Justia Government & Administrative Law Opinion Summaries

Dr. Erdle was arrested for possession of cocaine. He successfully completed drug treatment under a deferred entry of judgment program. Before completion of his drug program and dismissal of his criminal matter, the Medical Board filed an accusation. Erdle argued that he could not be disciplined because the action was based entirely on information obtained from his arrest record. Penal Code 1000.4 provides that “[a] record pertaining to an arrest resulting in successful completion of a pretrial diversion program shall not ... be used in any way that could result in the denial of any employment, benefit, license, or certificate.” Business and Professions Code section 492, however, states: “Notwithstanding any other provision of law, successful completion of any diversion program under the Penal Code . . . shall not prohibit" disciplinary action by specific agencies, "notwithstanding that evidence of that misconduct may be" in an arrest record. The ALJ concluded that section 492 permits discipline but that arrest records should not be permitted at the hearing; that testimony by the arresting officer was allowable; and that cause for discipline existed. The court of appeal held that section 492 creates a blanket exemption from the restrictions contained in section 1000.4 for licensing decisions made by the specified healing arts agencies. View "Medical Board of California v. Superior Court" on Justia Law

Erie is a Chicago “Federally Qualified Health Center” (FQHC), 42 U.S.C. 254b (2012). FQHCs rely heavily on federal grants and Medicaid reimbursement. Erie Employees are federal employees under the Federal Tort Claims Act, 42 U.S.C. 233(a). Erie was founded as a project between Northwestern Memorial Hospital (NMH) and Erie Neighborhood House in 1957. NMH provides financial support and technical assistance, but Erie physicians seeking NMH privileges are required to apply for them. In 2005, Yarbrough went to the Erie after searching for a clinic that would not require insurance coverage. Yarbrough was informed that she would have her ultrasounds done at Northwestern and would likely deliver her baby at NMH. Based upon information she received during the visit, Yarbrough believed that Erie and NMH were the same entity. Yarbrough sued NMH. based on her daughter’s premature birth, alleging medical negligence. The Illinois Supreme Court answered a certified question: A hospital cannot be held vicariously liable under the doctrine of apparent agency set forth in Gilbert v. Sycamore, for the acts of the employees of an unrelated, independent clinic that is not a party to the litigation. Yarbrough sought treatment at Erie but looks to impose liability on NMH. Erie is neither owned nor operated by NMH. While Erie receives some charitable assistance from NMH, it relies heavily on federal money. Erie does not utilize the Northwestern name, Northwestern-related branding, or Northwestern’s trademark purple color. View "Yarbrough v. Northwestern Memorial Hospital" on Justia Law

The DC Circuit reversed the district court's grant of summary judgment in favor of Clarian in an action challenging the legality of HHS's decision to set forth certain policies regarding the means of calculating reimbursements for Medicare providers in an instruction manual without engaging in notice and comment rulemaking. The court held that the Manual instructions embodied a general statement of policy, not a legislative rule, setting forth HHS's enforcement priorities; policy statements did not establish binding norms; they were not "rules" that must be issued through notice and comment rulemaking; nor were the instructions subject to the Medicare Act's independent notice and comment requirement because they did not establish or change a substantive legal standard. Therefore, neither the Administrative Procedure Act nor the Medicare Act required that the Manual instructions be established by regulation. View "Clarian Health West, LLC v. Hargan" on Justia Law

The district court granted Dana-Farber partial summary judgment, agreeing that Dana-Farber was entitled to full reimbursement of Medicare's share of a tax paid and vacating the Board's decision. At issue was the Board's interpretation of two regulations expounding upon the statutory directive to reimburse only reasonable costs actually incurred. The DC Circuit reversed the district court's judgment, holding that the Board's interpretation was reasonable and Dana-Farber failed to show otherwise — much less that the interpretation violated the Administrative Procedure Act — and thus the court appropriately deferred to it. View "Dana Farber Cancer Institute v. Hargan" on Justia Law

The Supreme Court vacated the district court’s order granting Respondent’s petition for judicial review filed under Nev. Rev. Stat. 233B, the Nevada Administrative Procedure Act (APA), holding that the application process provided by Nev. Rev. Stat. 453A.322 does not constitute a contested case as defined by Nev. Rev. Stat. 233B.032, and therefore, the district court did not have authority to grant APA-based relief.Respondent petitioned for judicial review of the Nevada Department of Health and Human Service’s decision not to issue it a Las Vegas registration certificate authorizing it to operate a medical marijuana dispensary. Respondent’s petition was based exclusively on the Nevada APA. The Department moved to dismiss, arguing that the APA only affords judicial review in contested cases, which the marijuana dispensary application process does not involve. The district court granted judicial review and directed the Department to reevaluate Respondent’s application. The Supreme Court vacated the judgment of the district court, holding that the APA did not afford Respondent the right of review it sought. View "State, Department of Health & Human Services v. Samantha Inc." on Justia Law

