Justia Health Law Opinion Summaries

Julian Omidi and his business, Surgery Center Management, LLC (SCM), were involved in a fraudulent scheme called "Get Thin," which promised weight loss through Lap-Band surgery and other medical procedures. Omidi and SCM defrauded insurance companies by submitting false claims for reimbursement, including fabricated patient data and misrepresented physician involvement. The scheme recruited patients through a call center, pushing them towards expensive medical tests and procedures regardless of medical necessity.A grand jury indicted Omidi and SCM for mail fraud, wire fraud, money laundering, and related charges. After extensive pretrial litigation and a lengthy jury trial, both were convicted on all charges. The district court sentenced Omidi to 84 months in prison and fined SCM over $22 million. The government sought forfeiture of nearly $100 million, arguing that all proceeds from the Get Thin scheme were derived from fraud. The district court agreed, finding that even proceeds from legitimate procedures were indirectly the result of the fraudulent scheme.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court affirmed the district court's forfeiture judgment, holding that under 18 U.S.C. § 981(a)(1)(C), all proceeds directly or indirectly derived from a health care fraud scheme must be forfeited. The court rejected the argument that only proceeds from fraudulent transactions should be forfeited, noting that the entire business was permeated with fraud. The court concluded that there is no "100% Fraud Rule" in forfeiture cases seeking proceeds of a fraud scheme, and all proceeds from the Get Thin scheme were subject to forfeiture. View "United States V. Surgery Center Management, LLC" on Justia Law

Relator filed a qui tam action under the False Claims Act, 31 U.S.C. 3729-3733, alleging that defendants submitted false certifications under 42 C.F.R. 422.504(l)(l)2), by conducting retrospective reviews of medical records designed to identify and report only under-reported diagnosis codes (diagnosis codes erroneously not submitted to CMS despite adequate support in an enrollee’s medical records), not over-reported codes (codes erroneously submitted to CMS absent adequate record support). The district court denied relator leave to file a proposed fourth amended complaint. The court concluded that the district court erred by concluding that amendment would be futile where relator's proposed fourth amended complaint asserts a cognizable legal theory. Relator alleged that Medicare Advantage organizations design retrospective reviews of enrollees’ medical records deliberately to avoid identifying erroneously submitted diagnosis codes that might otherwise have been identified with reasonable diligence. The court also concluded that the district court abused its discretion by denying leave to amend based on undue delay. In this case, leave to amend is proper given the early stage of litigation, relator does not seek to assert a new legal theory, and this is relator's first attempt to cure deficiencies. Therefore, because the district court abused its discretion in denying leave to amend, the court vacated the district court's dismissal and remanded with instructions. View "Swoben v. United Healthcare" on Justia Law

This appeal arose out of a 42 U.S.C. 1983 action filed against DSHS by plaintiff. At issue is whether the Due Process Clause compels the state to perform a competency evaluation of pretrial detainees within seven days of a court order requiring evaluation. The district court addressed both initial competency evaluations and the mental health restoration services that follow a determination of incompetency to stand trial and concluded that the Due Process Clause of the Fourteenth Amendment requires that services for both categories must be provided within seven days of a court order, absent an individualized determination of clinical good cause. The district court entered a permanent injunction to this effect, although Washington appeals only that portion related to initial competency evaluations. The court agreed with the district court that DSHS must conduct competency evaluations within a reasonable time following a court’s order. The district court’s seven-day mandate, however, imposes a temporal obligation beyond what the Constitution requires. Therefore, the court vacated the injunction with respect to the seven-day requirement for in-jail competency evaluations and remanded to the district court to amend the injunction. View "Trueblood V. WSDSHS" on Justia Law

Mission purchased the assets of South Coast and attempted by an assets-only purchase to avoid South Coast's potential liabilities under South Coast's Medicare provider agreement. These liabilities encompassed potential mandated reimbursement to Medicare for any previous overpayments made to South Coast. The Secretary determined that Mission was not entitled to bill Medicare for patient services at its new facility until that facility had a provider agreement of its own. Mission appealed the Secretary's decision. The court rejected Mission's assertion that former 42 C.F.R. 489.13(d)(1)(i) permitted it to avoid South Coast’s Medicare liabilities. The court cited to the Fifth Circuit's opinion in United States v. Vernon Home Health, Inc.: “federal law governs cases involving the rights of the United States arising under a nationwide federal program such as the Social Security Act. The authority of the United States in relation to funds disbursed and the rights acquired by it in relation to those funds are not dependent upon state law.” It is equally true that private parties have no power to alter their legal obligations with Medicare under their provider agreements. The court also rejected Mission's argument that it is entitled to the benefit of the retroactivity provision in 42 C.F.R. 489.13(d)(2). The court concluded that the Secretary's interpretations and decisions rendered by the DAB in this case were reasonable. Accordingly, the court affirmed the judgment. View "Mission Hosp. Reg'l Med. Ctr. v. Burwell" on Justia Law