PPACA One Year Later: Where Have We Been and Where Are We Going?

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By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

March 2011–Even before its enactment on March 23, 2010, the Patient Protection and Affordable Care Act (PPACA) has incited great debate and controversy.  Immediately after its enactment, the first major action against PPACA began with a joint complaint filed by 13 attorneys’ general[1] in the US District Court for the Northern District of Florida within hours of President Obama signing the bill into law (aka “The Florida Challenge”).  While the controversy has made headlines on a near-daily basis, many significant challenges have been taken, both by Congress and the judiciary, to prohibit its increasing influence over the healthcare system.  Many challenges were taken within the first few months of 2011, leaving many to speculate whether PPACA can survive through its first year intact.

While the battle over PPACA’s constitutionality ensues, it is incumbent upon all providers and suppliers to bear in mind that they continue to be responsible for adhering to provisions of the law as they become effective.  For example, imaging providers and suppliers of advanced imaging services remain obligated to comply with the Stark disclosure requirement if self-referring for certain services (as described in greater detail in the December 2010 Link), as well as preparing to comply with the new Medicare enrollment provisions (as described in the February 2011 Link).  Finally, all providers and suppliers should remain attentive to and be prepared for further updates and guidance from the legislature, judiciary, and other governmental administrative bodies.

Constitutional Challenges to PPACA
On January 31, 2011, Judge Roger Vinson issued his opinion relative to the Florida Challenge and held that, “Congress exceeded the bounds of its authority in passing the Act with the individual mandate . . . Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.”  While this appeared to be a tremendous victory for the anti-healthcare reform camp, in reality, this ruling, while significant, is far from meaningful from a legal standpoint.  That is, a district court’s ruling only influences the district in which the ruling was made. Thus, outside of the Northern District of Florida, the Florida Challenge may be nothing more than a sensational headline.

On the legislative front, notably, less than two weeks prior to the Florida Challenge ruling, on January 20, 2011, the House of Representatives voted 245-189 to repeal PPACA in its entirety.  Largely symbolic, this repeal served to fulfill campaign promises of many newly-elected Republican congressmen who vowed to stand up against their Democratic counterparts.  On February 2, 2011, the Senate responded to the House by defeating the repeal by a 51-47 vote, which was straight down party lines.

On February 22, 2011, Judge Gladys Kessler of the Federal District Court for the District of Columbia rejected the constitutional challenge regarding the individual mandate, holding that Congress did not exceed its power as the activities substantially affect interstate commerce. Judge Kessler held that the individual mandate is the “least restrictive means of furthering this compelling interest,” which is “safeguarding the public health by regulating the healthcare and insurance markets.”

It should be noted that these are just a few examples of some of the more notable PPACA constitutional challenges, as there have been numerous cases filed across the country, many of which have been dismissed on procedural grounds, and one that has made it to the appellate court level.

Will PPACA Survive?
This struggle between the supporters and dissenters of PPACA is only the beginning.  Repealing PPACA would require a vote by both the House and Senate and then, to become effective, would further require the President’s signature or, if there is a presidential veto, an override by a two-thirds vote would be required.  Congress, consistent with the ever heightened partisanship since the elections, has voted along party lines and in the State of the Union address on January 25, 2011, President Obama acknowledged his willingness to “fix what needs fixing,” but refuses to sign any bill repealing PPACA.  Without Congress and the President’s approval, repealing PPACA rests with the judiciary.

To date, the five judges who have opined on the constitutionality of PPACA have ruled according to the position of their appointing president’s party.  The Supreme Court, currently, has five Republican appointed justices and four Democratic appointed justices, so how the Supreme Court will rule is still not entirely known; however, with many of the provisions having already been implemented and regulations having already been issued, it appears unlikely that it will rule PPACA, as a whole, unconstitutional.  However, the Supreme Court’s determination that PPACA, in its entirety, is constitutional does not preclude it from determining certain provisions are unconstitutional, which may be where the ruling lies.

[1] The Attorneys’ General included in the Florida Challenge representing the following states:  Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, and South Dakota.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.

The authors are founding members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.

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