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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

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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

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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

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The Supreme Court affirmed the circuit court’s denial of a motion for a new trial based on insufficient evidence filed by the South Dakota Department of Transportation (DOT), holding that the jury’s verdict was not unsupported by any valid legal theory or evidence. DOT was sued by Reede Construction, Inc., which entered into a contract with DOT to perform highway construction work in Sioux Falls. DOT refused to issue a letter of acceptance after requesting several repairs, many of which Reede failed to perform. After Reede left the job and demanded payment for the repairs it had completed, Reede sued, and DOT counterclaimed. The jury returned a verdict awarding no damages to either party. The circuit court denied DOT’s motion for a new trial. The Supreme Court affirmed, holding that sufficient evidence supported the jury’s verdict. View "Reede Construction, Inc. v. South Dakota Department of Transportation" on Justia Law

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The Supreme Court affirmed the opinion of the court of appeals remanding this matter to the circuit court for entry of an order requiring Utility Management Group, LLC (UMG) to comply with the Open Records Act, Ky. Rev. Stat. 61.870-.884. The Pike County Fiscal Court made an Open Records request to UMG, which provided management and operational services to Mountain Water District, so that the Auditor of Public Accounts could determine the actual costs of the services UMG provided. UMG declined to produce the request documents, asserting that it was a “wholly private entity.” The Attorney General found UMG subject to the Open Records Act and required production. The circuit court, however, concluded that UMG had no disclosure obligation under the Act. The court of appeals reversed. The Supreme Court affirmed, holding (1) at the time of Pike County Fiscal Court’s Open Records Act request, UMG was a public agency subject to the Act; (2) the 2012 amendment to section 61.870(1)(h) does not apply retroactively to relieve UMG of its disclosure obligation; and (3) the challenged 1994 version of section 61.870(1)(h) was and is constitutional. View "Utility Management Group, LLC v. Pike County Fiscal Court" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court affirming the district court’s dismissal of this action filed by Big Sandy Regional Jail Authority against the Lexington-Fayette Urban County Government seeking reimbursement for the cost of housing prisoners held pursuant to warrants issued by Fayette County courts. The district court dismissed the case after finding that the Urban County Government was entitled to sovereign immunity. The circuit court affirmed without addressing the issue of sovereign immunity, finding, rather, that the county of arrest controls responsibility for incarceration costs. The Supreme Court affirmed, but on different grounds, holding that the Urban County Government was not responsible for the costs of incarcerating prisoners not in its possession. View "Big Sandy Regional Jail Authority v. Lexington-Fayette Urban County Government" on Justia Law

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In 2014, following investigations by the Indiana Attorney General and FBI, a grand jury indicted Shorter and her company, Empowerment, which provided transportation to Medicaid patients, for health care fraud, 18 U.S.C. 1347, and three counts of misusing a means of identification, 18 U.S.C. 1028A. The government submitted evidence of Shorter’s personal involvement in Empowerment’s billing practices; the results of an Indiana Attorney General Investigation into Empowerment’s billing practices; an FBI search of Empowerment’s records; and the experiences of Empowerment employees and of clients who used its services. The Seventh Circuit affirmed her convictions rejecting arguments challenging the indictment, the admission of certain evidence at trial and the sufficiency of the evidence as a whole. The court noted “powerful” circumstantial evidence that permitted the jury to convict her, especially because the jury could reasonably infer from the evidence that she “caused” the fraudulent billings. View "United States v. Shorter" on Justia Law

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This interlocutory appeal concerned a contract dispute about the provision of food services at the Fort Riley Army base in Kansas. The Department of the Army (Army) contracts with outside vendors for food preparation and related supporting services for its cafeteria dining facilities at Fort Riley. Since 2006, the State of Kansas, through the Kansas Department for Children and Families (Kansas), successfully bid under the RSA on those food preparation and related services contracts at Fort Riley. Kansas’s most recent contract awarded under the RSA was scheduled to expire in February 2016. As that date approached, the Army determined that its next dining contract at Fort Riley would be for supporting services only. The Army therefore decided that it need not solicit bids under the RSA and it approached another vendor directly, as permitted by the JWOD. Kansas took exception to the Army’s decision because it eliminated Kansas’s ability to bid on the contract. So Kansas initiated arbitration proceedings under the RSA’s dispute resolution provisions. And upon learning that the Army intended to contract with the other vendor despite the commencement of arbitration proceedings, Kansas sued in federal court, seeking to preliminarily enjoin the Army from executing the JWOD contract pending arbitration. The root of the dispute was the intersection of two federal statutes that both address the procurement of food services at federal facilities: (1) the Randolph-Sheppard Vending Facility Act of 1936 (RSA), and (2) the Javits Wagner O’Day Act (JWOD). The parties disagreed as to which of these statutes governed the award of the Fort Riley food services contract. And due to events that have occurred since this action was filed, the parties also disputed whether this appeal was rendered moot. The Tenth Circuit concluded that the issue raised by this appeal fell within an exception to the mootness doctrine for matters capable of repetition yet evading review. Because an arbitration panel has since issued its decision thereby dissolving the injunction at issue in this appeal, the Court declined to address whether the district court correctly granted the injunction. View "Kansas Department for Children v. SourceAmerica" on Justia Law

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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

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Robbin Taylor filed a statement of charges seeking recall of Black Diamond City council member Patricia Pepper. In November 2015, Pepper defeated opponent Ron Taylor (husband of Robbin Taylor) in an election for Black Diamond City Council in King County. Beginning in January 2016, a chasm developed with Mayor Carol Benson and council members Tamie Deady and Janie Edelman on one side, and a majority of the city council - Pepper, Erika Morgan, and Brian Weber - on the other. After Pepper, Morgan, and Weber passed R-1069, they voted to fire city attorney Carol Morris. Upon passing R-1069, Pepper and a majority of the council made decisions to alter contracts regarding the Master Development Review Team (MDRT) contracts for two large development projects planned in Black Diamond that had been approved by Mayor Benson and former council members. Mayor Benson hired emergency interim city attorney Yvonne Ward. Ward submitted two memoranda to the council, concluding that R-1069 violated the Black Diamond Municipal Code (BDMC) and the Open Public Meetings Act (OPMA), chapter 42.30 RCW. The council had also received advice from prior city attorney Morris and from the city's risk management pool that the resolution could create liability for the city if council members violated the OPMA. Ultimately, the council's decision to enact R-1069 and revisit the MDRT contracts, among other actions, led to a lawsuit: MDRT contractor CCD Black Diamond Partners LLC (Oakpointe) filed suit against the city and council members Pepper, Morgan, and Weber, alleging violations of the OPMA, which has led to litigation and costs for the city. Pepper was a member of council standing committees; allegations were made that Pepper, Morgan, and Weber held secret council and standing committee meetings conducting city business in violation of the OPMA. After approximately a year and a half of tensions, Taylor filed a statement of charges with the King County Elections Division, requesting Pepper's recall. The superior court ruled that four of those charges were factually and legally sufficient to support a recall petition. Pepper appealed. After review, the Washington Supreme Court affirmed the trial court's decision with regard to the first three charges, but reversed with regard to the fourth charge. View "In re Recall of Pepper" on Justia Law