Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Public Benefits

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Morris worked as a coal miner for nearly 35 years, 19 years underground. Morris’s breathing difficulties caused him to leave work. In 2006, Dr. Cohen diagnosed him with pneumoconiosis (black lung disease). Eighty Four Mining’s physician also examined Morris, but determined that Morris’s breathing difficulties were caused by smoking and that there was no radiographic evidence of pneumoconiosis. In 2008, aPennsylvania Workers’ Compensation Judge denied benefits. Morris did not appeal. Morris’s breathing problems worsened; a doctor put him on oxygen nearly full-time. In 2011, Morris sought Black Lung Benefits Act (BLBA), 30 U.S.C. 901, benefits. He did not rely upon the 2006 report that had been discredited, but on a 2011 arterial blood gas study and pulmonary function testing that supported a finding of black lung disease. In 2013, an ALJ granted BLBA benefits, rejecting a timeliness challenge and reasoning that a denial of black lung benefits due to the repudiation of the claimant’s pneumoconiosis diagnosis renders that diagnosis a “misdiagnosis” and resets the three-year limitations period for subsequent claims. Morris sufficiently established the existence of pneumoconiosis through medical evidence obtained after 2010 and Eighty Four failed to adequately explain why Morris’s years of coal dust exposure were not a substantial cause of his impairment. The Benefits Review Board affirmed, citing judicial estoppel as precluding the timeliness argument. The Third Circuit denied a petition for review. View "Eighty Four Mining Co. v. Morris" on Justia Law

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Plaintiffs each applied for Medicaid institutional care coverage shortly after purchasing a short-term annuity. The Pennsylvania Department of Human Services (DHS) classified each of their annuities as a resource when determining Medicaid eligibility. This classification meant that the value of each annuity precluded them from receiving Medicaid assistance and resulted in a penalty period of ineligibility. The district court held that the plaintiffs’ purchases of the short-term annuities were sham transactions intended only to shield resources from Medicaid calculations, and affirmed DHS’s imposition of a period of Medicaid ineligibility, but held that, contrary to DHS’s arguments, a Pennsylvania statute that purported to make all annuities assignable was preempted by federal law. The Third Circuit affirmed in part, finding that the statute was preempted, but reversed in part, citing “safe harbor” provisions, under which, certain annuities are not considered resources for purposes of Medicaid eligibility, 42 U.S.C. 1396p(c)(1)(F). The court noted the qualifications for safe-harbor protection: the annuity must name the state as the remainder beneficiary, be irrevocable and nonassignable, be actuarially sound, and provide for payments in equal amounts during its term, with no deferral and no balloon payments. The court rejected the state’s argument that the annuities were “trust-like.” View "Zahner v. Sec'y Pa. Dept. of Human Servs." on Justia Law

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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

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Hansler was hired by Lehigh Valley in 2011. In 2013, Hansler began experiencing shortness of breath, nausea, and vomiting, of unknown origins. Hansler’s physician completed a medical certification form “requesting intermittent leave at a frequency of 2 times weekly starting on March 1, 2013 and lasting for a probable duration of one month.” Hansler submitted the certification as part of a formal request for leave under the Family Medical Leave Act, 29 U.S.C. 2601. Hansler was unable to work on March 13, 14, 23, 24, and 25. Without seeking further information from either Hansler or her physician, Lehigh terminated Hansler on March 28, citing absenteeism, including the five days she took off in March. Lehigh informed her, for the first time, that her leave request had been denied because her “condition presently does not qualify as a serious health condition under the criteria set forth by the [Act].” After her dismissal, Hansler received a diagnosis of diabetes and high blood pressure. The district court dismissed her suit under the Act, on the basis that the medical certification supporting Hansler’s request for leave was “invalid.” The Third Circuit reversed, finding that Lehigh violated the Act in failing to afford Hansler a chance to cure any deficiencies in her medical certification. View "Hansler v. Lehigh Valley Hosp. Network" on Justia Law

