators or insurers then step in and provide the coverage to those employees who want it, without requiring the charity to pay for it. However, the Little Sisters believe that the requirements for opting out of the coverage still impose an undue burden on religion in violation of the Religious Freedom Restoration Act (RFRA) (42 U.S.C. §2000bb). After the Tenth Circuit ruled otherwise and injunctions allowing the organizations to escape the accommodation process were wiped away, the Little Sisters appealed (see Prayers for injunctions go unanswered in appellate review of contraceptive accommodation, Health Reform WK-EDGE, July 15, 2015).

Why us?

The brief takes the position that the government has implemented so many other options for ensuring that contraceptive coverage is provided that nonprofit action is unnecessary. The argument points out that the health insurance exchanges serve to provide coverage to those who do not have access to employer sponsored plans, and that those exchanges should also suffice to provide additional coverage to religious nonprofit employees. In addition, the brief states that other employers have been completely exempted from the requirements, but that religious nonprofits have merely been “accommodated” and therefore required to jump through more hoops. Little Sisters states that it does not object to the provision of contraceptive coverage to its employees and that it is not challenging independent actions of other parties. The organization does, however, protest the requirement that its own health plan infrastructure be used to provide coverage or be subject to penalties.

Idaho temporarily delays Medicaid cuts to services for developmentally disabled

After receiving harsh criticism over its decision to slash Medicaid reimbursement rates for in-home care for developmentally disabled individuals, the Idaho Department of Health and Welfare (Department) is delaying the reimbursement rate reductions by one month, to February 1, 2016. Previously, the Department announced that starting on January 1, 2016, rates would be returning to their 2006 levels, which would amount to as much as a 46 percent cut in daily reimbursement rates for providers who offer in-home care at an “intense level.”

Rate challenge

The rate reduction comes in response to the U.S. Supreme Court’s decision in Armstrong v. Exceptional Child Center, Inc. (135 S. Ct. 1378, 2015), in which the court held that providers could not challenge state-determined Medicaid rates in federal courts (see High court reverses 9th Cir.; won’t allow providers to bring private action to challenge Medicaid reimbursement, Health Law Daily, March 31, 2015). The decision overturned a previous ruling by a lower court that increased reimbursement rates based on a challenge to the state’s practice of keeping rates at 2006 reimbursement levels despite evidence suggesting that the costs of providing such care had increased.

Dramatic cuts

Advocates say the rate reductions are severe, amounting to a 15 percent cut in real reimbursement, when taking into account the general rate of inflation. This means that a provider that currently receives $500 per day for providing in-home services at the “intense” level will receive $270 for the same services. However, the Department says that only 200 individuals receive intense level care and that the reimbursement rates for the largest group of participants will be reduced by only $23 per day. Rates for the lowest level of support were cut by 37 percent and nine percent for “high” level of support services.

Provider concerns

Health care providers criticized the timing of the announcement, which came close to the holidays and gave less than 30 days’ notice. Others say that they cannot continue to provide services after the rate reductions go into effect, which will force developmentally disabled individuals to go into state institutions.

The Department previously said that the short timeframe for the rate changes was necessary because delaying the rate reduction would cost the state $1 million per month. However, the Department backed off on the January implementation rate after realizing that it would not be enough time for providers and beneficiaries to come up with alternative plans and now intends on implementing the rate reduction on February 1, 2016.

The Department also said that it would continue to review the rates to ensure that the participants have access to quality services.

Update on Tennessee’s Medicaid Woes

In July 2014, Wolters Kluwer reported that Tennessee had turned over all Medicaid eligibility determinations to the federally facilitated marketplace (FFM),,  and thousands of applications were in limbo somewhere between the FFM and the state agency. The Tennessee Justice Center and other advocates for the poor had sued TennCare officials to compel them to act on applications and hearing requests. A federal court had ordered the agency to begin to provide hearings for individuals whose Medicaid applications were not acted upon within 45 days. CMS had directed the state to submit a plan to come into compliance with the enrollment requirements of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). What has happened since then?

Pending appeal

State officials appealed the preliminary injunction. According to Tennessee Justice Center attorney Chris Coleman, the Sixth Circuit Court of Appeals heard oral argument recently, and the judges seemed most interested in whether the case was moot because the original plaintiffs had been granted assistance. Another case involving a similar mootness issue is pending at the United States Supreme Court. A ruling could be issued any time, although the Sixth Circuit may be waiting for the outcome of the Supreme Court case.

TennCare’s technical difficulties

In January 2015, TennCare terminated its contract with Northrup Grumman, which had been unable to complete the development of the TennCare eligibility determination system (TEDS) to meet the requirements of the ACA. KPMG submitted a report on the problems with the contractor’s performance, and the agency hired KPMG to help it select the new contractor. No selection has been announced. Under these circumstances, there is no way even to estimate when Tennessee will resume accepting applications.

The application process

Meanwhile, the state continues to require that all Medicaid applications be submitted to According to Coleman, the state has discontinued accepting applications at the county offices. There is now nowhere in the state to submit an application in person. Applications must be submitted online to, by phone, or by mail. determines the date of the application. After 45 days, sends the applications to TennCare. Rather than hold hearings for every applicant whose eligibility has not been determined, TennCare requests any needed information from the applicant and makes a determination within 45 days. The problem of delay is not completely solved, but at least applicants no longer have an interminable wait, he added.

Under the terms of the TennCare waiver, the state does not provide retroactive eligibility for the three months immediately preceding the date of application under 42 C.F.R. sec. 431.914 and Soc. Sec. Act sec. 1902(a)(34). Coleman told Wolters Kluwer that this creates problems for hospitals because they cannot  submit applications for patients on the day they arrive. Without retroactive eligibility,  Medicaid will not pay the hospital bill.  Some hospitals are sending fax transmissions to the TennCare contractor that handles the call center, but TennCare will not permit the contractor to accept applications.

