Articles Posted in Health Law

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Sports Medicine performed shoulder surgery on “Joshua,” who was covered by a health insurance plan, and charged Joshua for the procedure. Because it did not participate in the insurers’ network, Sports Medicine was not limited to the insurer’s fee schedule and charged Joshua $58,400, submitting a claim in that amount to the insurers on Joshua’s behalf. The claim form indicated that Joshua had “authorize[d] payment of medical benefits.” The insurer processed Joshua’s claim according to its out-of-network cap of $2,633, applying his deductible of $2,000 and his 50% coinsurance of $316, issuing him a reimbursement check for the remaining $316, and informing him that he would still owe Sports Medicine the remaining $58,083. Sports Medicine appealed through the insurers’ internal administrative process and had Joshua sign an “Assignment of Benefits & Ltd. Power of Attorney.” Sports Medicine later sued for violations of the Employee Retirement Income Security Act (ERISA), and breach of contract, citing public policy. The district court dismissed for lack of standing because Joshua’s insurance plan included an anti-assignment clause. The Third Circuit affirmed, holding that the anti-assignment clause is not inconsistent with ERISA and is enforceable. View "American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield" on Justia Law

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Little Sisters of the Poor, a Roman Catholic congregation serving the elderly poor of all backgrounds, operates homes for the elderly, all of which adhere to the same religious beliefs. A religious nonprofit corporation that operates a Little Sisters home in Pittsburgh sought to intervene in litigation challenging regulations promulgated under the Patient Protection and Affordable Care Act, 42 U.S.C. 300gg-13(a)(4). That litigation was instituted by the Commonwealth of Pennsylvania, challenging interim final rules, providing for “religious” and “moral “ exemptions to the Act's "contraceptive mandate" for “entities, and individuals, with sincerely held religious beliefs objecting to contraceptive or sterilization coverage,” including “for-profit entities that are not closely-held.” The Third Circuit reversed the denial of their motion. Little Sisters’ interest in the regulations is neither novel nor isolated; it has been involved in Affordable Care Act litigation for years. Little Sisters’ interest in preserving the religious exemption is concrete and capable of definition; the relationships among the organization's various homes indicate a unique interest compared to other religious objectors who might wish to intervene. Those interests are significantly protectable. Little Sisters have demonstrated that they may be “practically disadvantaged by the disposition of the action” and have established that their interests are not adequately represented by the federal government. View "Commonwealth of Pennsylvania v. President United States" on Justia Law

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Shuker underwent a hip replacement surgery that resulted in unexpected complications and brought tort claims against Smith & Nephew, the manufacturer of his hip replacement system. The Medical Device Amendments of 1976, added comprehensive medical device approval processes to the Federal Food, Drug, and Cosmetic Act, prescribing tiers of federal requirements for certain devices corresponding to the device’s inherent risk level. In exchange for compliance with the strictest federal mandates, Congress afforded manufacturers express preemption from state laws imposing different or additional “safety or effectiveness” requirements for those devices, 21 U.S.C. 360k(a)(2). Shuker’s medical device was comprised of multiple components, some of which are from “Class III” medical devices subject to federal requirements and some of which are from medical devices that carry a different class designation and are not subject to those requirements. The Third Circuit affirmed a determination that Shuker’s negligence, strict liability, and breach of implied warranty claims are expressly preempted. The court reversed the dismissal of other claims. Shuker adequately pleaded non-preempted claims based on Smith & Nephew’s alleged off-label promotion in violation of federal law and loss of consortium, and jurisdictional discovery is warranted with respect to personal jurisdiction over one of the defendants. View "Shuker v. Smith & Nephew PLC" on Justia Law

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Shuker underwent a hip replacement surgery that resulted in unexpected complications and brought tort claims against Smith & Nephew, the manufacturer of his hip replacement system. The Medical Device Amendments of 1976, added comprehensive medical device approval processes to the Federal Food, Drug, and Cosmetic Act, prescribing tiers of federal requirements for certain devices corresponding to the device’s inherent risk level. In exchange for compliance with the strictest federal mandates, Congress afforded manufacturers express preemption from state laws imposing different or additional “safety or effectiveness” requirements for those devices, 21 U.S.C. 360k(a)(2). Shuker’s medical device was comprised of multiple components, some of which are from “Class III” medical devices subject to federal requirements and some of which are from medical devices that carry a different class designation and are not subject to those requirements. The Third Circuit affirmed a determination that Shuker’s negligence, strict liability, and breach of implied warranty claims are expressly preempted. The court reversed the dismissal of other claims. Shuker adequately pleaded non-preempted claims based on Smith & Nephew’s alleged off-label promotion in violation of federal law and loss of consortium, and jurisdictional discovery is warranted with respect to personal jurisdiction over one of the defendants. View "Shuker v. Smith & Nephew PLC" on Justia Law

