Justia Health Law Opinion Summaries

A trade association representing the dietary supplement industry challenged a New York law that prohibits the sale of dietary supplements marketed for weight loss or muscle building to individuals under eighteen. The law was enacted in response to concerns about health risks to minors from such supplements. The statute defines covered products based on how they are labeled or marketed, and authorizes the Attorney General to seek injunctions against violators. The association argued that the law violates the First Amendment, is unconstitutionally vague, and is preempted by federal law.The United States District Court for the Southern District of New York denied the association’s motion for a preliminary injunction, finding that the association was unlikely to succeed on the merits of its claims, had not shown irreparable harm, and that the balance of equities and public interest weighed against granting relief. The District Court later dismissed the vagueness and preemption claims but allowed the First Amendment claim to proceed.On appeal, the United States Court of Appeals for the Second Circuit affirmed the District Court’s denial of a preliminary injunction. The Second Circuit held that the law satisfies intermediate scrutiny under the Central Hudson test for commercial speech, finding that New York has a substantial interest in protecting minors’ health, that the law directly advances that interest, and that it is not more extensive than necessary. The court also concluded that the age verification requirement does not unconstitutionally compel speech, that the statute is not unconstitutionally vague or overbroad, and that it is not preempted by federal law. The court further found that the association failed to demonstrate irreparable harm or that the public interest favored an injunction. The order denying the preliminary injunction was affirmed. View "Council for Responsible Nutrition v. James" on Justia Law

A licensed veterinarian developed and manufactured undetectable performance enhancing drugs (PEDs) for use in professional horse racing, selling them to trainers who administered them to horses to gain a competitive edge. His salesperson assisted in these activities, operating a company that distributed the drugs without prescriptions or FDA approval. The drugs were misbranded or adulterated, and the operation involved deceptive practices such as misleading labeling and falsified customs forms. The PEDs were credited by trainers for their horses’ successes, and evidence showed the drugs could be harmful if misused.The United States District Court for the Southern District of New York presided over two separate trials, resulting in convictions for both the veterinarian and his salesperson for conspiracy to manufacture and distribute misbranded or adulterated drugs with intent to defraud or mislead, in violation of the Food, Drug, and Cosmetic Act. The district court denied motions to dismiss the indictment, admitted evidence from a prior state investigation, and imposed sentences including imprisonment, restitution, and forfeiture. The court calculated loss for sentencing based on the veterinarian’s gains and ordered restitution to racetracks based on winnings by a coconspirator’s doped horses.On appeal, the United States Court of Appeals for the Second Circuit held that the statute’s “intent to defraud or mislead” element is not limited to particular categories of victims; it is sufficient if the intent relates to the underlying violation. The court found no error in the admission of evidence from the 2011 investigation or in the use of gain as a proxy for loss in sentencing. However, it vacated the restitution order to racetracks, finding no evidence they suffered pecuniary loss, and vacated the forfeiture order, holding that the relevant statute is not a civil forfeiture statute subject to criminal forfeiture procedures. The convictions and sentence were otherwise affirmed. View "United States v. Fishman" on Justia Law

Mathew James, a former nurse and owner of a medical billing business, was convicted after a jury trial for health care fraud, conspiracy to commit health care fraud, wire fraud, and aggravated identity theft. The charges arose from a scheme in which James and his employees falsified insurance claims by “upcoding” and “unbundling” medical procedures, directed patients to emergency rooms for pre-planned surgeries, and impersonated patients in communications with insurance companies. The fraudulent activity spanned several years, involved nearly 150 physicians, and resulted in tens of thousands of claims. While some of James’s business was legitimate, the government’s evidence focused on the fraudulent aspects of his operations.The United States District Court for the Eastern District of New York (Judge Seybert) presided over the trial and sentencing. The jury convicted James on most counts but acquitted him of money laundering conspiracy. During trial, jurors were inadvertently given access to transcripts of two recorded calls not admitted into evidence, but the district court declined to conduct an inquiry into the exposure, instead instructing the jury to disregard any material not in evidence. At sentencing, the court imposed a 144-month prison term, a forfeiture order of over $63 million, and restitution of nearly $337 million. The court applied sentencing enhancements for James’s leadership role and abuse of trust, and increased the sentence after considering James’s potential eligibility for earned time credits and rehabilitation programs.The United States Court of Appeals for the Second Circuit affirmed James’s conviction, finding any jury exposure to extra-record material harmless. However, the court vacated the sentence, including the forfeiture and restitution orders, holding that the district court erred by enhancing the sentence based on potential earned time credits and rehabilitation program eligibility, misapplied sentencing enhancements without adequate findings, and failed to properly calculate forfeiture and restitution by including legitimate business revenue. The case was remanded for resentencing. View "United States v. James" on Justia Law

