U. S. District Court Ruling from Florida on Health Reform Law

Provided by: Strasburger and Price LLP

The U. S. District Court Ruling from Florida
(January 31, 2011)   

What Happened?    

The U.S. District Court for the Northern District of Florida ruled that the Patient Protection and Affordable Care Act of 2010 (“PPACA”) provisions related to the individual mandate for the purchase of health insurance exceeds the constitutional authority of Congress.  The opinion is 78 pages, and legal scholars will be analyzing each sentence.  In essence, however, the court concluded that the Commerce Clause of the Constitution authorizes Congress to regulate commerce among the states, but it does not go so far as to permit Congress to penalize individuals for failing to engage in commerce.  PPACA requires individuals to purchase insurance or to pay a penalty.  That is the only provision that the Court said violates the Constitution; however, since the law does not contain a severability clause (i.e., if one provision is held unconstitutional, the other provisions should be enforced without regard to the unconstitutional provision), the entire PPACA is void.   That said, Judge Vinson refused to enjoin the government from attempting to enforce ACA, noting that it was not necessary since the government cannot enforce an unconstitutional law.   

Why is This Important?   

Judge Vinson’s ruling is one of 4 Federal District Court rulings on the constitutionality of PPACA (2 for-2 against).  The Eastern District of Michigan and the Western District of Virginia concluded that PPACA was constitutional; the Eastern District of Virginia and now the Northern District of Florida have concluded that PPACA is unconstitutional.  Although, Judge Vinson expresses the opinion that the Executive Branch will follow his ruling and not attempt to implement PPACA through regulatory activities, the White House has already announced that it will continue implementation of PPACA.   

The Supreme Court will be the final arbiter, as one of its constitutional mandates is to settle contrary decisions among the circuits.  The route to the Supreme Court is through appeals to the Circuit Courts of Appeal.  The Florida decision would be appealed to the 11th Circuit in Atlanta; the two Virginia decisions would be appealed to the 4th Circuit in Richmond; and the Michigan decision would be appealed to the 6th Circuit in Cincinnati.  Following decisions in some or all of these Circuit Courts of Appeal, the Supreme Court would get the case sometime in the 2011-2012 term, at the earliest.   

Attorneys on both sides of this issue may be considering ways to get to the Supreme Court sooner.  The problem Judge Vinson has thrown to both proponents and dissenters is that by finding all of PPACA void, if his decision were to be upheld, all portions of PPACA, including provisions impacting insurers (no pre-existing condition denials, permitting children to remain on parents’ plans until age 26, assistance with drug costs for Medicare beneficiaries, limitations on the medical loss ratio) would be unenforceable.  Literally, no one in the country wants to see all the reforms contained in PPACA thrown out.    

Congress is also working on having the final say.  The House had its symbolic vote to overturn PPACA earlier this year.  Richard Durbin, the Democratic Senator from Illinois, has said he will convene a Judiciary Committee hearing on Wednesday to examine the constitutionality of the law.  Another road Congress could take is to amend PPACA and pass alternative ways to encourage people to participate in the process without making participation mandatory.   

Action Plan   

PPACA will be implemented.  The fight will continue in the courts and in Congress.  The country still needs to reduce the cost of health care.  The issues that PAI is looking at are still in the forefront.  As physicians continue in ways to work together - to increase their footprint in the health care landscape - clinically integrated entities will continue to emerge and expand.   

We will continue to monitor the developments relating to the regulatory implementation of the PPACA and make them available to PAI.