Articles Posted in US Court of Appeals for the Sixth Circuit

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Wilkerson mined coal for over 25 years. In 1994, he retired from the Island Creek’s Crescent mine, where he had worked most recently as an electrician. In 2012, Wilkers sought benefits under the Black Lung Benefits Act, which provides compensation to miners disabled by pneumoconiosis, 30 U.S.C. 902(b), 922(a)(1). The Sixth Circuit denied a petition for review, upholding the Benefits Review Board’s award of benefits. The defendant forfeited an argument that the ALJ lacked authority to hear the case under the Appointments Clause by failing to raise it in its opening brief. Appointments Clause challenges arise under the U.S. Constitution, but are “not jurisdictional and thus are subject to ordinary principles of waiver and forfeiture.” Substantial evidence supports the award. An ALJ may presume an applicant suffers from the disease if he worked for 15 years at a qualifying coaling mine and suffers “a totally disabling respiratory or pulmonary impairment.” Wilkerson worked for more than 15 years at a qualifying mine, and substantial evidence showed that he suffered total disability due to a respiratory or pulmonary impairment. Faced with the conflicting medical evidence, the ALJ turned to the four doctors who testified, credited testimony from one doctor, discounted the three others for legitimate reasons, and concluded that Wilkerson suffered from a disability. The doctor’s conclusion about Wilkerson’s disability tracked the newest available data. View "Island Creek Coal Co. v. Wilkerson" on Justia Law

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The Tennessee Hospital Association and three hospitals sued, challenging efforts by the Centers for Medicare and Medicaid Services (CMS) to direct states to recoup certain reimbursements made under the Medicaid program. The hospitals serve a disproportionate share of Medicaid-eligible patients and are thereby entitled to supplemental payments under the Medicaid Act, (DSH payments), 42 U.S.C. 1396a(a)(13)(A)(iv); 1396r-4(b). The Act limits the amount of DSH payments each hospital can receive in a given year. CMS contends that the hospitals miscalculated their DSH payment-adjustments for fiscal year 2012 and received extra payments. Plaintiffs argued, and the district court agreed, that CMS’s approach to calculating DSH payment adjustments is inconsistent with the Act and the regulations that CMS implemented in 2008. The Sixth Circuit affirmed, agreeing that CMS’s policy is inconsistent with its 2008 rule and cannot be enforced unless it is promulgated pursuant to notice-and-comment rulemaking. The court disagreed with the district court’s conclusion that CMS’s policy exceeds the agency’s authority under the Medicaid Act. CMS’s payment-deduction policy is a reasonable interpretation of an ambiguous section of the Act but is not a valid interpretative rule. CMS attempted to exercise its delegated discretion to “determine[]” the “costs incurred” in serving Medicaid-eligible patients—precisely the sort of agency action that requires notice-and-comment rulemaking. View "Tennessee Hospital Association v. Azar" on Justia Law

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In 2010, the defendants formed PremierTox, a urinalysis testing company: Doctors Peavler and Wood owned a substance abuse treatment company, SelfRefind; Doctor Bertram previously worked for SelfRefind. Bottom and Walters owned a drug testing service and laboratory. Physicians at clinics ordered urinalysis tests to check if their patients used illicit drugs and to monitor their medications. PremierTox was to receive those urine samples, perform the testing, and report back. In October 2010, SelfRefind began to send frozen urine samples to PremierTox for testing, but PremierTox did not have the correct equipment. In 2011, after PremierTox bought the necessary, expensive machines, they broke down. Urine samples from SelfRefind piled up. PremierTox started testing them between February and April 2011 and finished testing them in October. Over the same period, it tested and billed for fresh samples as they came in, aiming for a 48-hour turnaround. PremierTox billed insurers, saying nothing about the delays. The defendants were charged with 99 counts of health care fraud and with conspiracy. A jury acquitted them of conspiracy and 82 of the health care fraud charges and convicted them of 17 health care fraud charges. The trial judge imposed sentences of 13-21 months in prison. The Sixth Circuit affirmed the convictions. A reasonable jury could find that the defendants violated 18 U.S.C. 1347 by requesting reimbursement for tests that were not medically necessary. View "United States v. Walters" on Justia Law

