Oral arguments set for Texas Obamacare lawsuit Presented by

With help from Dan Diamond, Victoria Colliver, Brianna Ehley and Rachel Roubein

MARK YOUR CALENDARS: ORAL ARGUMENTS IN OBAMACARE CASE SET FOR SEPT. 10 — The sides in a Texas lawsuit seeking to strike down Obamacare as unconstitutional will air out their arguments early next month. The case was filed in February by 20 Republican attorneys general. They're seeking a preliminary injunction halting enforcement of the federal health care law.

The Trump administration has partly sided with the plaintiffs in seeking to strike down the Affordable Care Act's insurance protections, including the prohibition on denying coverage to individuals with pre-existing medical conditions. But practically the entire health care industry — hospital, doctors, insurers, patient advocacy groups — have filed briefs opposing the lawsuit.

The litigation is certain to factor in the mid-term elections. Democrats have already pilloried Republicans for trying to eliminate one of the most popular provisions of Obamacare. Polling shows widespread support for pre-existing condition protections across party lines.

LAWSUIT SEEKS TO HALT ARKANSAS MEDICAID WORK REQUIREMENTS — Advocacy groups filed a lawsuit Tuesday to block Arkansas from imposing work requirements on Medicaid enrollees, weeks before the state was expected to begin eliminating coverage for thousands of low-income adults who don't meet the new standards, reports Dan Goldberg. The lawsuit — filed in federal court in Washington, D.C., on behalf of three residents — alleges the Trump administration abused its authority by allowing Arkansas to condition Medicaid enrollment on employment.

The lawsuit comes two months after a federal judge blocked similar work rules in Kentucky, and signals ongoing legal challenges for the Trump administration's conservative overhaul of the Medicaid program. The judge in the Kentucky case found the Trump administration failed to consider how many people would lose coverage as a result of the work requirement; the Arkansas lawsuit makes a similar argument.

The Arkansas rules took effect in June and are the only work requirements actively enforced in the country. Similar requirements have also been approved in New Hampshire and Indiana, while seven other states are awaiting federal permission, including Arizona, North Carolina and Wisconsin. Despite the legal headaches, HHS remains fully committed to requiring some Medicaid beneficiaries to work.

“Medicaid should be not just a government insurance card, but a pathway out of poverty, to fuller purpose and better health,” HHS Secretary Alex Azar said in a speech last month at the Heritage Foundation.

More on the Arkansas lawsuit from Dan G. here.

URBAN: 55,000 COULD LOSE COVERAGE UNDER KENTUCKY WORK RULES -- Roughly one third of working Kentucky Medicaid beneficiaries who won’t qualify for an exemption from new work requirements – about 55,000 individuals – would be at risk of losing their coverage if the rules ultimately take effect, according to a new analysis by researchers at the Urban Institute. That’s because they likely don’t currently meet the threshold of spending at least 80 hours per month working, or engaging in other qualifying activities.

In addition, part-time workers are unlikely to be able to transition to coverage through their jobs, since only 13 percent of part-time employees in Kentucky are eligible to enroll in coverage. And even for those who do have access to employer plans, premiums are likely to be too expensive. That means they’ll either have to find a way to consistently increase their workload or go without coverage.

STAR TRIBUNE TO MAYO CLINIC: 'DO BETTER' ON COMMUNITY CARE — Minnesota’s largest newspaper warned the acclaimed health system and its next CEO to remember its responsibilities to rural communities across the Midwest.

“A nonprofit health system like Mayo, especially one with deep financial resources, must broaden its vision to include the well-being of the communities it serves,” the Star Tribune editorial reads. The clinic earned more than $700 million in net income last year on about $12 billion in revenue, but has pulled services from small cities and towns, saying that it can’t afford the current model of rural health care.

Incoming CEO Gianrico Farrugia “would do well to add ‘Community Care’ to his already-daunting agenda and make clear to his talented staff that Mayo must do better,” the editorial adds. Read the editorial. POLITICO in December 2017 examined the consequences of Mayo Clinic’s decision to pull services from rural communities.

... Meanwhile, Rep. Tim Walz — who's criticized Mayo Clinic's retreat from rural communities — won Minnesota's Democratic nomination for governor last night.

Welcome to Wednesday PULSE, where your scab correspondent just finished reading Black Edge, Sheelah Kolhatkar’s gripping 2017 account of investigations into rampant insider trading at hedge funds, including the sordid tale of how a doomed clinical trial for an Alzheimer’s drug led to one firm booking hundreds of millions in profits. Tips to: [email protected] or @pauldemko

A message from PhRMA: Today, there are several promising vaccine candidates in stage three clinical trials. These trials have tens of thousands of participants, from every walk of life. From development to robust clinical trials, and throughout manufacturing, these vaccine candidates follow the same rigorous process of other vaccines that have saved millions of lives. More.

