AZ Supreme Court Holds AZ Legislators Have Standing to Challenge AZ Law, But Media Mischaracterizing the Lawsuit
You know the old adage, “Believe none of what you hear, and only half of what you see?” –Benjamin Franklin.
Well the old adage still holds true, especially when it comes to journalists and the media interpreting and reporting on lawsuits that deal with Medicaid laws, and which, perhaps, only an infinitesimal, ancillary aspect may touch the issue of Medicaid expansion.
Even if the lawsuit will not impact Medicaid expansion, journalists and the media hype the lawsuits as “conservatives challenging Obamacare yet again,” which mischaracterizes the actual lawsuit.
It seems that the media have become so accustomed to polarizing the topic of Medicaid expansion that reporters seem incapable of truly assessing the issues objectively and reporting accordingly. This has happened recently when the AZ Supreme Court rendered a decision December 31, 2014, regarding legal standing, not the constitutionality of Medicaid expansion as many journalists report. Biggs, et al. v. Hon. Cooper, et al.
The Arizona Supreme Court only decided that 36 legislators have the legal standing to challenge the passage of House Bill 2010, which was signed into law as A.R.S. § 36-2901.08.
What is A.R.S. § 36-2901.08?
For starters, A.R.S. stands for Arizona Revised Statutes (ARS). For those of you who missed “Schoolhouse Rock” as a child, a statute is a law that is enacted by the legislative body and which governs the state. Statutes are considered “black letter law” and should be interpreted on their face value and plain meaning.
The content of 36-2901.08 allows the State of Arizona to expand Medicaid. In addition to expanding Medicaid, 35-2901.08 assesses a levy on hospitals to aid in funding the expansion of Medicaid.
36 Arizona legislators voted against 36-2901.08. It passed by a simple majority and was signed into law. The 36 legislators, who voted against the bill, brought a lawsuit to enjoin the statute from being applied or enacted. The State of Arizona’s position is that the 36 legislators lack the legal standing to bring the lawsuit.
Here are the issues in the legislators’ case, BIGGS ET AL. v. HON. COOPER ET AL.:
1. Do the 36 legislators have the standing to bring an injunctive action enjoining Arizona from carrying out 36-2901.08?
2. If the answer to #1 is yes, then have the 36 legislators proven that 36-2901.08 was passed in violation of the AZ Constitution?
I’ve read a number of articles from journalists covering this matter who mischaracterize the Biggs lawsuit as a lawsuit brought by the Arizona legislators, predominantly Republicans, asking the Arizona Supreme Court to strike statute 36-2901.08 because the expansion of Medicaid is unconstitutional, or “challenging Governor Jan Brewer’s Medicaid expansion plan,” or “challenging the legality of the state’s Medicaid expansion…”
These journalists are mischaracterizing the Arizona Supreme Court’s opinion. And I am not talking about journalists for small, local papers are making these mistakes…the above quotations are from “The New York Times” and “The Associated Press.”
So, let’s discuss the true, correct ramifications of the Arizona Supreme Court opinion in Biggs…
First, the Biggs opinion does not hold that Medicaid expansion in Arizona or elsewhere is unconstitutional…nor does it decide whether Medicaid expansion in Arizona is invalid on its face.
The opinion, rendered December 31, 2014, only holds that the 36 legislators have the legal standing to bring the lawsuit…there is no holding as to constitutionality of Medicaid expansion, despite so many journalists across America stating it so.
What is standing?
Standing, or locus standi, is the capacity of a party to bring suit in court. This is not a question of whether a person is physically capable of bringing a lawsuit, but whether the person prove that he or she has sustained or will sustain a direct injury or harm and that the harm is redressable (or can be fixed or set right by the lawsuit).
The issue on the Supreme Court level in Arizona is only the narrow issue of whether the 36 legislators have standing. Period.
The Arizona Supreme Court held that the 36 legislators do possess the requisite legal standing in order to bring the lawsuit.
Now, the case will be remanded (sent to a lower court), in this instance, to the Superior Court, for a new fact-finding trial now that the issue of standing has been resolved. In other words, at the lower superior court level, the ref (judge) made a call that the football players on the team (36 legislators) were ineligible to play NCAA football (poor grades, were red-shirted last year), and the alleged ineligible players appealed the decision all the way up. Now the NCAA (AZ Supreme Court) has determined that the players are eligible and the game will resume.
