Health Law Case Brief: Mayo Collaborative Services v. Prometheus Laboratories, Inc.

By: Kristyn Bunce DeFilipp

On March 20, 2012, the Supreme Court unanimously held that patent claims that help doctors who use thiopurine drugs to treat patients with autoimmune diseases determine whether a given dosage is too low or too high were unpatentable pursuant to 35 U.S.C. § 101, because the claims set forth laws of nature rather than applications of those laws.

Respondent Prometheus is the sole licensee of two patents, U.S. Patent Nos. 6, 355,623 (‘623 patent) and 6,680,302 (‘302 patent).  The ‘623 and ‘302 patents address the use of thiopurine drugs, a group of antimetabolites, in the treatment of autoimmune diseases.  Thiopurine drugs cause metabolites to form in the patient’s bloodstream andbecause different people metabolize thiopurine at different rates, the same dose of a thiopurine drug affects different people differently.Medical research established that the levels of certain metabolites in a patient’s blood could indicate whether a thiopurine dose was too high (and possibly dangerous) or too low (and likely ineffective).  The ‘623 and ’302 patents embody certain research findings that specify the correlation between the particular metabolites and the preferred dosage with some precision.  Prometheus sells diagnostic tests that employ the processes described in the ‘623 and ‘302 patents.

The petitioners, Mayo Clinic Rochester and Mayo Collaborative Services (collectively Mayo), formerly bought and used Prometheus’ diagnostic tests.  In 2004, Mayo indicated that it had developed its own test, which it planned to use and sell.  Prometheus sued Mayo for patent infringement in the U.S. District Court for the Southern District of California.  The district court found that Mayo’s test infringed one claim of the ‘623 patent, but granted summary judgment in Mayo’s favor, finding that Prometheus’ patents claim natural laws or natural phenomena that are not patentable.

Prometheus appealed this decision to the Federal Circuit.  The Federal Circuit applied the “machine or transformation test” and found that two steps in the patent claims “transformed” the human body or the blood taken from it:  the patents specify steps of “administering” the thiopurine drug to the patient, and “determining” the metabolite level. [1]

Mayo filed a petition for certiorari to the Supreme Court, and it granted certiorari, vacated, and remanded the Federal Circuit’s decision in 2010, indicating that it should be reviewed in light of the Court’s decision in Bilski v. Kappos.[2]   The Federal Circuit considered the case again and came to the same conclusion:  the patents were valid.  Mayo filed a second petition for certiorari, which the Supreme Court granted.

Breyer wrote for a unanimous Court, first examining the patent claims for “additional features” beyond a law of nature, “that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself.”[3]  The Court addressed the steps of the process that the Federal Circuit had held were enough to transform the claims into patentable material:  the “administering” step, the “determining” step, and the “wherein” step.[4]  The Court found that these steps simply indicate that the patent is directed to doctors who treat patients using thiopurine drugs, and that those doctors should use the natural law described in the patent when they are treating those patients and by measuring metabolites in their blood.  “The upshot is that the three steps simply tell doctors to gather data from which they may draw an inference in light of the correlations.”[5]  The Court found that these steps were not enough to transform the natural correlations into patentable applications.

In finding the claims unpatentable, the Court considered its most relevant precedent on patentable subject matter, Diehr[6] and Flook[7].  In Diehr, the process for molding raw, uncured rubber into cured, molded products was found to be patentable because, although it centered on a basic mathematical equation (which, like a natural corollary, is not patentable), it integrated that equation with additional steps into a process.  The patent in Flook described an improved system for updating alarm limits in the catalytic conversion of hydrocarbons, but it did not limit the claim to a particular application and so was found unpatentable.  The Court found that methods in the ‘623 and ‘302 patents were weaker than the claims in Diehr and no stronger than those in Flook.  Like the invention in Flook, the patents simply provided instructions in applying a law of nature that were already “well-understood, routine, conventional activity, previously engaged by those in the field.”[8]

The Court went on to describe other cases supporting its view that “simply appending conventional steps, specified at a high level of generality, to laws of nature, natural phenomena, and abstract ideas cannot make those laws, phenomena, and ideas patentable.”[9] This review included an English case that instructed users that hot air promotes ignition better than cold air, but did so by describing the implementation of the principle in an inventive way.[10]  Thus, the English court held the invention patentable.  The Court also considered Bilski, which described a mathematical formula that allowed users to hedge risks in investing (unpatentable), and Benson,[11] which rejected the patentability of implementing a mathematical principle on a physical machine in order to convert binary-coded decimal numbers into pure binary numbers.

The Court’s holding in Prometheus works to avoid an unwarranted monopoly on a law of nature, which could impede medical research by disallowing the development of more refined treatment methods that utilize the same law.  The Court quoted from the amicus brief of several medical associations, which argued that “if claims to exclusive rights over the body’s natural responses to illness and medical treatment are permitted to stand, the result will be a vast thicket of exclusive rights over the use of critical scientific data that must remain widely available if physicians are to provide sound medical care.”[12]  Even so, the Court recognized the arguments advanced by Prometheus and the amici that agreed with it, that the medical diagnostics field is driven by investments that are motivated by the exclusivity guaranteed by patent protection.

The Court’s decision does not shut the door on patents for medical diagnostics; rather, it sets another benchmark in the jurisprudence of patentable subject matter which inventors of diagnostic tools that make use of natural laws must aim to overcome.

Kristyn Bunce DeFilipp serves as an Associate in Foley Hoag’s Litigation and Labor and Employment departments.  Kristyn represents clients involved in complex litigation matters involving commercial contract disputes, intellectual property and other business disputes.  Her practice includes a focus on labor and employment issues in litigation.

Kristyn advises and represents corporations in all aspects of labor and employment law. She has experience in labor arbitrations involving unions, including disputes involving just cause termination and organizing campaigns.  Kristyn also defends clients against discrimination, harassment and wage and hour lawsuits. She represents companies in federal and state courts, before administrative agencies including the Massachusetts Commission Against Discrimination, and before the American Arbitration Association.  In addition, Kristyn drafts employment handbooks and policies in order to ensure that employers comply with both state and federal employment law statutes, and provides advice to clients on these topics.

Kristyn is also active in the firm’s pro bono program. Her pro bono practice is varied, and includes assistance with obtaining restraining orders for protection against abuse for victims of domestic violence; assistance to parents and students on special education matters; and pursuit of Chapter 7 and Chapter 13 bankruptcy relief for individual debtors.

Prior to joining Foley Hoag, Kristyn interned at Neighborhood Legal Services in Lynn, Massachusetts, where she assisted low-income clients with housing-related legal issues.

[1] See 581 F.3d 1336, 1345 (Fed. Cir. 2009)

[2] Bilski v. Kappos, 561 U.S. __ (2010)

[3] Prometheus, 566 U.S. __  (2012) (slip op. at 8-9).

[4] Id. at 9.

[5] Id. at 10-11.

[6] Diamond v. Diehr, 450 U.S. 175 (1981).

[7] Parker v. Flook, 437 U.S. 584 (1978).

[8] 566 U.S. __ (slip op. at 13).

[9]Id. at 14.

[10] Neilson v. Harford, Webster’s Patent Cases 295 (1841).

[11] Gottschalk v. Benson, 409 U.S. 63, 67 (1972).

[12] 566 U.S. at ___ (slip op. at 23) (quoting Brief for American College of Medical Genetics et. al. as Amici Curiae 7.)

Health Law Case Brief: “But What Does it Mean?” – An Analysis of Douglas v. Independent Living Centers of Southern California, Inc.

By: Thomas Barker & Joel Goloskie

Does a Medicaid provider or beneficiary have a right to sue a state Medicaid agency if that state enacts a law or regulation that is contrary to the “quality and access” provision of the federal Medicaid Act?  That question was put before the U.S. Supreme Court recently in Douglas v. Independent Living Centers of Southern California, Inc., No. 09-958, the lead case in a group of combined appeals arising out of the U.S. Circuit Court of Appeals for the Ninth Circuit.  Considering the large number of Medicaid providers and beneficiaries nationwide, and considering that skyrocketing Medicaid costs represent one of the largest threats to the future solvency of many states, it is a question whose answer has been eagerly awaited by providers, beneficiaries, and the states alike.

While the Court’s decision in Douglas failed to answer this question, an analysis of the case and the circumstances in which it is playing out indicates that an answer may be safely inferred.  It is likely not, however, the answer that providers and beneficiaries would care to hear.


Facing a well-publicized budget shortfall, the California legislature imposed Medicaid rate cuts across the spectrum of provider types, from hospitals to pharmacies.  CMS did not timely approve these rate cuts, and several lawsuits were filed in federal court by providers, provider associations, and beneficiaries.  These plaintiffs claimed that California’s new rates were so low that they violated the Medicaid Act’s requirement that Medicaid payments are sufficient to: (a) ensure that beneficiaries receive quality healthcare, and (b) enlist enough providers so that beneficiaries have adequate access to that care.  These “quality and access” provisions are found in § 1396a(a)(30)(A) of the Medicaid Act, commonly referred to as section (30)(A). 

Finding that the plaintiffs had established a high likelihood of success on the merits, and because any harm is irreparable under the Eleventh Amendment ‘s prohibition against retrospective relief against states, the district courts in which these cases were pending all granted injunctive relief.  That relief was subsequently upheld by the Ninth Circuit.  California appealed, and the Supreme Court agreed to hear the case. 

What made this a thorny issue is the fact that the Supreme Court had previously held that section (30)(A) does not confer a private right of enforcement under 42 U.S.C. § 1983.[1]  In Gonzaga University v. Doe, 536, U.S. 273, 283 (2002), the Court clarified that a section 1983action required the challenged state law to be in violation of a private right, and not merely a federal law.[2]  Unlike other sections of the Medicaid Act whose wording is deemed specific enough to grant a private right of action, the broad wording of section (30)(A) contains no such “rights creating language.”  Thus, absent some other basis of standing, a provider or beneficiary aggrieved by Medicaid rates that fail the quality and access provision of the Medicaid Act would have no right to contest the state’s rates in federal court.

In Douglas, what turned this from a thorny issue to a justiciable one was the plaintiffs’ reliance upon the Supremacy Clauseto establish standing.  The Supremacy Clause of the U.S. Constitution, found at Article VI, Clause 2, requires state law to yield to federal law with which it conflicts, either directly or through “field preemption.”  However, the Supremacy Clauseis limited by the sovereign immunity granted to states by the Eleventh Amendment.

The tension between the Supremacy Clause and the Eleventh Amendment was at least partly relieved a century ago in Ex parte Young, 209 U.S. 123, (1908).  Under the ex parte Young doctrine, a federal court, consistent with the Eleventh Amendment, may enjoin state officials to conform their future conduct to the requirements of federal law.  Across the subsequent hundred years of jurisprudence, official-capacity cases seeking purely prospective relief have not been treated as actions against the state for Eleventh Amendment purposes, and plaintiffs aggrieved by state action in contravention of federal law have routinely been granted injunctive relief in federal court.

In Douglas, what turned this justiciable issue back into a thorny one was the fact that the ex parte Young doctrine has never been applied to Spending Clause legislation.  Congress’ Spending powerarises under its Article I, section 8 power to provide for the general welfare of the United States.  It is this power from which the Medicaid Act draws its legitimacy.  In Douglas, the state focused upon the fact that there was simply no Spending Clause jurisprudence for the plaintiffs to rely upon to establish Supremacy Clause standing under ex parte Young.

Furthermore, unlike other purely-federal Spending Clauseprograms such as the Medicare Act, Medicaid is a joint federal-state program.  California argued that, because the Medicaid program is a voluntary compact between the federal government and the states, and because the states only agree to participate under the explicit terms of the Medicaid Act, the only private rights of action that providers or beneficiaries can claim are those rights explicitly granted in the Act.  Congress’ decision not to imbue section (30)(A) with rights-creating language, California argued, shielded section (30)(A) from the ex parte Young doctrine.  In essence, California’s argument was that, because Congress had (ostensibly) decided not to grant a private right under section 1983 in this Spending Clause legislation, Congress did not intend for standing to exist under the Supremacy Clause, either.

The Supreme Court Decision 

Then, the unexpected happened.  About a month after oral argument was heard by the Supreme Court, the Centers for Medicare and Medicaid Services (“CMS”) approved most of California’s requested changes, including some that were approved retroactively, and the state withdrew the remaining unapproved change requests.  Thus, before the Court rendered a decision, the federal agency charged with administering the Medicaid program determined that the challenged rate cuts did, in fact, comply with federal law.

Writing for a five-justice majority, Justice Breyer held that CMS approval had sufficiently changed the posture of the case such that the Court would not decide the question of whether the Ninth Circuit properly recognized a Supremacy Clause action to enforce the federal statute against the State before the federal agency took final action.  Instead, the majority remanded the case to the Ninth Circuit for further argument on whether CMS approval of the rate cuts meant that the plaintiffs would now have to abandon their Supremacy Clause action against the state and instead challenge the federal agency determination under the Administrative Procedure Act (“APA”).

The APA provides for judicial review of final agency action, specifically allowing anyone “adversely affected or aggrieved” by agency action to obtain judicial review of the lawfulness of that action.  Under the APA, a reviewing court will set aside agency action it finds to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”  In an APA action challenging CMS’ approval of the rate reductions, the state agency, of course, is not the proper defendant.  In Douglas, therefore, to challenge CMS’ approval of California’s rate cuts under the APA, the plaintiffs would have to bring suit against the Secretary of Health and Human Services (“HHS”), who had theretofore not been a party to the case.

Justice Breyer gave several reasons why an APA action might be the proper posture for the plaintiffs once CMS had granted approval.  First, the broad and general language of section (30)(A) suggests that the agency’s expertise is relevant in determining that provision’s application.  Second, allowing a Supremacy Clause action to proceed after the agency has reached a decision threatens potential inconsistency or confusion, with the conflicting interpretations of law by several courts (and the agency) threatening to defeat the uniformity that Congress intended by centralizing administration of the program in the agency.  Third, to allow the Supremacy Clause action to continue would appear redundant and inefficient, since the agency was not a participant in the litigation below.

Ordinary review of agency action requires courts to apply the highly-deferential standard of review found in cases like National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967 (2005), and Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 476 U.S. 837 (1984).  Justice Breyer found that the parties had not suggested reasons why, in the changed posture of the case following agency approval, those ordinary standards of deference should not apply.  However, noting that the parties had not fully argued that question, the majority chose not to decide it themselves, but to vacate the decision below and remand the question back to the Ninth Circuit.

It should also be noted that the majority did not hold that the plaintiffs had Supremacy Clause standing prior to CMS approval of the rate cuts.  The majority’s failure to so hold was likely the price of Justice Kennedy’s decision to join the majority; Justice Kennedy had ruled that states could not be sued under § 1983 in the earlier Wilder decision. Instead, Douglas was remanded on a far narrower question.  As to the broader question of Supremacy Clause standing, the dissenting opinion, delivered by Chief Justice Roberts on behalf of the four conservative justices, may well signal the ultimate answer.  “When Congress did not intend to provide a private right of action to enforce a statue enacted under the Spending Clause,” the Chief Justice opined, “the Supremacy Clause does not supply one of its own force.  The Ninth Circuit’s decisions to the contrary should be reversed.”

What Does it Mean?

Since the Ninth Circuit decisions in the Douglas cases, a handful of trial courts in other states have found Supremacy Clause standing where the agency had not yet approved a challenged rate cut.  Further, there is not a single court case where Supremacy Clause standing was not granted because the federal law in question was enacted under the Spending Clause.

In the U.S. Circuit Court of Appeals for the First Circuit, states will continue to point to Long Term Care Pharmacy Alliance, Inc. v. Ferguson, 362 F.3d 50 (1st Cir. 2004), which relied upon Gonzaga to hold that section (30)(A) did not confer a private right of action.  However, Long Term Care Pharmacy Alliance was decided solely under § 1983, and did not address Supremacy Clause standing.  While Rosie D. v. Swift, 310 F.3d 230 (1st Cir. 2002), contains language that appears to favor plaintiffs’ standing, it involves early and periodic screening, diagnosis and treatment (“EPSDT”) under § 1396(a)(10) of the Medicaid Act.  At least five circuit courts of appeal have held that Section 1396(a)(10) creates a private right of action, and none have held to the contrary.  See Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006).  This renders Rosie D. less than ideal footing for a Supremacy Clause action.

Far more supportive of Supremacy Clause standing are the First Circuit’s holdings in Puerto Rico Telephone Co. v. Municipality of Guayanilla, 450 F.3d 9 (1st. Cir 2006), and O’Brien v. Massachusetts Bay Transportation Authority, 162 F.3d 40 (1st Cir. 1998).  Puerto Rico Telephone Co., decided two years after Long Term Care Pharmacy Alliance, announced a broadly-worded rule that did not carve out an exception for Spending Clause legislation.  To quote: “A party may bring a claim under the Supremacy Clause that a local enactment is preempted even if the federal law at issue does not create a private right of action.”   The 1998 O’Brien decision actually did address the Spending Clause, holding “[P]reemptive legislation under the spending power presents states with a choice… *** When congress delineates conditions governing the receipt of federal dollars and a state agency accepts the money on that basis, the Supremacy Clause requires conflicting local laws to yield.  The rule then, is crystal clear: as long as a state receives federal funds for a particular purpose, its law, if contrary to conditions attached to the funds, must give way to federal law.”

However, it might now be expected that district courts will draw stronger direction from the four dissenting Supreme Court justices in Douglas, who did not hesitate to answer the underlying Supremacy Clause question.  Moreover, the dissent needs only one other justice to join them if the underlying question makes its way back before the Court.

Furthermore, Douglas and the Supremacy Clause cases in its wake are not being decided in a vacuum.  The federal government is facing a multi-trillion dollar shortfall due to unfunded liabilities, and the explosive growth of Medicaid spending has been identified by many states as their number one threat to fiscal solvency.  Against this backdrop, states are already taking lessons from the California cases.  For example, one of the findings that supported a likelihood of success on the merits in the California cases is the fact that the plaintiffs could demonstrate that rates cuts had been made for purely budgetary reasons, without the “section (30)(A) analysis” that prior Medicaid cases have required of the states.  Providers should expect that states will increasingly alchemize their budget processes into “well-researched studies” supporting the fact that quality and access can be effectively maintained under the proposed rate cuts.