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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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Horizon Blue Cross Blue Shield provides health insurance products and services to approximately 3.7 million members. Two laptop computers, containing sensitive personal information about members, were stolen from Horizon. Four plaintiffs filed suit on behalf of themselves and other Horizon customers whose personal information was stored on those laptops, alleging willful and negligent violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, and numerous violations of state law. The district court dismissed the suit for lack of Article III standing. According to the court, none of the plaintiffs had claimed a cognizable injury because, although their personal information had been stolen, none of them had adequately alleged that the information was actually used to their detriment. The Third Circuit vacated. In light of the congressional decision to create a remedy for the unauthorized transfer of personal information, a violation of FCRA gives rise to an injury sufficient for Article III standing purposes. Even without evidence that the plaintiffs’ information was in fact used improperly, the alleged disclosure of their personal information created a de facto injury. View "In re: Horizon Healthcare Inc. Data Breach Litigation" on Justia Law

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Penn State Hershey Medical Center is a leading academic medical center, with 551 beds and more than 800 physicians. Hershey offers all levels of care, but specializes in more complex, specialized services, unavailable at most other hospitals. Hershey draws patients from a broad area. PinnacleHealth System has three hospital campuses, two in Harrisburg, and another in Mechanicsburg, focusing on cost-effective primary and secondary services, with only a limited range of more complex services. It employs fewer than 300 physicians and provides 646 beds. In 2014, Hershey and Pinnacle signed a letter of intent for a proposed merger. Their respective boards subsequently approved the merger; the Hospitals notified the Federal Trade Commission (FTC), and, in 2015, executed a “Strategic Affiliation Agreement.” The FTC opposed the merger and filed suit under the Clayton Act and the FTC Act. The district court denied a preliminary injunction pending the FTC’s adjudication on the merits, finding that the opponents of the merger did not properly define the relevant geographic market, a necessary prerequisite to determining whether a proposed combination is sufficiently likely to be anticompetitive as to warrant injunctive relief. The Third Circuit reversed after determining the government’s likelihood of success and weighing the equities, finding that a preliminary injunction would be in the public interest. The Hospitals did not rebut the government’s prima facie case that the merger is likely to be anticompetitive. View "Fed. Trade Comm'n v. Penn State Hershey Med. Ctr." on Justia Law

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Deborah is a New Jersey charity hospital. CGPA is a group of New Jersey cardiologists. Because no CGPA physician could perform advanced cardiac interventional procedures (ACI) procedures, in 1992, CGPA and Deborah began a relationship that resulted in the transfer of numerous ACI patients to Deborah. In 2005, the CGPA doctors entered into an exclusive agreement to provide Virtua Hospital with cardiovascular services. Referrals to Deborah dropped off significantly. In 2006, CGPA hired a doctor who had previously worked at Deborah and was capable of performing some ACIs. CGPA terminated its agreement with Deborah. In 2007, CGPA signed agreements with doctors who worked primarily at Penn Presbyterian Hospital. Virtua is not mentioned in those contracts, but Deborah alleges that Virtua was an unnamed participant in negotiations and that the goal was to drive Deborah out of business. Deborah sued, asserting that this arrangement constituted an illegal restraint on trade and resulted in harm to competition, in violation of the Sherman Act. The district court granted Virtua and CGPA summary judgment, holding that Deborah did not introduce sufficient evidence to show injury to competition in the designated market. The Third Circuit affirmed, noting that Deborah identified the “products” and i the market at issue. Virtua did not challenge Deborah’s market definitions in the district court. Having set the parameters for the dispute, Deborah failed to meet its self-imposed burden. View "Deborah Heart & Lung Center v. Virtua Health Inc" on Justia Law

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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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Temporary civil commitment at New Jersey psychiatric hospitals is subject to regular review; patients have the right to counsel, to be present at the hearing, to present evidence, and to cross-examine witnesses. In a challenge to the state’s “Rennie process” for forcible medication, the Third Circuit held, in 1984, that civilly committed psychiatric patients “have a qualified constitutional right to refuse antipsychotic medication” in nonemergency situations and the process accommodated that right consistent with the Due Process Clause. A 2010 challenge alleged that the Rennie process violated the Constitution, the Americans With Disabilities Act, and the Rehabilitation Act, and demanded that the state “provide patients who refuse the non-emergency administration of psychotropic medication with meaningful due process protections—including legal counsel, notice and a hearing before a judicial decision-maker.” The state replaced the Rennie process with policies for forcible treatment in emergencies (AB 5:04A), which were not challenged, and nonemergent situations (AB 5:04B). The nonemergency policy permits longer-term forcible medication of a patient, involuntarily committed, who, as a result of a diagnosed mental illness, poses a substantial risk of serious harm to self, others, or property “within the reasonably foreseeable future” if psychotropic medication is not administered. Patients who satisfy the substantive requirements may be forcibly medicated only pursuant to procedures that stop short of prior judicial review. The Third Circuit affirmed that AB 5:04B is valid, except as to patients who have been not to require continued commitment but who remain in custody pending transfer. View "Disability Rights N.J., Inc. v. Comm'r N.J. Dep't of Human Servs." on Justia Law