ACOS CAN NOW SEE THEIR 2017 RESULTS -- On Tuesday, CMS gave accountable care organizations their performance results from last year, though the information is under an embargo, according to a CMS email obtained by POLITICO‘s Rachel Roubein. CMS confirmed that ACOs in the Medicare Shared Savings Program and the Next Generation ACO Model received their financial and quality results. An agency spokesperson noted that CMS always shares the preliminary performance results with ACOs on an embargoed basis. This lets them review the data and contact CMS if there are any issues.

The agency anticipates releasing the final results in the fall. Last year, CMS released the data in October, but with less fanfare than the Obama administration.

ACO results will be closely watched this year. Last week, CMS unveiled a proposed rule to reboot the MSSP so that doctors and hospitals would take on financial risk quicker. The administration argues it’s a necessary change to incentivize ACOs to save more and boost their quality outcomes over time. But the National Association of ACOs is warning the proposal could cause many ACOs to bolt the program.

SUICIDE PREVENTION HOTLINE LEGISLATION BECOMES LAW -- President Trump has signed legislation that will create a three-digit national suicide prevention hotline similar to the 911 emergency response system. The proposal was championed by Sen. Orrin Hatch (R-Utah).

Nevada: Exchange vendor chosen. Nevada’s Silver State Health Insurance Exchange on Tuesday awarded a contract to take back control of its technology platform to GetInsured, a Mountain View, Calif., company that transitioned Idaho off the HealthCare.gov platform and provides e-commerce technology to six other state exchanges. Nevada plans to take full control of its marketplace in 2020.

The state, which tried but failed to manage its technology when the exchange debuted in 2014, wants to run its own platform due to the rising costs of relying on the federal website. Nevada estimates savings of as much as $6 million per year. More for Pros on that experience and why Nevada decided to make the shift here.

Washington: Lawsuit seeks to block initiative requiring hotels to provide coverage. The ERISA Industry Committee has filed a lawsuit against the City of Seattle seeking to block implementation of an initiative that requires hotels with 100 or more rooms to provide health insurance to employees who work at least 80 hours per month. Under the initiative, which was passed by voters in 2016, hotels have to offer at least the equivalent of a gold level plan on the state’s Obamacare market to qualifying workers. If employers don’t, they instead have to increase the salaries of their workers, initially by $275 per month. But the ERISA Industry Committee argues that the requirement violates federal laws regulating employee benefit plans.

“Large hotel employers in the City, like all private employers in Seattle and everywhere else in the Nation, are subject to exclusively federal rules in the provision of health benefits for their employees,” the complaint reads.

District of Columbia: Mental health, disability groups file class-action lawsuit. A class action lawsuit was filed this week against the District of Columbia for allegedly violating the Americans with Disabilities Act and failing to provide children essential services, raising the likelihood that they will be institutionalized. Mental health and disability advocacy groups filed the complaint on behalf of children who have been “needlessly institutionalized” or are at risk of institutionalization due to a lack of adequate community based care for children provided by the DC’s mental health system. As a result, they claim, “the District’s children suffer drastically curtailed life opportunities, cycling in and out of psychiatric hospitals, psychiatric residential treatment facilities that are often hundreds or thousands of miles away from their families, other residential treatment centers, juvenile detention facilities, and group homes.” Read the complaint here.

HRSA to award $100 million-plus to grantees. The Health Resources and Services Administration will be announcing awards to more than 1,300 health center grantees, part of National Health Center Week. HHS Deputy Secretary Eric Hargan and HRSA administrator George Sigounas will make the announcement at 11 a.m. at Mary’s Center in Washington, D.C. The detailed breakdown of awardees and amounts will simultaneously be posted live on HHS.gov and HRSA.gov.

The real scandal raised by last week’s indictment of Rep. Chris Collins is that there are no rules preventing lawmakers from owning stock or serving on the boards of companies affected by their legislative work, argue ethics experts Matthew McCoy and Genevieve Kanter in STAT. More.

The months after giving birth are often the most treacherous for women recovering from addiction, explains Stateline’s Christine Vestal. More.

Emergency room visits have continued to spike in California since the implementation of Obamacare, undermining arguments that the state is the prototypical success story, argues Chris Jacobs in The Federalist. More.

Trump’s cumulative efforts to dismantle Obamacare amount to an illegal dereliction of his constitutional duties, argue Nicholas Bagley and Abbe Gluck in The New York Times. More.

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