Justia Health Law Opinion Summaries

Dr. Brian Carpenter was involved in a scheme to defraud TRICARE, the Department of Defense’s health insurance program. The scheme was orchestrated by Britt and Matt Hawrylak, who hired sub-reps to obtain medical information about TRICARE beneficiaries and identify doctors willing to write unnecessary prescriptions for compounded medications. These prescriptions were filled by Rxpress Pharmacy, which billed TRICARE at high rates. Carpenter, a podiatrist, was recruited by his co-defendant Jerry Hawrylak to write these prescriptions. Carpenter initially refused but later agreed to write prescriptions without receiving payment, claiming it was to help veterans. However, evidence showed that Carpenter's prescriptions were highly profitable for the Hawrylak brothers and Jerry, who made millions from the scheme.In September 2019, Carpenter and Jerry were indicted on six counts of healthcare fraud and one count of conspiracy to commit healthcare fraud. They were convicted on all counts in April 2023 by the United States District Court for the Northern District of Texas. Carpenter appealed, raising several issues, including the district court’s decision to excuse a juror mid-trial.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the district court abused its discretion by excusing a juror after the first day of trial without a legally relevant reason or factual basis. The juror was excused based on an email from her principal stating that her absence would cause hardship for her school, but there was no indication that the juror was unable to perform her duties. The appellate court held that this error was prejudicial and required vacating Carpenter’s convictions. The court remanded the case for a new trial. View "United States v. Carpenter" on Justia Law

Emergency air medical providers challenged award determinations made under the No Surprises Act (NSA). The NSA, enacted in 2022, protects patients from surprise bills for emergency services from out-of-network providers by creating an Independent Dispute Resolution (IDR) process for billing disputes between providers and insurers. Guardian Flight transported a patient in Nebraska, and a dispute arose with Aetna over the service value. Similarly, Guardian Flight and its affiliates provided emergency services to patients insured by Kaiser, leading to disputes over payment amounts. Both disputes were submitted to Medical Evaluators of Texas (MET) as the IDR entity, which sided with the insurers.The United States District Court for the Southern District of Texas consolidated the cases. The court dismissed Guardian Flight’s claims against Aetna and Kaiser, ruling that the providers failed to plead sufficient facts to trigger vacatur of the awards. However, the court denied MET’s motion to dismiss based on arbitral immunity, leading to MET’s cross-appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the NSA does not provide a general private right of action to challenge IDR awards, incorporating Federal Arbitration Act (FAA) provisions that allow courts to vacate awards only for specific reasons. The court affirmed the district court’s dismissal of the providers’ claims against Aetna and Kaiser, finding that the providers did not allege facts sufficient to show that the awards were procured by fraud or undue means under the FAA.Additionally, the Fifth Circuit addressed MET’s claim of arbitral immunity. The court concluded that MET, functioning as a neutral arbiter in the IDR process, is entitled to the same immunity from suit typically enjoyed by arbitrators. Consequently, the court reversed the district court’s judgment on this point and remanded with instructions to dismiss the providers’ claims against MET. View "Guardian Flight, L.L.C. v. Aetna Health, Inc." on Justia Law

Two air ambulance providers, Guardian Flight, LLC, and Med-Trans Corporation, sued Health Care Service Corporation (HCSC) for failing to timely pay dispute resolution awards under the No Surprises Act (NSA). The providers also claimed that HCSC improperly denied benefits under the Employee Retirement Income Security Act (ERISA) and was unjustly enriched under Texas law.The United States District Court for the Northern District of Texas dismissed the providers' complaint. The court found that the NSA does not provide a private right of action for enforcing dispute resolution awards. It also dismissed the ERISA claim for lack of standing, as the providers did not show that the beneficiaries suffered any injury since the NSA shields them from liability. Lastly, the court dismissed the quantum meruit claim, stating that the providers did not perform their services for HCSC's benefit. The court also denied the providers' request for leave to amend their complaint, deeming it futile.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The appellate court agreed that the NSA does not contain a private right of action and that the statute's text and structure support this conclusion. The court also upheld the dismissal of the ERISA claim, reiterating that the beneficiaries did not suffer any concrete injury. Finally, the court affirmed the dismissal of the quantum meruit claim, as the providers did not render services for HCSC's benefit. The appellate court also found no abuse of discretion in the district court's denial of leave to amend the complaint. View "Guardian Flight v. Health Care Service" on Justia Law

