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New York Health Law

False Claims Act Complaint Dismissed Where Defendant Followed State Regulations

Posted in Audit and Compliance, Fraud and Abuse and Stark, Litigation, Medicaid and Medicare, OMIG and OIG

DOE-logoA recent SDNY False Claims Act decision provides strong support for the argument that a false claim may not be based on conduct that follows federal or state rules and guidelines. 

In United States ex rel. Doe v. Taconic Hills Central School District, relators alleged that the New York City Department of Education (“DOE”) and several school districts submitted fraudulent claims to Medicaid for case management services provided to disabled children when defendants had already received funding under the Individuals with Disabilities Education Act (“IDEA”). 

New York State agencies receive federal grants under the IDEA, and distribute the funds to public school districts for the development of special education services.  In addition, Medicaid provides federal funds to states for Targeted Case Management (“TCM”) services furnished to school children.  The New York State Education Department issues a handbook that describes the type and scope of TCM services covered by Medicaid. 

Relators alleged that defendants billed Medicaid for TCM services that had already been funded by IDEA grants.  Relators argued that the school districts did not provide services beyond development and implementation of an Individualized Educational Program (“IEP”), which had been funded under the IDEA, and that billing Medicaid for those services was the  presentation of a false claim. 

Judge Crotty stated that the federal government approved New York’s Medicaid program, and it was then up to New York State to determine the standards and procedures for claims submission.  The state provisions authorized schools to bill Medicaid for IEP reviews, regardless of whether they had received any IDEA funding.  If there was a conflict between federal and state Medicaid regulations, the Court said, that was the fault of New York State.  “[I]t is not appropriate to hold DOE liable for submitting a ‘false claim’ when it complied with all applicable regulations and therefore did absolutely nothing wrong.”

The Court questioned whether federal law is violated when a school bills Medicaid for services that also received IDEA funding.  Even if it were a violation, however, the Court held that relators failed to sufficiently allege that defendants acted knowingly.  The DOE billed Medicaid “under the exact procedures set up by the State. . . .  As a result, it would have been impossible for the DOE to know that billing Medicaid – using rate codes provided by the State and approved by the Federal government – violated federal law.” 

The Taconic Hills decision provides defendants with a strong argument that reliance on federal or state guidance can defeat a False Claims Act case by undermining the requirement that a false claim be presented with knowledge of its falsity.

Private Right of Action Recognized Under New York’s Prompt Pay Law

Posted in Corporate and Business, Hospitals and Health Care Facilities, Insurance and Managed Care, Litigation
Hands holding U.S. currencyClaimants have a private right of action against insurers under New York’s Prompt Pay Law, N.Y. Ins. Law 3224-a, according to the Appellate Division in Maimonides Med. Ctr. v. First United Am. Life Ins. Co., decided earlier this month.   
 
Under the Prompt Pay Law, an insurer must pay undisputed claims within 45 days, and within 30 if electronic submission is received.  The insurer must pay any undisputed portion of a disputed claim within 30 days and notify the policyholder, covered person, or healthcare provider of the reason the insurer is not liable.  The insurer may also request additional information to determine its potential liability.  A violation of the Prompt Pay Law obligates the insurer to pay the full amount of the claim plus 12% interest. 
 
Maimonides Medical Center billed First United American Life Insurance Co. over $19 million for medical services, but First United paid only slightly more that $4 million.  Maimonides sued under the Prompt Pay Law, and First United argued that the statute did not provide a private right of action, but could only be enforce by the Superintendent of Insurance. 
 
The Appellate Division, Second Department held that the claimants including health care providers have a private right of action to sue under the Prompt Pay Law.  The parties did not dispute the first two requirements for finding a private right of action, that plaintiff is one of the class for whose particular benefit the statute was enacted, and that recognition of a private right of action would promote the legislative purpose.  As to the third, the Appellate Division held that a private right of action would be fully consistent with the legislative scheme.  The Court found that the Prompt Pay Law “does impose specific duties upon insurers and creates rights in patients and health care providers, and thus militates in favor of the recognition of an implied private right of action to enforce such rights.”  The Court noted that the legislative history of the statute reflected its purpose in protecting health care providers and patients from late payment, and not as a mechanism for preventing harm to the public in general.  
 
