Court Holds That Key ACA Preventive Services Requirements Are Unconstitutional
On September 7, 2022, Judge Reed O’Connor, a federal district court judge in Texas, issued a ruling in Braidwood Management v. Becerra, a lawsuit challenging the preventive services requirement under the Affordable Care Act (ACA). The lawsuit, filed in 2020, was previously known as Kelley v. Becerra.
Judge O’Connor held that a key part of the preventive services mandate—namely, the requirement that most commercial plans cover services with an “A” or “B” recommendation from the U.S. Preventive Services Task Force (USPSTF) without cost sharing—violates the Appointments Clause and is thus unconstitutional. He also ruled that the requirement that insurers and plans cover an HIV prevention medication known as preexposure prophylaxis (PrEP) violated one plaintiff’s rights under the Religious Freedom Restoration Act (RFRA). For now, Judge O’Connor did not invalidate other parts of the ACA’s preventive services mandate related to immunizations, women’s services, or children’s services.
In a bit of a twist, Judge O’Connor did not reveal how far his ruling will extend or who it will affect. On my list of questions is whether his ruling will apply only to the plaintiffs who filed this lawsuit? Or will he strike down this ACA provision in a way that has a nationwide impact? If so, will he stay his decision (so that coverage is not disrupted while the case is appealed)? Instead of addressing these issues, Judge O’Connor asked the parties for more information on the scope of relief, the appropriate remedy, and outstanding claims on the contraceptive mandate. This process will begin with a joint status report and proposed briefing schedule from the parties due on September 16, 2022. This suggests there will be additional briefing and a future decision from Judge O’Connor, although the timeline is unclear.
While we wait, it is worth emphasizing that invalidation of the USPSTF’s recommendations would eliminate the requirement to cover, without cost sharing, a whole host of preventive services relied on by millions of people. These services include screening for breast cancer, lung cancer, cervical cancer, colorectal cancer, heart disease, hepatitis b and c virus, and hypertension; alcohol, substance use, and tobacco cessation; PrEP; preeclampsia screening and folic acid for pregnant women; depression screening; and breastfeeding services and supports.
Without this requirement, the coverage of these preventive services would vary by plan and insurer as it did before the ACA. Insurers and plans would pick and choose which services to cover and whether to impose cost sharing. Consumers would (once again) be left to pay for preventive care out of pocket, leading to less screening and prevention, worse long-term health outcomes, and health disparities.
Brief Background
Section 2713 Of The ACA
Regular readers are likely familiar with the many legal challenges to the ACA’s contraceptive mandate, including the most recent Supreme Court decision on this issue, Little Sisters of the Poor v. Pennsylvania. This lawsuit builds on these earlier challenges to the contraceptive mandate but is broader—it incorporates all preventive services under Section 2713 of the Public Health Service Act.
Section 2713 requires all non-grandfathered private health plans—including individual, small group, and large group health plans and policies—to cover certain preventive services without cost-sharing. These preventive services include evidence-based services that have a rating of “A” or “B” under current USPSTF recommendations, vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), and recommended services for infants, children, and adolescents as well as women provided for in comprehensive guidelines from the Health Resources and Services Administration (HRSA).
In 2020 alone, more than 150 million people with private health insurance—including 58 million women and 37 million children—benefited from Section 2713. This provision is also credited with significantly expanding access to preventive care, leading to increases in cancer screening, earlier detection and treatment of chronic health conditions, and narrower racial disparities. Congress, on a bipartisan basis, built on Section 2713’s requirements over time and leveraged these provisions to rapidly expand access to COVID-19 testing and vaccines in the Families First Coronavirus Response Act and the CARES Act.
The Lawsuit: Braidwood Management v. Becerra
The lawsuit was first filed by two individuals and two companies as a class action in March 2020. The plaintiffs later amended their complaint in July 2020 to add more plaintiffs and to drop the request for a class action. Some of the new plaintiffs did not have religious or moral objections to contraceptive coverage but simply did not need the coverage of certain services (such as contraceptives because of a hysterectomy or age). The amended complaint also eliminated prior claims that the federal government violated the Administrative Procedure Act.
The lead plaintiffs in this case are repeat players in ACA litigation. John Kelley, who initially filed the lawsuit both as an individual and on behalf of his company (Kelley Orthodontics), filed an earlier class action lawsuit against the contraceptive mandate in another case then before Judge O’Connor, known as DeOtte v. Azar (discussed more below). Braidwood Management, owned by Dr. Steven Hotze, is also a plaintiff in DeOtte and previously brought and lost challenges to other parts of the ACA. The plaintiffs are also represented—in both DeOtte and here—by Jonathan Mitchell, the former solicitor general of Texas who is credited with developing the “bounty hunter” abortion law adopted in Texas last year.
