Thursday, January 13, 2022: SCOTUS Allowed Enforcement of the CMS Interim Final Vaccination Rule; Healthcare Facilities Subject to Vaccine Mandate for Medicare/Medicaid Staff
On the same day the Supreme Court (the “Court” or “SCOTUS”) struck down the OSHA ETS applicable to private employers with 100 or more employees, the Court handed down a second separate opinion and ruled in favor of the Biden Administration by upholding the CMS Interim Final Rule (the “Rule”) vaccination mandate and thus allowing it to go into effect. The Rule requires all staff of healthcare facilities receiving Medicaid and/or Medicare funding to be vaccinated against COVID-19. In a 5-4 per curiam opinion (meaning “by the court” with no attribution to any particular Justice for having written the decision), the Court held that the Rule was a proper exercise of the Secretary of Health and Human Services’ (“HHS”) authority as the Congress had delegated it to the Department. Biden, et al. v. Missouri, et al., Case No. 21A240 (January 13, 2022), and Becerra, et al. v. Louisiana, et al., Case No. 21A241 (January 13, 2022).
In its opinion, the Court noted that Congress authorized HHS to impose conditions on the receipt of Medicaid and Medicare funds that are necessary “in the interest of the health and safety of the individuals who are furnished services.” Thus, because a COVID-19 mandate would substantially reduce the likelihood that healthcare workers contract the virus and transmit the same to patients, many of whom are especially vulnerable to serious consequences from the disease, the Rule “fits neatly within the language of the statute.” Indeed, the Court cited various vaccines healthcare workers are already required to receive.
The Court rejected the arguments of those attempting to enjoin enforcement of the Rule by noting that the broad language HHS relies upon is more than “bureaucratic rules” regarding the technical administration of the programs. Rather, CMS had previously used this same language to obligate healthcare facilities to satisfy many conditions that address the “safe and effective provision of healthcare.” Examples include the amount of time within which a patient must be examined, the procurement and transplantation of organs, and programs hospitals must implement to govern the surveillance, prevention, and control of infectious diseases.
The Court also rejected the contention that the Rule violated the federal Administrative Procedure Act. This was not a case in which the Department failed to undergo Rulemaking, but rather the challenge centered on whether the vaccination mandate Rule was “arbitrary and capricious.” Proving a federal administrative law is “arbitrary and capricious” is very difficult because it requires a very high standard of proof to allow the federal agencies leeway to interpret the Congressional statutes they are charged to enforce. Most successful APA lawsuits challenge a Proposed or Final federal Rule as “not otherwise in accordance with law.” Those legal attacks claim the at-issue Proposed or Final Rule is unlawful either because the agency lacks the raw legal authority to promulgate and enforce the Rule, or the agency has just flat failed to engage in Rulemaking (posting a proposed Rule for public “Notice” and thereafter receiving public “Comment”) to further aid the agency’s deliberations as it hardens its Proposal into a Final Rule.
Specifically, SCOTUS held that HHS’ implementation of the Rule was reasonable, and neither arbitrary nor capricious. First, HHS’ issuance of the Rule in advance of the winter flu season constituted the “something specific” necessary to allow for an “Interim” Final Rule. SCOTUS thus found it unnecessary for HHS to undergo the usual Notice and Comment requirement typically otherwise required in advance of the imposition of a Rule. Second, the Court found HHS sufficiently examined the relevant data to articulate a satisfactory explanation for the decision to impose a vaccine mandate in contradiction of its initial approach to merely encourage vaccination, and to also require vaccination of those individuals who had obtained only “natural immunity.” Finally, HHS’ failure to prepare a regulatory impact analysis did not violate federal law given that this requirement attaches only to the issuance of a Final Rule, whereas the Rule here was merely only an interim Rule.
In his dissent, joined by Justices Alito, Gorsuch, and Barrett, Justice Thomas believed that HHS failed to establish that the two statutory provisions HHS relied upon empowered it to impose a vaccine mandate. Rather, the statutory provisions pertained to the practical management and direction of Medicaid and Medicare programs, to which the mandate had no connection in their opinion. This opinion is further evidence of a solid block of four Justices who wish to narrow the “non-delegation doctrine” (see parallel discussion in the OSHA ETS story, above) to allow federal Executive action to occur in response to only a narrow and specific mandate from the Congress to the Executive Branch of the federal government.
Furthermore, Justice Thomas believed HHS had not adequately explained why Congress would have used “ancillary” provisions in the statute to grant such an expansive exercise of power without explicit authorization. Such a broad grant of authority required Congress to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” (Citations omitted).
In a separate dissent, Justice Alito (joined by Justices Thomas, Gorsuch, and Barrett) noted his skepticism the Federal Government possessed sufficient authority to compel vaccination of over 10 million healthcare workers. Even if the Federal Government did have such authority, Justice Alito argued the enactment of the Rule was arbitrary and capricious in violation of the Administrative Procedure Act’s requirements.
Following the ruling, the injunction in 25 states that previously existed to stop implementation of the CMS Interim Final Rule is no longer operative. Healthcare facilities in those 25 states must therefore now comply with the December 28, 2021 Guidance the CMS issued regarding implementation of the Rule. The timeline set forth in the Guidance, which we previously discussed here, is now operative in all 50 states and the District of Columbia. Healthcare facilities should now implement policies needed to achieve the 100% vaccination goal within the timeline set in CMS’ December 28, 2021 Guidance.