Justia Health Law Opinion Summaries

A pharmaceutical company developed a sublingual opioid painkiller, DSUVIA, which could only be administered in medically supervised settings due to safety concerns and was subject to a strict FDA Risk Evaluation and Mitigation Strategy (REMS). The company marketed DSUVIA with the slogan “Tongue and Done” at investor conferences, accompanied by additional disclosures about the drug’s limitations and REMS requirements. After the FDA issued a warning letter objecting to the slogan as potentially misleading under the Federal Food, Drug, and Cosmetic Act, several shareholders filed suit, alleging that the slogan misled investors about the complexity of administering DSUVIA and the drug’s limited market potential.The United States District Court for the Northern District of California dismissed the shareholders’ complaint, finding that the plaintiffs failed to adequately plead facts supporting a strong inference of scienter, but did not rule on whether the statements were false or misleading. The plaintiffs were given two opportunities to amend their complaint, but the court ultimately dismissed the case with prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The Ninth Circuit held that the plaintiffs failed to adequately plead falsity because a reasonable investor would not interpret the “Tongue and Done” slogan in isolation, but would consider the context provided by accompanying disclosures and other available information. The court also held that the FDA’s warning letter did not establish falsity under securities law, as the standards and intended audiences differ. Additionally, the court found that the plaintiffs did not plead a strong inference of scienter, as the facts suggested the company’s officers acted in good faith. The Ninth Circuit affirmed the district court’s dismissal. View "Sneed v. Talphera, Inc." on Justia Law

Russell Johnson, a resident of a continuing care retirement community operated by Stoneridge Creek, filed a class action lawsuit alleging that Stoneridge Creek unlawfully increased residents’ monthly care fees to cover its anticipated legal defense costs in ongoing litigation. Johnson claimed these increases violated several statutes, including the Health and Safety Code, the Unfair Competition Law, the Consumer Legal Remedies Act (CLRA), and the Elder Abuse Act, and breached the Residence and Care Agreement (RCA) between residents and Stoneridge Creek. The RCA allowed Stoneridge Creek to adjust monthly fees based on projected costs, prior year per capita costs, and economic indicators. In recent years, Stoneridge Creek’s budgets for legal fees rose sharply, with $500,000 allocated for 2023 and 2024, compared to much lower amounts in prior years.The Alameda County Superior Court previously denied Stoneridge Creek’s motion to compel arbitration, finding the RCA’s arbitration provision unconscionable. Johnson then moved for a preliminary injunction to prevent Stoneridge Creek from including its litigation defense costs in monthly fee increases. The trial court granted the injunction, finding a likelihood of success on Johnson’s claims under the CLRA and UCL, and determined that the fee increases were retaliatory and unlawfully shifted defense costs to residents. The court also ordered Johnson to post a $1,000 bond.The California Court of Appeal, First Appellate District, Division Four, reviewed the case and reversed the trial court’s order. The appellate court held that the fee increases did not violate the CLRA’s fee-recovery provision or other litigation fee-shifting statutes, as these statutes govern judicial awards of fees, not how a defendant funds its own legal expenses. The court further concluded that Health and Safety Code section 1788(a)(22)(B) permits Stoneridge Creek to include reasonable projections of litigation expenses in monthly fees. However, the court remanded the case for the trial court to reconsider whether the fee increases were retaliatory or excessive, and to reassess the balance of harms and the appropriate bond amount. View "Johnson v. Stoneridge Creek Pleasanton CCRC" on Justia Law