Supremacy Clause plaintiffs may also find that hearings on their request for preliminary injunctive relief take just long enough for the state’s proposed changes to be “presumptively approved” under the 90 day rule in 42 C.F.R. § 430.16.  Presumptive approval might then be held to mean that an APA action is the proper remedial vehicle.  Of course, APA actions are decided under the highly-deferential Chevron standard.[3]

This does not mean, however, that CMS will never disapprove a proposed state plan amendment simply because of today’s challenging fiscal environment.  In a pair of change requests recently submitted to CMS by the State of Rhode Island, CMS denied requested premium increases that would have violated “maintenance of effort” requirements, but approved a twenty-three percent rate cut to providers of developmental disability services.  In the latter determination, CMS found that the providers’ attestations and cost documentation simply had not defeated the state’s assurances that that quality and access would be maintained.

So, what is the lesson here?  Given the clear signals from the dissent, it is not clear that a Supremacy Clause action against the state is an advisable strategy.  Rather, the more effective strategy might seem to center on communications with CMS.  The agency has shown that it is not a rubber stamp for the states: if it is presented with persuasive evidence that quality or access will suffer, or that some other Medicaid-related statute will be violated, CMS will deny a state’s change request.  However, potential grievants must be able to demonstrate not merely that the state action will cause reductions in service delivery, but that the reductions will be so great as to constitute a violation of federal law.  When all is said and done, this is the standard, and parties who cannot meet it will fail in their efforts regardless of how they go about seeking redress.

Thomas Barker is a partner in the law firm of Foley Hoag LLP, where he is a member of the firm’s life sciences, health care, and government strategies practices. He represents health care providers, pharmaceutical, biological and medical device manufacturers on complex CMS and FDA regulatory issues. Mr. Barker splits his time between the firm’s Washington, DC and Boston offices. 

Prior to joining Foley Hoag LLP, Mr. Barker served as a political appointee in the Administration of President George W. Bush. Most recently, Mr. Barker was the acting General Counsel of HHS from May of 2008 through the end of the Bush Administration. In that role, he supervised a staff of 450 attorneys nationwide and was responsible for attesting to the legal sufficiency of each regulation issued by HHS and its component agencies, as well as overseeing the conduct of all litigation to which the Department was a party. Mr. Barker also served as counselor to the Secretary of HHS, the Honorable Michael Leavitt, and before that, worked as a policy advisor to the Centers for Medicare & Medicaid Services (CMS). During his tenure at HHS, Mr. Barker was integrally involved in every major health care initiative implemented or proposed by the Bush Administration, including the part D drug benefit.

Prior to his service at HHS, Mr. Barker was regulatory counsel to the Massachusetts Hospital Association. He has also worked on Capitol Hill. Mr. Barker is an adjunct professor of health law at Suffolk University School of Law in Boston, and the George Washington University Schools of Law and Public Health and Health Services in Washington, D.C.

Joel Goloskie is Deputy General Counsel and Director of Compliance, Privacy & Ethics at CharterCARE Health Partners, a multi-facility healthcare delivery system centered in Providence, Rhode Island.  Focusing upon the development of competitive centers of excellence in high-demand services such as cancer care, digestive diseases, elder care, and behavioral health, CharterCARE specializes in breathing vitality and viability into formerly-struggling hospitals and healthcare institutions.

Prior to moving in-house, Mr. Goloskie maintained an active practice in healthcare-related litigation, regulatory, and transactional matters, representing a wide range of clients across all points of the provider spectrum.  Mr. Goloskie spent ten years as the founder and president of Goloskie Consulting Group, Inc., providing reimbursement, compliance, and strategic guidance that generated tens of millions of dollars in additional reimbursement for over fifty hospitals in fifteen states.  Mr. Goloskie also served as the founding Executive Director of a Robert Wood Johnson Foundation-sponsored collaborative consisting of four rural hospitals, two rural referral centers, and nine federally-qualified health center sites.  A graduate of Boston College Law School and a Hingham resident, Mr. Goloskie co-chairs the Boston Bar Association’s Health Law Education Committee.

[1] Twelve years earlier, the Supreme Court had held that another provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(13)(A), could be enforced under § 1983.  Wilder v. Virginia Hosp. Assoc., 496 U.S. 498 (1990).

[2] The inconsistency between Wilder and Gonzaga can likely be explained by two factors.  Number one, in the years between the decisions in Wilder and Gonzaga, the underlying statute had been amended.  Number two, the composition of the Court had changed; Justice Marshall, who had been in the majority in Wilder, was replaced by Justice Thomas, who was in the majority in Gonzaga.

[3] In PhRMA v. Walsh, 538 U.S. 644 (2003), another Medicaid case that arose, in part, under the Supremacy Clause, the Supreme Court implied just how high a challenger’s bar would be once CMS approved a state plan amendment.  See id. at 659 (describing such CMS action as “presumptively valid”).

Health Law Case Brief: Revisiting Federal Authority: An Analysis of Supreme Court’s Patient Protection and Affordable Care Act Cases

By: James P. Dowden, Douglas H. Hallward-Driemeier, and Brendon O. Carrington

            In a landmark ruling this summer, the Supreme Court upheld key provisions of the Patient Protection and Affordable Care Act (ACA), while at the same time stressing the limits of federal regulatory authority.  National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (2012).  The most immediate and direct impact of the Court’s opinion will be to spare health care providers, insurers, and insureds the task of unwinding steps they had already taken to implement the law, which many commentators believed would be held unconstitutional in whole or in part.  In a sharply divided opinion with shifting majorities, the Court held that the ACA’s individual mandate provision — which requires that nearly every individual obtain health insurance or pay a monetary penalty — was beyond Congress’s power to regulate commerce, but could nonetheless be upheld as a valid exercise of Congress’s power to lay and collect taxes.  The Court also upheld the ACA’s expansion of Medicaid programs, but effectively rendered participation in the expanded scope optional to the States.  The Court found that a provision threatening States with the loss of all Medicaid funding if they did not comply with the expansion was impermissibly coercive.

The mix of rulings came as a surprise to many commentators, who had thought that the Court would strike down the individual mandate, and perhaps the whole ACA.  However, the biggest surprise was not the Court’s ruling, but its alignment, with the Chief Justice (rather than Justice Kennedy) casting the swing vote to save key provisions of the statute.  While the decision’s final judgment upholds the law, the Chief Justice’s opinion — in civics lesson fashion — offers a strong reaffirmation of the principles of federalism and separation of powers that limit what some on the Court see as an ever-expanding assertion of federal power.  For the ACA in particular, the decision returns the debate to the political realm.

Anti-Injunction Act.  As a threshold matter, the Court first determined that it had authority to rule on the law’s constitutionality.  The Anti-Injunction Act (AIA) generally prevents taxpayers from challenging a tax in court before it becomes operative.  Because the individual mandate and requirement to pay a penalty to the Internal Revenue Service if one fails to obtain insurance do not become operative until 2014, the challenge to that provision was arguably premature.  Employing a literal statutory analysis, the Court held that because Congress called the monetary exaction a “penalty” rather than a “tax” and did not include it among penalties that should be “deemed” taxes for purposes of the AIA, the jurisdictional bar did not apply.

The Individual Mandate. The Court then turned to the question that had captured the most public attention:  whether Congress had the authority to enact the individual mandate.  In briefing and during oral argument, the Court principally focused on whether Congress had the power to enact this provision pursuant to its constitutional authority to regulate interstate commerce.  Since the New Deal, the Supreme Court has taken an expansive view of the Commerce Clause, permitting Congress to enact legislation in many areas, so long as it had a “substantial effect” on interstate commerce, including in agriculture, narcotics, and civil rights.  However, several cases over the last two decades have imposed some limiting principles.

In the Court’s opinion, five Justices — the Chief Justice and Justices Scalia, Kennedy, Thomas, and Alito — declared a further limitation on Congress’s Commerce Clause authority: Congress cannot create commerce by forcing otherwise inactive participants to enter the market.  The Chief Justice wrote separately from the other four, who authored a rare joint opinion that did not indicate the author — something often reserved for when the Justices wish to signal unity on an issue.  These five determined that the individual mandate was an attempt to compel individuals who were not participating in the health insurance market to enter that market.  These Justices rejected the argument pressed by the government and health care and insurance industries that these individuals were already participating in the health care system because almost all were accessing (or someday would access) health care services, but were shifting the cost to others by failing to pay for insurance now.  The five conservative Justices held that interpreting the Commerce Clause to encompass even non-activity that has significant effects on commerce would explode any limits on the federal government’s regulatory authority under our constitutional scheme.  For similar reasons, these Justices concluded that the individual mandate could not be regarded as “necessary and proper” to the exercise of Commerce Clause authority because it represented a vast expansion of that power, not a mere complement to it.

Justice Ginsburg, in an opinion joined by Justices Breyer, Sotomayor, and Kagan, penned a vigorous defense of the individual mandate’s validity under the Court’s Commerce Clause jurisprudence.  She rejected the activity/inactivity dichotomy as unsupported by precedent or the facts of this case.  She stressed that nearly all people will be active in the health care market at some time, and those who choose not to buy insurance are taking an active step to “self-insure.”  She likened the contrary view to the long-discredited Lochner era, in which the Supreme Court regularly struck down economic regulation.  She urged that the Court should avoid unnecessarily constraining Congress’s “capacity to meet the new problems arising constantly in our ever-developing modern economy.”

Despite all the ink spilled over the commerce power, the mandate’s fate was decided, in the end, without reliance on the Commerce Clause.  The Chief Justice was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan in ruling that the law was valid under Congress’s power to levy taxes.  In something of a semantic twist — which the dissenters lambasted as sophistry — the majority held that the individual mandate could be saved by construing its penalty as a constitutionally authorized “tax,” despite the fact that the same penalty did not constitute a “tax” for statutory purposes under the AIA in the context of the threshold jurisdictional inquiry.  The question the Court addressed was whether it was “fairly possible” to read the individual mandate’s provisions not as making it unlawful for an individual to fail to obtain insurance, and imposing a penalty for this unlawful act, but instead as exacting a “tax,” the condition of which is that the person does not have insurance.  The majority concluded that the latter construction was “fairly possible.”  In reaching this conclusion, the Court employed a functional analysis, and relied on the fact that the exaction is collected by the Internal Revenue Service as part of tax returns, is relatively small and calculated with reference to income and tax status, and is imposed without regard to criminal scienter.

Medicaid Expansion.  The second issue on center stage before the Court was the ACA’s expansion of Medicaid coverage.  Starting in 2014, the ACA increases eligibility for Medicaid, by requiring all States to cover people under 65 with individual or family incomes up to 133% of the federal poverty level.  Although the federal government entirely pays for the expansion for the first two years, it will gradually reduce its payments and only cover 90% by 2020.  Another provision of the ACA authorized the Secretary of Health and Human Services (HHS) to withdraw all of a State’s Medicaid funding should the State fail to comply with the expansion provisions.  The question facing the Court was whether the Secretary’s ability to deprive a State of so significant a percentage of a State’s revenue made the expansion unconstitutionally coercive.

The Supreme Court has from time to time discussed limits on Congress’s power to spend and tax, but it had not found that Congress overstepped those limits since 1936.  In the Court’s ruling, seven members of the Court (all but Justices Ginsburg and Sotomayor) for the first time declared that conditional federal spending unconstitutionally coerced the States.  Chief Justice Roberts wasted no euphemisms, characterizing Congress as pointing “a gun to the head” of each State.  Moreover, he concluded that the expansion of Medicaid to cover all persons with income below 133% of the poverty line constituted a change in kind, rather than degree, to the existing Medicaid program.

But Chief Justice Roberts (joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan) ultimately saved Medicaid expansion by limiting its holding to the unconstitutional applications that the Court had identified.  In other words, the decision precludes the Secretary only from withdrawing funds under the extant Medicaid program from those States that decline to participate in, or fail to comply with, the expansion provisions.  It remains to be seen what practical issues may arise as the Secretary attempts to administer two versions of the Medicaid program, one for States participating in the expanded program and the other for States that reject the new provisions.


            While proponents of the ACA are surely celebrating its constitutional vindication, the Justices’ multiple opinions exposed deep ideological rifts and foreshadow fissures that are likely to expand in future cases dealing with the scope of federal legislative power.  Indeed, four Justices would have struck down the ACA in whole, and the Court’s opinions indicate that a majority of the Justices presently on the Court have a relatively restrictive view of Congress’s commerce and spending powers.  While these two powers have expanded without much impediment since the New Deal, a majority of Justices have made it clear, at the least, that federal regulation of commercial inactivity and large monetary grants to the States with onerous conditions will be viewed through a jaundiced eye.

James Dowden is a government enforcement partner with Ropes & Gray and concentrates his practice on advising organizations and individuals in a wide variety of investigations and enforcement proceedings brought by federal, state and foreign government agencies.  Jim has extensive experience in white collar criminal, as well as civil and administrative matters involving the regulation of the health care, life sciences, pharmaceutical and medical devise sectors.  Jim is also a member of Rope & Gray’s Appellate and Supreme Court practice.  Prior to rejoining the firm in January 2012, Jim served as an Assistant United States Attorney in the Economic Crimes and Public Corruption Units in the U.S. Attorney’s Office for the District of Massachusetts.  He also served as a law clerk to Associate Justice Stephen G. Breyer during the United States Supreme Court’s 04-05 Term.

Douglas Hallward-Driemeier is a partner and leads Ropes & Gray’s Appellate and Supreme Court practice. Doug has presented more than 40 appellate arguments, including arguments before the U.S. Supreme Court and every federal circuit court of appeals. He has briefed and argued both civil and criminal matters covering a wide range of subjects and has particular experience in the areas of federal preemption, the False Claims Act, securities litigation, and intellectual property. Doug has extensive experience litigating issues of concern to multinational corporations and other businesses with international activities, including the Alien Tort Statute, the Foreign Sovereign Immunities Act, private enforcement of treaties, and forum non conveniens. In addition to handling appeals, Doug works closely with trial court colleagues to present the most compelling dispositive motions and to preserve our clients’ rights to appeal if necessary. Earlier in his career, Doug was an Assistant to the Solicitor General, where he briefed and argued cases on behalf of the United States before the Supreme Court

Brendon Carrington is a litigation associate at Ropes & Gray, where he defends companies in shareholder class actions, derivative lawsuits, and government investigations.  Brendon also works on federal and state appellate matters, and he devotes significant time to pro bono family law litigation.  He received his J.D., magna cum laude, from Harvard Law School and his A.B. from Princeton University.  Before entering private practice, Brendon spent a year clerking for the Honorable Patrick E. Higginbotham of the U.S. Court of Appeals for the Fifth Circuit.

IN THIS ISSUE: Health Law Reporter Spring 2012

We are pleased to present to you the Spring 2012 Edition of the Health Law Section’s Health Law Reporter. Our Health Law Report­er provides BBA members with cutting-edge and unique perspectives on the fast-changing field of health law.

For the past several years, Massachusetts has played a leading role in national health reform, with our models for mandated indi­vidual insurance coverage, health insurance exchanges and other concepts winning ac­ceptance and adoption at the national level. This edition of the Health Law Reporter ad­dresses several of these important aspects of health reform.

We are pleased and honored to begin this is­sue with a contribution from Governor Deval Patrick. This is followed by discussion of the extension of health insurance to legal immi­grants in Massachusetts, and a discussion of some of the unique impacts of national health reform on Massachusetts. We also profile one of the key individuals involved in implement­ing health reform in our state, Aron Boros, the Commissioner of the Massachusetts Division of Health Care Finance and Policy.

The following articles can be found within this issue:

We also have a contribution discussing the pending lawsuits in the U.S. Supreme Court regarding the federal Affordable Care Act. This is just a preview of what is to come, as we will address the outcome of those Su­preme Court lawsuits in our next edition of the Health Law Reporter, so stay tuned! One of the best ways to keep abreast of these is­sues is through the BBA Health Law Section. We invite the involvement of anyone who wishes to join our section, and welcome the addition of your time, talents and ideas. The Health Law Section has several committees to choose from (CLE, Communications, Mem­bership, Legislative Update, Social Action); or you can volunteer as a participant at one of our CLE programs or Brown Bag lunches. Your ideas for new programs, events or new approaches to making our Section better are welcome.

– Colin S. Zick & Leslie Joseph, Health Law Section Co-Chairs

Health Care in Massachusetts 2012: The Way I See It

 By Governor Deval Patrick

This month, we celebrate the sixth anniversary of Massachusetts health care reform.  Our reforms are an expression of values, a codifying of our belief that health is a public good and that everyone deserves access to affordable, high-quality care.

Like President Obama’s Affordable Care Act, we took a hybrid approach, relyingmainly on private insurance provided through the workplace, with varying degrees of public subsidy, depending on a person’s ability to afford private insurance.

It’s working.  Today, more than 98% of Massachusetts’s residents have health care coverage, including 99.8% of children. No other state in America can touch that. More companies offer their employees insurance today than before the bill was passed.  More than 90% of our residents have a primary care physician and four out of five have seen their primary care doctor in the last year.  Emergency room visits for primary care are down and spending on the uninsured and underinsured has dropped by nearly half.

We’re healthier, too.  For example, because of access to screenings, we’ve seen a 36% decrease in cervical cancer in women.

All of this while adding about 1% to state spending on health care.

Those are the numbers; but policy matters most when it touches people.  And this policy touches people.I remember meeting a young woman named Jaclyn Michalos, a cancer survivor who got the care she needed through the Commonwealth Connector, our version of the Exchange. She had no affordable way to receive the care she needed before Massachusetts’ health care reform – it saved her life.  People no longer have to fear having their insurance cancelled when they get very sick and need it most, or that a serious illness will leave them bankrupt.  Health care reform in Massachusetts is helping people in profound ways.

