Court of Appeals Rulings Don’t “Blow Up” the ACA

By Dashawn Groves

On June 22, 2014, two U.S. courts of appeals issued conflicting rulings on whether the health insurance subsidies are available to ONLY people in states that have created their own exchanges or to all residents regardless if the exchange was created by the state or federal government. The cases center on a brief description in the Affordable Care Act (ACA) that says subsidies will be available “through an exchange established by the State.”  The Internal Revenue Service (IRS) interpreted the law to allow individuals to receive subsidies to help purchase insurance, regardless of whether they are in an exchange run by their state or by the federal government. Opponents are questioning the interpretation of the law, saying that subsidies are only available to individuals residing in the 14 states with state-based exchanges.
What does it mean for health centers and their patients?
Neither case will have an immediate impact on the ACA as it could take years for the courts to decide. Individuals across the country will continue to receive the ACA’s tax credits and subsidies, ensuring they can afford the health care they need. Health center O&E staff should continue to do business as usual, reaching out to individuals and enrolling them in Medicaid, CHIP and the Marketplace. Current subsidies would likely remain in place until there is a final legal decision on the matter.
What did the Courts decide?
The U.S. Court of Appeals for the District of Columbia was the first ruling (Halbig v. Burwell) out last week. In a 2-1 decision, the three-judge panel ruled that the health insurance subsidies were only available to the individuals in the 14 states and the District of Columbia operating their own health insurance exchanges. The majority opinion concluded “that the ACA unambiguously restricts” the subsidies to “exchanges ‘established by the state.’ “ The dissenting opinion argues, “it was well understood that without the subsidies, the individual mandate was not viable as a mechanism for creating a stable insurance market.”

Shortly following the Halbig v. Burwell ruling, a three-judge panel on the Fourth Circuit Court of Appeals in Richmond, VA unanimously ruled in King v. Burwell that the subsidies were available to residents in all states.  Similar to the dissenting opinion in Halbig v. Burwell, the Fourth Circuit concluded that “established by the State” is ambiguous, when read in combination with another section of the ACA, and could include federal exchanges.  The “broad policy goals of the Act,” described above, primarily persuaded the court that the IRS’s interpretation of the statute was permissible.
What happens next?
The two decisions are not the final word.  All 11 judges on the D.C. Circuit Court could be asked to decide the Halbig v. Burwell case, a process called “en banc” review.  The Obama administration has said it will ask the court for such a review.  A majority of the judges would have to agree to rehear the case for it to be reconsidered in this way.  The challengers in King v. Burwell could ask the Fourth Circuit to reconsider as well.  Two trial court cases raise similar issues, one in Oklahoma and one in Indiana.  Those cases could also go to appellate courts. Oklahoma is in the 10th Circuit; Indiana is in the 7th.  Depending on the outcomes of the various rulings, all the courts could end up agreeing, or there could remain a disagreement between different circuits.  Either side could appeal the rulings to the Supreme Court for consideration. It is unclear when a final decision will be made.

HRSA Funding Opportunities Announced

Last week, the Health Resources and Services Administration (HRSA) announced two important funding opportunities, the new FY2015 Service Area Competition (SAC) and Supplemental Ryan White Funding. See below for more information on both announcements.


FY 2015 Service Area Competition Has Been Released

On June 19, 2014, HRSA issued the FY 2015 Service Area Competition (SAC) application.  In total, there will be eight rounds throughout FY 2015 for project periods beginning November 1, 2014 through June 1, 2015.  HRSA anticipates awarding approximately $591,000,000.00 in funding to 242 applicants.  Similar to prior years, each round will have a distinct Funding Opportunity Announcement (FOA) with its own application package.  Although the applications generally are the same with the exception of the submission deadlines and the service areas available for competition, it is vital that each applicant use the application package that matches its FOA – failure to do so will result in an ineligible application that will not be reviewed and could result in awarding the funds to another applicant or a re-competition of the service area.

Presently, the first four (4) rounds have been announced for project periods beginning:

  •  November 1, 2014 – submission of July 23; EHB submission of August 6
  • December 1, 2014 – submission of July 30; EHB submission of August 13
  • January 1, 2015 – submission of August 13; EHB submission of August 27
  • February 1, 2015 – submission of August 27; EHB submission of September 10

HRSA anticipates announcing the next two rounds (with 2015 start dates of March 1 and April 1) on September 10, 2014 and the final two rounds (with 2015 start dates of May 1 and June 1) on October 8, 2014.

