Conflicting federal, state COVID-19 vaccine requirements have hospitals trapped in noncompliance

Conflicting federal and state guidance on workforce COVID-19 vaccination has many healthcare provider organizations caught in a no-win situation when it comes to compliance.

In August, the Centers for Medicare & Medicaid Services (CMS) unveiled plans to issue an emergency regulation requiring staff vaccinations for Medicare- and Medicaid-participating nursing homes.

Those plans ballooned in early September when President Joe Biden announced that vaccination policies would eventually be required for all Medicare- and Medicaid-certified healthcare providers—including hospitals, ambulatory surgical centers and home health agencies—that wish to participate in those programs.

The president issued two additional executive orders requiring vaccinations for workforces of 100 or more people and for all employees of federal contractors.

The timelines and specifics for most of those federal requirements are still under deliberation.

A CMS spokesperson told Fierce Healthcare that the agency is currently in the active rule-making process and cannot comment on any specifics of the pending healthcare provider regulations but did note that there will be a 60-day comment period immediately following its publication in the Federal Register.

On Oct. 12, the Occupational Safety and Health Administration (OSHA) sent a draft of the 100-or-more employee requirement to the White House for its review and approval.

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Meanwhile, the phase-in process of the federal contractor requirement has already begun, with the administration requiring agencies to begin including a vaccination clause in all newly solicited contracts as of Oct. 15, according to guidance released Sept. 24 (PDF). All covered contractor employees must be fully vaccinated by Dec. 8, per the guidance.

However, the road to compliance with the administration’s requirements has been complicated by a spate of state-level orders and legislation Republican leaders say preserve an individual’s right to decide whether they receive the vaccine.

Such was the case in Texas this past week when Gov. Gregg Abbott issued an executive order stating that no entity “can compel receipt of a COVID-19 vaccination by any individual … who objects to such vaccination for any reason of personal conscience, based on a religious belief, or for medical reasons.”

"The COVID-19 vaccine is safe, effective and our best defense against the virus, but should remain voluntary and never forced," Abbott said in a statement.

Texas follows in the footsteps of Montana, which earlier this year passed a law that “prohibits discrimination based on vaccination status or having an immunity passport,” which extends to refusing employment.

Arkansas Gov. Asa Hutchinson also announced this week that vaccine mandate bills passed by “wide margins” across the state’s legislature would become law without his signature.

“These two bills are designed to push back on President Biden’s vaccination mandate for federal contractors and employers with more than 100 employees,” the governor said in a statement. “I am opposed to the current mandate by the Biden Administration, but the solution is not to place additional mandates on employers at the state government level. The solution is not to put employers in a squeeze play between state and federal law.”

Hospitals stuck between a rock and a hard place

Healthcare employers and other provider groups have generally spoken out against these conflicting orders and laws, which for many have placed their existing or planned workforce policies at odds with their state.

Texas Hospital Association President and CEO Ted Shaw characterized Abbott’s order as a political move that first and foremost puts hospitals’ patients and staff at increased risk.

“Hospitals have soldiered on for months at ground zero of this pandemic,” he said in a statement. “As experts in healing and saving lives, hospitals must have the trust, respect and flexibility to mandate vaccines in their own facilities to protect the people of Texas.”

White House press secretary Jen Psaki similarly pointed to political positioning as the primary driver of Abbott’s order.

“I think it’s pretty clear when you make a choice that’s against all public health information and data out there, that it’s not based on what is in the interest of the people you are governing, it’s perhaps in the interest of your own politics,” she said during a Tuesday press gaggle.

Marc Boom, president and CEO of Houston Methodist, the first major health system to announce and implement a workforce COVID-19 vaccination requirement, told reporters this week that his team is “deeply disappointed” in the governor’s decision. He said that Houston Methodist was still reviewing the order but does not expect it to have any impact on his organization due to their early action.

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Others, such as Texas Children’s Hospital the Dallas-Fort Worth Hospital Council—which includes facilities affiliated with Baylor Scott & White, Methodist and Texas Health—similarly indicated to the press that they are reviewing the order but so far have no changes planned for their vaccine requirement rollouts.

Still, Boom said he is “concerned” that other health systems may no longer be able to move forward with their planned mandates.

United Regional Health Care System, a 2,300-employee safety net system based in Wichita Falls, Texas, may fall under that umbrella.

A representative told Fierce Healthcare that the system has decided to delay the implementation of its previously announced vaccine requirements from Nov. 1 to Dec. 1 or later. United Regional is also delaying planned communications to its staff regarding its review of medical/disability and religious exemption requests as it reviews the implications of Abbott’s order.

