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Healthcare Industry Reacts to Landmark Supreme Court Ruling

June 28, 2012
by Gabriel Perna, David Raths, and Jennifer Prestigiacomo
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Reactions coming in for Supreme Court healthcare ruling

The U.S. Supreme Court has made a landmark ruling on the Affordable Care Act, upholding the main parts of President Barack Obama’s signature domestic act, by a vote of 5-4. Reactions to the ruling have started to come in from all sides of the healthcare industry, mostly met with approvals from leaders at industry associations and providers.

Chief Justice John Roberts, typically a conservative jurist who was nominated by President George W. Bush in 2005, voted alongside Justices Elena Kagan, Sonia Sotomayor, Ruth Bader Ginsburg, and Stephen Breyer. Justice Anthony Kennedy wrote the dissenting opinion, and he was joined by Justices Clarence Thomas, Samuel Alito, and Antonin Scalia.

As per the Supreme Court, the individual mandate for the purchase of health insurance was affirmed not under the Commerce Clause of the U.S. Constitution, but in the form of a tax. With regard to the individual mandate, the court ruled that the federal government cannot use the Commerce Clause to justify the individual mandate, as the government cannot force people to purchase services. However, it sustained the mandate under the concept of its being a tax, as there is no criminal or civil penalty for not purchasing health insurance under the ACA.

Ruling on another significant element of the ACA, the nation's high court ruled that the Medicaid expansion provided for in the act is constitutional, but that it would be unconstitutional for the federal government to withhold Medicaid funding for non-compliance with the expansion provisions.

Reactions to the ruling have started to come in from all sides of the healthcare industry. Already, the Healthcare Information Management and Systems Society (HIMSS) has said through president and CEO H. Stephen Lieber, that it is relieved “that questions about the healthcare reform law have now been settled and the nation can move forward with the essential work of transforming healthcare in America.  Health information technology is critical to the ongoing transformation in our nation.”

To some, the Supreme Court ruling will come as a great relief to state health IT executives working on the infrastructure to enact the reforms in the law. “If the court had thrown out the entire Affordable Care Act, it would have had a significant impact on state governments that have been working on health benefit exchanges,” said Jonah Frohlich, managing director of Manatt Health Solutions, which provides policy and regulatory advice to healthcare organizations and state governments. “They would have had to reconsider all the initiatives the law funded them to do.”

“This ruling will be very reassuring for states committed to accelerating the pace of adoption,” added Frohlich, who was previously the deputy secretary of health information technology at the California Health & Human Services Agency. 

The court ruling also upheld Medicaid expansion, as long as the federal government does not penalize states that choose not to participate in the new program by taking away their existing Medicaid funding. It's not clear how many states would choose to opt out of the Medicaid expansion program. Some states had taken a political stand against the Medicaid expansion, even though they have taken funding for planning and upgrading their Medicaid infrastructure. “Even in those states that opposed it, this will likely provide momentum to move forward,” Frohlich said.

For many in the healthcare industry, the ruling by the Supreme Court would not have stopped the momentum of health reform in any case. Donald W. Fisher, Ph.D., president and CEO of the American Medical Group Association (AMGA), said that the delivery system is reforming, and that change is not reliant on any law or regulation.

“The real reform is taking place out on the front lines by these highly integrated health delivery systems that are now and have been for decades committed to coordinating patient care and high quality care across multiple patient conditions,” Dr. Fisher said. “For us, nothing is really changing, no matter what they would have decided. This reform of the healthcare delivery is occurring in the marketplace.”

Howard says while he was somewhat surprised by the decision, it doesn’t matter because, “The train has already left the station.” This opinion was seconded by Edward F. Howard, executive vice president of the Alliance for Health Reform.  

“Even had the Court invalidated all or most of the act, there is such movement to a reshaped health system; I don’t think it would have done much to slow down the speed with which the change is going to occur,” Howard said.

Fisher did note that the ruling leaves intact the Center for Medicaid and Medicare’s (CMS) Healthcare Innovation Center, which had its fate in doubt. Other pilot programs that are meant to spur innovation and designed to “move the change meter up “were also saved by the Supreme Court’s ruling. 

Many, like AGMA’s Fisher and the Alliance for Health Reform’s Howard, as well as the Premier Alliance’s senior vice president of Public Affairs, Blair Childs, are noting that the battle over the Affordable Care Act is far from over.  “This removes one of the uncertainties, the politics of healthcare will still continue,” Childs said.

Sharon F. Canner, senior director of advocacy programs for the College of Healthcare Information Management Executives (CHIME), weighed in with her approval of the ruling.