Justia Health Law Opinion Summaries

A company that manufactures menthol-flavored e-cigarette products applied to the United States Food & Drug Administration (FDA) for marketing authorization, as required under the Family Smoking Prevention and Tobacco Control Act (TCA). The FDA, concerned about the appeal of non-tobacco-flavored e-cigarettes to minors, especially menthol varieties, evaluated whether the benefits of these products for adult smokers outweighed the risks to youth. After reviewing the evidence and applying its “comparative-efficacy standard,” which requires proof that non-tobacco-flavored e-cigarettes encourage more adult smokers to switch or quit compared to tobacco-flavored versions, the FDA denied the application.The petitioners challenged the FDA’s denial through a petition for review to the United States Court of Appeals for the Fifth Circuit. They raised four main arguments: that the FDA’s authority under the TCA violated the major questions and nondelegation doctrines; that the TCA’s “appropriate for the protection of the public health” (APPH) standard is unconstitutionally vague; that the FDA’s comparative-efficacy standard was an unlawfully adopted tobacco product standard; and that the FDA’s application of the APPH standard to their application was arbitrary and capricious. The petitioners also argued that the FDA improperly disregarded recent data and failed to consider their proposed marketing plan.The United States Court of Appeals for the Fifth Circuit reviewed the FDA’s decision under the Administrative Procedure Act’s arbitrary and capricious standard. The court held that Congress’s delegation of authority to the FDA was constitutional, the APPH standard was not unconstitutionally vague, and the comparative-efficacy standard was not a tobacco product standard requiring notice-and-comment rulemaking. The court further found that the FDA reasonably explained its decision and did not act arbitrarily or capriciously in denying the application. The petition for review was denied. View "VDX Distro v. FDA" on Justia Law

A laboratory testing services company, which participates in the Texas Medicaid program, was accused by the State and a private qui tam relator of violating Texas administrative regulations. The State alleged that the company failed to offer Medicaid the same pricing and discounts it provided to other payors, and that it made false statements, misrepresentations, and omissions about its compliance with those regulations. The State sought civil penalties under Texas’s Health Care Program Fraud Prevention Act for conduct going back more than twenty years.After a private party initiated a qui tam action in 2013, the Office of the Attorney General conducted a lengthy investigation, during which the company provided detailed disclosures about its billing practices and its interpretation of the relevant regulations. Despite this, the State continued to pay the company’s Medicaid claims without objection for seven years. In 2021, the State intervened, alleging that the company’s conduct resulted in overpayments by Medicaid.The trial court granted summary judgment for the company, holding that the State failed to prove that the alleged false statements, misrepresentations, or omissions were material to its payment decisions. The Court of Appeals for the First District of Texas reversed, holding that materiality was not required for omissions under the Act, and that fact issues remained regarding materiality.The Supreme Court of Texas reviewed the case. It held that the Act requires a showing of materiality for omissions as well as for false statements or misrepresentations. The court found no materiality in this record, given the State’s knowledge of and acquiescence to the company’s practices for years. The Supreme Court of Texas reversed the judgment of the court of appeals and reinstated the trial court’s judgment in favor of the company. View "LABORATORY CORPORATION OF AMERICA HOLDINGS v. THE STATE OF TEXAS" on Justia Law

