Justia Health Law Opinion Summaries

A pharmacist in Florida, serving as the pharmacist-in-charge at a pharmacy called NH Pharma, was indicted for conspiracy to commit health-care fraud and several counts of health-care fraud. The indictment alleged that he defrauded Medicare by billing for drugs different than those he dispensed and for prescriptions never filled. The pharmacy’s owner cooperated with the government after pleading guilty to conspiracy. At trial, the prosecution presented evidence that the pharmacist and the owner prepared compounded medications using unreimbursable ingredients while billing Medicare for more expensive, reimbursable ones, and attempted to cover up the discrepancies during audits. There was also evidence, including video and witness testimony, that the pharmacist had stolen about $200,000 in cash from the pharmacy. Three Medicare beneficiaries testified that they never received or believed they were prescribed the medications billed in their names.The United States District Court for the Middle District of Florida admitted evidence of the uncharged cash theft, ruling it was intrinsic to the case. The court also excused a potential defense witness, a part-owner and pharmacy technician, from testifying after she invoked her Fifth Amendment right against self-incrimination, and declined to recommend immunity for her. After a jury found the pharmacist guilty on all counts, he moved for a new trial based on statements made by the pharmacy owner in her own sentencing memorandum, arguing they constituted newly discovered evidence. The district court denied this motion.The United States Court of Appeals for the Eleventh Circuit affirmed the convictions. It held that the district court did not abuse its discretion by denying a new trial because the statements were not new evidence, nor material, nor likely to produce a different result. The appellate court also found no abuse of discretion in admitting the theft evidence, declining to compel witness immunity, and not conducting an in-camera hearing, and rejected constitutional claims raised by the defendant. View "USA v. Beasley" on Justia Law

This case involves allegations of Medicare fraud under the False Claims Act (FCA) against MD Labs, an independent clinical laboratory. Between 2017 and 2019, OMNI Healthcare, a medical practice, sent MD Labs nearly 600 requests for PCR urinary tract infection (UTI) tests, which are more costly than traditional bacterial urine culture (BUC) tests. OMNI, acting on the instruction of its owner, directed staff to order only PCR tests, even when providers had requested BUC tests, with the admitted intention of building a Medicare fraud case against MD Labs. There is no evidence MD Labs knew of OMNI's intentions; MD Labs simply received and processed test orders submitted by physicians.The United States District Court for the District of Massachusetts reviewed the case after discovery and cross-motions for summary judgment. OMNI alleged that MD Labs “knowingly” submitted false claims to Medicare by seeking reimbursement for medically unnecessary PCR tests. MD Labs argued it was entitled to rely on the ordering physician’s determination of medical necessity and that it lacked the required scienter for FCA liability. The district court granted summary judgment to MD Labs, finding that OMNI had not produced sufficient evidence that MD Labs “knowingly” submitted false claims.On appeal, the United States Court of Appeals for the First Circuit affirmed the district court’s decision. The court held, as a matter of first impression in the circuit, that a laboratory generally may rely on a doctor’s order as evidence that a test is medically necessary for FCA purposes, absent evidence of fraud or other improper conduct by the lab. OMNI failed to present evidence that MD Labs had actual knowledge, was deliberately indifferent, or recklessly disregarded the medical necessity of the tests ordered. Accordingly, summary judgment was affirmed for MD Labs on all federal and state claims. View "United States, ex rel. Omni Healthcare Inc. v. MD Spine Solutions LLC" on Justia Law

