As we previously reported, the Centers for Medicare and Medicaid Services’ (CMS) interim final rule (“the Rule”) requiring full COVID-19 vaccination for staff and others at Medicare- and Medicaid-certified providers and suppliers (i.e., the “vaccine mandate”) has been challenged in the U.S. District Courts for the Eastern District of Missouri (“the Missouri Court”) and the Western District of Louisiana, Monroe Division (“the Louisiana Court”).  As of the date of this writing, both Courts have granted preliminary injunctions placing the Rule on hold.

On November 29, 2021, the Missouri Court granted a preliminary injunction of the Rule, which applies to the coalition of ten states [1] that filed the challenge there. The following day, the Louisiana Court entered a similar injunction, which applies to the remaining forty states.

Continue Reading Courts Grant Preliminary Injunctions Placing CMS Interim Final Rule on Hold

As featured in #WorkforceWednesday: The Centers for Medicare & Medicaid Services (CMS) issued an interim final rule outlining vaccine requirements for staff at Medicare- and Medicaid-certified providers and suppliers.

Attorney Frank Morris discusses the next steps for health care providers. In addition, covered employers should continue to monitor the recent litigation filed in the Eastern District of Missouri and the Western District of Louisiana seeking to permanently enjoin the CMS interim final rule.

See below for the video and podcast links. Visit https://www.ebglaw.com/insights/cms-vaccine-rule-for-health-care-workers/

Video: YouTube, Vimeo.

Podcast: Apple Podcasts, Google Podcasts, Overcast, Spotify, Stitcher.

[UPDATE, Nov. 30, 2021: The District Court for the Eastern District of Missouri grants injunction for the ten plaintiff states listed in the First Complaint.]

As we previously reported, effective November 5, 2021, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule (the Rule) requiring full COVID-19 vaccination for staff and others at Medicare- and Medicaid-certified providers and suppliers as a Condition of Participation by January 4, 2022.

On November 10, 2021, a coalition of ten states lodged a complaint in the U.S. District Court for the Eastern District of Missouri (the “First Complaint”), which is subject to appeals in the U.S. Court of Appeals for the Eighth Circuit, seeking to set aside the Rule. On November 17, 2021, the U.S. District Court for the Eastern District of Missouri granted Plaintiff’s Motion to Expedite Briefing — requiring Defendant to file their response to the Plaintiffs’ Motion for Preliminary Injunction by November 22, 2021; and Plaintiffs to file their reply by November 23, 2021.

On November 15, 2021, a coalition of twelve different states filed a similar complaint (the “Second Complaint”) but, perhaps strategically, filed it with the United States District Court for the Western District of Louisiana, Monroe Division.  An appeal of the Louisiana District Court’s decision would go to the U.S. Court of Appeals for the Fifth Circuit, which recently stayed the OSHA vaccination Emergency Temporary Standard (ETS), reported here.

The Complaints

The First Complaint was filed by the States of Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota, and New Hampshire.  The Second Complaint was lodged by the States of Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana Mississippi, Oklahoma, South Carolina, Utah, and West Virginia.  In total, twenty-two states joined one or the other of the complaints.

Both complaints make similar arguments.  To summarize, the States’ Attorneys General argue that CMS’s statutory authority does not authorize it to impose a vaccine mandate.  They also attack the implementation of the Rule, which was not subject to a notice and comment period as provided by the Administrative Procedure Act.  This period, usually sixty days, generally allows for interested parties to participate in the rulemaking process by submitting written data, views, or arguments before a rule is promulgated.  They further argue that the Rule is arbitrary and capricious because CMS failed to consider relevant factors in implementing the Rule, such as staff shortages, particularly in rural hospitals, alternatives to mandates (e.g., testing), and weighing an individual’s right to refuse medical treatment and failure to consult with the States under the Social Security Act where a rule would impact rural hospitals, among other contentions.

The States also make general arguments with respect to the Federal Government’s power.  First, the States’ Attorneys General argue that the Rule improperly allows for the Federal Government to have authority over states and their citizens, including Medicare state surveyors who review compliance by certified providers.  They also contend that the Rule violates Congress’s Spending Power in that Plaintiffs’ receipt of federal funds is conditioned on compliance with the Rule.

The States seek to set the Rule aside and request permanent injunctions to stop the imposition of the Rule’s vaccine requirements.

