On November 10, 2020, the U.S. Supreme Court heard oral arguments for California v. Texas, a case that will potentially decide the fate of the Patient Protection and Affordable Care Act (“ACA”).
Continue Reading Texas v. California: SCOTUS Hears Oral Arguments About the Constitutionality of the ACA
The death of Supreme Court Justice Ruth Bader Ginsburg, and alongside it the high probability of a conservative successor to the open seat she left behind, is likely to shift the Court substantially to the right. Among the most notable cases that will likely be presented before the newly constituted Court is the pending challenge to the Affordable Care Act (the “ACA”).
Continue Reading The Death of RBG…and the ACA?
On May 18, 2020, California Senate Bill 977 (“SB-977”) was passed out of the California Senate Health Committee and is now scheduled for its first hearing before the Senate Appropriations Committee on June 1, 2020. SB-977 as written would subject all acquisitions and affiliations on and after January 1, 2021 by larger health systems, private equity funds and hedge funds of (i) hospitals, (ii) other health facilities, (iii) physicians, (iv) clinics, (v) ambulatory surgery centers or (vi) laboratories to prior approval by the California Attorney General. In its current form, SB-977 would require the California Attorney General to withhold his approval from a proposed transaction unless the transaction would (i) increase clinical integration and/or (ii) increase access or availability of healthcare services to underserved populations, and would not otherwise be anti-competitive. SB-977 would also give the Attorney General the discretion to hold a public hearing on a proposed transaction. In short, with SB-977, the California Legislature is going far beyond earlier proposals or legislation in other states – including Connecticut and Washington State – that have prior approval requirements for healthcare transactions.
In this article, we consider the forces behind SB-977 – a decade or more of healthcare consolidations and the financial distress being experienced by hospitals and other healthcare providers as a result of the current healthcare emergency – and the potential impact that SB-977 could have on the California healthcare marketplace if it were signed into law in its current form.
Continue Reading Getting Ahead of California’s Post-Pandemic M&A Surge: California Senate Bill 977 Seeks to Expand Attorney General Oversight of Healthcare Acquisitions and Affiliations involving Hospitals, Health Systems, Private Equity Groups, and Hedge Funds
In 2012, the U.S. Supreme Court in NFIB v. Sebelius struck down a provision in the Patient Protection and Affordable Care Act (the “ACA”) which, for all intents and purposes, made the expansion of the Medicaid program voluntary for individual states. As a consequence, the Medicaid expansion provided for in the ACA has been rolled out in piecemeal fashion, with various states opting to expand Medicaid in the years since the ACA’s passage, and other so-called “holdout” states choosing to preserve their respective pre-ACA structured Medicaid programs. These holdout states tend to be more conservative and Republican-controlled, with governors and state legislatures opposed to the ACA’s Medicaid expansion for various political and economic reasons. The COVID-19 pandemic, however, seems to have prompted some of these “holdout” states, even considerably conservative states, to reconsider their decision not to expand Medicaid.
Continue Reading Will COVID-19 Prompt “Holdout States” to Reconsider Medicaid Expansion?
On April 16, 2020, the Trump Administration issued its “Opening Up America Again Guidelines” (the “OUAA Guidelines”) as a self-styled roadmap to the staged reopening of the American economy.
On Sunday, April 19, 2020, the Centers for Medicare & Medicaid Services (“CMS”) followed suit by issuing new guidance (the “Reopening Guidance”) designed to reintroduce the provision of non-essential surgeries and medical procedures by healthcare providers located in “Phase 1” states and/or regions. Such non-elective procedures were previously put on hold at the state and local levels in accordance with prior CMS guidance dated March 18, 2020 (the “March Guidance”) in which CMS called for the delay of all elective surgeries, non-essential medical, surgical, and dental procedures during the COVID-19 state of emergency.
Continue Reading Elective and Non-Essential Medical Procedures: States React to Federal Recommendations and the Opening Up America Again Guidelines
On March 17, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued a memorandum to provide information to organizations that participate in the Programs of All-Inclusive Care for the Elderly (“PACE”) program in furtherance of preventing the spread of the 2019 Novel Coronavirus (“COVID-19”).
Continue Reading CMS Issues COVID-19 Prevention Guidance for PACE Organizations
January 30th, 2020 marked a dramatic change in Medicaid funding, as the Trump Administration and Centers for Medicare & Medicaid Services (“CMS”) showcased a plan, called the “Healthy Adult Opportunity,” that would permit states to cap Medicaid spending. This was a blow to the Medicaid expansion under the Affordable Care Act (“ACA”), which expanded federal spending for low income individuals that did not previously qualify for the program.
Continue Reading ACA Medicaid Expansion Weakens: Trump Administration Unveils Optional Plan for Block Grants
On December 18th, 2019, the Fifth Circuit Court of Appeals released a long-awaited decision on a significant challenge to the Affordable Care Act (“ACA”), affirming a lower-court ruling that we discussed in a previous post. In the lower-court ruling, the Federal District Court judge determined that the ACA’s individual mandate, which was reduced to $0 as a result of the Tax Cuts and Jobs Act of 2017, is no longer considered a tax and therefore Congress no longer has constitutional authority to enforce the mandate. Going one step further, the Federal District Court judge found that the individual mandate is not severable from the rest of the ACA, and thus held that the whole law is unconstitutional.
Continue Reading Update to Texas v. United States: Fifth Circuit Strikes Individual Mandate, Remands on Severability
Today the United States Court of Appeals for the Fifth Circuit reached its widely anticipated decision in Texas vs. Azar, ruling that the Affordable Care Act’s (ACA) individual mandate is unconstitutional as a result of the Tax Cuts and Jobs Act of 2017’s elimination of the mandate’s financial penalty. The Court has remanded the case to the District Court to further address the question (known as the “severability” question) of whether the remaining provisions of the ACA are lawful in light of the decision regarding the individual mandate.
Continue Reading JUST IN: Fifth Circuit Court of Appeals Reaches Decision on Latest Case Involving Constitutionality of ACA
As we noted in our November 1, 2019 Healthcare Law Blog post, California Attorney General Xavier Becerra rejected the proposed merger between Adventist Health System/West and St. Joseph Health System (the “Proposed Merger”) in a denial letter issued on October 31, 2019. The Proposed Merger would have created a joint operating company to manage each health system’s facilities in Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma Counties. In this blog post we will be discussing the Attorney General’s review process of hospital transactions and the reasons why this particular transaction may have been rejected. Moreover, we will assess what lessons can be learned going forward for other California healthcare systems and entities undergoing mergers and acquisitions in the future.
Continue Reading Adventist – St. Joseph Merger: AG Concludes Merger is Not in the Public Interest
On October 31, 2019, the California Department of Justice (“DOJ”) issued a denial letter rejecting a proposed merger between Adventist Health System/West and St. Joseph Health System. The parties had submitted notices to the DOJ requesting approval to form a joint operating company to manage the health systems’ nine health facilities in Northern California. According to the denial letter, the proposed transaction was rejected because the Attorney General concluded that it was not in the public interest due to concerns related to the potential for higher health costs and for reduced access and availability of health care services.
Continue Reading Merger of Adventist-St. Joseph Rejected by the California Attorney General