Our next challenge is slowing the growth in health care premiums.  This is a national problem, one neither caused by our reform nor unique to Massachusetts.  Spending on health care makes up 18% of all spending in the United States and is projected to reach 34% by 2040 if costs continue to grow at historic rates.  In recent years, growth in health care costs has outstripped growth in GDP even as the share of Americans with health insurance has fallen.  In many ways, this will be harder to solve than universal access.  But we need to solve it.

As spending on health care programs and emergency care grows, it weakens our ability to compete and slows job growth.  In budgets everywhere – families, businesses and governments alike – spending on health care comes at the expense of spending on education and other basic needs. Left unchecked, health care costs threaten our fiscal integrity and our ability to provide future generations with the services we have enjoyed.

Just as we in Massachusetts have provided the national model for universal access, I believe we are on track to crack the code on cost control.

We have already seen significant progress.Two years ago, I directed the state’s Commissioner of Insurance to disapprove excessive premium hikes.  While an admittedly blunt tactic and not in and of itself a long-term solution, it was a necessary step to galvanize the market to act.  Massachusetts is home to an innovative, world-class health care community and they have responded with real solutions.

Hospitals and insurance carriers have reopened their contracts and cut rate increases, in some cases by more than half.We’ve created limited network health plans to give consumers opportunities to get great care in neighborhood settings at lower cost.  There are new plans coming out tailored for small businesses that promise to be as much as 20% cheaper than current rates.  Our new Wellness Track program offers a 15% rebate for certain small business owners who take part in the wellness program.  We are also ending administrative duplication by requiring common codes and forms from insurers and providers.  And with the help of the Affordable Care Act, more and more providers are piloting medical home or accountable care models that manage wellness for the whole person, and deliver both better care and more cost-effective care.

All of this is making a difference.  In the last two years, average premium increases have since dropped from over 16% to less than 2% today.Our focus now is on making these gains last.

There are a number of strategies we are pursuing, including putting an end to the “fee-for-service” model wherever practicable, to stop paying for the amount of care and start paying instead for the quality of care.  We need to empower doctors to coordinate patient care and to focus on wellness rather than sickness.

We are working with our health care community to accelerate this transition to innovative models for delivering health care, in which incentives are realigned to reward integrated care that emphasizes wellness and lowers costs for everyone.  For example, Blue Cross Blue Shield has persuaded some of the state’s biggest hospitals and thousands of doctors to accept a fixed amount each month per patient rather than receive payment for each individual procedure.

In state government, by using these new tools and new approaches to how we pay for care, we will avoid nearly a billion dollars in cost increases in this fiscal year and another several hundred million more next year.Our goal is for integrated, cost-efficient caregiving to predominate throughout Massachusetts by 2015.

This is a complex challenge but we are making great progress and will be successful in the end.We have no choice.  For us, and for this country, solving the health care challenge has everything to do with fulfilling our generational responsibility – that old-fashioned idea that each of us in our time must do all we can to leave things better for those who come behind us.  This challenge belongs to all of us, from whatever party or no party.  We owe it to our future to get this right.

Restoring Legal Immigrants’ State Health Insurance – The Finch Cases

By Lorianne M. Sainsbury-Wong and Wendy E. Parmet

“In light of their particularly vul­nerable status, it thus remains necessary to exercise heightened vigilance to ensure that the full panoply of constitutional protec­tions are afforded to the Com­monwealth’s resident aliens.”[1]


Last January in Finch v. Common­wealth Health Insurance Con­nector Authority.[2] (“Finch II”), the Massachusetts Supreme Judicial Court held that section 31(a) of chapter 65 of the Acts of 2009 (“§ 31(a)”), [3] violated the state Consti­tution. The decision in Finch II, which followed the Court’s earlier Finch I
[4] decision determining that § 31(a) discriminated on the ba­sis of alienage or national origin and was subject to strict scrutiny, paved the way for approximately 40,000 low-income legal immi­grants to receive state-subsidized health insurance. By so ruling, the Court effectively reaffirmed the state’s commitment to near universal health insurance. The two decisions also clarified that legal immigrants are a protected class under the state Constitution and that in Massachusetts, strict scrutiny is indeed strict.

This Article presents our unique perspective as plaintiffs’ counsel. We focus on the pragmatic issues affecting the cases rather than the constitutional questions that were before the Court.

Section 31(a) – The Fiscally Mo­tivated Law

In 2006 the legislature passed and Governor Romney signed landmark health care reform [5] requiring nearly every state resi­dent to have comprehensive health insurance so long as it is affordable.[6] To support that re­quirement, the state established the Commonwealth Care Health Insurance Program (“Common­wealth Care”) which provides slid­ing scale premium subsidies for low and moderate income resi­dents who otherwise lack access to insurance.[7] When Common­wealth Care was established,[8] legal immigrants were eligible to participate on the same basis as other residents.[9]

In 2009 the state faced a severe budget shortfall. Looking to save money, the legislature enacted § 31(a),[10] which was expected to save over $80 million by eliminat­ing Commonwealth Care for legal immigrants who were ineligible for federal means-tested public benefits under the Personal Re­sponsibility and Work Opportu­nity Reconciliation Act of 1996 (“PRWORA”).[11]
This class was comprised of individuals with a variety of immigration statuses, including individuals who had green cards for less than five years.[12] Under PRWORA the state did not receive partial federal re­imbursement for enrolling this class in Commonwealth Care, al­though it did receive federal sup­port under a Medicaid waiver for enrolling U.S. citizens and other federally-eligible aliens.[13] The legislature therefore felt that this class was “more expensive for the state to insure” than other mem­bers of Commonwealth Care.[14]
And, of course, immigrants could not vote to voice their displeasure with their expulsion from Com­monwealth Care.

In order to mitigate the hardship caused by § 31(a), the legislature appropriated $40 million to create the Commonwealth Care Bridge Program (“Bridge”).[15] Bridge pro­vided less comprehensive cover­age, with higher cost sharing to legal immigrants who had been on Commonwealth Care prior to July 2009, but were excluded due to § 31(a). Bridge, however, was never available to those who would have otherwise become eligible for Commonwealth Care after July 31, 2009, had § 31(a) not been enacted.[16] For example, legal immigrants who lost access to employer-sponsored insurance after July 2009 could not join Bridge and were left uninsured.

Health Law Advocate’s Role

We work on behalf of Health Law Advocates (“HLA”), a not-for-profit law firm affiliated with Health Care For All (“HCFA”). HLA provides le­gal services to low–income, vul­nerable individuals and families that have difficulty accessing or paying for health care. After le­gal immigrants were excluded from Commonwealth Care, HLA was inundated with calls pre­senting similar scenarios: “I’m afraid I won’t be able to pay for specialty care services,” or “I was denied state insurance and am now uninsured.” Hearing these concerns, we became convinced we needed to do something. We also believed that § 31(a) un­dermined the promise of univer­sal access to care made by the state’s health insurance reform. If legal immigrants could be de­nied health care when times got tough, so could other politically vulnerable groups. In this way, the fundamental commitment that the state made in 2006 was broken but not irretrievably lost.

Litigation was not our first choice. We knew it would be time con­suming and expensive. Constitu­tional challenges to state laws are never easy; courts are reluctant to second-guess the legislature’s fiscal decisions. Our clients also preferred less adversarial meth­ods. Thus in the fall of 2009, along with HCFA, HLA contacted other organizations committed to health reform, local health care providers, and community orga­nizations. In addition, HCFA met with legislators. Although some expressed concern for the well-being of the excluded class, it soon became apparent that the legislature would not revisit its decision. We therefore began to focus on litigation.

As a small not-for-profit, HLA has very limited financial resources. But it does have a dedicated staff and a rich network of committed volunteers. Chief among the lat­ter was HLA’s Volunteer Legal Ad­visor, Stephen Rosenfeld. Invalu­able support was also provided by Lauren Barnes of Hagens Berman Sobel Shapiro LLP, and Jack Cush­man, who was initially practicing solo but later joined Stern Shap­iro Weissberg & Garin LLP. North­eastern University School of Law also provided law students and a legal fellow. With their help, we researched the viability of a con­stitutional claim against § 31(a). As our research progressed, we became convinced that § 31(a) was unconstitutional.

During this period we also spoke with immigrant advocates around the country. Some believed that § 31(a) would withstand judicial scrutiny on the basis of Doe v. Commissioner of Transitional Assistance.[17] In Doe, the Su­preme Judicial Court appeared to affirm a state law excluding the same class affected by § 31(a) from the state’s federally-created transitional assistance program and establishing a separate cash program for that class which con­tained a six month durational res­idency requirement.[18] However, as we studied Doe, we realized it supported our position. The dura­tional residency requirement was upheld precisely because the pro­gram to which it was attached did not discriminate against legal im­migrants; it benefitted them. The immigrants’ exclusion from the transitional assistance program, however, was not actually before the Court. In dicta the Court suggested that legal immigrants were a protected class in Massa­chusetts and that their exclusion from the cash assistance pro­gram was constitutional only be­cause as a federal means-tested public benefit, the state was ob­ligated to follow PRWORA. Com­paring Doe with § 31(a), we be­lieved that Commonwealth Care was not a federal public benefit and the state was not required to adhere to PRWORA’s eligibility requirements. Thus, the very fac­tors that led the Court to find for the state in Doe would lead the Court to find for our clients. As a result, we decided to rely on Doe in challenging § 31(a) as violating the state Constitution’s protec­tions against discrimination.

Once we decided to bring a state constitutional challenge, numerous questions remained, including the identity of class representatives. Although many legal immigrants sought our help, some were reluctant to be class representatives. Given the anti-immigration movement that was sweeping the country (for exam­ple, Arizona was about to pass the nation’s harshest anti-immi­gration law),[19] their hesitancy was understandable.

Eventually, four clients[20] who were harmed by § 31(a) agreed to be class representatives. Dor­othy Ann Finch is a permanent resident who had to stop working due to a medical condition. Al­though initially approved for Com­monwealth Care, she was denied coverage because of § 31(a). Lacking insurance, she incurred medical debt and faced a collec­tion action. Roxanne S. Prince is a single parent with a family-based visa. Her employer did not offer health insurance. She had been enrolled in Commonwealth Care before being placed in Bridge. As a result, she lost the conti­nuity of care with her providers. Another plaintiff, a domestic vio­lence victim, is a political asylum applicant and mother of two U.S. citizen children. In 2006, she started receiving Commonwealth Care. When § 31(a) struck, she was placed in Bridge where she was unable to access culturally and linguistically appropriate care. A fourth class representa­tive had been living and working in the U.S. for more than eight years under a visa based on her employer’s petition for an alien worker. She later became a law­-ful permanent resident but held her green card for less than five years. Because her employer did not offer insurance, she was en­rolled in Commonwealth Care be­fore being transferred to Bridge. When she was diagnosed with cancer, she had difficulty access­ing oncologists and related pro­viders in her area. The latter two class representatives insisted on anonymity because they feared retaliatory harm to themselves or their children.[21]

As in any litigation, we also had to consider who to sue, the specific claims we would raise, and where we would seek relief. We deter­mined the appropriate defen­dants were the Commonwealth Health Insurance Connector Au­thority (“Connector Authority”), which administers Common­wealth Care, and its then Execu­tive Director, Jon Kingsdale. De­ciding upon the specific claims required more analysis. As noted above, because we believed that the case concerned a program unique to Massachusetts and that Doe supported our clients’ claims, we focused on the state Constitution’s commitment to equal protection. However, we believed that § 31(a) also violat­ed the federal Constitution and knew that federal law allows for reasonable attorneys’ fees to the prevailing party.[22] We therefore added a federal civil rights claim.

The choice of forum and relief sought proved to be challenging. We considered filing in a superior court, asking for a temporary re­straining order and preliminary injunction. Doing so might have provided our clients relatively swift relief, but courts are gener­ally reluctant to issue preliminary injunctions against public enti­ties. We also knew that any order issued by a trial court was likely to be appealed, and possibly stayed, pending appeal. After consulta­tion with our clients, we therefore decided that initial review by the full Supreme Judicial Court of­fered the best chance of speedy relief. On February 25, 2010, we filed a declaratory judgment action before the Single Justice (Cordy, J.) asking him to report the case to the Full Court.[23] In addition, because we challenged the constitutionality of a legisla­tive appropriation, we served the Attorney General,[24] who had the right to intervene.

Finch I – On and Off the Path to the Massachusetts Su­preme Judicial Court

As we probably should have antic­ipated, our path to the Supreme Judicial Court was not swift. After filing its answer, the Connector Authority removed the case to fed­eral court. Although we could have remained in federal court, we believed that federal litigation would be delayed by a likely cer­tification of questions to the Su­preme Judicial Court and eventu­al appeal to the First Circuit. On the other hand, if we dropped our federal claims, thereby forfeiting attorneys’ fees, the federal court would have been able to exercise judicial discretion to return the case to state court. Concluding the latter was in our clients’ best interests, we exercised our right to delete the federal claims[25] and asked Judge Young to remand the case to Justice Cordy. [26] In June 2010, he agreed.

Once the case returned to Justice Cordy, we requested a reservation and report to the Full Court. In response, the Connector Author­ity argued that there were unre­solved factual issues so that the case should be sent to Superior Court. On July 21, 2010, Justice Cordy reported four questions of law to the Full Court but also re­quired the parties to agree upon a statement of material facts about the funding and operation of Commonwealth Care pre- and post-§ 31(a). During the sum­mer of 2010, we developed that statement of material facts with the Connector Authority through its legal counsel, Carl Valvo, Cos­grove, Eisenberg & Kiley, P.C., and Ken Salinger, the Massachusetts Attorney General’s Office, which had intervened.

The four questions reported fo­cused on the appropriate stan­dard of review for judging the constitutionality of § 31(a). Two issues were critical: (1) are legal aliens a protected class under the state Constitution?; and (2) even if they are, should the less strin­gent rational basis test be ap­plied because § 31(a) borrowed its classification from PRWORA? We began working on our brief. HLA’s arguments were quite sim­ple. First, the Massachusetts Constitution either under Article 106’s explicit protection against discrimination on the basis of na­tional origin,[27] or under general principles of equal protection, recognizes legal immigrants as a discrete and insular, suspect class. Second, PRWORA does not require the state to discrimi­nate in the provision of Common­wealth Care. As a result, under Doe, the discrimination effected by § 31(a) could not be saved by PRWORA; it had to be subject to strict scrutiny.

In making these arguments, we were generously supported by several amicus briefs[28] that ex­panded upon our arguments and offered valuable background in­formation to the Court.

Although we had hoped for a speedy ruling, that was not to be. However, on May 6, 2011, in a 3-2 decision, the Supreme Judicial Court held that § 31(a) discrimi­nated on the basis of alienage or national origin and was subject to strict scrutiny.[29] Writing for the Court, Justice Spina rejected our argument that legal immigrants were protected by the national or­igin provision in Article 106.[30] He agreed, however, that legal immi­grants were a suspect class under the state Constitution.[31] He also found that Commonwealth Care is a state public benefit and that Congress was indifferent about whether it included or excluded legal immigrants.[32] As a result, the state’s actions would be sub­jected to strict judicial scrutiny.[33] The Court ordered the case be remanded to the Single Justice to determine whether § 31(a) could survive strict scrutiny.

Finch I – The Restoration of Coverage Nears

After receiving the Court’s deci­sion in Finch I, our clients were grateful. In its opinion, the Court recited the well-settled rule that a statute cannot survive strict scru­tiny unless it is “narrowly tailored to further a legitimate and com­pelling governmental interest and [is] the least restrictive means available to vindicate that inter­est.”[34] Because saving money is not a compelling state interest[35] and the state had always justi­fied § 31(a) as a fiscal measure, we assumed that Justice Cordy would find § 31(a) unconstitution­al. On May 23, 2011, we filed a motion for partial summary judg­ment. We were surprised by what happened next. The defendants argued that § 31(a) was designed to further a compelling state in­terest in advancing federal immi­gration policies. Specifically, the defendants relied on PRWORA’s preamble which identifies federal policy as promoting the self-suf­ficiency of aliens, and the denial of public benefits so that they do not serve as an incentive to im­migration.[36] Defendants also argued that the merits of this de­fense should be decided by the Full Court. Justice Cordy agreed that the case should be reported to the Full Court. So in the fall of 2011, more than two years af­ter our clients had lost Common­wealth Care, we were back before the Supreme Judicial Court. Once again, we were supported by pow­erful amicus curiae briefs.[37]

Our arguments were straightfor­ward. First, if strict scrutiny was to be strict, the Court had to con­sider the actual, not a hypotheti­cal motive for § 31(a). If it did so, the answer would be clear: the ap­propriation was designed simply to save money. Second, further­ing national immigration policy is not a compelling state interest. Finally, even if furthering national immigration policy were an actual purpose for § 31(a), and even if it were a compelling state interest, the appropriations bill was not narrowly tailored to further that interest.

On January 5, 2012, in a unani­mous opinion written by Justice Cordy, the Supreme Judicial Court ruled that § 31(a) was unconsti­tutional.[38] The Court noted that the state’s articulated purpose for its discrimination against our class of legal immigrants was fis­cal; indeed, the record contained no evidence that the legislature thought about national immigra­tion policy, nor had the legisla­ture considered whether § 31(a) was narrowly tailored to further the self-sufficiency of legal aliens in the Commonwealth. The mere fact that § 31(a) referenced PRWORA did not justify the dis­crimination against plaintiff class members. According to the Court, “the conclusory method does not satisfy strict scrutiny.”[39]


In March 2012, the Connector Authority began restoring state-subsidized Commonwealth Care coverage to our plaintiff class. Complete restoration is expected as of May 1, 2012.[40] Because of the Massachusetts Constitution and strict judicial scrutiny, our cli­ents are now able to receive the state health insurance they were wrongfully denied. Once again Massachusetts has lived up to the commitment of equality in its Constitution and the promise of universal health insurance made in 2006.

