Justia Health Law Opinion Summaries

Under the Hatch-Waxman Act, a drug may receive “new chemical entity exclusivity” if no active ingredient in the drug was previously “approved.” The drug Aubagio was awarded this exclusivity because the Food & Drug Administration (“FDA”) determined that Aubagio’s only active ingredient, teriflunomide, had never previously been approved. This case concerns a challenge to Aubagio’s exclusivity period, which Sandoz Inc. raises to secure a solo period of marketing exclusivity for its generic equivalent. Sandoz maintains that teriflunomide was previously “approved” as an impurity in the drug Arava. In the alternative, Sandoz argued that teriflunomide was in fact approved as an active ingredient in Arava. The district court granted summary judgment for the FDA, agreeing with the agency that Aubagio was entitled to exclusivity because teriflunomide had never previously been approved.   The DC Circuit affirmed the district court’s judgment. The court held that while Sandoz did not exhaust its statutory argument before the FDA, in the absence of a statutory or regulatory exhaustion requirement, the court found it appropriate to decide Sandoz’s challenge. When the FDA approves a new drug, it does not also “approve” known impurities in that drug for the purpose of new chemical entity exclusivity. And the record is clear the FDA did not approve teriflunomide as an active ingredient when it approved Arava. Aubagio was therefore entitled to new chemical entity exclusivity, and Sandoz cannot benefit from a solo exclusivity period for its generic equivalent. View "Sandoz Inc. v. Xavier Becerra" on Justia Law

Appellant sought the dismissal of most of the counts of his indictment and a new trial on the remaining counts. In his view, the indictment failed to allege a convergence between the deceived entity, CareFirst, and those deprived of property— which, in Appellant’s view, were his clients. In other words, he claimed that the indictment did not allege that he defrauded CareFirst of any of its own property. He argued instead that the indictment and trial improperly relied on evidence that he defrauded his small business clients by overcharging them for health insurance premiums. He also brought a number of evidentiary challenges.   The DC Circuit affirmed Appellant’s conviction and sentence. The court wrote that there is no convergence problem in this case. The indictment alleged that Appellant defrauded CareFirst, causing it to lose money. That is the same fraud that the government proved at trial. The differential between the falsely lowered premiums that Appellant tricked CareFirst into charging and those he billed his clients represented, at least in part, property fraudulently taken from CareFirst. That price difference also helped to show Appellant profit motive for the fraud, and demonstrated that he was neither acting as a Robin Hood nor at the behest of his clients to help reduce their premiums. None of Appellant’s other challenges on appeal succeed. View "USA v. Tarek Abou-Khatwa" on Justia Law

In 2016, the Secretary of Health and Human Services (“HHS”) issued a final rule that implemented The Protecting Access to Medicare Act of 2014 (“PAMA” or “Act”), definition of “applicable laboratory” (“2016 Rule”). The American Clinical Laboratory Association (“ACLA”) filed a lawsuit challenging the 2016 Rule as arbitrary and capricious under the Administrative Procedure Act (“APA”) on the basis that it depresses Medicare reimbursement rates by excluding most hospital laboratories from PAMA’s reporting requirements. ACLA contended that because hospital laboratories tend to charge higher prices than standalone laboratories, their exclusion from reporting obligations results in an artificially low weighted median.   On remand, the parties cross-moved for summary judgment. The district court declined to reach the merits of ACLA’s APA challenge to the 2016 Rule, based on its determination that the Secretary had issued a new rule (“2018 Rule”) that superseded the 2016 Rule and mooted ACLA’s lawsuit.   The DC Circuit concluded that the case is not moot. Accordingly, the court reversed the district court’s dismissal for lack of subject matter jurisdiction and reached the merits of ACLA’s APA claim. The court explained that the 2016 Rule is arbitrary and capricious because the agency “failed to consider an important aspect of the problem.” The court wrote that PAMA provides that an applicable laboratory “means a laboratory that” receives “a majority” of its Medicare revenues from the Physician Fee Schedule or Clinical Laboratory Fee Schedule. Thus, hospital laboratories that provide outreach services may, in some instances, constitute “applicable laboratories” under PAMA. View "American Clinical Laboratory Association v. Xavier Becerra" on Justia Law

