Justia Health Law Opinion Summaries

An orthopedic surgeon partnered with a medical supply businessman to form a durable medical equipment company. The company was formally listed under the surgeon’s mother’s name, even though she had no actual ownership or management role. The surgeon provided his mother’s personal information to his partner, who submitted Medicare enrollment forms on the company’s behalf. In January 2019, the company submitted a Medicare form notifying a change in business hours, but it falsely listed the mother as the sole owner and manager. The company ceased operations after Medicare began to suspect fraud.A federal grand jury in the Southern District of Florida indicted the surgeon on charges of conspiracy to defraud the United States and pay health care kickbacks, and making a false statement relating to health care matters. The jury acquitted him of conspiracy but convicted him of making a false statement. The United States District Court for the Southern District of Florida sentenced him to thirty-three months in prison, imposed three years of supervised release, and ordered him to pay $315,704.52 in restitution and to forfeit $125,000. The defendant challenged several aspects of his conviction and sentence, including venue, the sufficiency of the indictment, the sufficiency of the evidence, jury instructions, forfeiture, and restitution.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings on all grounds except restitution. The court held that the evidence was sufficient to support the false statement conviction and found no error in the jury instructions or the forfeiture order. However, the court determined that the government had not shown by a preponderance of the evidence that the false statement actually caused the losses for which restitution was ordered. The restitution order was vacated and the case remanded for further proceedings on that issue. View "United States v. Alexander" on Justia Law

A California-based company that produces lab-grown chicken sought to distribute and sell its product in Florida. After the company received federal approval from the USDA and FDA to market its lab-grown chicken, Florida enacted SB 1084, a law banning the manufacture, sale, and distribution of all lab-grown meat within the state. The company had previously held tasting events and developed business relationships in Florida but had no plans to manufacture its product there.Following the enactment of SB 1084, the company filed suit in the U.S. District Court for the Northern District of Florida against state officials, seeking declaratory and injunctive relief. The company argued that the federal Poultry Products Inspection Act (PPIA) preempted Florida’s ban, claiming the state’s law imposed “additional or different” ingredient or facilities requirements in violation of the PPIA. The district court denied the company’s motion for a preliminary injunction, finding the company unlikely to succeed on its preemption claims because SB 1084 did not regulate the company’s ingredients, premises, facilities, or operations. The court also addressed standing and procedural questions, ultimately dismissing the preemption claims after the company amended its complaint.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed whether the filing of an amended complaint or the district court’s dismissal order rendered the appeal moot and whether the company could challenge the Florida law as preempted. The Eleventh Circuit held the appeal was not moot and that the company could bring a preemption action in equity. However, the court concluded the company was unlikely to succeed on the merits. The court held that Florida’s ban did not impose ingredient or facilities requirements preempted by the PPIA, as it simply banned the product’s sale and manufacture. Therefore, the district court’s denial of a preliminary injunction was affirmed. View "Upside Foods Inc v. Commissioner, Florida Department of Agriculture" on Justia Law

An elderly man, Jerome, experienced significant health decline and was moved into a nursing home, prompting his wife, Janet, to petition the Saginaw Probate Court for a protective order under Michigan law. She requested the transfer of all of Jerome’s assets and most of his income to her, citing her increased financial needs and Jerome’s inability to manage his affairs due to physical and mental health issues. Janet’s petition was filed before Jerome’s application for Medicaid was resolved, and the probate court granted the transfer and set a monthly support payment for Janet.The Department of Health and Human Services (DHHS) appealed. The Michigan Court of Appeals affirmed in part but vacated the probate court’s order, relying on its earlier precedent in In re Estate of Schroeder, which prohibited consideration of Medicaid eligibility before a formal determination. The case was remanded for a new assessment of need and current valuation of assets. On remand, the probate court again ordered the transfer and support, applied retroactively, but the Court of Appeals vacated this order as well, citing reliance on outdated asset information and the same legal standard regarding Medicaid eligibility.The Michigan Supreme Court reviewed the case after Jerome’s death, holding that the appeal was not moot because Medicaid benefits can be awarded retroactively, even to a deceased individual’s estate. The Supreme Court ruled that probate courts may consider the likely availability of Medicaid benefits before a final eligibility determination when assessing the needs of an individual and their dependents under MCL 700.5401(3)(b). The Court expressly overruled the contrary rule announced in In re Estate of Schroeder, reinstated the probate court’s 2022 protective order, and remanded the case for further proceedings. View "In Re Estate Of Sizick" on Justia Law

