Legal issues in health care regulation and compliance

Affordable Care Act Impact

Political scandals are often wrought with unintended consequences for unsuspecting political parties. The recent IRS scandal is no different in this regard. The interesting aspect regarding the scandal is its timing relative to the implementation of the Affordable Care Act. In short, the IRS targeted certain conservative groups seeking tax-exempt status for extra scrutiny at beginning in 2010, according to an inspector general's report released last week. Lois G. Lerner, the agency official who oversees tax-exempt groups, first revealed publicly on May 10 that IRS personnel had targeted the groups. The IRS has insisted that the effort was a misguided attempt at greater efficiency rather than a partisan endeavor. White House counsel Kathryn Ruemmler informed senior White House officials including chief of staff Denis McDonough about the likely findings of the IG's report nearly a month ago, White House Press Secretary Jay Carney said Monday in an account that went well beyond what the White House had previously said. President Obama, the White House has said all along, did not learn of the targeting until the news media reported it on May 10, 2013, and did not learn about what the IG's report said until it was released last week. Deputy Treasury Secretary Neal S. Wolin learned about the IG's probe last year and Treasury Secretary Jack Lew testified that he first became aware of allegations that the IRS was targeting conservative groups on March 15, 2013. Some lawmakers knew about the IG probe in 2012. Naturally, those who oppose the act are using this mistake as a means to counter the implementation process of the ACA altogether. This has implications for both society and the Obama administrations at large. For one, quality individuals who may not have had anything to do with the scandal may be required to leave. Such is the case of Jeff Miller. Miller resigned last week at the president's demand. Obama tapped budget official Daniel Werfel to replace him (Draper, 1981). Meanwhile, Joseph Grant, the commissioner of the agency's tax exempt and government entities division, will retire early on June 3. This individuals may have been great assets to the IRS who were forced to leave on account of an incident they may not have been apart. Such are the unintended consequences of scandals, someone must be punished.

As such, there are many issues regarding health care regulation and compliance in which must be addresses as a result of this recent scandal. One of which is proper disclosure. Primarily, this scandal is all about disclosure of donors, and about political actors trying to find ways to avoid disclosure. To be clear that the ability to conceal donors, to launch stealth attack ads, or to threaten lawmakers with such ads if they don't support the policy preferences or legislative goals of the donors is something the Supreme Court rejected 8-1 in the famous Citizens United decision. As such proper disclosure was lapse within the scandal. In many instances, such grievances should immediately be reported to the proper athourities. However, the IRS is the primary authority and therefore the scandal erupted unbeknownst to many of the top political leaders. In order to prevent this problem in the future, proper oversight and disclosure must be tightened (Fang, 2006).

This is very important as it relates to health care overall. Lawmakers often crafted financial subsidies available under the health law as tax credits. These tax credits, as referenced by the recent scandal must have proper oversight in order to be effective. The agency already administers another major social program, the earned income tax credit, which long ago surpassed welfare as the main source of government assistance for low-income families.

The next is proper oversight of the IRS. The IRS should move unilaterally to fix the law sitting at the root of the agency's targeting of conservative groups, according to Senate Democrats. The problem for the IRS arises in attempting to determine whether an organization is primarily involved in political activity or not. The original law as passed by Congress, as several Democratic senators noted, says 501(c)(4) organizations must be "exclusively" devoted to charitable, educational or recreational purposes.When the IRS began implementing that rule half a century ago, however, they decided that exclusively really meant not "primarily" engaged in political activity. This gave the law ambiguity which ultimately led to the scandal. As such, oversight of the organization will allow both the law and the affordable care act to be properly implemented. But figuring out just what counts as political activity and what's an educational offering tied to social welfare is often in the eye of the regulator rather than a definitive science (Lucia, 2009).