Eligible applicants must be organizations that propose to serve an existing service area and its population as specified in the Service Area Announcement Table.  The Table identifies which service areas are available for competition in FY 2015 and pertinent information for each area (such as project period start date, city and state, available funding, respective target population, patient origin and service area zip codes, percentage of patients from each zip code, total patient projection).  Similar to prior years, the applicant must propose a project that: (1) serves all existing target populations (including any special populations); (2) reflects zip codes from where at least 75% of the current patients reside; and (3) requests annual funding that does not exceed the amount specified in the Table.

In a change from prior years, the applicant can propose to serve less than 100% of the patient projection specified in the Table, provided that the proposal will serve at least 75% of the projection by December 31, 2016 and the funding requested is reduced consistent with the SAC instructions.  HRSA indicated that it will hold all grantees accountable for their stated patient projections – if a grantee is unable to demonstrate compliance within 5% of its projection by December 31, 2016, HRSA may proportionately reduce the funding for the service area.  Other changes from prior years include:

  • Availability of 5 priority points for current grantees renewing their existing projects if the grantee has no unresolved grant conditions in the 60-day, 30-day or default phases of the Progressive Action process at the time of submission.
  • Availability of an additional 5 priority points for current grantees renewing their existing projects if they meet the aforementioned and can demonstrate a positive or neutral 3-year patient growth trend (must meet both of these requirements to receive the additional 5 points).
  • Modifications to the standard forms based on HRSA policies issued this past year regarding governance, budgeting and scope of project.

The new SAC also revises the criteria for awarding a one-year project period (as opposed to the standard 3-year period).  Applicants who meet one or more of the following will be awarded a one-year project period:

  •  Current grantee or new applicant has 10 or more grant conditions based on non-compliance with Program Requirements including existing unresolved conditions as well as those that would be placed on the grant based on the SAC application.
  • Current grantee has 3 or more unresolved grant conditions based on non-compliance with Program Requirements that are in the 60-day phase of the Progressive Action process.
  • Current grantee has 1 or more unresolved grant condition(s) based on non-compliance with Program Requirements that are in the 30-day phase of the Progressive Action process.

It is crucial that applicants submit proposals that do not exceed the available funding and that meet all of the other eligibility criteria.  An application that fails to comply with all eligibility requirements will be considered ineligible for funding, which could result in awarding the funds to another applicant or a re-competition of the service area. The FY 2015 SAC Technical Assistance page can be accessed at .  From that page, applicants can access, among other things: (1) the specific FOAs; (2) the Service Area Announcement Table; (3) the chart listing all submission dates; (4) Frequently Asked Questions; (5) eligibility criteria; and (6) links to technical assistance resources, program specific forms that are part of the application, and applicable performance measures.


HRSA Announces Availability of Supplemental Ryan White Part D Funding

On June 25, 2104, HRSA published a notice in the Federal Register announcing the availability of a one-time only non-competitive program expansion supplement under the Ryan White HIV/AIDs Part D program.  These supplemental awards will be provided to Part D grantees for the purpose of supporting interventions that will positively impact the HIV health outcomes of women, infants, children, and youth in the grantees’ communities.  All 115 existing grantees are eligible for the funds, which will be awarded in amount not to exceed the lesser of $150,000.00 or 25% of each FY 2014 grant award with a maximum cumulative amount not to exceed $12,177,374.00. The project period for these supplemental funds will be 11 months, starting August 1, 2014 through June 30, 2105.

Recording of NACHC Medicare PPS Webinar

Recording of NACHC Medicare PPS Webinar

Last week, NACHC held a webinar “Dawn of a New Day: the Medicare FQHC PPS” which provided an overview of the new Medicare FQHC PPS final rule.   We had overwhelming participation in the webinar, but wanted to make sure you had an opportunity to listen to the recording in case you missed it last week.  Below are the instructions on how to access the recording.   Please do not hesitate to let us know if you have any questions on this or the Medicare PPS.

