ACA in The Supreme Court – The Closing Arguments

Author: Marc L. Penchansky

Yesterday, the Supreme Court of the United States heard the final two arguments concerning the Affordable Care Act (“ACA” or “Act”). The day’s first argument concerned whether the remaining provisions of the Act could stand if the Supreme Court ruled that the mandate was unconstitutional. For more information on that argument, click here. The final argument concerned the extension of Medicaid benefits codified in the Act.

Medicaid is a cooperative program between the federal government and the States where the Federal government shares the costs of providing health care to the indigent with the States. In exchange, the States agree to comply with the requirements of the Medicaid Act and its implementing regulations. In an effort to insure as many Americans as possible, the ACA extended Medicaid coverage beginning in 2014 to individuals with incomes up to 133% of the poverty level. 42 U.S.C. § 1396a(A)(10)(a)(i)(VIII). It is estimated that this extension would lead to an additional 16 million people on Medicaid. For the first three years, the federal government must pay all of the additional costs. In 2017, the federal government’s share is lowered to 95%, and over the next two years the federal share diminishes one percent per annum. In 2020, the allocation becomes fixed at 90% paid by the federal government and 10 % paid by the States. 42 U.S.C. § 1396d(y). This level of federal support far exceeds the typical federal contribution rate of 50% to 83%. See 42 U.S.C. 1396(b); Government’s Brief at p. 9.

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Day 2 – The Supreme Court Considers the Constitutionality of the Minimum Coverage Provision of the Affordable Care Act

By Marc L. Penchansky

Earlier today, the United States Supreme Court heard argument about whether Congress exceeded its constitutional authority when it passed the minimum coverage provision of the Affordable Care Act. This provision which is often referred to by the misnomer, the individual mandate, requires nearly everyone to obtain health insurance or face paying a financial penalty as high as $3,000.00 with their tax return. Although the parties and amici have raised several constitutional provisions in support and opposition of the minimum coverage provision, the most frequently discussed and debated question is whether the disputed provision oversteps Congress’s authority to regulate interstate commerce.

Before discussing the legal arguments of each side, it is important to discuss the environment in which the Act was passed. All hospitals with an emergency department that accept Medicare payments, which is to say nearly all hospitals, are required to provide medical services to anyone who walks through their doors, regardless of their ability to pay. See Emergency Medical and Treatment and Active Labor Act of 1996, 42 U.S.C. § 1395dd. According the American Hospital Association, hospitals in the last decade have provided $300 billion in uncompensated care to the uninsured and underinsured. Moreover, in 2008, uninsured Americans received $86 billion worth of health care from all providers. See J. Hadley et al., Covering the Uninsured in 2008: Current Costs, Sources of Paryment & Incremental Costs 399, 402-403, Health Affairs, Aug. 25, 2008. Of that $86 billion, approximately $56 billion was in the form of uncompensated care. Id. at 399.

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Supreme Court Considers its own Jurisdiction to Determine the Constitutionality of the Affordable Care Act

By Amy L. Miles

This morning, the United States Supreme Court heard the first day of Oral Arguments surrounding the controversy over some provisions of the Obama Administration’s healthcare reform act known as the Affordable Care Act (ACA). In its first round, the Court must determine whether it has the jurisdiction to consider the challenges to the Act at all. The ACA, among other things, contains an “individual mandate,” which will require U.S. taxpayers above a certain minimal income threshold to maintain healthcare insurance or to pay a penalty for failing to do so. In the case of Department of Health and Human Services v. Florida, which is a consolidation of challenges to the ACA from lawsuits brought in 26 states, the court will be considering whether, among other things, the individual mandate is a constitutionally permitted exercise of legislative power. As the ACA is written, the individual mandate goes into effect in 2014 and will be fully implemented by 2016. Therefore, the lawsuits challenging the mandate were in the form of seeking injunctive relief from the courts—asking them to prohibit the federal government from implementing the mandate before it goes into effect.

The jurisdictional question that the Supreme Court must answer first is whether it has the authority to issue the injunction the various states are seeking. Under the federal tax Anti-Injunction Act (AIA), courts have absolutely no power to prevent the federal government from assessing or collecting taxes before they are actually assessed or collected. Of course, once a taxpayer is liable for paying an assessment, he or she has a right to bring a refund action in federal court. The determination of the Court’s power to decide this case will revolve around whether the penalty required by the ACA is properly classified as a tax, which would divest the Court of its injunctive power before the law is in effect, or whether it is some other non-tax penalty.

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Doctors Forbidden From Sharing Information Learned About Chemicals Used in Fracking

Author: Karen L. Tucci

A new Pennsylvania law, an amendment to Title 52 (Oil and Gas) of the Pennsylvania Consolidated Statutes, requires that companies provide to a state-maintained registry the names of chemicals and gases used in fracking. It also forbids physicians, and other health care providers, from obtaining information on potentially harmful chemicals used in fracking, if that information is claimed to be a trade secret or confidential proprietary information of the company, unless the physician enters into a confidentiality agreement.

Fracking is the method of forcing water, gases, and chemicals at tremendous pressure of up to 15,000 pounds per square inch into a rock formation as much as 10,000 feet below the earth’s surface to open channels and force out natural gas and fossil fuels. The Marcellus Shale extends beneath the Allegheny Plateau, through Southern New York, much of Pennsylvania, east Ohio, West Virginia, and parts of Maryland and Virginia. It is one of the nation’s largest sources of natural gas mining. Pennsylvania has about 5,255 wells, as of the beginning of March 2012, with dozens being added each week. Over the expected life time of each well, companies may use as many as nine million gallons of water and 100,000 gallons of radioactive isotopes within a four to six week period. About 650 of the 750 chemicals used in fracking operations are known carcinogens.