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Zirnsak was involved in a motor vehicle accident. She sustained head and lung injuries and skeletal fractures and was hospitalized from October 8 through November 14, 2001, temporarily on life support. Upon her discharge, she was sent to a rehabilitation facility, where she was treated from January 16, 2002 through October 18, 2005. In 2003, she suffered a seizure. She was prescribed medication and did not suffer any further seizures. Between January 5, 2005 and August 11, 2006, Zirnsak underwent plastic surgery for lipoma reductions. Zirnsak sought treatment from several medical professionals, including treatment for “traumatic brain injury, left hemiparesis cognitive impairments with short-term memory deficits, organic affective changes[,] and a seizure disorder.” In 2010, Zirnsak applied for Social Security Disability Insurance benefits alleging a disability commencing on May 11, 2006. Zirnsak’s date last insured was December 31, 2007. The SSA denied Zirnsak’s application, finding that Zirnsak was capable of performing certain jobs available in the national economy, so long as those jobs were sedentary and routine. The district court and Third Circuit affirmed. Substantial evidence supports Zirnsak’s ability to perform jobs widely available in the national economy: order clerk, food and beverage; charge account clerk; and telephone clerk. View "Zirnsak v. Colvin" on Justia Law

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Babaria, a licensed radiologist and medical director and manager of Orange Community MRI, an authorized Medicare and Medicaid provider, pleaded guilty to one count of making illegal payments (kickbacks), 42 U.S.C. 1320a-7b(b)(2)(A). From 2008 through 2011, he paid physicians to refer patients to Orange for diagnostic testing and billed Medicare and Medicaid for testing that was tainted by the corrupt referrals. Orange received $2,014,600.85 in payments that were directly traceable to the kickback scheme. There was no evidence that Babaria falsified patient records, billed Medicare or Medicaid for testing that was not medically necessary, or otherwise compromised patient care. Babaria objected to the PreSentence Investigation Report, which recommended a two-level adjustment for abuse of a position of trust (USSG 3B1.3) and a four-level adjustment for aggravating role (USSG 3B1.1(a)), resulting in a recommended Guidelines range of 70-87 months’ imprisonment. Ultimately, the Guidelines range was 60 months, capped by the statutory maximum for Babaria’s count of conviction. He argued that the correct range was 37 to 46 months. The court applied both adjustments but granted a downward variance and sentenced Babaria to 46 months’ imprisonment, a fine of $25,000, and forfeiture of the $2,014,600.85. The Third Circuit affirmed the sentence. View "United States v. Babaria" on Justia Law

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The Medicare as a Secondary Payer Act, 42 U.S.C. 1395y(b)(2) precludes Medicare from providing benefits when a “primary plan” could be expected to pay. When the primary plan does not promptly pay medical expenses, Medicare makes conditional payments and is entitled to reimbursement. Under the New Jersey Collateral Source Statute (NJCSS), N.J. Stat. 2A:15–97, a tort plaintiff cannot recover damages from a defendant when she has already received funding from a different source. Taransky was injured when she fell at a shopping center. Medicare conditionally paid for her care. She sued the owner, seeking damages for bodily injury, disability, pain and suffering, emotional distress, economic loss, and medical expenses. She settled for $90,000, granting a full release, stating that liens or subrogation claims would be satisfied from settlement proceeds, and stating that Taransky would indemnify the owner with respect to such claims. Based on the NJCSS, Taransky then claimed that her Medicare expenses were not included in the settlement and obtained an order that the settlement was solely recovery for bodily injury, disability, pain and suffering, emotional distress, and non-economic, otherwise-uncompensated loss. A Medicare contractor demanded reimbursement of $10,121.15. Taransky refused to pay, arguing that a tortfeasor was not a “primary plan” and that reimbursement would be inequitable because she had not recovered medical expenses. An ALJ ruled against Taransky. The Medicare Appeals Council affirmed. The district court dismissed, holding that it lacked jurisdiction over proportionality and due process claims because she had not raised them before the agency; that the NJCSS did not apply to conditional Medicare benefits; and that the MSP Act authorized reimbursement from the settlement. The Third Circuit affirmed. View "Taransky v. Sec'y U.S. Dep't of Heath & Human Servs." on Justia Law

