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Federal Judge in Florida Invalidates Healthcare Reform Law; Physician Hospitals of America/Texas Spine & Joint Hospital Request Adoption of Ruling in Physician-Owned Hospitals Lawsuit

Posted in Healthcare Services Investing

On Monday, a  federal judge sitting in Florida, Judge Robert Vinson,  declared unconstitutional the portion of the healthcare reform law (aka PPACA, or the Affordable Care Act)  requiring most Americans to buy health insurance by 2014 or face penalties.  Judge Vinson also declared unconstitutional the section of the act that withholds Medicare funds from states that refuse to participate.  This ruling is similar in part to the decision out of Virginia in mid December we’d previously discussed.   However, the Florida ruling is different in one key way – – – Judge Vinson ruled that, because the law contains no savings clause permitting certain provisions to be voided while retaining the remainder of the law, the unconstitutionality of those provisions voids the entire law.

Florida is one of 26 states that has challenged the law to date, while other states have indicated  that they are considering challenging as well.   In contrast to the decisions out of Florida and the Eastern District of Virginia,  federal judges in the Eastern District of Michigan and the Western District of Virginia and have ruled to uphold the "individual mandate" to carry health insurance.

On a related note, the Physician Hospitals of America (PHA) and Texas Spine & Joint Hospital (TSJH) lawsuit challenging Section 6001 regarding physician-owned hospitals may be impacted by the ruling in Florida.   PHA and TSJH have been awaiting an opinion in their case in the Eastern District of Texas from Judge Michael H. Schneider, and they have already filed a motion asking Judge Schneider to adopt the decision and invalidate the ban on physician-owned hospitals.

As the Senate debates whether to vote on the healthcare reform repeal and modification bills introduced over the past several days and other federal courts tackle similar healthcare reform challenges, developments on the healthcare reform front are occurring seemingly daily.  

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