Justia Government & Administrative Law Opinion Summaries

Drug manufacturers challenged the Department's rule that broadly requires drug manufacturers to disclose in their television advertisements the wholesale acquisition cost of many prescription drugs and biological products for which payment is available under Medicare or Medicaid.The DC Circuit affirmed the district court's judgment in favor of the drug manufacturers, holding that the Department acted unreasonably in construing its regulatory authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs. The court explained that, in the overwhelming majority of cases, the price that the rule compels manufacturers to disclose bears little resemblance to the price beneficiaries actually pay under the Medicare and Medicaid programs. Therefore, the court held that there is no reasoned statutory basis for the Department's far-flung reach and misaligned obligations, and thus the rule is invalid and is hereby set aside. View "Merck & Co., Inc. v. United States Department of Human and Health Services" on Justia Law

Methodist Specialty Care Center was the only nursing facility for the severely disabled (NFSD) in Mississippi. NFSDs generally incur higher costs than other nursing facilities, and because of this, Methodist received a percentage adjustment to its new-bed-value (NBV) calculation when the Mississippi Division of Medicaid (DOM) determined how much it should reimburse Methodist for its property costs through the DOM’s fair-rental system. A NBV was intended to reflect what it would cost to put a new bed into service in a nursing facility today. Methodist had received a NBV adjustment of 328.178 percent added to the standard NBV every year since it opened in 2004 until State Plan Amendment (SPA) 15-004 was enacted. During the 2014 Regular Session, the Mississippi Legislature passed House Bill 1275, which authorized the DOM to update and revise several provisions within the State Plan; one such amendment changed Methodist's adjustment rate, and made the facility experience a substantial decrease in its NBV, while all other nursing facilities in the state received increases. Methodist appealed the DOM’s changes to its NBV that were enacted in SPA 15-004. After a hearing, an Administrative Hearing Officer (AHO) upheld the decreased percentage adjustment to Methodist’s NBV, but also determined the DOM had miscalculated Methodist’s NBV adjustment. The DOM had planned to calculate Methodist’s adjustment as 175 percent of the base NBV, but the AHO found that Methodist’s adjusted NBV should be calculated in the same manner as it was calculated preamendment - by taking 175 percent of the standard NBV and adding that value to the standard NBV. Methodist still felt aggrieved because its NBV adjustment rate had not been restored to the preamendment rate. Methodist appealed the DOM’s final decision to the Chancery Court. When the chancellor affirmed the DOM’s final decision, Methodist appealed to the Mississippi Supreme Court. After review, the Supreme Court found the DOM’s final decision was supported by substantial evidence, was not arbitrary or capricious, did not violate Methodist’s constitutional or statutory rights and that the DOM was acting within its power in reaching and adopting its final decision. View "Methodist Specialty Care Center v. Mississippi Division of Medicaid" on Justia Law

The district court remanded the Fiscal Year 2014 Rule to the Secretary of Health and Human Services without vacating the Rule. The district court's decision was made in response to the challenge by a group of hospitals to a 0.2% reduction in Medicare reimbursement rates for inpatient hospital services. The Secretary subsequently increased the Medicare inpatient rates by 0.6% for Fiscal Year 2017 to offset the past effects of the abandoned rate reduction.The DC Circuit affirmed the district court's grant of summary judgment for the Secretary. The court held that the district court was not required to vacate the Rule or order make whole relief as the hospitals sought, and the remedy on remand reasonably addressed the problem. The court also held that the district court did not err in partially granting and denying statutory interest to certain hospitals in accord with this court's precedent. Finally, the court affirmed the partial award and denial of statutory interest. View "Shands Jacksonville Medical Center, Inc. v. Azar" on Justia Law

The Mississippi Division of Medicaid (DOM) appealed a chancery court judgment ordering the DOM to reverse the adjustments for “Legend Drug” costs reported by Windsor Place Nursing Center, Inc., d/b/a Windsor Place Nursing & Rehab Center (Windsor) and Billdora Senior Care, Lexington Manor Senior Care, and Magnolia Senior Care (collectively Senior Care). The chancery court found that legend drug expenses incurred by these providers were properly reported on each of their Long Term Care (LTC) cost reports as an allowable cost and should have been taken into account the by DOM in determining the per diem rates for each provider. The DOM contends that its decision to disallow the legend drug expenses claimed by the providers in their required cost report for reporting years 2005, 2007, and 2008 was supported by substantial evidence, was not arbitrary or capricious, and was within its authority to decide. Therefore, the chancery court’s order must be reversed and the DOM’s decision must be reinstated. The Mississippi Supreme Court agreed with the DOM. "No where in the controlling statutes, the state plan, or Medicaid’s policy do we see language that lends itself to a construction taken by the providers that all prescription drug costs “not covered” by the Medicaid drug program means drug costs 'not paid for' by Medicaid. ... While the DOM may have failed to catch this in the past, legend drugs covered by Medicaid’s Drug Program are subject to direct reimbursement from Medicaid to the dispensing pharmacist, and constitute a non-allowable cost for the provider’s pier diem reimbursement report. And any action taken to the contrary by Medicaid is a violation of its rules and regulations." View "Mississippi Division of Medicaid v. Windsor Place Nursing Center, Inc. et al." on Justia Law