You can now access the webinar recording and all supporting materials on the MyNACHC Learning Center, by clicking here.   If you have technical difficulties logging in to MyNACHC or accessing the materials please contact Neha Desai at

To access MyNACHC and the recorded webinar, follow these easy steps:

  1. Click on the link above which direct you to the My NACHC Learning Center login screen.
  2. Your username and password is the same one you used to register for this webinar and all NACHC events
  3. If this is your first time visiting MyNACHC, you will be prompted to choose a role.  The role you select will determine the type of continuing education credits you receive when credits are available.
    • Currently, NACHC only offers continuing education credits (CPE, CME, CEU & Gov ) for some of our live and recorded conference sessions, not webinars or webinar recordings.
    • After choosing your role, click on “update”
  1. If this is not your first time logging in to MyNACHC or after selecting your role, you will be directed to the recorded webinar.  Click “Launch” to view the recording or view handouts.


HRSA Issues Two New PALs Impacting Health Center Operations

HRSA Issues Second Program Assistance Letter Explaining the Scope Alignment Validation Process

As noted in the Policy Shop on May 20, 2014, in mid-May HRSA issued a new Program Assistance Letter (PAL) describing updates to the Scope of Project forms for services and sites (Forms 5A and 5B, respectively), which served as the first step in an overall scope alignment process (PAL #2014-06: Documenting Scope of Project in Updated Forms 5A and 5B). At that time, HRSA indicated that it would issue a second PAL explaining the actual Scope Alignment Validation (SAV) process – a one-time only opportunity for health centers to validate the data migrated from the old forms to the new forms and to make certain changes necessary to ensure the accuracy of services and sites listed as “in-scope” without submitting full Change in Scope (CIS) requests.

On June 10, 2014, issued the second PAL, entitled “PAL #2014-07: Scope Alignment Validation in HRSA Electronic Handbooks.” HRSA indicated that it will migrate the data from the current scope forms included in the Electronic Handbook (EHB) into the new forms as of June 27, 2014, after which health centers will have almost a month (between June 30, 2014 – July 23, 2014) to complete the validation process (i.e., make any necessary changes and verify accuracy). Until the SAV process is complete, the current scope forms will remain effective. If a health center does not complete its validation by July 23, 2014, the forms will be updated to reflect the data that was migrated by HRSA (i.e., the data as of June 27) and any changes thereafter will require submission of a formal CIS request(s). As such, it is important that every health center review their new forms after migration and make any necessary changes prior to July 23, 2014 or risk losing this one-time opportunity for easy modification.

In general, each health center is expected to review the data migrated to the new forms, either accept it or make limited changes as necessary to ensure accuracy, and certify that the forms (as updated) are accurate OR identify that additional changes that could not be made during the SAV process are necessary. The types of revisions that can be made during the SAV process are summarized in table 1 on page 3 of the PAL. Of importance, particularly for those centers facing an upcoming Operational Site Visit (OSV), health centers may be able to use the SAV process for some “common clean-up” modifications, including, but not limited to:

  • Breakout of psychiatry from general behavioral health and adding it as a separate Additional/ Specialty Service (rather than submitting a CIS request to “correct” or “fix” Form 5A to reflect current HRSA policy regarding specialty services), provided that psychiatry is currently furnished by the health center and behavioral health is already included in its approved scope of project; and
  • Deletion of “x” under Column III of Required Services or Column III of Additional/Specialty Services for services that are also available directly and/or by contract (Columns I and/or II)
  • Deletion of “x” under Column III of Additional/Specialty Services only for services available solely through referral arrangements.

These last two actions are particularly important for health centers whose forms reflect that they provide certain services through formal referral arrangements (Column III) but that do not have written agreements in place to document the arrangements, consistent with HRSA requirements.

In addition to making changes, health centers also should identify any changes required for accuracy that are not allowed pursuant to the table and/or that cannot be performed under the SAV process. HRSA will follow up with those centers and may require submission of full CIS requests consistent with the current policy.

Health centers should note that the CIS module in the EHB will be suspended during the validation period (i.e., from June 27, 2014 at 5:00 PM eastern to July 24, 2014). Any CIS requests approved by HRSA that are pending health center verification at the time of the shut-down will remain pending until after the SAV process. As such, health centers with approved CIS requests that have not yet been verified should use best efforts to verify implementation prior to that time, or risk waiting another month to do so.

