Articles Posted in Health Law

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In this action brought by two individuals (Relators) under the False Claims Act (FCA) and various state analogues, the First Circuit affirmed in part and reversed in part the district court’s dismissal of the complaint. The district court concluded that Relators failed to plead false claims under either the FCA or the state-law versions of the FCA with the particularity required by Fed. R. Civ. P. 9(b). The First Circuit held (1) the complaint was correctly dismissed to the extent it relied on the alleged falsity of statements made by the product manufacturer in securing approval from the FDA to market a hip-replacement device; but (2) the district court erred in dismissing the complaint to the extent to rested on allegations that the manufacturer sold latently defective versions of its FDA-approved product on unsuspecting doctors who sought government reimbursement for defective products, as Relators’ complaint was sufficient to survive a Rule 9(b) motion to dismiss. View "Nargol v. DePuy Orthopaedics, Inc." on Justia Law

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Appellant brought a qui tam action against Cyberonics, Inc. alleging that Cyberonics violated the False Claims Act (FCA) and related state statutes by promoting medically unnecessary replacements of batteries in nerve stimular devices, which resulted in patients and medical providers filing false claims for reimbursement from government health care programs. The district court dismissed all but two of Appellant’s claims, including the FCA allegations, for failure to state a claim. Thereafter, the district court denied Appellant’s request for leave to file a second amended complaint on the basis of undue delay. The First Circuit affirmed, holding (1) Appellant’s first amended complaint did not satisfy Fed. R. Civ. P. 9(b)’s particularity requirement, and therefore, the district court did not err in dismissing the first amended complaint; and (2) Appellant did not meet his burden of providing a valid reason for his delay, and the district court did not abuse its discretion in denying Appellant’s motion for leave to amend. View "Hagerty v. Cyberonics, Inc." on Justia Law

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Relators’ daughter died of a seizure after receiving mental health treatment at Arbour Counseling Services, a facility in Massachusetts owned and operated by Universal Health Services (UHS). When Relators learned that Arbour had employed unlicensed and unsupervised personnel, in violation of state regulations, they brought a qui tam action against UHS under the False Claims Act (FCA), alleging that UHS had fraudulently submitted reimbursement claims to the Commonwealth despite knowing that it was in violation of state regulations (a theory of FCA liability known as the “implied false certification theory”). The district court dismissed the complaint, concluding that the regulatory violations were not conditions of payment as required for a claim to be actionable under the FCA. The First Circuit reversed, holding that the regulatory violations at issue were conditions for payment and that Relators appropriately stated a claim with particularity under the FCA. On certiorari, the Supreme Court held that the implied false certification theory can be a basis for FCA liability but remanded the case for further consideration of whether the complaint sufficiently alleged that the regulatory violations were material to the government’s payment decision. The First Circuit again reversed the district court’s grant of UHS’s motion to dismiss after applying the Supreme Court’s guidance on the question of whether UHS’s misrepresentations were material, holding that Relators’ complaint sufficiently stated a claim under the FCA. View "United States, ex rel. Escobar v. Universal Health Services, Inc." on Justia Law

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The consolidated appeals in this case involved a dispute between the Secretary of Health and Human Services and a group of Maine hospitals about certain payments - called disproportionate share payments (DSH payments) - the hospitals had received in reimbursement from the federal government for charity care for fiscal years dating as far back as 1993. Generally speaking, the more low-income patients a hospital services, the higher the hospital’s DSH payment. In this case, the Secretary maintained that the Hospitals were overinclusive in their DSH payment calculations. An intermediary reassessed the DSH payments and recouped from the Hospitals approximately $22 million in alleged overpayments. The Provider Reimbursement Review Board, in turn, ordered the intermediary to restore approximately $17 million to the Hospitals. The Secretary reversed. The Hospitals sought judicial review, but neither side was satisfied with the district court’s ruling. On appeal, the First Circuit reversed in part and affirmed in part, holding (1) the Secretary properly reopened the disputed years and adequately demonstrated that the Hospitals had received substantial overpayments of DSH funds; and (2) the Hospitals’ defenses to repayment were unavailing. View "Maine Medical Center v. Burwell" on Justia Law

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Appellant was civilly committed as a sexually dangerous person. When a forensic psychologist concluded that Appellant was no longer sexually dangerous, Appellant moved for a hearing to determine whether he satisfied the criteria for release under the Adam Walsh Child Protection and Safety Act. After a hearing, the district court concluded that Appellant remained sexually dangerous and, thus, subject to continued civil commitment. At issue on appeal was whether the government or the committed person bears the burden of proof at a release hearing held pursuant to 18 U.S.C. 4247(h). The First Circuit affirmed, holding (1) the burden of proof rests on the committed person to show by a preponderance of the evidence that he has achieved the capacity to safely reenter the community; and (2) in this case, Appellant failed to carry his burden of proof. View "United States v. Wetmore" on Justia Law

