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.


Despite expanded health coverage, expensive ER visits are on the rise

Despite the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), 75 percent of emergency physicians indicate that emergency room (ER) visits are on the rise. When the American College of Emergency Physicians (ACEP) conducted this poll one year before, less than half of physicians reported increases. ACEP’s president, Dr. Michael Gerardi, stated that emergency care remains a valuable model of care, pointing out that the ER is the only place that remains open at all hours and that no one is ever refused care.

Polling results

Poll respondents reported that the availability of alternative models of care, such as urgent care centers and triage lines conducted by telephone, has not reduced the volume of ER visits. The large majority said that the severity of illnesses among these patients is either the same or has increased, compared to the past. Over half of respondents also said that the number of Medicaid patients is rising, as well.


The ACA’s goal of seeing more people covered by health insurance was furthered by the individual mandate, requiring people to have health care coverage or pay a penalty. ACEP reports that the rise in ER visits comes after the date that the individual mandate went into effect. The ACA also provided an opportunity for states to expand Medicaid programs to cover those who were previously ineligible, with additional financial contributions from the federal government. ACEP notes that a Health Policy Alternatives report also indicates that efforts to direct Medicaid enrollees away from ERs to primary care is failing.

More patients, no providers

Despite Medicaid expansion covering more patients, providers cannot be forced to see these patients. Medicaid reimburses providers at the lowest rate, although the ACA includes a provision to offer a slightly higher rate to primary care physicians willing to treat Medicaid enrollees. However, since the ACA resulted in more coverage by private insurance that typically pays providers at much higher rates, providers are even more interested in boosting their bottom line with those patients. Even providers listed on Medicaid managed care plans are busy, with median wait times for appointments at two weeks and a quarter of providers forcing patients to wait over a month.

This problem is exacerbated by the shortage of providers overall, particularly primary care providers. A 2014 report from the Association of American Medical Colleges (AAMC) indicated that the primary care physician shortage would reach 45,000 by 2020. This shortage is explained by aging physicians, Medicaid expansion, and more people newly insured through the ACA. In 2015, these projections were updated through 2025, indicating that the shortfall of primary care physicians would be somewhere between 12,600 and 31,100. The lower numbers will require aggressive changes to payment and delivery models, such as accountable care organizations (ACOs). ACOs unite providers and coordinate patient care in an effort to save government funding. However, provider participation is voluntary.

Emergency model of care

According to Dr. Orlee Panitch, an ACEP fellow, access to both primary and specialty care for Medicaid patients is not timely, resulting in ER visits as the last, or only, resort. Panitch is also concerned by some state policies that discourage Medicaid patients from seeking emergency care, noting that it could have dangerous results. Gerardi points out that this polling offers evidence that the emergency care model is valuable and desirable. There is evidence that this model is evolving. The Mayo Clinic offers a joint Emergency and Urgent Care Center, where triage evaluates the seriousness of a patient’s condition and determines the appropriate level of care. Directing patients to urgent, rather than emergency care, in situations that are not life-threatening or do not warrant immediate attention may result in cost savings. Although information is available from places such as Blue Cross Blue Shield to help patients determine where to seek care, a possible emergency or even urgent situation might not allow a patient to take precious time to make these decisions.

Kentucky Hospital Association calls ‘code blue’ over $7B in cuts

In what it termed a “code blue,” the Kentucky Hospital Association (KYHA) released a report warning that health reforms implemented under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) will significantly contribute to $7 billion in federal cuts to Kentucky hospitals by the year 2024. The report acknowledged that the uninsured rate in Kentucky dropped by 50 percent as a result of the ACA, but maintained that Kentucky hospitals will lose more in revenue than they gain through the expansion of the covered population, amounting to a net loss of $1 billion by 2020.

According to the report, the ACA reduced the number of uninsured Kentucky residents by 50 percent, with over 400,000 individuals gaining health insurance, including through Kynect, the state’s health insurance marketplace. Kentucky was the only southeastern state in the United States to expand its Medicaid under the ACA. However, the KYHA warns that the expansion comes at a cost to Kentucky hospitals that will face $7 billion in federal cuts which will cause layoffs and reductions in available services, especially to those in rural areas.

Kentucky Hospital Association President Mike Rust has been reported as stating that while the expanded coverage of the uninsured has provided additional money to hospitals, there is a significant downside to the changes in the health care system and that the report, “provides the real picture” of the challenges faced by Kentucky hospitals.

The report blames the expected federal cuts to Medicare and Medicaid payments, with many of the newly insured in Kentucky qualifying for the expanded Medicaid services. The report also cited Medicare payments that are lower than cost of inflation, readmission penalties, hospital acquired condition penalties, cuts to disproportionate share hospital (DSH) payments, and problems with Medicare Managed Care Organizations (MCOs), such as slow, reduced, or denied payments. Additionally, it noted that hospitals are facing reductions in funding unrelated to the ACA, including across-the-board federal cuts.

As a result, Kentucky hospitals have resorted to reducing staff, benefits and wages, and programs and services, according to a survey conducted by KYHA. The survey stated that over three quarters of hospitals reducing programs and services were located in rural areas.

Kentucky Governor Steve Beshear, however, defended the state’s Medicaid expansion. According to the governor’s website, the Medicaid expansion will have a $15.6 billion impact on the state’s economy in the coming years and will create 17,000 new jobs.

It was reported that the governor issued a statement defending the changes to the Kentucky health care system and stated, “We are very aware of the challenges that medical providers face in Kentucky.” He added, “Rather than trying to turn back the clock and return to old business practices, we are working directly with providers to help them develop new strategies for better, more efficient, quality health care delivery.”