Justia Health Law Opinion Summaries

Thomas Keller, a physician specializing in pain management, was convicted of prescribing controlled substances outside the scope of professional practice. Keller was known for prescribing large quantities of opioids, which led to a federal investigation. During the investigation, agents seized a journal from Keller's residence, which contained patient information and medical notes. Keller was subsequently indicted on federal charges, including unlawfully dispensing controlled substances and health care fraud. He was convicted on four counts of distributing controlled substances outside the scope of professional practice.The United States District Court for the Northern District of California denied Keller's motion to suppress the journal, finding it fell within the scope of the search warrant and was supported by probable cause. The court also declined to hold an evidentiary hearing on the suppression motion, ruling that Keller's allegations did not establish contested issues of fact. Additionally, the court rejected Keller's argument that the charges violated the nondelegation doctrine, holding that the Attorney General's regulations were within the scope of authority delegated by Congress. Keller was sentenced to 30 months in prison and 3 years of supervised release.The United States Court of Appeals for the Ninth Circuit affirmed Keller's conviction and sentence. The court held that the district court did not err in denying the motion to suppress the journal, as it was properly seized under the search warrant. The court also found no abuse of discretion in the district court's decision not to hold an evidentiary hearing. The court upheld the constitutionality of the nondelegation doctrine as applied to Keller's charges. Finally, the court ruled that the district court correctly calculated Keller's sentencing range using the drug conversion ratio found in the Sentencing Guidelines commentary, as it was properly incorporated into the Guidelines. View "United States v. Keller" on Justia Law

Juan Carlos Enriquez, a pharmacy technician, was involved in a scheme to refer Medicare and Medi-Cal beneficiaries to pharmacies owned by his alleged co-conspirator, Irina Sadovsky, in exchange for kickbacks. Enriquez was indicted for conspiracy to receive healthcare kickbacks in violation of 18 U.S.C. § 371 and for receiving prohibited payments in violation of the Anti-Kickback Statute (AKS). He moved to dismiss the indictment, arguing it failed to state an offense and lacked specificity because it did not negate the statutory safe harbor for a bona fide employment relationship under 42 U.S.C. § 1320a-7b(b)(3)(B).The United States District Court for the Central District of California denied Enriquez’s motion to dismiss. Enriquez then entered a conditional guilty plea, reserving the right to appeal the denial of his pretrial motion. The district court sentenced him to one day of imprisonment, followed by two years of supervised release, and ordered him to pay $121,115 in restitution.The United States Court of Appeals for the Ninth Circuit reviewed the case. Enriquez argued that the principles from Ruan v. United States, which required the government to prove beyond a reasonable doubt that a defendant knew they were acting in an unauthorized manner under the Controlled Substances Act, should apply to the AKS. He contended that the AKS bona fide employment safe harbor should be treated as a "quasi-element" for pleading purposes. The Ninth Circuit declined to extend Ruan’s reasoning to the AKS or to pleading requirements, affirming that indictments need not allege affirmative defenses. The court held that the indictment provided sufficient detail to inform Enriquez of the charges and enable him to prepare his defense. The district court’s denial of Enriquez’s motion to dismiss was affirmed. View "USA V. ENRIQUEZ" on Justia Law

Elizabeth Holmes and Ramesh "Sunny" Balwani, founders of Theranos, were convicted of defrauding investors about the capabilities of their company's blood-testing technology. Theranos claimed it could run accurate tests with just a drop of blood, attracting significant investments. However, the technology was unreliable, and the company misled investors about its financial health, partnerships, and the validation of its technology by pharmaceutical companies.The United States District Court for the Northern District of California severed their trials due to Holmes's allegations of abuse by Balwani. Holmes was convicted on four counts related to investor fraud, while Balwani was convicted on all counts, including conspiracy to commit wire fraud against investors and patients. Holmes was sentenced to 135 months, and Balwani to 155 months in prison. The district court also ordered them to pay $452 million in restitution.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court affirmed the convictions, sentences, and restitution order. It held that the district court did not abuse its discretion in admitting testimony from former Theranos employees, even if some of it veered into expert territory. The court found any errors in admitting this testimony to be harmless due to the weight of other evidence against the defendants.The Ninth Circuit also upheld the district court's decision to admit a report from the Center for Medicare and Medicaid Services, finding it relevant to Holmes's knowledge and intent. The court rejected Holmes's argument that the district court violated her Confrontation Clause rights by limiting cross-examination of a former Theranos lab director. Additionally, the court found no merit in Balwani's claims of constructive amendment of the indictment and Napue violations. The court concluded that the district court's factual findings on loss causation and the number of victims were not clearly erroneous and affirmed the restitution order. View "USA V. HOLMES" on Justia Law

A medical institute and its co-director sought to provide patients with psilocybin, a schedule I controlled substance, for therapeutic use. They requested the Drug Enforcement Administration (DEA) to exempt the co-director from registration under the Controlled Substances Act (CSA) or to waive the registration requirement. The DEA declined both requests, leading the petitioners to seek judicial review.Previously, the petitioners had asked the DEA for guidance on accommodating the Right to Try Act (RTT Act) for psilocybin use. The DEA responded that the RTT Act did not waive CSA requirements, and the petitioners' initial judicial review was dismissed for lack of jurisdiction. The petitioners then made a concrete request to the DEA for exemption or waiver, which the DEA again denied, prompting the current appeal.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that it had jurisdiction under 21 U.S.C. § 877 to review the DEA's final decision. The court found that the DEA's denial was not arbitrary and capricious. The DEA provided a reasonable explanation, stating that the RTT Act did not exempt the CSA's requirements and that the proposed use of psilocybin was inconsistent with public health and safety. The DEA also noted that the petitioners did not provide sufficient details for the proposed regulation. The court denied the petition for review, affirming the DEA's decision. View "ADVANCED INTEGRATIVE MEDICAL SCIENCE INSTITUTE, PLLC V. UNITED STATES DRUG ENFORCEMENT ADMIN" on Justia Law

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