This decision gives health care providers and patients a powerful tool against recalcitrant insurers.  First United will likely seek to bring this issue before the Court of Appeals, and we may see a definitive ruling from New York’s highest court on this important issue. 

United States Provides Supreme Court With Its View of False Claims Act Pleading Standard

Posted in Fraud and Abuse and Stark, Litigation, OMIG and OIG

On Tuesday, the United States filed an Amicus Curiae Brief on a closely watched petition for certiorari.  The Department of Justice articulated the government’s view of the proper standard for pleading fraud in a False Claims Act case.  The petition in United States ex rel. Nathan v. Takeda Pharms. N. Am. asked the Court to resolve the Circuit conflict on whether an FCA relator must identify specific false claims with particularity to satisfy the pleading requirement of Fed. R. Civ. P. 9(b).  The government’s brief ultimately argued that the Supreme Court should deny certiorari and let the lower courts continue to hash this issue out. 

In Nathan, the relator alleged the defendant company promoted one of its drugs for off-label uses, and argued that allegations of a fraudulent scheme supporting the inference that false claims were presented to the government is sufficient.  The Fourth Circuit affirmed the dismissal of the complaint, holding that when a defendant’s actions “could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims were presented to the government for payment.”  Nathan, 707 F.3d 451 (4th Cir. 2013). 

Relator filed a petition for certiorari, arguing that the Supreme Court should resolve a split among the Circuits.  The FCA requires a false claim for payment to the government; it is not enough to simply allege a fraudulent scheme.  Some courts have therefore held that particular allegations of the false claims presented to the government are necessary, something often not within relator’s knowledge.  Other courts have found details of a fraudulent scheme and reliable indicia leading to an inference that claims were submitted to be sufficient. 

The Supreme Court raised speculation that it would take this case in October 2013, when it asked the United States to file a brief stating the government position.  The United States had previously declined to intervene.  

The government’s brief recognized that there is a split in the Circuits, with some courts having a per se rule requiring specific allegations of particular false claims.  The government argued that this approach is wrong, and that the correct rule is that “a qui tam complaint satisfies Rule 9(b) if it contains detailed allegations supporting a plausible inference that false claims were submitted to the government, even if the complaint does not identify specific requests for payment.” 

The government concluded, however, that the Court should deny the petition, for a few reasons.  First, it argued that the complaint was dismissed below not just for lack of specificity, but also for lack of plausibility, so the case should not go forward under any 9(b) standard.  Also, even in Circuits holding to the per se view, the government found cases taking a more relaxed view, so it argued that the disagreement among the lower courts is uncertain and needs further development. 

On why the per se rule is wrong, the government referenced the role Congress intended relators to play in the detection and remediation of fraud against the United States, and argued that a rigid rule hinders that role.  The government also noted that it has any needed claim information, so a per se rule improperly attaches dispositive significance to the relator’s awareness of details that are already known to the government.  This highlights the fact that a per se rule requiring particularity of claim information is typically not a problem for the government when it intervenes, since it has the claim information.  It is more a problem for the relator in a declined case.  This could be one reason that the government does not see a strong need for the Supreme Court to decide this issue, in addition to possible concerns that a ruling could sweep broadly to other FCA issues.   

The Supreme Court now has the government’s position on the proper pleading standard.  The United States does not want the Supreme Court to grant certiorari, but False Claims Act practitioners will be watching closely to see if the Justices decide that they do want to take the case and decide the Circuit split.

