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Biden’s HHS to Inherit Legal Fights Over Obamacare, Medicaid

Jan. 11, 2021, 10:40 AM

Legal battles left over from the prior administration are likely to dictate which health-care policy priorities President-elect Joe Biden and his officials must focus on first.

Fights are ongoing over the scope of Trump administration rules that scaled back Obamacare’s anti-discrimination protections, gave health-care workers the right to refuse patients care based on their religious beliefs, and expanded access to skimpier health plans. Court schedules in the cases could force the new administration to make some quick decisions come Jan. 20.

“The Biden administration is going to be pretty quickly put in a position where it has to decide whether it’s going to defend Trump-era regulations, including at the Supreme Court,” said Katie Keith, a health law professor at Georgetown University.

Officials will have to decide whether to drop appeals, seek extensions, or ask for cases to be put on hold. If confirmed as Health and Human Services Secretary, Xavier Becerra could have to rely on his deputy to determine what to do with the cases he brought against the agency as California attorney general.

‘Race Against the Clock’

The justices agreed Dec. 4 to hear the Trump administration’s appeal of court decisions tossing out approvals of state Medicaid programs that impose a work requirement on its beneficiaries. The government’s opening briefs are due just days before Biden is set to take office.

“They are walking into an incredible situation where the government will be on record arguing for the legality of experiments that the administration considers neither legal nor found policy,” said Sara Rosenbaum, a professor of health law and policy at George Washington University.

While the Biden administration is expected to notify the justices that the government has changed its position in the case, “it’s literally going to be an incredible race against the clock,” she said. Respondents’ briefs are due Feb. 17 under the court’s rules and the arguments will likely be held in March.

In the lower courts, lawsuits are still pending over the Department of Health and Human Services rule that stripped LGBT people from the Affordable Care Act’s anti-discrimination protections. Cases remain in the U.S. Court of Appeals for the Second Circuit and federal district courts in New York, Massachusetts, and the District of Columbia.

The Obama administration rule that expanded Section 1557 to cover discrimination based on gender identity and termination of a pregnancy is also still being litigated in the U.S. Court of Appeals for the Fifth Circuit. Meanwhile, the Trump administration has been fighting to keep it’s so-called conscience rule on the books. The Ninth Circuit is scheduled to hear arguments Feb. 8 over the legality of a rule that lets anyone involved in the delivery of health care to deny patients care based on their religious and moral beliefs.

In most cases, the Biden administration will ask the court to hold the litigation in abeyance while it reviews the policy, “but the courts probably aren’t going to do that for years and years,” said Timothy Jost, an emeritus professor of law at Washington and Lee University. “They probably will have to move pretty quickly to address those specific issues.”

Becerra v. Becerra

Some of the challenges to Trump-era health policies were brought by California under Becerra. Now that Democrats have won a slim majority in the Senate, Becerra’s confirmation seems all but assured. In that role, he would be heading the very agency he’s been forcefully fighting against.

Under Becerra’s leadership, California led the fight to save Obamacare from being tossed out as unconstitutional. The Supreme Court has yet to issue a ruling in that high-profile case, but a decision is expected by the end of June.

California also took the Trump administration’s Department of Homeland Security to court over it’s public charge rule. The rule, which was ultimately blocked by the Ninth, Seventh and Second circuits, lets government officials deny visas to immigrants who are likely to need public assistance like Medicaid.

The U.S. Court of Appeals for the Fourth Circuit was the only federal appeals court to allow the rule to proceed. Its full panel of judges is scheduled to take another look at that August decision the week of Feb. 8.

The norm would be for Becerra to recuse himself from decision-making related to resolving or settling cases in which he was involved, said Jonathan Adler, an administrative and constitutional law professor at Case Western Reserve University School of Law.

The HHS deputy secretary would take over, but the deputy is unlikely to make a different decision than Becerra would have, he said.

Adler noted there were similar issues when Scott Pruitt became administrator of the Environmental Protection Agency after he spent years battling Obama-era agency policies as Oklahoma’s attorney general. But Becerra still needs to be confirmed and it’s unclear how quickly that will happen, Adler said. “Some of this will be done before he’s confirmed,” he said.

Not So Easy

Biden campaigned on a promise to strengthen and expand Obamacare, and pushing back against Trump administration moves to undercut the ACA may be a high priority for the new administration.

The U.S. Court of Appeals for the District of Columbia Circuit ruled in July the administration could expand short-term health plans that don’t meet Obamacare standards. The Association for Community Affiliated Plans and others that challenged the rule have asked the court’s full panel of judges to review its decision. A decision from the D.C. Circuit is also pending over the legality of a Labor Department rule that allows small businesses to band together in associations to offer health insurance as a large employer group.

Some of the cases against Trump-era policies will be easier to clean up than others, health and administrative law scholars say.

“You can rescind a guidance document and moot the case pretty quickly but if it’s a rule, you have to rescind it and that takes longer,” Adler said.

To repeal a rule and start again, the agency has to put out a notice, draft a proposed rule, and give the public an opportunity to comment. Even to repeal guidance, which is really all the Medicaid work requirements are, the administration has to put out a notice and a logical explanation as to why it’s repealing its decision, Rosenbaum said.

“There’s incredible cases just on the issue of changing one’s mind as an agency,” she said. “Once an agency takes a position, it’s taken the position. If the agency subsequently wants to change its mind, the fact that it’s a new administration causing the agency to change its mind is sort of irrelevant.”

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com

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