The plaintiffs argued that the preventive services mandate violates the Appointments Clause, the Vesting Clause, and the nondelegation doctrine. They thus asked the court to declare that Section 2713 is unconstitutional and unenforceable and that any and all preventive service mandates required under Section 2713 are no longer required to be covered. The plaintiffs further argued that some of the recommendations—to cover contraceptives and PrEP—also violate RFRA. They objected to PrEP, for instance, because it “facilitate[s] and encourage[s] homosexual behavior, prostitution, sexual promiscuity, and intravenous drug use.” Some of the plaintiffs also objected to the coverage of testing and behavioral counseling for STDs and the HPV vaccine. Per the plaintiffs, the coverage of these services “encourages and facilitates homosexual behavior, drug use, or sexual activity outside of marriage between one man and one woman.” Note, however, that the non-PrEP claims were dropped in the amended complaint, leaving only the plaintiffs’ RFRA challenge to the coverage of PrEP.
In February 2021, Judge O’Connor allowed some but not all of the plaintiffs’ claims to advance. After finding that both the “religious-objector” plaintiffs and the “free-market” plaintiffs had standing to sue, he allowed the plaintiffs to continue with their claims under the Appointments and Vesting Clauses, the nondelegation doctrine, and RFRA. He rejected the government’s argument that the plaintiffs were time-barred from bringing constitutional and statutory interpretation claims. He also rejected the plaintiffs’ suggestion that Section 2713 be interpreted to refer only to the recommendations in place from the USPSTF, ACIP, and HRSA on the date of enactment of the ACA.
From there, the parties proceeded to summary judgment. Amicus briefs were filed in support of the government by 21 Democratic attorneys general and a group of health policy experts, the American Public Health Association, and the Association of American Medical Colleges. Following a hearing on July 26, there was supplemental briefing in response to the hearing and new Fifth Circuit decisions on the contraceptive mandate (discussed below). Finally, citing concerns about negative attention directed at Kelley in response to media coverage of this litigation, the plaintiffs asked to change the name of the case from Kelley v. Becerra to Braidwood Management v. Becerra.
Judge O’Connor’s Latest Decision
On September 7, 2022, Judge O’Connor issued his decision in Braidwood Management. He 1) agreed with the plaintiffs that a key part of Section 2713 violates the Appointments Clause; 2) rejected the plaintiffs’ arguments regarding the Vesting Clause and the nondelegation doctrine; and 3) agreed that the requirement that Braidwood Management cover PrEP violated RFRA. As it stands, the ruling would invalidate only Section 2713’s requirement that insurers and plans cover services recommended by the USPSTF—but not those recommended by ACIP or HRSA. As noted above, we do not yet know the full scope of relief or remedy that Judge O’Connor will adopt; we will have to await additional status reports and briefing before he issues that decision.
Standing
Despite an earlier ruling with far deeper analysis on standing, Judge O’Connor limits his standing analysis to only Braidwood Management which he believes has the “easiest case” for standing. He does not bother to address whether the other plaintiffs have standing—at least not for the purpose of deciding the substantive legal issues in the case—but acknowledges that each plaintiff must show that it has standing to obtain relief, such that additional briefing will be needed.
Returning to why Braidwood has standing, there is not much analysis other than to assert that Braidwood offers a self-funded plan for its 70 employees and is subject to Section 2713. Section 2713, in turn, requires plans to cover services that Hotze objects to on both religious and non-religious grounds. (Judge O’Connor oddly cites the ACA’s employer mandate as the source of the ]coverage requirement. And there is no reference to whether the company’s plan might be a grandfathered plan, such that Section 2713 would not apply at all.)
What harm does Hotze face? Per Judge O’Connor, Section 2713 prevents Braidwood from making its own decisions about preventive care—namely to exclude, limit, or charge more for preventive services. Beyond simply having to pay for services he objects to, Hotze believes that offering coverage is an endorsement of objectionable behaviors that he believes are encouraged by the preventive services. Put another way, Braidwood is forced to underwrite coverage for care that it objects to on religious grounds. Finally, Braidwood is injured by the fact that federal officials could use their authority to enforce Section 2713, including by imposing a significant tax or fine.