After a multi-car collision in August 2021, law enforcement found a man unconscious behind the wheel of his vehicle. An officer administered Narcan to revive him, and paramedics transported him to the hospital. During his treatment, the man told paramedics and later his girlfriend that he had used heroin. His girlfriend relayed this information to a nurse. Following the incident, a district court judge issued a warrant allowing law enforcement to obtain the man’s medical records and ambulance run sheets for the day of the accident. The records included statements made to both the paramedics and his girlfriend.After he was charged with driving under the influence of a controlled substance, he moved to suppress the medical records and ambulance reports, arguing that disclosure violated statutory medical privilege and that the warrant was overbroad. The District Court for Hennepin County suppressed some records but ruled that neither the physician-patient privilege nor the nurse-patient privilege protected his statements to the paramedics or his girlfriend, nor his girlfriend’s statements. The court also found the warrant sufficiently particular. After a jury convicted him, he appealed.The Minnesota Court of Appeals affirmed, holding that paramedics are excluded from the physician-patient privilege, the privilege did not cover statements made to his girlfriend, and the search warrant was not overbroad.The Minnesota Supreme Court reviewed the case and clarified that the physician-patient privilege can extend to paramedics only if they act under the direction of a treating physician, but found the accused did not show such a relationship existed here. The court held that statements to a girlfriend who is not a necessary or customary participant in treatment are not privileged, and that nonprivileged information does not become privileged simply by inclusion in medical records. The court also held that the privilege does not bar issuing a particularized warrant for medical records in these circumstances. The decision of the court of appeals was affirmed. View "State of Minnesota vs. Smeby" on Justia Law

Two physicians who operated a pain management clinic and laboratory were indicted on multiple federal charges, including conspiracy to unlawfully distribute controlled substances, health care fraud, and making false statements relating to health care matters. In exchange for the government dropping the majority of charges, both defendants pled guilty to a single count of making false statements about health care matters. The plea agreements included stipulations that they submitted nearly 3,000 claims to government health benefit programs for unnecessary drug screens, receiving over $166,000 in payments, and contained waivers of their right to appeal the conviction or sentence unless the sentence exceeded the statutory maximum.The United States District Court for the Southern District of Ohio sentenced each defendant to five years of probation, ordered restitution of the full amount defrauded to be paid jointly and severally, and imposed a fine of $125,000 on each. At sentencing, the defendants objected to the fines as procedurally improper, unsupported by the record, and unconstitutional under the Eighth Amendment's Excessive Fines Clause. The district court rejected these arguments.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed whether the appellate waivers in the plea agreements barred the defendants’ challenges. The court held that the waivers precluded their arguments regarding procedural and substantive unreasonableness of the fines. Regarding the Eighth Amendment claim, the court concluded that, even if not barred, the argument failed because the fines were not grossly disproportional to the stipulated offense conduct, which included the full fraudulent scheme and resulting harm. The court found the fines were well below the statutory maximum and appropriate given the seriousness and scope of the offense. Accordingly, the Sixth Circuit affirmed the district court’s imposition of the fines. View "United States v. Mukhdomi" on Justia Law

