May 2019 Volume LIV Number 3


Legislative and Regulatory Update

September 2012 Volume XLVIII Number 5


Supreme Court Upholds Affordable Care Act

In an opinion issued on June 28, 2012, Supreme Court Chief Justice John Roberts sided with the courts four liberal justices in the 5-4 ruling, stating that Congress has the power to impose an individual mandate under its taxing authority.1 Although the Court also held that Congress exceeded the power granted to it under the Commerce Clause when it enacted the individual mandate, the provision is nevertheless valid under Congress’ taxing authority.

"It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without insurance," Robert wrote in the majority opinion. "Such legislation is within Congress’ power to tax."

Ironically, the mandate was not treated as a tax for purposes of providing injunctive relief (normally one has to suffer a tax before seeking such judicial relief), but was treated as a tax for purposes of upholding the Affordable Care Act (ACA). Roberts indicated that the ACAs description of the payment as a "penalty" does not control as to whether the individual mandate provision is within the federal governments power to tax. He wrote that the most straightforward reading of the mandate is that it commands individuals to purchase insurance, but the government proposes an alternative reading that the Court must consider. Roberts indicated the Court has a duty to adopt any reasonable interpretation of a statute to avoid a finding of unconstitutionality, and therefore had to determine whether the governments proposed interpretation of the mandate is a "fairly possible" one. Under the governments theory, the mandate is not a legal command to buy insurance, but simply a tax on those without insurance.The exaction that the ACA requires those without health insurance to pay resembles a tax in many ways, Roberts wrote, including how and when it is assessed, collected, and paid. A tax also must comply with other constitutional requirements, including the requirement that any direct tax must be apportioned so that each state pays in proportion to its population. Plaintiffs argued that if the individual mandate imposes a tax, it is a direct tax and therefore unconstitutional because Congress made no effort to apportion it among the states. The Court rejected this argument, stating that a tax on going without health insurance does not fall within any recognized category of direct tax, and was not subject to apportioning among the states.

The Court also offered three considerations to address concerns that its decision permits Congress to impose a tax for not doing something.

Although the Constitution protects individuals from federal regulation under the Commerce Clause so long as they abstain from regulated activity, it does not guarantee that individuals may avoid taxation through inactivity.

Congress’ ability to influence conduct through its taxing power is not unlimited, and previous cases have invalidated taxes that are excessively punitive. But Roberts found the tax in this case is within even narrow interpretations of federal taxing power, making it unnecessary to address this issue.

The power to tax does not give Congress the same degree of control over individual behavior as the power to regulate commerce, the Court emphasized.

In concluding the majority opinion on this issue, Roberts wrote:

"The Affordable Care Acts requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be character-ized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it or to pass upon its wisdom or fairness."


A majority of the Court (Roberts and Justices Kennedy, Scalia, Thomas, and Alito) found the individual mandate was not a valid exercise of Congress’ power under the Commerce Clause, Art. 1, § 8, cl. 3.

"Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority," the opinion said.

 As widely expected, Justices Ginsburg, Breyer, Kagan, and Sotomayor concluded the individual mandate should survive under both the Commerce Clause and the Necessary and Proper Clause, as well as under Congress’ taxing power.

The court also upheld the governments ability to expand Medicaid coverage, but said it could not withdraw existing Medicaid funding from states that opt out of the expansion. Roberts, joined by Breyer and Kagan, concluded that the ACAs Medicaid expansion violates the Constitution by threatening states with the loss of their existing Medicaid funding if they decline to comply with the expansion. But Roberts held that the constitutional violation would be fully remedied by precluding the

Department of Health and Human Services Secretary from withdrawing existing Medicaid funds for failure to comply with the expansion. Instead, only the new expansion funds can be denied to states that refuse to comply with the expansion requirements. He argued that under the ACA:

"Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level. It is no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage."

Kennedy, Scalia, Thomas and Alito dissented from the opinion upholding the mandate as a tax. They said the key issue is not whether Congress had the power to frame the individual mandate as a tax, but whether it actually did so. They argued that Congress clearly enacted a mandate enforced by a penalty, not a tax as the

Roberts opinion found. In the dissents view, the exaction under the ACA is "unquestionably" imposed for violation of the law and therefore may not be classified as a tax for constitutional purposes.

The dissent also pointed to the fact that the mandate and penalty appeared among the ACAs operative core, rather than with its revenue raising provisions, as evidence the payment was not a tax.

The decision puts the issue squarely back in the legislative and political arena. Republican presidential nominee Mitt Romney has vowed to see the law repealed and replaced if he is elected president in November. President Obama claimed vindication and urged implementation of all provisions to move forward.

Next Steps for Dentistry

The AAPD continues to work closely with the ADA in helping our state units deal with implementation of health care exchanges required by the law to be operational on Jan. 1, 2014. There will be many updates in PDT, E-News and on the AAPD website. State units should work very closely with state dental associations in this area.

The essential benefits package includes pediatric oral health care, which may potentially expand coverage to millions of children.

