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

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

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

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

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

Kolodesh owned a home-health services company. He approached his employee, Pugman, about starting a home-based hospice care company. Pugman's agreed. Kolodesh funded the new company, Home Care Hospice. Pugman managed the operations. Kolodesh’s wife and Pugman were listed as owning equal shares; Kolodesh was intimately involved in forming and overseeing its management. In 2000 or 2001, Kolodesh, Pugman, and Pugman's wife began giving gifts and cash “kickbacks” to doctors in exchange for patient referrals. At Kolodesh’s suggestion, Pugman placed doctors or their employees on the Hospice payroll with sham job titles and issued paychecks in exchange for patient referrals. About 90% of the revenue generated by Hospice came from Medicare reimbursements. Kolodesh and Pugman had contractors submit fake invoices Hospice would pay; the contractor would give most of the money to Kolodesh and Pugman, keeping a portion. The participants were charged with conspiracy to defraud a health care benefit program, 18 U.S.C. 1349, 21 counts of health-care fraud, 18 U.S.C. 1347, two counts of mail fraud, 18 U.S.C. 1341, and 11 counts of money laundering, 18 U.S.C. 1957. Pugman testified for the government after having pled guilty. The Third Circuit affirmed Kolodesh's sentence of 176 months’ imprisonment and a restitution order of $16.2 million. View "United States v. Kolodesh" on Justia Law

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

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

The Providers supply outpatient cardiac telemetry (OCT) services, used by doctors to monitor cardiac arrhythmias. The device differs from conventional technology in that it transmits electrocardiographic (EKG) data in real time to certified technicians, who forward the data to a physician. OCT is approved by the FDA, and has long been covered by Medicare and commercial insurers. CIGNA administers employer sponsored health benefit plans. CIGNA pays its in-network providers directly for the services rendered to patients. In 2007, the Providers joined CIGNA’s network by Agreements that set the reimbursement rate and define “Covered Services.” In 2012, CIGNA issued a statement that it would no longer cover OCT “for any indication because it is considered experimental, investigational or unproven.” The 2012 Policy acknowledged that this new position would be trumped by any conflicting language in the coverage policies themselves. In arriving at the new policy, CIGNA relied on the same medical literature it had previously relied upon in concluding that OCT should be covered. The Providers claim that CIGNA indicated that its motive was financial, but refused to reconsider the 2012 Policy. The district court found that the Providers’ claims fell within the arbitration clause of the Agreement. The Third Circuit vacated. The clause at issue is limited in scope to disputes “regarding the performance or interpretation of the Agreement” and the claims at issue do not relate to the performance or interpretation of the Agreement.View "Cardionet Inc v. Cigna Health Corp." on Justia Law

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

The U.S. Department of Health and Human Services approved a 2008 amendment to Pennsylvania’s state plan for administering its Medicaid program. Private nursing facilities that provide services to Medicaid recipients challenged the amendment as violating Title XIX of the Social Security Act, 42 U.S.C. 1396, by adjusting Pennsylvania’s method for determining Medicaid reimbursement rates to private nursing facilities for the 2008-09 fiscal year without considering quality of care, which they claim violates 42 U.S.C. 1396a(a)(30)(A) and without satisfying the public process requirements of 42 U.S.C. 1396a(a)(13)(A). The district court rejected the claims on summary judgment. The Third Circuit affirmed in part, finding the state immune from the requested relief under the Eleventh Amendment. The district court erred in granting summary judgment to the federal defendants. By approving the amendment without any assurance that the amended plan would produce payments that are consistent with quality of care, HHS acted arbitrarily. View "Christ the King Manor, Inc. v. Sec'y, U.S. Dep't of Health & Human Servs." on Justia Law