A healthcare provider operating as a covered entity under the federal Section 340B Drug Pricing Program purchased pharmaceuticals from several drug manufacturers. The provider alleged that these manufacturers engaged in a fraudulent scheme by knowingly charging prices for drugs that exceeded the statutory ceiling, resulting in inflated reimbursement claims submitted to Medicaid, Medicare, and other government-funded programs. The provider did not seek compensation for its own overcharges, but instead brought a qui tam action under the False Claims Act (FCA), seeking to recover losses on behalf of the federal and state governments.The United States District Court for the Central District of California dismissed the complaint with prejudice. It reasoned that, under the Supreme Court’s holding in Astra USA, Inc. v. Santa Clara County, Section 340B does not confer a private right of action for covered entities to sue drug manufacturers over pricing disputes; such claims must instead be pursued through the Section 340B Administrative Dispute Resolution process. The district court concluded that the provider’s FCA claims were essentially attempts to enforce Section 340B and should therefore be barred.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal. The appellate court held that the provider’s FCA claims were not barred by the absence of a private right of action under Section 340B or by the Astra decision, because the action was brought to remediate fraud against the government and not to recover personal losses or enforce Section 340B directly. The court further found that the provider had plausibly pleaded falsity under the FCA. The Ninth Circuit remanded the case for further proceedings. View "ADVENTIST HEALTH SYSTEM OF WEST V. ABBVIE INC." on Justia Law

A former employee of a pharmaceutical manufacturer brought a qui tam lawsuit under the False Claims Act, alleging that the company improperly calculated and reported its “Best Price” for certain drugs to the Centers for Medicare and Medicaid Services (CMS), as required under the Medicaid Rebate Statute. The plaintiff claimed that, during a period from 2005 to 2014, the company failed to aggregate multiple rebates and discounts given to different entities on the same drug, resulting in inflated “Best Price” reports and underpayment of rebates owed to Medicaid. The complaint asserted that the company was subjectively aware that CMS interpreted the statute to require aggregation of all such discounts, especially after the company’s communications with CMS during a 2006–2007 rulemaking process and the company’s subsequent internal audit.After the government and several states declined to intervene, the United States District Court for the District of Maryland dismissed the amended complaint, finding that, even under the subjective scienter standard established in United States ex rel. Schutte v. SuperValu Inc., the plaintiff had not plausibly alleged that the company acted with actual knowledge, deliberate ignorance, or reckless disregard as to the truth or falsity of its reports. The district court also suggested that ambiguity in the statute precluded a finding of falsity.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the dismissal de novo. The Fourth Circuit held that the plaintiff’s allegations—including the company’s awareness of CMS’s interpretation of the rule, its targeted audit and compliance efforts, and its continued use of non-aggregated reporting—plausibly alleged the requisite subjective scienter under the False Claims Act. The court clarified that statutory ambiguity does not, at the pleading stage, negate scienter or falsity, and remanded for the district court to address other elements, including falsity, in the first instance. The Fourth Circuit reversed the dismissal and remanded for further proceedings. View "United States ex rel. Sheldon v. Allergan Sales, LLC" on Justia Law

Kaiser Foundation Health Plan, Inc. operated a health plan primarily using its own facilities, but its members sometimes sought emergency medical care at non-Kaiser hospitals, including Pomona Valley Hospital Medical Center. From 2004 until late 2017, Kaiser reimbursed Pomona Valley Hospital for emergency services at contractual rates under a written agreement. After Kaiser terminated this contract in 2017, it began paying Pomona Valley Hospital at a lower, unilaterally determined rate. Dissatisfied with these payments for services rendered from October 2017 through March 2020, Pomona Valley Hospital sued Kaiser in quantum meruit, seeking the asserted reasonable value of its emergency services, which it claimed was approximately $66 million more than what Kaiser had paid.The Superior Court of Los Angeles County held a jury trial in which Pomona Valley Hospital prevailed, and the jury awarded the full amount sought. Kaiser moved for a new trial, arguing, among other things, that the trial court erred by admitting the parties’ prior contract into evidence. The trial court agreed that admitting the contract was legal error but found the error only affected damages, not liability, and conditionally granted a new trial unless Pomona Valley Hospital accepted a remittitur, reducing the award by about $8 million. Pomona Valley Hospital accepted the remittitur, and judgment was entered. Kaiser appealed, and Pomona Valley Hospital cross-appealed, claiming the new trial should not have been granted.The California Court of Appeal, Second Appellate District, Division Two, held that the trial court erred in granting Kaiser’s new trial motion. The appellate court concluded the contract was properly admitted because its exclusionary clause only applied to regulatory valuations, not to common law quantum meruit actions like this one. The court also rejected Kaiser’s other arguments except for the prejudgment interest rate, holding that interest should be awarded at 7 percent, not 10 percent. The appellate court reversed the new trial order, vacated the amended judgment, and remanded for entry of judgment on the jury’s original verdict, subject to the corrected interest rate. View "Pomona Valley Hospital v. Kaiser Foundation Health etc." on Justia Law