What Employers Subject to the Rule Should Do Now

Unless or until there is a stay of the Rule, covered facilities should consider moving forward with preparing the policies and procedures to comply with the Rule, including collecting vaccination information and providing a documented exemption application process based on federal law requirements (i.e., medical and religious accommodations under the Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964). Employers with union represented employees should also consider discussing with the pertinent unions any potential impact the Rule may have on their represented employees.

Taking these steps, as discussed in more detail in our previously reported Insight (the first link above), will help ensure timely compliance in the event that no stay is issued.

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*Kamil Gajda, a Law Clerk – Admission Pending (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.

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On August 26, 2021, the Public Health and Health Planning Council approved an emergency regulation requiring health care personnel to be fully vaccinated against COVID-19. The emergency regulation is effective immediately and will remain in effect for 90 days, subject to review and renewal.

The emergency regulation supersedes the Section 16 Order issued by the New York Department of Health (“DOH”) on August 18, 2021, which mandated the vaccine for personnel at general hospitals and nursing homes.

The emergency regulation expands the mandate to cover personnel at entities beyond general hospitals and nursing homes to also include diagnostic and treatment centers, public health centers, rehabilitation centers, birth centers, adult care facilities, certified home health agencies, hospices, long-term home health care programs, AIDS home care programs, licensed home care service agencies and limited licensed home care service agencies (collectively “Covered Entities”). Under the regulation, covered personnel is defined as: “all persons employed or affiliated with a covered entity, whether paid or unpaid, including but not limited to employees, members of the medical and nursing staff, contract staff, students, and volunteers, who engage in activities such that if they were infected with COVID-19, they could potentially expose other covered personnel, patients or residents to the disease.”

Covered Entities must continuously require personnel to be fully vaccinated against COVID-19. Hospitals and nursing homes must require their current personnel to receive the first dose of the vaccine by September 27, 2021. “Fully vaccinated” for the purpose of this regulation shall be determined by the Department in accordance with applicable federal guidelines and recommendations. All other health care facilities must require their current personnel to receive the first dose of the vaccine by vaccinated by October 7, 2021. Proof of vaccination must be provided and include the manufacturer, lot number(s), date(s) of vaccination, and vaccinator or vaccine clinic site.

Notably, the emergency regulation eliminated the exemption due to a sincerely held religious belief that was included in the proposed emergency regulation and in the Section 16 Order. The emergency regulation provides for a medical exemption so long as it is supported by a certification issued by a licensed physician or certified nurse practitioner opining that the vaccine mandate would be detrimental to the individual’s health based on a pre-existing condition. Covered Entities are required to document the any medical exemptions, including the nature and duration of the medical exemption, and reasonable accommodations provided, in an individual’s medical file, maintained separately from the general personnel file, and ensure that such documentation is immediately available upon request by DOH.

In addition, the emergency regulation requires Covered Entities to develop and implement a policy and procedure to ensure covered personnel are vaccinated for COVID-19 and ensure that such policy and procedure is available to the DOH on request. The emergency regulation also requires Covered Entities, upon the DOH’s request, to report the number and percentage of total covered personnel; the number and percentage that have been vaccinated against COVID-19; and those who have been granted a medical exemption, along with any reasonable accommodation.

Finally, the emergency regulation provides that “[t]he Department may require all personnel, whether vaccinated or unvaccinated, to wear an appropriate face covering for the setting in which such personnel are working in a covered entity. Covered entities shall supply face coverings required by this section at no cost to personnel.”

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Our colleague Denise Dadika and Alexandria Adkins of Epstein Becker Green have a new post on the Workforce Bulletin blog that will be of interest to our readers: “New Jersey Mandates COVID-19 Vaccination or Weekly Testing for Workers in Health Care and Congregate Settings.”

The following is an excerpt:

On August 6, 2021, New Jersey Governor Philip Murphy signed Executive Order 252 (“Order 252”) requiring health care and high-risk congregate settings to maintain a policy requiring workers to either provide adequate proof of vaccination or submit to weekly COVID-19 testing. Although Governor Murphy declared an end to the state’s Public Health Emergency in June, he retained the authority to issue orders related to vaccine distribution, administration, and management as well as COVID-19 testing and data collection. Following the CDC’s vaccine guidance, Order 252 recognizes the “importance of heightened mitigation protocols in certain congregate and health care settings,” and it takes additional steps to address the significant risk of spread and the vulnerability of the populations served in those settings.

