Articles Posted in U.S. 9th Circuit Court of Appeals

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PAMC appealed the district court's affirmance of the Secretary's decision denying PAMC its full Medicare Annual Payment Updated for the fiscal year 2009. PAMC claimed that the Department acted arbitrarily and capriciously when it refused to excuse PAMC's late filing of the required Reporting Hospital Quality Data for Annual Payment Updated (RHQDAPU) program data by the admittedly applicable deadline. The court concluded that PAMC neither pointed to any contrary or antithetical decisions by the Department under similar circumstances, nor otherwise demonstrated that the Board acted arbitrary or capriciously when it denied equitable relief. The court rejected PAMC's argument that the Board should have used the contract doctrine of substantial performance to excuse PAMC's failure to submit data at the proper time. The court did not view the Board's adherence to the policy of strict compliance with a deadline as arbitrary and capricious. Accordingly, the court affirmed the judgment of the district court. View "PAMC, LTD. v. Sebelius" on Justia Law

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In enacting comprehensive welfare reform in 1996, Congress rendered various groups of aliens ineligible for federal benefits and also restricted states' ability to use their own funds to provide benefits to certain aliens. As a condition of receiving federal funds, Congress required states to limit eligibility for federal benefits, such as Medicaid, to citizens and certain aliens. Plaintiffs filed suit claiming that Basic Health Hawai'i violated the Equal Protection Clause of the Fourteenth Amendment because it provided less health coverage to nonimmigrant aliens residing in Hawai'i (COFA Residents) than the health coverage that Hawai'i provided to citizens and qualified aliens who are eligible for federal reimbursements through Medicaid. The court concluded that Congress has plenary power to regulate immigration and the conditions on which aliens remain in the United States, and Congress has authorized states to do exactly what Hawai'i had done here - determine the eligibility for, and terms of, state benefits for aliens in a narrow third category, with regard to whom Congress expressly gave states limited discretion. Hawai'i has no constitutional obligation to fill the gap left by Congress's withdrawal of federal funding for COFA Residents. Accordingly, the court vacated the district court's grant of a preliminary injunction preventing Hawai'i from reducing state-paid health benefits for COFA Residents because Hawai'i is not obligated to backfill the loss of federal funds with state funds and its decision not to do so was subject to rational-basis review. View "Korab v. Fink" on Justia Law

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After the Department denied Memorial's application for a Certificate of Need to perform elective percutaneous coronary interventions (PCIs), Memorial filed suit alleging that the PCI regulations were an unreasonable restraint of trade in violation of the Sherman Act, 15 U.S.C. 1, and unreasonably discriminated against interstate commerce in violation of the dormant Commerce Clause and 42 U.S.C. 1983. The court concluded that the requirements did not violate the dormant Commerce Clause where the minimum procedure requirement did not burden interstate commerce and the minimum procedure requirement protected public safety. Accordingly, the court affirmed the district court's dismissal of all of Memorial's remaining claims. View "Yakima Valley Mem'l Hosp. v. Dep't of Health" on Justia Law

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The Clinics filed suit challenging California Welfare and Institutions Code 14131.10, which eliminated certain Medi-Cal benefits that the state deemed optional, including adult dental, podiatry, optometry, and chiropractic services. The court reversed the district court's holding that the Clinics have a private right of action to challenge the Department's implementation of the state plan amendments (SPA) prior to obtaining approval; affirmed that the Clinics have a private right of action to bring a claim pursuant to 42 U.S.C. 1983 challenging the validity of section 14131.10; and reversed the district court's interpretation of the Medicaid Act, 42 U.S.C. 1396 et seq., holding that section 14131.10 impermissibly eliminated mandatory services from coverage. View "California Ass'n of Rural Health Clinics v. Douglas" on Justia Law

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Plaintiffs appealed the Secretary's denial of their claims for Medicare coverage for dental services. Plaintiffs contended that this denial was premised on the Secretary's unreasonable interpretation of the Medicare Act, Pub. L. No. 89-97, 79 Stat. 286, which contravened the intent of Congress and violated plaintiffs' right to equal protection under the Fifth Amendment. The court concluded that, although the statutory provision for exclusion of dental services was ambiguous in the sense that plausible divergent constructions could be urged, the Secretary's interpretation of the statute was reasonable. The court also concluded that the Secretary's statutory interpretation warranted Chevron deference and the Secretary's statutory interpretation was reasonable. Accordingly, the court affirmed the judgment. View "Fournier v. Sebelius" on Justia Law

