When it was signed into law by President Bush on February 8, the Deficit Reduction Act (DRA) of 2005 implemented $39 billion in budget reductions for federal programs over the next five years. The law includes at least $2.8 billion in cuts to imaging services performed outside the hospital setting -- a devastating blow to the outpatient imaging center industry.
But the DRA has a potentially fatal flaw. Under the U.S. Constitution, both the Senate and the House of Representatives must pass identical versions of the same bill before it is signed by the president and becomes law. In the case of the DRA, the Senate and House versions differed due to a clerical error regarding the length of time Medicare would pay for the rental of oxygen equipment.
Alabama attorney Jim Zeigler believes that due to this discrepancy, the DRA is unconstitutional and should be declared null and void. He's filed a lawsuit in U.S. District Court for the Southern District of Alabama seeking to have the law overturned. In the interview below, Zeigler discusses his objections to the DRA and his strategy for having it overturned.
AuntMinnie: What is your background?
Zeigler: I am an elder law attorney. I work with families who have an aging family member to get them eligible for Medicaid nursing home coverage.
What impact does the Deficit Reduction Act have on your clients?
It makes two changes. One, it extends the Medicaid "look-back" period from three years to five years. It's to prevent affluent people from giving everything away to their children and then qualifying for Medicaid nursing home coverage.
You have to report all your finances, including any gifts to family, church, and charities, and you have to report all those on the Medicaid application. Can you imagine if a family member is now beginning to have dementia, Alzheimer's -- how is the family going to reconstruct all that?
It's (a tough change), but it's livable. It's the other change that we can't live with. The other change changes the start of the penalty period for any gift of any nature, including your church tithes.
Under the old law, the penalty starts when you give a gift. With the new law, the penalty doesn't start until you are in the nursing home, you've dropped below $2,000 in assets, and you apply for Medicaid. Then bingo, the penalty starts, and the penalty is an accumulation of five years' worth of gifting of any nature.
You add up five years' worth and you owe it all back, dollar for dollar. Well, you only have $2,000, because the penalty doesn't apply until you drop below $2,000 (in assets), and then you owe everything back.
It was not well thought through. The first person who figured this out, that a person with less than $2,000 was going to owe back five years of gifting, was me down in Mobile, AL. You have all those lawyers and lobbyists and church leaders in Washington, DC, and why does it fall to me to do any of this?
In addition to radiology and older folks who are entering nursing homes, who else is affected by the DRA?
Student loans. They are tightening up the eligibility and raising the interest rates, and tightening up the payback periods. It also affects any providers of medical services or equipment under Medicare. Durable medical equipment, oxygen, and home healthcare.
As your lawsuit indicates, the version of the DRA passed by the House is different from that passed by the Senate. How are they different?
The bill that passed the House stated that a person dependent on oxygen would be allowed to live 36 months. The Senate version said they would be allowed to live 13 months.
Of course I'm being facetious to make a point -- under the old law they could have their oxygen as long as they lived. Now, it's 36 months under the House version, 13 months under the Senate version. The version signed by the president, which has illegally become law, says 13 months. Then, best of luck to you.
That's a pretty major discrepancy. How did that happen?
I've heard it referred to as a typo. A typo is where you have the word "the" twice, or you spell the word "the" as "teh." That's a typo. This is a substantive difference that makes a $2 billion difference.
It was a screw-up, a clerical screw-up. The House leadership realized the screw-up in mid-January, and they decided to simply ignore the Constitution and proceeded to pass the defective bill anyway.
Why did they do that?
They didn't have the votes to amend it and send it back to the Senate, where it only passed 51-50. The more people find out about the inner workings of this bill, the less support it has.
Do you think if they went back and tried to pass this again, it would pass?
No, they would be one or two votes short.
So you filed a lawsuit, and where is that being heard right now?
Mobile, AL, in the U.S. District Court for the Southern District of Alabama.
When do you think the suit will be heard by a judge?
May.
When do you think we will see a ruling on this?
It's too early to tell. I'm looking at adding some additional plaintiffs. Maybe a little old lady who is dependent on an oxygen tank, and in another 12 months she'll be cut off. She'd make a good plaintiff.
Do you think anyone from radiology could be added to your lawsuit?
Oh, yes, absolutely. If they are affected by this, they could be a plaintiff. I would welcome them. It would help.
What do you think your chances are of having the DRA overturned?
It's too early to tell. The U.S. Constitution is broad and vague on a number of things. This is not one of those. On this point the constitution is perfectly clear. The same bill must be passed by the House and the Senate and signed by the president. Otherwise it is not law. That's constitutional law 101.
What will happen if your lawsuit does succeed? Will the law revert to what it was before?
Yes, it will. Automatically we will be under the previous law.
What are some of the groups that are affected by the legislation doing to fight it?
They are doing nothing. My lawsuit is the only chance we have to overturn the Deficit Reduction Act.
There is a possibility that some groups may join me on this. There is the possibility that I may coordinate some independent filings. We are looking at the possibility of some affected people in the District of Columbia that I would assist so we could coordinate the efforts. Basically, I've got the only active opposition to the bill. The AARP has declined to participate.
Why is that?
They didn't think of it. It wasn't their idea.
What can people in the radiology community do to help?
Number one, find a few good plaintiffs, affected persons who need radiological services, and a few good businesses that are affected by these cutbacks in coverage.
Number two, raise money. To present our case properly I need a top-notch constitutional law firm to represent me. I need an investigator to prove that the House leadership knew of this problem two weeks before they cast a flawed vote. I need to depose the Senate clerk who caused this problem. I need to depose the Speaker of the House and his staff, and the Senate president pro tempore, Sen. Ted Stevens (R-AK) and his staff.
We need to do this right. At the moment this case is David versus Goliath. Well, that worked one time, but I'm not willing to go in with myself as both lawyer and plaintiff and have 20 high-powered government lawyers on the other side with no backup.
I have handled cases in the David v. Goliath mode before, with a small degree of success. In this same federal district, I got the 527 Act (requiring political groups to register and report to the Internal Revenue Service) declared unconstitutional in 2001. I filed a suit and won a declaratory judgment that it violated the First Amendment.
That's the good news. The bad news is that we ran completely out of money. The constitutional law firm that we had quit; the U.S. Court of Appeals for the 11th Circuit overturned my judgment. We simply ran out of resources.
It's hard to fight city hall; it's even harder to fight the federal government.
By Brian Casey
AuntMinnie.com staff writer
March 21, 2006
For more information on Zeigler's lawsuit against the Deficit Reduction Act, visit his Web site at www.jimzeigler.com, or send e-mail to [email protected].
Related Reading
Deficit Reduction Act of 2005 puts radiology through the grinder, March 3, 2006
Lawsuit takes aim at Deficit Reduction Act, February 21, 2006
Bush signs bill cutting Medicare payments, February 9, 2006
Congress passes steep Medicare imaging cuts, February 2, 2006
ACR to fight proposed Medicare imaging cuts, December 22, 2005
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