The Supreme Court’s decision in King v. Burwell that the federally facilitated exchanges can grant premium tax credits was clearly the big Affordable Care Act implementation news for the end of June, if not for the year. But it was not the only ACA-related news.
First the Supreme Court ended its term this year, as it did last year, by entering an order in one of the cases challenging the accommodation the federal government has offered religious organizations with respect to the contraceptive mandate. The accommodation that the Departments of Labor, Treasury, and Health and Human Services offered religious organizations — after last year’s end-of-term order in the Wheaton College case called into question an earlier HHS rule — requires religious organizations to inform the government of their objection to covering all or some contraceptives for their employees, and to identify the insurer or third party administrator that covers their employees. The government will then arrange with the insurer or third party administrator to offer contraceptive coverage without further involvement from the religious organization.
Some religious organizations have continued to contest this accommodation, claiming that it still makes them responsible for allowing their employees to commit a sin and thus violates the Religious Freedom Restoration Act by substantially burdening their free exercise of religion. The Third, Fifth, Seventh, and D.C. Circuits have rejected this argument; they have upheld the most recent accommodation, saying that it does not substantially burden the plaintiffs’ religious beliefs and is a reasonable accommodation for fulfilling the compelling governmental interest of ensuring employees’ access to contraceptive coverage. But litigation continues.
The plaintiffs in Zubik v. Burwell had asked the Supreme Court to stay the mandate of the Third Circuit, which had rejected their arguments. Justice Alito had granted a temporary stay of the mandate in April. The June 29 order denied the plaintiffs’ request for a stay, but it enjoined the government from enforcing the contraceptive rule against the plaintiffs as long as they qualified as a religious organization and self-certified their opposition to contraceptive coverage to the government.
The order specified that nothing in it affected the ability of employees to receive contraceptive coverage or of the government to rely on information supplied to it by the religious organizations to ensure coverage. It may not always be the case, however, that the government can identify the insurer or third party administrator responsible for coverage if a religious organization does not provide that information — thus some employees may go without coverage. Justice Sotomayor would have denied the request.
In any event, the order is only in effect pending the filing and disposition of the plaintiffs’ pending request for certiorari (review). Given that all of the circuits that have ruled on last summer’s accommodation have so far ruled against the plaintiffs, it is not a foregone conclusion that the Court will grant certiorari.
What A Decision On Legislative Standing Might Mean For House v. Burwell
Another case decided by the Court on June 29 is likely also to have ramifications for pending Affordable Care Act litigation. Arizona State Legislature v. Arizona Independent Redistricting Comm’n concerned legislative redistricting in Arizona, an issue remote from the ACA. But a major issue in the case was the standing of the Arizona State Legislature to bring a lawsuit to challenge the redistricting. The standing of a legislature to sue if, of course, a key issue in House v. Burwell, arguably the most serious remaining case challenging the ACA.
House v. Burwell is a case brought by the House of Representatives challenging the administration’s delay of the employer mandate and, more importantly, arguing that the federal government is improperly paying out cost-sharing reduction payments in the absence of a specific annual appropriation. It is a serious challenge to the ACA, because the ACA’s cost-sharing reductions are what makes health care affordable for the almost 60 percent of exchange enrollees who receive them. Although insurers would be required to continue to reduce cost-sharing even if the courts found for the House, they would not, absent a specific appropriation, be paid for the cost-sharing reduction, causing financial distress and dramatic premium increases on the part of insurers.
The government has moved to dismiss this litigation based on existing precedent, notably the 1997 Supreme Court decision of Raines v. Byrd, which held that members of Congress cannot sue to challenge executive action. The Court in the Arizona case distinguished Raines and found standing in the Arizona State Legislature to challenge the redistricting, in part because Raines involved individual legislators while the Arizona case involved the state legislature suing as an institution pursuant to a vote to authorize litigation. This is arguably the situation also presented in House v. Burwell, where the majority of the House authorized the litigation. The Court in the Arizona case, however, explicitly noted at footnote 12 that its decision does not “touch and concern the question of whether Congress has standing to bring suit against the President,” suggesting that this raises serious separation of power issues.
Justices Scalia and Thomas dissented in the Arizona case, and would have held that the Court had no jurisdiction to hear a challenge brought by a legislature. Although they emphasized the separation-of-powers basis for rejecting standing, they observed that the lack of standing argument may be stronger where state legislatures are suing than when Congress sues.
House v. Burwell is currently awaiting further briefing of the government’s motion to dismiss the case. It is likely that the Arizona case will play a major role in its decision.
Health Plan Efforts To Improve Quality And Reduce Disparities
On June 19, while all the world including myself was awaiting the Court’s decision in King, the Department of Health and Human Services released further details on its ongoing quality improvement strategy for qualified health plans, in a notice published in the Federal Register and in documents filed at its Paperwork Reduction Act website. The documents include a Quality Improvement Strategy Implementation Plan and Progress Report Form to be filed by qualified health plans, as well as a cross-walk showing changes in the form from earlier versions.
CMS claims to have streamlined the form to eliminate redundancies and reduce effort on the part of insurers. Substantively, CMS clarified that an insurer can meet the requirement that it reduce health and health care disparities by either selecting it as a topic area or by integrating relevant activities in the issuer’s quality information system (QIS). CMS states that it has developed a flexible QIS form to encourage issuer innovation and promote a culture of continuous quality improvement.
Insurers may make annual changes to their activities, quality measures, and/or performance targets without creating a new QIS. An insurer will, however, have to submit a new QIS if it changes the topic area or market-based incentives of its QIS, if it achieves one or more performance targets, if it does not realize the QIS impact as expected, or if the QIS results in negative outcomes or unintended consequences.
In the initial years of QIS implementation, CMS will not establish any standardized or uniform set of performance measures for the QIS and does not require insurers to select measures from any specific set of measures. CMS will require insurers to submit updates using performance measures as a measure of progress along with a narrative description. Insurers will be allowed to focus on the issues of greatest importance to their markets and covered populations. In particular, CMS intends to collect information regarding alternative payment models linking quality and value to promote transparency, align with HHS delivery system reform efforts, and help Marketplaces make better informed QHP certification decisions.
Insurers will be required to collect quality information beginning in 2016 for the 2017 coverage year.
Reinsurance And Risk Adjustment Payments
Finally, on June 30, 2015 health insurers will be notified regarding the reinsurance and risk adjustment payments they will receive and of any risk adjustment payments they may have to make for 2014 under the ACA’s premium stabilization programs. It is likely that these amounts will be substantial and that they will not always be in line with what insurers anticipated. Stay tuned for further developments.
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