Supreme Court Upholds CMS Vaccine Mandate: Next Steps for Healthcare Providers

Latest update in series:
End of an Era: White House Ends Many Federal COVID-19 Vaccine Requirements (May 3, 2023)
CMS Vaccine Mandate Enforcement Begins — Understanding the Three Deadlines (January 27, 2022)

On Jan. 13, 2022, in a 5-4 per curiam decision, the U.S. Supreme Court permitted the Centers for Medicare & Medicaid Services (CMS) to enforce its interim final rule requiring many Medicare- and Medicaid-certified providers and suppliers to vaccinate their staff for COVID-19 (the vaccination rule). The cases return to the respective courts of appeals that were hearing challenges to the rule, but the Supreme Court’s decision means those challenges are likely to be dismissed.

The Supreme Court determined that CMS had the statutory authority to impose the vaccination rule in an effort to ensure that the healthcare providers who care for Medicare and Medicaid patients protect their patients’ health and safety. The Court also rejected the procedural challenges to CMS’ adoption of the rule. Enforcement on Phase 1 of the vaccination rule’s implementation is now slated to begin Jan. 27, 2022, with all staff to be vaccinated thereafter, although CMS is expected to issue updated guidance and could extend the current deadlines.

Separately, the Supreme Court issued an opinion staying the emergency temporary standard (ETS) issued by the Occupational Safety and Health Administration (OSHA), as McGuireWoods labor and employment lawyers discussed in alerts distributed on Nov. 4, 2021, and on Jan. 13 and Jan. 14, 2022. The Supreme Court determined that the challengers to the ETS were likely to show that OSHA exceeded its authority by requiring that employers with 100 or more employees mandate vaccination or weekly testing for covered employees.

In the CMS case, the Supreme Court explained that the federal government has the authority to impose conditions in connection with funding for public programs, such as Medicare and Medicaid. The Court noted that longstanding health and safety conditions of participation and other standards set by CMS regularly impose requirements on providers and suppliers as a condition to receiving Medicare and Medicaid reimbursement. The Supreme Court noted that the “vaccine mandate goes further than what [CMS] has done in the past to implement infection control” but CMS “has never had to address an infection problem of this scale and scope before.”

The Supreme Court held that CMS has authority to address infection control and the power to protect patient safety. Additionally, the Supreme Court determined that CMS’ vaccination rule aligns with regulatory requirements for participating providers and suppliers to enforce programs that prevent infections and control communicable diseases.

The Court noted, as if to explain the different outcomes between CMS’ vaccination rule and the OSHA ETS, that “[t]he challenges posed by a global pandemic do not allow a federal agency to exercise power that Congress has not conferred upon it. At the same time, such unprecedented circumstances provide no grounds for limiting the exercise of authorities [CMS] has long been recognized to have.”

Next Steps and Key Open Questions

Providers and suppliers enrolled in Medicare and Medicaid should determine if CMS’ vaccination rule applies to them. The rule only applies to 15 provider and supplier facility categories with health and safety conditions of participation (or similar requirements), as discussed in the Nov. 5, 2021, McGuireWoods alert. It does not include physician practices but may apply to practice staff who spend time in regulated facility categories.

Where the vaccination rule applies to a provider or supplier, CMS currently plans to enforce Phase 1 of the rule on Jan. 27, 2022 — necessitating that such providers and suppliers have policies ensuring all eligible staff have received the first dose of a two-dose COVID-19 vaccine or a one-dose COVID-19 vaccine prior to providing any care, treatment or other services.

All eligible staff will also be required to be “fully vaccinated” by Phase 2’s enforcement deadline — currently slated for Feb. 28, 2022. Vaccination rates of less than 100 percent will not comply as of that date. Of course, CMS previously postponed the enforcement dates due to this litigation, and providers and suppliers will want to monitor to see if the agency does so again.

CMS requires facilities to allow exemptions for staff as a reasonable accommodation for a disability or a sincerely held religious belief, observance or practice, and for medical reasons. Providers and suppliers should establish exception protocols as part of their policies and procedures and in alignment with federal law. CMS requires facilities to ensure that requests for such accommodations and religious exemptions are documented and evaluated in accordance with applicable federal law.

For those providers and suppliers developing policies and encouraging vaccinations, employers will want to consider ways to incentivize staff to assist the facility in complying with the vaccine mandate. Not all healthcare providers are subject to the vaccination rule and many providers have worried that non-universal vaccination requirements may make it difficult to retain staff.

Healthcare providers with facilities or operations subject to CMS’ vaccination rule, such as hospitals, and those that are not subject to it, such as physician practices, should closely scrutinize operations to determine which staff members require vaccinations. As discussed in the Nov. 5, 2021, McGuireWoods alert, CMS broadly defined staff to include individuals who provide care, treatment or other services for the facility and/or its patients, whether employed or under contract or another arrangement, including volunteers and remote employees.

Providers and suppliers should also be aware of developments with respect to the definition of “fully vaccinated” and any boosters that may be required for their staff. As CMS responds to the now-closed public comment period, expect further development of the interim final rule.

For providers and suppliers that are not in compliance with the vaccination rule, CMS has indicated that civil monetary penalties, denial of payments, and termination of participation will be pursued, as applicable. CMS notes, however, that “[t]ermination would generally occur only after providing a facility with an opportunity to make corrections and come into compliance.” CMS clarified in the Dec. 28, 2021, guidance to State Survey Agency directors that surveyors should give facilities time to come into compliance as long as they have reached certain targets exceeding 80 percent staff vaccination rates with plans to achieve a 100 percent staff vaccination rate within a limited time period.

The industry will also want to continue to monitor litigation involving CMS’ vaccination rule. The result of the Supreme Court’s opinion is that the challengers will still be able to proceed with their challenge before two courts of appeals, albeit with the rule moving forward and taking effect. The challengers will likely lean heavily on arguments cited in the two dissents to the Supreme Court’s majority opinion.

McGuireWoods monitors this developing area of the law and may provide additional analysis of CMS’ vaccination rule requirements. Subscribe to firm client alerts for such updates. For questions about the vaccination rule, the import of the Supreme Court’s decisions, or if you need assistance developing or updating policies and materials for implementation, please contact the authors of this article, your McGuireWoods contact, or a member of the firm’s healthcare team, appeals and issues team or COVID-19 response team.