Justice Scalia's death leaves healthcare cases in limbo

The death of U.S. Supreme Court Justice Antonin Scalia, who famously said the Affordable Care Act should be called “SCOTUScare,” leaves in limbo a number of healthcare-related cases. The news also quickly sparked a debate over who would replace him amid the presidential campaign.

Scalia died Friday, presumably of natural causes, at a ranch in Texas. He was 79.

The Supreme Court justices are considering a number of important healthcare cases focusing on topics including abortion and the ACA's contraception mandate.

The court is also weighing a case about data sharing with potential implications for insurers and state healthcare reform efforts and another case with the potential to reduce—or increase—the number of False Claims Act suits brought against healthcare providers and other companies.

Scalia's absence could make a difference in some of those cases. Scalia was a stalwart conservative, known for his colorful writing and acerbic jabs toward justices with whom he disagreed.

He joined a dissenting opinion in the 2012 case that upheld the ACA's individual mandate and penned the dissenting opinion in last year's King v. Burwell decision, which allowed Americans in all states to receive insurance premium subsidies.

Scalia felt that the Supreme Court justices had gone so far in ostensibly rewriting the ACA, that it should be named after them.

President Barack Obama Saturday said he intends to nominate a new justice, but it's unclear whether he would be able to, given Republican opposition to filling the seat before a new president takes office.

It's possible the court could hold off on hearing those four big healthcare cases until a new justice replaces Scalia, said Josh Blackman, an associate professor of law at South Texas College of Law who's written extensively on the Supreme Court. He said that's happened in the past.

Or, if the court moves forward with those cases and ends up in a 4-4 split, the decisions in the circuit courts will stand, said Tim Jost, a law professor at Washington and Lee University. The risk of such 4-4 decisions is high, especially in cases involving politically polarizing issues, considering that four of the remaining justices are generally considered liberal, three are considered conservative and one, Justice Anthony Kennedy, is often a swing vote.

In those very divisive cases, it will be more difficult for the conservatives to score a real win without Scalia.

“On really controversial cases where there would have been a 5-4 split, the business of the court essentially stops because you won't have a precedential decision from the court,” Jost said. “You won't have a decision from the court binding on the whole country.”

In such a split, the lower court's decision would remain in place, but only for the area of the country served by that circuit. That could make for some messy results, including in the challenge over the ACA contraception mandate.

That challenge was brought by religious not-for-profits opposed to an Obama administration policy that says if they want to opt out of the ACA's contraception mandate, they must submit a form to their third-party administrator or provide information to HHS so the government can arrange contraception coverage. They oppose having to play any part in providing birth control to employees.

That's the kind of challenge that could result in a 4-4 split--but such an outcome would lead to different rules across the country. That's because seven circuit courts have sided with the government, and one has sided with the religious not-for-profits. Some, however, have speculated the government was more likely than not to win that case anyway, with or without Scalia.

A 4-4 split in the abortion case, however, would leave intact a Texas law that requires doctors at abortion clinics to have admitting privileges at local hospitals and providers to comply with the same standards as ambulatory surgical centers. That case is known as Whole Woman's Health v. Cole. A federal appeals upheld the law, saying it didn't impose an undue burden on a woman's right to get an abortion. The law has resulted in the closures of many Texas clinics. More broadly, the case has potential implications when it comes to how all states may regulate abortions.

The Supreme Court this term is also considering a case, Gobeille v. Liberty Mutual Insurance Co., on whether a self-funded insurer should have to turn over certain information—such as on claims and member eligibility—to the state of Vermont for its all-payer database. The state argues it needs the data to improve the cost and effectiveness of healthcare and that a ruling against it could also limit reform efforts in other states with similar databases.

The court is also weighing a case, Universal Health Services v. United States ex rel Escobar, about fraud lawsuits that's caught the attention of major healthcare organizations and associations. That case is over the validity of a legal theory now used to bring many fraud lawsuits against healthcare organizations. The case has the potential to reduce—or increase—the number of False Claims Act suits brought against providers and other companies.

But Blackman said it's too early to say exactly how Scalia's death might affect those or other cases.

The task of replacing Scalia will surely become a protracted political battle because Obama will need the Republican-dominated Senate's majority approval to fill the spot.

Conservatives were quick to assert Saturday that a replacement justice shouldn't be appointed before the 2016 presidential election.

Rarely, a president has made “recess appointments” to the Supreme Court without the Senate's consent when it was in recess, according to a Congressional Research Service report. But that hasn't happened since the 1950s and was highly controversial then.

Just hours after the death was announced, Republican presidential candidate Sen. Ted Cruz (R-Texas) tweeted that “we owe it to (Scalia), & the nation, for the Senate to ensure that the next President names his replacement.”

Senate Majority Leader Mitch McConnell said in a statement that “the American people should have a voice in the selection of their next Supreme Court Justice. Therefore, this vacancy should not be filled until we have a new President.”

Senate Minority Leader Harry Reid tweeted that the president can and should send a nominee to the upper chamber right away. “The Senate has a responsibility to fill vacancies as soon as possible,” he added.

The vacancy leaves presidential hopefuls with a lot more to consider as they continue to campaign.

“It certainly emphasizes the importance of the Supreme Court in the next election, which to me, has always been the most important factor in any event because the Supreme Court always has the last word,” Jost said.

Scalia was appointed by President Ronald Reagan in 1986, after Chief Justice Warren Burger retired and was replaced by William Rehnquist. He was previously appointed by Reagan to sit on the D.C. Court of Appeals.

Lisa Schencker

Lisa Schencker covers legal issues and enforcement agencies. Before joining Modern Healthcare in 2014, she was an education reporter for the Salt Lake Tribune and before that wrote for the Bakersfield Californian and the Scranton (Pa.) Times-Tribune. She has bachelor’s and master’s degrees in journalism from the University of Illinois at Urbana-Champaign.

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Adam Rubenfire

Adam Rubenfire covers supply chain for Modern Healthcare. His beat responsibilities include pharmaceuticals, medical devices, capital equipment, group purchasing organizations and medical supplies. His work has appeared in the Wall Street Journal, Automotive News and Crain’s Detroit Business. He has a bachelor’s degree in organizational studies from the University of Michigan. He joined Modern Healthcare in 2014.

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