Wendy E. Parmet is George J. and Kathleen Waters Matthews Dis­tinguished Professor of Law at Northeastern University School of Law and Associate Dean for Academic Affairs. A member of the Board of Directors of Health Law Advocates, in 2010 and 2011 she served as lead counsel along with Health Law Advocates in Finch v. Commonwealth Health Insurance Connector Authority, in which the Massachusetts Su­preme Judicial Court found that a state law denying state subsi­dized health insurance to a class of legal immigrants violated the state constitution. She was also co-counsel in Abbot v. Bragdon, in which the Supreme Court held that HIV was disability under the Americans with Disabilities Act. She is the author of the Popu­lations, Public Health, and the Law, published by Georgetown University Press in 2009 and with Professor Patricia Illing­worth, Ethical Health Care, pub­lished by Prentice Hall in 2005, as well as numerous articles in medical journals and law reviews on public health law, health law, and disability law. Prof. Parmet is also on the Board of Directors of Health Care for All, is special counsel to the ABA’s AIDS Coor­dinating Committee and is a fel­low of the American Bar Founda­tion. She received her J.D. from Harvard Law School in 1982 and her B.A. from Cornell University in 1979.


Lorianne M. Sainsbury-Wong is the Litigation Director at Health Law Advocates (HLA) where she serves as lead in-house coun­sel and consulting counsel on complex and novel litigation, including class actions and appeals related to health care access. She is former Senior Staff Attorney at the law firm, a position which she held for four years. Her work concen­trates on health care reform and consumer medical debt. She also serves as HLA counsel to representatives and members of approximately 40,000 lawfully residing immigrants in the Com­monwealth in two cases before the Massachusetts Supreme Judicial Court, entitled Finch v. Commonwealth Health Insur­ance Connector Authority. She is a graduate of Assumption College and New England Law | Boston. Her publications include “Protecting Consumers: The Elimination of Lifetime an Annual Limits on Health Insur­ance Benefits” (Massachusetts Lawyers Journal) and “The use­ful but overlooked Massachu­setts Equal Rights Amendment” (Massachusetts Lawyers Jour­nal). She has also presented on many topics, including “The Growing Problem of Consumer Medical Debt,” sponsored by the Boston Bar Association. She is proficient in Spanish and admit­ted to practice in Massachu­setts and New Hampshire state courts, the U.S. District Court for the District of Massachusetts, and the Supreme Court of the United States.



[1] Finch v. Commonwealth Health Ins. Connector Auth., 459 Mass. 655, 675 (2011) (declining to apply the rational basis review of aliens excluded from political functions to the plaintiff class of legal immigrants)(“Finch I”).

[2] Finch v. Commonwealth Health Ins. Connector Auth., 461 Mass. 232 (2012)(Finch II).

[3] An Act Making Appropriations for the Fiscal Year 2010 to Provide for Supplementing Certain Existing Appropriations and for Certain Other Activities and Projects, 2009 Mass. Acts ch. 65, § 31(a). The legislative appropriation provides that individuals eligible for Commonwealth Care “shall not include persons who cannot receive federally-funded benefits, under sections 401, 402, and 403 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.” As part of an outside appropriations bill, § 31(a) was in effect for only one year. In 2010 and 2011 the legislature reenacted the exclusion. 2010 Mass. Acts ch. 131, § 136; 2011 Mass. Acts ch. 68, § 166. In the discussion that follows, references to § 31(a) should be read to include, where appropriate, references to these subsequent appropriations.

[4] Finch I, 459 Mass. at 655.

[5] An Act Providing Access to Affordable, Quality, Accountable Health Care, 2006 Mass. Acts ch. 58, § 12. See also M.G.L. ch. 111M, § 2 (2006).

[6]6 Id.


[8] Commonwealth Care was created distinct from MassHealth, which is defined as a welfare program pursuant to federal law. See M.G.L. ch. 118E, § 9 and § 9A (2007). In fact, in order to be eligible for Commonwealth Care, a resident must not be eligible for MassHealth. M.G.L. ch. 118H, § 3(a).

[9] For example, a ‘[r]esident’ eligible for Commonwealth Care was defined under the law as “a person living in the commonwealth, . . . including a qualified alien, as defined by section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 . . . or a person who is not a citizen of the United States but who is otherwise permanently residing in the United States under color of law; provided, however, that the person has not moved into the commonwealth for the sole purpose of securing health insurance under this chapter . . .” M.G.L. ch. 118H, § 1. See also M.G.L. ch. 118H, § 3; 956 C.M.R. 3.04 (2008); 956 C.M.R. 3.09 (2008).

[10] See An Act Making Appropriations for the Fiscal Year 2010 to Provide for Supplementing Certain Existing Appropriations and for Certain Other Activities and Projects, 2009 Mass. Acts 65, § 31(a).

[11] Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Pub. L. 104-193, 110 Stat. 2105 (1996).

[12] 8 U.S.C. § 1613 (1996).

[13] Under PRWORA certain aliens are not eligible for federal welfare benefits. States may voluntarily provide benefits for alien residents but may not receive federal reimbursement. See Pub. L. 104-193, §§ 401-403 (1996) (codified as amended at 8 U.S.C. § 1601 and 8 U.S.C. §§ 1611-1612 (1996)).

[14] 461 Mass. at 239-40 (quoting Senator Steven Panagiotakos).

[15] See 2009 Mass. Acts 65, § 31(b).

[16] 459 Mass. at 660 n.5 (noting that legal immigrants whose household income declined after August 31, 2009 to at or below 300% of the Federal Poverty Level were left without state coverage.)

[17]Doe v. Commissioner of Transitional Assistance, 437 Mass. 521, 533-34 (2002)(concluding that the appropriate standard of review “depends on the nature of the classification that creates the distinction between subgroups of aliens. If that classification were a suspect one such as race, gender, or national origin, we would apply a strict scrutiny analysis.”)


[19]The Arizona law, S.B. 1070, 49th Leg., 2d Reg. Sess. (Ariz. 2010), modified by H.B. 2162 (Ariz. 2010), has been the subject of federal challenges, with the most recent decision issued by the Ninth Circuit in U.S. v. Arizona, 641 F.3d 339 (9th Cir. 2011), which has subsequently been appealed and is scheduled to be heard before the U.S. Supreme Court on April 25, 2012. See Arizona v. U.S. no. 11-182.

[20] After filing the complaint, HLA was contacted by other legal immigrants who offered to provide further testimonies or affidavits in support of class action certification. See Chelsea Conaboy and Martin Finucane, SJC Orders State to Cover Legal Immigrants, Boston Globe, Jan. 6, 2012, at 1.)(interviewing the parents of legal immigrant Samuel Goncalves).

[21]HLA succeeded in obtaining a Court Order allowing two class representatives to proceed under the pseudonyms Jane Doe 1 and Jane Doe 2.

[22] 42 U.S.C. § 1988.

[23] This process is permitted pursuant to M.G.L. ch. 214, § 1 and M.G.L. ch. 231A, § 1.

[24] Plaintiffs gave notice to the Attorney General initially pursuant to M.G.L. ch. 231A, § 8 and subsequently under Fed .R. Civ. P. 5.1.

[25] Fed .R. Civ. P. 15(a)(1). See Carnegie Mellon Univ. v. Cohill, 484 U.S. 343 (1988)(a remand is within the discretion of the judger and is the preferred course of action when no federal claims remain and the federal court not invested substantial resources on the dispute.)

[26] In hindsight it is quite plausible that we would have succeeded on the federal claim; however, our clients’ needs directed us to a more expedient process in state court.

[27] Mass. Const. art. , as amended by Mass. Const. amend. art. 106.

[28] The following organizations submitted amici curiae briefs on behalf of the plaintiffs in Finch I: the Irish Immigration Center (represented by Mary M. Calkins, W. Keith Robinson, and Vid Mohan–Ram, and Michael J. Tuteur ); the Asian Pacific American Legal Center, Asian American Justice Center, and Asian American Institute (represented by Julie A. Su, Justin Ma, Daniel S. Floyd, Elaine Ki Jin Kim, Minae Yu, Meredith Higashi, and Ami Gandhi); Massachusetts Law Reform Institute, Health Care For All and the Massachusetts Immigrant and Refugee Advocacy Coalition (represented by Victoria Pulos); and the American Civil Liberties Union of Massachusetts (represented by Anthony D. Mirenda, Ara B. Gershengorn, Thomas Ayres, Katie Marie Perry, and John Reinstein).

[29] 459 Mass. at 675.

[30] Id. at 663. Justice Duffly disagreed with this conclusion. Id. at 690 (Duffly, J., concurring in part and dissenting in part).

[31] Id. at 675-77.

[32] Id..

[33] Id. at 677-78. Not all the justices agreed. Concurring in part and dissenting in part, Justice Gants, joined by Justice Cordy, argued that § 31(a) was consistent with Congress policy in PRWORA and that as a result, the rational basis test should be applied. Id. at 684-86.

[34] Id. at 669.

[35] Graham v. Richardson, 403 U.S. 365, 375 (1971).

[36] See 8 U.S.C. § 1601. PRWORA, however, does permit states to exercise independent decision-making with respect to alien eligibility for state public benefits which may be provided at the state’s cost. 8 U.S.C. §§ 1621-1624.

[37] The following organizations submitted amici curiae briefs on behalf of the plaintiffs in Finch II: the Asian Pacific American Legal Center et al. (represented by Doreena Wong, Justin Ma, Daniel S. Floyd, Minae Yu, Jordan Bekier, Christopher Punongbayan, and Kimberly Lewis, Andrew Kang, Miriam Yeung, Erin E. Oshiro, Jessica S. Chia, and Priscilla Huang, and Jacinta S. Ma); the Massachusetts Law Reform Institute, Health Care For All and the Massachusetts Immigrant and Refugee Advocacy Coalition (represented by Victoria Pulos); the American Civil Liberties Union of Massachusetts (represented by Ara B. Gershengorn, Katie Marie Perry, John Reinstein, and Laura Rotolo); and the Chinese Progressive Association et al. (represented by Sarah F. Anderson, Nancy J. Lorenz, and Jan M. Stiefel).

[38] 461 Mass. at 238-42.

[39] Id. at 244.

[40] In addition, under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, §§ 1312(f), 1411, 124 Stat. 119, 183-84, 224-26 (2010), in 2014, lawfully residing individuals, such as our plaintiff class, will be eligible for federal subsidies to support the purchase of health insurance under the state exchanges, regardless of PRWORA.

National Health Care Reform Comes Home: Massachusetts’ Implementation of the Affordable Care Act

By Michael T. Caljouw and Sarah G. Gordon


On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (hereinafter the “ACA”).1 The law has been characterized as the most sweeping reform act since the implementation of Medicare and Medicaid. ACA goes beyond these historical areas of federal involvement in health care and impacts how insurance products are sold to employers and consumers.

At a very basic level, ACA increases access to health insurance cover-age through broadened Medicaid eligibility, the Children’s Health Insurance Program (“CHIP”), and subsidized premium assistance for certain lower-income individuals. These costs are intended to be met by increased insurer, employer, and pharmaceutical taxes; reduced Medicare and Medicaid spending; and other revenues. The law also includes important measures designed to enhance the delivery and quality of health care. While some provisions of ACA became effective shortly after passage in 2010, most provisions do not take effect until 2014, and others will be phased in over the next few years.

Four years earlier, in the Spring of 2006, Massachusetts enacted its own version of health care reform when then-Governor Mitt Romney signed Chapter 58 of the Acts of 2006 (“Chapter 58”). Chapter 58 increased health insurance coverage through a combination of Medicaid expansions, subsidized private insurance programs, and insurance market reforms. This expansion of coverage was financed through an individual mandate to purchase health cover-age, redirected Uncompensated Care Pool and Disproportionate Share Hospital funds, and requirements that employers either make a “fair share contribution” to their employees’ health insurance or pay a “free rider surcharge.” Since enactment of Massachusetts health care reform, over 98% of the Commonwealth’s residents have health insurance coverage, including 99.8% of children.2

ACA follows the Massachusetts model in many important ways. While many have noted that both pieces of legislation include individual mandates to purchase health insurance, there are many other similarities, ranging from insurance exchange structures to new rules for insurers and employers. Despite these thematic parallels, Massachusetts policymakers have much work to do implementing the thousands of pages of federal laws and regulations within an existing state framework.3 Harmonizing the two laws will be a painstaking, multi-year process involving every major health care stakeholder: Massachusetts and federal governments, employers, insurers, consumers and health care providers. While some states have chosen to challenge ACA pro-visions, Massachusetts policymakers and stakeholders have instead already commenced the implementation process. Accordingly, the following article examines five key features4 of ACA that must be addressed during Massachusetts implementation:

  1. The Individual Mandate to Purchase Health Insurance Coverage;
  2. Employer Responsibilities;
  3. Individual and Employer Subsidies;
  4. Essential Health Benefits and Minimum Credible Coverage Requirements; and
  5. Medicaid Expansions and Basic Health Plan Coverage Options.

1. The Individual Mandate

The major expansion and reform provisions under ACA occur in 2014. Beginning that year, ACA mandates that individuals must purchase insurance coverage if they can afford it – meaning that there are affordability exemptions from ACA’s individual mandate based on limitations in income.5 Otherwise, a qualifying individual must demonstrate that cover-age exists (through either private or public insurance programs), or face a federal penalty. This penalty gradually increases over a three-year period, from a maxi-mum of $285 per family (or 1% of family income, whichever is greater) in 2014 to a maximum of $2,085 per family (or 2.5% of family income, whichever is greater) in 2016. The penalty will be prorated by the number of months without coverage, and post-2016 penalty amounts will increase annually by the cost of living. Chapter 58 includes a conceptually similar mandate. Massachusetts residents are required to obtain health insurance coverage only if affordable coverage is avail-able. The Massachusetts Health Connector (the “Health Connector”) annually sets a schedule of affordability based on income levels and defines the minimum level of required or creditable cover-age. The affordability schedule is progressive, with the percentages of income people are expected to pay for coverage rising over time. Individuals with incomes under 150% of the federal poverty level (“FPL”) and those with valid religious exemptions are exempt from the Massachusetts individual mandate. Otherwise, Chapter 58 establishes fiscal penalties for qualifying adults who do not purchase health insurance that meets the standards of minimum creditable coverage. Penalties are assessed through the Massachusetts Department of Revenue tax filing process and are based on the affordability and premium schedules. As a general matter, penalties are lowest for those ages 18–26 and for anyone with income below 300% of FPL. While the penalty was phased in over time, the penalty for non-compliance can now reach up to half the cost of the lowest available yearly premium.

In light of the operational differences between the Massachusetts and federal mandates, Massachusetts policymakers must resolve certain key issues. First, different income exemption standards mean that there are different standards of who is subject to being penalized. There is also conflict in the amount of the penalty and how it is phased in over time. Because the federal individual mandate has somewhat different provisions and does not appear to preempt the state man-date, Massachusetts legislative action is likely required to prevent uninsured Massachusetts residents from facing both state and federal penalties.6 To illustrate the real conflict between the laws, in 2016 and beyond, uninsured people who earn less than 250% of FPL are subject to higher penal-ties under ACA than under Chapter 58.7 Meanwhile, individuals with more moderate income levels are penalized less under ACA than under Chapter 58. Indeed, unless reconciled, uninsured individuals may face both state and federal mandate penalties for the same period of time.

2. Employer Responsibilities

ACA, like Chapter 58, relies on the central premise that the majority of individuals will obtain their insurance through employer-based coverage. Accordingly, employer responsibilities are central to the success of both statutes. Under ACA, businesses with fifty or more employees must offer coverage that meets minimum standards beginning in 2014, or face two types of penalties.8 First, businesses that do not offer cover-age are fined $2,000 per full-time employee (after the first thirty employees). Second, businesses that offer coverage to employees who receive a public subsidy based on affordability are fined the lesser of $3,000 per employee receiving the subsidy or $2,000 multiplied by the total number of employees. Chapter 58 establishes a separate set of standards, requiring that businesses with more than ten full-time-equivalent employees bear a “fair and reasonable” contribution to the insurance premiums of their employees. The annual assessment is $295 per employee (verified by prorated quarterly filings).9 Compliance with the so-called “fair share contribution” is determined through two tests:

  • Percent of Full-Time Employees Enrolled: Are at least 25% of “full-time” employees enrolled in a qualifying employer-sponsored health plan? O
  •  Premium Contribution Levels: Does the business pay at least 33% of the cost of individual coverage for its “full-time” employees who have been employed for at least ninety days?10

As of 2009, Massachusetts businesses with fifty or fewer employees needed to meet only one of these two prongs. Larger employers (those with at least fifty-one employees) automatically comply if 75% of their “full-time” employees are enrolled in a qualifying employer-sponsored health plan. Larger employers with less than 75% enrollment must meet both prongs of the test to be exempt from the assessment. Chapter 58 also establishes a Free Rider Surcharge on businesses.11 This surcharge is different from the state’s fair share contribution. The surcharge is applied when a qualifying employer (with eleven or more employees) does not arrange for a pre-tax payroll deduction sys-tem for health insurance and has employees who receive care paid for by the Health Safety Net.12

Massachusetts officials are currently working to reconcile many differences between the state and federal health care reform laws relating to employer obligations. At a basic level, ACA imposes significantly higher penalties but also exempts more businesses. ACA exempts all small employers (with fifty and fewer employees) while the state law applies to businesses with eleven or more full-time employees. The state and the federal laws also use different definitions of “full-time” employment.13 Another key difference between the state and federal rules is that under ACA, full-time equivalent employees (FTEs) are used only to determine if the employer has a sufficient number of employees to be subject to the coverage requirements while Chapter 58 uses employee thresholds to calculate the assessment as well. Since the federal law becomes effective in 2014, Massachusetts legislative action is needed in 2012 or early 2013 to allow adequate time for administrative agency and business operational compliance.

3. Essential Health Benefits and Massachusetts Minimum Creditable Coverage

ACA, like Chapter 58, sets baseline requirements in order to ensure that individuals receive access to (and health insurers offer) a comprehensive set of benefits and services. The federal baseline coverage requirements are called Essential Health Benefits (“EHB”),14 while the state baseline coverage requirements are called Minimum Creditable Coverage (“MCC”).15 While both laws set forth basic requirements for coverage of benefits and services as well as cost sharing, the laws differ in both scope and applicability.16

A.     Federal Essential Health Benefits (“EHB”)

The federal EHB requirement applies to all individual and small group coverage offered in a state’s commercial health insurance market. Fully insured large group health plans, grandfathered health plans, and certain self-insured health plans17 are exempt from the requirements to provide EHB.