HHS-OIG 2014 Work Plan Focuses On Health Insurance Transitions

Posted in Audit and Compliance, Fraud and Abuse and Stark, Medicaid and Medicare, OMIG and OIG, Regulatory Issues
At the end of January, the Office of Inspector General for the Department of Health and Human Services (“HHS-OIG”) released its 2014 Work Plan.  The Work Plan summarizes new and ongoing reviews and activities that HHS-OIG plans to pursue with respect to HHS programs and operations in the coming year. 
 

Senior HHS-OIG officials outlined agency goals in a video presentation entitled “OIG Outlook 2014.”  In OIG Outlook 2014, HHS-OIG Inspector General Daniel Levinson described “a period of great transition in health care, as insurance marketplace models are introduced, and as payment models transition from volume to value-based.  These transitions intend to produce higher quality of care at lower costs.”  The Inspector General said that agency oversight of new health insurance marketplaces would focus on four primary areas of risk: payment accuracy, eligibility controls, contracting oversight, and privacy and security issues.  He also said the agency would continue to focus on the use of health information technology, including the use of electronic health records. 

Gary Cantrell, Deputy IG for Investigations, outlined the issues facing his investigators for 2014.  Chief areas of concern are prescription drugs and home based services.   With prescription drugs, Cantrell said that in addition to pain medication abuse, which the agency has been combatting over the past few years, investigators have been finding cases of “pure financial greed” involving drugs that are not necessary or sometimes not even dispensed.  In home health and personal care, services are often not being provided, or services are delivered but are not necessary.  The patient harm that often accompanies financial fraud remains a strong focus of administrative efforts.  Cantrell said that investigators would also be monitoring the transitions in health insurance, with an emphasis on identity theft and educating consumers so they are not victims of fraud schemes. 
 
An appendix to the Work Plan identifies work-in-progress and planned reviews for 2014 related to the Affordable Care Act.  For 2014, ACA oversight focuses on operation of the new health insurance marketplaces and the expanding Medicaid program.  Increasingly, HHS-OIG resources are likely to be spent over this year and the coming years on oversight and investigation of the healthcare and insurance industry response to ACA.      
 

The New York Nonprofit Revitalization Act of 2013 – What NFPs Need to Know

Posted in Audit and Compliance, Corporate and Business, Regulatory Issues

Farrell Fritz partner Lou Vlahos recently issued an important advisory report addressing the New York Nonprofit Revitalization Act of 2013 (the “Act”). Nonprofit corporations in New York will need to comply with many of the Act’s provisions by July 1, 2014.

Major new requirements include:

-the adoption of conflict of interest and whistleblower policies;

-creation of an audit committee composed of independent directors; and 

-adherence to guidelines regarding related party transactions.  

Many of these provisions turn best governance practices into statutory mandates.

Nonprofits are advised to consult with legal counsel familiar with the Act’s requirements.  New policies may need to be developed, and corporate bylaws may need to be amended, in order to comply with the new law.

Forfeiture and Restitution Intersect in Health Care Fraud Plea

Posted in Fraud and Abuse and Stark, Litigation

Federal criminal defense practitioners will be interested in United States v. Barry Cohan, an EDNY decision addressing the priority of overlapping forfeiture and restitution remedies in a health care plea agreement.

In Cohan, the defendant pled guilty to health care fraud and identity theft, and was subject to a $600,000 forfeiture and $607,186 in restitution.  While forfeiture and restitution may be imposed concurrently, EDNY Judge Frederic Block recognized that the two remedies are often competing for the same assets of the defendant.  The Court’s decision was driven by its “view that satisfaction of the restitution judgment should take priority over satisfaction of the forfeiture judgment.”

The Cohan defendant first argued that the government had promised to apply forfeited funds to restitution and should be estopped from recovering both amounts.  His plea agreement, however, included a standard merger clause stating that there were no oral agreements or promises.  EDNY Judge Frederic Block rejected defendant’s argument after a hearing.  In particular, the Court found that to the extent there were any discussions of forfeited funds being used for restitution among the parties and with the Court, they were premised on an erroneous assumption that defendant did not have sufficient assets to satisfy both the forfeiture and restitution judgments.