Quintan Cockerell, a marketer for two compounding pharmacies, was convicted for receiving illegal kickbacks as part of a conspiracy to induce physicians to prescribe highly lucrative prescriptions. These pharmacies, including Xpress Compounding, focused on formulating expensive topical creams, resulting in significant reimbursements from federal insurers like TRICARE. Cockerell was involved in recruiting physicians, developing new formulas, and receiving commissions disguised as payments to his then-wife. He also provided financial incentives to physicians, including lavish vacations and investment opportunities, to encourage them to prescribe these creams.The United States District Court for the Northern District of Texas convicted Cockerell of violating the Anti-Kickback Statute, conspiracy, and money laundering. He was sentenced to 29 months of imprisonment, two years of supervised release, and ordered to pay $59,879,871 in restitution. Cockerell appealed, challenging the sufficiency of the evidence, alleged misstatements of law by the Government during trial, and the restitution order.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that a reasonable jury could have convicted Cockerell based on the evidence presented. The court held that the Government provided sufficient evidence of Cockerell's involvement in the illegal kickback scheme and his intent to influence physicians. The court also found no reversible error in the Government's statements during closing arguments and upheld the restitution order, noting that Cockerell failed to provide evidence of legitimate services to offset the loss amount. Consequently, the Fifth Circuit affirmed the district court's judgment. View "United States v. Cockerell" on Justia Law

Roy Lee Jones, Jr. was involved in a methamphetamine-trafficking organization in North-Central Louisiana. He received large shipments of methamphetamine from his California-based supplier, DeLewis Johnson IV, and redistributed them to Willie Todd Harris, who then sold them to street-level dealers. After a ten-month investigation, federal law enforcement initiated grand jury proceedings, resulting in a five-count indictment. Jones was charged under 21 U.S.C. §§ 841(a)(1) and 846 for conspiracy to distribute and possess with intent to distribute methamphetamine.Jones and Johnson were tried as co-defendants and convicted by a jury. The initial presentence report (PSR) calculated Jones' offense level as 37, recommending a Guidelines range of 210-262 months. The district court sentenced Jones to 210 months' imprisonment. Jones appealed his conviction and sentence, which were affirmed by the United States Court of Appeals for the Fifth Circuit. The Supreme Court denied Jones' petition for a writ of certiorari.Jones filed a motion for a sentence reduction under Amendments 821 and 825 of the United States Sentencing Guidelines. The district court denied the motion, finding that Jones was ineligible for a reduction under USSG § 4C1.1(a)(10) because he had received an aggravating role enhancement under § 3B1.1 and had engaged in a continuing criminal enterprise as defined in 21 U.S.C. § 848.The United States Court of Appeals for the Fifth Circuit reviewed the district court's decision for abuse of discretion, its interpretation of the Guidelines de novo, and its findings of fact for clear error. The court held that either receiving a § 3B1.1 adjustment or engaging in a continuing criminal enterprise is sufficient to disqualify a defendant from a sentence reduction under § 4C1.1(a)(10). Since Jones received an aggravating role enhancement, he was ineligible for a reduction. The court affirmed the district court's decision. View "United States v. Jones" on Justia Law

Mark Eugene Ricks, a Texas state prisoner, filed a pro se lawsuit under 42 U.S.C. § 1983 against employees of the University of Texas Medical Branch (UTMB), alleging violations of his Eighth Amendment rights. Ricks claimed that he was denied treatment for chronic hepatitis C virus (HCV) based on nonmedical reasons and that the TDCJ HCV Policy was the driving force behind this unconstitutional denial of treatment. He sought injunctive and declaratory relief, as well as damages.The United States District Court for the Southern District of Texas granted the defendants' motion to dismiss Ricks's complaint for failure to state a claim, concluding that his allegations did not support a claim for deliberate indifference. The district court also denied Ricks's motion for appointment of counsel. Ricks filed a timely appeal, and the district court denied him leave to proceed in forma pauperis (IFP) on appeal, certifying that any appeal would not be taken in good faith.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and found that the district court erred in dismissing Ricks's complaint without allowing him an opportunity to amend his pleadings. The appellate court held that Ricks's allegations, when liberally construed, could potentially raise a viable claim of deliberate indifference. The court also found that the district court abused its discretion in denying Ricks's motion for appointment of counsel without considering the relevant factors set out in Ulmer v. Chancellor.The Fifth Circuit vacated the district court's orders granting the motion to dismiss and denying the appointment of counsel. The case was remanded with instructions for the district court to allow Ricks to amend his pleadings and to appoint counsel to represent him. View "Ricks v. Khan" on Justia Law

