Justia Government Contracts Opinion Summaries

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

This case involved the County's approval of a no-bid contract for pharmacy administrator services under the Affordable Care Act (ACA), 42 U.S.C. 300gg et seq. On appeal, the County challenged the trial court's judgment against it. The court agreed with the County that the trial court failed to accord sufficient deference to the County’s evaluation of its needs for the services of a pharmacy administrator who could provide the necessary data management and provision of pharmaceuticals to address its needs in implementing provisions of the ACA. Accordingly, the court reversed with directions that the trial court enter judgment in favor of the County. View "Weinstein v. County of Los Angeles" on Justia Law

When Colonel Antoon (U.S. Air Force, retired) learned that he needed prostate surgery, he researched options and specialists, which led him to the Cleveland Clinic and Dr. Kaouk. Antoon interviewed Kaouk and arranged for him to perform the operation. When Antoon experienced complications following the surgery, his further investigation caused him to suspect that Kaouk did not actually perform the surgery, but passed off major duties to a surgical resident. Antoon lodged several complaints and filed a medical malpractice action in state court, which was dismissed voluntarily. Antoon then filed suit as a relator under the qui tam provisions of the False Claims Act (FCA), premised on the theory that Kaouk billed the government for work he did not perform, and promoted the robotic surgical device he recommended in violation of the anti-kickback statute, 42 U.S.C. 1302a-7b(b)(2). The United States declined to intervene. The district court dismissed. The Sixth Circuit affirmed, based on a jurisdictional bar. Antoon does not have any direct and independent knowledge of the information upon which his fraud allegations are based; therefore he cannot qualify as an original source of that information, and cannot establish standing as a qui tam plaintiff under the FCA, 31 U.S.C. 3730(e)(4)(B). View "Antoon v. Cleveland Clinic Found." on Justia Law

Respondent New Hampshire Department of Administrative Services (appealed a Superior Court order that granted summary judgment in favor of petitioner CaremarkPCS Health, LLC (Caremark). In 2010, the Department issued a Request for Proposals (RFP) for pharmacy benefit management services for the State of New Hampshire’s health plan. In response to the RFP, Caremark submitted a bid, which ultimately led to a final negotiated contract with the Department. The Governor and Executive Council approved the contract on November 17, 2010. Both the bid and final contract included statements to the effect that certain information set forth in those documents is proprietary and constitutes trade secrets of Caremark. In 2011, the Department received multiple requests to inspect and copy Caremark’s bid and the final contract. Two of the requests were made by Caremark’s competitors. Caremark, after being informed by the Department of the requests, responded that certain confidential information contained in the bid and final contract was exempt from disclosure under the Right-to-Know Law. The parties disputed whether certain information was subject to disclosure. The trial court ruled that certain information constituting trade secrets under the New Hampshire Uniform Trade Secrets Acts (UTSA) was exempt from disclosure under the Right-to-Know Law. Specifically, the trial court ruled that disclosure of Caremark’s trade secrets by the Department would constitute a “misappropriation” under the UTSA and, therefore, that the subject information is exempt from disclosure under the Right-to-Know Law. On appeal, the Department argued that the trial court erred in finding that the UTSA prohibited the Department from disclosing Caremark’s trade secrets under the “otherwise prohibited by statute” exemption in RSA 91-A:4, I. Finding no error, the Supreme Court affirmed. View "CaremarkPCS Health, LLC v. New Hampshire Dept. of Admin. Svc." 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

Relator filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that healthcare clinics provided, and the Humana defendants either knew of or promoted, a variety of free services for patients and health plan members. Relator alleged that the clinics offered such services without regard for medical purpose or financial need and that the value of the services is more than nominal. The court affirmed the district court's dismissal of the amended complaint with prejudice where, under the prior or amended version of section 3730 of the FCA, relator cannot overcome the public disclosure bar. View "Osheroff v. Humana Inc." on Justia Law

To compensate teaching hospitals for the extra financial burden of providing training, the Medicare program provides additional reimbursement for expenses beyond the immediate costs of patient care, including for “indirect medical education” (IME) costs to account for the time medical interns and residents spend in ways that enhance their ability to provide patient care but that are not connected to the treatment of any particular patient, 42 U.S.C. 1395ww(d)(5)(B)(ii). The district court held that time spent by interns and residents in research activities wholly unrelated to the diagnosis or treatment of patients could be counted as part of this indirect-education time and that Rush University Medical Center, was entitled to Medicare reimbursements for these activities between the years 1983 and 2001. The Seventh Circuit reversed and remanded, noting that the Secretary of Health and Human Services has interpreted the Medicare Act consistently since 1983 to exclude pure research activities from compensable IME costs. Congress codified this exclusion for Fiscal Years 2001 onward in the Patient Protection and Affordable Care Act of 2010, but explicitly declined to lay down a rule for the years 1983 to 2001. The Secretary has now promulgated a regulation excluding pure research from the IME cost calculation for all years since 1983. View "Rush Univ. Med. Ctr v. Sebelius" on Justia Law

Foglia, an RN, was hired by Renal, a dialysis care services company, in 2007, and was terminated in 2008. Foglia filed a qui tam complaint against Renal under the False Claims Act, 31 U.S.C. 3729, in 2009. The United States chose not to intervene. In a second amended complaint, Foglia claimed that Renal falsely certified that it was in compliance with state regulations regarding quality of care, falsely submitted claims for reimbursement for the drug Zemplar, and re-used single-use Zemplar vials. The court dismissed, finding that Foglia had failed to state his claim with the heightened level of particularity required by Federal Rule of Civil Procedure 9(b) for fraud claims. The court noted Foglia’s failure to provide a “representative sample” or to “identify representative examples of specific false claims” and that even if Foglia’s claim had met the requirement of Rule 9(b), Foglia “provided no authority under an express or implied false certification theory that the claims submitted … violated a rule or statute establishing compliance as a condition of payment.” Foglia appealed dismissal of his claim of over-billing on Zemplar. The Third Circuit reversed, noting that it was a close case, the need to assume that Foglia was correct in alleging that Renal did not follow proper procedures if it was to harvest “extra” Zemplar from used vials, and that only Renal has access to the documents that could prove the claim. View "Foglia v. Renal Ventures Mgmt., LLC" on Justia Law

Orillo, her husband (a doctor), and another owned Chalice, a home health care provider. Chalice was an enrolled provider with Medicare and could seek reimbursement of home health care through that program. Orillo falsified forms by altering the codes and information that had been completed by the Chalice nurses to make the patient’s condition appear worse and the health care needs greater than the actuality. Those alterations caused Medicare software to generate different reimbursement rates Orillo also aided her husband in paying kickbacks to a Chicago doctor in return for referrals of Medicare patients. Orillo pled guilty to healthcare fraud, 18 U.S.C. 1347 and paying kickbacks to physicians for patient referrals under a federal health care program, 42 U.S.C. 1320a-7b and 18 U.S.C. 2, and was sentenced to 20 months’ imprisonment. Orillo conceded that her scheme caused a loss, to Medicare, in excess of $400,000, and agreed to entry of a $500,000 forfeiture judgment.The district court determined that the loss amount for the healthcare fraud count was $744,481 and ordered her to pay that amount in restitution. The Seventh Circuit affirmed, rejecting Orillo’s argument that the loss and restitution amount should be limited to only those stemming from visible alterations.View "United States v. Orillo" on Justia Law