The Court noted that forfeiture and restitution overlap where the disgorgement represented by forfeiture corresponds to the victim’s loss.  In United States v. Kalish, 626 F.3d 165 (2d Cir. 2010), the Second Circuit observed without deciding that a defendant could argue that when forfeiture represents ill-gotten gains, money returned to a victim should be a credit against restitution.  The Seventh Circuit rejected this argument in United States v. Emerson, 128 F.3d 557 (7th Cir. 1997).  In Cohan, Judge Block found this argument unavailable because defendant had agreed to a $600,000 forfeiture and the plea agreement did not contemplate a set-off for restitution.  The Court concluded that defendant was required to pay both the forfeiture and restitution judgments, and then addressed the priority between forfeiture and restitution.

The Court noted that given the known available assets, there would be a shortfall of more than $350,000, and there is no statutory priority between forfeiture and restitution.  The Court found, however, some statutory “hints” in 18 U.S.C. 3664(i) and 18 U.S.C. 3612(c), which provide that restitution to victims has priority over restitution to the United States and fines, penalties and costs imposed under the sentence.  Judge Block also found support in United States v. Steel, in which EDNY Judge Garaufis stated “it is not apparent why victims of criminal activity should not be compensated for their proven losses before the Government received a defendant’s ill-gotten gains.”  The Court held for those reasons that it had the authority to prioritize restitution over forfeiture.

As to property that had already been forfeited, the Court held that ownership had transferred to the government.  In United States v. Pescatore, 637 F.3d 128 (2d Cir. 2011), the Second Circuit held that the government’s authority to restore forfeited property to victims is discretionary, and DOJ will generally not exercise such discretion if a defendant can pay both restitution and forfeiture.  Thus, the Court did not have authority to order previously forfeited assets to be used for restitution.

With respect to property that had not already been forfeited, however, the Court held it would give priority to restitution, and provided that the forfeiture order could not be executed until the restitution obligation was satisfied in full.  Significantly, Judge Block stated that he would not sign any future forfeiture order without first assessing the possible impact on restitution.

United States v. Cohan highlights the critical importance of clarity in criminal plea agreements, particularly concerning the monetary parts of the plea, and whether forfeited funds will be used to compensate victims entitled to restitution.  Post-plea assertions of an oral agreement or understanding with the government are unlikely to be accepted in the face of the standard plea agreement language and allocution.  In both Steel and Cohan, the Courts refused any set-off between forfeiture and restitution because the plea agreement provided both for a forfeiture money judgment and restitution to be set at sentencing.  Criminal defense practitioners will want plea agreements to specify the relationship and priority between restitution and forfeiture, including whether the prosecutor will recommend to DOJ that forfeited funds be restored to victims.  In addition, Courts may be increasingly reluctant to approve forfeiture orders unless the impact on restitution has not been considered and determined.

OMIG May Exclude Physician from Medicaid Even When BPMC Allows Continued Practice

Posted in Hospitals and Health Care Facilities, Litigation, Medicaid and Medicare, OMIG and OIG, Physicians and Other Licensed Professionals, Regulatory Issues

In Matter of Koch v. Sheehan, the New York Court of Appeals held that the Office of Medicaid Inspector General (“OMIG”) may remove a physician from the Medicaid program based solely on a consent order between the physician and the Bureau of Professional Medical Conduct (“BPMC”), even if BPMC does not suspend the physician’s license and OMIG does not conduct its own investigation.

The BPMC is the adjudicatory arm of the Office of Professional Medical Conduct (“OPMC”), the authority within the New York State Department of Health (“DOH”) charged with investigating complaints of physician misconduct.  OPMC sends the results of its investigations to OMIG, the DOH agency responsible for policing the Medicaid program.