Two hospitals incorporated and operating in Mexico provided emergency medical care to individuals insured under Medicare Advantage plans issued by a Maine-based health insurance company. The patients, while in Mexico, signed contracts with the hospitals agreeing to pay for all services rendered and provided their insurance information. The hospitals, through a third-party administrator, contacted the insurer and received representations that the patients had “full medical insurance benefits” for the proposed out-of-country emergency services. Relying on these representations, the hospitals provided extensive treatment. After the patients were discharged, the insurer refused to reimburse the hospitals beyond a $25,000 cap, citing the terms of the Medicare Advantage plans.The hospitals filed separate lawsuits in the United States District Court for the District of Maine, asserting Maine common-law claims for promissory estoppel and negligent misrepresentation. They argued that the insurer’s representations induced them to provide care for which they were not fully reimbursed. The insurer moved to dismiss, contending that the claims were, in substance, claims for Medicare benefits and thus subject to the Medicare Act’s administrative exhaustion requirements. The district court agreed, finding that the claims arose under the Medicare Act and that the hospitals had not exhausted administrative remedies. The court dismissed both actions for lack of subject-matter jurisdiction and later denied the hospitals’ motions to alter the judgments, rejecting the argument that foreign hospitals are exempt from the exhaustion requirement.On appeal, the United States Court of Appeals for the First Circuit affirmed. The court held that the hospitals’ claims, though styled as common-law torts, were “inextricably intertwined” with determinations of Medicare benefits and thus arose under the Medicare Act. Because the hospitals had not exhausted administrative remedies, the district court properly dismissed the actions for lack of subject-matter jurisdiction. The court also found no basis to excuse exhaustion for foreign hospitals. View "Hospital Amerimed Cancun S A DE C V v. Martin's Point Health Care, Inc." on Justia Law

After suffering spinal fractures in a car accident, the plaintiff received surgical treatment and post-operative care from a neurosurgeon and a surgical nurse. The plaintiff was insured at the time, and the medical provider received his insurance information but did not bill the insurer. Instead, the provider filed a medical lien for over $180,000 against any potential recovery the plaintiff might obtain from a third-party tortfeasor, pursuant to Idaho Code section 45-704B. The plaintiff’s attorney objected, arguing that the Idaho Patient Act (IPA) required the provider to bill the patient’s insurance before filing such a lien. The provider maintained the lien was proper under the medical lien statute and did not comply with the IPA.The District Court of the Fourth Judicial District, Ada County, reviewed cross-motions for partial summary judgment. The court determined that the medical lien was not subject to the IPA because it did not constitute an “extraordinary collection action” as defined by the Act. The court also found a factual dispute regarding whether the charges were reasonable, ultimately concluding after a bench trial that the physician’s charges were reasonable but the nurse’s charges should be excluded. The court dismissed the plaintiff’s claims with prejudice, and the plaintiff appealed.The Supreme Court of the State of Idaho reversed the district court’s decision, holding that the medical lien did constitute an “extraordinary collection action” under the IPA because it was a lien placed on the patient’s property in connection with a debt. The Supreme Court further held that, because the provider failed to bill the patient’s insurance before filing the lien, as required by the IPA, the lien was invalid. The judgment was vacated, and the case was remanded with instructions to enter judgment for the plaintiff and declare the lien invalid. The Supreme Court also awarded attorney fees on appeal to the plaintiff. View "DeKlotz v. NS Support, LLC" on Justia Law

Two brothers with developmental disabilities, Gaven and Jared, live with their parents, who are certified to provide in-home care. Both brothers qualified for Maine’s “Single Member Services,” which would allow each to receive one-on-one care from a designated provider. The family requested that each parent be reimbursed for providing care to one brother. However, the Maine Department of Health and Human Services determined that, because the brothers lived together, they were only eligible for “Two Member Services,” meaning a single provider would be reimbursed to care for both, at half the total rate. The parents continued to provide one-on-one care to both brothers, but were only reimbursed for one provider, resulting in a significant financial shortfall.The family challenged this determination in Maine Superior Court, which ruled in their favor, finding that the Department’s interpretation of its rules was arbitrary and inconsistent with its policies. Following this decision, the Department began reimbursing both parents for providing one-on-one care. The family then filed a federal lawsuit seeking damages for the period before the state court’s ruling, alleging discrimination under Title II of the Americans with Disabilities Act (ADA). The United States District Court for the District of Maine dismissed the case, holding that the Department was protected by Eleventh Amendment sovereign immunity.On appeal, the United States Court of Appeals for the First Circuit reversed the district court’s dismissal. The First Circuit held that the Department was not entitled to sovereign immunity because Congress validly abrogated such immunity under Title II of the ADA in this context. The court found that the Department’s policy violated the brothers’ equal protection rights, as there was no rational basis for providing reduced services solely because the brothers lived together. The case was remanded for further proceedings. View "McKenna v. Maine Department of Health and Human Services" on Justia Law