A pharmaceutical company challenged the federal government’s implementation of a new program created by the Inflation Reduction Act of 2022, which authorizes the Centers for Medicare and Medicaid Services (CMS) to negotiate prices for certain high-expenditure prescription drugs under Medicare. The company’s drug was selected for the program, and it signed an agreement to participate “under protest” while filing suit. The company alleged that the program violated its constitutional rights under the First, Fifth, and Eighth Amendments, and that CMS failed to follow required notice-and-comment procedures under the Administrative Procedure Act (APA) when issuing the standard agreement for participation.The United States District Court for the District of Connecticut granted summary judgment to the government on all claims. The district court found that participation in the program was voluntary, so there was no unlawful deprivation of rights. It also held that the program did not impose unconstitutional conditions on participation in Medicare and Medicaid, and that the Inflation Reduction Act expressly allowed CMS to implement the program for its first three years without notice-and-comment rulemaking.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s judgment. The Second Circuit held that, under its precedent in Garelick v. Sullivan, participation in the Medicare Drug Price Negotiation Program is voluntary, and thus the program does not effect a taking, deprive the company of property without due process, or compel speech in violation of the First Amendment. The court further held that the program does not impose unconstitutional conditions because it is designed to control Medicare spending and does not regulate the company’s private market conduct. Finally, the court concluded that the Inflation Reduction Act expressly exempted CMS from the APA’s notice-and-comment requirement for the program’s initial years. View "Boehringer Ingelheim Pharms., Inc. v. Dep't of Health & Hum. Servs." on Justia Law

A healthcare provider, Neurological Surgery Practice of Long Island, PLLC, provides out-of-network medical services governed by the No Surprises Act. This Act requires out-of-network providers to seek compensation from the patient’s healthcare plan rather than billing patients directly. If a provider and a healthcare plan cannot agree on a compensation amount, an independent dispute resolution (IDR) process is used. Neurological Surgery alleges that a backlog of disputes has resulted in unpaid or delayed reimbursements due to the Departments of Health and Human Services, Treasury, and Labor failing to implement the Act properly, violating the Administrative Procedure Act (APA) and the Due Process Clause of the Fifth Amendment.The United States District Court for the Eastern District of New York dismissed Neurological Surgery’s claims. The court concluded that the claims were moot due to the reopening of the IDR portal, Neurological Surgery lacked standing to compel the Departments to enforce the Act’s deadlines on third parties, and the claims regarding the Departments’ failure to certify a sufficient number of arbitrators and provide guidance on New York’s surprise billing law were foreclosed by the APA.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court’s judgment, agreeing that the challenge to the pause of the IDR portal was moot since the portal was operational. The court also held that Neurological Surgery lacked standing to compel the Departments to enforce deadlines on healthcare plans and IDR entities, as the injury was caused by third parties, not the Departments. Additionally, the court found that the challenge to the Departments’ failure to certify a sufficient number of IDR entities was foreclosed by the APA, as the Act did not specify discrete actions required by the Departments. Lastly, the court held that the challenge to the Departments’ failure to issue guidance on New York’s surprise billing law failed to state a claim under the APA. View "Neurological Surgery v. Department of Health & Human Services" on Justia Law

