Severability and Providers

What does the question of “severability” mean for providers of health care (hospitals, health systems, physicians, nurses, and other allied health care professions)?

Today, the first argument before the Supreme Court was the question of what happens if parts of the Affordable Care Act are ruled unconstitutional.  Opponents contend that if the Court determines the individual mandate to be unconstitutional, then the entire law should be struck down.  The federal government contends the individual mandate is constitutional, but that if the Courts determines all other parts of the ACA should be allowed to stand. with the exception of certain insurance market reforms.  In legal terminology, the lawyers and court refer to the question of whether or not parts of the law can stand while others are struck down as “severability” – can parts of the law be severed, or separated, from others.  (For additional background on the issue click here.)

If the Court were to strike down the individual mandate and keep other provisions in place, it could have an adverse impact on many providers.  In general, health care providers accepted the individual mandate requirement, the insurance-market reforms, and Medicare cuts, and other revenue-raising provisions as a package deal.  Eliminating the requirement that all individuals have health insurance coverage (thereby spreading the risk), would essentially mean that some providers would see their reimbursement cut, and would receive a double whammy of getting little relief from the amount of uncompensated care they provide because the promise of more patients having insurance would not come to fruition.

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