Injunction junction need not function, contraceptive accommodation is enough for 7th Circuit

The Seventh Circuit held that the University of Notre Dame was not entitled to a preliminary injunction barring its insurer and third party administrator from providing contraception coverage to University students and employees under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) contraception mandate. On remand from the United States Supreme Court, the Seventh Circuit held that the accommodation provided by EBSA Form 700 adequately removed Notre Dame from complicity in what Notre Dame called the “sin of contraception.” The court reasoned that because only a third party administrator and Notre Dame’s insurer were engaged in the provision of contraceptives, no religious objection by Notre Dame was sufficient to prevent continuation of that coverage (University of Notre Dame v. Burwell, May 19, 2015, Posner, R.).

ESBA Form 700

Because Notre Dame did not meet the ACA’s religious employer exception, the university was required to execute EBSA Form 700, certifying that it was a nonprofit entity holding itself out as a religious organization and that it opposed the provision of contraceptive services. By signing the form, the burden of covering contraceptives shifted from Notre Dame to Aetna and Meritain Health, Inc., the university’s health insurance provider and third party administrator. The university asserted that executing the form constituted a substantial burden on its exercise of religion. A district court and the Seventh Circuit disagreed with that analysis and held that the form served as a “warning” and not a “trigger” because it merely shifted the obligation to a different entity that was obligated to provide contraception coverage under federal law anyway (see Notre Dame signs EBSA Form 700-Certification, not substantially burdened, Health Reform WK-EDGE, February 26, 2014).

Supreme Court

After the U.S. Supreme Court handed down its decisions in Burwell v. Hobby Lobby Stores, Inc. (Hobby Lobby) and Wheaton College v. Burwell (Wheaton College), Notre Dame filed a petition for a writ of certiorari with the Supreme Court, asking it to vacate the Seventh Circuit decision and remand it for consideration. Notre Dame relied on the Hobby Lobby decision and renewed its position that the mandate substantially burdened its exercise of religion without either serving a compelling government interest or being the least restrictive means of doing so. The Supreme Court granted the petition, vacated the Seventh Circuit’s decision, and remanded the case back to the appellate court (see Notre Dame contraception battle revived, Health Reform WK-EDGE, March 11, 2015).


On remand, the Seventh Circuit was unpersuaded by Notre Dame’s objections to the accommodation. In particular, the appellate court rejected the position that the mailing of EBSA Form 700 caused or triggered the provision of contraceptive coverage. The court reasoned that once Notre Dame opted out of providing federally mandated contraception coverage, by exercising its religious exemption, the federal government—and not Notre Dame—enlisted the third party administrator and insurer to provide the coverage.


As a result, the court held that Notre Dame was not functioning as a “conduit” to deliver contraceptives. On the contrary, the court reasoned that the university had its religious burden “lifted” when it filled out EBSA Form 700. Because the effect of the form was to have students and staff members do business directly with Aetna and Meritain to obtain contraceptives, Notre Dame bypassed the objectionable act. Additionally, the court reasoned that Notre Dame could not have, as it argued, “triggered” the provision of contraceptives because federal law mandated such coverage. The filling out of the form merely shifted who was responsible for providing that coverage.

Hobby Lobby

In accordance with the Supreme Court’s request, the Seventh Circuit analyzed the effect of the Hobby Lobby decision where the high court held that the contraceptive mandate could not be applied to for-profit closely-held corporations with religious objections to contraceptive coverage because the mandate violated the Religious Freedom Restoration Act (RFRA) (42 U.S.C. §§2000bb et seq.). In that case, the Supreme Court held that the RFRA should apply to “nonreligious institutions owned by persons having sincere religious objections to their institutions’ having to comply with the ACA’s contraceptive regulations.”


The Seventh Circuit distinguished the Hobby Lobby decision from the Notre Dame case on the fact that in Hobby Lobby, the complaining organizations requested the right to fill out the form for religious accommodation, whereas, Notre Dame’s principal objection was to filling out the form at all. Although the Seventh Circuit acknowledged that the Hobby Lobby Court left open the possibility that the accommodation could substantially burden the free exercise of religion for some organizations in some cases, the Seventh Circuit found no meaningful explanation in the record of feasible alternatives to the status quo accommodation.


Additionally, the Seventh Circuit pointed to the accommodation struck in Wheaton College where the Supreme Court held that an objecting organization could evade the ESBA Form 700 and directly inform HHS of its objection as an alternative. The court held that accommodation “implies a balance of competing interests.” Accordingly, the court balanced the burden on Notre Dame of “simply notifying the government that the ball is now in the government’s court” with the potential burden of devising an “entirely new method of providing contraceptive coverage.” The court held that the balance did not favor an injunction for the university.


Judge Hamilton concurred with the opinion on the grounds that, based upon the current state of the record, Notre Dame was not entitled to preliminary injunctive relief. The concurrence reasoned that “an injunction would disrupt the status quo and temporarily cut off contraceptive coverage for hundreds or thousands of women.” According to the concurrence, the merits of the case required further exploration at a trial. The concurrence articulated important differences between Hobby Lobby and the Notre Dame case and reasoned that those distinctions rendered the Hobby Lobby case less than instructive on the breadth of religious freedom for an institution like Notre Dame.

