Supreme Court Issues Split Decisions on Federal Vaccine Mandates

On January 13, 2022, the U.S. Supreme Court (“Court”) issued split decisions regarding Federal vaccine mandates issued by the Centers for Medicare and Medicaid Services (CMS) and the Occupational Safety and Health Administration (OSHA).

The Court sided with the government in granting the government’s motion for a stay of the preliminary injunction of the CMS Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule (IFR) that had previously been issued by a lower court. The stay thus paves the way for CMS to enforce the IFR in all states except Texas, pending the outcome of proceedings on the merits of the challenge in the United States Court of Appeals for the Eighth Circuit.

The Court did not side with the government, however, in granting an emergency motion for a stay by those challenging OSHA’s Emergency Temporary Standard (“Vaccination ETS”). The Vaccination ETS imposed a vaccination or test mandate on all employers having 100 or more employees, pending the outcome of proceedings on the merits of the challenge in the United States Court of Appeals for the Sixth Circuit.

The Court’s split decisions signal how it will likely decide the merits of the challenges and thus provide healthcare organizations covered by one or both rules much needed clarity going forward.

In a 5-4 decision, the Court found that the CMS IFR was within the authorities conferred upon the Secretary of the Department of Health and Human Services by Congress. Specifically, the Court noted that Congress has authorized the Secretary to impose condi­tions on the receipt of Medicaid and Medicare funds that “the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.”¹ 

The Court, in a 6-3 decision, found that the OSHA Vaccination ETS should be stayed pending further proceedings at the lower court level. The majority noted that the Vaccination ETS “operates as a blunt instrument,” in that it “draws no distinctions based on industry or risk of exposure to COVID-19.” In reaching its conclusion that a stay is warranted because those challenging the Vaccination ETS are likely to succeed on the merits of their claim that the Secretary of the Department of Labor lacked authority to impose the mandate, the Court emphasized that COVID-19 is a universal risk rather than an occupational hazard for most workplaces. While the Court stated that where the virus poses a special danger because of the particular features of an employee’s job or workplace, target regulations are plainly permissible; however, the Vaccine ETS represents an “indiscriminate approach” that fails to distinguish between a universal risk of contracting COVID-19 and an occupational risk of contracting COVID-19.

Reactions by CMS and OSHA to the decisions were swift.

CMS followed up with a QSO Memorandum on January 14, 2022 (“QSO-22-09-ALL”) with provider-specific guidance and instructions to surveyors regarding enforcement of the IFR. The Memorandum timeline and thresholds to be met by providers is patterned after a QSO Memorandum issued on December 29, 2021 (“QSO-22-07-ALL”) that is applicable to providers in those states where a preliminary injunction had previously been lifted by the Fifth Circuit. QSO-22-09-ALL applies to all states where the preliminary injunction was lifted as a result of the Supreme Court’s decision.² Both Memoranda specify the following enforcement framework and timeline:

All Medicare and Medicaid-certified facilities covered by the IFR must comply with all regulatory requirements or face enforcement remedies, up to and including termination of participation in the Medicare and/or Medicare programs. CMS emphasized that facility staff vaccination rates under 100% (taking into consideration medical and religious exemptions as well as delays in vaccination as recommended by the Centers for Disease Control and Prevention (“CDC”)) constitute non-compliance with the IFR and established the following revised deadlines for compliance:

Within 30 days after issuance of the memorandum³, if a facility demonstrates that:

– Policies and procedures are developed and implemented for ensuring all facility staff, regardless of clinical responsibility or patient/resident contact, are vaccinated for COVID-19; and

– 100% of staff have received at least one dose of COVID-19 vaccine, or have a pending request for, or have been granted a qualifying exemption, or have been identified as having a temporary delay as recommended by the CDC, then the facility is compliant under the IFR.

