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

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

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

In 2012, Plaintiff applied for disability insurance benefits under the Social Security Act, alleging a disability onset date of 1995. Plaintiff’s date last insured (DLI) was in 1998. An administrative law judge (ALJ) denied benefits, concluding that Plaintiff was not disabled prior to her DLI and was thus not eligible to receive benefits. The district court vacated the Commissioner’s decision and remanded for further proceedings, ruling that the ALJ failed to comply with Social Security Ruling (SSR) 83-20 and consult a medical advisor before drawing inferences as to whether Plaintiff’s onset date preceded the expiration of her insured status. In making its ruling, the district court relied upon Social Security Ruling (SSR) 83-20, which instructs an ALJ to consult a medical expert when the ALJ must infer a claimant’s date of disability onset on the basis of ambiguous medical evidence. The First Circuit vacated the judgment of the district court, holding that SSR 83-20 did not require the ALJ to consult a medical expert because the medical evidence was not ambiguous, and thus, the ALJ did not need to infer Plaintiff’s date of disability onset. Remanded for consideration of Plaintiff’s remaining claims. View "Fischer v. Colvin" on Justia Law

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

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

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

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

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

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

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