A dentist who worked for a group of dental practices in Texas discovered what he alleged to be a scheme of fraudulent dental procedures billed to the Texas Medicaid program. After being promoted to a leadership role in 2019, he claimed to have uncovered practices where dentists were pressured to perform unnecessary fillings and bill them under specific ADA codes. The dentist filed a qui tam action under the Texas Health Care Program Fraud Prevention Act in 2021, naming the dental group, its management company, and related entities as defendants. The alleged scheme involved hiring dentists burdened by student debt and compensating them in ways that encouraged compliance with these practices.Previously, another employee had filed a similar qui tam action in Travis County in 2012, alleging a broader fraudulent scheme by the same dental group, including unnecessary procedures and improper billing. That action also involved a third-party payment processor and resulted in a large settlement with the State in 2019. The earlier action was still pending on appeal. After the dentist who filed the 2021 action died, the defendants moved to dismiss, arguing that the claim was extinguished by his death and barred by the earlier pending action, the public disclosure of fraud allegations, and the doctrine of dominant jurisdiction. The trial court denied all these motions, including substituting the deceased relator’s widow as representative, and the defendants sought mandamus relief in the Court of Appeals for the Fifteenth District of Texas, which denied their petition.The Supreme Court of Texas reviewed the petition for writ of mandamus. It held that qui tam claims under the Act survive the relator’s death because they belong to the State, not the individual relator. The Court also found that the defendants had not conclusively shown the later suit was based on the same facts as the earlier action, nor that public disclosure barred the claims. Finally, dominant jurisdiction did not require abatement. The Court denied the petition. View "IN RE TAFEL" on Justia Law

Samuel Harris established a medical marketing company, Secure Health, to promote cancer-screening tests to Medicare and Medicaid recipients. The company sent salespeople door-to-door, paid telemedicine providers and employees on a per-patient basis, and referred patients to a laboratory, Crestar, which compensated Secure Health per referral. Crestar billed federal healthcare programs, generating substantial income. Harris sought legal advice regarding the business model; his attorney, Christopher Esseltine, provided a compliance memorandum premised on the belief that employees were paid a flat salary, not per patient. Despite this, Harris paid employees and doctors per patient, raising concerns under the Anti-Kickback Statute, which prohibits remuneration for patient referrals in federally funded healthcare programs.After federal agents investigated Secure Health, Harris was indicted in the United States District Court for the Middle District of Tennessee on several counts, including conspiring to violate the Anti-Kickback Statute and receiving kickbacks for patient referrals. Following a lengthy trial, the jury convicted Harris on counts related to the Anti-Kickback Statute and acquitted him of healthcare fraud charges. The district court sentenced Harris to 30 months, below the guideline range.The United States Court of Appeals for the Sixth Circuit reviewed Harris’s appeal, focusing on three main issues: the district court’s refusal to instruct the jury on an advice-of-counsel defense, denial of a mistrial following a prosecutorial remark, and exclusion of a full recording as hearsay evidence. The Sixth Circuit held that Harris failed to fully disclose pertinent facts to his attorney, specifically the per-patient payment structure, and thus was not entitled to the advice-of-counsel instruction. The court also found no abuse of discretion in denying a mistrial or in the evidentiary ruling. The convictions and sentence were affirmed. View "United States v. Harris" on Justia Law

Three physicians—Evann Herrell, Mark Grenkoski, and Keri McFarlane—worked at Express Health Care, a clinic claiming to treat opioid addiction but operating as a pill mill. The clinic prescribed controlled substances in high volumes for cash, disregarding legitimate medical standards. Doctors spent minimal time with patients, ignored signs of diversion, and falsified records. EHC also submitted fraudulent Medicare claims by ordering unnecessary drug tests. McFarlane eventually cooperated with the FBI. Herrell, Grenkoski, and McFarlane were among the few who went to trial after most other clinic staff pleaded guilty.The United States District Court for the Eastern District of Kentucky conducted a 30-day jury trial, resulting in convictions for conspiracy to distribute controlled substances, falsifying medical records, wire and health care fraud, and money laundering. The defendants filed post-trial motions for acquittal and new trials, which the district court denied. Each defendant was sentenced to prison and filed timely appeals, raising challenges related to sufficiency of the evidence, evidentiary rulings, jury instructions, trial severance, and sentencing.The United States Court of Appeals for the Sixth Circuit reviewed the case. Applying the appropriate standards of review—including abuse of discretion for evidentiary and severance decisions and de novo review for legal questions—the court found sufficient evidence to support all convictions. It held the challenged evidentiary rulings were either correct or harmless. The jury instructions appropriately conveyed the required mens rea under Supreme Court precedent. The court determined that denial of severance for McFarlane was not an abuse of discretion and that cumulative error did not warrant reversal. Grenkoski’s challenge to sentencing correction was rejected due to jurisdictional limits. The Sixth Circuit affirmed all convictions and sentences. View "United States v. Herrell" on Justia Law