Again, despite the rhetoric put forth by numerous widespread journalists, the 36 legislators are not merely challenging Arizona Medicaid expansion on its face.
Instead, the Arizona Constitution requires that certain Acts that increase state revenues must pass the legislature by a supermajority vote. See Ariz. Const. art. 9, § 22(A).
Remember from the beginning of this blog that 36-2901.08 was passed by a simple majority.
The 36 legislators argue that the assessment of a levy on Arizona hospitals constitute an Act that requires a supermajority vote, which, obviously would require more than a straight 50% approval.
So the 36 legislators’ lawsuit in AZ is about whether 36-2901.08 needs a supermajority or simple majority to vote it into law.
Not whether Medicaid expansion is constitutional.
Believe none of what you hear, and only half of what you see…especially when it comes to journalists and media reporting on lawsuits regarding Medicaid rules and regulations.
Supreme Court Will Decide Whether Citizens in NC and 26 Other States Can Receive Tax Credits for Health Care Premiums!!
With a decision that, I can only imagine, ricocheted against the White House walls, the Supreme Court granted certiorari to hear King v. Burwell this past Friday, November 7, 2014, despite Obama’s administration’s request for the Supreme Court to postpone granting certiorari in order to wait for a D.C. circuit to re-visit an opinion, the Halbig ruling.
The Supreme Court’s decision in King could, potentially, have devastating consequences on the Affordable Care Act (ACA). However, I write that last sentence with an asterisk. Journalists across the country are entitling articles, “Obamacare Is Doomed! Everybody Panic!”, “The Supreme Court Might Gut Obamacare. Your State Could Save It,” and “Obamacare vs. Supreme Court.” These titles to articles are misleading, at best, and factually incorrect, at worst. King v. Burwell is actually not an attack on the ACA. But I will explain later…
First of all, what the heck is certiorari…or “cert”, as many attorneys call it?
A writ of certiorari is actually an order from a higher court to a lower court demanding a record in a case so that the higher court may review the lower court’s decision. A writ of certiorari is the instrument most used by the Supreme Court to review cases. The Supreme Court hears such a small, minute fraction of lawsuits that when the Supreme Court “grants cert,” it is a big deal.
I have written in the past about these same two appellate court cases, which were both published July 22, 2014, within hours of one another, regarding the Health Care Premium Subsidies Section of the Affordable Care Act. These two cases yield polar opposite holdings. In Halbig v. Burwell, the D.C. Circuit Court found that the clear language of the ACA only allows the health care premium subsidies in states that created their own state-run health care exchanges, i.e, residents in NC along with 35 other states would not be eligible for the subsidies. See my blog: Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges.
Juxtapose the 4th Circuit Court’s decision in King v. Burwell, which held that “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.”
So the two cases came to two entirely different conclusions. Halbig: ACA is clear; King: ACA is ambiguous.
Well, for everyone else, that is as clear….as mud.
When the D.C. court decided Halbig, it was not an en banc decision. In English, this means that the entire bench of judges in the D. C. Circuit did not hear the case, only a panel of three (which is the usual way for a case to be heard on appeal to a federal circuit). The Obama administration, along with other proponents of the ACA, hoped that the U.S. Supreme Court would deny cert to King until the D.C. court could re-visit its decision, this time en banc.
Yet, this past Friday, the Supreme Court opted to consider King v. Burwell.
The sole issue to be decided is: Whether the Internal Revenue Service may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through exchanges established by the federal government under Section 1321 of the Patient Protection and Affordable Care Act.
How is King v. Burwell NOT an attack on the ACA?
The plaintiffs in King are not asking the Supreme Court to strike down the ACA, even, in part. They are asking the Court to uphold the plain language of the ACA by holding that the IRS’s interpretation of the ACA is erroneous. Let me explain…
Section 1311 directs states to establish exchanges, and Section 1321 directs the federal government to establish exchanges “within” any state that opts to not set up its own state-run exchange, e.g., NC.