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Medicare (42 U.S.C. 1395ww) reimbursement includes an adjustment for “disproportionate share hospitals” (DSH), that serve high numbers of low-income patients. The calculation formula takes into account the number of patient days for those patients eligible for Medicaid, and may also include patient days for those patients ineligible for Medicaid, but who received benefits under a Medicaid “demonstration project,” 42 U.S.C. 1315. The Medicare DSH formula was initially regarded by intermediaries, at least in some states, as including days covered under state general assistance (GA) and charity care programs. In 1999 the Centers for Medicare and Medicaid Services clarified that the DSH formula only permitted the inclusion of patient days wherein the patients were eligible for Medicaid, excluding state general assistance and charity plan patient days, but, under the final rule hospitals could count patient days for individuals covered under a Section 1115 waiver project. The Deficit Reduction Act of 2005 essentially ratified the rule. The district court concluded that the regulation was arbitrary and capricious and a violation of the Equal Protection Clause, reasoning there was no rational basis to exclude from reimbursements patients covered by Pennsylvania’s General Assistance plan, while including patients covered under a federal statutory waiver program. The Third Circuit reversed. View "Nazareth Hosp. v. Sec'y, U.S. Dep't of Health & Human Servs." on Justia Law

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E attended kindergarten and first grade in the Ridley School District, 2006-2008, receiving special services for learning disabilities and health problems. After first grade, her parents concluded that the school was not meeting E’s needs, and enrolled her at a private school, Benchmark, that specializes in educating students with learning disabilities, then filed a complaint with the Pennsylvania Department of Education claiming violation of the Individuals with Disabilities Education Act, 20 U.S.C. 1415(j), and the Rehabilitation Act, 29 U.S.C. 794(b)(2), by failing to provide a suitable Individualized Education Program. A hearing officer found no violations during kindergarten year, but awarded compensatory education for first grade and ordered Ridley to reimburse tuition and transportation costs for 2008-2009. Two years later, a federal district court reversed, finding the proposed IEP adequate. The Third Circuit affirmed. Meanwhile, the parents sought payment for Benchmark costs from the date of the hearing officer’s decision forward pursuant to the IDEA, which states that a disabled child shall remain in the child’s current educational setting pending resolution of a dispute over the child‘s placement. The district court ruled in favor of the parents, rejecting the district’s timeliness contentions and awarded costs for three years, $57,658.38. The Third Circuit affirmed. It is impossible to protect a child‘s educational status quo without sometimes taxing school districts for private education costs that ultimately will be deemed unnecessary. View "M. R. v. Ridley Sch. Dist." on Justia Law

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Under the Individuals with Disabilities Education Act (IDEA), states that provide special education funds are eligible for federal funds to implement state-wide special education programs that guarantee a free appropriate public education (FAPE) to eligible disabled children, 20 U.S.C. 1412(a)(1)(A). Pennsylvania enacted 24 P.S. 25-2509.5, its special education funding formula, under which each school district receives a base supplement, calculated by apportioning the total amount of base supplement money available among all districts based on the average daily membership of the district from the prior year under the assumption that 16% of students in each district are disabled. Plaintiffs, disabled students who attend schools in districts with a 17% or greater enrollment of special needs students and with a market value/personal income ratio of .65 or greater, claimed that Pennsylvania’s method violates IDEA, the Americans with Disabilities Act, and the Rehabilitation Act The district court found that the formula did not deprive the class of a FAPE as required by the IDEA and did not discriminate in violation of either the ADA or RA. The Third Circuit affirmed, noting that there was no evidence that any class member was deprived of a service available to nonclass members. View "CG v. PA Dep't of Educ." on Justia Law