“Our vaccine requirements, announced in early September, were designed to comply with existing state and federal laws,” the representative said. “We will be working closely with legal counsel, the Texas Hospital Association, and others to evaluate the executive order (as well as any subsequent legislation), better understand related implications for health care organizations and ensure our vaccine policy continues to align with applicable laws and regulations.”

Legal experts weigh in

For healthcare employers caught between the competing vaccination requirements, labor and employment lawyers point to the go-to rule of government law: Federal legislation trumps conflicting laws from state leaders.

The main question, they said, is which areas of the states’ laws and orders are considered to be in direct conflict and which will be allowed to stand.

“Obviously there is conflict between the Texas executive order and the president’s executive order for federal contractors, and likely for the forthcoming guidance on the other two [federal orders],” Mark Goldstein, a labor and employment partner at Reed Smith, told Fierce Healthcare.

“I don’t think either party will modify their guidance to account for the other's. I think ultimately there will be legal challenges and a court will be asked to weigh in on if X, Y, Z portions of the federal guidances … preempt the conflicting state [guidance]. The court [would] also opine, ‘OK, but these other portions of the state law might not conflict,’ but I think it will ultimately be determined by the courts,” he said.

Jill Lashay, a labor and employment law attorney for Buchanan, Ingersoll & Rooney, similarly said to expect a states’ rights fight to play out across courtrooms.

“Notwithstanding the legal presumption that federal law is controlling, states are certain to challenge the breadth and heavy-handed intervention of the federal government into what many see as clear rights of the states to take actions that best serve their citizens,” she told Fierce Healthcare. “Such challenges will likely be seen first in response to OSHA’s Emergency Temporary … because that federal standard will apply to more than federal contractors.”

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Industry groups are bringing their own grievances to the courtroom. In late September, the Montana Medical Association threw its weight behind a suit due to exemptions in the state’s vaccination discrimination law for certain healthcare settings. By not including physicians’ offices among those exceptions, the bill “substantially impacts medical providers in a way we believe was not the intent of the legislation,” the group wrote.

After these potential challenges play out, there may be some cases where smaller employers who do not participate in federal government programs find themselves bound to portions of the states’ requirements, Goldstein said.

For example, he pointed to language in Abbott’s executive order outlining the different grounds on which an individual’s exemption request would need to be accommodated. Medical and religious grounds included in the order are already legally protected at the federal level, he said, but objections based on “personal conscience” are new and currently undefined.

As a result, “employers who are not going to be subject to any of the federal guidance and operate in Texas or any state that adopts a similar order or legislation may well need to update their process of intake of accommodation and exemption requests to potentially account for things that are not typically given accommodations,” Goldstein said. “I don’t think it’s going to involve completely eliminating the policy, because thus far the proposed legislation [and] the executive orders haven’t outright banned them.”

Goldstein and Lashay recommended that healthcare employers faced with the conflicting requirements take a practical look at how noncompliance with either side will impact their business and workforce.

Case in point—Texas’ executive order comes with a $1,000 penalty per violation and gives employees no private right of action that would allow them to sue their employer, Goldstein said. Texas’ legislature may also codify that order as a law that could include the private right to action, he said.

Although the president’s requirements will not include any additional private right to action, “the consequences for not complying with the federal executive order can be much more dire, including but not limited to termination of federal contracts or removing the ability to bid on future federal contracts,” Goldstein said.

Healthcare employers should also consider whether their business and political decisions will trigger a reputation hit across the surrounding community and their own workforce, Lashay said.

“In addition to the legal preemption issues, walking back an earlier vaccine mandate would certainly create labor relations tensions for an employer, because employees, who may not have wanted the vaccine but got it to avoid losing their jobs, will likely express extreme discontent with management’s change in the requirement,” she said. “If an employer has a collective bargaining agreement with a union, that would also need to considered.”

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Lashay noted there could be cases where employers in affected states “may seek ‘cover’ by joining together to challenge the federal mandates in those states where political leaders are also engaged in similar challenges.”

As courtrooms work to hammer out the legal specifics, Goldstein advised hospitals and other healthcare employers to do whatever they can to stay ahead of the curve. That means knowing what laws or orders have been signed, how they’re faring in court and whether there are any proposed bills or actions coming down the pipe that could further impact a mandatory vaccination policy, he said.

“For hospitals that are federal contracted, I would also recommend engaging in a dialogue with whomever their government contact is for their contract,” he said. “[They should] ask their contact … what that agency’s position is on that precise issue.”