Justia Public Benefits Opinion Summaries

Presser, who has 20 years of experience as a Wisconsin nurse and a nurse practitioner, began working with Acacia in 2011, providing psychiatric evaluations, managing patient medication, and providing other medical services. Presser alleges that Acacia and its owner, Freund, engaged in “upcoding,” provided unnecessary medical procedures, and then charged the federal and state governments for those expenses. The district court dismissed Presser’s qui tam action under the False Claims Act, 31 U.S.C. 3729 and the Wisconsin False Claims Act. Citing the need for particularity in pleading, the court noted Presser did not allege that the defendants actually sent any of the alleged claims or made any of the alleged statements to the state or federal governments. The Seventh Circuit affirmed that judgment except with respect to the claims regarding the use of an improper billing code, which were stated with sufficient particularity. Presser otherwise provided no medical, technical, or scientific context which would enable a reader of the complaint to understand why Acacia’s alleged actions amount to unnecessary care forbidden by the statute. View "Presser v. Acacia Mental Health Clinic, LLC" on Justia Law

A Massachusetts’ Medicaid beneficiary received services at Arbour, a mental health facility owned by Universal’s subsidiary. The teenager had an adverse reaction to a medication that a purported doctor prescribed after diagnosing her with bipolar disorder. She died of a seizure. Her parents discovered that few Arbour employees were licensed to provide mental health counseling or to prescribe medications without supervision. They filed a qui tam suit, alleging violations of the False Claims Act (FCA), which imposes penalties on anyone who “knowingly presents . . . a false or fraudulent claim for payment or approval” to the federal government, 31 U.S.C. 3729(a)(1)(A). They alleged an “implied false certification theory of liability,” which treats a payment request as an implied certification of compliance with relevant statutes, regulations, or contract requirements that are material conditions of payment. They cited Universal’s failure to disclose serious violations of Massachusetts Medicaid regulations and claimed that Medicaid would have refused to pay the claims had it known of the violations. The First Circuit reversed dismissal, in part. A unanimous Supreme Court vacated. The FCA does not define a “false” or “fraudulent” claim; the claims at issue may be actionable because they do more than merely demand payment. Representations that state the truth only so far as it goes, while omitting critical qualifying information, can be actionable misrepresentations. By conveying specific information about services without disclosing violations of staff and licensing requirements, Universal’s claims constituted misrepresentations. FCA liability for failing to disclose violations of legal requirements does not depend upon whether those requirements were expressly designated as conditions of payment. While statutory, regulatory, and contractual requirements are not automatically material, even if labeled as conditions of payment, a defendant can have “actual knowledge” that a condition is material even if the government does not expressly call it a condition of payment. View "Universal Health Servs., Inc. v. United States" on Justia Law

Garbe, an experienced pharmacist, began working at Kmart pharmacy in Ohio in 2007. When Garbe picked up a personal prescription at a competitor pharmacy, he discovered the competitor pharmacy had charged his Medicare Part D insurer far less than Kmart ordinarily charged it for the same prescription. He inspected Kmart’s pharmacy reimbursement claims and discovered that Kmart routinely charged customers with insurance—whether public or private—higher prices than customers who paid out of pocket, even ignoring “discount programs sales. Garbe shared his discovery with the government and filed a qui tam suit in 2008. The government has not intervened. Garbe asserts that Kmart’s “usual and customary” prices should be based on the prices Kmart charged the majority of its cash customers. The district court granted Garbe partial summary judgment. On interlocutory appeal, the Seventh Circuit, reversed in part, holding that Medicare Part D Pharmacy Benefit Managers and Plan Sponsors are not “officers or employees of the United States” for purposes of the False Claims Act, 31 U.S.C. 3729(a). The court agreed that Garbe has satisfied the materiality requirement under the Act for his Medicare Part D claims; and that Kmart’s “discount” prices were offered to the “general public.” View "Garbe v. Kmart Corp." on Justia Law

