Justia Health Law Opinion Summaries

An inpatient rehabilitation facility employed a sales representative who raised concerns about the facility’s use of nonclinical personnel in the preadmission screening process required for Medicare reimbursement. The sales representative was terminated after five months of employment. Shortly thereafter, she filed a qui tam action under the False Claims Act, alleging that the facility presented false claims to Medicare, used false records to obtain payment, and conspired to submit false claims. She amended her complaint multiple times, and the government declined to intervene in the case.The United States District Court for the Southern District of Texas reviewed the second amended complaint after the defendant moved to dismiss under Rule 12(b)(6). The magistrate judge recommended dismissal of all claims, finding the complaint insufficiently plausible and lacking the particularity required by Rules 8(a) and 9(b). The magistrate judge also recommended denying leave to further amend the complaint as futile under Rule 16. The district court adopted these recommendations, entered final judgment, and dismissed the case with prejudice. The plaintiff timely appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo and the denial of leave to amend for abuse of discretion. The Fifth Circuit held that the complaint failed to plead sufficient facts to support the elements of a False Claims Act violation, specifically the falsity of the claims and the connection between the alleged conduct and the submission of false claims. The court also found that amendment would be futile, as the plaintiff had already amended her complaint twice without remedying the deficiencies. The Fifth Circuit affirmed the district court’s dismissal of the claims with prejudice. View "Gentry v. Encompass Health Rehabilitation Hospital of Pearland, L.L.C." on Justia Law

Fifty-six Texas emergency-medicine physician groups provided out-of-network emergency care to patients insured by twenty-four Blue Cross Blue Shield-affiliated plans from outside Texas. The physician groups sought reimbursement for their services, relying on assignments of benefits obtained from patients during hospital registration. The Blue Plans paid only part of the billed amounts, and the physician groups pursued appeals through the provider appeals process, but often received generic or no responses. After partial payments and unsuccessful appeals, the physician groups filed suit, alleging underpayment for 290,000 claims. Following a settlement, most claims were dismissed, and the district court selected 182 representative bellwether claims for summary judgment.The United States District Court for the Northern District of Texas granted summary judgment for the Blue Plans on all bellwether claims. The court found that the physician groups lacked standing due to issues with the assignments, such as ambiguous language, lack of written evidence for some claims, and anti-assignment provisions in the underlying plans. The court also held that the physician groups failed to exhaust administrative remedies, as they did not use the member appeals process specified in the plans, and dismissed some claims as time-barred. Final judgment was entered for the Blue Plans, and the physician groups appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s decision de novo. The Fifth Circuit affirmed summary judgment only for claims where no written assignment was produced, finding the physician groups’ evidence insufficient. For the remaining claims, the Fifth Circuit vacated summary judgment and remanded for further proceedings. The court held that ambiguities in assignment language created factual disputes, that assignments of “all rights” could include the right to sue, and that the district court applied the wrong legal standard to estoppel regarding anti-assignment clauses and exhaustion of administrative remedies. The case was remanded for further evidentiary determinations. View "Angelina Emergency Medicine Associates PA v. Blue Cross" on Justia Law

An advanced practice registered nurse in Texas, who maintained an active nursing license and a Prescriptive Authority Number, did not have a current prescriptive-authority agreement with a physician, as required by Texas law to prescribe drugs. She was not accused of any misconduct but was attending an educational program to transition careers. Because she lacked a prescriptive-authority agreement, the Drug Enforcement Administration (DEA) initiated proceedings to revoke her federal Certificate of Registration, which allows her to handle controlled substances.An administrative law judge within the DEA recommended revocation, finding that she was “without state authority to handle controlled substances.” The Administrator of the DEA adopted this recommendation and revoked her registration. The nurse then petitioned for review directly to the United States Court of Appeals for the Fifth Circuit, as permitted by statute.The United States Court of Appeals for the Fifth Circuit reviewed the DEA’s action and concluded that the agency exceeded its statutory authority under 21 U.S.C. § 824(a)(3). The court held that the statute requires both the loss of a state license or registration and the lack of state authorization to handle controlled substances before the DEA may revoke a registration. Because the nurse still held all relevant state licenses and registrations, the court determined that the DEA lacked authority to revoke her registration solely due to the absence of a prescriptive-authority agreement. The court granted the petition for review, vacated the DEA’s revocation order, and remanded the case to the agency for further proceedings consistent with its opinion. View "DeWitt v. Drug Enforcement Administration" on Justia Law