Click here to read the full post on the Workforce Bulletin blog. 

Our colleagues Adam C. Abrahms and Juan Larios of Epstein Becker Green recently published an Act Now Advisory that will be of interest to our readers: “California’s New COVID-19 Vaccine (Non)Mandate and Testing Requirements.”

The following is an excerpt:

On July 26, 2021, the California Department of Public Health (“CDPH”) issued a State Public Health Officer Order (“Order”) seeking to address the increase California is experiencing in positive COVID-19 cases. With infections of the COVID-19 Delta variant rising, Governor Gavin Newsom and State Public Health Officer Tomás Aragón issued the Order as an effort to reduce COVID-19 infections in California. However, contrary to some press reports, the Order is not really a vaccine mandate in any way, shape, or form. As this Advisory describes in detail, in addition to a separate order for employees of the state, the Order applies to certain categories of health care and high-risk facilities, requires verification of workers’ vaccination status and compliance with masking guidelines, and imposes requirements for testing unvaccinated and incompletely vaccinated workers.

Click here to read the full piece.

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On June 12, 2021, a federal District Court in Texas soundly rejected an attempt by Houston medical workers to challenge the legality of their employer’s decision to require that all employees receive a COVID-19 vaccine. In the lawsuit, Bridges, et al. v. Houston Methodist Hospital et al., 117 hospital workers sued for an injunction to block the hospital’s mandatory vaccination policy as well as the termination of any employee unwilling to comply with the employer’s mandate that all employees be vaccinated against COVID-19. More specifically, the employees asserted that the vaccine mandate would result in wrongful termination in violation of the public policy of the state of Texas and federal law.

In an enlightened decision, Judge Hughes rejected the employees’ wrongful termination claim, as Texas law “only protects employees from being terminated for refusing to commit an act carrying criminal penalties to the worker,” and getting a COVID-19 vaccination is not an illegal act. The court found that Texas does not recognize a wrongful termination claim predicated on a violation of public policy and, even “if it did, [the hospital’s] injection requirement is consistent with public policy,” citing a 1905 U.S. Supreme Court decision that ruled that compulsory vaccination was not a violation of due process. The court further explained that the Equal Employment Opportunity Commission’s recently updated guidance provides persuasive advice that employers may require employees to be vaccinated against COVID-19, subject to reasonable accommodation requirements.

In addition, the court rejected the plaintiffs’ federal claim that the vaccine mandate violated federal law because it is not fully approved by the Food and Drug Administration, explaining that the Food, Drug, and Cosmetic Act does not confer a private right to sue an employer. It also dismissed plaintiffs’ argument that the vaccine mandate violated federal law that protects the rights of human subjects. In doing so, the court explained that the plaintiffs misrepresented the facts because the employees are not participants in a human trial, but are merely subject to a vaccine requirement. The judge further explained that the lawsuit’s reliance on the Nuremberg Code was misplaced because the Code does not apply to private employers, writing that it was “reprehensible” for the plaintiffs to equate a COVID-19 vaccine requirement to medical experimentation in Nazi concentration camps.

Finally, the court explained that the vaccine mandate is part of the bargain of at-will employment and does not constitute coercion, since the hospital is simply “trying to do their business of saving lives without giving [employees] the COVID-19 virus. It is a choice made to keep staff, patients and their families safer.” Employees “can freely choose to accept or refuse a COVID-19 vaccine; however, if [they] refuse, [they] will simply need to work somewhere else…Every employment includes limits on the worker’s behavior in exchange for his remuneration. This is all part of the bargain.”

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As employers are expanding their fertility, surrogacy, and family planning benefits, the tax treatment of such benefits continues to be a challenge for employers and their employees by both increasing the cost of these benefits and creating administrative hurdles. In a private letter ruling, the IRS maintains its position that the majority of the medical costs and fees incurred by a same-sex couple seeking to have a child through gestational surrogacy are not deductible “medical expenses” under Section 213 of the Internal Revenue Code. On January 12, 2021, the IRS issued Private Letter Ruling 202114001 (the “Ruling”) in response to a male couple’s request for a ruling that would allow a deduction for costs and fees related to:

  • medical expenses directly attributable to one or both spouses,
  • egg retrieval,
  • sperm donation,
  • sperm freezing,
  • in vitro fertilization (“IVF”),
  • childbirth expenses attributable to the surrogate,
  • medical insurance for the surrogate,
  • legal and agency fees related to the surrogacy, and
  • any other medical expenses arising from the surrogacy.

