Articles Posted in U.S. D.C. Circuit Court of Appeals

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Petitioners, a group of hospitals that serve a significant number of elderly, very low-income patients, filed suit challenging the Secretary's issuance of a rule concerning the "disproportionate share percentage" calculation of supplemental payments for low-income Medicare patients. When the Secretary published reimbursement calculations for FY 2007, petitioners learned that their payments would decrease by tens of millions of dollars per year. The rule change had an enormous financial consequence on hospitals. The court held that the Secretary did not provide adequate notice and opportunity to comment before promulgating its 2004 rule, and so affirmed the portion of the district court's opinion vacating the rule. The court reversed only the portion of the district court's opinion directing the Secretary to recalculate the hospitals' reimbursements using the alternate methodology. View "Allina Health Services, et al. v. Sebelius" on Justia Law

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Plaintiffs filed suit against the Secretary of Health and Human Services (HHS) and the Commissioner of the Social Security Administration (SSA) raising constitutional challenges to the Patient Protection and Affordable Care Act (ACA), Pub. L. No 111-148, 124 Stat. 119; raising statutory challenges to actions of HHS and the Commissioner relating to the implementation of the ACA and prior Medical legislation; and attacking the failure of defendants to render an "accounting" that would alter the American people to the insolvency towards which Medicare and Social Security programs were heading. On appeal, plaintiffs challenged the district court's dismissal of their claims. The court rejected plaintiffs' claims that 26 U.S.C. 5000A, which was sustained as a valid exercise of the taxing power, violated the Fifth Amendment's prohibition of the taking of private property without just compensation and violated the origination clause. The court concluded that plaintiffs' substantive attack on the Social Security Program Operations Manual System (POMS) provisions was clearly foreclosed by its decision in Hall v. Sebelius, holding that the statutory text establishing Medicare Part A precludes any option not to be entitled to benefits. The court rejected plaintiffs' second statutory claim attacking an interim final rule. Finally, the court concluded that plaintiffs failed to provide a legal argument for their claims against the Commissioner and Secretary, and therefore, the court lacked jurisdiction over plaintiffs' claim to an "accounting." Accordingly, the court affirmed the judgment of the district court. View "Assoc. Amer. Physicians, et al. v. Sebelius, et al." on Justia Law

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The government filed suit against appellants, alleging that they violated federal laws regulating the manufacture and labeling of drugs and biological products by producing, as part of their medical practice, a substance consisting of a mixture of a patient's stem cells and the antibiotic doxycycline (the "Mixture"). The Federal Food, Drug & Cosmetic Act (FDCA) 21 U.S.C. 301 et seq., and the Public Health Service Act (PHSA), 42 U.S.C. 201 et seq., are statutes that promote the safety of drugs and biological products, respectively, by setting forth detailed requirements for how such substances are to be manufactured and labeled. The court held that, by virtue of its use of doxycycline, the Mixture was within the scope of drugs - and, by extension, biological products, - regulated by section 331(k) of the FDCA; appellants failed to establish that the Mixture was exempt from the FDCA's manufacturing and labeling requirements; the Mixture was per se adulterated where it was undisputed that appellants' facilities, methods, and controls for processing the Mixture violated federal manufacturing standards in numerous respects; because its label failed to provide the minimum information necessary to qualify for either exemption from section 352(f), the Mixture was misbranded; and the district court properly enjoined appellants from committing future violations of the FDCA's manufacturing and labeling provisions. Accordingly, the court affirmed the judgment of the district court and dismissed appellants' counterclaims. View "United States v. Regenerative Sciences, LLC, et al." on Justia Law

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In 2007, the Secretary revamped Medicare's Inpatient Prospective Payment System, updating the diagnostic weighting used to calculate reimbursements for hospitals treating the program's beneficiaries. Plaintiffs sought review of the Secretary's decision regarding a downward prospective adjustment for hospital-specific rate payments. The district court concluded that the statutory scheme was ambiguous and deferred to the Secretary's reasonable interpretation of the adjustment provisions. Applying Chevron deference, the court agreed with the district court's conclusion that the statutory scheme was ambiguous and unclear. Accordingly, the court affirmed the judgment of the district court. View "Adirondack Medical Center, et al. v. Sebelius" on Justia Law

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ATRA petitioned for review, challenging revisions made by OSHA to the wording of a paragraph (a)(2) of OSHA's hazard communication (HazCom) standard, 29 C.F.R. 1910.1200. HazCom establishes labeling requirements for chemicals used in the workplace. The changes reflect the agency's view that HazCom preempts state legislative and regulatory requirements, but not state tort claims. The court rejected ATRA's arguments under the Occupational Safety and Health Act (OSH Act), 29 U.S.C. 651-678, concluding that OSHA has no authority to speak with the force of law on preemption and the agency never meant for the disputed paragraph to have the effect of a legislative rule. Because Paragraph (a)(2) is merely interpretive, it is not subject to notice and comment rulemaking and was not subject to judicial review. Accordingly, ATRA's challenge was unripe for review. Accordingly, the court denied the petition for review. View "American Tort Reform Assoc. v. OSHA, et al." on Justia Law