Health plans subject to the federal EHB requirement must provide an “Essential Benefit Package” (which must include EHB as defined by the Secretary of Health and Hu-man Services (“HHS”)), annual limitations on cost sharing, and offer coverage in one of the “tiers” – Bronze, Silver, Gold, or Platinum — available through the exchange.18 While ACA grants the Secretary of HHS broad authority to define the EHB requirements, ACA establishes ten categories of benefits that must be included within any final EHB rule. These include emergency services, maternity care, prescription drugs, preventive care and pediatric services.19 ACA also caps total annual out-of-pocket costs for these plans (equal to the out-of-pocket limit in Health Savings Account qualified plans), and sets annual limits on deductibles for employer-sponsored health plans.20

B.     Benchmark Plans and State Implementation of EHB

In order to provide the states with flexibility to implement ACA EHB provisions, HHS issued a bulletin on December 16, 2011.21 ACA requires that the scope of EHB benefits be equal to the scope of benefits covered under a typical small group employer plan avail-able in the state. Rather than set forth a prescriptive regulatory scheme for the initial years of implementation (2014 and 2015), HHS offers states broad flexibility in selecting a “benchmark” plan, which will define the benefits (but not the cost-sharing requirements) that each individual and small group health plan must provide.22 The bulletin provides four alternative benchmark plan options:

  • The largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market;
  • Any of the largest three state employee health benefit plans by enrollment;
  • Any of the largest three national Federal Employee Health Benefits Plan (“FEHBP”) options by enrollment; and
  • The largest insured commercial non-Medicaid HMO operating in the state. 23

HHS intends to assess the bench-mark plan selection process and is expected to issue subsequent guidance for EHB for years 2016 and beyond. This later approach may ultimately exclude some state mandated benefits from inclusion in the EHB package.

The interplay between state and federal mandated benefits and the state selection of a benchmark plan will be key implementation issues. Currently, Massachusetts has 58 mandated benefit laws on the books, none of which are pre-empted by ACA,24 and ACA requires states to defray the costs associated with coverage of any state-man-dated benefit that is in excess of the EHB for individuals enrolled in a qualified health plan (“QHP”).25 At the same time, of the plans that could potentially be selected as the “benchmark” plan in Massachusetts, only the health plans offered in the small group market and by HMOs are required to cover all of the state mandated benefits. This is important because, if the state selects one of the State Employee Health Benefit plans or the FEHBP, only those mandated benefits that are included as part of that “benchmark” plan become part of the EHB package. The state would then become responsible for funding coverage associated with the remaining benefits mandated by state law. Finally, the guidance further clarifies that if a state enacts additional mandated benefit legislation after December 31, 2011, and those new mandated benefits are not included as a covered benefit within the benchmark plan, the state is responsible for the cost of covering those benefits as well.

As part of the state implementation activities in Massachusetts, the Division of Insurance and the Health Connector are examining the implications of each potential benchmark plan on the state’s commercial market. The Division of Insurance is collecting data on the benefits and services provided by health plans within each category. While meaningful similarities exist between the health benefit plans offered in the small group and the largest HMO plan, there are important differences between these offerings and the state employee health benefit plans in terms of covered benefits.26 The most striking differences however are between the FEHBP and the state plans. The FEHBP does not cover some of the state’s mandated health benefits, including those mandates that are the most expensive.27 The federal guidance recommends that states select a benchmark plan by the third quarter of 2012, and Massachusetts is expected to make its decision by this fall.

C.     EHB and Minimum Creditable Coverage (“MCC”)

Finally, many questions have been raised regarding the intersection between the federal EHB requirements and Chapter 58’s requirement that individuals purchase coverage meeting MCC requirements – and whether Massachusetts will eliminate or modify Chapter 58’s MCC rule. The Board of the Health Connector has promulgated regulations requiring that an MCC-compliant health plan cover a broad range of medical services, include limits on the out-of-pocket costs for individuals and families, and not include limits or caps on certain benefits.28 Unlike EHB, the Massachusetts rules govern out-of-pocket spending such as deductibles and co-payments, and set a basic actuarial value as a floor for minimum cover-age. While the requirements for obtaining MCC-compliant health care coverage apply to individuals, health plans writing coverage in Massachusetts provide cover-age that is consistent with these requirements.

By contrast, EHBs apply to non-grandfathered plans in the individual and small group markets both inside and outside of the Exchanges, Medicaid benchmark and benchmark-equivalent, and Ba-sic Health Programs.29 Large group (both fully- and self-insured), and grandfathered health plans in existence as of the effective date of the federal law, are exempted from the EHB requirements. While Massachusetts law does not reach those employers subject to ERISA, most Massachusetts employers nevertheless offer coverage that enables their employees to comply with the requirements of the Massachusetts mandate. There is some concern that if Massachusetts eliminates its own requirements for comprehensive coverage, individuals employed by large employers will lose access to MCC-compliant coverage.

Massachusetts individual mandate and MCC requirements are not preempted by ACA. Massachusetts is therefore permitted to continue to enforce its own individual man-date and baseline requirements for coverage. This will continue to be an important discussion during the forthcoming year as the state con-siders legislation designed to bring the state into compliance with ACA.

4. Individual and Employer Subsidies

ACA expands access to health insurance coverage through the establishment of premium credits, available to both individuals and to small employers purchasing cover-age through the exchange. Massachusetts health care reform took a similar approach through subsidies for individuals below a set income threshold who purchase coverage through the Health Connector; however, Massachusetts did not provide corresponding subsidies for small employers. The upcoming sections discuss the intersection between the Federal assistance provided to individuals and employers and the subsidies provided through Massachusetts health care reform.

A. Individual Premium Credits

ACA provides individuals without access to Medicare, Medicaid, or affordable employer-sponsored insurance the opportunity to purchase coverage through the Exchange with premium and cost sharing assistance, provided that certain income criteria are met.30 The ACA premium credit program provides refundable and advance-able premium credits to eligible individuals and families with house-hold incomes between 100% and 400% of FPL. Individuals seeking premium credits are restricted to purchasing a QHP through the state’s exchange. At the time an individual seeking assistance enrolls in coverage through the state exchange, the exchange is required to determine the individual’s eligibility for advanced tax credit.31 The expected individual premium contribution will be set on a sliding scale, ranging from 2% of income for individuals earning up to 122% FPL and 9.5% of income for individuals earning between 300%-400% FPL.

ACA makes the premium credit advanceable and paid directly to the health plan in which the individual enrolls. However, the state ex-change is required to annually reconcile these advanced payments against the actual credit for the taxable year. Unlike the structure of the Massachusetts premium assistance models, individuals obtaining ACA premium credits could receive additional credits over the course of the year should their income status change (through a loss of employment or wages); conversely, such a scheme could potentially result in individuals owing additional income tax liability should their income status improve mid-year.32 In addition to premium credits, ACA provides cost-sharing subsidies to eligible individuals and families to assist in payment of an individual or family’s out-of-pocket costs, including co-payments and deductibles.

In Massachusetts, the most significant aspect of Chapter 58 was arguably the eligibility expansion of the publicly-subsidized MassHealth and the establishment of the publicly-subsidized Commonwealth Care program. Commonwealth Care provides individuals earning up to 300% FPL with access to comprehensive and affordable coverage. Unlike the federal premium tax credits, however, individuals enrolling in Commonwealth Care enroll in one of the four “Plan Types” and pay a discounted monthly premium on a sliding scale that is based on income. There is no reconciliation at the end of the year, thus no opportunity to either receive additional subsidies or be responsible for tax liability. How-ever, the Health Connector does conduct regular reconciliations to redetermine eligibility.

By 2014, federal premium tax credits will become available and could replace state subsidies for current Commonwealth Care members who earn between 133% and 300% FPL.33 These federal subsidies will provide less assistance to individuals than is currently provided by Common-wealth Care. Critical decisions still need to be made by Massachusetts officials as to how to address this overlap and whether to continue to provide state assistance to individuals who are now enrolled in this program at the amount currently available. A discussion of current options for providing continued assistance for Commonwealth Care enrollees is contained in subsequent sections.

State fiscal considerations may resolve many of the questions concerning restructuring state programs, and the Commonwealth is in the process of conducting an analysis of different options for restructuring the programs and the impact on the state budget going forward. However, if the Health Connector does not provide for additional “wrap” subsidies, Commonwealth Care enrollees could have to pay higher premiums and out-of-pocket expenses than they do now.

B. Employer Subsidies

ACA created a new premium tax credit to enable small businesses to purchase health insurance coverage for their employees.34 This credit, unlike the individual premium credit, became effective immediately upon enactment of ACA in 2010. For years 2010 through 2013, the tax credit is worth up to 35% of a taxable eligible small employer’s premium payments. During those years for eligible small employers, the maximum amount is 25% of the employer’s premium payments. That amount increases to 50% in 2014. In order to qualify for the credit, an employer is required to meet three qualifications. The first is to have fewer than twenty-five FTEs during the taxable year. Second, the annual average wage for all employees during the taxable year must be less than $50,000. Finally, the employer must have in place a “qualifying arrangement.”35

Currently, Massachusetts offers an assistance program for eligible small employers and self-employed individuals to provide health insurance coverage for employees. Similar to ACA’s small employer tax credits, the Massachusetts Insurance Partner-ship Program provides premium subsidies for small employers with between two and fifty FTEs, provided that the employer offers comprehensive coverage to employees and contributes at least 50% of the costs of the premi-ums.36 MassHealth is authorized to provide as much as $1,000 per year for each qualified employee.37

An open question remains as to the fate of the Insurance Partnership Program, given the new insurance tax credits made avail-able by ACA for small businesses that are in effect today. Much will be contingent upon the status of the Massachusetts Section 1115 federal Medicaid waiver and avail-ability of state and federal dollars as the current public insurance programs are reorganized to satisfy the new coverage requirements contained within ACA and maximize new federal matching funds.

5. Medicaid Expansion and the Basic Health Plan

One of the centerpieces to Chapter 58 was its expansion of Medic-aid eligibility and the creation of subsidized coverage through the Commonwealth Care program – and these will be impacted by the mandatory Medicaid expansion included within ACA. In particular, Massachusetts will likely need to reorganize several existing public programs due to changes in eligibility criteria created by ACA. Although by no means an exhaustive list, the analysis below illustrates just a few ways in which the Massachusetts landscape may change in the coming year.

First, ACA expands mandatory coverage of Medicaid eligibility to individuals who earn up to 133% FPL.38 This change will allow most legal residents with incomes up to 133% FPL to qualify for MassHealth. One of the key features of ACA is that it simplified Medicaid eligibility by removing

categorical eligibility requirements. Coverage provided to expansion population is not required to comply with the Medicaid benefit requirements that are required for other mandatory populations; how-ever coverage must at least equal benchmark or benchmark equivalent coverage.39 ACA allows states the option of developing a Basic Health Plan, which covers eligible individuals with incomes between 133% and 200% FPL and allows legal immigrants with incomes up to 133% FPL to receive coverage through this plan.40

In Massachusetts many of these individuals within the mandatory expansion population may already be covered through the MassHealth Basic, MassHealth Essential or Commonwealth Care programs.41 Members enrolled in either the Commonwealth Care program or MassHealth experience significant churn between programs as their individual eligibility status changes. Moving these individuals into MassHealth will simplify the program and reduce churn. However, as with all of the new federal rules, ACA’s Medicaid expansion provisions bring about new and important policy considerations that the state will have to address. During the coming months, Massachusetts will need to sort through the existing state coverage programs and determine how to incorporate the new classification of eligible individuals and how to fully take advantage of opportunities to receive enhanced federal matching dollars. The Patrick Administration has announced its recommendation to establish a Basic Health Plan within MassHealth for this population.42 Many of the individuals who will become eligible for the Basic Health Plan are currently enrolled in Commonwealth Care today, including legal immigrants.

Finally, Massachusetts must determine how to cover those individuals who currently receive insurance or subsidies through Commonwealth Care and earn 200% -300% FPL along with those earning up to 400% FPL. The Patrick Administration has announced recommendations to provide individuals with incomes between 200% and 300% FPL who receive a premium tax credit with additional state subsidies.43 This population will be transitioned to the ACA-mandated exchange and receive premium tax credits. However, premium tax credits and cost sharing subsidies will not pro-vide the same level subsidies that individuals within this population receive through Commonwealth Care today. The Patrick Administration further announced its recommendation to provide additional assistance to those between 200% and 300% FPL with “wrap” coverage. The amount is currently estimated to cost the Common-wealth $187 million.44 Both ACA and Massachusetts health care reform contain provisions that expand affordable health care options for the state’s most vulnerable populations. Important decisions need to be made at the state level as to how best to transition this population in a manner that maintains coverage for this population and ensures that Massachusetts is in full compliance with the new federal rules.


Much of the public’s attention on national health care reform, including much legal analysis, has been focused on Washing-ton, D.C. With a United States Supreme Court challenge and a national election in which health reform is center stage, that is quite understandable. However, there are very significant challenges related to federal health reform facing Massachusetts today. Policymakers are confronting the hard task of reconciling a federal law which – in many important ways – differs from its older sister in Massachusetts.

Massachusetts has convened a dedicated workgroup to address these and the many other issues presented by ACA. The group has met several times since September 2010, and consists of state officials from the Executive Office of Health and Human Services, the Massachusetts Health Connector, the Massachusetts Division of Insurance, the Massachusetts Department of Public Health, MassHealth, other relevant state agencies, health plans, providers, employer groups, consumer groups and other interested parties.45 In addition, smaller state-led workgroups have commenced more focused discussions with stakeholders.46 Led by the Massachusetts Division of Insurance and the Massachusetts Health Connector, these groups have included the so-called “Three R’s” Workgroup addressing implementation issues centering on reinsurance, risk adjustment and risk corridors. The separate Insurance Market Reform Workgroup has focused on essential health benefits, catastrophic health plans, child-only health plans, group market size and rating issues and enrollment matters. As of April 2012, no workgroup sessions have begun to address the many issues presented by the individual mandate or employer responsibility issues.

This article illustrates that there are difficult legal, policy and operational issues to face from ACA’s implementation in Massachusetts. Much of the work has already begun in earnest. However, with many of the major provisions effective in 2014, state lawmakers and agency officials will need to continue with careful deliberation and timely legislative and regulatory actions.

Michael T. Caljouw is Vice Presi­dent of Public Government and Regulatory Affairs for Blue Cross Blue Shield of Massachusetts. Mr. Caljouw directs the leading Massachusetts-based health plan’s activities in a wide range of policy, legislative and regu­latory issues including major health care reform matters in Massachusetts. Prior to join­ing Blue Cross, he was Senior Counsel at a national law firm, Holland & Knight, within their Boston office. In this capac­ity, Mr. Caljouw represented national and local clients in the administrative law, regulatory compliance, licensing and insur­ance law fields.

Sarah G. Gordon is Vice President of Legal Affairs for the Massachu­setts Association of Health Plans. Ms. Gordon joined MAHP in 2006, shortly following passage of Mas­sachusetts Health Care Reform, Chapter 58 of the Acts of 2006. Sarah brought with her two years of litigation experience in criminal, financial, and insurance litigation. Since joining MAHP, Ms. Gordon was extensively involved in implementa­tion of Massachusetts Health Care Reform, working with issues related to commercial, Medicaid and Con­nector programs. Ms. Gordon is responsible for coordinating MAHP’s public policy agenda, including all issues related to Medicaid and MassHealth and MAHP’s payment reform and cost control policies. Ms. Gordon is MAHP’s representa­tive to the Advisory Committee to the Health Care Quality and Cost Council, where she has served as both Vice Chair and Chair for the Committee. Ms. Gordon also serves as MAHP’s general counsel and advises MAHP on compliance with state Ethics laws and regulations. Ms. Gordon currently serves on the MWPC PAC Board, and also serves as the co-chair for the MassGap Health and Human Services and Elder Affairs Task Force. Ms. Gordon received a BA, Honors, in Environ­mental Policy from the University of Kansas and holds a JD from Vermont Law School.

Guardianship Proceedings in Massachusetts Probate Courts for Health Care Facilities: The Not-so-Uniform Probate Code

By William A. Mandell and Suzanne M. Fuchs


On January 15, 2009, Massachu­setts joined 18 other states in adopting the Uniform Probate Code (“UPC”).1 Article V of the UPC went into effect on July 1, 2009, making sweeping substantive and proce­dural changes to guardianship law, aiming to grant greater protections to the civil rights of incapacitated persons.2 Further changes to the UPC were adopted in April of 2012, mostly relative to intestate succes­sion and estate administration.

In theory, Article V of the UPC was de­signed to streamline procedural re­quirements for appointing surrogate decision makers while protecting the civil rights of the incapacitated by crafting decrees and orders spe­cifically tailored to address particu­lar areas of incompetency. In prac­tice, however, so far the UPC has led to a significant increase in petitions, motions and return appearances being filed by health care facilities for incompetent patients at a time of diminished Probate Court system re­sources. Under the UPC, health care facilities are more frequently secur­ing the appointment of guardians and seeking specific and modified court orders for admission to skilled nursing facilities, treatment plans for patients unable to give informed consent, non-routine medical deci­sions and end-of-life decisions. They are doing so for a broader scope of medical conditions and transfer situations, and finding that Probate Court judges, in applying the UPC, are often limiting the authority of guardians to give consent for treat­ments unless further court review and approval are secured.