A group of drug manufacturers that participate in the federal Section 340B program challenged a Mississippi law, H.B. 728, which prohibits manufacturers from interfering with healthcare providers’ use of contract pharmacies to distribute discounted drugs to low-income and uninsured patients. The manufacturers argued that the law compels them to transfer drugs at a discount to private, for-profit pharmacies and expands their obligations under federal law, potentially enabling improper resale of discounted drugs. They sought a preliminary injunction to prevent the law from taking effect, claiming it constituted an unconstitutional taking and was preempted by federal law.The United States District Court for the Southern District of Mississippi denied the manufacturers’ motion for a preliminary injunction. The court found that the manufacturers had not demonstrated a substantial likelihood of success on the merits of their takings or preemption claims, and thus were not entitled to preliminary injunctive relief. The manufacturers appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of a preliminary injunction for abuse of discretion, applying clear error review to factual findings and de novo review to legal conclusions. The Fifth Circuit affirmed the district court’s decision, holding that the manufacturers had not shown a substantial likelihood of success on their claims. The court concluded that H.B. 728 did not effectuate a physical or regulatory taking, nor was it preempted by federal law under either field or conflict preemption theories. The court emphasized that, on the record presented, the manufacturers had not met their burden to justify the extraordinary remedy of a preliminary injunction. The district court’s denial of injunctive relief was therefore affirmed. View "AbbVie v. Fitch" on Justia Law

A Chinese manufacturer of electronic nicotine delivery systems (ENDS) sought authorization from the Food and Drug Administration (FDA) to market its refillable e-cigarette device in the United States. The device, sold without e-liquid, allows consumers to use a wide range of nicotine concentrations. The manufacturer submitted a premarket tobacco product application (PMTA) in August 2020, asserting that its product was appropriate for the protection of public health. After a preliminary assessment, the FDA identified deficiencies in the application and issued a deficiency letter in March 2023, requesting additional information. The manufacturer responded to some, but not all, of the deficiencies and requested an extension, which the FDA later denied. In January 2024, the FDA issued a final order denying the application, citing insufficient data to evaluate the product’s risks and benefits.The United States Court of Appeals for the Fifth Circuit reviewed the case after the manufacturer and a retailer based in Texas, who was also affected by the denial, petitioned for review. The court determined that venue was proper because the retailer had its principal place of business in the circuit. The petitioners argued that the FDA’s denial was arbitrary and capricious, claiming the agency failed to weigh the public health benefits of the product and improperly limited applicants to a single deficiency letter.The Fifth Circuit held that the FDA’s decision was reasonable and reasonably explained. The court found that the FDA had considered the potential benefits and risks of the product, explained the deficiencies in the application, and did not impose new evidentiary requirements without notice. The court also concluded that the FDA’s policy of issuing only one deficiency letter was adequately justified and not arbitrary. The petition for review was denied. View "Shenzhen Youme v. FDA" on Justia Law

The plaintiffs, Cynthia Wilson, Erin Angelo, and Nicholas Angelo, filed a class action lawsuit against Centene Management Company, L.L.C., Celtic Insurance Company, Superior HealthPlan, Inc., and Centene Company of Texas, L.P. They alleged that the defendants provided materially inaccurate provider lists for their health insurance plans, causing the plaintiffs and proposed class members to pay inflated premiums. Specifically, the plaintiffs claimed that the inaccuracies in the provider directories led to overcharges for access to healthcare providers who were not actually available.The United States District Court for the Western District of Texas denied class certification, concluding that the plaintiffs lacked standing because they failed to establish an injury-in-fact. The court found that the plaintiffs did not adequately demonstrate that they had reasonable expectations regarding the size of the provider network and that the premiums they paid were inflated due to discrepancies between the promised and actual network sizes. The court also questioned the plaintiffs' expert report, which attempted to show a correlation between network size and premium prices, stating that it only showed correlation, not causation.The United States Court of Appeals for the Fifth Circuit reviewed the case and determined that the district court erred by not considering the appropriate test for determining standing at the class-certification stage. The Fifth Circuit adopted the class-certification approach, which requires only that the named plaintiffs demonstrate individual standing before addressing class certification under Rule 23. The appellate court found that the district court improperly engaged in a merits-based evaluation of the plaintiffs' expert testimony when determining standing. The Fifth Circuit vacated the district court's order denying class certification and remanded the case for further proceedings consistent with its opinion. View "Wilson v. Centene Management" on Justia Law

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