In Koch, the petitioner-physician entered into a consent order with BPMC pleading “no contest” to charges that his care and treatment of two elderly patients failed to meet accepted standards of care.  He agreed to a 36-month probation, but BPMC allowed him to continue practicing medicine.  OMIG, however, removed him from the Medicaid program, without any further investigation and even though BPMC did not impose a suspension of his license.  The Appellate Division annulled the OMIG determination on the grounds that it was arbitrary and capricious for OMIG to bar petitioner-physician from Medicaid when BPMC allowed him to continue his practice, and that OMIG had to conduct an independent investigation before taking such action.

The Court of Appeals held, however, that OMIG is authorized to exclude a physician from the Medicaid program regardless of the sanctions imposed by BPMC, and OMIG is not required to conduct an independent investigation or develop additional evidence before making its decision.  Nevertheless, the Court held that the OMIG decision was arbitrary and capricious, but for a different reason than the Appellate Division.  The Court held that OMIG’s basis for finding the BPMC consent order sufficient to terminate Medicaid participation was not in the administrative record.  Thus, while OMIG has the power to exclude a doctor from Medicaid based solely on a BPMC consent order, and does not have to defer to the BPMC’s decision to allow a doctor to continue practicing, in this instance the administrative record did not have sufficient reasoning to support OMIG’s decision.

The takeaway from this case is supplied by the Court of Appeals itself:  “When resolving charges of professional misconduct with BPMC, physicians and their attorneys should be mindful that a settlement with BPMC does not bind OMIG.”

NYS DOH Recommends Regulations for Retail and Urgent Care Clinics

Posted in Audit and Compliance, Corporate and Business, Hospitals and Health Care Facilities, Information Technology and EMR, Physicians and Other Licensed Professionals, Regulatory Issues

Alternatives to the hospital emergency room and primary care doctor’s office are opening in strip malls and other retail locations throughout the country. New York State is no exception. In an effort to provide oversight for these walk-in clinics, New York’s Public Health and Health Planning Council (PHHPC) has recommended regulations for these facilities.

The recommendations would place walk-in clinics into one of four categories:
1. Limited Services Clinics (Retail Clinics);
2. Urgent Care;
3. Hospital-Sponsored Freestanding Emergency Departments; and
4. Non-Hospital Surgery- Ambulatory Surgery Centers and Office-Based Surgery.

The recommendations for each category of walk-in clinic are summarized below:

Limited Services Clinics (Retail Clinics)

• The name, marketing materials and all signage would be required to include the term “Limited Services Clinic.”
• Services would be limited to episodic care related to minor ailments and immunizations.
• Surgical, dental, physical rehabilitation, mental health, substance abuse and birth center services would not be permitted.
• No dispensing of controlled substances would be permitted.
• No services could be administered to children 24 months of age or younger.
• No childhood immunizations to patients under 18 years of age (except influenza) would be permitted.
• Accreditation by a national organization approved by the NYS Department of Health (DOH) would be required.
• The clinic would be required to have a Medical Director at the corporate level who is licensed to practice medicine in New York.

Urgent Care Providers

• Urgent Care would be limited to treatment of acute episodic illness or minor traumas.
• Services required would include:

  • unscheduled, walk-in visits typically with extended hours on weekends and weekdays;
  • Ex-ray and EKG;
  • Laceration repair; and
  • Crash cart supplies and medications

• The term “Urgent Care” would be required in the name and in all signage at the provider site and in all marketing materials. Other commercial terms could still be used in the provider’s name, but would need to include “Urgent Care” (e.g. “FastMed Urgent Care”).
• The word “Emergency” or its variations would not be permitted for urgent care providers unless licensed by New York State as an emergency department.
• Non-article 28 Urgent Care would require accreditation. No CON review required.
• Article 28 Urgent Care not otherwise accredited would be surveyed by DOH.
• Existing Article 28 Hospital or D&TC providers wanting to provide Urgent Care would require a limited review of their operating certificate.
• Private physician practices affiliated with an Article 28 may provide urgent care if they are accredited or become an Article 28 through CON review.
• Establishment of a new Article 28 Hospital or D&TC to provide urgent care services would require CON review.