The UPC instructs Probate Court judges not to confer more authority over a person than is necessary.3 The balance between an incapaci­tated patient’s civil rights and the altruistic discretion of hospitals and other treating facilities has been fundamentally altered by the UPC as Probate Court judges are now clearly required to make orders only to the extent necessitated by the protected person’s limitations and other con­ditions.4

Furthermore, the variability of the Massachusetts Probate Courts in applying the UPC often adds delay and unnecessary cost for health care institutions and consequently their ability to efficiently and effec­tively treat the very individuals that the UPC was intended to protect. For example, the cost-effective health care system is designed to move pa­tients out of an acute care setting as quickly as possible when sub-acute level care is more appropriate and a bed placement has opened up for the patient. In order to authorize the transfer of an incompetent patient, who has no involved family mem­bers and never appointed a health care agent before becoming incom­petent, Massachusetts acute care hospitals are often forced to keep such a patient in the acute care set­ting pending the appointment of a guardian or the modification of the existing guardianship to authorize transfer to a skilled nursing facility, which is specifically required under the new law.5 This new aspect of the law results in extended stays in acute settings for extra weeks or months, exposing patients to great­er risk of infection and relapse, often without access to needed rehabilita­tion and long term care services. This occurs while the hospital coun­sel or family attorney navigates the various courts’ processes, subject to the courts’ overburdened schedules and lack of personnel.

Additionally, health care institutions pursuing guardianships will often en­counter the challenge of being in the middle of a dispute with or among the incapacitated individual’s family members about whether a guardian is needed, who will serve as guard­ian, and decisions as to treatment or treatment discontinuation. More often than not, a facility facing ad­versarial family members especially needs to petition for guardianship to secure a court order approving the recommended treatment plan. The facility is forced to bear the financial burden of pursuing a guardianship that is significantly delayed by the objecting family members.

Venue limitations under the UPC and inconsistent guardianship proceed­ings among Massachusetts Pro­bate Courts also challenge health care facility petitioners who must obtain guardians and court orders for treatment and transfers for the growing number of incapacitated patients lacking duly appointed sur­rogate decision makers and/or any involved family members. Clearly, the demographic trends of people in the U.S. living longer are impacting the number of patients in Massa­chusetts who need a legal surrogate to make health care decisions. The current backlog of cases pending in the underfunded and overburdened Probate Courts across the Common­wealth further delays guardianship proceedings and can lead to great variation of process among the Pro­bate Courts.

General Overview Of Guardianship Law and Procedure Under The UPC

A. Understanding Guardianship Sub­stantive Requirements:

Under the UPC, a guardian may be granted an array of general powers that effectuate the guardian’s ability to act as a medical decision maker on behalf of an incapacitated per­son. The guardian’s powers fall into three general categories, and each category necessitates distinct proce­dural and substantive requirements under the Code. Generally, the first category is known to practitioners as “ordinary medical decision making,” the second is “placement authority,” and the third is commonly referred to as “extraordinary medical deci­sion making” or “substituted judg­ment” proceedings, which neces­sitate the appointment of a public defender paid by the Committee for Public Counsel Services who is spe­cifically trained to advocate for the patient in these types of cases.

With regard to the first category, a guardian appointed without any additional authority is generally au­thorized to make decisions about routine, non-invasive medical proce­dures. Once appointed by the court, such a guardian may have the au­thority to “make decisions regarding the incapacitated person’s support, care, education, health and welfare . . . and the guardian shall act in the incapacitated person’s best inter­est and exercise reasonable care, diligence, and prudence.”6 Such “or­dinary decision making” authority generally gives consent to treatment and arranging appropriate medical inpatient or outpatient care that does not involve any antipsychotic medications. A guardian need not seek explicit orders for each “ordi­nary care” decision, so long as the guardian is appointed by the court and is acting in the incapacitated in­dividual’s best interest. Also, guard­ians are the duly appointed legal surrogates who have authority over the use and disclosure of the health information7 for the “person in need of services.”8

The second category, placement au­thority, requires an explicit court or­der allowing the guardian to consent to placement in a skilled nursing facility or other health care facility.9 The court, rather than the guardian, after a hearing on the matter, will apply the “best interest” standard in determining whether such author­ity, and thereby placement, is ap­propriate. This authority is required for admission of any person under guardianship to any facility licensed as a skilled nursing facility, whether for long term care or any short term rehabilitation, even if only for several days. The requirement also applies regardless of who the guardian is, including those who are spouses, children or other family members as opposed to professional or institu­tional guardians. Issues also arise regarding persons from out of state and whether the foreign decrees au­thorize admissions to skilled nursing facilities in the Commonwealth.

Finally, a guardian can only make “extraordinary medical decisions” upon an explicit court order au­thorizing the specific treatment in question. Extraordinary medical procedures generally fall into two categories: (1) administration of antipsychotic medication, known as “Rogers authority;”10 and, (2) all other invasive treatments. For both types of extraordinary medical pro­cedures, probate courts apply the “substituted judgment” standard, whereby the Court weighs various factors in order to determine the decision that the incapacitated in­dividual would have made if com­petent.11 The drafters of the UPC did not specify an exhaustive list of such extraordinary authorities, ac­counting for and leaving flexibility to adapt to evolving medical tech­niques and standards.12 The UPC has, however, codified the following common examples of extraordinary treatment: “[t]reatment with anti­psychotic medication, sterilization, abortion, electroconvulsive therapy, psychosurgery and removal of ar­tificial maintenance of nutrition or hydration.”13 The UPC is not clear as to whether a guardian may consent to a “Do Not Resuscitate”, “Do Not Intubate” or “Do Not Hospitalize” order without specific court author­ity. Prior to the adoption of the UPC, Massachusetts courts suggested that a substituted judgment finding is required for the guardian to enter a DNR/DNI order.14 An exception to this requirement may exist when the patient is in acute medical distress, the guardian/family/physician all agree that there is no choice to be made, and avoiding resuscitation or lifesaving measures will not hasten death.15

B. Understanding Guardianship Procedural Requirements

Any person “interested in the wel­fare of the incapacitated” may peti­tion for a determination of incapacity and/or the appointment of a guard­ian over the incapacitated person (hereinafter “Respondent”).16 The

UPC contains venue rules that re­quire the petitioner to file in the Pro­bate Court of the county where the Respondent resides at the time the proceeding is commenced.17 Pre- UPC guardianship procedure was more lenient in permitting Massa­chusetts health care facilities to file petitions of permanent appointment and motions for temporary appoint­ment in the Probate Court located in the County where the facility was located.

Upon receiving a petition for guard­ianship, the Probate Court issues a citation, which is to be served in hand upon the Respondent as well as the heirs at law at least two weeks prior to the return date listed on the citation.18 Where there are no heirs at law or the interested parties do not receive notice, a publication must occur in the County where the proceeding is pending at least seven days prior to the return date. G.L. c. 190B §1-401(3). The “return date” is, in effect, a deadline by which in­terested persons to the case may file an objection. This date is usually about 4-6 weeks from the date of filing of the petition with the Court. A permanent guardianship cannot be completed until this date passes and proof of service upon all inter­ested parties and/or publication is filed with the Court.

While the permanent petition is pending, a petitioner may file a veri­fied motion for the appointment of a temporary guardian if “an incapaci­tated person has no guardian, and the court finds that waiting during the longer time frame to secure a permanent appointment under UPC procedures will likely result in imme­diate and substantial harm to the health, safety or welfare of the per­son alleged to be incapacitated oc­curring prior to the return date, and no other person appears to have au­thority to act in the circumstanc­es.”19 A temporary guardian ap­pointment is effective for 90 days, at which time it will be reviewed and new medical documentation will be required.20 On a temporary motion, the Petitioner must give seven days in-hand notice to the Respondent and the same by mail to any heirs at law.21 If the Court finds that an immediate emergency exists requir­ing the appointment of a guardian, it may waive or shorten the notice requirements, provided that the Re­spondent is notified of the proceed­ing as directed by the Court, and the Respondent and heirs at law receive notice after the proceeding instruct­ing them that they may vacate the order. 22, 23

If a petitioner requests ordinary au­thority or skilled nursing home au­thority, the court must determine whether such placement is in the best interest of the Respondent.24 The Court may appoint counsel to represent the interests of the inca­pacitated person, or a guardian ad li­tem (GAL) to investigate and provide a report to the Court.25 If a petitioner seeks extraordinary authority or au­thority to consent to administration of antipsychotic medication (“Rog­ers authority”), the courts will always appoint counsel for the Respondent.

Variability of Guardianship Pro­ceedings Among Massachusetts Probate Courts

After a new guardianship petition and motion for temporary guardian is filed it can take two weeks to sev­eral months to have the first hearing date depending on which Probate Court the guardianship petition is filed. This length of time, particu­larly for petitions filed by acute care hospitals, is extremely problematic, costly, and can pose imminent harm to Respondents. The lack of suffi­cient funding for the Massachusetts Probate Courts has caused cuts to staff and most recently, a limitation on the hours that the Courts are open to consider petitions and mo­tions.26 This contraction of service is happening at the same time that the UPC is requiring the Probate Courts to adapt to entirely new rules and process on estate administration while still handling the normal work load. The increasing amount of inca­pacitated patients is also resulting in significantly more demands on the Probate Courts with more guard­ianship case filings.

A. Venue Requirements

The UPC provides that a guardian­ship petition shall be filed where the Respondent resided prior to hospitalization.27 This venue require­ment seems warranted if the patient has family or friends residing in the same County who are involved with the patient’s care and can provide information about the patient’s preferences prior to his incapacity. However, a growing number of pa­tients are homeless or have resided alone without any known heirs or acquaintances prior to hospitaliza­tion. Requiring health care facility petitioners to file in a Court that may be a long distance from the facility, causes undue delay, burdens the facility, the guardian, the court ap­pointed counsel, and testifying phy­sicians. Further, an incapacitated individual has the right to attend any hearing, and in Rogers cases, must attend a hearing absent extraordi­nary circumstances.28 As written, the UPC does not acknowledge ex­ceptions to the venue rule where the patient has no ties to his previous residence.

For example, a Boston tertiary care hospital that must seek a guardian­ship appointment to secure an order to approve a discharge plan to a sub-acute facility for a patient found homeless in Barnstable County is expected to file the matter in Barn­ stable County Probate Court. Previ­ously, such a case could have been filed in Suffolk County Probate Court, nearer to the patient, the physicians, and attorneys who may be involved with the case. To require a patient, who likely already has limitations and requires hospital transport, to travel long distances makes no sense and adds unnecessary cost to the health care system.

There is great variation among the Probate Courts on the strict adher­ence to this venue rule. As applied, courts vary as to permitting filing in the venue where the health care facility is located. More troubling, it seems that a Probate Court’s fi­nancial constraints and perceptions about other Counties’ practices drive judicial decisions to reject fil­ings. Anecdotally, it has been re­ported among regular guardian­ship petitioner counsels that some judges have stated that because another County will not accept cases involving their residents, they will not waive the venue rule for a petitioning local health care facility and accept a case involving an incapacitated person whose last known residence is from the other County.

There clearly needs to be greater discretion granted to Judges to have legal authority to waive venue re­quirements and allow filings in the County where the petitioning facility is located if circumstances warrant, for patient and family convenience and/or to realize economy in the use of resources of an already over-burdened health care system.

B. Docketing the Petition

Once a petitioner overcomes the venue obstacle, the petitioner must file the paperwork, have it docketed, and obtain a hearing date for the temporary guardianship motion. Like most guardianship procedural hurdles, the method for docketing a file and obtaining a hearing sig­nificantly varies with each Probate Court and presents further delays and expense. One common trend is that few of the Probate Courts will now process a file and assign it a docket number and hearing date on the day of filing. In the best case scenario, new matters are dock­eted within a few days and hearing dates are generally being scheduled ten days from filing. Guardianship cases, even those including motions for temporary appointments, will languish in some Probate Courts. If not pushed as life-or death emer­gencies, these cases will be placed in a pile of back-logged cases and not processed for several weeks, nor heard for several months.

In other cases, the court will not as­sign a case a court date. Instead, the petitioner must determine which Judge will hear the matter and when that Judge is available, and then at­tempt to contact the Probate Court to obtain a court date. A date ob­tained in this manner is often times weeks out, at best.

C. Appointment of Counsel

Even if a petitioner is successful in docketing within a few days of filing, most of the Probate Courts will not mark-up a hearing date until ap­proximately seven to ten days from filing, which is consistent with prop­er notice under Mass. G.L. c. 190B §1-401(3). Although judges hold weekly motion days, clerks in many of the busiest Probate Courts are unable or unwilling to schedule new cases less than a few weeks after the docketing of the case, if at all.

When an expeditious hearing date can be obtained, inconsistencies among the Probate Courts in coun­sel appointment can further delay the process and lead to vast differ­ences in the time it takes to secure the requisite legal authority to imple­ment a discharge and/or treatment plan. Patients needing rehabilitation or long term care services and treat­ment can remain unnecessarily in acute care settings.

As previously mentioned, all Probate Court judges will appoint Rogers counsel or counsel for the Respon­dent when consent to treat with anti­psychotics or extraordinary authority is sought. Counsel must be notified of their appointment, accept the court appointment and have the op­portunity to visit with the Respondent prior to the hearing on a proposed treatment plan. There is a limited list of Committee for Public Coun­sel Services (“CPCS”) attorneys who can accept Rogers appointments. Again, due to the courts’ backlog, counsels are often not appointed until days or even weeks after the filing of the petition. Often the ap­pointed counsel for the patient does not receive notice of appointment in time for a hearing, cannot visit the patient in time, or cannot accept the appointment at all. In such instanc­es, the initial hearing date on a mo­tion for a temporary guardian and immediate approval of a treatment plan is continued.

Additionally complicating matters are the inconsistencies among judges in appointing counsels and GALs in non-Rogers cases. Where a guardian is needed to authorize the transfer out of an acute care hospi­tal to a home care or non-acute facil­ity setting, currently there are huge and unpredictable variances in the process among the Probate Courts and even the judges within each County. Because the UPC calls for ju­dicial discretion for counsel appoint­ment, some judges routinely choose to appoint counsel, or even a GAL, while others do not. Without know­ing judicial preference beforehand, clerks may fail to appoint counsel, and the petitioners may prepare for a hearing date only to receive an or­der requiring a counsel appointment on the day of the hearing.

D. Shortage of Guardians

In guardianship cases involving pa­tients who have no living or involved family members and never appoint­ed a health care agent while com­petent, petitioning health care facili­ties need to identify and secure the services of some suitable person to serve as guardian. Overburdened Probate Court clerks and judges are unlikely to find a willing attorney or social worker to serve as a guardian in patient care cases filed by hospi­tals and nursing homes. The involve­ment of the Courts in helping secure guardians varies greatly from County to County. By separating the guard­ianship function over health care decisions from the conservator func­tions over financial affairs into two separate legal proceedings, the UPC makes it difficult to find willing volun­teers to serve as guardians in cases involving incompetent patients with no involved family or friends who are willing to serve as guardian. For hospitals and other facilities that regularly seek guardianship appoint­ments it has become a constant challenge to secure the services of guardians for incompetent patients. The shrinking pool of guardians is in part attributable to the increasingly complex annual reporting required under the UPC, coupled with the convoluted manner in which profes­sional guardians are compensated for indigent patients. Under the cur­rent scheme, a professional guard­ian can only seek payment for serv­ing a MassHealth patient by seeking approval from the Court to order MassHealth to adjust the amount of the patient’s contribution for her care from external income sources (social security or pension).29 This adjustment must be authorized by the Court on an annual basis, and it is a mechanism that precious few attorneys will tolerate to serve as guardians. This is a situation that will get worse and warrants a sys­tematic fix.

E. Process to Affirm Health Care Agents

As currently written, the UPC pro­vides that a properly designated health care agent’s authority under M.G.L. c. 201D takes priority over the authority of a guardian, and can­not be revoked absent court order.30 Further, the comments to M. G.L. c. 190B §5308, state that the lan­guage of the revised UPC “should aid in preventing the mere institu­tion of a guardianship proceeding from upsetting an arrangement for care under a health care proxy.” Ac­cordingly, it is clear that the drafters of the UPC intended to prioritize des­ignated health care agents and re­spect an individual’s right to prepare an advance directive.

Under M. G.L. c. 201D §5, a health care agent has broader decision making authority than a court ap­pointed guardian. “The agent has authority to make any and all health care decisions on the principal’s be­half that the principal could make, in­cluding decisions about life-sustain­ing treatment, subject, however, to any express limitations in the health care proxy.”31 An agent’s powers are not limited to non-antipsychotic treatment plans or consenting to non-extraordinary authority, as are the guardians. Further, an agent may admit an incapacitated individ­ual to a locked psychiatric facility,32 whereas the under G.L. c. 190B §5- 309, a guardian explicitly lacks such authority.

Despite the UPC’s clear intent to up­hold the broad authority of health care agents without the need for court intervention, M. G.L. c. 201D §7 makes it easier for the patient who executed a proxy when com­petent to render it unreliable for the health care provider by refusing treatment or to undergo a procedure authorized by the agent. M. G.L. c. 201D §7 states that “[a] principal may revoke a health care proxy by notifying the agent or a health care provider orally or in writing or by any other act evidencing a specific in­tent to revoke the proxy.”33 In such circumstances, this section of the Massachusetts Health Care Proxy Law requires a physician who is in­formed of or provided with a revoca­tion of a health care proxy to imme­diately record the revocation in the principal’s medical record and to notify orally, and in writing, the agent and any health care providers known by the physician to be involved in the principal’s care of the revocation.

Thus, hospitals encountering pa­tients who refuse treatment over the authority of their agents often have no choice but to file a guardianship petition or seek a court order af­firming the authority of the agent in order to secure the requisite legal authority over treatment decisions. The UPC does not provide for any process to resolve such cases. The Health Care Proxy Law does provide a process through which a petition­er, including a hospital or health care facility, may “commence a spe­cial proceeding in a court of com­petent jurisdiction, with respect to any dispute arising under [M. G.L. c. 201D].”34 This language suggests that a petitioner may seek to affirm the powers of the agent, but neither M. G.L. c. 201D nor the UPC provide any further guidance on when affir­mation of a proxy is appropriate or any procedural guidelines regarding affirming an agent’s continuing au­thority under a proxy despite a pa­tient’s refusal to voluntarily submit to treatment.