Plaintiff, a hospice provider, challenges the Centers for Medicare and Medicaid Services (“CMS”) methodology, contending that it violates both the Medicare statute and the Budget Control Act and that CMS did not follow the required administrative procedures for adopting it.According to Plaintiff, the sequestration methodology violated the statute and the regulation by adding back the sequestration reduction withheld from the preliminary disbursements into the equation, such that — for overpayment purposes — funds the providers did not actually receive were being counted against them. Plaintiff contends that CMS was required to use the net payments methodology instead of the sequestration methodology.The court held that the regulations and guidance do not support Plaintiff’s contention that the statute unambiguously requires the net payments methodology. Reasoning that section 1395f(i)(2)(A) does not mandate any one methodology for applying the aggregate cap. Further, the plain meaning of the statute gives no instruction as to how overpayments should be calculated, the court concludes the statute is “silent . . . with respect to the specific issue” of what methodology CMS must use in applying the aggregate cap. Further, because the Secretary’s chosen methodology comports with the statutory text, purpose, and operation, Plaintiff has not shown that the Board’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Thus, the court affirmed the district court’s grant of summary judgment to the Secretary and denial of summary judgment to Plaintiff. View "Gentiva Health Services, Inc. v. Becerra" on Justia Law

Appellant, a California critical access hospital, sought Medicare reimbursement for the cost of keeping specialty doctors on call. Under the federal Emergency Medical Treatment and Active Labor Act, hospitals providing emergency room service must stabilize patients before releasing them or transferring them to another hospital. Additionally, California law requires all hospitals to perform certain procedures, including surgery. Appellant claims that it cannot comply with both state and federal law unless it can pay on-call compensation to specialists in surgery, obstetrics, pediatrics, and cardiology.Affirming the district court’s ruling, the D.C. Circuit held that Appellant is not entitled to Medicare reimbursement for the cost of keeping various specialty doctors on call. Appellant’s federal obligation to stabilize patients before release does not necessarily imply the need for various specialists. Thus, the Provider Reimbursement Review Board (“the Board”) reasonably concluded that Appellant had the ability to stabilize patients with existing emergency room physicians and that specialists were not required to be on call.Regarding Appellant’s state obligations, the Board’s conclusion that Appellant could satisfy the requirements by keeping a physician with surgical training on-site was reasonable. View "St. Helena Clear Lake Hospital v. Xavier Becerra" on Justia Law

The DC Circuit affirmed the district court's dismissal of RICU's complaint alleging that the Department's determination that critical care telehealth services provided by physicians who are outside of the United States are ineligible for Medicare reimbursement. The court concluded that RICU seeks to avoid well-settled authority requiring administrative exhaustion under the Medicare Act by presenting a concrete claim for payment of rendered services to the Department for decision. Because RICU has neither satisfied the channeling requirement of 42 U.S.C. 405(g) nor demonstrated that the Illinois Council exception applies, the court dismissed based on lack of subject matter jurisdiction. The court has no jurisdiction to consider the merits of RICU's motion for a preliminary injunction. View "RICU LLC v. Department of Health and Human Services" on Justia Law

Petitioner sought review of the TSA's Mask Directives, issued in response to the ongoing COVID-19 pandemic, claiming that the TSA has no authority to issue the directives. Petitioner argued that TSA's authority under the Aviation and Transportation Security Act does not empower TSA to require face masks to prevent the spread of COVID-19.The DC Circuit found no merit in petitioner's claim and denied the petition for review. The court concluded that the COVID-19 global pandemic poses one of the greatest threats to the operational viability of the transportation system and the lives of those on it seen in decades. TSA, which is tasked with maintaining transportation safety and security, plainly has the authority to address such threats under both sections 114(f) and (g) of the Aviation and Transportation Security Act. The court stated that the Mask Directives are reasonable and permissible regulations adopted by TSA to promote safety and security in the transportation system against threats posed by COVID-19. The Mask Directives are not ultra vires, and the court deferred to the agency's interpretation of the Act. View "Corbett v. Transportation Security Administration" on Justia Law