Federal officials argued that Braidwood’s religious objections—and thus its injuries—are limited to the PrEP coverage requirement and the company has not shown that it has paid for or will likely ever pay for PrEP drugs. This, the government asserted, made its injuries hypothetical (rather than concrete). Judge O’Connor disagrees. Citing the Supreme Court’s decision in California v. Texas (which overruled his earlier decision on standing by a 7 to 2 vote), he notes that Braidwood suffers “an ongoing dignitary harm” by having to cover services that violate his religious beliefs. After concluding that one plaintiff has standing, Judge O’Connor proceeds to the merits.
Ratification, The Appointments Clause, And The Vesting Clause
The plaintiffs argued that the entirety of Section 2713 violates the Appointments Clause because members of the USPSTF, ACIP, and HRSA have not been nominated by the President or confirmed by the Senate but can “unilaterally determine” the preventive care that must be covered by insurers and plans. Judge O’Connor’s decision does not fully embrace this theory. Instead, he draws important distinctions between the USPSTF versus ACIP and HRSA to hold that the portion of Section 2713 related to covering USPSTF-recommended services—42 U.S.C. § 300gg-13(a)(1)—violates the Appointments Clause. The remainder of the statute regarding ACIP- and HRSA-recommended services do not.
The Appointments Clause claim turns on whether the members of the USPSTF, ACIP, and HRSA are officers of the federal government. If the authority granted to them under Section 2713 makes them officers, then that grant of authority is unconstitutional since the members were not appointed by the President and confirmed by the Senate. Alternatively, the members can be treated as “inferior officers” who can be appointed by the President (without Senate confirmation), the courts, or the head of an agency. The government argued that the appointment process for the members of the USPSTF, ACIP, and HRSA is constitutional and that the Secretary of the Department of Health and Human Services (HHS) ratified the challenged recommendations. On the latter point, a properly appointed official (such as the Secretary) can ratify an improperly appointed official’s action.
Judge O’Connor agrees with the government in part, concluding that the Secretary ratified the recommendations from ACIP and HRSA—but not those from the USPSTF. The arguments about ratification refer to a one-page document that Secretary Becerra signed on January 21, 2022 that was filed in Braidwood Management to make clear that he affirmed and ratified a specific list of guidelines and recommendations from the USPSTF, ACIP, and HRSA.
This ratification cured any potential appointment defects from ACIP and HRSA. Both of those entities are part of the Public Health Service, which falls under the supervision and discretion of the Secretary of HHS. ACIP reports to the director of the Centers for Disease Control and Prevention (CDC) while HRSA is directed by an administrator. The CDC director and HRSA administrator are appointed by the President and exercise delegated authority from the Secretary of HHS. Given this level of oversight by the Secretary, he is empowered to direct HRSA to include particular care and screenings in the guidelines and can direct the CDC director to require, reject, or alter ACIP’s recommendations. Overall, Section 2713 gives the Secretary the authority to oversee recommendations made by ACIP and HRSA such that there is no Appointments Clause violation.
But the ratification did not cure issues with how members of USPSTF are appointed. This is because the Secretary does not have the same level of control or authority (as he has for ACIP and HRSA) to direct USPSTF to assign “A” or “B” recommendations. Here, Judge O’Connor notes that the statute authorizing the USPSTF specifically states that its recommendations “shall be independent and, to the extent practicable, not subject to political pressure.” This limitation notwithstanding, the government argued that the Secretary has authority and can—under his authority over the Public Health Service and the Agency for Healthcare Research and Quality—remove members of the USPSTF who were unwilling to provide an “A” or “B” rating to a particular service. But Judge O’Connor does not find that to be sufficient since the Secretary, a political actor, cannot decree the recommendations on his own. Because he cannot dictate the recommendations, he also cannot ratify the USPSTF’s recommendations.
Judge O’Connor then turns to whether the USPSTF violates the Appointments Clause. I will spare you the details (which span many pages), but Judge O’Connor first concludes that members of the USPSTF are in fact officers because they have a continuing position established by law and they exercise significant legal authority. What is the significant legal authority that the USPSTF exercises? Judge O’Connor cites Section 2713 itself, reasoning that the USPSTF has the authority to dictate which preventive services must be covered by plans and insurers. The USPSTF’s recommendations thus have the force and effect of law thanks to Section 2713.