Some hospitals have been suc­cessful in petitioning Probate Court judges to affirm an agent’s authority on the basis of the Probate Court’s general authority. Other hospitals have adopted the practice of seek­ing a guardianship appointment of the agent in such cases. Currently, there is a lack of uniformity on how to most expeditiously secure the mini­mum necessary judicial interven­tional while protecting the patient’s rights. Arguably the patient’s rights would be best served by honoring the prior broad agency appointment. But if there is evidence of unfitness of the agent or a question of suffi­cient competency by the patient to have the informed capacity to refuse the treatment, then some level of an evidentiary hearing may be required in many of these cases to sufficiently adjudicate the matter.

F. Short Order on Notice

One mechanism that can be at­tempted by health care facility peti­tioners, and should be more widely accepted by all Massachusetts Pro­bate Court clerks and judges, is to file motions for short orders of notice due to an exigent medical situation and the necessity of expediting the proceedings. A short order of notice allows the moving party to be heard on its motion within a period of time shorter than the required 7 days no­tice. Further, it allows a motion to be heard on a day that may otherwise be blacked out by those who sched­ule motions for the Judge due to the number of already marked up mat­ters. There is a great variance cur­rently among the Probate Courts as to their willingness to permit short orders of notice. In all venues, Court staff and case managers alike are understandably resistant toward any cases filed on emergency status, as it burdens an already strained sys­tem. Emergency motions are now almost always met with scrutiny and some push back.

Moreover, each County differs on its procedure to expedite appointment of counsel for matters that may be marked up more quickly. Some judges permit petitioner’s coun­sel to propose CPCS counsel who is available on short notice. Other Judges forbid proposing counsel in a motion and instruct that counsel is appointed “off the list” where too of­ten counsel is not appointed in time for the scheduled hearing. In some Counties, depending on the nature of the circumstances, temporary guardianship appointment may be made without appointment of coun­sel, and subsequent appointment is made with a short review date in order to reassess the emergency order. A broader adoption of this ap­proach among more Counties would be helpful.

G. Out-of-State Patients/Juris­dictional Questions

Another major challenge many Massachusetts health care facili­ties face now under the UPC is with out-of-state incompetent patients. Facilities located near the border of neighboring states, as well as Mas­sachusetts teaching hospitals and centers of excellence, regularly treat out-of-state patients and inevitably many of them are not competent to make informed health care deci­sions. Many Massachusetts hospi­tals and sub-acute facilities have service areas that include large portions of Rhode Island, Connecti­cut, New York, New Hampshire and Maine.

Many out-of-state incompetent pa­tients present without having made out an advance directive recognized by their state of residence. This leaves a major question of jurisdic­tion and applicable law. Clearly, a Massachusetts hospital cannot treat and discharge such a patient on a non-emergency basis without seeking the appointment of a guard­ian and would need to do so by filing a petition in a Massachusetts Pro­bate Court. Many Probate Courts, however, will not accept such peti­tions and instruct Massachusetts health facility counsels to seek an appointment in the state court of the patient’s residence.

In other situations, a patient does have a surrogate in place from an­other state but additional questions come up as to that out-of-state sur­rogate’s authority to consent to anti-psychotic treatment and other inva­sive treatments being rendered in Massachusetts.

The American Bar Association has proposed adoption by the states of the Uniform Adult Guardianship and Protective Proceedings Jurisdic­tion Act (“UAGPPJA”). This Act would address jurisdictional issues such as transfer, out of state jurisdiction, and multi-jurisdictionalguardianships.35 Massachusetts could resolve many of these jurisdictional issues by join­ing the 30 other states that adopted the Act.

H. Consequences of the Vari­ability in Procedure Among Pro­bate Courts

The increasing length of time under current UPC Probate Court practice before a temporary or permanent guardianship is heard is problematic and does not serve the interests of the incapacitated individuals that the UPC was drafted to protect. It is important to understand that most cases initiated by health care facili­ties are, by their very nature, urgent situations. For patients who do not have a surrogate decision-maker but are medically stable and ready for discharge, the current Probate Court system is causing acute care hospi­tals longer than is medically advis­able to discharge. These patients are often at greater risk of acquiring healthcare-associated infections, also referred to as nosocomial, hos­pital-acquired or hospital-onset in­fections. These patients also remain unable to obtain appropriate reha­bilitation or post-acute care, facing the likelihood that his or her condi­tion will deteriorate. Further, proper placements cannot be held indefi­nitely and are often lost by the time a temporary guardian appointment with the discharge approved by the Court can be secured. Patients who must wait one month for a guardian­ship order often will not be accepted by the originally available post-acute care facility or program as the bed or placement has been filled. More­over, the patient in a locked- psychi­atric facility awaiting a guardianship appointment and an order approv­ing a treatment plan must remain in the most restrictive setting, suffering the symptoms of a psychiatric illness without the ability to commence an antipsychotic treatment plan.


The variability of Massachusetts Probate Courts in applying UPC requirements is currently causing unnecessary financial costs to the Massachusetts health care system, inconvenience and uncertainty to litigants and their counsel, and most importantly, is not serving the inter­ests of the incapacitated. Some of the current challenges stem from the financial shortfalls and lack of resources in the system. Many, how­ever, could be easily rectified by UPC amendments and/or more consis­tent application of procedural steps by all of the Massachusetts Probate Courts in handling guardianship pe­titions and motions filed by health care facilities. A re-examination of the UPC as applied by the Probate Courts and the handling of all health care intervention matters is due and should be undertaken by the Chief Administrative Justice of the Mas­sachusetts Probate Courts. Such a process could hopefully result in more efficient, fair standardized procedural rules to ensure that the UPC’s intent to create uniformity of procedure and greater rights for the incapacitated is effectively carried out in practice.

William A. Mandell is a partner in the Boston law firm of Pierce & Mandell, P.C. He has over 25 years of experience representing health care providers, medical societies, biotech companies, and research and educational companies, on all aspects of health and business law. He is also the author of several works on legal compliance, including, Managing Relationships with In­dustry A Physician’s Compliance Manual; the Massachusetts Health and Hospital Law Manual and Making Sense of the Stark Law: Compliance for the Medical Practice. He is a member of the American Health Lawyers Associ­ation, the American Bar Associa­tion and the Boston Bar Associa­tion Health Law Section Steering Committee.

Suzanne M. Fuchs is an associate with Pierce & Mandell, P.C. focusing her practice on a variety of matters, with a concentration in the areas of civil litigation, personal injury, insurance defense, and health care related legal proceedings, including civil commitments and guardian­ships. Suzanne is a graduate of Cornell University (B.A. 2006) and Northeastern University School of Law. Prior to joining Pierce & Mandell, Suzanne interned as a law clerk for the Honorable Judge Frank Gaziano of the Massachusetts Su­perior Court. Suzanne also worked for a state agency that provided direct legal representation to indi­viduals with mental disabilities in a variety of legal matters. She was also employed as outside counsel for a large insurance company. Su­zanne is admitted to practice in the states of Massachusetts and Rhode Island, as well as in the Federal District Court for the District of Mas­sachusetts.


1 Mass. G.L. c. 190B §§1-101 -1-507.

2 The UPC defines an “incapacitated person” as “an individual who for reasons other than advanced age or minority, has a clinically diagnosed condition that results in an inability to receive and evaluate information or make or communicate decisions to such an extent that the individual lacks the ability to meet essential requirements for physical health, safety, or self care, even with appropriate technological assistance.” Mass. G.L. c. 190B 521 § 5-101(9).

3 Mass. G.L. c. 190B, § 5-306. Under the UPC guardians no longer have any authority over the funds or estate of a person, but rather no have authority only over the person’s personal/health care decisions. Court appointed surrogate authority over the financial affairs of an incapacitated person is limited to a conservator, who must be appointed through a separate legal process from a guardianship under the UPC.

4 Mass. G.L. c. 190B, § 5-407 (a), (d).

5 Mass. G.L. c. 190B § 5-309 (g). “No guardian shall have the authority admit an incapacitated person to a nursing facility except upon a specific finding by the court that such admission is in the incapacitated person’s best interest.” According to the note for § 5-309(g), the requirement of specific authority for admission to a nursing facility is an important new protection for the elderly.

6 Mass. G.L. c. 190B §5-309 (A).

7 45 C.F.R. §164.502 (g)(1) and (2); Mass. G.L. C 111, §70; Mass. G.L. C 112, §12C

8 The UPC replaces the reference of “ward” to “person in need of services” for adult incapacitated individuals.

9 Mass. G.L. c. 190B § 5309 (g).

10 The Court in Rogers et al v. Commissioner of the Department of Mental Health et al., 390 Mass. 489 (1983) held that specific court authority must be sought to administer antipsychotic medication, whereby the court applies a “substituted judgment” standard in order to determine whether an incapacitated individual would have refused treatment if he were not incapacitated.

11Brophy v. New England Sinai Hospital, 398 Mass. 417, 427 (1986) (At least six factors are weighed in making substituted judgment: the individual’s express preferences regarding treatment; the strength of the individual’s convictions in relation to their refusal of treatment; the impact of the decision on the individual’s family; the probability of adverse side effects; the prognosis with and without treatment; and any other relevant factors); Mass. G.L. c. 190B § 5306A.

12 The Massachusetts Comment to Mass. G.L. c. 190B §5-306A states that: “The types of treatment for which a substituted judgment procedure may be required are not listed as they may vary depending on the invasiveness of the particular proposed procedure or because of advancements which reduce side effects, etc., see In Matter of Spring, 380 Mass. 629, 405 N.E.2d 115 (1980).”

13 Massachusetts Comment to Mass. G.L. c. 190B §5-303.

14 See In re Saikewicz, 373 Mass. 728 (1977).

15See In re Dinnerstein, 6 Mass.App.Ct. 466; 380 N.E.2d 134 (1978).

16 Mass. G.L. c. 190B §5-303 (A).

17 Mass. G.L. c. 190B §5-105.

18 Mass. G.L. c. 190B §5-303, citing to G.L. c. 190B §1-401.

19 Mass. G.L. c. 190B § 5308 (A).

20 Id.

21 Mass. G.L. c. 190B § 5308 (c).

22 Mass. G.L. c. 190 § 5308 (d).

23 Often urgent and potentially life-threatening circumstances call for even more immediate court intervention which can be availed through the Emergency Judicial Response System.

24 Mass. G.L. c. 190B 521 § 5309 (g).

25 Mass. G.L. c. 190B 521 § 5106; Mass. G. L. c. 190B 521 § 5309 (d).

26 The current hours for Massachusetts Probate Courts are 8:30am – 3:30pm.

27 Mass. G.L. c. 190B §5-105.

28 Mass. G.L. c. 190B 521 §§ 5-106, 5- 306A (d).

29 See 130 C.M.R. 520.026 (E)(3).

30 Mass. G.L. c. 190B §5-309 (e).

31 Mass. G.L. c. 201D §5

32 Cohen v. Bolduc, 435 Mass. 608, 609 (2002).

33 Mass. G.L. c. 201D §7 (emphasis added).

34 Mass. G.L. c. 201D § 17.

35 The National Guardianship Association describes UAGPPJA on their website,

Boston University Law Class Files Affordable Care Act Amicus Briefs with the U.S. Supreme Court

By Valerie Moore and Frederick Thide


On March 23, 2010, following nearly a year of congressional debate, President Obama signed the Patient Protection and Afford­able Care Act (the “ACA” or “Act”) into law.1 The Act is the most sig­nificant piece of social welfare legislation since the Great So­ciety, redefining the boundaries between the federal government and the states in the regulation and finance of health insurance.2 Congress relied on the Commerce Clause, the Taxing and Spending Clause, and the Necessary and Proper Clause to enact various pieces of this comprehensive so­lution to the nation’s health care crisis.

The ensuing litigation over this landmark law may redefine the reach of Congress’s regulatory powers. On March 26-28, 2012, the Supreme Court heard six hours of oral arguments on four issues briefed by the parties and amici. First, the Court considered the threshold question whether the minimum essential coverage provision in Section 1501 (the so-called “individual mandate”) was a tax for the purposes of the Anti- Injunction Act. If so, federal juris­diction over the individual man­date will be deferred until at least 2015, when individuals who have paid the penalty may sue for a re­fund. The Respondents and the Government both argued against this result; however, the Court ap­pointed an amicus to brief and argue that the Anti-Injunction Act bars jurisdiction.3 Second, assuming the Anti-Injunction Act does not apply, the Court heard argument on whether the indi­vidual mandate exceeded con­gressional power under Article I of the Constitution. Third, the Court considered severability: if the Court were to hold that the individual mandate is unconsti­tutional, should any part of the ACA be left standing?4 Finally, the Court considered whether the Act’s Medicaid expansion uncon­stitutionally coerces the states.5

This high-profile litigation has sparked public interest across the nation, including at Boston University School of Law, where Professors Kevin Outterson and Abigail Moncrieff created a spe­cial class, Constitutional Health Care Litigation. Law students from both Boston University and Boston College participated and submitted several amicus curiae briefs to the Court.6 Outterson and Moncrieff were joined by pro­fessors from other law schools in Boston and across the nation.

This Article examines the nearly yearlong effort in this class to craft arguments to aid the Court in adjudicating a wide-ranging dispute about the proper role of the federal government in health care. In Part I, this Article sketches the basic structure of the ACA. Part II provides a brief procedural history of ACA-related ligation. Part III and IV then ex­amine the law students’ efforts to craft arguments before the Court to place them within the broader context of the ACA litigation and the recent oral arguments

I. Structure of the Act

The ACA’s primary focus is expand­ing access to health care cover­age. The Act achieves this objec­tive through several mechanisms. First, the Act reforms the small-group health insurance market by greatly restricting medical un­derwriting.7 In its place, the Act establishes a system of adjusted community rating coupled with guaranteed issue and renewabil­ity reforms.8 To compensate for the influx of riskier individuals into private health insurance markets, the Act mandates that qualifying individuals maintain “minimum essential coverage” or pay a so-called “penalty.”9 In addition, the Act eliminates certain health in­surance industry practices identi­fied as unfriendly to consumers, including rescissions and caps on coverage.10 Second, the Act provides tax incentives to encour­age small businesses to provide coverage to their employees and mandates that certain large em­ployers provide coverage.11 Thus, the Act builds upon the existing system of employer-sponsored health insurance. Third, the Act expands eligibility for Medicaid, thereby creating a uniform health care entitlement for more of the poor.12 Congress provided that the federal government would shoulder all expansion costs ini­tially, requiring the states to grad­ually assume a maximum of ten percent of the costs associated with the newly eligible population by 2020.13

The balance of the ACA contains an assortment of health care pol­icy provisions, including public re­porting of company payments to physicians, longer data exclusivity for large molecular weight drugs, and many attempts to control the increasing costs of health care. Although these provisions were not directly challenged in the liti­gation, their fate will nonetheless hang in the balance as the Court considers whether, in light of any constitutional infirmities, the bulk of the Act can be salvaged under the doctrine of severability.

II. Taking the Battle to the Courts

On March 24, 2010, only a day after President Obama signed the Act, fourteen states filed a lawsuit in federal district court in Florida. Among other things, the states al­leged that the minimum essential coverage provision exceeded the Article I powers of Congress and that the Medicaid expansions were coercively unconstitutional. Numerous lawsuits followed in various federal district courts, challenging everything from the constitutionality of Medicaid it­self to whether President Obama was a citizen born in the United States. Constitutional challenges to the minimum essential cover­age provision have garnered the most attention, as opponents of the Act have attacked this “pay or play” provision as a mandate that invades personal liberty.14 While these cases were litigated across the country, the case that ulti­mately made it to the Supreme Court originated in Florida and was heard on appeal at the Elev­enth Circuit Court of Appeals.

The Eleventh Circuit held that the individual mandate imper­missibly regulates individuals by forcing market entry.15 Accord­ingly, the court concluded that the mandate is an exercise of the general police power, which is expressly reserved to the states by the Constitution.16 The court further held that the mandate was not essential (i.e., necessary and proper) to implementation of Congress’s broader regulatory scheme.17 Rather, the Eleventh Circuit reasoned that the numer­ous exemptions and exceptions to the individual mandate and the associated penalty would, in fact, frustrate Congress’s objective of growing the insurance risk pool.18 Thus, the court opined that Con­gress included the mandate merely to compensate insurance companies for their compliance with the new federal regulatory scheme.19

As to the Medicaid expansion, the Eleventh Circuit held that al­though the Supreme Court has yet to formulate an administrable test for coercion, the ACA’s expan­sion of Medicaid falls short of the point where “‘pressure turns into compulsion.’”20 In reaching its holding, the Eleventh Circuit found several factors particularly com­pelling. First, the court reasoned that the states impliedly waived such challenges because, prior to joining the optional Medicaid program, the states were placed on notice that Congress reserved the right to alter, amend, or re­peal the Medicaid Act.21 Second, the court found that the states’ coercion claims were belied by the federal government’s deci­sion to shoulder nearly all costs associated with the ACA’s Medic­aid expansion.22 Third, the court noted that Congress had provided the states with reasonable notice to adjust their budgets and, if required, to raise additional rev­enue to support the expansion.23 The court took pains to note that the states would not be required to provide any funding for the ex­pansion until nearly seven years after enactment, in 2017.24 Fur­ther, the court reasoned that the states were left with ample time to arrange for an orderly exit from the federal-state Medicaid part­nership by devising alternative healthcare programs.25 Finally, the court observed that the Med­icaid Act provides the Secretary with discretion regarding funding decisions related to non-compli­ance, and thus deeply discounted petitioners’ claim that all Medic­aid funding would automatically be lost for failure to comply with the expansion.26 Therefore, con­sistent with all prior court chal­lenges to Medicaid amendments, the Eleventh Circuit found the states’ claim that the ACA’s Med­icaid expansion would leave the states without a real choice un­persuasive.27

III. Briefing the Issues

The goal of making an original contribution drove the search for amicus brief topics in our class. Over 150 briefs were filed with the Supreme Court in this case, many reiterating similar points on the issues. In such a crowded field, we wanted to avoid repeating ar­guments made by the parties or other amici. The topic that gar­nered the most attention in the media and in the quantity of am­icus briefs filed below was the in­dividual mandate. The Supreme Court surprised most observers when it also granted certiorari on the challenge to the Medicaid ex­pansion because there had been no circuit split on this issue. Accordingly, fewer amicus briefs addressed this topic. The granting of certiorari on the Medicaid expansion also raised concerns for many Medicaid scholars, as there would be no reason for the Court to accept the challenge unless it was seriously considering invali­dating the expansion.

