Four ways Trump’s SCOTUS nominee will affect healthcare

Industry experts are watching President Trump’s nomination of Colorado Judge Neil Gorsuch to the Supreme Court. Judge Gorsuch is well-known for arguing for an exclusion from the contraception mandate in the Affordable Care Act (ACA) in the Hobby Lobby case.

Here are four things to know about Judge Gorsuch, according to healthcare experts and policy analysts.

Piper1. He is a critic of the Chevron doctrine, which could influence how he leans in cases related to healthcare. In Chevron v. National Resources Defense Council, a 1984 decision concerning the Chevron energy company established the so-called Chevron doctrine under which courts are supposed to defer to federal agencies when it comes to interpreting vague or ambiguous laws defining their responsibilities. “Under the Supreme Court’s decision in Chevron, federal judges greatly defer to federal agencies in what Congressional laws mean,” says Kip Piper, MA, FACHE, president, Health Results Group, LLC, in Washington, D.C. “Judge Gorsuch is a critic of the Chevron decision and the idea that bureaucrats, not judges, should be the ones interpreting the law when there is a conflict over the meaning of a statute.”

Today, if a hospital or Medicare Advantage (MA) plan were to appeal a CMS payment decision or an audit, they face a daunting challenge of proving to a federal judge that either CMS was arbitrary and capricious or that CMS’ interpretation of the law was obviously unreasonable, according to Piper.

“Under the Chevron doctrine, CMS gets to interpret the extent of its own authority,” he says. “Without the Chevron decision, providers, insurers, and state Medicaid agencies would be in a much better position and better able to prevail in court when challenging CMS audit recoveries and payment decisions. Examples would be hospital challenges of recovery audit findings and MA plan challenges to CMS risk adjustment validation audits.”

Herrick

2. He is a strict constitutionalist, and his healthcare decisions will likely reflect this. “His decisions are well-thought-out and reasoned,” says Devon Herrick, senior fellow, National Center for Policy Analysis. “He does not appear to be motivated by a personal agenda. He does, however, have a history of protecting religious liberty, as the Hobby Lobby case illustrated. It remains to be seen how he will view hot button issues like abortion.”

3. He shares the conservative legal philosophy held by the late Antonin Scalia and this will be reflected in his healthcare decisions. “From the perspective of his impact on potential healthcare decisions, he will likely support employers’ ability to opt out of the contraceptive mandate in the ACA, have a negative view of both abortion and the ‘right-to-die’ laws passed in several states, and support the defunding of Planned Parenthood,” says Managed Healthcare Executive advisor Don Hall, principal, Delta Sigma LLC.

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4. He will closely interpret the Administrative Procedures Act (APA), which could impact the extent to which federal agencies, such as CMS, must go through formal rulemaking and when they can make enforceable policy through memos and letters. “CMS often makes policy through sub-regulatory guidance, without the public notice and comment process required for regulations under the federal APA,” explains Piper. “Affected parties must still adhere to the guidance or run severe financial and compliance risks. While rules are intended to form the basis of administrative law, increasingly informal instruments similar to memos and manuals are used instead and they are far more voluminous than already massive federal regulations.”

The line between when a rule is required and when an agency may instead use a letter or memo to issue instructions is not always clear, according to Piper. “Criticism that CMS often violates at least the intent of the APA is not new, it goes back decades, but the expansion of CMS’ authority over healthcare, the Obama Administration’s expansive view and aggressive use of executive power over states and businesses, and the practical necessities of getting policies out the door quicker than formal rulemaking allows have all meant a dramatic increase in the use of instruments other than rulemaking,” he says. “Federal court deference to agencies, the huge cost of taking an agency to court, and fears of angering an increasingly powerful bureaucracy tend to mean few legal challenges by affected health industries or state governments.  Judge Gorsuch is more likely to interpret laws like the APA as Congress wrote them and closer to the original intent.”

In May 2016, CMS published a massive final rule governing Medicaid managed care, with an array of new complex requirements for the over $200 billion Medicaid managed care industry and state Medicaid agencies, according to Piper. “While the final rule was massive, in many places it deferred further instructions to sub-regulatory guidance,” he says. “Instead of spelling everything out in the rule, CMS wrote it to allow them to define requirements through memos and manuals, without any public comment and without going the OMB review as is required of rules. As a result, CMS has been developing guidance on over two dozen areas.”