Justia Government & Administrative Law Opinion Summaries

AstraZeneca Pharmaceuticals LP and AstraZeneca AB challenged the Drug Price Negotiation Program created by the Inflation Reduction Act of 2022, which directs the Centers for Medicare & Medicaid Services (CMS) to negotiate prices for certain high-expenditure drugs. CMS issued guidance on selecting qualifying drugs for 2026, including Farxiga, manufactured by AstraZeneca. AstraZeneca sued the Secretary of the Department of Health and Human Services and the CMS Administrator, claiming the Negotiation Program violated procedural due process and that parts of CMS’s guidance violated the Administrative Procedure Act (APA).The United States District Court for the District of Delaware ruled that AstraZeneca failed to state a due process violation and lacked standing to pursue its APA claims. The court entered judgment in favor of the government.The United States Court of Appeals for the Third Circuit reviewed the case. The court found that AstraZeneca lacked Article III standing to challenge the CMS guidance under the APA because the company did not demonstrate a concrete and particularized injury. AstraZeneca's claims about the impact on its business decision-making and difficulty valuing Farxiga in negotiations were deemed hypothetical and conjectural.Regarding the due process claim, the court held that AstraZeneca did not have a protected property interest in selling its drugs at a market rate. The court noted that federal patent laws do not confer a right to sell at a particular price, and the Negotiation Program only sets prices for drugs reimbursed by CMS, not private market transactions. Consequently, the court affirmed the District Court’s judgment, granting summary judgment in favor of the government on both the APA and due process claims. View "AstraZeneca Pharmaceuticals LP v. Secretary United States Department of Health and H" on Justia Law

A group of over 200 hospitals claimed that the Department of Health and Human Services (HHS) miscalculated their Disproportionate Share Hospital (DSH) adjustments, which provide additional funding to hospitals treating a high percentage of low-income patients. The dispute centered on the interpretation of the phrase "entitled to supplementary security income (SSI) benefits" under subchapter XVI. The hospitals argued that this phrase should include all patients enrolled in the SSI system at the time of hospitalization, even if they were not entitled to an SSI payment during that month. HHS, however, interpreted it to mean patients who were eligible to receive an SSI payment during the month of hospitalization.The Provider Reimbursement Review Board denied the hospitals' request for additional reimbursement on procedural grounds, and the Centers for Medicare & Medicaid Services denied relief on the merits. The District Court rejected the hospitals' claims and granted summary judgment to HHS. The D.C. Circuit affirmed, concluding that SSI benefits are about cash payments for needy individuals and that it makes little sense to say individuals are entitled to the benefit in months when they are not eligible for a payment.The Supreme Court of the United States held that an individual is "entitled to [SSI] benefits" for purposes of the Medicare fraction when she is eligible to receive an SSI cash payment during the month of her hospitalization. The Court reasoned that SSI benefits are cash benefits determined on a monthly basis, and eligibility for such benefits is also determined monthly. The Court affirmed the judgment of the D.C. Circuit, respecting the specific formula that Congress prescribed for calculating the Medicare fraction. View "Advocate Christ Medical Center v. Kennedy" on Justia Law

Bidi Vapor LLC filed a premarket tobacco product application (PMTA) with the U.S. Food and Drug Administration (FDA) in 2020 for its tobacco-flavored electronic nicotine delivery system (ENDS) product, the Bidi Stick – Classic. The FDA identified several deficiencies in the application, and despite Bidi Vapor submitting supplemental information, the FDA found the evidence insufficient. On January 22, 2024, the FDA issued a Marketing Denial Order (MDO) based on three independent grounds: high abuse liability of the product, incomplete study on leachable compounds, and lack of adequate comparison data on harmful constituents. This order prevented Bidi Vapor from marketing the Bidi Classic.Bidi Vapor appealed the FDA’s decision, arguing that the FDA violated the Tobacco Control Act and the Administrative Procedure Act, and acted in an arbitrary and capricious manner. The company contended that the FDA failed to conduct a balanced analysis of the product’s benefits and deficiencies, imposed product standards without proper rulemaking, and did not conduct a second cycle of toxicological review.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that the FDA’s decision was reasonable and not arbitrary or capricious. The court found that the FDA had appropriately considered the relevant data and provided a satisfactory explanation for its actions, particularly regarding the high abuse liability of the Bidi Classic. The court noted that this deficiency alone was sufficient to support the MDO, and therefore did not address the other two grounds. The court denied Bidi Vapor’s petition for review, upholding the FDA’s Marketing Denial Order. View "Bidi Vapor LLC v. Food and Drug Administration" on Justia Law