Several pharmacists in Michigan and Ohio operated independent pharmacies where they engaged in fraudulent billing practices. Rather than reversing insurance claims for prescriptions that were never picked up by patients, these pharmacists intentionally left the claims uncorrected, thereby receiving payments for medications that were not actually dispensed. They also increased the volume of such claims by waiving copays and substituting generic drugs for brand-name ones while billing for the more expensive medication. An audit by Qlarant, a government contractor, uncovered that the pharmacies had billed Medicare and Medicaid for far more medication than they had purchased, resulting in significant financial losses to insurers.The United States District Court for the Eastern District of Michigan tried four of the charged pharmacists after their co-defendants pleaded guilty. A jury convicted all four of conspiracy to commit healthcare and wire fraud, with additional healthcare fraud convictions for two defendants. The district court granted a motion for acquittal on some substantive counts, sentenced the defendants to terms ranging from 24 to 120 months, and imposed restitution obligations commensurate with their roles in the scheme. The defendants appealed, raising issues about the admission of expert testimony, evidentiary rulings, variance from the indictment, jury polling, sentencing enhancements, and restitution orders.The United States Court of Appeals for the Sixth Circuit reviewed the convictions and sentences. It held that the admission of the government’s expert testimony did not violate the Confrontation Clause, that the district court properly excluded certain defense evidence and did not err in qualifying the expert in front of the jury, and that the evidence supported a single overarching conspiracy. The court also found no error in the calculation of loss amounts, enhancements for sophisticated means, or the procedure and amount of restitution. The Sixth Circuit affirmed the judgments of the district court. View "United States v. Hamaed" on Justia Law

Mark and Courtney Wightman, who own a dental clinic in Louisiana, entered into an agreement with DenteMax, a preferred provider organization (PPO), allowing DenteMax to offer their services at discounted rates to its network subscribers in exchange for access to more patients. Unbeknownst to the Wightmans, DenteMax also entered into a separate agreement with Ameritas Life Insurance Corporation, which permitted Ameritas to pay DenteMax’s network providers, including the Wightmans, at the same discounted rates. The Wightmans only became aware of this arrangement when Ameritas reimbursed them at the discounted rates rather than their standard rates for services rendered to Ameritas-insured patients.The Wightmans filed suit in the United States District Court for the Eastern District of Louisiana against Ameritas and DenteMax, alleging breach of contract, violations of Louisiana’s Preferred Provider Organization Act (PPO Act), and unjust enrichment. The district court initially dismissed several claims, partly on the ground that the suit was prescribed (time-barred). On appeal, the United States Court of Appeals for the Fifth Circuit certified a question to the Louisiana Supreme Court, which held that PPO Act claims are contractual for prescriptive purposes, making the claims timely. The Fifth Circuit reversed the district court’s prior dismissal. DenteMax settled, and on remand, the district court granted summary judgment to Ameritas, concluding that dental services are not “healthcare services” under the PPO Act, and that the Wightmans had abandoned their non-PPO Act claims.On further appeal, the United States Court of Appeals for the Fifth Circuit held that dental services are “healthcare” under the PPO Act, reversing the district court’s grant of summary judgment on those claims. The court also found error in the district court’s treatment of the abandonment of non-PPO Act claims and remanded for further proceedings. The denial of leave to amend was affirmed. View "Wightman v. Ameritas Life Ins" on Justia Law

