Busy Week in the Courts: ACA Lawsuit and Ruling on Drug Pricing

From ACG Legislative and Public Policy Council Chair, Whitfield L. Knapple, MD, FACG

ACA Lawsuit: On Tuesday, oral arguments began in the U.S. Circuit Court of Appeals in New Orleans on whether the Patient Protection and Affordable Care Act (now known as the “ACA”) is constitutional. The lawsuit brought by 18 Republican-led states alleges that Congress' decision to zero-out (but not repeal) the “individual mandate” penalty in 2017 rendered the law unconstitutional. The U.S. Supreme Court previously upheld the mandate as a valid exercise of taxing power, and also that the mandate intrinsically linked the other parts of the ACA. In December 2018, U.S. District Court in Texas sided with the Republican-led states. California and 19 other Democratic-led states have led the legal defense against the ACA lawsuit. The House of Representatives also joined the lawsuit in 2019, after Democrats won back control of the U.S. House in November 2018.

The Justice Department in June 2018 chose not to defend the ACA. The Tax Cuts and Jobs Act of 2017 may have effectively eliminated the individual mandate; however, it only zeroed out the penalty beginning in 2019. So, the 2017 law may not have repealed this provision, but rather, just changed the penalty amount. The court’s ruling may have a significant impact on important ACG priorities, such as coverage protections for pre-existing conditions and preventive care. The Justice Department in June 2018 chose not to defend the ACA in this case. This Justice Department letter also noted that it agrees with the Justice Department under President Obama—that guaranteed issue for those with pre-existing conditions and community rate-setting should be tied to or “inseverable” with the individual mandate. Thus, these sections of the ACA should potentially be struck down as well.

Drug Pricing: On Monday, a federal judge struck down an HHS rule that would have required pharmaceutical companies to include their products' list prices when advertising these products.

The U.S. District Court for the District of Columbia ruled HHS does not have the authority to compel manufacturers to disclose list prices. HHS finalized this rule in May 2019. Merck, Eli Lilly, Amgen and the Association of National Advertisers sued HHS in June, arguing the policy would ultimately discourage patients from trying to access therapies because they would mistake list prices for their own out-of-pocket costs.

Side note: The Trump administration has withdrawn a recent proposal to eliminate rebates from government-sponsored drug plans. HHS Secretary Alex Azar (a former division president for Eli Lilly) argued earlier this year that eliminating drug rebate programs would lower drug costs for beneficiaries. However, according to policy wonks, this idea was overruled by others within the Trump Administration due to the increased cost to the federal government.

ACG will continue to update membership as these cases move through the courts.

New Additions to ACG's Practice Management Toolbox: Better Practices Make Better Lives!

New to the ACG Practice Management Toolbox is an article brought to you by committee members Eric Shah, MD, MBA and Richard Moses, DO, JD, FACG. As healthcare policymakers embrace value-based care and integrated healthcare delivery, gastroenterologists must actively ensure that new healthcare policies reflect the current realities of GI practice. In this toolbox article, we outline valuable resources for gastroenterologists to advocate on key issues affecting their patients and practice.

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What is the Practice Management toolbox?

Gastroenterologists in private practice find themselves working in a time of unprecedented transformation. Pressures are high as they make important management decisions that profoundly affect their business future, their private lives, and their ability to provide care to patients. The ACG Practice Management Committee has a mission to bring practicing colleagues together to explore solutions to overcome management challenges, to improve operations, enhance productivity, and support physician leadership. It was in this spirit that the Practice Management Toolbox was created.

The Toolbox is a series of short articles, written by practicing gastroenterologists, that provide members with easily accessible information to improve their practices. Each article covers an issue important to private practice gastroenterologists and physician-lead clinical practices. They include a brief introduction, a topic overview, specific suggestions, helpful examples and a list of resources or references. Each month a new edition of the Toolbox will be released and will then remain available here along with all previous editions. The Practice Management Committee is confident this series will a provide valuable resource for members striving to optimize their practices.