In 2011, Bogina sued under the False Claims Act, 31 U.S.C. 3729, seeking compensation for exposing fraud allegedly perpetrated against the federal government and several state governments. Defendants included a major supplier of medical equipment to institutions reimbursed by Medicare and other federal programs and its customer, a chain of nursing homes. The district judge dismissed the federal claims as being too similar to those in a prior suit and relinquished jurisdiction over the state claims. The Seventh Circuit affirmed, finding differences between this suit and an earlier suit “unimpressive” and stating that it did not matter that the alleged fraud continued. View "Bogina v. Medline Indus., Inc." on Justia Law

In 2008, Javidan shadowed Shahab, who was involved with fraudulent home-health agencies. Javidan, Shahab, and two others purchased Acure Home Care. Javidan managed Acure, signing Medicare applications and maintaining payroll. She had sole signature authority on Acure’s bank account and, was solely responsible for Medicare billing. Javidan illegally recruited patients by paying “kickbacks” to corrupt physicians and by using “marketers” to recruit patients by offering cash or prescription medications in exchange for Medicare numbers and signatures on blank Medicare forms. Javidan hired Meda as a physical therapist. Meda signed revisit notes for patients that he did not visit. He told Javidan which patients were not homebound and which demanded money for their Medicare information. The government charged both with health care fraud conspiracy (18 U.S.C. 1347) and conspiracy to receive kickbacks (18 U.S.C. 371). At trial, Javidan testified that she did not participate in and was generally unaware of Acure’s fraudulent business practices. Meda called no witnesses. Javidan and Meda were sentenced to terms of 65 and 46 months of imprisonment, respectively. The Sixth Circuit affirmed, rejecting Meda’s claims that his conviction violated the Double Jeopardy Clause and that he was subjected to prosecutorial vindictiveness for refusing to plead guilty and requesting a jury trial in prior case and Javidan’s claims of improper evidentiary rulings and sentence calculation errors. View "United States v. Javidan" on Justia Law

The Defense Contract Management Agency within the Department of Defense (DOD) employed Vassallo as a computer engineer in 2012. That summer, it announced a vacancy for the position of Lead Interdisciplinary Engineer, stating that only certain individuals could apply: “[c]urrent [DCMA]” employees or “[c]urrent [DOD] [e]mployee[s] with the Acquisition, Technology, and Logistics . . . [w]orkforce who are outside of the Military Components.” Vassallo, a veteran, applied, but DCMA rejected his application. The Office of Personnel Management (OPM) determined that DOD was not required to afford him veterans employment preferences under the Veterans Employment Opportunities Act of 1998 (VEOA), 112 Stat. 3182. OPM defines the word “agency” in 5 U.S.C. 3304(f)(1) to mean “Executive agency” as defined in 5 U.S.C. 105 and concluded that DCMA was not required to give Vassallo an opportunity to compete under 5 U.S.C. 3304(f)(1) because the DOD— the agency making the announcement—did not accept applications from outside its own workforce. Vassallo sought corrective action from the Merit Systems Protection Board, which concluded that OPM’s regulation permissibly fills a gap in the governing statute. The Federal Circuit affirmed, rejecting arguments that the OPM regulation contradicts the plain terms of the statute and unreasonably undermines the purpose of the VEOA. View "Vassallo v. Dept. of Defense" on Justia Law

Hospitals that are disadvantaged by their geographic location may reclassify to a different wage index area for certain Medicare reimbursement purposes by applying for redesignation to the Medicare Geographic Classification Review Board. Section 401 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, enacted 10 years after the Board was established, creates a separate mechanism by which qualifying hospitals located in urban areas “shall [be] treat[ed] . . . [as] rural” for the same reimbursement purposes. To avoid possible strategic maneuvering by hospitals, the U.S. Department of Health and Human Services issued a regulation providing that hospitals with Section 401 status cannot receive additional reclassification by the Board on the basis of that status, 42 C.F.R. 412.230(a)(5)(iii) (Reclassification Rule). Geisinger, a hospital located in an urban area, received rural designation under Section 401 but was unable to obtain further reclassification by the Board pursuant to the Reclassification Rule. Geisinger sued. The district court upheld the regulation. The Third Circuit reversed, finding that Section 401 is unambiguous: HHS shall treat Section 401 hospitals as rural for Board reclassification purposes, 42 U.S.C. 1395ww(d)(8)(E)(i) View "Geisinger Cmty. Med. Ctr. v. Sec'y United States Dep't of Health & Human Servs." on Justia Law