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These are two appeals stemming from the government's immediate termination of a Medicare Part D services contract with a prescription drug insurance coverage provider, Fox. Fox subsequently filed actions in the district court challenging both the termination and an order for immediate repayment. The court affirmed the district court's holding that the contract was properly terminated; affirmed the district court's ruling that governing regulations authorized the government's demand for immediate repayment of a prorated share of the funds that had been paid to Fox at the beginning of the month and that Fox would not utilize after the contract's termination; and the government's actions were more than justified, as Fox had risked permanent damage to its enrollees by, inter alia, improperly denying coverage of critical HIV, cancer, and seizure medications, and having no compliance structure in place. View "Fox Ins. Co. v. Centers for Medicare and Medicaid" on Justia Law

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Plaintiffs claimed that PacifiCare was not entitled to any reimbursement payments out of the wrongful death benefits paid by an insurance policy to them. PacifiCare counterclaimed, arguing that it was entitled to reimbursement under both the terms of its contract with the deceased (Count I) and directly under the Medicare Act (Count 11), 42 U.S.C. 1395. At issue was whether a private Medicare Advantage Organization (MAO) plan could sue a plan participant's survivors, seeking reimbursement for advanced medical expenses out of the proceeds of an automobile insurance policy. Because interpretation of the federal Medicare Act presented a federal question, the district court had subject matter jurisdiction to determine whether that act created a cause of action in favor of PacifiCare against plaintiffs. The district court properly dismissed the causes of action arising under the Medicare Act for failure to state a claim where section 1395y(b)(2) did not create a federal cause of action in favor of a MAO and where, under section 1395y(b)(3)(A), the Private Cause of Action applied in the case of a primary plan which failed to provide for primary payment, which was not applicable in this instance. The court affirmed the district court's dismissal of Count II for failure to state a claim as well as its decision to decline to exercise supplemental jurisdiction over Count 1. View "Parra v. Pacificare of Arizona" on Justia Law

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This dispute arose from California's implementation of a change to Medicare in 2006. The Centers argued that California mishandled the shift in payment responsibility for dual-eligibles' prescription drug costs from state Medicaid programs to the new, federal Medicare Part D Program. The Centers brought suit for declaratory and injunctive relief. Among other things, the Centers urged the federal courts to declare unlawful California's "seizure" of the Centers' Medicare Part D funds, in excess of what would be owed under the per-visit rate for the Centers' expenses. The court concluded that the Eleventh Amendment barred the Centers' claims for retroactive monetary relief; the court affirmed the district court's dismissal of the Centers' claims to the extent that they sought money damages; however, the court reversed the district court and remanded to allow the district court to assess Ex parte Young's application to the Center's remaining claims. View "North East Medical Services v. CA Dept. of Health" on Justia Law

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Plaintiff and others sought and received LASIK eye surgery with a Nidek EC-5000 Excimer Laser System ("Laser") to correct farsightedness. Plaintiff, on behalf of himself and a class of similarly situated individuals, claimed that, had they known that the FDA had not approved the Laser for this use, they would not have consented to the surgeries. The court held that the complaint did not state a claim under the California Protection of Human Subjects in Medical Experimentation Act, Cal. Health & Saf. Code 24171 et seq., because the surgeries were not "medical experiments" subject to the protection of the Act. Plaintiff did not have standing to sue for injunctive relief under the California Consumers Legal Remedies Act (CLRA), Cal. Civ. Code 1750 et seq., and his other substantive claim was preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301 et seq. Plaintiff's common-law fraud by omission claim was expressly preempted by the preemption provision in the Medical Device Amendments. Even if it were not, it was impliedly preempted because it amounted to an attempt to privately enforce the FDCA. Accordingly, the court affirmed the dismissal of the complaint. View "Perez, et al v. Nidek Co., Ltd., et al" on Justia Law

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The Association sued the County, alleging that the County had breached its obligation to provide certain vested healthcare benefits in perpetuity. The Association alleged that the County had implicitly promised to provide these benefits. The California Supreme Court's recent decision in Retired Employees Ass'n of Orange County, Inc. v. County of Orange (REAOC II) recognized that a county could form a contract with implied terms under specified circumstances. The court held that the district court did not err in concluding that the amended complaint failed to state a cause of action. Nevertheless, in light of REAOC II, the court could not agree with the district court's decision to deny the Association leave to amend on the ground that such amendment would be futile. Accordingly, the court vacated and remanded for further proceedings consistent with REAOC II. View "Sonoma Cnty. Ass'n of Retired Emp. v. Sonoma Cnty." on Justia Law