Caremark is a pharmacy benefit manager. In 2006, Caremark employees identified approximately 4,500 Prescription Drug Events (PPDEs) under Medicare Part D that had been authorized for payment by Caremark, but not yet submitted to the Centers for Medicare and Medicaid Services (CMS), due to the lack of a compatible Prescriber ID. Caremark then used a dummy Prescriber ID for those PDEs and programmed that dummy Prescriber ID into its system. Thereafter, when any claim with a missing or incorrectly formatted Prescriber ID was processed, the system would default to the dummy, which allowed Caremark to submit for payment PDEs without trigging CMS error codes. Spay, a pharmacy auditor, discovered the use of “dummy” Prescriber IDs while auditing a Caremark client. That client dropped all issues identified in the audit, collected no recovery from Caremark, and did not pay Spay. Spay filed a qui tam lawsuit, asserting violations of the False Claims Act because the inaccurate PDEs were used to support reimbursement requests. The government declined to intervene. The court granted Caremark summary judgment, finding that Caremark had established sufficient government knowledge to preclude finding the required element of scienter, noting that several courts have adopted the government knowledge inference doctrine. The Third Circuit affirmed, declining to adopt that doctrine but stating that the misrepresentations were not material to the government’s decision to pay the underlying claims. View "Spay v. CVS Caremark Corp" on Justia Law

To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law

TRICARE provides current and former members of the military and their dependents' medical and dental care. Hospitals that provide TRICARE services are reimbursed under Department of Defense (DoD) guidelines. TRICARE previously did not require, DoD to use Medicare reimbursement rules. A 2001 amendment, 10 U.S.C. 1079(j)(2), required TRICARE to use those rules to the extent practicable. DoD regulations noted the complexities of the transition process and the lack of comparable cost report data and stated “it is not practicable” to “adopt Medicare OPPS for hospital outpatient services at this time.” A study, conducted after hospitals complained, determined that DoD underpaid for outpatient radiology but correctly reimbursed other outpatient services. TRICARE created a process for review of radiology payments. Each plaintiff-hospital requested a discretionary payment, which required them to release “all claims . . . known or unknown” related to TRICARE payments. Several refused to sign the release and did not receive any payments. Although it discovered calculation errors with respect to hospitals represented by counsel, TRICARE did not recalculate payments for any hospitals that did not contest their discretionary payment offer. The Claims Court dismissed the hospitals’ suit. The Federal Circuit reversed in part, finding that they may bring a claim for breach of contract but may not bring money-mandating claims under 10 U.S.C. 1079(j)(2) and 32 C.F.R. 199.7(h)(2) because the government’s interpretation of the statute was reasonable. View "Ingham Regional Medical Center v. United States" on Justia Law

E. Kendrick Smith, an Atlanta lawyer, brought this action to compel a corporation, Northside Hospital, Inc. and its parent company, Northside Health Services, Inc., (collectively, “Northside”), to provide him with access to certain documents in response to his request under the Georgia Open Records Act (“the Act”). A government agency owns and operates a large and complex hospital as part of its mission to provide healthcare throughout Fulton County. The agency leased its assets (including the hospital) to the Northside for a 40-year term at a relatively minimal rent. All governmental powers were delegated to Northside with respect to running the hospital and other assets. Northside’s organizing documents reflected that its purpose aligned with the agency’s: to provide healthcare for the benefit of the public. Thirty years into the arrangement, the corporation became “massive,” and owned other assets in surrounding counties. In resisting Smith’s request for records, Northside argued it no didn’t really do anything on behalf of the agency (in part because the now nearly-nonexistent agency has no idea what the corporation is doing), and thus the corporation’s records of a series of healthcare-related acquisitions weren’t subject to public inspection. The Georgia Supreme Court surmised that if the corporation’s aggressive position were wholly correct, it would cast serious doubt on the legality of the whole arrangement between Northside and the agency. Smith argued everything Northside did was for the agency’s benefit and thus all of its records were public. The Supreme Court concluded both were wrong: Northside’s operation of the hospital and other leased facilities was a service it performed on behalf of the agency, so records related to that operation were public records. But whether the acquisition-related records sought here were also public records depended on how closely related the acquisition was to the operation of the leased facilities, a factual question for the trial court to determine on remand. View "Smith v. Northside Hospital, Inc." on Justia Law

Abilify is approved to treat schizophrenia, Bipolar Disorder, major depressive disorder and irritability associated with autism. There are no disapproved treatments for elderly patients, but the FDA has included a warning since 2007 that Abilify is associated with increased mortality in elderly patients with dementia-related psychosis. Relators, former BMS employees, alleged in a qui tam suit that BMS and Otsuka engaged in a scheme to encourage providers to prescribe Abilify for unapproved (off-label) uses and improperly induced providers to prescribe Abilify in violation of the Anti-Kickback Statute. Nearly identical allegations were leveled against the companies years earlier. In 2007-2008, the companies each entered into an Agreement as part of a settlement of qui tam actions concerning improper promotion of Abilify. Relators allege that, despite those agreements, the companies continued to promote Abilify off-label and offer kickbacks, causing claims for reimbursement for the drug to be submitted to the government, in violation of the False Claims Act (FCA), 31 U.S.C. 3729. The district court dismissed in part. The Sixth Circuit affirmed; the complaint did not satisfy Rule 9(b)’s requirement that relators adequately allege the entire chain to fairly show defendants caused false claims to be filed. As sales representatives, relators did not have personal knowledge of provider’s billing practices.The alleged plan was to increase Abilify prescriptions through improper promotion, which does not amount to conspiracy to violate the FCA. View "Ibanez v. Bristol-Myers Squibb Co." on Justia Law