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About That ACA Ruling: More to Come This Week, But Perhaps Not an Appeal

Analysis  |  By Steven Porter  
   December 17, 2018

There could be much more said at the District Court level, where the judge has asked the parties to propose a schedule to resolve their remaining concerns.

The legal wrangling over a federal judge's late-Friday ruling invalidating the entire Affordable Care Act has just begun. While an appeal is certain, it may not come immediately.

Even though the Trump administration has indicated it will continue to treat the ACA as active law, a slow-moving judicial review could inflict prolonged political and business uncertainty, as conservative and liberal policymakers alike renew their debates over potential ACA replacements and industry stakeholders await final word on which portions of the sprawling legislation, if any, endure.

Despite the administration's commitment to maintain the status quo, pending appeal, hospital stocks opened sharply lower Monday. In early trading, Encompass Health Corp., HCA Healthcare Inc., Universal Health Services, Community Health Systems, Tenet Healthcare Corp., and Quorum Health Corp. were all in the red.

"Texas just really messed with us," said Jefferies health-strategist Jared Holz in a note, as Bloomberg reported. "The market skittishness could cause exaggerated moves in health-care stocks."

Judge Reed O'Connor followed up his controversial decision with a procedural order Sunday, giving the parties until this Friday to confer with each other and come up with a proposed schedule for further proceedings at the District Court level.

O'Connor granted partial summary judgment on just the first of five counts raised in the amended complaint filed last spring by 18 state attorneys general and two governors. The proposed schedule, which the parties must submit jointly to O'Connor by January 4, is supposed to address how the remaining claims might be resolved.

The remaining claims question the legality of ACA-authorized agency rulemaking and raise the prospect of an injunction to bar federal officials from implementing the law. (O'Connor's ruling Friday was a declaratory judgment, without an injunction.)

Related: Judge Rules ACA's Individual Mandate Unconstitutional, Declaring Entire Law Invalid

Related: ACA Exchanges 'Still Open for Business' Despite Dramatic Ruling

Related: 'The Judge Got It Wrong': Payers, Providers Pan ACA Ruling

California Attorney General Xavier Becerra, who's leading Democratic attorneys general from 16 states who intervened in the ACA challenge to defend the Obama-era law, released a statement Friday denouncing the decision. A spokesperson for Becerra's office could not be reached Monday morning to answer whether the intervenors plan to pursue an immediate appeal or to wait for more District Court proceedings.

Some legal scholars on both ends of the political spectrum have rejected O'Connor's conclusion that the ACA's individual mandate is inseverable from the rest of the law, leading many to expect his ruling to be overturned.

"There's no reason why the individual mandate provision can't be struck down and keep all the good provisions of the Affordable Care Act," Sen. Susan Collins, R-Maine, told CNN's Jake Tapper on Sunday.

Don't Forget About Maryland

While a majority of the states and the federal government continue their dispute in a Fort Worth courtroom, Maryland will be arguing this week in a separate ACA suit.

Maryland filed its suit last September (shortly after a hearing in which O'Connor reportedly seemed sympathetic to the argument raised by Republican state attorneys general), seeking an injunction to require the federal government to continue enforcing the law.

A spokesperson for the Maryland Office of the Attorney General tells HealthLeaders that the parties will be in court Wednesday to argue the government's motion to dismiss and the state's motion challenging the inclusion of Acting Attorney General Matthew Whitaker's name on the case.

Wednesday may also be the day the Centers for Medicare & Medicaid Services announces how many people signed up for ACA plans through, wrapping up an open-enrollment period that had been lagging behind last year's sign-ups even before Friday's ruling.

Correction: An earlier version of this story incorrectly identified California Attorney General Xavier Becerra as Javier Becerra.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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