A medical device company that manufactures spinal devices was indicted, along with its CEO and CFO, for allegedly paying bribes to surgeons through a sham consulting program in violation of the Anti-Kickback Statute. The indictment claimed the surgeons did not provide bona fide consulting services, but were paid to use and order the company’s devices in surgeries covered by federal health care programs. The company’s CFO, who is not a shareholder but is one of only two officers, allegedly calculated these payments based on the volume and value of surgeries performed with the company’s devices. During the development of the consulting program, the company retained outside counsel to provide legal opinions on the agreements’ compliance with health care law, and those opinions were distributed to the surgeons.After the grand jury returned the indictment, the United States District Court for the District of Massachusetts addressed whether the CFO’s plan to argue at trial that the involvement of outside counsel negated his criminal intent would effect an implied waiver of the company’s attorney-client privilege. The district court initially found that if the CFO or CEO invoked an “involvement-of-counsel” defense, it would waive the corporation’s privilege over communications with counsel. Following dismissal of charges against the company, the district court focused on whether the officers collectively could waive the privilege, concluded they could, and ruled that the CFO’s planned defense would constitute an implied waiver, allowing disclosure of certain privileged communications to the government. The district court stayed its order pending appeal.The United States Court of Appeals for the First Circuit vacated the district court’s waiver order and remanded. The Court of Appeals held that (1) the record was insufficient to determine whether the CFO alone had authority to waive the company’s privilege, and (2) not every involvement-of-counsel defense necessitates a waiver. The appellate court directed the district court to reassess the issue in light of changed circumstances and to consider less intrusive remedies before finding an implied waiver. View "United States v. SpineFrontier, Inc." on Justia Law

A nurse practitioner working in Georgia became involved in a nationwide Medicare fraud scheme between 2018 and 2019. She took part-time telemedicine jobs and reviewed patient charts for durable medical equipment (DME) prescriptions, such as neck and knee braces. The scheme involved submitting thousands of DME orders to Medicare for patients who had not actually been examined or treated as required by law. Federal investigators discovered she was signing orders, attesting to patient assessments and medical necessity, despite never contacting or examining the patients. Several orders were found to be fraudulent, such as prescribing braces to deceased or bedridden patients, or to patients with amputated limbs. She received compensation per chart reviewed, and her records indicated knowledge of the fraudulent nature of the activity.The United States District Court for the Southern District of Georgia presided over her trial, where she was charged with conspiracy, health care fraud, making false statements, aggravated identity theft, and related offenses. The jury found her guilty on sixteen counts but acquitted her of conspiracy to commit health care fraud. At sentencing, the district court applied a two-level enhancement for obstruction of justice based on perjury, citing her false testimony and inconsistencies. Her motion for a new trial was denied as untimely; the court rejected her claim of excusable neglect due to her attorney’s actions.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed four main issues: sufficiency of evidence, the lack of a deliberate ignorance jury instruction, the sentencing enhancement for perjury, and the denial of her new trial motion. The appellate court found sufficient evidence for all convictions, held that the absence of the deliberate ignorance instruction did not prejudice her substantial rights, affirmed the obstruction of justice enhancement, and found no abuse of discretion in the denial of the new trial motion. The Eleventh Circuit affirmed her convictions and sentence. View "USA v. Beaufils" on Justia Law

Two healthcare professionals operated a clinic specializing in pain management in Kentucky. One owned and managed the clinic, while the other served as its medical director. Together, they implemented a scheme to maximize profits by routinely ordering and billing insurers for both basic and more expensive, specialized urine drug tests for patients, regardless of actual medical need. The clinic eventually acquired in-house testing equipment to further increase billing. Staff raised concerns about the medical necessity of the tests and the reliability of the equipment, but the practice continued. The clinic also billed for tests conducted on malfunctioning equipment and for tests whose results could not be used for patient care due to processing delays.A grand jury indicted both individuals for conspiracy to commit health care fraud, substantive health care fraud, and (for one defendant) unlawful distribution of controlled substances. Both defendants went to trial in the United States District Court for the Eastern District of Kentucky. The jury convicted one defendant of health care fraud, and the other of both health care fraud and conspiracy to commit health care fraud. After denying post-trial motions for acquittal and new trial, the district court sentenced both to below-Guidelines imprisonment terms, after calculating loss amounts based on insurer payments for unnecessary testing, with a discount for tests likely to have been medically necessary.The United States Court of Appeals for the Sixth Circuit reviewed the convictions and sentences. The court held there was sufficient evidence to support both defendants’ convictions, upheld the district court’s evidentiary rulings (including admission of propensity and patient death evidence with limiting instructions), found no variance between the indictment and proof at trial, and determined that one defendant’s conflict-of-interest waiver was valid. The court also affirmed the district court’s methodology for estimating loss amounts for sentencing and restitution. The Sixth Circuit affirmed all convictions and sentences. View "United States v. Siefert" on Justia Law