Robert Saint, an attorney representing a whistleblower in a False Claims Act case, requested a legal memorandum (White Paper) from the Family & Social Services Administration (FSSA) under Indiana’s Access to Public Records Act (APRA). The White Paper was created by HealthNet, a private entity, and given to FSSA for use during Medicaid settlement negotiations. FSSA denied the request, claiming the document was protected by attorney-client privilege and the deliberative material exception.The Marion Superior Court ordered FSSA to disclose the White Paper, finding that FSSA failed to demonstrate an attorney-client relationship or that the document was deliberative material prepared for FSSA’s decision-making. The court also found that any privilege was waived when the document was tendered to FSSA. FSSA appealed, reasserting the deliberative material exception and arguing that the document was used for decision-making within the agency.The Indiana Court of Appeals affirmed the trial court’s decision, rejecting FSSA’s arguments and finding that the White Paper was neither intra-agency nor interagency material. The court also found that FSSA waived its private contractor and confidentiality arguments by not raising them earlier.The Indiana Supreme Court reviewed the case and affirmed the trial court’s order. The court held that the deliberative material exception did not apply because the White Paper was not intra-agency material. The court emphasized that intra-agency material must originate from and be communicated between employees of the same agency. Since the White Paper was created by HealthNet and not generated within FSSA, it did not qualify for the exception. The court concluded that FSSA failed to meet its burden of proof and ordered the disclosure of the White Paper. View "Family & Social Services Administration v. Saint" on Justia Law

Dr. Blake Vanderlan, a physician at a hospital operated by Jackson HMA, LLC, alleged that the hospital systematically violated the Emergency Medical Treatment and Labor Act (EMTALA). He reported these violations to the Department of Health and Human Services, prompting an investigation by the Center for Medicare and Medicaid Services (CMS). CMS confirmed the violations and referred the matter to the Office of Inspector General (OIG) for potential civil monetary penalties. Vanderlan then filed a qui tam lawsuit under the False Claims Act (FCA) against Jackson HMA, alleging five FCA violations, including a retaliation claim.The United States District Court for the Southern District of Mississippi handled the case initially. The government investigated Vanderlan’s claims but declined to intervene. The case continued for six and a half years, during which the district court severed Vanderlan’s retaliation claims. The government eventually moved to dismiss the qui tam claims, arguing that the lawsuit interfered with administrative settlement negotiations and lacked merit. The district court granted the dismissal based on written filings and reaffirmed its decision after reconsideration.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court did not err in denying Vanderlan an evidentiary hearing, as the FCA only requires a hearing on the briefs. The court also determined that the government’s motion to dismiss fell under Rule 41(a)(1), which allows for dismissal without a court order, and thus, the district court had no discretion to deny the dismissal. The Fifth Circuit affirmed the district court’s judgment, concluding that the government’s decision to dismiss the case was justified and that the district court applied the correct standard. View "Vanderlan v. Jackson HMA" on Justia Law

Jaime Vargas and Francis R. Alvarez, former employees of medical supplier Lincare, Inc., and its subsidiary Optigen, Inc., filed a qui tam complaint under the False Claims Act (FCA). They alleged that Optigen engaged in fraudulent practices, including systematic upcoding of durable medical equipment, improper kickback arrangements, waiver of co-pays, and shipment of unordered supplies. The relators claimed that Optigen billed CPAP batteries and accessories under codes designated for ventilator accessories, waived patient co-pays without assessing financial hardship, shipped CPAP supplies automatically without patient requests, and paid kickbacks to healthcare providers for referrals.The case was initially filed in the Eastern District of Virginia and later transferred to the Middle District of Florida. The United States declined to intervene, and the District Court unsealed the complaint. The relators filed multiple amended complaints, each of which was dismissed by the District Court for failing to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b). The District Court dismissed the fourth amended complaint, holding that it still failed to plead sufficient facts with the requisite specificity.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court affirmed the District Court's dismissal of the relators' claims regarding improper kickback arrangements, waiver of co-pays, and automatic shipment of supplies, finding that these allegations lacked the necessary specificity and failed to identify any actual false claims submitted to the government. However, the court reversed the dismissal of the upcoding claim, holding that the relators had pleaded sufficient facts with particularity to withstand a motion to dismiss. The court remanded the case for further proceedings limited to the upcoding issue. View "Vargas v. Lincare, Inc." on Justia Law

