Pennsylvania District Court Finds Individual Mandate Unconstitutional

On September 13, 2011, the United States District Court of the Middle District of Pennsylvania held that the Affordable Care Act’s individual mandate was unconstitutional as a violation of the Commerce Clause. In Goudy-Bachman v. U.S. Department of Health and Human Services, No. 1:10-CV-763 (M.D. Pa. Sept. 13, 2011), the court found, similar to its predecessors in other courts, that the federal government was one of limited enumerated powers and that “Congress [could not] invoke its Commerce Clause power to compel individuals to buy insurance as a condition of lawful citizenship or residency.” Thus, although the court recognized that “[t]he nation undoubtedly faces a health care crisis,” it severed the individual mandate, the guaranteed issue, and preexisting conditions reforms from the Affordable Care Act as unconstitutional. However, because the provisions found unconstitutional were severed from the Affordable Care Act, this decision allows the rest of the Act to stay intact and operative. The full decision is available at

Eleventh Circuit Declares Individual Mandate Provision in Health Reform Law Unconstitutional

On Friday, August 12, 2011, the U.S. Court of Appeals for the Eleventh Circuit held that the individual mandate provision in the Patient Protection and Affordable Care Act (“Act”) is an unconstitutional exercise of Congress’ power under the Commerce Clause of the United States Constitution. However, the court refused to hold the entire Act unconstitutional, ruling instead that the individual mandate provision is severable from the rest of the Act. The decision creates a circuit split because it conflicts with the recent decision by the U.S. Court of Appeals for the Sixth Circuit, which rejected a challenge to the individual mandate provision’s constitutionality.

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CMS Transmittal Clarifies that Critical Access Hospitals are Included in CMS Laboratory Demonstration Project

On July 29, 2011, CMS issued Transmittal 78 clarifying that critical access hospitals (CAH) are included in CMS’ laboratory demonstration project for certain complex diagnostic tests. Under standard rules, payment made for tests provided by a laboratory working under arrangement with a hospital or CAH would ordinarily be in the form of a bundled payment to the hospital or CAH, and not directly to the laboratory. However, the Affordable Care Act requires that CMS conduct a demonstration project that will allow laboratories to receive a separate, direct payment for certain complex tests. The demonstration project begins January 1, 2012 and continues for two years or until the $100 million in funding is exhausted. Transmittal 78 rescinds and replaces Transmittal 74 dated July 15, 2011.

To read Transmittal 78, please go to

$71.3 Million in Federal Funding to Expand Nursing Workforce

On July 29, 2011, the U.S. Department of Health and Human Services (HHS) announced that it would provide a total of $71.3 million in grant funding to expand the education and training of nurses and nursing diversity. The monies will be distributed among six types of awards: Nurse Education, Practice, Quality and Retention; Nursing Workforce Diversity; Nurse Faculty Loan Program; Advanced Nursing Education Program; Advanced Education Nursing Traineeships; Nurse Anesthetist Traineeships. Monies from these awards will support all levels of education from entry-level nursing to advanced traineeships, increase opportunities for individuals from disadvantaged backgrounds, and provide partial loan-forgiveness for nursing faculty.

To read more about this announcement and see details of each of the awards, please go to

FTC and DOJ Propose Enforcement Policy for Healthcare Antitrust Laws

The Federal Trade Commission and the U.S. Department of Justice have jointly issued a proposed enforcement policy for the application of the antitrust laws to healthcare collaborations among otherwise independent providers and provider groups that seek to participate as accountable care organizations (ACOs) under the Medicare Shared Savings Program. The agencies seek public comments until May 31, 2011, on the proposed enforcement policy and the new antitrust “safety zone” it would create.

For more information and the proposed antitrust policy, please visit the FTC and DOJ’s Proposed Statement.

A Summary of Medicare Shared Savings Program and ACO Proposed Regulations

On March 30, 2011, the Centers for Medicare and Medicaid issued the long-awaited, proposed regulations for the Medicare Shared Savings Program, including details of the requirements for qualifying as an accountable care organization (ACO), such as:

  • Eligible legal entities
  • Criteria for shared governance
  • Assignment of beneficiaries to ACOs
  • Different types of risk contracts
  • Benchmarks and calculations of savings
  • Shared savings, antitrust issues and policies, Medicare anti-kickback, and other regulatory requirements as applied to ACOs

The full text of the summary is available as a Duane Morris Alert.

12 Proposed Recommendations for Accreditation of Patient-Centered Medical Homes

On March 8, 2011, a coalition comprised of physicians representing the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, and the American Osteopathic Association, announced its completion of 12 new recommendations for accreditation organizations to use when developing and implementing standards for the patient-centered medical homes (PCMHs). The PCMHs are a central component of the Patient Protection and Affordable Care Act (ACA). The coalition developed the guidelines in anticipation of accreditation organizations, such as the Joint Commission, building upon its recommendations to establish updated standards for the PCMHs.

For additional information, please refer to the coalition’s guidelines.

$45 Million More in Federal Funding to Assist Medicaid Beneficiaries

On February 22, 2011, the U.S. Department of Health and Human Services (HHS) announced that it would provide $45 million in grant funding to 13 states for the startup and operation of Money Follows the Person (MFP) demonstration projects. States operate MFP programs to provide financial support and assist Medicaid beneficiaries with moving from institutions (i.e., hospitals and nursing facilities) and transitioning back into their communities to live in their own homes or other facilities. HHS anticipates that this federal funding will help 13,000 more Medicaid beneficiaries, and it will continue to provide grant funding through 2016 by committing at least $621 million to the state projects.

To read more about this announcement and see the list of 13 states scheduled to receive grant funding, please go to

$750 Million More in Prevention Funding

On February 9, 2011, the Department of Health and Human Services (HHS) announced that the Prevention and Public Health Fund would make an additional $750 million available to fund prevention initiatives throughout the United States for FY2011. Last fiscal year, the Prevention and Public Health Fund made $500 million available to states. This year, the $750 million will be distributed to states and local communities to address community prevention, clinical prevention, public health infrastructure, and research and tracking. This investment demonstrates the importance of prevention initiatives in improving the nation’s health. For additional information regarding this announcement, please go to

$12 Million More in Electronic Health Record Funding

On February 8, 2011, the Office of the National Coordinator for Health Information Technology announced the availability of an additional $12 million in grant funding for the adoption and implementation of electronic health records (EHRs) by critical access and rural hospitals throughout the United States. The purpose of the additional grant funding is to help hospitals implement and adopt EHRs such that they meet “meaningful use” requirements. For additional information regarding this announcement, please go to

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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