On November 14th, 2011, the Supreme Court announced in an order that it will hear arguments on three cases from the 11th Circuit challenging the constitutionality of the Patient Protection and Affordable Care Act (“ACA”): National Federation of Independent Business v. Kathleen Sebelius, Secretary of Health and Human Services, et al.; Florida v. Department of Health and Human Services; and Department of Health and Human Services v. Florida. The Court’s decision to hear these cases over the other health care appeals cases may be due to the involvement of more than half of the states and the inclusion of the most prominent legal questions raised about the legislation.
The Court will hear arguments on the following legal questions: 1) the constitutionality of the mandate that all Americans buy health insurance, 2) whether the insurance mandate, if deemed unconstitutional, is severable from ACA, allowing the remainder of the law to survive, 3) the legality of the expansion of Medicaid due to the potential coercive impact on states and whether such action exceeds Congress’s spending clause power, and 4) whether or not the Court has jurisdiction to hear this case in the absence of taxes being assessed and paid .
The Obama administration has expressed its confidence in the survival of the health care reform law. It is reported that Health and Human Services Secretary Kathleen Sebelius has stated, "We're very pleased that they have indeed decided to take the case…We're confident that the law is constitutional, will be upheld as constitutional."
In the National Federation of Independant Business case before the Court, the 11th Circuit found the individual mandate unconstitutional, but overturned the lower court’s decision and held that the individual mandate was severable from the remainder of the health care law. For the life science industry, the issue of severability is of primary interest. In the event the insurance mandate is determined to be unconstitutional and, secondarily, the mandate non-severable, it is a possibility that the entire healthcare law, including the sunshine provisions, might not survive. We do not believe, however, that this is the expected outcome.
Come January 1st, 2012, the life sciences industry will face requirements to begin capturing reportable data to comply with the Physician Payment Sunshine Act. While the Centers for Medicare and Medicaid Services (“CMS”) submitted the draft regulations to the Office of Management and Budget for review on November 17th, the life sciences industry still awaits an opportunity to view the draft regulations and the issuance of final regulations. Yet, it does appear that CMS is making progress toward the release of final regulations. Further, in the unlikely event that Court finds the individual mandate unconstitutional and non- severable, does anyone believe that Senators Grassley and Kohl will give up the battle for transparency and disclosure?