A group of long-term care providers and their associated management company filed cost reports for 2015 with the Mississippi Division of Medicaid (DOM), reporting dividends received from three insurance companies as “other income” rather than offsetting them against insurance costs. This reporting practice had been consistently followed and accepted by DOM for over two decades. When DOM audited the 2015 cost reports around 2018, it changed its approach by offsetting these dividends against current insurance costs, thereby affecting reimbursement rates for services provided by the providers.After DOM made these adjustments, the providers sought reconsideration, but DOM upheld its decision. The providers then pursued an administrative appeal, where a hearing officer found DOM’s adjustments supported by substantial evidence and not arbitrary or capricious, recommending affirmation of DOM’s actions. DOM’s executive director adopted this recommendation. The providers appealed to the Hinds County Chancery Court, which affirmed DOM’s decision, concluding that the State Plan required reference to the Provider Reimbursement Manual (PRM) for guidance, and that DOM acted within its authority and did not violate any statutory or constitutional rights. The chancellor also found no evidence of a written internal policy regarding the treatment of such dividends.On appeal, the Supreme Court of Mississippi reviewed whether DOM’s actions were arbitrary and capricious, whether public notice of the change was required, and other issues. The Court held that DOM’s abrupt reversal of its long-standing unwritten internal policy, without reasonable explanation or public notice, was arbitrary and capricious. The Court further found that public notice was required under federal regulations for significant policy changes affecting payment rates. Accordingly, the Supreme Court of Mississippi reversed the decisions of DOM and the chancery court and rendered judgment in favor of the providers. View "Hattiesburg Medical Park Management Corp. v. Mississippi Division of Medicaid" on Justia Law

During the COVID-19 pandemic, an employer instituted a company-wide vaccine mandate that applied to all employees, including those working remotely. Two remote employees requested religious exemptions from the vaccine requirement. One objected on the basis of her Christian beliefs regarding the use of fetal cell lines in vaccine development, while the other cited her conscience and faith, referencing Catholic teachings. Both exemption requests were denied, and the employees were subsequently terminated.After their terminations, the two employees initiated a lawsuit in the United States District Court for the District of Maryland. Their claims included religious discrimination under Title VII of the Civil Rights Act and two disability discrimination claims under the Americans with Disabilities Act (ADA): one for unlawful medical inquiry and one for being “regarded as” disabled due to their unvaccinated status. The district court dismissed all claims, concluding that the plaintiffs had not sufficiently pleaded that their objections were based on religious beliefs and finding that neither ADA theory was viable because vaccination status is not equivalent to a disability.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s decision de novo. The Fourth Circuit held that the plaintiffs’ complaints plausibly alleged that their opposition to the vaccine mandate was an essential part of their religious faith and that their refusal to be vaccinated was connected to those beliefs. Therefore, the court found that the district court erred in dismissing the Title VII religious discrimination claims at the pleading stage. However, the Fourth Circuit affirmed the dismissal of both ADA claims, holding that an inquiry into vaccination status is not a disability-related inquiry and that being unvaccinated does not constitute a physical or mental impairment under the ADA. The case was affirmed in part, vacated in part, and remanded for further proceedings on the Title VII claims. View "Finn v. Humane Society of the United States" on Justia Law