Two elderly individuals, Ms. Penelope Lamle and Ms. Maxine Houston, applied for Medicaid but faced delays and additional questions from the Oklahoma Department of Human Services, allegedly directed by attorney Susan Eads. They refused to answer these questions and subsequently sued, seeking an expedited decision, payment of Medicaid benefits, and damages. Both applicants died during the litigation, and their estates were substituted as parties in the appeal.The United States District Court for the Western District of Oklahoma dismissed the action with prejudice, citing the plaintiffs' failure to state a valid claim. However, the court was unaware that the applicants had died while the action was pending.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court found that the claims for an injunction became moot when the agency denied benefits and the applicants died. The court noted that the requested relief would no longer benefit the estates, as the Oklahoma Department of Human Services had already denied the applications. The court also held that the Eleventh Amendment barred the requested retrospective relief. Consequently, the court remanded the case to the district court with instructions to vacate the judgment on the claim for a prospective injunction and dismiss it without prejudice.Regarding the claim against Ms. Eads in her individual capacity, the Tenth Circuit held that she was entitled to qualified immunity. The court found that the plaintiffs did not allege facts showing the violation of a clearly established right. As a result, the court affirmed the dismissal with prejudice of the claim for damages against Ms. Eads. View "Lamle v. Eads" on Justia Law

California collects a fee from in-state hospitals and uses the revenue, along with federal Medicaid funds, to provide subsidies to California hospitals serving Medicaid beneficiaries. Out-of-state hospitals near the California border, which sometimes serve California Medicaid beneficiaries but do not pay the fee, sought access to these subsidies. They argued that their exclusion violated the dormant Commerce Clause, the Equal Protection Clause, and federal Medicaid regulations.The United States District Court for the District of Columbia rejected the out-of-state hospitals' arguments and granted summary judgment in favor of the Centers for Medicare and Medicaid Services (CMS). The hospitals appealed the decision.The United States Court of Appeals for the District of Columbia Circuit reviewed the case de novo and affirmed the district court's decision. The court held that the QAF program does not discriminate against interstate commerce because it does not tax out-of-state hospitals, and the supplemental payments are based on in-state provision of medical care. The court also found that the program does not violate the Equal Protection Clause, as California could rationally decide to target subsidies to in-state hospitals serving a disproportionate share of Medi-Cal beneficiaries. Lastly, the court concluded that the QAF program does not violate federal Medicaid regulations, as the regulation in question pertains to base payments for specific services rendered to beneficiaries, not supplemental subsidies like the QAF payments. View "Asante v. Kennedy" on Justia Law

The case involves the Food and Drug Administration (FDA) denying authorization for respondents to market certain flavored e-cigarette products. The FDA's decision was based on the lack of sufficient scientific evidence demonstrating that these products would be appropriate for the protection of public health. The FDA emphasized the need for evidence from randomized controlled trials or longitudinal cohort studies, which the respondents did not provide. Instead, respondents submitted literature reviews and cross-sectional surveys, which the FDA found inadequate.The United States Court of Appeals for the Fifth Circuit, sitting en banc, reviewed the FDA's denial orders. The court found that the FDA acted arbitrarily and capriciously by applying different standards than those articulated in its predecisional guidance. The court was particularly concerned with the FDA's failure to review marketing plans, which it had previously deemed critical. The Fifth Circuit rejected the FDA's argument that any errors were harmless and remanded the case to the FDA.The Supreme Court of the United States reviewed the case and vacated the Fifth Circuit's decision. The Court held that the FDA's denial orders were consistent with its predecisional guidance regarding scientific evidence, comparative efficacy, and device type, and thus did not violate the change-in-position doctrine. However, the Court agreed with the FDA that the Fifth Circuit's interpretation of harmless error was overly broad. The Supreme Court remanded the case to the Fifth Circuit to reconsider the harmless-error question without relying on its expansive reading of Calcutt v. FDIC. View "FDA v. Wages and White Lion Investments, LLC" on Justia Law

Dr. Jeffery D. Milner, a physician, brought a qui tam action under the False Claims Act (FCA) against Baptist Health Montgomery, Prattville Baptist, and Team Health. Milner alleged that while working at a hospital owned by the defendants, he discovered that they were overprescribing opioids and fraudulently billing the government for them. He claimed that he was terminated in retaliation for whistleblowing after reporting the overprescription practices to his superiors.Previously, Milner filed an FCA retaliation lawsuit against the same defendants in the U.S. District Court for the Northern District of Alabama, which was dismissed with prejudice for failure to state a claim. The court found that Milner did not sufficiently allege that he engaged in protected conduct under the FCA or that his termination was due to such conduct. Following this dismissal, Milner filed the current qui tam action in the U.S. District Court for the Middle District of Alabama. The district court dismissed this action as barred by res judicata, relying on the Eleventh Circuit's decisions in Ragsdale v. Rubbermaid, Inc. and Shurick v. Boeing Co.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court's dismissal. The court held that Milner's qui tam action was barred by res judicata because it involved the same parties and the same cause of action as his earlier retaliation lawsuit. The court found that both lawsuits arose from a common nucleus of operative fact: the defendants' alleged illegal conduct and Milner's discovery of that conduct leading to his discharge. The court also noted that the United States, which did not intervene in the qui tam action, was not barred from pursuing its own action in the future. View "Milner v. Baptist Health Montgomery" on Justia Law