1 National Fed. of Independent Bus. v. Sebelius, No. 11393 (U.S. June 28, 2012).

AAPD and Organized Dentistry Coalition Urge Repeal of Medical Device Tax

The AAPD and the Organized Dentistry Coalition, along with over 700 other organizations, sent a letter to the U.S. House of Representatives in June 2012 urging a repeal of the medical device tax contained in the Affordable Care Act. The letter raised concerns that the tax will increase the cost of medical and dental care while stifling innovation and job creation in the medical device industry. The House subsequently voted to repeal the tax by a vote of 270 to 146, with 37 Democrats voting with the Republicans. Senator Orrin Hatch (R-Utah) is taking the lead on repeal efforts in the Senate

A copy of the letter is available at: 2012_House_DeviceTax_Coalition_letter_FINAL_floor_6_6_12.pdf.

State News

North Carolina Bill Regulating Dental Management Services Approved

In July the North Carolina state legislature approved Senate Bill 655 DentistrManagement Arrangements, which was a compromise between the North Carolina Dental Society and the Alliance for Access to Dental Care (the umbrella organization for the dental management corporations).

The bill underwent intense negotiation and many iterations. The agreement was reached after months of negotiations and advocacy that saw the hiring of several outside lobbyists and several hundred thousand dollars spent on TV ads and mailers by each side. Dental service organization boosters say the firms help dentists control patient costs by handling paperwork for things such as purchasing and billing. State dental society leaders were concerned that some of these groups are essentially controlling dental practices and making medical decisions for patients in the name of cost savings.

The bill will require the State Boarof Dental Examiners to adopt rules giving greater regulatory oversight of the contracts that dentists reach with the management companies in the future. The bill will clarify existing dental law and attempt to reduce litigation against the state board, which currently reviews the management contracts that dentists are entering. The measure will require contracts to include warnings encouraging dentists to get legal advice before signing them. The final bill left out details on exactly how those contracts would be scrutinized further, leaving it to a six-member task force that will include two people connected to dental service organizations. The dental examiner will receive the task force recommendations in January 2013, but it doesnt have to follow the task forces suggestions.

The North Carolina Dental Society was pleased with the final version which gives the NC State Board of Dental Examiners additional safeguards and tools to enforce state law prohibiting corporations from owning or controlling dental practices. Language that would have given dental management corporations concessions was stricken from the final bill, as was language that modified the selection of members to the Board of Dental Examiners.

Governor Signs Bill to Help Fill Kansas Dentist Shortage

In May, Kansas Governor Sam Brownback signed into law a bill thats intended to help the state cope with a dentist shortage. The law the expands the ability of dental hygienists to deal with tooth decay, but rejected efforts to create a registered dental therapist.

The new law allows dental hygienists to pull the loosest baby teeth and to scrape away tooth decay with a hand instrument. They would only be allowed to provide temporary fillings. They would also only be allowed to serve the poor, prisoners and elderly patients who live in residential centers among others.

The bill also requires the Board of Regents to add more slots for Kansas residents at the University of Missouri-Kansas City dental school. Those students would have to work in underserved areas of Kansas for at least four years after graduation. The bill also creates a special license for retired dentists who want to donate their time to treat patients who are poor or who live in areas where there arent enough dentists.

Dental therapist proponents argued that 93 of 105 counties in the state did not have enough dentists. However, further analysis revealed that there are about five "dental deserts" within Kansas that have an access issue. Most of the 93 counties have a dentist a short distance away in an adjoining countyand are for the most part rural areas that have shrinking populations.

See the bills text at: http://www.kslegislature. org/li/b2011_12/measures/documents/hb2631_ enrolled.pdf.

Ruling in Florida Medicaid Litigation Expected Shortly

In 2005, the Florida Pediatric Society, the Florida Chapter of the American Academy of Pediatrics, the Florida Academy of Pediatric Dentistry and the parents or guardians of about nine children sued the state, accusing three state agencies, of running Medicaid so poorly and so miserly that children raised in poverty get inferior care compared to children with private insurance. The plaintiff alleged that Floridas Medicaid program pays physicians and dentists so little that it violates federal law. Plaintiffs argued children from impoverished families, estimated at 1.7 million in the state, often must do without necessary medical and dental care, or wait weeks or months to get it.

The trial was finally concluded earlier this year. In closing argument, the Plaintiff s lawyer said: 

"At the end of the day, its not adequate for the state to simply say, ‘It costs too much’."

The state argued that Plaintiffs has failed to prove that delays in accessing medical and dental care were either significant or widespread throughout the state or that such delays were longer than children who have private insurance typically experience.

Federal Judge Adalberto Jordan said he will rule shortly on whether Floridas Medicaid program violates federal law.

New Dental School to Open in 2013 

In March, the A.T. Still University in Kirksville, Mo., broke ground on a new dentistry building
State Governor Jay Nixon was at the ceremony and stated that:

"It looks a little like a beach right now, but it will be a school. All across this state—quite frankly folks—all across this country, there is a huge gap in health care professionals in this bandwidth."

The new school of dentistry at A.T. Still University will welcome its first class in the fall of 2013. Jack Magruder, the university president, said the goal is in part to help address gaps in dental care in Missouri. ATSU already runs a dental school at its campus in Mesa, Ariz., which has successfully recruited students who want to serve in rural and underserved areas. The school regularly graduates the largest number of Native American dental students, who often work in clinics serving Native Americans after graduation. Magruder said that experience can be replicated in rural Missouri. "Its how you recruit the students.

If you recruit the students from rural areas, theyre going to tend to go to rural areas. Were going to recruit people that are already feeling that thats the way theyd like to serve, they have a calling to do this."

The dental school in Kirksville will be the states second. The School of Dentistry at the University of Missouri, Kansas City has been producing dentists since the late 1800s.