Health care organizations team up to fight implied certification theory

A number of interested health care organizations have filed briefs before the U.S. Supreme Court in Universal Health Services v. U.S. ex rel. Escobar, in which the court will consider the theory of implied certification under the False Claims Act (FCA) (31 U.S.C. §3729). Under this theory, claims submitted to the government for reimbursement are tainted by failure to conform to statute, regulations, or provisions that are not considered a condition of payment (see Does fraud go without saying? Supreme Court to examine ‘implied certification’ in FCA, Health Law Daily, December 8, 2015).

Factual background

The case was brought by the parents of a patient who died at a mental health clinic following a seizure. The parents alleged that the caregivers were not supervised as required and that the clinic did not have psychiatrists and psychologists on staff with the credentials required by the state Medicaid program. They claimed that this noncompliance caused claims for payment to be false claims, even though payment was not conditioned upon meeting these particular regulations (see Appeals court takes practical approach to False Claims Act, Health Law Daily,  March 19, 2015).

Whistleblower suits

The health care organizations filing briefs in support of Universal Health Services, like the American Hospital Association, argue that the implied certification theory broadens the reach of the FCA beyond addressing truly fraudulent claims. The American Medical Association’s (AMA) brief notes the sharp increase in qui tam actions filed by relators hoping to obtain “life-changing wealth” by bringing fraud claims based on noncompliance with an underlying regulation, even when the government is satisfied with the original transaction. The organizations believe that the FCA should be used to fight fraud, and the AMA asserts that “imperfect compliance is not equivalent to fraud.”

Supreme Court sets March date for contraceptive mandate arguments

The Supreme Court has set a 90-minute hearing on March 23, 2016, for the seven cases challenging the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) contraceptive mandate. The challenges seek a decision from the Supreme Court overturning the ACA requirement that non-profit groups take action to opt out of the mandate, allowing them to benefit from the blanket exclusion granted to churches and other religious institutions (see Supreme Court will hear 7 challenges to contraceptive mandate, Health Reform WK-EDGE, November 10, 2015).

Non-profits challenge

At issue is whether the contraceptive coverage mandate and its accommodation process, which requires the filing of additional paperwork stating objections to the provision of contraceptives, violate the Religious Freedom Restoration Act (RFRA) (P.L. 103-141) by forcing religious nonprofits to act in violation of their sincerely held religious beliefs, when the government has not proven that the compulsion is the least restrictive means of advancing any compelling interest. The accommodation itself, the organizations argue, is a substantial burden on their religious exercise.

The Supreme Court will rule on whether the mandate and the accommodation violate the RFRA, but refused specifically to hear claims under the RFRA and the First Amendment that the government discriminated between those allowed an exemption and those not.

ACA implementation

The March hearing before the Supreme Court highlights the challenges found in implementing the contraceptive mandate. Despite these challenges, the ACA provision for contraceptive coverage has already directly benefited millions of women who use contraceptives by decreasing their total out-of-pocket spending on contraceptives.

According to researchers at Washington University in St. Louis, prior to the ACA, high initial costs were barriers to women using highly effective contraceptive methods such as intrauterine devices (IUDs) and implants. Cost also affected adherence to commonly used refillable methods such as oral contraceptive pills, the contraceptive patch, or the vaginal ring with recurring prescription co-payments previously required.

The researchers noted that the provision for contraceptive coverage has the potential to substantially improve public health. Access to contraception without financial barriers reduces unintended pregnancies and births, which in turn can improve maternal and infant health.

Religious ‘friends’ get their words in edgewise in Supreme Court debate

Amicus briefs piled in before the Supreme Court over the contraceptive coverage argument so that each agreeing organization would have its chance to be heard. In March, the Court will hear both sides of the argument over whether the government’s “accommodation” allowing religious organizations to opt out of the requirement that they provide contraceptive coverage for their employees infringes on their religious freedom.

ACA accommodation

Sections 1001 and 1004 of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) requires most private health insurance plans to provide coverage for a broad range of preventive services, including FDA-approved prescription contraceptives and services for women. Religiously-affiliated nonprofits and closely held for-profit corporations can opt out of providing contraceptive coverage by electing an accommodation, but they are not eligible for an exemption. When an accommodation is requested, female employees and dependents who are covered by a plan sponsored by an employer electing an accommodation have contraceptive coverage, but their employer does not have to pay for it.

The accommodation was originally created as a way to release nonprofit religiously-affiliated employers that oppose birth control from the requirement of paying for contraceptive coverage, but ensure that the employees and their dependents are able to obtain full coverage for the contraceptives to which they are entitled. This is done by requiring the insurer—rather than the employer—to bear the costs of the employees’ contraceptive coverage. Those challenging the accommodation 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).

Amicus briefs

On November 6, 2015, the Supreme Court agreed to hear the challenges of seven religious non-profits challenging the accommodation. To date, several friends-of-the-court briefs have been filed on their behalf. In favor of the religious organizations, these include: (1) Orthodox Jewish Rabis; (2) 207 members of Congress; (3) the American Center for Law and Justice; and (4) the Cato Institute, among others. The government must submit its response brief by February 10, 2016. Oral arguments are expected to be heard the end of March.

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.