As we previously reported, the critical question is whether the expense was incurred to affect the body of the taxpayer, taxpayer’s spouse, or taxpayer’s dependent. The Ruling similarly explains that “[e]xpenses involving egg donation, IVF procedures, and gestational surrogacy incurred for third parties are not incurred for treatment of disease nor are they for the purpose of affecting any structure or function of taxpayers’ bodies.” Accordingly, where a same-sex couple seeks to have a child through gestational surrogacy, payments related to egg retrieval, IVF, childbirth expenses attributable to the surrogate, medical insurance for the surrogate, legal and agency fees related to the surrogacy, and other costs or fees arising from the surrogacy are not deductible under Code Section 213. In contrast, payments related to sperm donation and sperm freezing—which, in this context, are directly attributable to the taxpayers—are considered to meet the definition of “medical care” in Code Section 213 as narrowly construed by the IRS.

The Ruling is consistent with cumulative case law on the matter, including the Eleventh Circuit Court of Appeals’s decision in Morrissey v. U.S., 226 F. Supp. 3d 1338 (M.D. Fla. 2016), aff’d, 871 F.3d 1260 (11th Cir. 2017), wherein the Court found that expenses related to IVF, egg donation, and gestational surrogacy incurred by a gay man in an unsuccessful attempt to have a child with his partner do not constitute “medical care” because the procedures did not affect the structure or function of his body.

Despite the rise in company-offered fertility, surrogacy, and family planning benefits, employers should note that the tax-savings advantages of such benefits do not apply equally to all employees. While a private letter ruling may not be relied on as precedent by other taxpayers, the narrow definition of “medical care” in this latest Ruling makes clear that the IRS requires an employee-taxpayer to show that the expenses qualify as “medical care” for the participant or his or her spouse or dependent. Therefore, it continues to be difficult for an employer to provide fertility, surrogacy, and family planning benefits on a tax-favored basis.

*Law Clerk – Bar Admission Pending

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Our colleagues Susan Gross Sholinsky, Lauri F. Rasnick, Jennifer Barna, Gretchen Harders, Nathaniel M. Glasser, and Nancy Gunzenhauser Popper of Epstein Becker Green have recently published an Act Now Advisory that will be of interest to our readers: “EEOC Updates Guidance on COVID-19 Vaccination Policies, Including Mandates, Incentives, and Accommodations.”

The following is an excerpt:

On May 28, 2021, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced the release of updated guidance regarding the COVID-19 vaccine, providing welcome clarity around a number of vaccine-related issues for employers, as they are revising safety policies and adjusting practices in response to new federal and state guidance on face coverings and social distancing. The EEOC confirmed its prior guidance that employers may mandate that employees be vaccinated for COVID-19, including as a condition to entering the workplace, subject to reasonable accommodation requirements under applicable law, while providing more significant detail on how employers should:

  • implement vaccine mandates,
  • receive and maintain documentation regarding an employee’s vaccination,
  • implement vaccination clinics hosted by the employer or its agent, and
  • educate or incentivize employees to receive the vaccine.

Click here to read the full piece.

In this episode of the Diagnosing Health Care Podcast:  Since the start of the COVID-19 pandemic, many jurisdictions have enacted protections from COVID-19-related liability claims through legislation and executive orders. These liability shields, however, may give health care businesses a false sense of security and offer little protection when it comes to employment claims.

Epstein Becker Green attorneys Denise Merna Dadika, Gregory Keating, and Elena Quattrone discuss the unintended liability consequences health care employers must consider as they transition more employees back to in-person work and the ways to mitigate increasing whistleblower and retaliation risks.

The Diagnosing Health Care podcast series examines the business opportunities and solutions that exist despite the high-stakes legal, policy, and regulatory issues that the health care industry faces. Subscribe on your favorite podcast platform.

Listen on Apple Podcasts, Google Podcasts,
Overcast, Spotify, Stitcher, YouTube, and Vimeo.