Obama Administration Faces Conservative Justices in Sixth Circuit

Posted on: May 29, 2011  |   Author: Michael Flood, J.D. Candidate 2012
Filed Under: Healthcare Reform, Legislation, Liability & Litigation   |   Leave a Comment

The Sixth Circuit Court of Appeals is set to hear a challenge to the constitutionality of the Affordable Care Act on June 1.  This is the second time the law will be challenged at the appellate level, and the first time in which the Obama Administration’s lawyers will face a bench with a majority of Republican appointees.

The case will be heard by Judges Jeffrey S. Sutton, James L. Graham, and Boyce F. Martin. Sutton and Graham were both Republican appointees. Sutton was appointed by George W. Bush and confirmed in 2003 despite Democrats’ concern over his states’ rights views and fear that he would weaken civil rights protections. Graham is a trial judge who was appointed by President Reagan, and is sitting on the Sixth Circuit on a temporary basis. Judge Martin is the lone liberal voice on the panel, and is well known for his opinion in the University of Michigan Law School affirmative-action ruling, which was later upheld by the Supreme Court. Judge Martin was appointed by President Carter.

The Sixth Circuit will be the second of three circuits to hear ACA litigation over the next few weeks. The most anticipated ACA case will be heard by the Eleventh Circuit on June 8, in which the law is being challenged by 26 states. The Fourth Circuit has already heard arguments, but has not yet handed down an opinion. The Fourth Circuit panel was composed entirely of Democratic appointments.

Commentary: Given the political makeup of the panel, the Sixth Circuit could rule the individual mandate is unconstitutional. However, this ruling would only set the stage for the legal battle in the Supreme Court. As the article notes, it is likely the Supreme Court could hear the case as soon as next term.

Price Check in Room Five

Posted on: May 22, 2011  |   Author: Scott Yackey, J.D. Candidate 2012
Filed Under: Healthcare Reform, Other   |   Leave a Comment

The Wall Street Journal reported that a joint study between Brown University and the University of Miami has found that simply notifying physicians of the cost of routine blood tests can reduce the daily bill by 27%. Over the eleven week study, where cost information was announced weekly to doctors-in-training and their attending physicians, the daily cost per non-intensive care patient dropped to a low of $108.11 from $147.73, resulting in a total savings of $54,967. While the cost savings was based on the sticker price and not the negotiated Medicare or insurance prices, the study emphasizes the cost savings that can be realized when physicians know the costs of routine tests. However, the short study was unable to gauge the long term impact of this publicized cost information to determine whether physicians will continue to engage in “defensive medicine” and order the often “redundant and unnecessary” blood tests. Yet, with patients and physicians in the dark about the costs of routine tests, the cost of the test cannot be weighed against the risk of legal suit.

Commentary: While the cost of any particular test should not be the determining factor in providing care, informing physicians and patients of the true costs may lead to a more open discourse on treatment options with an end result of lower system costs. However, the wide availability of cost information may negatively impact the push for more preventative medicine and early screenings. Patients and physicians, after seeing the costs, may seek cheaper, yet equally effective alternatives or may simply forego certain routine tests. In either event, providing cost information to both parties can be a surprisingly simple method of reducing health care costs.

Federal Malpractice Bill Passes Congressional Hurdle, Raises Constitutional Eyebrows

Posted on: May 22, 2011  |   Author: Mary Beekman, J.D. Candidate 2012
Filed Under: Legislation, Other   |   Leave a Comment

Last week, the House Energy and Commerce Committee  approved a bill that would cap noneconomic damages at $250,000 in federal medical malpractice cases. The bill also creates a three year statute of limitations on claims, restricts punitive damages, and limits contingency fees for attorneys. Further, it contains a safe harbor provision that,  in certain circumstances, shields medical products manufacturers and distributors from punitive damages.  According to the Congressional Budget Office, H.R. 5, the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act would reduce health care expenditures by .4 percent, reducing the federal deficit by $40 billion between 2011 and 2021. The most controversial part of the bill however, is its preemption of state tort reform laws.

The Committee approved the bill by a 30-20 vote along party lines. Despite strong Republican support in committee, the bill may not get such a warm reception from some if it gets on to the House floor. Lawmakers claim that the preemption clause violates states’ rights under the 10th Amendment. For instance, the HEALTH Act would preempt state laws or decisions that outlaw damage caps altogether. However, it would allow states with damage caps to set them either higher or lower than the federal level. Another exception would allow states to provide protection greater than the federal level to healthcare providers and organizations. Rep. Lee Terry, R-Neb. claims the law would preempt “every [law] but California and Texas.” Terry may be in the minority of his party, though, as most Republicans find the bill a necessary step in limiting the excessive costs associated with defensive medicine. Democrats counter that limiting damages for injured patients is not guaranteed to reduce health care costs.

The bill now moves to the Judiciary Committee to resolve differences with an earlier version before it can go to the floor.

Commentary: This debate mirrors arguments that have raged in state legislatures for years. It remains to be seen whether states that have fought bitterly to enact their own tort reforms would view this as federal encroachment or vindication. Given the preemption views on both sides of the aisle, should the bill become law, a constitutional challenge seems inevitable.

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