Management – Earlybirds Invest

On Monday, the Supreme Court heard oral arguments in a case that could lead health insurance plans to offer narrower coverage. The case, known as Kennedy v. Braidwood Management, challenges the authority of a group within the US Department of Health and Human Services tasked with requiring insurers to cover some forms of preventative care.

This body, known as the US Preventive Services Task Force (PSTF), has exercised its authority to mandate coverage of a wide range of treatments — from cancer screenings, to drugs that prevent transmission of the HIV virus, to eye ointments that prevent infections that cause blindness in infants. Notably, the PSTF was given this power by the Affordable Care Act, the landmark legislation signed by President Barack Obama, which Republican litigants frequently ask the courts to undermine.

The plaintiffs, represented by former Donald Trump lawyer Jonathan Mitchell, want the justices to strip the PSTF of this authority — thus permitting health plans to deny coverage for treatments they are currently required to pay for.

Based on Monday’s argument, it does not appear likely that Mitchell has the votes for that outcome. Justices Clarence Thomas and Samuel Alito came out swinging against the PSTF, and Justice Neil Gorsuch appeared likely to join them in attempting to sabotage Obamacare. But they were the only three justices who clearly telegraphed sympathy to Mitchell’s arguments.

Notably, Republican Justices Brett Kavanaugh and Amy Coney Barrett both seemed inclined to vote against Mitchell, although their questions did leave some uncertainty about how they would ultimately rule in this case. All three of the Court’s Democrats appeared all but certain to uphold the PSTF, so that means there may be at least five votes to preserve health insurers’ obligations under Obamacare.

What is the legal issue in Braidwood Management?

This case turns on a somewhat arcane issue involving the government’s hiring and firing practices. The Constitution says that certain officials — under the Supreme Court’s precedents, officials who wield significant authority — are “officers of the United States.” Officers that answer only to the president and who make final decisions on behalf of the government are considered “principal officers,” and must be nominated by the president and confirmed by the Senate. Meanwhile, lesser-ranking officials known as “inferior officers” may be appointed by an agency leader such as a Cabinet secretary.

Members of the PSTF were appointed by the Secretary of Health and Human Services, so they do not qualify as principal officers. So the question in this case is whether they are validly classified as inferior officers. To qualify as such an official, their work must be supervised by a principal officer confirmed by the Senate. As the Supreme Court said in Edmond v. United States (1997), “‘inferior officers’ are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”

The government’s argument that PSTF members count as inferior officers is pretty straightforward. Every judge who has looked at this case so far has concluded that the health secretary may remove PSTF members at will. A statute permits the secretary to delay implementation of the PSTF’s recommendations indefinitely. And the PSTF is part of the Public Health Service, which by statute is controlled by the assistant secretary for health (who is also a Senate-confirmed official), and by the secretary himself.

Mitchell, meanwhile, primarily relies on a provision of federal law which states that PSTF members “shall be independent and, to the extent practicable, not subject to political pressure.” Task force members, he claims, cannot simultaneously be “independent” and also subject to secretarial supervision.

But most of the justices appeared skeptical of Mitchell’s reading of the word “independent.” Justice Sonia Sotomayor pointed out that she sometimes asks her law clerks for their “independent judgment” regarding a legal question she needs to decide, but that does not mean that she has to take the law clerk’s recommendation, or that she can’t fire the clerk.

Significantly, Barrett — who repeatedly described Mitchell’s interpretation of the word “independent” as “maximalist” — seemed persuaded by Sotomayor’s argument. As Barrett said at one point during the argument, she sometimes asks her law clerks to provide recommendations that are “independent” of outside influence, but not “independent” of Barrett’s own approach to how cases should be decided.

Even more significantly, Barrett pointed to the doctrine of “constitutional avoidance,” which says that if there are multiple ways of construing a statute, courts should avoid reading it in ways that raise constitutional problems. Thus, if the word “independent” can be read in more than one way, the Court should pick an interpretation that doesn’t render the PSTF unconstitutional.

Kavanaugh, meanwhile, asked some questions that suggest he might be sympathetic to Mitchell’s approach; early in the argument, for example, he told Justice Department lawyer Hashim Mooppan that he thought the government’s interpretation of the word “independent” was “odd.” But he seemed to shift gears once Mitchell took the podium.

Among other things, Kavanaugh noted that his Court is normally reluctant to read the law to create federal bodies that are independent of the government’s normal organizational chart, where agency leaders answer to the president and nearly everyone else answers to an agency leader. Indeed, the Supreme Court is currently considering a case that could eliminate Congress’s ability to create such independent agencies. So Kavanaugh appeared to believe that this statute should not be construed to make the PSTF independent from the secretary if it is possible to read it in another way.

Again, Kavanaugh and Barrett did hedge enough in their questions that it is not entirely clear how they will vote in this case. And Chief Justice John Roberts, a Republican who also sometimes breaks with the Court’s right flank, was silent for most of the argument. So it is not at all clear where Roberts will come down in Kennedy v. Braidwood Management.

Still, based on Monday’s argument, it appears possible, perhaps even likely, that the PSTF will survive.

The Court may send this back down to the lower court

Gorsuch, at one point, floated an alternative way of resolving this case. While every judge who has heard the case so far agreed that the secretary has the power to appoint and remove task force members, there’s no statute which directly states that he can do so. Instead, that power is likely implicit in other provisions of law, such as the provision giving the secretary control over the Public Health Service.

Gorsuch suggested that the Court may send the case back down to the lower court to decide whether the secretary actually has the power to appoint and remove task force members. And Barrett, at one point, also signaled that she is open to sending the case back down in a procedure known as a “remand.”

If that happens, that would be bad news for the PSTF in the short term, because the case was previously heard by the US Court of Appeals for the Fifth Circuit, the most right-wing court in the federal appellate system, and one, based on its past behavior, that is likely to be hostile to any statute associated with a Democratic president.

Still, even if the case is sent back down to the Fifth Circuit, and even if the Fifth Circuit does read federal law to undercut the PSTF, the Supreme Court can still review that decision once it is handed down. So a remand does not necessarily mean that health insurers will gain the power to deny coverage for cancer screenings or anti-HIV medication.

Again, given the course of Barrett and Kavanaugh’s questioning, it’s difficult to say with certainty how this case will end up. For the moment, however, one of two outcomes seem most likely: Either the Supreme Court holds off on deciding the PSTF’s fate for now, or it votes to permanently rescue this body from Mitchell’s attack.

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What is the legal issue in Braidwood Management?

The Court may send this back down to the lower court