Freestanding Emergency Departments

• Hospital-sponsored off-campus “emergency department” would be defined as an emergency department that is hospital-owned and geographically removed from the hospital campus.
• PHHPC recommends that the sponsored off-campus emergency department use the name of the Hospital that owns the facility followed by “Satellite Emergency Department”.
• The facility would be subject to the same standards as a hospital-based emergency department regarding training of providers, staffing, and the array of services provided at the facility.
• Establishment of an off-campus emergency department would require full CON review.
• Accreditation would be required.

Non-Hospital Surgery

• No changes are recommended regarding ambulatory surgery.
• New and existing office-based surgery practices would require registration with DOH.
• All physician practices performing procedures utilizing more than minimal sedation would require accreditation and the provision of adverse event reports.

Limited Services Clinics, Urgent Care providers and Hospital-Sponsored Freestanding Emergency Departments would be required to utilize electronic medical records.  Further, these facilities would be required to provide a list of primary care providers to any patient indicating that they do not have a primary care provider. These clinics would also be required to recommend that the patient schedule an initial or annual appointment with a primary care provider and develop policies and procedures to identify and limit repeat encounters with patients.

Medical Corporation Not Liable For Employee’s Disclosure Of Confidential Medical Information

Posted in Audit and Compliance, Compensation and Employment, Corporate and Business, HIPAA and Privacy, Litigation, Physicians and Other Licensed Professionals

          In March 2013, the Second Circuit certified to the New York Court of Appeals the issue of whether a medical corporation may be liable for the unauthorized disclosure of medical information, when the employee responsible for the breach was not a physician and was acting outside the scope of her employment (see post).  In Doe v. Guthrie, decided last week, the New York Court of Appeals answered that question in the negative.

The plaintiff in Doe v. Guthrie went to a healthcare clinic to be treated for a sexually transmitted disease.  A nurse at the clinic was the sister-in-law of the plaintiff’s girlfriend, and sent six text messages to her about plaintiff’s medical condition.  The plaintiff learned of the messages and complained to the clinic, which fired the nurse.  The clinic advised plaintiff that his confidential information had been improperly disclosed, and that disciplinary action had been taken.

Plaintiff sued, alleging among other claims the common law breach of fiduciary duty to maintain the confidentiality of personal health information.  The Second Circuit, which determined that the nurse’s actions were neither foreseeable to defendants not within the scope of her employment, certified the question whether there was a cause of action for breach of fiduciary duty of confidentiality without respondeat superior liability.

The New York Court of Appeals stated that a medical corporation is generally not liable for an employee’s tort outside the scope of employment, and refused to impose absolute liability on a medical corporation for an employee’s dissemination of a patient’s confidential medical information.  “A medical corporation’s duty of safekeeping a patient’s confidential medical information is limited to those risks that are reasonably foreseeable and to actions within the scope of employment.”

The Court counseled, however, that a medical corporation can still be liable for its own conduct, including negligent hiring or supervision, failing to establish adequate policies and procedures, and failing to properly train employees in safeguarding confidential information.  This potential liability incentivizes medical corporations to properly safeguard medical information.

The dissent would have recognized a claim against a medical corporation for acts of employees outside the scope of employment.  This view would have unfairly expanded the liability of medical providers, imposing absolute liability for any release of medical information.  The Court’s holding recognizes an appropriate balance, declining to find liability against a provider for employee acts outside the scope of employment, while at the same time recognizing that a provider can be liable for acts within the scope of employment as well as for the provider’s own negligence in maintaining confidential information.