A woman with a history of serious mental illness was civilly committed after being found incompetent to stand trial for a criminal vehicular homicide. She was diagnosed with schizoaffective disorder, bipolar type, and persistent psychosis, and resided in a secure state hospital. After multiple unsuccessful attempts with medication and therapy, her treating psychiatrist petitioned the district court for authorization to administer electroconvulsive therapy (ECT), asserting it was necessary due to her refractory symptoms and inability to consent.The District Court for Dakota County appointed two examiners, both of whom agreed that ECT was medically necessary and reasonable under the Price v. Sheppard balancing test, which weighs the patient’s need for treatment against the intrusiveness of the prescribed treatment. After considering the examiners’ reports and testimony, the district court authorized ECT, finding clear and convincing evidence that the treatment was necessary and reasonable. The patient appealed, arguing that the district court erred by not separately analyzing whether ECT was “necessary to preserve [her] life or health” as required by Minn. Stat. § 253B.03, subd. 6(b). The Minnesota Court of Appeals affirmed, holding that the Price/Jarvis balancing test subsumed the statutory requirement.The Minnesota Supreme Court reviewed whether the Price/Jarvis balancing test adequately addresses the statutory language requiring that treatment be “necessary to preserve the life or health” of a committed patient. The court held that the balancing test does address this requirement, as it requires a court to determine that treatment is both necessary and reasonable. Therefore, the Supreme Court affirmed the decision of the court of appeals, upholding the district court’s authorization of ECT. View "In the Matter of the Civil Commitment of: Graeber" on Justia Law

Several individuals who participate in West Virginia’s Medicaid program and have been diagnosed with gender dysphoria sought surgical treatments that are excluded from coverage under West Virginia’s Medicaid plan. The state plan expressly excludes coverage for “sex change” or “transsexual” surgeries, though it covers these procedures for other medical indications, such as cancer or congenital abnormalities. The plaintiffs, representing a class of similarly situated individuals, alleged that this exclusion discriminates against them in violation of the Equal Protection Clause, Section 1557 of the Affordable Care Act, and certain provisions of the Medicaid Act.In proceedings before the United States District Court for the Southern District of West Virginia, the court granted summary judgment to the plaintiffs on all claims. The court found that the exclusion was unlawful under the Equal Protection Clause, the Affordable Care Act’s anti-discrimination provision, and the Medicaid Act’s comparability and availability requirements. The district court issued a declaratory judgment and enjoined enforcement of the exclusion. On appeal, the United States Court of Appeals for the Fourth Circuit sitting en banc affirmed the district court’s judgment. The state defendants then sought review by the Supreme Court, which granted certiorari, vacated the Fourth Circuit’s en banc decision, and remanded for reconsideration in light of two recent Supreme Court cases: United States v. Skrmetti and Medina v. Planned Parenthood South Atlantic.Upon reconsideration, the United States Court of Appeals for the Fourth Circuit reversed the district court. The court held that, under Skrmetti, West Virginia’s exclusion does not violate the Equal Protection Clause or the Affordable Care Act, because the exclusion is based on medical diagnosis rather than sex or transgender status and is supported by rational, non-discriminatory reasons. Applying Medina, the court further held that the Medicaid Act’s comparability and availability requirements do not provide a private right of action, and thus plaintiffs could not sue under those provisions. The Fourth Circuit reversed and remanded the case with instructions to enter summary judgment for the defendants. View "Anderson v. Crouch" on Justia Law