A pharmaceutical company sought approval from the Food and Drug Administration (FDA) to market tasimelteon, a drug previously approved for a rare sleep disorder, as a treatment for jet lag. The company submitted results from several clinical trials, focusing on both objective sleep measures and subjective assessments of alertness and next-day functioning. The FDA’s Center for Drug Evaluation and Research issued a complete response letter indicating that the application did not provide substantial evidence of efficacy, particularly criticizing the measurement of next-day impairment and the tools used for subjective endpoints. The company engaged in further discussions and dispute resolution with the FDA, including proposing a narrower indication for approval, but these efforts were unsuccessful.After the FDA issued a formal notice of opportunity for a hearing (NOOH), the company requested a hearing and submitted expert declarations supporting the adequacy of its clinical evidence. The FDA ultimately denied both the application and the hearing request, finding no genuine and substantial issue of fact warranting a hearing. The company then petitioned the United States Court of Appeals for the District of Columbia Circuit for review, arguing that the FDA was required to hold a hearing, that material factual disputes existed, that the FDA’s decision-making was arbitrary and capricious, and that the final decision violated the Appointments Clause.The United States Court of Appeals for the District of Columbia Circuit held that the Food, Drug, and Cosmetic Act does not require the FDA to hold a hearing before denying every new drug application, but the agency must grant a hearing if there are material factual disputes. The court found that, in this case, the FDA’s refusal to hold a hearing was arbitrary and capricious because the company’s expert evidence created genuine disputes over the adequacy of the clinical trials. The court remanded the case to the FDA for further proceedings consistent with its opinion. View "Vanda Pharmaceuticals, Inc. v. FDA" on Justia Law

A hospital submitted its proposed budget for the upcoming fiscal year, requesting a 6.1% increase in net patient revenue (NPR) and a 2.8% increase in commercial negotiated rates. The hospital justified its request by citing increased patient volume and efforts to reduce wait times. The Green Mountain Care Board, which regulates hospital budgets in Vermont, had previously issued guidance setting a 3.5% benchmark for NPR growth and a 3.4% benchmark for commercial rate increases, requiring hospitals to justify any requests above these benchmarks.After reviewing the hospital’s proposal, the Green Mountain Care Board approved a 5.0% NPR increase—higher than the benchmark but lower than requested—citing the hospital’s strong financial health and the need to balance access to care with cost containment. The Board also approved the requested 2.8% commercial rate increase but included a footnote reducing this increase to 1.2% due to a prior budget overage, referencing a separate budget-enforcement order. The hospital appealed the Board’s decision to the Vermont Supreme Court, arguing that the Board’s NPR decision was arbitrary and that the reduction in the commercial rate increase violated procedural requirements under the Vermont Administrative Procedure Act (VAPA).The Vermont Supreme Court held that the Board had adequately explained its decision to approve a 5.0% NPR increase and acted within its discretion, given the statutory mandate to balance cost control and access to care. However, the Court struck the footnote reducing the commercial rate increase to 1.2%, because the underlying budget-enforcement order had been reversed by the Vermont Superior Court for failure to follow VAPA procedures and was no longer valid. The Supreme Court otherwise affirmed the Board’s decision. View "In re Rutland Regional Medical Center Fiscal Year 2025" on Justia Law

