Update: Supreme Court upholds Affordable Care Act

In a 5-4 vote, the US Supreme Court upheld the Patient Protection and Affordable Care Act, maintaining that the individual mandate is constitutional when issued as a tax.

The Affordable Care Act (ACA) was passed by Congress and signed into law by President Barack Obama in March 2010. Twenty-six states challenged the constitutionality of the law, specifically the mandate that would require all individuals to purchase health insurance by January 2014 or face a monetary penalty.

The Supreme Court listened to 6 hours of oral arguments over the course of 3 days in March, and opponents of the law claimed that the individual mandate was unconstitutional because the federal government does not have the authority to require an individual to purchase anything.

Chief Justice John G. Roberts, Jr., who read the majority decision, was the deciding vote. The court determined that the federal government does not have the power to order an individual to purchase insurance, but it can impose a tax on the uninsured.

 The court also amended the provision regarding Medicaid expansion, which aimed to expand coverage to a wider range of individuals by offering states federal funding to comply with the new expansion laws. The court determined that individual states will have the option of being included in this expansion. If the state wishes to expand and accepts the funding, it must comply with the new rules dictating the expansion. However, if the state does not wish to expand, it can refuse funding and continue with its existing, unexpanded plan without losing all of its current funding.

How the Supreme Court’s decision will affect the O&P community remains to be seen, but many industry officials are hopeful that it will be beneficial for passing legislation that would support coverage for O&P devices.

“The decision means that many provisions of the law will be implemented on an accelerated basis, and I think the O&P field is well positioned to take advantage of this decision,” Peter W. Thomas, JD, general counsel for the National Association for the Advancement of Orthotics & Prosthetics, told O&P Business News. “There have been a lot of states and policy makers waiting on the sidelines for this decision, and I think that this will accelerate implementation of the law to the extent that it will help secure coverage of orthotic and prosthetic devices that will help O&P patients.”

However, Thomas Fise, executive director of the American Orthotic & Prosthetic Association, expressed concern about how the law will financially affect the orthotic and prosthetic industry.

 “With the Supreme Court decision upholding the Affordable Care Act in the absence of some subsequent Congressional action to repeal and replace the ACA, implementation of the law will continue and the remaining provisions will go forward on schedule,” Fise said. 

Some of these provisions include annual productivity adjustments, the first of which reduced the fee schedule update by 1.2% in 2012 and are expected to reduce O&P reimbursements over the long term; and the medical device excise tax, which will take effect on January 1, 2013. However, the odds are favorable that O&P medical devices will be exempted from the 2.3% tax, according to a statement released by AOPA.

“Adverse financial impacts on O&P will most notably come via tax and costs,” Fise said. “And the Court’s action relating to protecting state rights not to implement the envisioned Medicaid expansion is the wild card that could pose real funding problems for the law.”

The O&P industry has also been negatively affected by program integrity provisions designed to reduce waste, fraud and abuse in the Medicare and Medicaid programs, according to the AOPA statement. AOPA hopes that the Court’s decision on the ACA will ease the enactment of S. 2125 and H.R. 1958, the Medicare O&P Improvements Act.


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