(In reaching these conclusions, Judge O’Connor rejects arguments made by the government that the members of USPSTF are volunteers with other jobs that serve on the task force on a limited part-time basis—rather than employees that receive compensation. Federal officials also argued that the USPSTF makes recommendations about the types of services that must be covered and assigns ratings based on an evidence base. Insurance is not considered at all and it was rather Congress that determined that services with certain ratings must be covered by insurers and plans. The government also argued that the reference to the USPSTF in Section 2713 is simply an example—consistent with many other instances in federal law—where Congress adopted the recommendations by reference.)
After finding that USPSTF members are principal officers of the federal government, Judge O’Connor concludes that their appointment is unconstitutional. As principal officers, they must be appointed by the President and confirmed by the Senate. Since they are not, their appointment violates the Appointments Clause. Judge O’Connor would reach the same conclusion even if USPSTF members are considered inferior (rather than principal) officers because they are appointed only by the director of the Agency for Healthcare Research and Quality (rather than the President, the Secretary, or the courts).
The plaintiffs also argued that the President does not have the authority to remove USPSTF members. While the President can appoint lesser executive officers to assist him in his duties, he must be able to remove those officials. Judge O’Connor rejects this removal claim because the plaintiffs did not identify any restrictions on whether USPSTF members can be removed or not. On the one hand, the language in the USPSTF statute that insulates the USPSTF from political interference bars the Secretary from identifying what services must be covered by insurers and plans. But it does not, on the other hand, prohibit the Secretary or the President from removing USPSTF members. Without removal restrictions, USPSTF members remain appropriately and lawfully removable at will.
What It Means
When all is said and done, Judge O’Connor grants partial summary judgment to the plaintiffs on their claim that Section 2713(a)(1)—which focuses on the USPSTF recommendations—violates the Appointments Clause. Per their amended complaint, the plaintiffs said the court should “declare that any and all preventive-care mandates based on a rating, recommendation, or guideline issued by the U.S. Preventive Services Task Force … are unconstitutional and unenforceable, and it should permanently enjoin the defendants from enforcing them.”
Judge O’Connor has clearly held that this provision violates the Appointments Clause and is thus unconstitutional. What is unclear at this point is how far his ruling will extend, so he requests additional briefing on the appropriate remedy.
The government previously urged the court, if it found there to be a problem with the appointment of USPSTF members, to invalidate part of the statute that governs the USPSTF (namely, the provision in (a)(6) that requires the USPSTF to be independent thereby restricting the Secretary’s control over the USPSTF). That would allow the Secretary to assert authority over the USPSTF by ratifying their recommendations and enable the court to uphold both Section 2713(a)(1) and the USPSTF’s recommendations themselves. But Judge O’Connor expressly rejects this argument in his decision, emphasizing again that the Secretary has no authority over the USPSTF and, without authority, cannot ratify those recommendations.
Nondelegation Doctrine
The plaintiffs argued that Section 2713 violates the nondelegation doctrine because the provision unconstitutionally delegates legislative power to these entities without providing an “intelligible principle” to guide discretion. The Supreme Court has not invalidated a federal statute using the nondelegation doctrine in nearly a century, a precedent recognized by the Fifth Circuit and by Judge O’Connor here.
Judge O’Connor declines to invalidate Section 2713 on this ground. In rejecting the plaintiffs’ arguments, he concludes that 1) Congress set a general policy for the USPSTF, ACIP, and HRSA to follow when making recommendations (with some of this authority resting in the roles that Congress assigned to each entity when it authorized those organizations); 2) Section 2713 specifies the entities that are in charge; and 3) Congress limited the authority it delegated by directing each entity to select services that are “evidence-based,” have an “A” or “B” recommendation, or are “evidence-informed.”
Even so, this may not be the end of the road for this argument. In Little Sisters of the Poor, Justice Thomas—writing for the majority—noted that Congress delegated “virtually unbridled discretion” to HRSA and suggested the statute may violate the nondelegation doctrine. He did not rule on this issue because the parties had not raised it. But Braidwood Management presents a new opportunity for the appellate courts to reconsider this issue. Although the Supreme Court “hinted” that it may agree with the plaintiffs on the nondelegation doctrine as it relates to HRSA, Judge O’Connor was bound by current Fifth Circuit precedent.
Religious Freedom Restoration Act
As noted above, the plaintiffs initially argued that the coverage of many preventive services violated RFRA. However, this claim was narrowed in the amended complaint to only the requirement to cover PrEP. This requirement stems from June 2019 when the USPSTF assigned an “A” rating to PrEP, a daily antiretroviral medication that helps prevent high-risk individuals from acquiring HIV. Under current federal rules, plans and insurers have to cover PrEP without cost sharing (including ancillary and support services) beginning no later than the 2021 plan year. As discussed here, PrEP is a powerful prevention tool and was one of the key components of the Trump administration’s plan to end the HIV epidemic.