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The DEA bars hospitals from hiring, as an employee with “access to controlled substances,” any doctor who “for cause” has surrendered his registration to handle those substances. The DEA enforced this regulation against Doctors McDonald and Woods, who had voluntarily surrendered their registrations while in addiction treatment. They later regained full registrations. The doctors sued to enjoin the DEA from enforcing the regulation against them in the future, arguing that it no longer applied to them once their registrations were restored. The parties settled. Their agreement provides that “[t]he DEA no longer interprets 21 C.F.R. 1301.76(a) as requiring . . . potential employers of doctors with unrestricted DEA registrations to seek waivers.” The Sixth Circuit denied the government’s motion to keep the agreement under seal, noting “a strong presumption in favor of openness as to court records.” The government did not identify information too sensitive to remain public. Public interest is particularly strong where the information pertains to an agency’s interpretation of a regulation. Other doctors would no doubt be interested. View "Woods v. United States Drug Enforcement Administration" on Justia Law

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Dr. Paulus, a cardiologist at Ashland, Kentucky’s KDMC, was first in the nation in billing Medicare for angiograms. His annual salary was around $2.5 million, under KDMC’s per-procedure compensation package. In 2008, HHS received an anonymous complaint that Paulus was defrauding Medicare and Medicaid by performing medically unnecessary procedures, 42 U.S.C. 1320c-5(a)(1), 1395y(a)(1), placing stents into arteries that were not blocked, with the encouragement of KDMC. An anti-fraud contractor selected 19 angiograms for an audit and concluded that in seven cases, the blockage was insufficient to warrant a stent. Medicare denied reimbursement for those procedures and continued investigating. A private insurer did its own review and concluded that at least half the stents ordered by Paulus were not medically necessary. The Kentucky Board of Medical Licensure subpoenaed records and concluded that Paulus had diagnosed patients with severe stenosis where none was apparent from the angiograms. Paulus had retired; he voluntarily surrendered his medical license. A jury convicted Paulus on 10 false-statement counts and on the healthcare fraud count. It acquitted him on five false-statement counts. The court set aside the guilty verdicts and granted Paulus a new trial. The Sixth Circuit reversed. The degree of stenosis is a fact capable of proof. A doctor who deliberately inflates the blockage he sees on an angiogram has told a lie; if he does so to bill a more expensive procedure, then he has also committed fraud. View "United States v. Paulus" on Justia Law

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Brookdale employed Prather to review Medicare claims before their submission for payment. Many of these claims were missing required certifications from physicians attesting to the need for the medical services provided. Certifications must “be obtained at the time the plan of care is established or as soon thereafter as possible.” 42 C.F.R. 424.22(a)(2).Prather filed a complaint under the False Claims Act, 31 U.S.C. 3729, alleging an implied false certification theory. The district court dismissed her complaint. The Sixth Circuit reversed in part, holding that Prather had pleaded two claims with the required particularity and that the claims submitted were false. On remand, the district court dismissed Prather's Third Amended Complaint in light of the Supreme Court’s 2016 clarification of the materiality element of an FCA claim. The Sixth Circuit reversed. Prather sufficiently alleged the required materiality element; the timing requirement in section 424.22(a)(2) is an express condition of payment and Prather alleges that the government paid the claims submitted by the defendants without knowledge of the non-compliance, making those payments irrelevant to the question of materiality. Section 424.22(a)(2) is a mechanism of fraud prevention, which the government has consistently emphasized in guidance regarding physician certifications and Prather adequately alleged “reckless disregard” of compliance and whether this requirement was material. View "Prather v. Brookdale Senior Living Community" on Justia Law

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Abramge is a Brazilian nonprofit professional association of private health insurance providers, many of whom were impacted by a bribery and kickback scandal in the medical device market that broke in the Brazilian media in 2015. Abramge alleged that Stryker, a Michigan corporation, masterminded an “illicit scheme, which was planned and run from Michigan, designed to increase its market share by making improper payments and paying bribes and kickbacks to Brazilian doctors to induce the use of Stryker products” and “made improper payments and paid kickbacks to Brazilian doctors with the intent of influencing those doctors to use Stryker devices and products in patients even if those devices ... did not best meet the patients’ medical needs.” The scheme allegedly increased the cost of devices and the number of devices implanted and surgeries performed; health insurance providers paid for those increases. Abramge claims that Stryker’s actions injured not only its insurer members but also the entire Brazilian public health system and patients throughout the country. Abramge filed suit in the Western District of Michigan, claiming fraud, civil conspiracy, tortious interference with contractual relationships, and unjust enrichment. The district court dismissed, citing forum non conveniens. The Sixth Circuit reversed and remanded. Stryker did not carry its burden of proving that Brazil is an available and adequate alternative forum in which the case may be heard. View "Associacao Brasileira de Medicina v. Stryker Corp." on Justia Law