The Supreme Court held that Andrea Palm's order confining all people to their homes, forbidding travel, and closing businesses in response to the COVID-19 coronavirus (Emergency Order 28) was unenforceable because the order was a rule, and Palm did not follow statutory emergency rule making procedures established by the Legislature.On March 12, 2020, Governor Tony Evers issued Executive Order 72 proclaiming that a public health emergency existed in Wisconsin and directed DHS to take "all necessary and appropriate measures" to prevent incidents of COVID-19 in the State. On March 24, Palm, as secretary-designee of the Department of Health Services, issued Emergency Order 12 ordering Wisconsin citizens to stay at home. On April 16, Palm issued Emergency Order 28 ordering individuals to stay at home or risk punishment. The Wisconsin Legislature brought an emergency petition for original action asserting that Palm failed to follow emergency rulemaking procedures required under Wis. Stat. 227.24. The Supreme Court held (1) Emergency Order 28 is a "rule" under Wis. Stat. 227.01(13); (2) because Palm did not follow rulemaking procedures during Order 28's promulgation, there could be no criminal penalties for violations of her order; and (3) Palm's order further exceeded the statutory authority of Wis. Stat. 252.02. View "Wisconsin Legislature v. Palm" on Justia Law

The Supreme Court affirmed the order of the district court granting the Montana Department of Public Health and Human Services' (DPHHS) motion for judgment on the pleadings, holding that the district court did not err in concluding that guardians had the authority to decide whether their wards would return to the At Home Assisted Living and At Home Also (collectively, At Home) facility.In 2017, the DPHHS suspended At Home's license for noncompliance with certain DPHHS rules and regulations and required the At Home residents to be relocated. After DPHHS reinstated At Home's license, some relocated residents who were wards with guardians appointed by DPHHS Adult Protection Services indicated their desire to return to the facility. The APS guardians refused to allow their wards to return. At Home and its owners sued DPHHS alleging intentional interference. The district court granted judgment on the pleadings for DPHHS. The Supreme Court affirmed, holding that the district court did not err in determining that the guardians had the authority to determine where the wards would reside and in thus granting judgment on the pleadings. View "Wingfield v. Department of Public Health & Human Services" on Justia Law

Defendants Michael Touchette and Centurion Healthcare brought an interlocutory appeal of a trial court's certification of a class of plaintiffs in a Vermont Rule 75 action. The certified class was comprised of people in the custody of the Vermont Department of Corrections (DOC), each of whom suffered from opioid-use disorder, and alleged defendants’ medication-assisted treatment (MAT) program did not meet prevailing medical standards of care as required by Vermont law. Defendants, the former Commissioner of the DOC and its contract healthcare provider, argued the trial court erred both in finding that plaintiff Patrick Mullinnex exhausted his administrative remedies before filing suit, and in adopting the vicarious-exhaustion doctrine favored by several federal circuits in order to conclude that Mullinnex’s grievances satisfied the exhaustion requirement on behalf of the entire class. Defendants also contended the trial court’s decision to certify the class was made in error because plaintiffs did not meet Rule 23’s numerosity, commonality, typicality, and adequacy-of- representation requirements. After review, the Vermont Supreme Court reversed, concluding that - even if the vicarious-exhaustion doctrine was appropriately applied in Vermont - it could not apply in this case because, on the record before the trial court, no member of the putative class succeeded in exhausting his administrative remedies. Because plaintiffs’ failure to exhaust left the courts without subject-matter jurisdiction, the Supreme Court did not reach defendants’ challenges to the merits of the class-certification decision. View "Mullinnex et al . v. Menard et al." on Justia Law

