Scalia’s death places many healthcare regulations in temporary limbo

12715395_839346236195037_3376240725045691005_nU.S. Supreme Court Justice Antonin Scalia’s death last Saturday raises not only the question of who will fill the empty SCOTUS seat and when, but what will become of the court’s healthcare cases in the meantime.

Scalia was appointed by President Ronald Reagan in 1986, after Chief Justice Warren Burger retired and was replaced by William Rehnquist. He was previously appointed by Reagan to sit on the D.C. Court of Appeals.

Scalia was known for his conservative stance and his opposing views on SCOTUS’ upholding of major cases around the Affordable Care Act.

  • In losing Scalia, SCOTUS’ loses its previous alignment of
  • four conservatives, four liberals and one swing vote, leaving the court–for now most likely to lean liberal or tie.

The court could be dealing with an empty seat for some time if congressional Republicans refuse to act on a forthcoming nomination by President Obama, with the intent of pushing the appointment of a new justice back until after a new president is elected in November.

In the meantime, the fate of several major healthcare cases could be determined by whether they are held off or heard by the eight-member court, which risks tying and leaving the case to either default back to the decision of the lower court or to be re-heard later when the Supreme Court is whole.

The issues at stake include abortion regulation, the ACA’s contraception mandate, required data sharing for a state all-payer database, and healthcare fraud regulation.

Let’s look at these issues in more detail.

Shannon Firth in a Medscape article wrote that the Supreme Court justices are considering a number of important healthcare cases focusing on topics including abortion and the ACA’s contraception mandate.

Here are five healthcare-related cases that could be affected by Scalia’s death:

  1. Whole Woman’s Health v. Hellerstedt: This case deals with the question of whether a 2013 Texas law imposes an “undue burden” on a woman’s right to an abortion. Under the Texas law, doctors who perform abortions must have admitting privileges at a full-scale hospital no further than 30 miles from the clinic, and each clinic must have the same facilities as a surgical center, according to SCOTUSblog. The court is slated to hear arguments on the case in March. A 4-4 decision would leave standing an appeals court ruling that upheld the law.
  2. Gobeille v. Liberty Mutual Insurance Company: This case questions whether self-funded insurers should be required to share certain claims data with the state of Vermont to help it develop its all-payer database. A split decision would leave the Second Circuit Court of Appeals decision as precedent. That previous decision invalidated Vermont’s all-payer database.
  3. Zubik v. Burwell: A third case asks whether the federal mandate that insurers offer contraception coverage — even with an exception allowing certain employers not to pay for it themselves — undermines the Religious Freedom Restoration Act by requiring religious nonprofits to act in ways they say run counter to their religious beliefs. That case is slated to be argued March 23. If the Supreme Court deadlocks, an appeals court ruling that rejected the religious groups’ challenge would stand.
  4. Universal Health Services v. United States ex rel. Escobar: This case examines whether certain legal approaches used in fraud cases against healthcare groups are valid; depending on the outcome, it could potentially shrink the number of fraud lawsuits against healthcare providers by calling into question provisions of the False Claims Act. The Act “makes it illegal to knowingly submit fraudulent bills to the government, such as for services not actually performed,” according to Modern Healthcare. A 4-4 ruling would leave the issue muddled, as three federal circuit courts have ruled one way and two others came to opposite conclusions.
  5. House v. Burwell: This case is not currently before the Supreme Court, but will probably make its way there eventually. Brought forward by former House Speaker John Boehner (R-Ohio), it challenges the administration’s decision to reimburse insurers for lowering beneficiaries’ cost-sharing responsibilities under the Affordable Care Act. The Congressional Budget Office reported that the subsidies would cost $136 billion over the next decade.

 

The court is also weighing a case about data sharing with potential implications for insurers and state healthcare reform efforts and another case with the potential to reduce—or increase—the number of False Claims Act suits brought against healthcare providers and other companies.

Scalia’s absence could make a difference in some of those cases. Scalia was a stalwart conservative, known for his colorful writing and acerbic jabs toward justices with whom he disagreed.

He joined a dissenting opinion in the 2012 case that upheld the ACA’s individual mandate and penned the dissenting opinion in last year’s King v. Burwell decision, which allowed Americans in all states to receive insurance premium subsidies.

Scalia felt that the Supreme Court justices had gone so far in ostensibly rewriting the ACA, that it should be named after them.

President Barack Obama Saturday said he intends to nominate a new justice, but it’s unclear whether he would be able to, given Republican opposition to filling the seat before a new president takes office.

