Healthcare Business News

Federal judge strikes down Missouri's regulations on exchange navigators, other outreach workers

By Paul Demko
Posted: January 24, 2014 - 3:15 pm ET

Missouri's regulations for outreach workers who help individuals sign up for healthcare coverage through the federal exchange have been thrown out by a federal judge. The ruling could have implications for other states that also have attempted to regulate training and activities of outreach workers, a healthcare law expert said.

U.S. District Judge Ortrie Smith issued a preliminary injunction Thursday prohibiting enforcement of a Missouri law that requires outreach workers to register with the state and limits their activities. Outreach workers include navigators, in-person assisters and certified application counselors.

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Missouri is among 36 states relying on the federal exchange to provide access to insurance products. That decision, Smith ruled, precludes the state from interfering with implementation of the Patient Protection and Affordable Care Act. States had the option of creating their own exchanges or using the federal marketplace.

“Missouri has opted not to be in the health insurance exchange business,” Smith wrote in his opinion. “Having made the choice to leave the operation of the exchange to the federal government, Missouri cannot choose to impose additional requirement or limitations on the exchange.”

At least 17 other states that are relying on the federal exchange to sign up residents for healthcare coverage have laws regulating the behavior of outreach workers, according to data collected by researchers at Georgetown University's Health Policy Institute. Many of these laws are being pushed by insurance brokers, who view the outreach efforts as state-sanctioned competition. The Missouri ruling could have significant implications for those other states, according to Timothy Jost, a healthcare expert at Washington and Lee University's School of Law.

“If groups in those states decide to litigate this they've got a very strong decision that supports their position,” Jost said. “I think this is an important decision.”

Regulation of outreach workers also has generated complaints in states such as Indiana, Ohio, Tennessee, Texas and Wisconsin. In general, these states are controlled by Republican lawmakers hostile to the ACA.

In October, a federal judge issued a temporary restraining order blocking enforcement of Tennessee's law regulating the activities of outreach workers on the grounds that it violated their free speech rights. A second lawsuit challenging Tennessee's rules for outreach workers was filed in state court. The state then agreed not to enforce those rules in order to settle the legal disputes.

Texas initially proposed requiring workers to go through 40 hours of training and pay a $50 registration fee. Following widespread complaints, the most onerous requirements were eliminated. But outreach workers in Texas are still subject to more than 300 pages of state regulations (PDF).

The Missouri attorney general's office has not indicated whether it will appeal the decision. “We are reviewing the ruling,” said press secretary Nanci Gonder.

In addition to requiring outreach workers to register with the state, Missouri's law prohibits them from providing any “advice” to individuals about obtaining coverage. Individuals could be subject to fines if they violate these rules.

State regulations were in conflict with the requirements of the federal healthcare law, Smith determined. “Providing information about various plans—which necessarily requires providing information about the different strengths, weaknesses and other contrasting features—is indistinguishable from advice,” Smith wrote.

Abigail Coursolle, a staff attorney with the National Health Law Program who is working on the Missouri case, hailed the ruling as a victory for low-income individuals and others who currently lack healthcare coverage. “We definitely hope that it will send a strong message,” she said.

Coursolle is not aware of any other litigation that is currently pending on the issue. “As far as we know this is the first case of its kind,” she said.

Follow Paul Demko on Twitter: @MHpdemko

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