Further, complete submissions submitted prior to 5:00 PM eastern on June 27, 2014 will be reviewed during the suspension. If a CIS request is initiated but not completed prior to that date, HRSA will move it into an inactive status and will require re-submission when the system is back up after completion of the SAV process.

HRSA Issues Program Assistance Letter Revising the Progressive Action Process

On June 11, 2014, HRSA issued Program Assistance Letter (PAL) #2014-08: Health Center Program Requirements Oversight, which updates the current Progressive Action process utilized by HRSA when an instance of a health center grantee’s non-compliance with Program Requirements is identified. The PAL also clarifies the actions HRSA will take when a grantee materially fails to comply with the terms of the Section 330 grant and in particular, the actions it will take when the grantee exhausts the Progressive Action process. The PAL supersedes PAL #2010-01, the current Progressive Action policy.

The general framework for the Progressive Action process remains the same – an instance of non-compliance will result in a grant condition detailing the area of non-compliance and the action that must be taken by the grantee to correct. Thereafter, the grantee will have ninety (90) days to provide documentation of compliance or present an action plan to come into compliance; if the action plan is accepted, an additional 120 days will be afforded for implementation. If the proof of compliance or the plan is not accepted, or if the grantee fails to respond or to implement an accepted plan, the grantee will be afforded sixty (60) days to respond (Phase Two), followed by a “last chance” thirty (30) days (Phase Three).

Conditions in Phase Two or Phase Three will be included in a grantee’s “Health Center Profile” on the BPHC website. Further, grantees that have failed to meet conditions by the end of Phase Three will have materially failed to comply with the terms and conditions of their grant award, resulting in the issuance of a new service area competition to re-compete the grant. Grantees in that position may also face shortened project periods and the withdrawal of support through the cancellation of all or part of the grant award before the current project period expires.

Although conditions typically arise through the Operational Site Visit (OSV) review, HRSA also reserves the right to review compliance through various other means, including, but not limited to, on-site reviews in addition to the OSV and paper reviews. If those assessments determine that the grantee has not complied with the conditions from previous awards or that a condition was lifted based on false information, a special award condition may be imposed. Grantees with special award conditions will be afforded a one-time only opportunity to respond within sixty (60) days to avoid penalties for material failure.

In reiterating and clarifying the existing Progressive Action process, the PAL emphasizes the importance of complying with grant conditions in a timely manner. Given the extent of consequences for failure to do so, including the enforcement actions described above as well as placement of a “high risk” designation and awarding of one-year project periods (which in turn may impact the ability of a grantee to compete for additional funds), it is vitally important that each grantee review the process described in this PAL and use best efforts to comply, as applicable.

Upcoming 340B Events

We have two exciting 340b Drug Discount Program learning opportunities that we wanted to share with you.  As you know, the 340b Drug Discount Program is a very important program for community health centers and it is important for health centers to stay up to date on the latest policies and requirements to participate in the program.   Check out the opportunities below.




340B Coalition Summer Conference in DC – Register now!

2014 is shaping up to be a groundbreaking year for the 340B program. 340B’s rapidly evolving nature makes it important for all stakeholders to stay on top of program changes. Whether you work for a health care provider, contract pharmacy, pharmaceutical manufacturer, 340B-oriented business, or government agency, there is no better way to stay informed and have a voice in shaping the program’s future than to attend the 340B Coalition Summer Conference in Washington DC July 14-16, 2014.  Register today.



340B University Held Prior to NACHC CHI

Take advantage of this opportunity to learn about the 340B drug program from Apexus, the 340B Prime Vendor, at 340B University. The session takes place on Saturday, August 23, at the Manchester Grand Hyatt, prior to the NACHC Community Health Institute in San Diego. Whether you’re just implementing a 340B program, or are a seasoned veteran,  340B University provides actionable information to support entity implementation and compliance. The expert faculty includes health center pharmacists sharing best practices and compliance tools. This 340B University is for FQHCs and state Primary Care Associations (PCAs), and will focus on health center 340B issues. There will also be a specific educational break-out session for attendees from the C-Suite. Continuing pharmacy education credits will be offered to pharmacists and pharmacy technicians.  Register today.