Justia Civil Procedure Opinion Summaries

Tadlock served in the Army, 1982-2003, including service in the Persian Gulf. In 2010, he suffered a pulmonary embolism (PE) that resulted in a heart attack. Tadlock sought presumptive service connection under 38 U.S.C. 1117, which refers to a “qualifying chronic disability” for veterans who served in the Persian Gulf War. The regulations limit the definition of “qualifying chronic disability” to one that, “[b]y history, physical examination, and laboratory tests cannot be attributed to any known clinical diagnosis.” Tadlock underwent a final medical examination by a VA physician, who explained that Tadlock’s PE “is not an undiagnosed illness.” The Board of Veterans Appeals based its denial of service connection on that opinion.Neither the Board nor the examiner made any finding that Tadlock’s condition was not a “medically unexplained chronic multisymptom illness” (MUCMI). Tadlock contended that the statute expressly includes both “an undiagnosed illness” and a MUCMI. The Veterans Court found that Tadlock's PE was "not characterized by overlapping signs and symptoms and unique features ... and disproportional disability when compared with physical findings.” It held that "any error in the Board decision regarding whether his diagnosed illness could count as a MUCMI is harmless.”The Federal Circuit vacated. The Veterans Court exceeded its authority in making a fact-finding in the first instance that Tadlock’s illness did not qualify as a MUCMI because of a lack of overlapping symptoms. The Veterans Court’s jurisdiction to consider prejudicial error does not give it the right to make de novo findings of fact or otherwise resolve matters that are open to debate. View "Tadlock v. McDonough" on Justia Law

Rite Aid’s “Rx Savings Program” provides generic prescription drugs at reduced prices. The program is free and widely available but excludes customers whose prescriptions are paid by publicly funded healthcare programs like Medicare or Medicaid. Federal regulations require pharmacies to dispense prescriptions for beneficiaries of those programs at their “usual and customary charge to the general public” (U&C rate). Rahimi alleged that Rite Aid overbilled the government programs because the amounts it charged did not take into account the lower Rx Savings Program prices. Rahimi claimed Rite Aid's submission of bills for those covered by publicly funded health insurance, representing the price to be the U&C rate, violated the False Claims Act, 31 U.S.C. 3729(a).The Sixth Circuit affirmed the dismissal of Rahimi’s claim. The Act’s public disclosure bar precludes qui tam actions that merely feed off prior public disclosures of fraud. From the beginning, communications about the Rx Savings Program have stated that publicly funded health care programs were ineligible for the discounted prices. Before Rahimi’s disclosures, Connecticut investigated membership discount prices; the Department of Health and Human Services announced that it would review Medicaid claims for generic drugs to determine the extent to which large chain pharmacies are billing Medicaid the usual and customary charges for drugs provided under their retail discount generic programs; and a qui tam action was unsealed in California, describing an identical scheme. View "Rahimi v. Rite Aid Corp." on Justia Law

The hospital, located in Philadelphia, received a reclassification into the New York City area, which would sizably increase the hospital’s Medicare reimbursements due to that area’s higher wage index, 42 U.S.C. 1395ww(d). Although a statute makes such reclassifications effective for three fiscal years, the agency updated the geographical boundaries for the New York City area before the close of that period and reassigned the hospital to an area in New Jersey with an appreciably lower wage index. The hospital successfully sued three agency officials in the Eastern District of Pennsylvania.The Third Circuit vacated and remanded for dismissal. The Medicare Act, 42 U.S.C. 1395oo(f)(1), channels reimbursement disputes through administrative adjudication as a near-absolute prerequisite to judicial review. The hospital did not pursue its claim through administrative adjudication before suing in federal court. By not following the statutory channeling requirement, the hospital has no valid basis for subject-matter jurisdiction. View "Temple University Hospital, Inc. v. Secretary United States Department of Health & Human Services" on Justia Law

The “effective date of an award” of disability compensation to a veteran “shall not be earlier than the date” the veteran’s application for such compensation is received by the VA. 38 U.S.C. 5110(a)(1). Section 5110(b)(1) provides an exception that permits an earlier effective date if the VA receives the application within one year of the veteran’s discharge from military service: under such circumstances, the effective date of the award shall date back to “the day following the date of the veteran’s discharge or release.”Arellano filed his application more than 30 years after he was discharged from the Navy, he argued that section 5110(b)(1)’s one-year period should be equitably tolled to afford his award an earlier effective date reaching back to the day after his discharge. The Veterans Court denied Arellano an effective date earlier than the date his disability benefits application was received by the VA. The Federal Circuit previously held that 5110(b)(1) is not a statute of limitations amenable to equitable tolling but merely establishes an effective date for the payment of benefits, thereby categorically foreclosing equitable tolling. The Federal Circuit affirmed as to Arellano, declining to overrule that precedent, stating that the statutory text evinces clear intent to foreclose equitable tolling of section 5110(b)(1)’s one-year period. View "Arellano v. McDonough" on Justia Law

