Category: Jeremy Kreisberg

City of Arlington v. FCC and Subsidies in Federally Facilitated Exchanges

The Petrie-Flom Center Staff Leave a comment

By Jeremy Kreisberg

Plaintiffs in a pair of cases — Oklahoma v. Sebelius and Halbig v. Sebelius — are challenging the authority of the IRS to issue tax credits to individuals purchasing insurance through federally facilitated exchanges under the ACA.  While these cases are still pending at the district court level, the Supreme Court may have already signaled that its framework for deciding these cases will be friendly to the government.

Section 1311 of the ACA provides that each State “shall, not later than January 1, 2014, establish an American Health Benefit Exchange.”  Section 1321 is a fallback provision that allows for the creation of federally facilitated exchanges by requiring the Secretary of HHS to “establish and operate such Exchange within” any State that does not establish its own exchange.  Section 1401 of the ACA provides a calculation for tax credits provided to individuals purchasing insurance through “an Exchange established by the State under [section] 1311.”  Proponents of the aforementioned challenges argue that the ACA does not contain a calculation of tax credits for individuals purchasing insurance on a federally facilitated exchange, and therefore the IRS may not issue tax credits to those individuals.  Professor Timothy Jost has countered that “such Exchange” in section 1321 refers to those exchanges established by a state under section 1311.  Therefore, when other sections of the ACA (including section 1401) refer to an “Exchange established by the State under section 1311,” all of those references apply equally to federally facilitated exchanges.  In light of this apparent statutory ambiguity, the IRS has promulgated a rule clarifying that tax credits will be available through both state exchanges and federally facilitated exchanges.

Under the Chevron doctrine of judicial deference, courts generally defer to agency interpretations of ambiguous statutes.  However, a line of Supreme Court cases has previously suggested a “major questions exception” to Chevron whereby courts would hesitate before deferring to agency interpretations on questions of economic and political significance.  The Court explained the logic of the exception in FDA v. Brown & Williamson: while Chevron deference is “premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency,” the major questions exception reflects a belief that, “[i]n extraordinary cases, . . . there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.”  Last year, I noted some possible ambiguity over whether a court could invoke the “major questions exception” in a case concerning the IRS’s authority to issue tax credits through federally facilitated exchanges.  But as David Baake correctly concluded, the Supreme Court’s recent decision in City of Arlington v. FCC should put an end to any notion that the “major questions exception” has continuing vitality in the Chevron doctrine.

Read More

EMTALA and Patient Hoarding

jkreisberg Leave a comment

By Jeremy Kreisberg

It is clear that EMTALA aims to prevent hospitals from dumping patients that require emergency care until these patients are stabilized.  But whether EMTALA also prevents hospitals from hoarding emergency patients to their detriment is far less clear.  Recently, the Tenth Circuit confronted this question in Genova v. Banner Health, a case concerning a physician who claims that he was fired for complaining about overcrowding at his emergency room.  The physician sought protection under EMTALA’s whistleblower provisions, which prevent hospitals from taking an “adverse action” against an employee simply because that employee “report[ed] a violation of a requirement of [EMTALA].”  Thus, the question for the Tenth Circuit was whether a hospital violates EMTALA if it has an overcrowded emergency room and refuses to offer a transfer to its waiting patients.  Writing for a unanimous panel, Judge Gorsuch held that there was no such violation.

As a matter of statutory purpose, the Tenth Circuit had a persuasive case.  After all, EMTALA is clearly intended to prevent hospitals from dumping its emergency patients onto other hospitals to avoid the costs of providing uncompensated care.  So when Dr. Genova complained about “patient hoarding” rather than “patient dumping,” the court cleverly stated that “[h]is complaint wasn’t about an EMTALA violation but more nearly its inverse.”  Indeed, there are serious potential issues with finding that EMTALA requires any overcrowded hospital to transfer its patients.  Such a rule might allow hospitals, which are often overcrowded, to use resource constraints as an excuse for transferring patients that require expensive care.

But the Tenth Circuit rested much of its case on the statutory text.  And as a matter of statutory interpretation, this issue is far from clear.  EMTALA states that a hospital which receives a patient “must provide for an appropriate medical screening examination within the capability of the hospital’s emergency department.”  If a patient has an “emergency medical condition,” the hospital must provide either (A) “within the staff and facilities available at the hospital, for such further medical examination and such treatment as may be required to stabilize the medical condition,” or (B) “for transfer of the individual to another medical facility in accordance with subsection (c) of [EMTALA].”

Read More