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The Supreme Court Reviews the ACA’s Individual Mandate Provisions

The Supreme Court is Examining the Individual Mandate Provisions of the ACA.(April 2, 2012):  The fate of universal health care for all Americans currently hangs by a thread — and several Judges on America’s highest Court appear anxious to cut that thread.  As you may know, the Supreme Court of the United States is currently hearing arguments about the constitutionality of the health care reform law enacted two years ago, the Patient Protection and Affordable Care Act (Affordable Care Act). This case, United States Dept. of Health and Human Servcs. v. Florida, specifically challenges aspects of 26 U.S.C. § 5000A, otherwise known as the individual mandate provisions. Essentially, Congress has mandated in health care reform that every U.S. citizen who files a tax return secure a minimum amount of health insurance coverage or pay a penalty collected by the Internal Revenue Service (IRS). Congress has the power to regulate interstate commerce under the Constitution, and even has the power to regulate intrastate commerce after expansive decisions in Wickard v. Fillburn and Gonzales v. Reich. However, many critics think that the health care reform law now regulates inactivity, and argue that such regulation goes too far. Whatever your personal views on the matter, this case is shaping up to be one of the most important in the history of the country, both politically and from the perspective of the health care industry.

I.  The First Day of Debate:

The Supreme Court set aside three days  (March 26, 27 and 28, 2012) to hear argument regarding the various issues in the health care reform case. The first day was entirely devoted to a complex and obscure question, but one that would entirely block the Court from hearing the rest of the case if decided in a certain way. Specifically, the Court heard argument about the Anti-Injunction Act of 1867, which requires that an individual challenging the propriety of a tax pay that tax first. The original idea of this law was to safeguard the government’s revenue stream – if everyone simultaneously filed suit to challenge paying a tax, the Federal government would quickly run out of money. This Act requires that individuals first pay, and then challenge, the tax. In the situation currently before the Court, the determination of whether this is a tax or other penalty, and whether the Anti-Injunction Act applies, is paramount.

II. Health Care Reform — Is it All or Nothing?

It is amazing to think that a case involving the constitutionality of a major healthcare reform currently hinges on a tax law from the 1800’s, but that is how Congress set up the relevant penalty provisions of the Affordable Care Act. But beyond the constitutionality of the individual mandate, the outcome of this case could have a number of important effects. First and foremost, all of the work and funding that has gone into new health care programs as a result of the Affordable Care Act would likely be for naught. This is because the individual mandate provision is most likely not severable from the rest of the law. While a complex concept in practice, severability basically refers to whether one section of a law can be removed from the rest of the law or whether the entire thing must be declared invalid. While laws passed by Congress usually have a severability clause, Congress did not, for whatever reason, put such a clause in the Affordable Care Act. This means that accountable care organizations, health insurance exchanges, mandatory compliance plans, qui tam cases based on the Anti-Kickback Statute, and many other government healthcare programs would be affected. There would be a significant amount of confusion in the healthcare community. While individual providers and small practices may not be greatly impacted, payors, clearinghouses, larger hospitals and group practices, and managed care organizations may need to consider what changes they have made in the last two years, and make sure that such changes are consistent with applicable law, whether that law is the Affordable Care Act or whatever else came before it.

III.  Final Thoughts on the Individual Mandate Issue:

Overall, this case presents an interesting political and legal dynamic, one that is highly charged with political rhetoric, deeply-entrenched opposing views, and above all else — confusion.  If you are like most Americans (myself included), you tend to consider these situations from a personal perspective.  As a father with a child who suffers from a chronic, critical illness (for which there is no cure or treatment), there isn’t a day that goes by that I don’t worry what my son will do when he is no longer eligible for coverage under our health insurance policy.   The passage of the Affordable Care Act is truly a Godsend for my son.  Therefore, despite its many flaws, I hope that our government officials can work through their disagreements and allow this legislation to move forward.

Robert Liles Healthcare AttorneyLiles Parker is a full-service health law firm focusing on regulatory compliance and provider representation. Our attorneys are highly skilled in designing and implementing effective Compliance Plans for physician practices, clinics, home health agencies, DME suppliers and other health care providers.  Moreover, our attorneys are experienced in handling an array of complex health law matters, including Medicare overpayment appeals, PRRB appeals, negotiations with DOJ, OIG and state MFCUs, along with a full range of health care transactional projects. For more information on the Supreme Court case or to discuss your own matter, call us today.  Robert W. Liles, Esq, Managing Partner at the firm, can be reached at: 1 (800) 475-1906.  Please call him today for a free consultation.

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