A woman was seriously injured as a passenger in a car accident in Montgomery County, Alabama. She first received treatment at one hospital and was then transferred to another for further care. Both hospitals, which are affiliated with public entities, filed statutory hospital liens in probate courts to secure payment for her medical expenses from any settlement or recovery she might obtain related to her injuries. The total amount of the liens exceeded the amount available from the car owner’s insurance, which provided $75,000 in coverage. The woman settled with the insurance company and received a portion of the proceeds, with the rest held by her attorney pending resolution of the hospital liens.Afterward, she filed an action in the Montgomery Circuit Court, seeking interpleader and declaratory relief to determine the validity and amounts of the hospitals’ liens. One hospital, the University of South Alabama Health University Hospital, argued it was immune from suit under Article I, § 14, of the Alabama Constitution because it is a state agency. The trial court agreed, found that the state hospital was a necessary party, and dismissed the claims against both hospitals with prejudice, concluding it lacked subject-matter jurisdiction.The Supreme Court of Alabama reviewed the dismissal de novo. It held that an interpleader action brought under Rule 22 of the Alabama Rules of Civil Procedure to resolve the validity and amount of hospital liens does not implicate state immunity and does not deprive the trial court of jurisdiction, even when a state entity is named as a defendant. The Court reversed the trial court’s dismissal and remanded the case for further proceedings, allowing the plaintiff’s interpleader claim to go forward. View "Wood v. Health Care Authority for Baptist Health" on Justia Law

A former patient of a hospital in Bayamón, Puerto Rico, alleged that her personally identifiable and health information was compromised in a ransomware attack that affected over half a million patients. She received a notice letter from the hospital confirming the breach but stating that, although files were accessed and encrypted, there was no indication that patient information had been used by unauthorized persons. Subsequently, she filed a putative class action in federal court, claiming that the breach resulted from the hospital’s failure to properly safeguard patient data. She asserted that this failure exposed her and others to risks such as identity theft, required them to spend time and incur expenses mitigating potential harm, and diminished the value of their information.The United States District Court for the District of Puerto Rico, after several rounds of amended complaints and motions, dismissed the claims for lack of Article III standing. The district court found that the plaintiff’s complaint did not plausibly allege that her alleged injury—such as the discovery of a fraudulent cellphone account opened in her name—was traceable to the hospital’s data breach. Attempts to add further allegations or conduct jurisdictional discovery were denied as futile.On appeal, the United States Court of Appeals for the First Circuit reviewed whether the plaintiff had adequately pleaded both an injury in fact and traceability for standing. The court held that, while the complaint sufficiently alleged an injury in fact by describing actual misuse of her information, it failed to plausibly connect that harm to the hospital’s data breach. The court found no specific facts to support a temporal or factual link between the breach and the fraudulent activity. As a result, the First Circuit affirmed the dismissal of all claims for lack of standing. View "Santos-Pagan v. Bayamon Medical Center" on Justia Law

After being involuntarily detained for 72 hours under California Welfare and Institutions Code section 5150 due to a diagnosis of bipolar disorder and concerns about his safety, Anthony Sgaraglino was discharged from the psychiatric unit at Ventura County Medical Center. The attending physician determined that Anthony did not meet the criteria for an extended hold under section 5250. Despite his family’s warnings that he was suicidal and their efforts to continue his commitment, Anthony was released without medication. He died by suicide the following day.Anthony’s parents, Franklin and Linda Sgaraglino, filed a wrongful death lawsuit against the County of Ventura in the Superior Court of Ventura County, alleging general negligence based on the hospital’s decision to discharge Anthony without medication and despite warning signs. The County moved for summary judgment, arguing it was immune from liability under Welfare and Institutions Code section 5113. The trial court agreed, granting summary judgment in favor of the County. The court found that section 5113 provided immunity for decisions related to the release of psychiatric patients, and rejected the argument that the immunity did not extend to claims of gross negligence. The court also deemed the facts in the County’s separate statement as undisputed because the plaintiffs failed to file a responsive statement.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. It affirmed the trial court’s decision, holding that section 5113 immunizes psychiatric treatment facilities and their operators from both civil and criminal liability for actions taken by a person released at or before the end of an involuntary commitment period. The Court also held that this immunity applies even where claims are framed as gross negligence and that new theories of liability not raised below could not be considered on appeal. Judgment was affirmed. View "Sgaraglino v. County of Ventura" on Justia Law