Eight years ago, several hospitals challenged the Department of Health and Human Services’ methodology for calculating certain Medicare payments. The hospitals had sought expedited judicial review (EJR) from the Provider Reimbursement Review Board, which is available if a hospital’s claim involves a question that the Board “is without authority to decide,” 42 U.S.C. 1395oo(f)(1). While the Board granted most of the EJR requests, it dismissed the claims of certain hospitals (appellants) for failing to comply with agency filing procedures. The Board declined to grant EJR to those hospitals. In 2018, the D.C. Circuit ruled against the hospitals on the merits.The appellants filed suit, arguing that the Board’s dismissal of their claims was a “final decision” subject to judicial review, and urged the court not to remand their cases but to resolve the merits of their challenge to the rules for Medicare outlier payments. The district court held that the Board had lacked authority to resolve their challenges—the triggering condition for the Board’s granting of EJR—and that the court could proceed to consider the merits. The other hospitals (who had been granted EJR) joined with appellants in seeking vacatur of the challenged Medicare outlier rules. The district court rejected that suit on summary judgment.The D.C. Circuit affirmed. For the hospitals to establish that the now-final judgment against them was void because the district court lacked jurisdiction, they would need to show that there was not even an arguable basis for that court’s conclusion—at the urging of the hospitals themselves—that jurisdiction existed. The hospitals fail to make that showing. View "Lee Memorial Hospital v. Becerra" on Justia Law

UnitedHealthcare Medicare Advantage insurers challenged the Overpayment Rule, promulgated by the Centers for Medicare and Medicaid Services (CMS) under 42 U.S.C. 1301-1320d-8, 1395-1395hhh, in an effort to trim costs. The Rule requires that, if an insurer learns that a diagnosis submitted to CMS for payment lacks support in the beneficiary’s medical record, the insurer must refund that payment within 60 days. UnitedHealth claims that the Overpayment Rule is subject to a principle of “actuarial equivalence,” and fails to comply. Two health plans that pay the same percentage of medical expenses are said to have benefits that are actuarially equivalent.The D.C. Circuit rejected the challenge. Actuarial equivalence does not apply to the Overpayment Rule or the statutory overpayment-refund obligation under which it was promulgated. Reference to actuarial equivalence appears in a different statutory subchapter from the requirement to refund overpayments; neither provision cross-references the other. The actuarial-equivalence requirement and the overpayment-refund obligation serve different ends. The actuarial-equivalence provision requires CMS to model a demographically and medically analogous beneficiary population in traditional Medicare to determine the prospective lump-sum payments to Medicare Advantage insurers. The Overpayment Rule, in contrast, applies after the fact to require Medicare Advantage insurers to refund any payment increment they obtained based on a diagnosis they know lacks support in their beneficiaries’ medical records. View "UnitedHealthcare Insurance Co v. Becerra" on Justia Law

Saunders worked as a bus attendant for the Washington, D.C., school system, helping students with special needs and those in wheelchairs on and off the bus. On January 7, 2014, she slipped and fell on ice at work, suffering a hip contusion and back pain. Saunders never returned to work but filed a disability claim with the Social Security Administration six months after her fall. She obtained multiple opinions from Dr. Williams, her generalist, and Dr. Liberman, her neurologist. Saunders received disability benefits from the Washington, D.C., workers’ compensation board.After Saunders’s federal disability claims were denied an ALJ held a hearing and concluded that she was not disabled. The ALJ gave “some” weight to certain medical opinions but “no weight” to others, including Dr. Lieberman’s opinion that Saunders was permanently disabled. The ALJ placed considerable weight on the vocational expert’s testimony and found that someone with Saunders’s functional capacity could perform her past work as generally performed in the national economy. The district court affirmed. The D.C. Circuit remanded. The ALJ erroneously failed to consider certain medical opinions, particularly those of Saunders’s treating physician. View "Saunders v. Kijakazi" on Justia Law