Section 1401 authorizes subsidies for people whose household income falls between 100 and 400% of the federal poverty level, who are not eligible for qualified employer coverage or other government programs, and who enroll in coverage “through an Exchange established by the State.” (emphasis added). These 3 criteria are crystal clear based on the plain language of the statute.
The statute makes no provision for subsidies in states that opt not to create their own exchange but, instead, allow the federal government to create an exchange within its state.
The ACA was intended to create penalties if the states do not establish their own exchanges. For example, the subsidies are not allowed to citizens of states without state-created exchanges.
In August 2011, the IRS issued a proposed rule [add link] announcing it would provide tax credits (and implement the resulting penalties) in states with federal exchanges, too. IRS officials later admitted to Congress that they knew the statute did not authorize them to issue tax credits through federal exchanges…Oops…
The proposed rule received much negative feedback based on the fact that the IRS appeared to have no statutory basis for the rule. Nonetheless, the proposed rule was finalized in May 2012, and lawsuits ensued…
Oklahoma began the litigation with Pruitt v. Burwell in September 2012. In September 2014, a federal district court held that the plain language of the ACA does not allow subsidies in states with federally-run exchanges. In May 2013, Halbig v. Burwell was filed, and in September 2013, King v. Burwell was filed.
So, much to the contrary of popular belief, these lawsuits are not “against the ACA” or “proving the unconstitutionality of the ACA.” Instead, these lawsuits are “against” the IRS interpreting the ACA to allow tax credits for all states, even if the state has a federally-run exchange.
Will it negatively impact the ACA if the plaintiffs win? That would be a resounding yes.
Oral argument could be as soon as March 2015.
Jason DeBruyn of the Triangle Business Journal wrote:
Computer Sciences Corporation, the company that designed, developed and is operating the Medicaid claims payment system in North Carolina, is facing a health care fraud lawsuit brought by the U.S. attorney’s office in New York.
That lawsuit has no immediate impact in North Carolina, though Computer Sciences Corp. (CSC) built the system in this state – called NCTracks – using 32 percent of the code used in New York City. Initially, CSC had hoped to duplicate as much as 73 percent of the New York City code in North Carolina.
NCTracks has been the target of several attacks from health care providers who say they have not been paid on time. The N.C. Department of Health and Human Services, where NCTracks is housed, faces a lawsuit that could incorporate 70,000 health care providers and end up with damages exceeding $100 million. NCTracks has been the target of at least three searing audits.
The New York lawsuit, brought by Preet Bharara, the U.S. Attorney for the Southern District of New York, alleges billing fraud schemes that used computer programs to automatically alter billing data, including the use of a defaulting program to systematically falsify diagnosis codes submitted to Medicaid.
“As alleged, CSC and the City created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible,” Bharara said through a statement. “Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid.”
Although this lawsuit makes no mention of activity in North Carolina, Knicole Emanuel, an attorney with Williams Mullen in Raleigh who represents providers in the lawsuit against DHHS, says it “will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states (including North Carolina).”
Representatives from DHHS did not immediately comment on the New York lawsuit.
Remember the NCTracks lawsuit? NCTracks Derailed: Class Action Lawsuit Filed!! Computer Sciences Corporation (CSC) is one of the Defendants in that action here in NC.
Well, Monday CSC was hit with another enormous lawsuit. This one is filed in New York, and the Plaintiff is the U.S. Federal Government.
The feds are accusing CSC of a multi-million dollar Medicaid fraud scheme through its Medicaid billing software CSC implemented in NY.
Here is the press release.
From the complaint: “[T]hese fraud schemes were far from isolated events; instead, they were part and parcel of a general practice at CSC and the City to blatantly disregard their obligations to comply with Medicaid billing requirements.” (Compl. par. 8.)
The feds are seeking treble damages, which permits a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff.
According to the lawsuit, CSC has received millions of taxpayer dollars (budgeted for Medicaid) unlawfully and in direct violation of federal billing requirements.
If I were a taxpayer in NY, I would be incensed!!!! If I were a Medicaid recipient of parent of a child receiving Medicaid services, I would be furious!!
Now, take a step back…who is administering our Medicaid billing system here in NC?
This will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states…