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Health Care Reform, Community Health Needs Assessments, and the US Supreme Court


A very compelling, yet thorough review from both sides. As a Senior Director of Development at Scott & White Healthcare Foundation, your review is very much appreciated and I plan to share it with members of our Development and legal teams.
--Glen W. Cosper, M.A. ACFRE

For general information on community health needs assessments, visit our web page

 As you may be aware, the US Supreme Court is currently considering a challenge to the Patient Protection and Affordable Care Act of 2010. This law, often referred to as the Affordable Care Act, ACA, or "Obamacare," has faced several challenges in lower courts, with mixed results.

The US Supreme Court has already heard oral arguments on three specific areas associated with the Affordable Care Act. The three areas are: 1) whether the law can be challenged before people have to pay for coverage under the Act; 2) whether the "individual mandate" or "individual responsibility" component of the Act is a constitutional use of Congress’s function to regulate interstate commerce; and 3) whether some parts of the Affordable Care Act can be found constitutional should other parts be found unconstitutional. This is sometimes referred to as "severability." A ruling on the pending case is expected in June.

On the first of three days of oral argument, the Court weighed whether the 1867 law known as the Tax Anti-Injunction Act applies to challenges to the Affordable Care Act. The Anti-Injunction Act forbids lawsuits against federal tax policies until after someone has actually paid the tax. If the costs and penalties associated with the Affordable Care Act are judged to be taxes, then the Tax Anti-Injunction Act may apply, and cases challenging the health care reform law would not be permitted until 2016.

President Obama and many ACA supporters steadfastly maintained during the debates and Congressional votes on the ACA that the provisions of the Affordable Care Act, are not taxes as typically defined and understood. Opponents previously identified the mandated participation in health care insurance or the alternative payment of a penalty a "tax" due to its compulsory nature.

Ironically, both sides in the case had to argue the opposite case. The government attempted to argue that the Anti-Injunction Act applies - this would allow the Court to avoid making a ruling at this time. Those challenging the ACA argued that the Tax Anti-Injunction Act did not apply, thus allowing the Court to rule on the ACA this year.

On the second day, the Court entertained arguments on whether the Affordable Care Act’s "individual mandate" or "individual responsibility" clauses, requiring most Americans to purchase insurance or pay a penalty for not doing so, fall within Congress’s authority to regulate interstate commerce.

ACA supporters cited existing markets where people are mandated to participate, such as auto insurance. They also cited the special nature of the healthcare market, in that all will participate at some point in their lives either by choice or by circumstance. Opponents argued that the interstate commerce clause has never been used to mandate the purchase of a specific product, such as health insurance. Mandated participation in markets such as auto insurance are state-regulated markets, not federal.

The third and final day of arguments at the Supreme Court centered on the "severability" of the Affordable Care Act. Typically, in legislation as in contracts, there is a clause that says that, should a part of the contract (or legislation) be found to be unenforceable, that does not affect the rest of the contract or legislation. The Affordable Care Act did not include the standard "severability clause," which raises the question: should the ACA be assumed to fall under the standard severability clause, of should the Court assume that the severability clause was omitted for some intentional reason?

The government and supporters of the ACA argued that the Court should assume that the ACA is subject to severability just as other legislation is treated. This is especially important to ACA supporters who want to assure that the rest of the Affordable Care Act remains in place should the individual mandate section be ruled unconstitutional. Opponents of ACA argue that Congress’s omission of a severability clause from the ACA must be presumed to be an intentional act, and therefore respected by the Court. Opponents believe that this will make it more likely that the entire law may be struck down as unconstitutional by the Court. Some supporters, however, believe that the lack of a severability clause works to the Act’s favor, in that the Court will be less willing to rule part of the law invalid if it means invalidating the entire Act.

The Supreme Court is likely to issue its ruling in June, 2012, at the end of the current court term.


It is our opinion that, regardless of how the Court rules, the requirement for CHNAs will continue to be placed on nonprofit hospitals. There is a legal basis and a political basis for this viewpoint.

Legally speaking, the CHNA requirement will continue unless the Court rules: 1) that the Affordable Care Act’s constitutionality may be ruled on at this time; 2) that one or more of the Act’s provisions are declared unconstitutional; AND 3) the Affordable Care Act does not have a severability provision, meaning that the entire law must be thrown out because a part of it is found to be unconstitutional. While all three conditions may occur, a change in any one of them would change the outcome.

The political basis for believing that the CHNA requirement will continue is based on three points. First, the provision originated with Sen. Charles Grassley (R-IA), who has had a long-standing, strong interest in the governance and management of all nonprofit entities, including nonprofit hospitals. This interest in nonprofit accountability includes nonprofit hospitals but is not specific to them.  We fully expect that Sen. Grassley will push to maintain the CHNA requirement.

Second, the CHNA provisions are not directly tied to other provisions of the Affordable Care Act; the CHNA provisions can easily stand as separate legislation, or be included with any other bill likely to be passed by Congress.

Third, the CHNA provisions involve little governmental cost and have no revenue-raising mechanism attached to them. There is a cost to the IRS for developing regulations and administering the collection of the CHNAs, but this anticipated cost is small enough to be rolled into already-existing IRS appropriations. At the same time, while nonprofit hospitals face a monetary and regulatory burden in performing CHNAs, this is generally seen by regulators and legislators as a minor expense (though nonprofit critical access hospitals and other smaller nonprofit hospitals may disagree).