The Medocks’ company, MAS, transported patients to kidney dialysis for Medicare reimbursement. Reimbursement of non-emergency ambulance transport is allowed only if medically necessary for bedridden patients; both a driver and an EMT must accompany any such passenger. Certification of medical necessity (CMN) must be signed by a doctor. A “run sheet” is reviewed by a Medicare contractor other than the ambulance company, such as AdvanceMed, to reduce fraud. AdvanceMed identified MAS as a high biller in Tennessee for dialysis ambulance transport and audited MAS. MAS’s records were missing some CMNs. Covert surveillance resulted in videotapes of patients walking, riding in the front seat, being double-loaded, being driven by single-staffed ambulances, or being transported by wheelchair. MAS had billed the transports as single-passenger and “stretcher required.” Executing a search warrant at the Medlocks’ home, agents seized CMNs and run tickets; some had been altered or forged. The Sixth Circuit reversed a conviction for aggravated identity theft, 18 U.S.C. 1028A, agreeing that misrepresentations that certain beneficiaries were transported by stretcher did not constitute a “use” of identification, but affirmed health-care fraud convictions, rejecting arguments that the court should have instructed the jury that Medicare, not merely a prudent person, was the relevant decision-maker; that Medicare would have reimbursed MAS without their misrepresentations; and that refusal to sever a defendant was prejudicial. View "United States v. Medlock" on Justia Law

The Medicare program provides federally funded healthcare to the elderly and the disabled. See Title XVIII of the Social Security Act, 42 U.S.C. 1395. Under a “complex statutory and regulatory regime” called Medicare Part A, the Government reimburses participating hospitals for care that they provide to inpatient Medicare beneficiaries. Most hospitals are reimbursed for inpatient hospital services pursuant to a standardized rate, but the Social Security Act also provides a method for calculating reimbursement rates for certain rural hospitals that qualify as “sole community hospital[s]” (SCHs) or that qualify as “medicare-dependent small rural hospital[s]” (MDHs). SCHs and MDHs receive reimbursement based on either the standard rate or a hospital-specific rate derived from its actual costs of treatment in one of the base years specified in the statute, whichever is higher. MDHs and SCHs challenged revisions to the rules covering their Medicare reimbursements for inpatient hospital services, arguing that the Medicare statute forbids the Secretary from modifying the hospitals’ reimbursements with budget neutrality adjustments from years prior to the base year. The district court rejected the claims. The D.C. Circuit affirmed, finding that the revisions were neither arbitrary nor manifestly contrary to the statute. View "Adirondack Med. Ctr. v. Burwell" on Justia Law

Providers of “habilitation services” under Idaho’s Medicaid plan are reimbursed by the state Department of Health and Welfare. Section 30(A) of the Medicaid Act requires Idaho’s plan to “assure that payments are consistent with efficiency, economy, and quality of care” while “safeguard[ing] against unnecessary utilization of . . . care and services,” 42 U.S.C. 1396a(a)(30)(A). Providers of habilitation services claimed that Idaho reimbursed them at rates lower than section 30(A) permits. The district court entered summary judgment for the providers. The Ninth Circuit affirmed, concluding that the Supremacy Clause gave the providers an implied right of action, under which they could seek an injunction requiring compliance. The Supreme Court reversed, concluding that there is no private right of action. The Supremacy Clause instructs courts to give federal law priority when state and federal law clash, but it is not the source of any federal rights and does not create a cause of action. The suit cannot proceed in equity. The power of federal courts of equity to enjoin unlawful executive action is subject to express and implied statutory limitations. The express provision of a single remedy for a state’s failure to comply with Medicaid’s requirements, the withholding of Medicaid funds by the Secretary of Health and Human Services, 42 U.S.C. 1396c, and the complexity associated with enforcing section 30(A) combine to establish Congress’s “intent to foreclose” equitable relief. View "Armstrong v. Exceptional Child Ctr., Inc." on Justia Law