It’s possible the court could hold off on hearing those four big healthcare cases until a new justice replaces Scalia, said Josh Blackman, an associate professor of law at South Texas College of Law who’s written extensively on the Supreme Court. He said that’s happened in the past.

Or, if the court moves forward with those cases and ends up in a 4-4 split, the decisions in the circuit courts will stand, said Tim Jost, a law professor at Washington and Lee University. The risk of such 4-4 decisions is high, especially in cases involving politically polarizing issues, considering that four of the remaining justices are generally considered liberal, three are considered conservative and one, Justice Anthony Kennedy, is often a swing vote.

In those very divisive cases, it will be more difficult for the conservatives to score a real win without Scalia.

“On really controversial cases where there would have been a 5-4 split, the business of the court essentially stops because you won’t have a precedential decision from the court,” Jost said. “You won’t have a decision from the court binding on the whole country.”

In such a split, the lower court’s decision would remain in place, but only for the area of the country served by that circuit. That could make for some messy results, including in the challenge over the ACA contraception mandate.

That challenge was brought by religious not-for-profits opposed to an Obama administration policy that says if they want to opt out of the ACA’s contraception mandate, they must submit a form to their third-party administrator or provide information to HHS so the government can arrange contraception coverage. They oppose having to play any part in providing birth control to employees.

That’s the kind of challenge that could result in a 4-4 split–but such an outcome would lead to different rules across the country. That’s because seven circuit courts have sided with the government, and one has sided with the religious not-for-profits. Some, however, have speculated the government was more likely than not to win that case anyway, with or without Scalia.

A 4-4 split in the abortion case, however, would leave intact a Texas law that requires doctors at abortion clinics to have admitting privileges at local hospitals and providers to comply with the same standards as ambulatory surgical centers. That case is known as Whole Woman’s Health v. Cole. A federal appeal upheld the law, saying it didn’t impose an undue burden on a woman’s right to get an abortion. The law has resulted in the closures of many Texas clinics. More broadly, the case has potential implications when it comes to how all states may regulate abortions.

The Supreme Court this term is also considering a case, Gobeille v. Liberty Mutual Insurance Co., on whether a self-funded insurer should have to turn over certain information—such as on claims and member eligibility—to the state of Vermont for its all-payer database. The state argues it needs the data to improve the cost and effectiveness of healthcare and that a ruling against it could also limit reform efforts in other states with similar databases.

The court is also weighing a case, Universal Health Services v. United States ex rel. Escobar, about fraud lawsuits that’s caught the attention of major healthcare organizations and associations. That case is over the validity of a legal theory now used to bring many fraud lawsuits against healthcare organizations. The case has the potential to reduce—or increase—the number of False Claims Act suits brought against providers and other companies.

But Blackman said it’s too early to say exactly how Scalia’s death might affect those or other cases.

The task of replacing Scalia will surely become a protracted political battle because Obama will need the Republican-dominated Senate’s majority approval to fill the spot.

Conservatives were quick to assert Saturday that a replacement justice shouldn’t be appointed before the 2016 presidential election.

Rarely, a president has made “recess appointments” to the Supreme Court without the Senate’s consent when it was in recess, according to a Congressional Research Service report. But that hasn’t happened since the 1950s and was highly controversial then.

Just hours after the death was announced, Republican presidential candidate Sen. Ted Cruz (R-Texas) tweeted that “we owe it to (Scalia), & the nation, for the Senate to ensure that the next President names his replacement.”

Senate Majority Leader Mitch McConnell said in a statement “the American people should have a voice in the selection of their next Supreme Court Justice. Therefore, this vacancy should not be filled until we have a new President.”

Senate Minority Leader Harry Reid tweeted that the president can and should send a nominee to the upper chamber right away. “The Senate has a responsibility to fill vacancies as soon as possible,” he added.

It appears virtually certain that the court will have to proceed with eight justices this term, as Senate Republicans leaders vowed not to confirm any Obama appointee, and may even refuse to hold hearings on a nominee.

The vacancy leaves presidential hopefuls with a lot more to consider as they continue to campaign.

“It certainly emphasizes the importance of the Supreme Court in the next election, which to me, has always been the most important factor in any event because the Supreme Court always has the last word,” Jost said.

Recommended Reading

Modern Healthcare: Justice Scalia’s death leaves healthcare cases in limbo

Becker’s Hospital Review: What Justice Scalia’s death could mean for healthcare: 7 things to know

The New York Times: Scalia’s Absence Is Likely to Alter Court’s Major Decisions This Term

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