Extension of the waiver

The current TennCare waiver expires June 30, 2016, and the Bureau of TennCare is seeking an extension through June 30, 2021. The agency sought public input on its draft application on November 12, 2015. The pre-application comment period ended on December 14, 2015. There will be additional opportunities for public comment after the application is submitted to CMS. It is possible that CMS will not renew the waiver of retroactive eligibility.

M.D. Pa.: Take the coverage! Court declines to apply moral objection to contraceptives

The government’s interest in ensuring that contraceptive methods are available is compelling, even though the benefit is not achieved for all members of the population and may be provided to some who have a moral objection. The U.S. District Court for the Middle District of Pennsylvania dismissed Real Alternatives, Inc.’s case against HHS, which alleged that the contraception mandate found in sections 1001 and 1004 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) goes against its moral beliefs and that a pro-life health insurance option should be made available. The court did not find that the mandate violated Real Alternatives’ equal protection rights and that a moral objection to such coverage was not entitled to the same protection as the exercise of religious freedom (Real Alternatives, Inc. v. Burwell, December 10, 2015, Jones, J.).

Real Alternatives

The company is a non-profit organization that seeks to offer alternatives to abortion services in Pennsylvania, Michigan, and Indiana. It hires social services agencies as subcontractors to administer its programs, such as pregnancy and parenting support. It requires these subcontractors to refrain from recommending or providing all IUDs and hormonal birth control methods. It excluded contraception coverage from its health plan starting in 2008, which the insurer cancelled in 2014. Real Alternatives’ current plan cannot be grandfathered under the ACA, and the company filed suit seeking a court order permitting it to obtain “morally acceptable coverage” that did not include contraceptive care. Real Alternatives states that it does not hold itself out to be a religious organization.


Real Alternatives has only three full-time employees, all males, who state that they share in the company’s beliefs regarding contraception. They all claim moral and religious objections to participating in a health plan that provides contraceptive coverage. Their employee coverage extends to their wives and seven children collectively.

Equal protection

Real Alternatives argued that requiring it to offer contraceptive coverages violates its Fifth Amendment right to equal protection. An equal protection claim requires showing that the government has treated one party differently from a similarly situated party with inadequate reasoning. Real Alternatives states that its objections to the contraceptive mandate are purely moral and based on non-religious philosophies. The court found that because the contraceptive mandate does not burden a fundamental right (religion), the proper level of scrutiny would be a rational basis review. A statute does not violate the equal protection clause incorporated through the Fifth Amendment’s due process clause if it bears a rational relationship to a legitimate purpose.

Religious employers versus other employers

HHS and other government agencies responsible for the ACA’s administration provide an exception to the contraceptive mandate for religious employers. Real Alternatives argued that such an exception fails the rational basis test. The agencies have stated that religious employers are more likely to employ those of the same faith and those employees would be less likely to use contraceptive services. The court agreed with Real Alternatives, as any employer may discourage the use of these services and seek to employ those who agree, not just religious employers.

However, the court found that HHS’ second justification that the employer exemption due to the effect on the beliefs of religious employers if contraceptive coverage services were required in their health plans survived rational basis review. Protecting religious freedom has long been legitimate government interest. The court stated that it did not question Real Alternatives’ sincerely held beliefs, but that it detected a difference between philosophical views and large secular organized moral systems that function similar to a religion without belief in a deity.

Contraceptive mandate and federal laws

Real Alternatives attacked the contraceptive mandate on the grounds that it runs contrary to various federal laws, such as the Administrative Procedure Act (APA) (P.L. 79-404), the Weldon Amendment of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act (P.L. 110-329), the Church Amendment (42 U.S.C. §300a-7(d)), the ACA itself, and the Religious Freedom Restoration Act (RFRA) (P.L. 103-141). The court found that the religious exemption was not an arbitrary and capricious classification under the APA.

Additionally, the argument under the Weldon Amendment failed to state a claim. This amendment prohibits the provision of funds to a federal agency if it subjects a health care entity to discrimination on its treatment of abortions. Federal law has never recognized emergency contraceptives to be the same as abortion. This extends to Real Alternatives’ attack on the ACA, which states that a qualified health plan is not required to provide coverage of abortion services. The court found that the term abortion was not intended to include emergency contraception.

The Church Amendment, which provides that no one will be required to assist in an HHS program if it violates religious beliefs or moral convictions, only applies to grant funding for voluntary family planning projects. There is no connection between the three employees and such activity. Finally, RFRA could only apply to the employees (who claim religious beliefs) and not to Real Alternatives, which only objects on moral grounds. However, the employees have not indicated that they would be able to find individual coverage that did not contain contraceptive benefits, because insurers are not covered by an exemption. The court found that instituting contraceptive coverage for those who do not desire to use it is not a substantial burden on religion under RFRA.

According to the court, other services covered by ACA plans could be objectionable under any number of religions, but allowing individuals to demand that a health plan be tailored to their believes “would render the health care system totally unworkable.” In addition, providing contraceptive coverage furthers a compelling government interest in promoting public health and gender equality in the least restrictive way possible. The court also expressed concerns about “an issue of great sensitivity,” in providing contraceptive coverage to entire families covered under an employer’s plan. It noted that there is no guarantee that every member of the family would agree with the decision to opt out of contraceptive coverage, and that each member should be able to maintain her ability to utilize the coverage. The court found that due to these and other reasons, the government’s desire to implement a broad contraceptive mandate is compelling.

The case is No. 1:15-cv-0105.