Justia Health Law Opinion Summaries

A group of hospitals challenged a rule by the Department of Health and Human Services (HHS) that adjusted Medicare reimbursement rates. HHS had increased reimbursements for hospitals in the lowest wage quartile and decreased them for others to maintain budget neutrality. The hospitals argued that this adjustment exceeded HHS's statutory authority under the Medicare Act.The United States District Court for the District of Columbia ruled in favor of the hospitals, finding that HHS lacked the authority to make such adjustments. However, the court did not vacate the rule but remanded it to HHS with instructions to recalculate the reimbursements.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and agreed with the lower court that HHS exceeded its authority. The court held that the Medicare Act's wage-index provision did not allow HHS to deviate from the congressionally prescribed formula. The adjustments provision also did not grant HHS the power to override the specific statutory formula. The court concluded that HHS's action must be vacated, not just remanded. Additionally, the court directed that the hospitals should receive an award of interest on the recalculated reimbursements as required by the Medicare statute.The court affirmed in part, reversed in part, and remanded the case to the district court for further proceedings consistent with its opinion. View "Bridgeport Hospital v. Becerra" on Justia Law

The case involves the Iowaska Church of Healing (the "Church"), an organization whose religious practices involve the consumption of Ayahuasca, a tea containing the hallucinogenic drug dimethyltryptamine (DMT), which is regulated under the Controlled Substances Act (CSA). The Church had applied for tax-exempt status under 26 U.S.C. § 501(c)(3) but was denied by the Internal Revenue Service (IRS) on the grounds that the Church's religious use of Ayahuasca was illegal. The Church challenged this decision in the District Court, arguing that the IRS's determination was based on an incorrect assumption of illegality and that the denial of tax-exempt status violated the Religious Freedom Restoration Act of 1993 (RFRA).The District Court denied the Church's motion and granted the Government's motion for summary judgment. The court held that the Church lacked standing to assert its RFRA claim and that the lack of standing also undermined its tax-exemption claim. The court found that the Church's religious use of Ayahuasca was illegal without a CSA exemption, and the IRS had no authority to assess whether the Church's proposed Ayahuasca use warranted a religious exemption from the CSA.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the District Court's judgment. The Court of Appeals held that the Church lacked standing to assert its RFRA claim because the economic injury it claimed was neither an injury-in-fact nor redressable. Without a cognizable RFRA claim, the Church's tax-exemption claim also failed. The Court of Appeals found that the Church could not proffer evidence of a CSA exemption to show it passed the organizational and operational tests for tax-exempt status. View "Iowaska Church of Healing v. Werfel" on Justia Law

The case involves Novartis Pharmaceuticals Corporation and United Therapeutics Corporation, both drug manufacturers, and the Health Resources and Service Administration (HRSA). The dispute centers around Section 340B of the Public Health Service Act, which mandates drug manufacturers to sell certain drugs at discounted prices to select healthcare providers. These providers often contract with outside pharmacies for distribution. The manufacturers argued that these partnerships have left the Section 340B program vulnerable to abuse, leading them to impose their own contractual terms on providers, such as limits on the number of pharmacies to which they will make shipments. The government contended that these restrictions violate the statute.The case was initially heard in the United States District Court for the District of Columbia. The district court ruled that Section 340B does not prohibit manufacturers from limiting the distribution of discounted drugs by contract.The case was then reviewed by the United States Court of Appeals for the District of Columbia Circuit. The court agreed with the district court's ruling, stating that Section 340B does not categorically prohibit manufacturers from imposing conditions on the distribution of covered drugs to covered entities. The court further held that the conditions at issue in this case do not violate Section 340B on their face. The court did not rule out the possibility that other, more onerous conditions might violate the statute or that these conditions may violate Section 340B as applied in particular circumstances. The court affirmed the district court's decision to set aside the enforcement letters under review, while reserving the possibility of future enforcement under theories of liability narrower than the one pressed here. View "Novartis Pharmaceuticals Corporation v. Johnson" on Justia Law