Dr. Blake Vanderlan, a physician at a hospital operated by Jackson HMA, LLC, alleged that the hospital systematically violated the Emergency Medical Treatment and Labor Act (EMTALA). He reported these violations to the Department of Health and Human Services, prompting an investigation by the Center for Medicare and Medicaid Services (CMS). CMS confirmed the violations and referred the matter to the Office of Inspector General (OIG) for potential civil monetary penalties. Vanderlan then filed a qui tam lawsuit under the False Claims Act (FCA) against Jackson HMA, alleging five FCA violations, including a retaliation claim.The United States District Court for the Southern District of Mississippi handled the case initially. The government investigated Vanderlan’s claims but declined to intervene. The case continued for six and a half years, during which the district court severed Vanderlan’s retaliation claims. The government eventually moved to dismiss the qui tam claims, arguing that the lawsuit interfered with administrative settlement negotiations and lacked merit. The district court granted the dismissal based on written filings and reaffirmed its decision after reconsideration.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court did not err in denying Vanderlan an evidentiary hearing, as the FCA only requires a hearing on the briefs. The court also determined that the government’s motion to dismiss fell under Rule 41(a)(1), which allows for dismissal without a court order, and thus, the district court had no discretion to deny the dismissal. The Fifth Circuit affirmed the district court’s judgment, concluding that the government’s decision to dismiss the case was justified and that the district court applied the correct standard. View "Vanderlan v. Jackson HMA" on Justia Law

Richard Hall and his partners established a pharmacy business to capitalize on the market for compounded drugs, targeting federal insurers for high reimbursements. They created two pharmacies, Rxpress and Xpress Compounding, to handle private and federal insurance claims, respectively. The business model involved paying marketers commissions to secure prescriptions from physicians, which led to over $59 million in federal healthcare reimbursements. Hall and his partners were indicted for conspiracy to defraud the United States, paying and receiving illegal kickbacks, and money laundering.The United States District Court for the Northern District of Texas tried the case. The jury found Hall guilty on multiple counts, including conspiracy to defraud the United States and paying illegal kickbacks. The district court sentenced Hall to 52 months in prison, three years of supervised release, and ordered him to pay over $59 million in restitution. Hall's motion for release pending appeal was denied by both the district court and the appellate court.The United States Court of Appeals for the Fifth Circuit reviewed the case. Hall raised four arguments on appeal: improper jury instructions regarding the burden of proof for the safe-harbor defense under the Anti-Kickback Statute (AKS), the definition of "employee" in the jury instructions, the exclusion of his proposed jury instruction on kickback recipients, and the imposition of restitution. The Fifth Circuit held that the district court correctly placed the burden of persuasion for the safe-harbor defense on Hall, properly defined "employee" in the jury instructions, and did not err in excluding Hall's proposed instruction on kickback recipients. The court also upheld the restitution order, finding it appropriate based on the total loss to the government. Consequently, the Fifth Circuit affirmed Hall's convictions and the district court's restitution order. View "United States v. Hall" on Justia Law

Scott Breimeister and four codefendants were tried for allegedly defrauding public and private healthcare programs of over $140 million through a scheme involving false claims for prescription drugs. During the trial, the Government made late disclosures of evidence favorable to the defense, affecting a significant portion of the testimony. The district court, concerned about the fairness of the trial, declared a mistrial sua sponte after determining that curative measures would not suffice to ensure a fair verdict.The United States District Court for the Southern District of Texas denied Breimeister's subsequent motion to bar retrial, finding that the Double Jeopardy Clause did not preclude a second trial because the mistrial was a "manifest necessity." Breimeister appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that Breimeister had impliedly consented to the mistrial by failing to object contemporaneously, and thus, the Double Jeopardy Clause did not bar retrial. Additionally, the court found that the district court did not abuse its discretion in declaring a mistrial due to manifest necessity, given the extensive impact of the Government's late disclosures on the trial's fairness. The appellate court concluded that the district court had carefully considered alternatives and acted within its discretion in declaring a mistrial. View "United States v. Breimeister" on Justia Law

Relators Tiffany Montcrief and others filed a False Claims Act suit against Peripheral Vascular Associates, P.A. (PVA), alleging that PVA billed Medicare for vascular ultrasound services that were not completed. The claims were categorized into "Testing Only" and "Double Billing" claims. The district court granted partial summary judgment to Relators, concluding that PVA submitted knowingly false claims. A jury found these claims material and awarded approximately $28.7 million in damages against PVA.The district court granted partial summary judgment to Relators on the issues of falsity and knowledge of falsity. The jury found that the claims were material and caused the Government to pay out money. The district court entered judgment against PVA, including statutory penalties and treble damages. PVA appealed, challenging the district court's grant of partial summary judgment and certain rulings during and after the trial.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's grant of partial summary judgment on the Testing Only claims but remanded for a new trial on damages. The court reversed the partial summary judgment ruling on the Double Billing claims, vacated the final judgment, and remanded for a new trial consistent with its opinion. The court concluded that the district court erred in interpreting the CPT–4 Manual and in concluding that the Manual required PVA to create separate, written reports for vascular ultrasounds before billing Medicare. The court also found that the district court abused its discretion in relying on Relators' post-trial expert declaration to calculate damages. View "Montcrief v. Peripheral Vascular" on Justia Law