A provider of air ambulance services transported a patient insured by a health maintenance organization, but the provider was not part of the insurer’s network. After the transport, the provider and insurer could not agree on the payment amount. The dispute was submitted to the Independent Dispute Resolution (IDR) process established by the federal No Surprises Act, which requires each party to submit a payment offer and supporting rationale to an arbitrator. The arbitrator, a certified IDR entity, selected the insurer’s lower payment offer. The provider alleged that the insurer had misrepresented its “Qualifying Payment Amount” (QPA) by submitting a lower QPA to the arbitrator than it had previously provided to the provider, and claimed this constituted fraud.The United States District Court for the Middle District of Florida dismissed the provider’s complaint, finding that judicial review of IDR awards is limited to the grounds set forth in the Federal Arbitration Act (FAA), and that the provider’s allegations did not meet the heightened pleading requirements for fraud. The court also dismissed the arbitrator from the case with prejudice, holding that the No Surprises Act does not create a cause of action against IDR entities.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s dismissal. The Eleventh Circuit held that the No Surprises Act incorporates the FAA’s limited grounds for vacating arbitration awards and that the provider failed to adequately plead fraud or undue means under those standards. The court also found that the arbitrator did not exceed its authority and that it was not necessary to name the arbitrator as a defendant to challenge the award. The judgment of the district court was affirmed in full. View "REACH Air Medical Services LLC v. Kaiser Foundation Health Plan Inc." on Justia Law

Several individuals, representing a class, challenged a health insurance company’s refusal to cover gender-affirming care for transgender individuals diagnosed with gender dysphoria. The company, acting as a third-party administrator for employer-sponsored, self-funded health plans, denied coverage for such treatments based on explicit plan exclusions requested by the employer sponsors. Some plaintiffs also alleged that they were denied coverage for treatments that would have been covered for other diagnoses, such as precocious puberty, but were denied solely because of the concurrent diagnosis of gender dysphoria.The United States District Court for the Western District of Washington certified the class and granted summary judgment in favor of the plaintiffs. The district court rejected the company’s arguments that it was not subject to Section 1557 of the Affordable Care Act because its third-party administrator activities were not federally funded, that it was merely following employer instructions under ERISA, and that it was shielded by the Religious Freedom Restoration Act (RFRA). The district court also found that the exclusions constituted sex-based discrimination under Section 1557.On appeal, the United States Court of Appeals for the Ninth Circuit agreed with the district court that the company is subject to Section 1557, that ERISA does not require administrators to enforce unlawful plan terms, and that RFRA does not provide a defense in this context. However, the Ninth Circuit held that the district court’s analysis of sex-based discrimination was undermined by the Supreme Court’s intervening decision in United States v. Skrmetti, which clarified the application of sex discrimination standards to exclusions for gender dysphoria treatment. The Ninth Circuit vacated the summary judgment and remanded the case for further proceedings to consider whether, under Skrmetti, the exclusions at issue may still constitute unlawful discrimination, particularly in cases involving pretext or proxy discrimination or where plaintiffs had other qualifying diagnoses. View "PRITCHARD V. BLUE CROSS BLUE SHIELD OF ILLINOIS" on Justia Law

A hospital operating in Weston, West Virginia, sought to construct a new facility approximately four miles from its current location, at a cost of about $56 million. The hospital’s current site is about sixteen miles from another hospital in Buckhannon, which holds a critical access hospital (CAH) designation, allowing it to receive higher Medicare and Medicaid reimbursements. The Buckhannon hospital argued that the construction of the new facility within twelve mountainous miles of its own would jeopardize its CAH status and financial stability.Previously, the West Virginia Health Care Authority denied the Weston hospital’s application for a certificate of need, finding that the project would harm the Buckhannon hospital and was not a superior alternative under state law. The Intermediate Court of Appeals of West Virginia affirmed this denial. However, after legislative amendments in 2023 raised the capital expenditure threshold for certificate of need requirements to $100 million, the Weston hospital requested a determination from the Authority as to whether its new project required such a certificate. The Authority, applying an unwritten guideline, concluded that a certificate of need was unnecessary for the relocation of an existing facility within the same service area if the cost was below the new threshold. The Intermediate Court of Appeals affirmed this decision, finding the relevant statute ambiguous and deferring to the Authority’s interpretation.The Supreme Court of Appeals of West Virginia reviewed the case and held that the statutory language requiring a certificate of need for the “construction . . . of a health care facility” is clear and unambiguous. The court determined that the construction of a new hospital building, even as a relocation, falls within this requirement, regardless of the capital expenditure amount. The court reversed the decisions of the lower courts and remanded the case to the Authority for further proceedings consistent with its interpretation. View "St. Joseph's Hospital of Buckhannon v. Stonewall Jackson Memorial Hospital Co." on Justia Law