The United States Court of Appeals for the District of Columbia Circuit ruled in a case involving Regenative Labs ("Regenative"), a manufacturer of medical products containing human cells, tissues, or cellular or tissue-based products ("HCT/Ps"), and the Secretary of Health and Human Services. Following the Centers for Medicare and Medicaid Services ("CMS") issuing two technical direction letters instructing Medicare contractors to deny reimbursement for claims for products manufactured by Regenative, the company filed suit challenging these letters without first exhausting administrative remedies. The District Court dismissed the case due to lack of subject matter jurisdiction as Regenative had failed to exhaust its administrative remedies. On appeal, the Court of Appeals affirmed the District Court’s dismissal, in part for lack of subject matter jurisdiction and in part on grounds of mootness. The Court concluded that the claims raised by Regenative arose under the Medicare Act and had to be pursued through the statutorily-prescribed administrative process. The Court also found that the company’s request for the court to vacate the contested policy was moot because the policy had already been rescinded by CMS. Finally, the court rejected Regenative's argument for mandamus jurisdiction, finding that it did not satisfy the jurisdictional requirements for this relief. View "Row 1 Inc. v. Becerra" on Justia Law

Hospitals receive greater payment if their Medicare patients are disproportionately low-income individuals entitled to federal supplemental security income benefits. Pomona Valley Hospital Medical Center contends that the Department of Health and Human Services undercounted the number of its Medicare patients who were entitled to SSI benefits and thus undercompensated the hospital for treating them. Pomona sought to prove the undercount through data from state benefit programs that piggyback on SSI. In an administrative proceeding, Pomona introduced expert testimony explaining how the state data derives from and overlaps with the federal SSI data. The Provider Reimbursement Review Board held that Pomona failed to prove the undercount, but the district court set aside its decision and remanded the case to the Board for further proceedings.   The DC Circuit affirmed. The court explained that using statewide statistics, Pomona estimated that fewer than 10 such patients would likely show up in its SSI-fraction calculations in any given year. And neither the Board nor the Contractor countered these estimates. Given the lack of contrary evidence in the record, such discrepancies appear immaterial and suggest no substantial flaw in Pomona’s methodology. Further, the court explained that Pomona provided uncontroverted evidence that two potential difficulties with its approach amounted to little more than rounding errors. It proffered creditable testimony from two experts indicating that the only explanation for the discrepancy was some error in CMS’s collection or matching of data. By contrast, the Contractor remained silent. Given the strength of the hospital’s showing, and the absence of any countervailing evidence, the Board’s conclusion that Pomona had failed to prove an undercount was unreasonable View "Pomona Valley Hospital Med v. Xavier Becerra" on Justia Law

After the FDA promulgated regulations applying the Act to vaping products, Fontem US, LLC, submitted numerous applications to market its flavored and unflavored vaping products. The FDA denied all of them, concluding Fontem had not shown its products were “appropriate for the protection of the public health.” Fontem petitioned for review, arguing the denial was unlawful.   The DC Circuit denied the petition for review as to Fontem’s flavored products and granted the petition for review with respect to the unflavored products. The court explained that as to Fontem’s flavored products, the FDA reasonably found a lack of evidence that the benefits of such products to adult smokers sufficiently outweighed the potential risks to young non-smokers. The court wrote that as to Fontem’s unflavored products, however, the FDA acted unlawfully by failing to engage in the holistic public health analysis required by the statute. The court concluded that the agency did not take into account the potential benefits of unflavored products or weigh those benefits against risks to public health. Instead, the agency identified highly granular deficiencies but failed to evaluate the potential effects of such deficiencies on public health or to weigh these deficiencies against the potential benefits of Fontem’s products. View "Fontem US, LLC v. FDA" on Justia Law

The Affordable Care Act obligates large employers to provide their full-time employees with health insurance coverage meeting certain requirements. If an employer fails to provide coverage or provides noncomplying coverage, it is liable for an exaction under 26 U.S.C. Section 4980H. In 2019, the Internal Revenue Service sent two letters proposing exactions under Section 4980H to appellant Optimal Wireless, a wireless communications company. Optimal then filed an action against the IRS and the Department of Health and Human Services, claiming that the agencies had failed to satisfy certain procedural requirements before imposing the proposed exactions. Optimal sought a declaratory judgment and an injunction barring the IRS from collecting any money without complying with those procedures. The district court dismissed Optimal’s suit for lack of jurisdiction.   The DC Circuit affirmed. The court explained that the Anti-Injunction Act provides that, with certain exceptions, “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” The court explained that because Congress repeatedly called the Section 4980H exaction a tax, Optimal’s suit is barred by the Anti-Injunction Act. The court further wrote that Congress’s use of the phrase “assessable payment” does not conflict with—or otherwise detract from the import of—its choice to label the Section 4980H exaction a “tax” in multiple provisions. The terms are not mutually exclusive. View "Optimal Wireless LLC v. IRS" on Justia Law

