President Trump’s Nominee for the Supreme Court: Potential Impact to ACG Members and Patients

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    Whitfield L. Knapple, MD, FACG
    Chair, ACG Legislative and Public Policy Council

    On Monday evening, President Trump nominated Brett Kavanaugh, a judge on the U.S. Court of Appeals for the District of Columbia since 2006, to replace retiring Supreme Court Justice Anthony Kennedy.  Brett Kavanaugh was once a law clerk for Justice Kennedy.

    What does this mean for GI and patient care?

    In short, it is unclear, as we will describe below.  It is important to note that ACG is focusing only on potential GI health care policy issues.  We leave the larger and higher-profile issues to other organizations and our membership’s individual opinions.

    What is also unclear is whether one should assume that a judge considered a “judicial conservative” is automatically politically conservative.  For example, legal scholars point to Judge Kavanaugh’s dissenting opinion in 2011, when reviewing the Patient Protection and Affordable Care Act (ACA).  A recent article explains how a 2011 dissenting opinion from Judge Kavanaugh perhaps helped Chief Justice Roberts and the U.S. Supreme Court uphold the constitutionality of the ACA.  The Supreme Court in 2015 later upheld the ACA’s ability to provide federal assistance for insurance exchanges created by the states.

    In 2011, the D.C. Appellate Court upheld the ACA mandate as a valid exercise of Congress’ power under the Commerce Clause.  However, Kavanaugh dissented, not on the merits, but because he viewed that it was premature for the court to hear the case.  In his view, the Anti-Injunction Act prevents individuals from challenging the validity of taxes in court until after they have paid them (the earliest a court could hear a challenge on the individual mandate would have been 2015, or 1 year after the penalty took effect).   In his view, judicial-restraint was warranted.  Kavanaugh further explained in this opinion the individual mandate may be construed as a penalty or a tax, and that Congress has the power to pass tax legislation. Thus, courts must give deference to the legislature.  This is significant, as when the case reached the Supreme Court in 2012, the Supreme Court ruled that the ACA’s individual mandate was unconstitutional under the Commerce Clause (disagreeing with the D.C. Court of Appeals) but that the mandate is within Congress’s power to “lay and collect Taxes” (agreeing in part with Judge Kavanaugh’s dissent).

    There are also additional health care policy issues currently in lower courts that soon may wind up at the U.S. Supreme Court. Medicaid work requirements and mandates on pre-existing conditions are a few issues that Judge Kavanaugh may hear as a member of the Supreme Court.  While legal scholars look to his dissenting opinion on the ACA as a “moderate” position, others point to a 2015 dissenting opinion, stating that ACA contraceptive coverage requirements could infringe upon the rights of religious organizations.  Health policy experts are also using this dissent to gauge how he could potentially rule in cases on other ACA coverage requirements, such as mandatory coverage for those with HIV or hepatitis C.

    The constitutionality of the ACA is in the courts again: ACG is monitoring a case in Texas, where 20 state attorneys general have filed another suit on the ACA.  Congress zeroed the penalty for not having health insurance in 2017, as part of the Jobs Act.  They argue that based on the Supreme Court’s logic above, the ACA is now rendered unconstitutional.  The Justice Department in June echoed these arguments when it chose not to defend the ACA.  Please note that while the Jobs Act may have effectively eliminated the individual mandate, it only zeroed out the penalty beginning in 2019.  The law did not actually repeal this provision.  This may have a significant impact on important ACG objectives, as pre-existing conditions and community rating coverage requirements fall under the ACA.  This Justice Department letter also noted that it agrees with the Justice Department under President Obama—  that guaranteed issue for those with pre-existing conditions and community rate-setting should be tied to or “inseverable” with the individual mandate.  Thus, these sections of the ACA should potentially be repealed as well.

    ACG will continue to update membership as we review and study all analyses on the potential impact to GI clinicians and patient care throughout Judge Kavanaugh’s nomination process.

    Another legal issue: Trump Administration Withholds “Risk Adjustment” Payment to Commercial Insurers

    Another hot health care topic in the courts as of late is the ACA’s “risk adjustment” payment to commercial insurers.  “Risk adjustment” is a federal program that allows insurers, primarily in the small group and individual markets, pay into a pool.  These funds are then redistributed to commercial plans with a disproportionate number of high-cost claims.  In February, a judge in New Mexico ruled that the formula that determined who received funding is flawed, and that the rationale to make the payments budget-neutral needs refinement.  HHS has asked the court in New Mexico to reconsider the decision.  Last week, CMS announced that all payments will be suspended until this court case is resolved.  The issue in the New Mexico case is that the “risk adjustment” program has created financial winners and losers.  The New Mexico health care co-op alleges that they have been unfairly penalized, while larger commercial plans have profited from the program.

    In making this decision to halt payments, however, commercial insurers now warn that they will have to charge higher premiums next year.  ACG will continue to update membership on the latest developments on these issues.

    Whitfield L. Knapple, MD, FACG

    Chair, ACG Legislative and Public Policy Council

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