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E-Discovery Lesson: You don’t want to be the next “McDermott”!

Author: E. Patrick Buntz

J-M Manufacturing Company, Inc. v. McDermott Will & Emery, California Superior Court, Los Angeles County – Central District, Case No.: BC 462832, is believed to be the first e-discovery legal malpractice lawsuit. McDermott Will & Emery, is an international law firm founded in Chicago in 1934 that houses more than 1,000 attorneys.

U.S. ex rel Hendrix v. J-M Manufacturing Co., Inc., US District Ct., CD California, Case No.: ED-CV06-000555, is the underlying case in which the legal malpractice allegedly occurred. This is a qui tam action (False Claims Act/whistleblower) brought by numerous governmental agencies based on allegations that J-M sold defective PVC pipe for use in water and sewage systems. If true, the qui tam actions could lead to the recovery of significant sums of money. The “Hendrix” referred to in the underlying case is an engineer who worked for J-M and who allegedly was fired one week after writing a memorandum that indicated the PVC pipe failed applicable product safety standards tests.

In the McDermott case J-M alleged that McDermott failed to supervise its e-discovery vendors and contract lawyers, and, as a result, almost 4,000 of J-M’s privileged documents were inadvertently produced to the other side. J-M filed its First Amended Complaint on July 28, 2011 and asserted that it had retained McDermott because the firm held itself out as knowledgeable in the area of qui tam actions and e-discovery. J-M claimed McDermott had billed on an hourly basis as high as $925 an hour.
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Pinning Physician Negligence on Hospitals in Florida Still as Unclear as Ever

Author: Derek M. Daniels

In the recent case of Newbold-Ferguson v. AMISUB, Inc. d/b/a North Ridge Medical Center, 2012 WL 555395 (Fla. 4th DCA 2012), the Fourth District Court of Appeals chimed in yet again on the issue of holding hospitals responsible for physician negligence under the guise of the doctrine of non-delegable duty. For some reason, the 4th DCA seems particularly interested in this issue, and their latest iteration of strained logic effectively does nothing more than stir already muddied water.

The patient went to the hospital for back surgery and died the next day from cardiac arrhythmia. Although not clear from the opinion, it appears the crux of the claim was the emergency room physician failing to timely respond to the code. As to the hospital, the plaintiff alleged directly liability for the ER physician’s negligence based on a “non-delegable duty to supervise…so that competent and careful medical personnel are provided….” On this claim, the trial court determined that the non-delegable duty as alleged did not exist and in allowing plaintiff to amend to allege a viable claim against the hospital instructed counsel that the issue was “the non-delegable duty to diligently determine that competent physicians are afforded house privileges or staff privileges.” In what sounds like a bizarre ruling, the trial court dismissed plaintiff’s next attempt at alleging a claim against the hospital but permitted the case to go to trial under the prior complaint with a ruling that all references to the emergency room physician be redacted. At trial, plaintiff was precluded from introducing evidence that the ER doctor deviated from the standard of care, and the jury returned a verdict in favor of the hospital.
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The Third Circuit Upholds Arbitration Clause in Nurse’s Employment Contract

Author: Marc L. Penchansky

The enforceability of arbitration clauses has become a hot topic. Last month we wrote on how the Supreme Court of the United States made it clear that the States were not free to ignore the Federal Arbitration Act’s preference for arbitration due to some contrary public policy. The highest appellate court of West Virginia had ruled that arbitration clauses in nursing facility residency contracts were not enforceable as they were against the State’s public policy.

On Wednesday, the Third Circuit also had an opportunity to consider the Federal Arbitration Act. In Quilloin v. Tenet Healthsystem Philadelphia, — F.3d —-, 2012 WL 833742 (C.A.3 (Pa.), March 14, 2012), the Third Circuit strongly supported the federal preference for arbitration clauses when it upheld an arbitration clause in a hospital employee’s contract.

Janice Quilloin twice entered into an employment agreement with Tenet Healthsystem to work as a registered nurse. Nurse Quilloin’s employment contracts set forth individualized arbitration as the sole avenue to resolve most disputes. Eventually, Nurse Quilloin filed a collective action in federal district court against Tenet under the Fair Labor Standards Act, as well as a state-based class action and common law claims. Tenet filed a motion to compel obedience with the agreement to arbitrate.
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Making Copies: Pennsylvania Supreme Court Agrees to Hear Challenge as to Proper Method for Calculating Cost of Copying Medical Records

Author: Marc L. Penchansky

Pennsylvania’s Medical Record Act addresses the medical record request process. The Act requires the records holder to provide to the requestor the “estimated actual and reasonable expenses of reproducing the charts and records.” 42 Pa.C.S. § 6152(a)(1). The Act further lists acceptable prices that the medical care providers or their designees may charge for searching, retrieving and copying those records. See id. at 6152(a)(2)(i). If a plaintiff suspects a violation of the Act, he may bring a breach of contract claim for violations of this Act.

The law firm of Chiurazzi & Mengine, LLC filed several class action suits against medical facilities alleging that these facilities charged plaintiffs an amount in excess of the maximum charges permitted by the Act. The law firm did not allege that the charges exceeded the statutory cap set by the Act but alleged that the charges exceed what were the actual and reasonable expenses of reproducing the medical records. The Supreme Court of Pennsylvania recently agreed to hear one of the class action suits. Among the issues designated for appeal was the following:

Does the Medical Records Act [MRA], 42 Pa.C.S. § 6152(a)(1) and (a)(2)(i), require medical records reproducers to disclose their estimated actual and reasonable expenses of reproducing the charts or records, and to limit their copying charges to these amounts or the statutory ceiling rates, whichever is less. See Wayne M. Chiurazzi Law Inc., et al. v. MRO Corporation, 1 WAP 2012.

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