MSHA’s jurisdiction, the Federal Mine Safety and Health Review Commission (“Commission”) held that for the list of items in Section 802(h)(1)(C) to be considered a “mine,” the items had to be located at an extraction site, or the roads appurtenant thereto.  Because neither the trucks nor the facility associated with the citations at issue were located on land covered under subsections (A)–(B), the Commission found they failed to constitute a “mine” and vacated the citations. The Commission also found that, as an independent contractor not engaged in servicing a mine at the time of the citation, KC Transport failed to qualify as an “operator” under Section 802(d) of the Mine Act. The Secretary of Labor (“the Secretary”), acting through MSHA, appealed the Commission’s decision and asked the court to uphold the two citations as an appropriate exercise of the Secretary’s jurisdiction under the Mine Act. In the Secretary’s view, subsection (C) of the “mine” definition covers KC Transport’s facility and trucks because they were “used in” mining activity.   The DC Circuit vacated and remanded the Commission’s decision, allowing the Secretary to interpret the statute’s ambiguous language. The court explained that given the Mine Act’s language, context, and the court’s binding precedent, it finds that the Commission erred in its interpretation of the “mine” and “operator” definitions. And we generally defer to the Secretary’s reasonable interpretation of an ambiguous statute—even when the Commission disagrees. But here, the Secretary’s position treats subsection (C) as 4 unambiguous and makes no meaningful effort to address the numerous practical concerns that would arise under such an interpretation. View "Secretary of Labor v. KC Transport, Inc." on Justia Law

Ascension Borgess Hospital and forty-four other hospitals appeal the grant of summary judgment to the Secretary of the U.S. Department of Health and Human Services (“HHS”) dismissing challenges of certain reimbursements for uncompensated care. The Hospitals challenged the “disproportionate share hospital” (“DSH”) payments. The Provider Reimbursement Review Board (“PRRB”) dismissed the complaint for lack of jurisdiction pursuant to the statutory bar on administrative and judicial review of challenges to the methodology for calculating those payments. The Hospitals contend that HHS was required to promulgate its audit instructions by notice and comment rulemaking before using audited data from each hospital’s Worksheet S-10 to estimate the Hospitals’ proportionate shares of the national total of uncompensated care. They maintain that they do not challenge the Secretary’s estimate but seek only an order directing fulfillment of HHS’s notice and comment obligations.   The DC Circuit affirmed the grant of summary judgment to the Secretary. The court held that t the Hospitals’ framing of their challenge as purely procedural under the Medicare Act’s notice and comment requirement does not save their appeal, notwithstanding the “strong presumption in favor of judicial review of final agency action.” Even if, as the Hospitals contend, the alleged procedural violation is reviewable, the Hospitals have failed to identify any standard required to be set by rule that was not. Although neither DCH nor Florida Health addresses whether notice and comment rulemaking is required for protocols or procedures used to modify providers’ raw uncompensated care data before calculating DSH payment estimates, routine audit instructions to Medicare contractors ordinarily fall outside of section 1395hh’s rulemaking requirement. View "Ascension Borgess Hospital v. Xavier Becerra" on Justia Law

In 2019, the Department of Justice announced that it would resume federal executions using a new lethal agent: the drug pentobarbital. Shortly thereafter, Citizens for Responsibility and Ethics in Washington submitted a Freedom of Information Act (FOIA) request for the Bureau of Prisons’ records related to its procurement of pentobarbital. The Bureau of Prisons supplied some records but withheld any information that could identify companies in the government’s pentobarbital supply chain. The Bureau invoked FOIA Exemption 4, which protects, among other things, trade secrets and confidential commercial information. The district court sustained those withholdings and entered judgment for the Bureau.   The DC Circuit reversed. The court concluded that on de novo review that the Bureau of Prisons has not met its burden to justify the challenged nondisclosures. In particular, the Bureau has not provided the detailed and specific explanation required to justify withholding the information as “commercial” and “confidential” under Exemption 4. The court remanded to the district court to determine in the first instance whether and to what extent any information in the public domain is the basis on which the government seeks to withhold any records or reasonably segregable portions thereof under Exemption 4. View "CREW v. DOJ" on Justia Law