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Raymond, a veteran of the U.S. Air Force, was born in 1947 and was a long-term resident of Middlesboro, Kentucky. He worked in the coal-mining industry for over 20 years and developed severe respiratory issues. Raymond, a non-smoker, sought benefits under the Black Lung Benefits Act, 30 U.S.C. 901, but died while his claim was pending. Raymond’s claim was consolidated with a claim for survivor’s benefits submitted by his widow, Joanna. The ALJ awarded benefits to Joanna, on both Raymond’s behalf, and as his surviving spouse. The Benefits Review Board affirmed. Zurich, the insurer of Straight Creek Coal, sought review. The Sixth Circuit denied Zurich’s petition, upholding the ALJ’s conclusions that Zurich failed to rebut the presumption of timeliness, that Raymond had worked for at least 15 years in qualifying employment, and that Raymond had a total respiratory disability. Raymond worked only in surface mines or coal-preparation plants during his career; the ALJ properly relied on 20 C.F.R. 718.305(b)(2) and determined whether Raymond’s mining employment was “substantially similar” to underground mining. View "Zurich American Insurance Group v. Duncan" on Justia Law

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Michael, a licensed pharmacist at Chapmanville's Aracoma Pharmacy, separately co-owns another West Virginia pharmacy and one in Pennsylvania. The government suspected that Michael used the pharmacies to distribute on-demand prescription drugs, worth more than $4 million, over the Internet. A grand jury returned a multi-count indictment. Count 7 charged Michael with fraudulently submitting a claim for payment to Humana for dispensing medication that was never dispensed (18 U.S.C. 1347). Count 8 charged him with committing aggravated identity theft by using the “identifying information” of a doctor and a patient “in relation to the [health care fraud] offense” (18 U.S.C. 1028A(a)(1), (c)(11)). Michael had submitted a claim to Humana indicating that A.S. (doctor) had prescribed Lovaza for P.R., including the doctor’s National Provider Identifier and the patient’s name and birth date. A.S. was not P.R.’s doctor and did not issue the prescription. Section 1028A requires a person to “assume the identity” of someone else; the district court held that the statute covered only “impersonation,” and dismissed Count 8. The Sixth Circuit reversed. To “use” a means of identification is to “convert to one’s service” or “employ” the means of identification. Michael used A.S. and P.R.’s identifying information to fashion a fraudulent submission, making the misuse of these means of identification “during and in relation to” healthcare fraud. View "United States v. Michael" on Justia Law

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Community, the nation’s largest for-profit hospital system, obtained about 30 percent of its revenue from Medicare reimbursement. Instead of using one of the systems commonly in use for determining whether Medicare patients need in-patient care, Community used its own system, Blue Book, which directed doctors to provide inpatient services for many conditions that other hospitals would treat as outpatient cases. Community paid higher bonuses to doctors who admitted more inpatients and fired doctors who did not meet quotas. Community’s internal audits found that its hospitals were improperly classifying many patients; its Medicare consultant told management that the Blue Book put the company at risk of a fraud suit. Community attempted a hostile takeover of a competitor, Tenet. Tenet publicly disclosed to the SEC, expert analyses and other information suggesting that Community’s profits depended largely on Medicare fraud. Community issued press releases, denying Tenet’s allegations, but ultimately corroborated many of Tenet’s claims. Community’s shareholders sued Community and its CFO and CEO, alleging that the disclosure caused a decline in stock prices. The district court rejected the claim. The Sixth Circuit reversed. The Tenet complaint at least plausibly presents an exception to the general rule that a disclosure in the form of a complaint would be regarded, by the market, as comprising mere allegations rather than truth. The plaintiffs plausibly alleged that the value of Community’s shares fell because of revelations about practices that Community had previously concealed. View "Norfolk County Retirement System v. Community Health Systems, Inc." on Justia Law