Empire challenged HHS's 2005 Rule interpreting a Medicare regulation under the Administrative Procedure Act (APA), as part of its appeal of HHS's calculation of its 2008 reimbursement. The 2005 Rule removed the word "covered" from 42 C.F.R. 412.106(b)(2)(i), effectively amending HHS's interpretation of "entitled to [Medicare]" in 42 U.S.C. 1395ww(d)(5)(F)(vi), a subsection of the Medicare Act, 42 U.S.C. 1395 et seq. The district court granted partial summary judgment for Empire, ruling that, while the 2005 Rule was substantively valid, it should be vacated because the rulemaking process leading to its adoption failed to meet the APA’s procedural requirements.The Ninth Circuit affirmed the district court's grant of summary judgment and vacatur of the 2005 Rule on different grounds. The panel held that the 2005 Rule's rulemaking process, while not perfect, satisfied the APA's notice-and-comment requirements. However, the panel held that the 2005 Rule is substantively invalid and must be vacated, because it directly conflicts with the panel's interpretation of 42 U.S.C. 1395ww(d)(5)(F)(vi) in Legacy Emanuel Hospital and Health Center v. Shalala, 97 F.3d 1261, 1265–66 (9th Cir. 1996). Legacy Emanuel interpreted the meaning of "entitled to [Medicare]" as unambiguous and thus the 2005 Rule's conflicting construction cannot stand. The panel remanded for further proceedings. View "Empire Health Foundation v. Azar" on Justia Law

The Eleventh Circuit denied a motion for a stay of a preliminary injunction that enjoins certain applications of a public health order issued in response to the COVID-19 pandemic in Alabama. The public health order, published on March 27, 2020, mandated the postponement of all dental, medical, or surgical procedures. Plaintiffs, abortion providers in Alabama, sought a temporary restraining order (TRO) preventing enforcement of the public health order as applied to pre-viability abortions. After the district court issued a TRO, the state filed a motion to dissolve the TRO and included clarifications. The district court subsequently adopted the state's clarifications and issued an April 3rd order, staying the TRO in part. The state later changed its interpretation again. Based on the evidence presented at the preliminary injunction hearing, the district court determined that the medical restrictions, as read pursuant to the state's earlier interpretation, violate the Fourteenth Amendment.The court held that the state has not made a strong showing that it is likely to succeed on the merits of its appeal or that it will be irreparably injured absent a stay. In this case, because of the state's shifting interpretations of the March 27th and April 3rd orders, the district court had ample authority to issue a preliminary injunction to preserve the status quo and prevent the state from reverting to its initial and more restrictive interpretations.The district court considered Jacobson v. Commonwealth of Massachusetts and Smith v. Avino, but read them together with cases holding that the Fourteenth Amendment generally protects a woman's right to terminate her pregnancy. Applying both the Jacobson framework and the Casey undue-burden test together, the district court concluded that the April 3rd order imposed a plain, palpable invasion of rights, yet had no real or substantial relation to the state's goals. The court held that the district court was permitted to reach this conclusion and to issue a status quo preliminary injunction to ensure that the state did not deviate from the Alabama State Health Officer's interpretation of the April 3rd order at the preliminary injunction hearing. View "Robinson v. Planned Parenthood Southeast Inc." on Justia Law

The Patient Protection and Affordable Care Act established online exchanges where insurers could sell their healthcare plans. The now-expired “Risk Corridors” program aimed to limit the plans’ profits and losses during the first three years (2014-2016). Under 31 U.S.C. 1342, eligible profitable plans “shall pay” the Secretary of the Department of Health and Human Services, while the Secretary “shall pay” eligible unprofitable plans. The Act neither appropriated funds nor limited the amounts that the government might pay. There was no requirement that the program be budget-neutral. The total deficit exceeded $12 billion. At the end of each year, the appropriations bills for the Centers for Medicare and Medicaid Services included a rider preventing the Centers from using the funds for Risk Corridors payments. The Federal Circuit rejected Tucker Act claims for damages by health-insurance companies that claimed losses under the program.The Supreme Court reversed. The Risk Corridors statute created an obligation to pay insurers the full amount set out in section 1342’s formula. The government may incur an obligation directly through statutory language, without details about how the obligation must be satisfied. The Court noted the mandatory term “shall,” and adjacent provisions, which differentiate between when the Secretary “shall” act and when she “may” exercise discretion. Congress did not impliedly repeal the obligation through its appropriations riders. which do not indicate “any other purpose than the disbursement of a sum of money for the particular fiscal years.”The Risk Corridors statute is fairly interpreted as mandating compensation for damages, and neither Tucker Act exception applies. Nor does the APA bar a Tucker Act suit. The insurers seek specific sums already calculated, past due, and designed to compensate for completed labors. Because the Risk Corridors program expired this litigation presents no special concern about managing a complex ongoing relationship. View "Maine Community Health Options v. United States" on Justia Law