The case involves the U.S. Centers for Medicare & Medicaid Services (CMS) approving the New York State Department of Health’s (NYSDOH) application to distribute $361.25 million to certain managed care organizations. These organizations were to direct the funds to the top one-third of revenue-generating licensed home care services agencies (LHCSAs) in New York’s four rate regions, provided they agreed to use the funding in a specified manner. The plaintiffs, who are LHCSAs that did not meet the revenue threshold, argued that the approval was unlawful under federal law and regulations because the class of eligible agencies was improperly defined and the application was not assessed for actuarial soundness before approval.The district court dismissed the amended complaint against the State Appellees for failing to adequately allege a cause of action under Ex parte Young and granted summary judgment to the Federal Appellees. The court concluded that the approval of the State’s application did not violate the Administrative Procedure Act (APA) and denied the plaintiffs’ motion to admit extra-record evidence.The United States Court of Appeals for the Second Circuit reviewed the case and agreed with the district court’s decision. The court held that CMS’s approval of NYSDOH’s application complied with federal law. It found that the provider class was properly defined under 42 C.F.R. § 438.6(c)(2)(ii)(B) and that CMS was not required to assess actuarial soundness during the pre-approval process. The court also concluded that CMS did not act arbitrarily or capriciously in approving the application and that the district court did not abuse its discretion in excluding the extra-record evidence. Consequently, the Second Circuit affirmed the judgment of the district court. View "Safe Haven Home Care, Inc. v. United States Department of Health and Human" on Justia Law

Plaintiffs, two individual psychiatrists and three professional associations of psychiatrists, filed suit against defendants, four health‐insurance companies, alleging that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the Mental Health Parity and Addition Equity Act of 2008 (MHPAEA), 29 U.S.C. 1185(a), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The court concluded that, because the psychiatrists are not among those expressly authorized to sue, they lack a cause of action under ERISA. The court also concluded that the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims because their members lack standing. Accordingly, the court affirmed the judgment. View "Am. Psychiatric Ass’n v. Anthem Health Plans, Inc." on Justia Law

Plaintiff filed a class action against the Commissioner, challenging New York’s coverage restrictions on certain medical services provided under its Medicaid plan. Plaintiffs argued that New York’s 2011 plan amendments, which restrict coverage of orthopedic footwear and compression stockings to patients with certain enumerated medical conditions, violate the Medicaid Act’s, 42 U.S.C. 1396 et seq., reasonable standards, home health services, due process, and comparability provisions, as well as the anti‐discrimination provision and integration mandate of Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. 12131 et seq., and section 504 of the Rehabilitation Act, 29 U.S.C. 794. Because neither the Medicaid Act nor the Supremacy Clause confers a private cause of action to enforce the reasonable standards provision, the court vacated the district court’s grant of summary judgment to plaintiffs on that claim; the court declined to reach plaintiffs’ unequal treatment claim under the ADA and Rehabilitation Act as largely duplicative of their integration mandate claim; and the court affirmed the summary judgment rulings with respect to the remaining claims. Defendant is entitled to summary judgment on plaintiffs' home health services plan because orthopedic footwear and compression stockings constitute optional “prosthetics” rather than mandatory “home health services” under the Medicaid Act; defendant is entitled to summary judgment on the hearing element and plaintiffs are entitled to summary judgment on the notice element of plaintiffs’ due process claim, because the due process provision required New York to provide plaintiffs with written notice – though not evidentiary hearings – prior to terminating their benefits; plaintiffs are entitled to summary judgment on their comparability provision claim because New York’s coverage restrictions deny some categorically needy individuals access to the same scope of medically necessary services made available to others; and plaintiffs are entitled to summary judgment on their anti‐discrimination claims because New York’s restrictions violate the integration mandate of the ADA and Rehabilitation Act. Finally, the court vacated the injunction and remanded for further consideration on the appropriate relief because the injunction is broader than is warranted by the court's liability conclusions. View "Davis v. Shah" on Justia Law

In 2000, the Secretary of Health and Human Services issued a regulation, known as the “reclassification rule,” 42 C.F.R. 412.230(a)(5)(iii), which provided that a hospital that has been reclassified from urban to rural under the Medicare Act, 42 U.S.C. 1395ww(d)(8)(E), may not thereafter receive an additional reclassification by the Medicare Geographic Classification Review Board (MGCRB) for reclassification as urban under subsection (d)(10). Lawrence filed suit seeking a preliminary injunction to enjoin defendants from applying the Secretary's reclassification rule to Lawrence's MGCRB application. The district court denied the motion. However, the court found the statutory language to be plain and unambiguous, and at odds with the Secretary’s reclassification rule, 42 C.F.R. 412.230(a)(5)(iii). Therefore, the court declared the regulation invalid and reversed the judgment of the district court, remanding for a determination of the appropriate remedy. View "Lawrence + Memorial Hosp. v. Burwell" on Justia Law