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Under Part A of the Ryan White Comprehensive AIDS Resources Emergency Act the U.S. Department of Health and Human Services (HHS) disburses funding to combat HIV/AIDS infection in metropolitan areas that are home to more than a specified number of individuals who have AIDS. When HHS determined that the Ponce metropolitan area no longer had enough AIDS cases to qualify for continued Part A funding, Ponce and several community health groups brought this lawsuit claiming that HHS had unfairly drawn the boundaries of Ponce’s metropolitan area too narrowly. The district court concluded that HHS acted arbitrarily and capriciously in defining the “metropolitan area” of Ponce and that HHS’s methodology for defining metropolitan areas in Puerto Rico was unfair and discriminatory. The First Circuit reversed, holding that Congress could reasonably be said to have told HHS to use the boundaries that it used in defining the Ponce metropolitan area. Remanded for entry of judgment in favor of Defendants dismissing the complaint with prejudice. View "Municipio Autonomo de Ponce v. U.S. Office of Mgmt." on Justia Law

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Plaintiffs filed a second amended complaint against Defendant, a medical doctor, alleging claims based on medical negligence, Defendant’s failure to obtain informed consent, and battery. The district court granted summary judgment in favor of Defendant as to the medical battery claim. After a trial as to Plaintiffs’ informed consent claim, the jury returned a verdict for Defendant. The First Circuit affirmed in part and vacated and remanded in part, holding (1) the district court properly dismissed Plaintiffs’ battery claim; but (2) the district court erred by excluding expert testimony that a fine-needle aspiration biopsy was a viable non-surgical alternative to a surgical biopsy. View "Bradley v. Sugarbaker" on Justia Law

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Defendant, Plaintiff’s co-worker at a mental health facility in Norton, Massachusetts, issued an order, pursuant to Mass. Gen. Laws ch. 123, 12, authorizing Plaintiff to be seized from her home and brought to a hospital for a psychiatric evaluation, certifying that there was a “very substantial risk” that Plaintiff would injure herself. Pursuant to that order, the police took Plaintiff from her home and drove her to the hospital. A doctor at the hospital determined that Plaintiff was lucid and released her. Plaintiff subsequently brought a 42 U.S.C. 1983 claim against Defendant. The district court dismissed Plaintiff’s claim for failure to state a claim that Defendant had violated Plaintiff’s federal constitutional rights. The First Circuit affirmed, holding that Plaintiff failed to state a plausible claim for relief. View "Durand v. Harpold" on Justia Law

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Home Orthopedics Corp. was a medical equipment supplier based in Puerto Rico. Raul Rodriguez, the president of another home medical supplier in Puerto Rico, attempted to collect a consulting fee Home Orthopedics agreed to pay him. Home Orthopedics refused to continue paying the fee when it discovered that the contract upon which it was based was fraudulent. Soon companies in the health insurance field started terminating their contracts with Home Orthopedics. Home Orthopedics filed an amended complaint seeking relief against numerous defendants - some of whom worked with Rodriguez and others of whom worked for the companies that terminated their contacts with Home Orthopedics - for violating, among other laws, the Racketeer Influenced and Corrupt Organizations Act (RICO). Specifically, Home Orthopedics alleged that Defendants conspired to help Rodriguez strong-arm more money from Home Orthopedics. The district court dismissed Home Orthopedics’ claims. The First Circuit affirmed, holding (1) Home Orthopedics failed to sufficiently allege a “pattern of racketeering activity” necessary to sustain its RICO claim; and (2) the district court did not err in denying Home Orthopedics’ motion to conduct limited discovery and then to amend its complaint for a second time. View "Home Orthopedics Corp. v. Rodriguez" on Justia Law

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Relators’ daughter was being treated by counselors at Arbour Counseling Services in Lawrence, Massachusetts when she was prescribed a medication for her purported bipolar disorder. The daughter experienced an adverse reaction to the drug and eventually suffered a fatal seizure. Relators filed this action against Defendant Universal Health Services, Inc., Arbour’s owner and operator, under both the federal and Massachusetts False Claims Acts, alleging that Arbour, in submitting reimbursement claims to the state Medicaid agency for services rendered by the staff members who treated their daughter, fraudulently misrepresented that those staff members were properly licensed and supervised, as required by law. Specifically, Relators alleged that Arbour’s alleged noncompliance with supervision and licensure requirements rendered its reimbursement claims actionably false. The district four dismissed the complaint for failure to state a claim. The First Circuit reversed the dismissal of the complaint with one limited exception, holding (1) a healthcare provider’s noncompliance with conditions of payment is sufficient to establish the falsity of a claim for reimbursement; and (2) Relators appropriately stated a claim with particularity under the False Claims Act. View "United States, ex rel. Escobar v. Universal Health Servs., Inc." on Justia Law