If less than 100% of all staff have received at least one dose of COVID-19 vaccine (or have a pending request for, or have been granted a qualifying exemption, or have been identified as having a temporary delay as recommended by the CDC), the facility is non-compliant and will receive a notice of non-compliance. However, a facility that is above 80% and has a plan to achieve a 100% staff vaccination rate within 60 days would not be subject to additional enforcement action; however, CMS cautioned that states should work with their CMS location for cases that exceed these thresholds, yet pose a threat to patient health and safety. Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility (e.g., plans of correction, civil monetary penalties, denial of payment, termination, etc.).

Within 60 days after the issuance of the memorandum, if the facility demonstrates that:

– Policies and procedures are developed and implemented for ensuring all facility staff, regardless of clinical responsibility or patient or resident contact, are vaccinated for COVID-19; and

– 100% of staff have received the necessary doses to complete the vaccine series (i.e., one dose of a single-dose vaccine or all doses of a multiple-dose vaccine series), or have been granted a qualifying exemption, or have identified as having a temporary delay as recommended by the CDC, the facility is compliant under the IFR.

If less than 100% of all staff have received at least one dose of a single-dose vaccine, or all doses of a multiple-dose vaccine series (or have been granted a qualifying exemption, or identified as having a temporary delay as recommended by the CDC), the facility is non-compliant.

A facility that is above 90% and has a plan to achieve a 100% staff vaccination rate within 30 days thereafter would not be subject to additional enforcement action. Again, CMS stated that states should work with their CMS location for cases that exceed these thresholds, yet pose a threat to patient health and safety. Facilities that do not meet the established parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility.

Within 90 days after issuance of the memorandum, facilities that have not met the 100% standard may be subject to enforcement actions depending on the severity of the deficiency and the type of facility.

Surveys for compliance as part of initial certification, standard recertification/reaccreditation, and complaints will begin 30 days after issuance of the memorandum.

OSHA issued a statement by the Secretary of the Department of Labor, who vowed that OSHA “will do everything in its existing authority to hold businesses accountable for protecting workers, including under the Covid-19 National Emphasis Program and General Duty Clause.”

The COVID-19 National Emphasis Program applies to a variety of health care⁴ settings and entails specific COVID-19 focused inspections based on measures contained in the Occupational Exposure to COVID-19 Emergency Temporary Standard (“Healthcare ETS”), which was largely withdrawn by OSHA on December 21, 2021.⁵ Like the Vaccination ETS, OSHA vowed to use the General Duty Clause, which states that employers shall furnish to employees employment and a place of employment free from recognized hazards that are causing or are likely to cause death or serious physical harm to employees, as well as the Respiratory Protection Standard and the PPE Standard, to “vigorously” enforce the substance of the Healthcare ETS until a final infectious diseases standard is promulgated.

Thus, while the Vaccination ETS and the Healthcare ETS are temporarily gone, they are definitely not forgotten. All healthcare providers should become familiar with each decision and understand the interplay among each of them and the CMS IFR.

[1] 42 U. S. C. §1395x(e)(9).  While the cited statute applies to hospitals, the Court notes that there are similar statutory authorizations applicable to the vast majority of other providers and suppliers covered by the rule. 

[2] The CMS IFR is still enjoined from enforcement in the State of Texas due to a separate legal challenge in that state.

[3] Either QSO-22-07-ALL or QSO-22-09-ALL, as applicable.

[4] Physicians’ Offices, Dentists’ Offices, Home Health Care Services, Ambulance Services, General Medical and Surgical Hospitals, Specialty Hospitals, Skilled Nursing Facilities, Residential Intellectual and Developmental Disability Facilities, Continuing Care Retirement Communities, and Assisted Living Facilities for the Elderly

[5] The recordkeeping portions of the Healthcare ETS were retained and include requirements for maintaining a COVID-19 log of positive COVID-19 cases among employees (regardless of whether those cases are work-related) and reporting work-related COVID-19 inpatient hospitalizations within 24 hours and work-related fatalities within eight hours of learning of such events to OSHA.