Several individuals who allegedly owed debts to Kentucky public institutions—either for medical services at the University of Kentucky or for educational services at the University of Kentucky, Morehead State University, or the Kentucky Community & Technical College System—challenged the referral of their debts to the Kentucky Department of Revenue for collection. The plaintiffs argued that the statutes used to justify these referrals did not apply to their debts and that the Department unlawfully collected the debts, sometimes without prior court judgments or adequate notice. The Department used its tax collection powers, including garnishments and liens, to recover these debts, and in some cases, added interest and collection fees.In the Franklin Circuit Court, the plaintiffs sought declaratory and monetary relief, including refunds of funds collected. The Circuit Court ruled that the Department was not authorized by statute to collect these debts and held that sovereign immunity did not protect the defendants from the plaintiffs’ claims. The court also certified the medical debt case as a class action. The Court of Appeals reviewed these interlocutory appeals and held that while sovereign immunity did not bar claims for purely declaratory relief, it did bar all claims for monetary relief, including those disguised as declaratory relief.The Supreme Court of Kentucky reviewed the consolidated appeals. It held that sovereign immunity does not bar claims for purely declaratory relief or for a refund of funds that were never due to the state, nor does it bar constitutional takings claims. However, the court held that sovereign immunity does bar claims for a refund of funds that were actually due to the state, even if those funds were unlawfully or improperly collected. The court affirmed in part, reversed in part, and remanded for further proceedings to determine which funds, if any, were never due to the state and thus subject to refund. The court also found that statutory changes rendered prospective declaratory relief in the medical debt case moot, but not retrospective relief. View "LONG V. COMMONWEALTH OF KENTUCKY" on Justia Law

An individual diagnosed with Alzheimer’s disease was admitted to a personal care facility in Kentucky after his spouse, who had been appointed his conservator by a Tennessee court, signed a mandatory arbitration agreement required for admission. The spouse did not specify her capacity when signing. The patient later suffered injuries and died, leading his spouse, as administratrix of his estate, to file suit alleging negligence, wrongful death, and other claims against the facility and its operators.The defendants moved to compel arbitration, arguing that the spouse had authority to sign the agreement under the Tennessee conservatorship order or, alternatively, under Kentucky’s Living Will Directive Act, which allows a spouse to make “health care decisions” for an incapacitated person. The Fayette Circuit Court denied the motion, finding that signing an arbitration agreement was not a health care decision under the Act and that the spouse lacked authority to bind the patient. The court did not rule on unconscionability. The Kentucky Court of Appeals affirmed, distinguishing prior cases involving powers of attorney and holding that the Act’s definition of “health care decision” did not include entering arbitration agreements.The Supreme Court of Kentucky reviewed whether a spouse may bind an incapacitated person to arbitration for facility admission under the Living Will Directive Act. The Court held that signing an arbitration agreement is not a “health care decision” as defined by Kentucky law, which limits such decisions to consenting to or withdrawing consent for medical procedures, treatments, or interventions. The Court affirmed the Court of Appeals’ decision, upholding the denial of the motion to compel arbitration, and remanded the case for further proceedings. View "LEXINGTON ALZHEIMER'S INVESTORS, LLC V. NORRIS" on Justia Law

Terri R. Winnon, a former executive assistant and controller for a group of skilled nursing facilities (SNFs) in Texas, alleged that her former employers and associated entities engaged in fraudulent schemes to obtain improper reimbursements from Medicare and Texas Medicaid. She claimed that the defendants paid unlawful kickbacks to doctors and hospital discharge planners for patient referrals and inflated therapy service bills to maximize government reimbursements. Winnon’s allegations included specific practices such as employee bonuses tied to Medicare census targets, “sham” medical directorships, and “marketing gifts” to hospital staff, as well as systematic upcoding of therapy services by a contracted provider, RehabCare.After Winnon filed her qui tam action under the False Claims Act (FCA) and related Texas statutes, the United States District Court for the District of Columbia dismissed her claims. The court found that her allegations against RehabCare were barred by the FCA’s public disclosure provision, as similar claims had already been made public in a prior lawsuit, United States ex rel. Halpin & Fahey v. Kindred Healthcare, Inc. The district court also determined that Winnon’s claims against the SNF Defendants did not meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), as they lacked sufficient particularity regarding the alleged fraudulent conduct.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s dismissals. The appellate court held that Winnon’s claims against RehabCare were precluded by the public disclosure bar because her allegations were substantially similar to those previously disclosed and she did not qualify as an “original source” under the FCA. Regarding the SNF Defendants, the court concluded that Winnon’s allegations failed to satisfy Rule 9(b)’s requirement for particularity, as she did not provide enough specific details to support a strong inference that false claims were actually submitted. The court affirmed the district court’s judgments in full. View "USA v. Lozano" on Justia Law