Notably, the concurrence pointed out distinction arising from the “extraordinary feature” of the lawsuit—Notre Dame’s claim that the process of requesting the accommodation itself was a substantial burden on its exercise of religion. Like Judge Posner, Hamilton concluded that the triggering or casual arguments raised by Notre Dame were unpersuasive because the contraceptive coverage provided to students and staff members of Notre Dame were “caused” by federal law and not by any action of the university. The concurrence articulated Notre Dame’s objection not as an objection to the accommodation itself but to the fact that its exemption was coupled with a substitute—specifically, that someone else would provide the coverage. Accordingly, the concurrence reasoned that Notre Dame’s request reached beyond the protections afforded to it by the RFRA.


Judge Flaum dissented on the grounds that the contraceptive mandate forced Notre Dame to act as a conduit for the provision of cost-free contraception, which made Notre Dame complicit in something that the university saw as a violation of its religious beliefs. The dissent reasoned that Notre Dame articulated a substantial burden for purposes of the RFRA because of its position as a self-insurer (through its contract with Meritain) and as an insurance broker (through its contract with Aetna). Although the accommodation removed the university’s obligation to pay for contraceptives, the dissent concluded that the ACA nevertheless obligated Notre Dame to occupy a “facilitator’s role” regarding the provision of contraception. Judge Flaum held that the Hobby Lobby decision required a different burden than the one applied by the court. The dissent reasoned that the RFRA analysis should have asked “whether the means by which the government is attempting to advance its compelling interest is the least burdensome on Notre Dame’s religious beliefs.”

Kusserow on Compliance: OIG reports on background checking by home health agencies

In response to a congressional request, the HHS Office of Inspector General (OIG) conducted a review to analyze the extent to which Home Health Agencies (HHAs) employed individuals with criminal convictions and to explore whether these convictions should have—according to State requirements—disqualified them from HHA employment. HHAs provide care—usually unsupervised—to patients in their homes and ensuring that their employees undergo a minimum level of screening would help protect the safety of Medicare beneficiaries. Home health programs have been a high priority for Medicare; Medicaid is intended to provide an alternative to institutional care for people with severe disabilities and it is intended that the needed services be delivered in a beneficiary’s home. This industry sector accounts for more than $20 billion paid by Medicare on behalf of 3.4 million beneficiaries with another estimated $15 billion in outlays paid by Medicaid programs.

This is a sensitive issue area as no one wants someone with a violent criminal history or one of committing thefts to be sent to care for beneficiaries in their home. To underscore, government concern with HHAs, including those concerns expressed by the Department of Justice (DOJ) and OIG, have found considerable evidence to recognize that home health is among the most vulnerable healthcare programs to fraud and abuse. The Government Accountability Office (GAO) recently reported 40 percent of all fraud convictions initiated by a group of Medicaid fraud-control units were for home health. CMS has been active in curbing problems in this arena by making uses of authority under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) to use temporary enrollment moratoria on home health providers in geographic areas of disproportionate crimes.

In their new report, the OIG noted that there are no federal laws or regulations that require HHAs to conduct background checks prior to hiring individuals or to periodically conduct background checks after individuals have been hired. State requirements for background checks vary as to what sources of information must be checked, which job positions require background checks, and what types of convictions prohibit employment. Though not stated in the report, what should be noted is that the background sanction-screening against the OIG’s List of Excluded Individuals/Entities (LEIE) is necessary and mandated in most states, along with screening State Medicaid sanction databases. However the problem is that most local criminal convictions are not related to violations of Medicare and Medicaid laws or regulation; and therefore not included in state reporting to the OIG LEIE.

In conducting the review, the OIG obtained a sample of Medicare-certified HHAs regarding all individuals they employed. It compared employee data with criminal history records to identify individuals with criminal convictions who were employed by the sampled HHAs. It also selected six employees for an in-depth review who had convictions for crimes against persons in the last five years and/or were registered sex offenders. Finally, it evaluated whether compliance with state laws would have led to disqualification of these six employees.


  • All HHAs conducted background checks of varying types on prospective employees.
  • Approximately half also conducted periodic checks after the date of hire.
  • Four percent of HHA employees had at least one criminal conviction that may or may not have disqualified them from employment.
  • Criminal history records reviewed were not detailed enough to enable a definitive determination of whether employees with criminal convictions should have been disqualified from HHA employment.
  • In-depth review of the six employees found that three had convictions for crimes against persons that would disqualify them from employment in HHAs, with the remaining three with convictions did not disqualify them from employment in their respective states.


CMS should promote minimum standards in background check procedures for HHA employee background checks by encouraging more states to participate in the National Background Check Program. CMS concurred with this recommendation.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.


Low-volume hospitals bring high risks: a drive might save your life

Patients who undergo procedures at low-volume hospitals are subjecting themselves to an increased risk of complications and death because surgical teams at those hospitals perform too few procedures to maintain adequate levels of skill. According to a U.S. News & World Report analysis, large numbers of low-volume hospitals continue to put patients at increased risks despite three decades of research tying low-volume hospitals to higher incidents of complications and death.

