Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Articles Posted in Public Benefits
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The False Claims Act (FCA) forbids private parties from bringing qui tam actions on the government’s behalf alleging fraud on government programs if the complaint rests on allegations that were already publicly disclosed through certain enumerated sources. In this case, Relators brought a qui tam action under the FCA challenging certain billing practices of CVS Caremark Corp. and affiliated companies (collectively, CVS). The district court dismissed the action, concluding that previous disclosures and controversies triggered the FCA’s public disclosure bar. The First Circuit affirmed, holding that the public disclosure bar forbade Relators’ suit. View "Winkelman v. CVS Caremark Corp." on Justia Law

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For more than a decade, the Commissioner of the Social Security Administration (SSA) has paid directly to qualified attorneys who bring Supplemental Security Income (SSI) claims a fee of no more than twenty-five percent of the successful recovery of past-due benefits to clients. When a state chooses to administer its own payments, the amount of state payments are not included as “past-due benefits” for the purpose of attorney compensation. In 2012, Attorney represented a client in a claim for SSI benefits before the SSA. In 2013, Attorney’s client received a partially favorable decision. In 2012, however, Massachusetts changed its practice and began administering its own program of supplementary payments rather than rely on federal administration of its supplementary payments. Upon learning that the SSA attorney’s fee award did not include twenty-five percent of the Massachusetts state-administered state supplementary payments, Attorney filed a complaint for declaratory relief and petition for writ of mandamus in the federal district court. The district court granted summary judgment to the Commissioner. The First Circuit affirmed, holding that the Commissioner’s interpretation of 42 U.S.C. 1383(d)(2)(B) was reasonable. View "Moriarty v. Colvin" 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

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At issue in this case was services that Maine Medical Center provided to Medicare/Medicaid “dual-eligible” patients, that is, patients covered by both Medicare and the state-administered Medicaid insurance program, MaineCare. The Secretary for the Department of Health and Human Services denied Maine Medical’s claim for partial federal reimbursement of “bad debt” for the fiscal years 2002 and 2003. A “bad debt” is an amount considered to be uncollectible for covered services that may be eligible for federal reimbursement under certain conditions. The Secretary denied reimbursement because Maine Medical had not acquired from MaineCare a state-issued remittance advice to use as proof. The district court affirmed. The First Circuit affirmed, holding that it was not arbitrary and capricious for the Secretary (1) to demand that Maine Medical provide documentation from the State confirming the identity of Medicaid-eligible beneficiaries and qualified Medicare beneficiaries, the amount that is the State’s to pay, and the State’s refusal to pay; and (2) to deny Maine Medical’s reimbursement claims that were unsupported by such documentation. View "Me. Med. Ctr. v. Burwell" on Justia Law

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Ven-A-Care of the Florida Keys, Inc. filed the first of two qui tam actions alleging that Baxter Healthcare Corporation had defrauded the federal Medicaid and Medicare programs. Ven-A-Care and Baxter eventually reached a settlement agreement. Before the district court dismissed Ven-A-Care’s action against Baxter, Linnette Sun and Greg Hamilton filed a qui tam action against Baxter. Baxter moved for partial summary judgment, asserting that the settlement had released Sun and Hamilton’s claims. Sun and Hamilton then filed a Fed. R. Civ. P. 60(b) motion requesting a reopening of the Ven-A-Care judgment, arguing that the Ven-A-Care settlement could not release their claims until they got a fairness hearing under the False Claims Act. The district court denied the motion and dismissed Sun and Hamilton’s suit, concluding that the Ven-A-Care complaint stated all the essential facts of the fraud alleged by Sun and Hamilton and thus had triggered the False Claims Act’s first-to-file bar. The First Circuit affirmed, holding that because Ven-A-Care’s earlier-filed complaint already provided the essential facts about the same scheme pled in Sun and Hamilton’s complaint, section 3730(b)(5) of the False Claims Act prevented Sun and Hamilton’s suit from going forward. View "United States, ex rel. Sun v. Baxter Healthcare Corp." on Justia Law

Posted in: Public Benefits
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For more than twenty years, the Maine Department of Health and Human Services (DHHS) provided Medicaid coverage for nineteen- and twenty-year-old children whose families met low-income requirements. In 2012, Maine DHHS submitted a state plan amendment to the federal DHHS plan seeking to drop that coverage. The federal DHHS Secretary declined to approve the amendment because it did not comply with 42 U.S.C. 1396a(gg), which requires states accepting Medicaid funds to maintain their Medicaid eligibility standards for children until October 1, 2019. Maine DHHS petitioned for review, contending that the statute is unconstitutional under the Spending Clause and violates the doctrine of equal sovereignty as articulated in Shelby County v. Holder. The First Circuit affirmed, holding that the statute is constitutional as applied in this case, as (1) application of section 1396a(gg) in these circumstances does not exceed Congress’s power under the Spending Clause; and (2) the equal sovereignty doctrine of Shelby County is not applicable in this case, and any disparate treatment caused by section 1396a(gg) is sufficiently related to the problem the statute was designed to address. View "Mayhew v. Burwell" on Justia Law