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Plaintiffs and their companies filed suit alleging that the contraceptive mandate in the Affordable Care Act, 42 U.S.C. 300gg-13(a)(4), violated their rights under the Religious Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb et seq., the Free Exercise Clause, the Free Speech Clause, and the Administrative Procedure Act (APA), 5 U.S.C. 500 et seq. The court concluded that, even if the government had a compelling interest - from safeguarding the public health to protecting a woman's compelling interest in autonomy and promoting gender equality, the mandate was not the most restrictive means of furthering that interest. The court concluded that the district court erred in denying a preliminary injunction for plaintiffs on the grounds that their case was unlikely to succeed on the merits; the court reversed the district court's denial of a preliminary injunction for the individual owners; because the district court premised its decision entirely on a question of law, the court must remand for consideration of the other preliminary-injunction factors; and the court affirmed the district court's denial of preliminary injunction with respect to the companies. View "Gilardi, et al. v. HHS, et al." on Justia Law

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Millard petitioned for review of the Commission's affirmance of citations issued to Millard for committing violations of emergency response, training, record-keeping, and other requirements after more than 30,000 pounds of anhydrous ammonia escaped from one of Millard's refrigerated storage facilities. The court concluded that Millard's challenges to the two process safety management violations, Millard's contention that OSHA was estopped from asserting that the company violated agency regulations, and Millard's ten remaining challenges either lacked merit or merited neither reversal nor further discussion. Accordingly, the court denied the petition for review. View "Millard Refrigerated Services v. Secretary of Labor" on Justia Law

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This case stemmed from Cytori's application to the FDA to market two new medical devices, the Celution 700 and the StemSource 900. Two devices that use adipose tissue as a source of stem cells that could later be used in lab analysis or, potentially, in regenerative medicine. The FDA concluded that the Celution and the StemSource were not substantially similar to devices on the market that extract stem cells from blood or bone marrow. Thus, the FDA ruled that Cytori must go through an extensive premarket approval process for new medical devices, rather than go through the streamlined premarket notification process for new devices that would be substantially equivalent to another device already on the market. Cytori appealed. As a preliminary matter, the court concluded that it was the proper forum for direct review of the FDA's substantial equivalence determination. On the merits, the court concluded that the FDA reasonably concluded and reasonably explained, for purposes of the Administrative Procedures Act, 5 U.S.C. 500 et seq., that the Celution and StemSource did not meet either the "intended use" requirement or the "technological characteristics" requirement for a substantial equivalence determination. View "Cytori Therapeutics, Inc. v. FDA" on Justia Law

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Plaintiffs, teaching hospitals, received Medicare payments to offset the costs associated with training "full-time equivalent" residents and intern physicians (FTEs). In 1997, Congress capped those payments in such a way that the number of FTEs the hospitals trained in 1996 would dictate the maximum reimbursement in all future years. Although the parties agreed that the 1996 data was not accurate, the Secretary believed that this predicate fact could not be corrected outside the three-year reopening window. The court held that the reopening regulation allowed for modification of predicate facts in closed years provided the change would only impact the total reimbursement determination in open years. Alternatively, the court agreed with the district court that the Secretary had acted arbitrarily in treating similarly situated parties differently. The court rejected the Secretary's claim that the Medicare Act, 42 U.S.C. 1395 et seq., would not allow the intermediary to change the 1996 GME resident count without changing the corresponding reimbursement amount, which all parties conceded would constitute a reopening of an "Intermediary determination." Accordingly, the court affirmed the judgment. View "Kaiser Foundation Hospitals v. Sebelius" on Justia Law

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The DEA, under the authority of the Controlled Substances Act of 1970, 21 U.S.C. 812(b)(1)(B), classified marijuana as a Schedule I drug, the most restricted drug classification under the Act. Petitioners challenged the DEA's denial of its petition to initiate proceedings to reschedule marijuana as a Schedule III, IV, or V drug. The principal issue on appeal was whether the DEA's decision was arbitrary and capricious. First, the court denied the Government's jurisdictional challenge because the court found that at least one of the named petitioners had standing to challenge the agency's action. On the merits, the court held that the DEA's denial of the rescheduling petition survived review under the deferential arbitrary and capricious standard where the petition asked the DEA to reclassify marijuana, which, under the terms of the Act, required a "currently accepted medical use." A "currently accepted medical use" required, inter alia, "adequate and well-controlled studies proving efficacy." The court deferred to the agency's interpretation of these regulations and found that substantial evidence supported the agency's determination that such studies did not exist. Accordingly, the court denied the petition for review. View "Americans for Safe Access, et al v. DEA" on Justia Law