While the medical provider in Doe v. Guthrie was not liable, the decision highlights the need for medical providers to have stringent standards governing the confidentiality of medical information, and to ensure that these standards are clearly communicated to all employees.

EDNY Judge Enjoins Enforcement of HHS Mandate

Posted in Insurance and Managed Care, Litigation, Regulatory Issues

Earlier this week, in Roman Catholic Archdiocese of New York v. Sebelius, U.S. District Judge Brian Cogan in the Eastern District of New York permanently enjoined the government from enforcing regulations mandating coverage for contraceptive and sterilization services by religious organization health plans.

The Patient Protection and Affordable Care Act requires health insurance plans to provide preventative medical services.  HHS regulations require these preventative services to include services such as contraception, sterilization and related counseling (the “HHS Mandate”).  In response to objections by religious organizations, the government promulgated a regulation it presented as an accommodation, which required those organizations to self-certify their religious objection, after which a third party administrator would have to provide the coverage at no cost to the organization or the individual. 

Several non-profit religious organizations, including Catholic Health Services of Long Island, sued under the Religious Freedom Restoration Act (“RFRA”), arguing that the HHS Mandate forced them to choose between violating their religious beliefs and paying substantial penalties.  They asserted that the HHS Mandate required them to affirmatively act and rendered them complicit by endorsing or facilitating coverage for services to which they have religious objections. 

Under RFRA, the government may only substantially burden a person’s exercise of religion if it demonstrates that the burden: (1) is in furtherance of a compelling governmental interest, and (2) is the least restrictive means of furthering that compelling governmental interest. 

The Court first addressed whether plaintiffs had demonstrated a substantial burden on their exercise of religion.  The Court found it “indisputable” that the substantial burden inquiry does not permit a court to determine the centrality of a particular religious practice to an adherent’s faith.  The Court found it “difficult to comprehend any situation where a court could rule that a plaintiff facing government compulsion to engage in affirmative acts forbidden by his religion has not suffered a substantial burden, without implicitly ruling that the belief he has been forced to violate is just not that important.” 

The religious organizations argued that submitting a self-certification stating their religious objection would make them complicit in a scheme violating their religious beliefs, because it would result in the provision of coverage.  The government did not contest the fact that completing the self-certification violated plaintiffs’ religious beliefs, but argued that the certification was de minimus.  The Court rejected this argument, holding that the religious organizations believed that the self-certification compelled the affirmation of a repugnant belief, and “[i]t is not for this Court to say otherwise.”  The Court concluded that the HHS Mandate compelled plaintiffs to perform acts contrary to their religion, and that the coercive pressure was a substantial burden.

The Court next addressed whether the HHS Mandate is narrowly tailored to serve a compelling governmental interest.  The Court rejected the government’s argument that an exemption for plaintiffs would undermine its ability to enforce the regulations in a rational manner, noting that the Supreme Court has held that a general interest in uniformity is not enough to show a compelling interest, and that tens of millions of people are already exempt from the Mandate.  “Having granted so many exemptions already, the Government cannot show a compelling interest in denying one to these plaintiffs.” 

The Court found that “the Mandate burdens plaintiffs’ religion by coercing them into authorizing third parties to provide this coverage through the self-certification requirement, an act forbidden by plaintiffs’ religion.”  The Court noted that numerous less restrictive alternatives were available, such as the government providing the contraceptive coverage directly to individuals or through tax incentives. 

The Court permanently enjoined the government from enforcing the HHS Mandate against the religious organizations.  Only one other Court, the Western District of Pennsylvania, has addressed whether the HHS Mandate violates RFRA as applied to religious non-profits, and that Court issued a preliminary injunction.  Judge Cogan’s decision is certain to be appealed to the Second Circuit, and thereafter this case or a similar one will be before the Supreme Court.  Next year, in a closely watched case, the Supreme Court will be addressing RFRA challenges to the Mandate brought by several for-profit corporations, and that decision may have a significant impact on the ruling for religious non-profits.