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In 2006, Michael Wilson, a former Bristol-Myers Squibb Co. (“BMS”) sales presentative, filed a complaint alleging that BMS engaged in off-label promotion of certain drugs, and that these actions caused false claims to be submitted to the government in violation of the False Claims Act (“FCA”). Wilson subsequently entered in a partial settlement agreement with BMS that concluded part of the case. In 2009, Wilson filed a second amended complaint expanding upon his earlier, not settled, allegations against BMS and adding Sanofi-Aventis, U.S., LLC as a defendant. In 2013, the district court dismissed Wilson’s federal FCA claims relating to Plavis and Pravachol because they violated the FCA’s first-to-file rule based on two complaints that were filed before Wilson filed his original complaint. Wilson appealed from the dismissal as well as from the denial of his motion to file a third amended complaint and from denial of his follow-up motion to reconsider. The First Circuit Court of Appeals affirmed, holding (1) the district court properly dismissed the remaining FCA claims because they ran afoul of the first-to-file rule; and (2) the district court was correct in rejecting the third amended complaint. View "United States ex rel. Wilson v. Bristol-Myers Squibb, Inc. " on Justia Law

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In 1997, in response to Congress’s enactment of the Personal Responsibility and Work Opportunity Reconciliation Act, which narrowed the eligibility of non-citizens for Medicaid and other federal benefits, the state of Maine extended state-funded medical assistance benefits to certain legal aliens rendered ineligible for Medicaid. In 2011, the Maine Legislature terminated these benefits. Appellants moved for a preliminary injunction against enforcement of the 2011 legislation, alleging that the state violated their equal protection rights by providing state-funded medical assistance benefits to United States citizens while denying those benefits to similarly situated non-citizens due solely to their alienage. The district court denied Appellants’ motion for a preliminary injunction. The First Circuit Court of Appeals affirmed the district court’s denial of a preliminary injunction, holding that Appellants’ equal protection claim failed on the merits because the state of Maine was not obligated to extend equivalent state-funded benefits to Appellants in the first place, and therefore, the termination of those benefits did not violate the Equal Protection Clause. View "Bruns v. Mayhew" on Justia Law

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Marilyn Davidson, an intellectually disabled individual, was in the care of the Massachusetts Department of Developmental Services (DDS) most of her life. In 1985, Marilyn was transferred to the Fernald Developmental Center, an intermediate care facility (ICF). In 2003, the Commonwealth of Massachusetts decided to close Fernald. DDS planned to transfer Marilyn to the Wrentham Developmental Center, another ICF. Plaintiffs, Marilyn’s guardians, filed a complaint in the federal district court, alleging that Marilyn’s transfer violated the federal Medicaid statute and various implementing regulations. Plaintiffs also sought a motion for a preliminary injunction. The district court denied the injunction and held that the statutory and regulatory provisions cited in the complaint did not create a private right of action. Marilyn was subsequently transferred to Wrentham, and Fernald was closed. The First Circuit Court of Appeals remanded the case to the district court with instructions to dismiss Plaintiffs’ complaint, holding (1) Plaintiffs’ claim for damages was barred by the Commonwealth’s Eleventh Amendment immunity from suit for damages in federal court; and (2) Plaintiffs’ claims for declaratory and injunctive relief were moot. View "Davidson v. Howe" on Justia Law

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Appellant filed two amended qui tam actions against her employer, a pharmaceutical company and its subsidiary (collectively, Appellees), under the federal False Claims Act (FCA), alleging that Appellees failed adequately to disclose the risks associated with some of their drugs and that this failure resulted in the submission of false claims by third-party patients and physicians for government payment. The district court dismissed both of Appellant's actions under Fed. R. Civ. P. 9(b) for failure to plead fraud with particularity and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Appellant subsequently sought to amend the second amended complaint, asserting more theories of FCA liability, but the district court refused to allow further amendment. The First Circuit Court of Appeals affirmed the district court's rulings regarding the dismissal of Appellant's claim under Rule 9(b) and the denial of Appellant's proposed amendments, holding (1) Appellant's claims on all theories which were presented failed under Rule 9(b); and (2) the district court did not err in denying Appellant's motion to amend. View "United States ex rel. Ge v. Takeda Pharm. Co. Ltd." on Justia Law