Justia Government Contracts Opinion Summaries

Articles Posted in Medical Malpractice
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Moshiri, other physicians, and hospital administrators were charged (42 U.S.C. 1320a-7b(b)) based on a kickback scheme. The former director of the podiatry residency program (Noorlag) testified that teaching contracts were a vehicle to pay physicians for referrals. Moshiri received $2,000 per month and was named as the Director of External Podiatric Office Rotations. Another doctor was named to that position at the same time. According to Noorlag, neither doctor was considered to hold that position, and neither performed the related duties. The Chair of the Counsel on Podiatric Medical Education, which oversees and certifies residency programs nationally and publishes standards, offered an expert opinion that teaching stipends are uncommon for attending physicians at residency programs and that he had never heard of such a physician being paid $2,000 per month. According to multiple witnesses, Moshiri did not conduct workshops and did not manage external rotations. Moshiri worked with residents about three times per month, while 11 other program physicians averaged 10 cases per month with residents. During the period at issue, the Hospital billed Medicare and Medicaid $482,000 for patients Moshiri treated. The Hospital’s Chief Operating Officer had recorded conversations in which Moshiri discussed his referrals. The agent who arrested Moshiri testified that Moshiri said that “the contract turned into basically paying for patients.” The Seventh Circuit upheld Moshiri’s conviction, rejecting challenges to the sufficiency of the evidence and to the expert testimony. View "United States v. Moshiri" on Justia Law

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Substantial evidence supported finding that hospital’s contracts with physicians violated Anti-Kickback statute.Novak and Nagelvoort participated in a scheme under which Sacred Heart Hospital paid illegal kickbacks to physicians in exchange for patient referrals. Novak was the Hospital’s owner, President, and Chief Executive Officer. Nagelvoort was an outside consultant, and, at various times. served as the Hospital’s Vice President of Administration and Chief Operating Officer. Federal agents secured the cooperation of physicians and other Hospital employees, some of whom recorded conversations. Agents executed warrants and searched the Hospital and its administrative and storage facilities. The prosecution focused on direct personal services contracts, teaching contracts, lease agreements for the use of office space, and agreements to provide physicians with the services of other medical professionals. The Seventh Circuit affirmed their convictions under 42 U.S.C. 1320a-7b(b)(2)(A) and 18 U.S.C. 371, rejecting arguments that there was insufficient evidence to prove that they acted with the requisite knowledge and willfulness under the statute; that the government failed to prove that certain agreements fell outside the statute’s safe harbor provisions; and that Nagelvoort withdrew from the conspiracy when he resigned his position, so that any subsequent coconspirator statements were not admissible against him. View "United States v. Naglevoort" on Justia Law

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A Massachusetts’ Medicaid beneficiary received services at Arbour, a mental health facility owned by Universal’s subsidiary. The teenager had an adverse reaction to a medication that a purported doctor prescribed after diagnosing her with bipolar disorder. She died of a seizure. Her parents discovered that few Arbour employees were licensed to provide mental health counseling or to prescribe medications without supervision. They filed a qui tam suit, alleging violations of the False Claims Act (FCA), which imposes penalties on anyone who “knowingly presents . . . a false or fraudulent claim for payment or approval” to the federal government, 31 U.S.C. 3729(a)(1)(A). They alleged an “implied false certification theory of liability,” which treats a payment request as an implied certification of compliance with relevant statutes, regulations, or contract requirements that are material conditions of payment. They cited Universal’s failure to disclose serious violations of Massachusetts Medicaid regulations and claimed that Medicaid would have refused to pay the claims had it known of the violations. The First Circuit reversed dismissal, in part. A unanimous Supreme Court vacated. The FCA does not define a “false” or “fraudulent” claim; the claims at issue may be actionable because they do more than merely demand payment. Representations that state the truth only so far as it goes, while omitting critical qualifying information, can be actionable misrepresentations. By conveying specific information about services without disclosing violations of staff and licensing requirements, Universal’s claims constituted misrepresentations. FCA liability for failing to disclose violations of legal requirements does not depend upon whether those requirements were expressly designated as conditions of payment. While statutory, regulatory, and contractual requirements are not automatically material, even if labeled as conditions of payment, a defendant can have “actual knowledge” that a condition is material even if the government does not expressly call it a condition of payment. View "Universal Health Servs., Inc. v. United States" on Justia Law

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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

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Chhibber, an internist, operated a walk‐in medical office on the south side of Chicago. For patients with insurance or Medicare coverage, Chhibber ordered an unusually high volume of diagnostic tests, including echocardiograms, electrocardiograms, pulmonary function tests, nerve conduction studies, carotid Doppler ultrasound scans and abdominal ultrasound scans. Chhibber owned the equipment and his staff performed the tests. He was charged with eight counts of making false statements relating to health care matters, 18 U.S.C. 1035, and eight counts of health care fraud, 18 U.S.C. 1347. The government presented witnesses who had worked for Chhibber, patients who saw him, and undercover agents who presented themselves to the Clinic as persons needing medical services. Chhibber’s former employees testified that he often ordered tests before he even arrived at the office, based on phone calls with staff. Employees performed the tests themselves with little training, and the results were not reviewed by specialists; normally, the tests were not reviewed at all. Chhibber was convicted of four counts of making false statements and five counts of health care fraud. The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings. View "United States v. Chhibber" on Justia Law

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A newborn suffered severe brain damage because doctors failed to promptly diagnose and treat an infection contracted at his 2003 birth. He was born prematurely and certain tests, normally done during pregnancy, were not performed by the federally-subsidized clinic where the mother received care. The clinic and its doctors are deemed federal employees under the Federally Supported Health Centers Assistance Act, 42 U.S.C. 233(g)-(n), and shielded from liability under the Federal Tort Claims Act. In 2005 the parents filed suit in state court and, in 2006, HHS denied an administrative claim for damages. Within six months of the denial the case was removed to federal court. In 2010, the district court held that the claim was filed within the two year statute of limitations under the FTCA (28 U.S.C. 2401(b)) and awarded more than $29 million in damages against the government. The Seventh Circuit affirmed. A claim only accrues when a plaintiff obtains sufficient knowledge of the government-related cause of his injury; the plaintiffs were reasonably diligent. View "Arroyo v. United States" on Justia Law

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In 2001 plaintiff received prenatal care from a clinic that receives federal funds. Its physicians and the clinic are deemed federal employees for purposes of malpractice liability, so that the United States could be substituted as a party to a suit. 28 U.S.C. 2679(d)(1); claims would be governed by the Federal Tort Claims Act, and neither would face liability. For complex situations, the clinic contracted with UIC for specialists. Plaintiff's baby died following a difficult delivery. She sued the clinic, its doctor, the delivery hospital, and two UIC physicians who assisted. The U.S. Department of Health and Human Services denied claims for damages. The district court entered summary judgment for the UIC doctors under the Illinois Good Samaritan Act, which shields physicians who provide "emergency care without fee to a person," 745 ILCS 49/25, but declined to dismiss the case against the government, which had been substituted for the clinic. The Seventh Circuit reversed, first holding that the district court had derivative jurisdiction. Although the salaried UIC doctors did not receive a direct financial benefit from the delivery, their employer billed the clinic for services. There was evidence that one doctor submitted a billing form with respect to the delivery; the other made a "bad faith" decision not to bill. View "Rodas v. Seidlin" on Justia Law