When the Supreme Court set the briefing schedule for the chal­lenge to the ACA, it set the dead­line for Petitioners to brief the challenge to the individual man­date in early January, followed by severability in early February, and the Medicaid expansion in mid February.28 Three teams from our class wrote individual mandate briefs; our team settled on Medic­aid. Professor Outterson reached out to several Medicaid scholars and formed a group of profes­sors who wanted to work with us on the brief. They were eager to provide an amicus brief on this is­sue because Medicaid has a long history of being expanded by Con­gress and upheld by the courts without any constitutional con­troversy at all, which is precisely the point that we chose to make in the brief.

All of the Medicaid briefs filed on behalf of the Petitioner states fo­cused on the financial burdens of Medicaid and general complaints about the program.29 Few offered any substantive legal argument or direct attack on any particular section of the ACA. In writing an appellate brief, one is inherently torn between writing to advance the argument one wants to make, and responding to the arguments made by the other side. Because our brief was in support of the Government as Respondents, we had the advantage of filing after the Petitioner states’ Merits Brief and their amici. After reading what we considered to be gross factual distortions of the pro­gram, a major focus of our brief became a factual statement of the history of the Medicaid pro­gram, together with the legal precedents for Medicaid expan­sion. We decided not to respond to some of the more provocative and extreme amici, as this could only give more traction to some of their more audacious claims.

Because many other ideas were floating around, the approach we took was to have various teams write up short 2,000 to 3,000 word sections on various ideas as to what should be in the brief, and then to decide which ones were the most important points to get across and then tie them together. With a strict word limit of 9,000 words, many excellent pages were cut.

One section that survived the ed­iting process looked carefully at the text of the Medicaid expan­sions in the ACA. This section focused on the structure of the amendments, looking at the way the law was written to try to parse out exactly what part of the stat­ute the states objected to. Be­cause the states did not identify which precise part of the Title II expansion was coercive, part of the brief walks through the ele­ments of the expansion they do mention and explains why each provision is not coercive.

Throughout assembling the brief, the group informally consulted with other groups who were writ­ing amicus briefs in support of Respondents, as well as attorneys at the Department of Justice. While we were solely responsible for writing our brief, coordinating with other groups was essential to make sure that we were not repeating arguments that they would make. We also wanted to avoid unknowingly undermining arguments made by the Respon­dents, who had to file their brief only a week before ours. By the time their Merits Brief was filed, it was too late to make any chang­es to our brief, except for small changes at the margin.

After many drafts, our nearly fi­nal brief was circulated to health policy scholars across the coun­try in the first week of February. More than 50 signed on to the brief, which was filed on February 17, 2012. At oral arguments on March 28, 2012, several ques­tions seemed directly taken from our brief, although the Justices did not mention it by name.

IV. Oral Argument

The provision of the Social Securi­ty Act which gives the Secretary of Health and Human Services the discretion to withdraw some or all of a state’s Medicaid funding if the state does not comply with the program requirements re­ceived a lot of attention from the Justices.30 Justice Breyer ques­tioned the Petitioners on how the provision could be an issue when it had been in the Social Security Act since 1965, while Chief Jus­tice Roberts and Justice Kagan questioned the Respondents on how the Secretary had exercised that discretion in the past and how the Secretary might use it in the future.31 Justice Ginsburg asked the Petitioners whether it mattered that some states liked the Medicaid expansion and wanted to keep it, an argu­ment that we made in our brief.32 Some of the material from our brief also appeared in a question by Justice Breyer, when he asked how the current expansion could be found unconstitutionally coer­cive without jeopardizing the past expansions.33 Justice Kennedy questioned the Respondents on the Maintenance of Effort provi­sion, which we had discussed at some length.34

V. Conclusion

From the months of heated de­bate leading up to its passage, to the challenges to the ACA filed immediately after the legislation was passed, to the extraordinary volume of amici the case has at­tracted at every stage of litigation, the story of healthcare reform is replete with voices from every part of the ideological spectrum. Our brief is one voice in a discus­sion that will continue long after the Supreme Court hands down its opinion in June and will hope­fully inspire others to engage in a conversation that affects every resident of the United States. We are grateful that Boston Univer­sity School of Law offered this unique class this year.

Valerie Moore is a 2012 gradu­ate of Boston University School of Law. During law school, Ms. Moore worked at the law firm of FerriterScobbo&Rodophele, PC, Tufts Medical Center, and the Access to Justice Initiative of the Massachusetts Trial Court, in addition to performing research on several public health law issues for Professor Wendy Mari­ner. Ms. Moore also served as a Writing Fellow during her second year of law school. She received her undergraduate degree in political science and econom­ics summa cum laude from the University of Massachusetts at Amherst in 2009.

Frederick Thide is a law student at Boston College Law School, where he serves as managing editor of the Boston College Law Review. Mr. Thide recently par­ticipated in a class at BU Law, where he worked with a team of students and professors to pre­pare an amicus brief defending the Affordable Care Act’s his­toric expansion of Medicaid. He served as an intern for the Hon­orable William G. Young of the U.S. District Court for the District of Massachusetts and as a sum­mer law intern with the FTC’s Bu­reau of Competition.


1 Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Healthcare and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010).

2 See Abbe R. Gluck, Intrastatutory Federalism and Statutory Interpretation: State Implementation of Federal Law in Health Reform and Beyond, 121 Yale L.J. 534, 582-94 (2011).

3 For a thoughtful critique of the Court’s practice of appointing amici to defend orphaned arguments, see Brian P. Goldman, Note, Should the Supreme Court Stop Inviting Amici Curiae to Defend Abandoned Lower Court Decisions?, 63 Stan. L. Rev. 907 (2011).

4 Severability is often described as a doctrine of judicial restraint. See Adrian Vermeule, Saving Constructions, 85 Geo. L.J. 1945, 1946 (1997) (describing severability as “a norm of legislative supremacy positing that statutes should take effect to the full extent the Constitution permits”). When a court finds that part of a statute is unconstitutional, it seeks to preserve the legislative bargain so long as (1) Congress would have passed the statute but for the constitutional defect and (2) the statute is capable of functioning without the severed provision. See Tom Campbell, Severability of Statutes, 62 Hastings L.J. 1495, 1505-06 & n.51 (2011).

5 Although the Court has paid lip service to the concept of coercion, it has never invalidated a federal law on this ground. See, e.g., South Dakota v. Dole, 483 U.S. 203, 211-12 (1987); Steward Mach. Co. v. Davis, 301 U.S. 548, 590 (1937).

6 E.g., Brief of Jewish Alliance for Law & Social Action et al. as Amici Curiae Supporting Petitioners, Dep’t of Health and Human Servs. v. Florida, No. 11-398 (U.S. Jan. 13, 2012) (Individual Mandate), available at; Brief of Health Law & Policy Scholars et al. as Amici Curiae Supporting Respondents, Florida, 11-400 (U.S. Feb. 17, 2012) (Medicaid Expansion), available at

7 See 42 U.S.C.A. § 18091.

8 See id.§§ 300gg-1(a), 300gg-3, 300gg-4(a).

9 26 U.S.C.A. § 5000A (West 2011) (effective Jan. 1, 2014). The individual mandate ensures that the cost of covering higher-risk individuals (e.g., the elderly and chronically ill) is subsidized by lower-risk individuals (e.g., the young). See Roger L. Pupp, Community Rating and Cross Subsidies in Health Insurance, 48 J. Risk & Ins. 610, 610–11 (1981).

10 See, e.g., 42 U.S.C.A. § 300gg-12 (ban on rescissions); id.§ 300gg-11 (no lifetime or annual limits).

11 26 U.S.C.A. §§ 45R, 4980H (West 2011).

12 See 42 U.S.C.A. § 1396a(a)(10)(A)(i)(VIII) (West 2003 & Supp. 2011); Sara Rosenbaum, Realigning the Social Order: The Patient Protection and Affordable Care Act and the U.S. Health Insurance System, 7 J. Health& Biomedical L. 1, 16–17 (2011).

13 See 42 U.S.C. § 1396d(y)(1). To permit the states adequate time to plan for shouldering their relatively modest share of implementation costs, the federal government will pay all expansion costs between 2014 and 2016. Id. Thereafter, the states’ share will gradually increase before reaching a capped contribution of 10 percent in 2020 and subsequent years. Id.

14See Abigail Moncrieff, The Freedom of Health, 159 U. Pa. L. Rev. 2209 (2011).

15 See generally Comment, In Search of Limiting Principles: The Eleventh Circuit Invalidates the Individual Mandate in Florida v. U.S. Department of Health and Human Services, 53 B.C. L. Rev. 359 (2012).

16 Florida v. U.S. Dep’t of Health & Human Servs., 648 F.3d 1235, 1311-13 (11th Cir. 2011).

17 See id. at 1309-11.

18 See id.

19 Id. 1310.

20 See 1265-68 (quoting Steward Mach. Co., 301 U.S. at 590).

21See id. at 1267 (citing 42 U.S.C. § 1304); see also Harris v. McRae, 448 U.S. 297, 301 (1980).

22 Florida,648 F.3d at 1267-68.

23 Id at 1268.

24 See id.

25 Id.

26 Id. (citing 42 U.S.C. § 1396c).

27 See id. (“These factors convince us that the Medicaid-participating states have a real choice—not just in theory but in fact—to participate in the Act’s Medicaid expansion.”);see also Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498, 502 (1990) (noting that participation in Medicaid is voluntary but subject to conditions).

28 Brad Joondeph, A Tentative Briefing Schedule, ACA Litigation Blog (November 14, 2011),

29 E.g., Brief of Indiana State Legislators, the James Madison Institute, and Christopher Conover, No. 11-400 (U.S. Jan. 17, 2012), available at

30 42 USC §1396(c), see generally Transcript of Oral Argument, Florida v. U.S. Dep’t of Health and Human Services (No. 11-400).

31 Transcript of Oral Argument at 12, 49, Florida v. U.S. Dep’t of Health and Human Services (No. 11-400).

32 Id. at 20.

33 Id. at 24.

34 Id. at 52.

Obtaining an OIG Advisory Opinion: The General Counsel’s Perspective – Interview of Daniel Orenstein, General Counsel, athenahealth, Inc.

By Julia R. Hesse

As many of you may know, athena­health, Inc. recently received a fa­vorable Advisory Opinion from the Office of Inspector General (Advis. Op. 11-18, December 7, 2011). Athenahealth is best known for its Internet based practice and revenue cycle management, and electronic health record services. Athenahealth also offers patient communications, and care co­ordination services on the same integrated technology platform. The favorable Advisory Opinion relates to athenahealth’s care co­ordination service. The Advisory Opinion itself has been discussed in the press and also by trade associations like the American Health Lawyers Association, and is interesting in its own right.

The purpose of this interview is not to discuss the substance of the Advisory Opinion, though. In­stead, I recently sat down with Daniel Orenstein, the General Counsel of athenahealth, Inc., to discuss the process of obtaining the Advisory Opinion. The ques­tions are all mine; Daniel provid­ed all answers.

Daniel Orenstein, General Counsel of athenahealth, Inc

Is this is the first Advisory Opin­ion your company had sought?


Who within the organization started the conversation with regard to getting an advisory opinion?

It’s a “chicken and egg” question. I was called into a meeting with the CEO and our head of Business Development, who were discuss­ing this business idea. They knew that it raised some potential anti-kickback issues and they raised the issue of a potential advisory opinion with me because we had already discussed seeking advi­sory opinions in other situations. The anti-kickback analysis was often part of the initial conversa­tion on a major initiative.

 What was different about this project that made you decide to go forward with the Advisory Opinion process?

This was a new planned service offering in the “drawing board” stage and where we had the strategic opportunity to get the security of the opinion. It wasn’t a “must-have” because it is a complimentary service offering – while it was a highly strategic initiative, if we got some nega­tive feedback we could work with it … and the prospect of getting positive feedback outweighed the negative. Also, because it is a new service offering – essen­tially creating a new market for information exchange outside of the usual paradigms – getting an advisory opinion could give us a competitive advantage.

What was the process once you decided to seek an advisory opinion?

Actually, we started influencing the development of the business model so that it would be con­sistent with what we thought the request was going to be – that process began months before we initiated the request and was on­going throughout the time the re­quest was being made. You have to continue to be vigilant about the approach you are taking be­cause the product development concepts are changing all the time. By the time we contacted outside counsel, we were well on the way to internally reinforc­ing the model based on what we thought we would be submitting as the model under the advisory opinion.

Did you have the opportunity to discuss the idea informally with the OIG before the formal request was made?

No. The OIG has a set process where they wanted the written request and then they take some time and ask for more informa­tion. That’s when you kind of get into more of a dialogue. But the OIG is clear; they wanted the initial request in writing. We did explore with outside counsel, though, whether it was possible to withdraw the advisory opinion request if the OIG reacted very negatively to the concept.

Did you have any ability to di­rect your advisory opinion re­quest to a particular person

within OIG (i.e., someone who may have been known in the community as being more fo­cused on Health IT issues)?

No. We were assigned an attor­ney who turned out to be very engaged and very good and easy to work with and responsive. We were very concerned, though, when we got the OIG’s initial re­quest for additional information, because the tone of the request seemed to indicate that maybe there were some things about the model that they didn’t un­derstand, or we didn’t commu­nicate adequately enough. But when we started engaging with the OIG about their questions, we got through that and the OIG felt that we were able to respond ad­equately.

Did you send all of your informa­tion to the OIG only in writing? Or did you have an opportunity to present the vision of the proj­ect to them, either in person or over the phone?

We didn’t do any communications directly. All of the communica­tions were through our outside counsel. We suggested meeting in person as a possibility and we would have done that. The OIG wanted our first response in writ­ing; we offered to do a “demo” of the product but the OIG decided they did not need a demo. We did provide some charts and graphi­cal representations of what we were doing as exhibits that I think were very helpful. In one of the rounds of responses we tried to make it simpler and easier to un­derstand than some of the narra­tive that we had given previously.

How many rounds of back-and-forth did you have with the OIG?

We received two requests for ad­ditional information, and there were a couple of questions which we answered verbally. We also had to submit a factual certifica­tion at the end prior to issuance of the opinion, and there was a round of back-and-forth on the factual certification.

Did some of their requests for information make it clear that perhaps they didn’t understand the model in the way that you would want to present it? Were you surprised at all by the con­tent or the depth of their re­quests for information?

The OIG’s requests were pretty much what we anticipated. We knew we would get some ques­tions and we would probably have a little work to do to respond. The OIG had a lot of questions around the economic model. I think they were correct to push us on that, because we hadn’t articulated it as clearly as we should have and it forced us to go back and spend some significant time internally. We revised the pricing model to make it simpler. I, personally, was on a crusade to make the model simpler. We needed to make the pricing model simpler – not only for the OIG, but we needed to make it simpler for the market to understand this. If we can’t com­municate it adequately to a so­phisticated government agency, just think about communicating it to a two or three doctor practice that doesn’t have a lot of time. I think that was probably the most salutary part of the process. We actually got to a simpler econom­ic model out of the process.

How long did the advisory opin­ion process take? And how long did you think it was going to take?

We submitted it in May or June (of 2011) and we had the opinion in December. I was pleased that we had it within the year. The OIG responded very quickly, as compared to a number of other agencies that we work with. Also, some of that time was spent on our side, with internal process­ing of responses back and forth. The OIG responded efficiently – which is great because pressure started mounting towards the end of the year to roll the service offering in general availability at the beginning of 2012. I was a little surprised that the OIG was so responsive. I had the “Plan B” starting to formulate just in case we didn’t have the Advisory Opinion in hand before that sales meeting in February.

When you think about it from the OIG’s perspective, though, they must love getting the advi­sory opinion requests because that’s where they get to do the big policy-level thinking, right?

Yes. When we received the work product back from the law firm, we felt it needed more of the policy argument in it because we wanted to appeal to that bigger picture thinking. We think there are some really strong public policy arguments in favor of this model because it facilitates care coordination. There are a lot of folks in the government who are interested in that now because of the challenges with making health exchange work properly. So, we worked to include the pub­lic policy argument and I think, at the end of the day, that was an important factor in the decision making.

I can see why you would want to put the request in context and explain not only why it mat­ters for the business, but also who it benefits and why?

That actually took a little while to communicate to our law firm.

The challenge from the out­side lawyers’ perspective is always that we never know your business as well as you do and therefore we can’t di­vine the public policy piece as well as the business can.

That’s right. There were a couple of points in time where I think it was appropriate that we took over a bunch of the drafting and a bunch of the processing. For example, we were really best po­sitioned to work on the economic model internally, and we were probably best positioned to craft the policy arguments.

Were there any unanticipated “hiccups” along the way that, in hindsight, you would think might be part of any advisory opinion process?

The OIG’s initial response back to us was a little bit of a shock. In some ways it was encourag­ing; but in some ways it took you aback to see how much they were getting into everything and ques­tioning some of what you were do­ing. On the other hand, we were pleasantly surprised about the OIG’s responsiveness.


Julia R. Hesse is a partner in the Healthcare Group of Choate, Hall & Stewart LLP and formerly prac­ticed as Associate General Counsel at Tufts Medi­cal Center, Inc. and as an associate in the Health Care practice group of Ropes & Gray LLP. Julia’s practice focuses on the full range of health care-related regulatory issues and other business and transactional matters important to hospitals, aca­demic medical centers and affiliated faculty and community physicians, including the implementa­tion of quality-related programs and systems, ne­gotiating and implementing managed care agree­ments that tie reimbursement to the achievement of quality goals, and advising health care insti­tutions and faculty practice plans on the devel­opment and implementation of compensation systems that reward the achievement of quality-related goals. She is a graduate of Williams Col­lege and the University of Pennsylvania, where she received degrees in both law and bioethics.