Under RFRA, the government may substantially burden religious exercise if doing so is the least restrictive means of furthering a compelling governmental interest. Here, the PrEP mandate allegedly substantially burdens Hotze’s religious exercise because, as the owner of for-profit Braidwood, he believes that PrEP coverage facilitates and encourages a range of conduct (e.g., “homosexual behavior” and “sexual activity outside of marriage between one man and one woman”) that he objects to on religious grounds. In his view, covering the drug alone makes him “complicit in those behaviors.”
The government argued that Hotze’s claim—that PrEP facilitates certain behaviors—is a factual claim that should be supported by evidence. But Judge O’Connor rejects that argument, construing it as an attack on the “correctness” of Hotze’s beliefs rather than the “sincerity” of those beliefs. Citing the Supreme Court’s decisions in Hobby Lobby and Little Sisters of the Poor, he concludes that Braidwood has shown that the PrEP mandate substantially burdens its religious exercise.
Rejecting the government’s argument that it has a compelling governmental interest in reducing the spread of HIV, Judge O’Connor rather construes the government’s interest in forcing private, religious corporations to cover PrEP drugs without cost sharing or religious exemptions. Citing Hobby Lobby once again, he points to the possibility that the government could simply pay for PrEP directly instead of requiring insurers and plans to cover it. Because the government did not show that it could not simply provide PrEP to those unable to obtain it from a plan due to an employer’s religious objection, the PrEP requirement is not the least restrictive means of reducing the spread of HIV.
The ruling that the PrEP coverage requirement violates RFRA is limited to only Braidwood. Judge O’Connor will ask for additional briefing regarding the scope of relief, the standing of the other plaintiffs, and any RFRA claims that the other plaintiffs want to raise. As discussed in the next section, one issue to watch is whether the plaintiffs also raise RFRA objections to the contraceptive mandate.
What’s Going On With The Contraceptive Mandate?
There are two cases—DeOtte and Leal—that are particularly relevant to the plaintiffs’ claims regarding the contraceptive mandate. In both of those cases, as well as Braidwood Management, the plaintiffs are represented by Jonathan Mitchell.
In DeOtte, Kelley and Hotze (among others) successfully challenged the Obama-era rule on the contraceptive mandate and secured a class action that could be joined by other individuals or employers who object to contraceptive coverage for religious reasons. The Trump administration did not defend the mandate. Judge O’Connor then ruled that the contraceptive mandate and the Obama-era accommodations process for religious entities violated RFRA and could no longer be enforced against those who object to contraceptive coverage. This essentially exempted the entities and individuals covered by his decision from the contraceptive mandate.
DeOtte was appealed to the Fifth Circuit, which held that the case was moot following the Supreme Court’s decision in Little Sisters of the Poor (which itself upheld Trump-era rules that created broad religious and moral exemptions to the contraceptive mandate). The plaintiffs asked for rehearing en banc by the full panel of Fifth Circuit judges; this request was denied but it was a close vote with eight judges voting in favor and nine judges voting against. On August 31, Judge O’Connor dismissed the case.
In Leal v. Azar, Judge Matthew J. Kacsmaryk allowed the plaintiffs to challenge the contraceptive mandate under the Appointments Clause and agreed that members of the DeOtte class could not challenge the mandate again. In light of some jurisdictional issues, he dismissed the remaining claims in Leal in March 2021. On appeal, the Fifth Circuit found that the plaintiffs in Leal are no longer barred from proceeding with their claims against the contraceptive mandate (because they no longer have protection under the prior injunction from DeOtte). The court then vacated and remanded the decision back to Judge Kacsmaryk for further proceedings.
Turning back to Braidwood Management, Judge O’Connor had agreed with the government that the “religious-objector” plaintiffs were barred from challenging the contraceptive mandate in light of his own decision in DeOtte. However, in light of the Fifth Circuit’s decisions in DeOtte and Leal, the Braidwood Management plaintiffs recently asked Judge O’Connor to reconsider this decision. In notices of supplemental authority on these two decisions, the plaintiffs argued that they are no longer barred by DeOtte from pursuing their challenges to the contraceptive mandate under the Appointments Clause, the nondelegation doctrine, and RFRA. They then asked to file supplemental briefs and proceed with a request for summary judgment on these claims. Judge O’Connor invited additional information on how the parties want to proceed.
