Missoula judge hears case that forces medical providers to choose between state, federal law

Nurses, doctors and healthcare centers found themselves at the center of a controversy in federal court on Thursday in a hearing about medical providers being ground zero between state and federal law.

On one hand, the federal government requires any healthcare provider who accepts CMS payments, which includes Medicare and Medicaid, to comply with COVID-19 vaccination requirements, including all workers being vaccinated.

On the other, state law forbids employers from requiring employee vaccination, saying that to do so constitutes discrimination.

The State of Montana and medical providers met in federal court in Missoula to litigate the request for a preliminary injunction because CMS has already informed at least a couple of healthcare facilities they’re out of compliance, while the Montana Human Rights Bureau, which handles discrimination complaints, has five pending cases against one facility alone.

Judge Donald Molloy said that he planned to rule quickly on a request by medical providers and healthcare facilities for an injunction on enforcement of House Bill 702, which bans the vaccine mandates.

Assistant Solicitor General Christian Corrigan argued the plaintiffs need to show “irreparable harm” for the judge to go in that direction.

“They simply haven’t done that,” Corrigan said.

Corrigan represents the State of Montana defendants, Attorney General Austin Knudsen and Labor and Industry Commissioner Laurie Esau, who has oversight on workplaces.

But lawyer Raph Graybill said the plaintiffs, including the Montana Nurses Association which he represents, have an interesting right that’s in play.

“Plaintiffs have the right to conduct their affairs lawfully,” Graybill said.

When it comes to complying with the law, though, they’re in a fix, and it could be a costly one, Graybill said. For plaintiffs to follow federal law, they have to flout state law, which bans most employers from requiring not just a COVID-19 vaccination, but any vaccination.

So Graybill argued they risk being sued for discrimination — or risk not receiving substantial CMS reimbursements for seeing patients.

Earlier, the Montana Hospital Association estimated the annual CMS payments to be $2.1 billion in Montana and 67 percent of payments to its members.

And if some facilities lose their federal funding, they can’t operate, said Justin Cole, with Garlington, Lohn and Robinson. On the plaintiffs’ side, Cole represents lead plaintiff Montana Medical Association, along with others including Five Valleys Urology, Providence Health and Services, and Western Montana Clinic.

Already, the Montana Department of Public Health and Human Services is actively enforcing CMS regulations, and a recent review found two out of seven facilities out of compliance, Cole said. Additionally, the Montana Human Rights Bureau is getting complaints, so he argued facilities have legal exposure both civilly and criminally.

Corrigan, though, told the judge that none of the plaintiffs can actually point to any harm that’s taken place, and he also said the conflict between the state and federal laws was “alleged.” Plus, he said workers have the right to make their own choices.

But Molloy quizzed him about the idea the federal regulation wasn’t at odds with Montana law, especially given the CMS rule mentioned Montana: “Do you admit there is a conflict?”

Only if the federal regulation is valid, Corrigan said.

“You don’t have to hedge on everything,” Molloy said.

Corrigan also said the regulation likely wouldn’t be relevant for much longer, and in the meantime, the plaintiffs haven’t shown a credible threat of enforcement.

Molloy questioned that rationale as well and wondered if the plaintiffs just get to ignore the law and risk getting sued and losing money.

The plaintiffs’ request for a preliminary injunction argues the facts show they’re likely to succeed on the merits that the state law is preempted by the CMS rule and because of that, it’s likely unconstitutional, and they will suffer harm in the absence of a court ruling.

After hearing arguments, Molloy told the parties he would likely rule next week in a short decision and then follow it up with longer decision.

In an earlier order, on the states’s motions to dismiss, Molloy said the plaintiffs made eight claims, and he denied all but two requests to dismiss, the two related to Montana’s protection of a clean and healthful environment.

“Ultimately, the briefing throws into sharp relief the fact that the parties are divided over the efficacy of vaccines and the effect of such vaccines on healthcare employers, employees and patients,” the order said; it noted it only concerned the viability of claims, not the merits of the claims. “But these disputes are grounded in the merits of the case and are beyond the scope of the present motions. For the reasons stated below, plaintiffs have standing and, for the most part, have stated plausible claims for relief.”