Increased risk

According to an evaluation of five procedures from the U.S. News analysis, as many as 11,000 deaths might have been prevented between 2010 and 2012 if patients had undergone procedures at the highest-volume fifth of hospitals rather than the lowest-volume fifth. Some evaluations suggest that if other procedures are considered, tens of thousands of deaths might have been avoided. The increased risk of dying at a low-volume hospital from relatively safe procedures is staggering. For example, at one 25-bed Colorado hospital, the relative risk of death for elective knee replacement patients at the hospital was 24 times the national average. Similarly, at a 331-bed medical center in Florida, the relative risk of dying following a hip replacement was nine times the national average and, at a 316-bed New Jersey Medical Center, the risk for patients who had heart bypass surgery was four times above the national average.


Ultra-low-volume hospitals were identified as those which treated “fewer than 25 traditional Medicare inpatients from 2010 through 2012 for nearly 20 frequent procedures and conditions.” Between 2010 and 2012, ultra-low-volume hospitals performed or treated an average of 3.3 hip replacements per year, 3.7 knee replacements per year, 4.1 basic heart bypass surgeries per year, 3.9 cases of heart failure per year, and 4.3 cases of chronic obstructive pulmonary disease per year. Knee-replacement patients at the ultra-low-volume hospitals had “double the national average death risk and a 25 percent higher rate of readmission because of post-discharge complications.” Similarly, “hip-replacement patients faced a 77 percent higher risk of death and a 25 percent higher risk of readmission.” The problem stems from the simple fact that surgical teams at low-volume hospitals are out of practice.


The problem is exacerbated by the fact that few patients ask hospitals or physicians how many similar procedures a hospital has treated. U.S. News offers questions that patients can ask hospitals when trying to determine whether a low-volume hospital is a safe place to undergo a particular procedure. The findings of the analysis suggests that longstanding patient preference for local care should give way to a preference for travel and better outcomes, if safety is what patients are after.

FDA informs doctors of rogue distributors, offers drug purchasing tips

To reduce the threat to patients posed by unapproved, counterfeit, or otherwise unsafe prescription drugs, the FDA has issued letters to doctors who may have obtained these drugs from a rogue distributor. In addition to warning about the rogue distributors, the letters also contain tips on how doctors can avoid purchasing drugs that: (1) are fake, contaminated, ineffective, or otherwise unsafe; (2) have not been approved as safe and effective by the FDA; (3) do not contain the appropriate amount of active ingredients; (4) contain harmful ingredients; (5) were not manufactured using quality manufacturing processes; or (6) were stored under improper conditions.

These letters are part of the FDA’s “Know Your Source” program, which works to inform doctors about how to protect their patients from unsafe drugs. Here is a list of the most recent letters:

  • On April 1, 2015, the FDA sent more than 300 letters to medical practices that may have purchased unapproved prescription drugs, or unapproved injectable devices, from a foreign supplier, Gallant Pharmaceutical International, Inc., also known as Gallant Medical International, Inc.
  • On July 11, 2013, the FDA sent approximately 250 letters to medical practices that purchased Botox® from “Online Botox Pharmacy,” “,” and “Onlinebotox.” The medication’s outer carton was counterfeit, while the vial inside was labeled as a foreign version of Botox.
  • On May 13, 2013, the FDA sent more than 1,000 letters to medical practices that may have received prescription drugs from Pharmalogical, Inc., d/b/a Medical Device King, that contained a counterfeit version of Altuzan (bevacizumab) that had no active ingredient. Bevacizumab is approved in the U.S. as Avastin®, and sold by Genentech, Inc.

Many of the distributors of these unsafe drugs have had criminal actions brought against them.

Growing trend

Ilisa Bernstein, Pharm.D., J.D., Deputy Director of FDA’s Center for Drug Evaluation and Research’s Office of Compliance, says she has seen a “growing trend of health care professionals and medical practice administrators who purchase prescription drugs from rogue wholesale drug distributors outside of the legitimate supply chain.” Bernstein offers a number of tips for doctors:

  • If an offer sounds too good to be true—it probably is. Deep discounts may indicate that the products are stolen, counterfeit, or unapproved.
  • Doctors should ensure they are receiving FDA-approved prescription drugs.
  • Only purchase from state-licensed wholesale drug distributors.
  • Check to see if the packaging, labeling, warnings, and dosing recommendations differ in any way from the FDA-approved packaging, labeling, warnings, and dosing for the product.
  • If several patients report that they are experiencing a new side effect or lack of therapeutic effect from the same product, consider that the drug may be substandard or counterfeit.

New tracing, verification, and identification system

The FDA is also working with prescription drug manufacturers, wholesale distributors, repackagers, and dispensers to establish and implement a new system that allows product tracing, verification, and identification as drugs travel through the U.S. market. This effort is part of FDA’s implementation of the Drug Supply Chain Security Act (DSCSA)—Title II of the Drug Quality and Security Act signed into law on November 27, 2013. Under the DSCSA, doctors who dispense or administer prescription drugs are required to purchase their prescription drugs only from authorized trading partners licensed by or registered with the state or federal government.