Petitioners, whose applications for disability benefits were denied by the Social Security Administration (SSA) unsuccessfully challenged their adverse determinations before an SSA administrative law judge (ALJ). The SSA Appeals Council denied discretionary review in each case. Thereafter, the Supreme Court decided Lucia v. SEC, holding that the appointment of Securities and Exchange Commission ALJs by lower-level staff violated the Constitution’s Appointments Clause. The SSA ALJs were also appointed by lower-level staff. The Courts of Appeals held that the petitioners could not obtain judicial review of their Appointments Clause claims because they failed to raise those challenges in their administrative proceedings. The Supreme Court reversed. The Courts of Appeals erred in imposing an issue-exhaustion requirement on petitioners’ Appointments Clause claims. Administrative review schemes commonly require parties to give the agency an opportunity to address an issue before seeking judicial review of that question. If no statute or regulation imposes an issue-exhaustion requirement, courts decide whether to require issue exhaustion based on “an analogy to the rule that appellate courts will not consider arguments not raised before trial courts.” In the context of petitioners’ Appointments Clause challenges, two considerations tip the scales against imposing an issue-exhaustion requirement: agency adjudications are generally ill-suited to address structural constitutional challenges, which usually fall outside the adjudicators’ areas of technical expertise, and the Supreme Court has consistently recognized a futility exception to exhaustion requirements. Petitioners assert purely constitutional claims about which SSA ALJs have no special expertise and for which they can provide no relief. View "Carr v. Saul" on Justia Law

MAO-MSO acquired rights to collect conditional payments that Medicare Advantage Organizations (MAOs) made if a primary insurer (such as automobile insurance carriers) has not promptly paid medical expenses. MAO-MSO sued those primary payers. The district court proof of required actual injury. Specifically, MAO-MSO needed to identify an “illustrative beneficiary”— a concrete example of a conditional payment that State Farm, the relevant primary payer, failed to reimburse to the pertinent MAO. MAO-MSO alleged that “O.D.” suffered injuries in a car accident and that State Farm “failed to adequately pay or reimburse” the appropriate MAO. The district court determined that these allegations sufficed for pleading purposes to establish standing.As limited discovery progressed, MAO-MSO struggled to identify evidence supporting the complaint. One dispute centered on whether O.D.’s MAO made payments related to medical care stemming from a car accident before State Farm reached its limit under O.D.’s auto policy so that State Farm should have reimbursed the MAO. The payment in question was to a physical therapist. State Farm argued that the physical therapy services had no connection to O.D.’s car accident and related only to her prior knee surgery.The district court determined no reasonable jury could find that the payment related to O.D.’s car accident, meaning that MAO-MSO lacked standing. The Seventh Circuit affirmed the dismissal. The Medicare Act may authorize the lawsuit but MAO-MSO fail to establish subject matter jurisdiction by establishing an injury in fact. View "MAO-MSO Recovery II, LLC v. State Farm Mutual Automobile Ins. Co." on Justia Law

When Medicare overpays hospitals, it offsets that mistake by reducing future payments. By 2013, Medicare was out $11 billion because of new diagnostic codes and bookkeeping that did not keep up. Congress required that the Secretary of Health and Human Services recoup that amount by the end of fiscal year 2017 by reducing the base rate (standardized amount) paid for inpatient care and directed the Secretary to adjust the base rate by 0.5% each year through 2023, 129 Stat. 87, 163 (2015). Subsequently, while reviewing the 2017 budget, the Secretary realized that a -3.2% adjustment would leave the agency short of its $11 billion goal and announced a -3.9% adjustment. Congress then told the Secretary to increase the base rate by 0.4588% (not 0.5%) in 2018, 130 Stat. 1033, 1320 (2016). In 2017, the Secretary adjusted the base rate -3.9%. The agency met its goal. In 2018, the Secretary adjusted the base rate -3.4412%.Medicare providers sued, arguing that the Secretary should have reversed that expedient at the end of 2017 rather than carry it over into 2018, costing the hospitals $840 million in lost payments. The D.C. Circuit affirmed the dismissal of the suit. While the hospitals felt a “significant financial impact” from the -0.7% adjustment, Section 7(b)(5) bars judicial review of adjustments made under the Act. View "Fresno Community Hospital and Medical Center v. Cochran" on Justia Law

The National Organization of Veterans’ Advocates (NOVA), sought review under 38 U.S.C. 502. The Knee Joint Stability Rule, promulgated in 2018 and set forth in the Veterans Affairs Adjudication Procedures Manual, assigns a joint instability rating under Diagnostic Code (DC) 5257, 38 C.F.R. 4.71a, based on the amount of movement that occurs within the joint. The Knee Replacement Rule provides that evaluation under DC 5055, 38 C.F.R. 4.71a, is not available for partial knee replacement claims. The Replacement Rule was published in the Federal Register in 2015, stating that section 4.71a was amended to explain that “‘prosthetic replacement’ means a total, not a partial, joint replacement.” It was published in a 2016 Manual provision, which informs regional office staff that evaluation under DC 5055 is not available for partial knee replacement claims filed on or after July 16, 2015.The Federal Circuit referred the case for adjudication on the merits. NOVA has standing because it has veteran members who are adversely affected by the Rules. The Manual provision is an interpretive rule reviewable under 38 U.S.C. 502 and constitutes final agency action. The Knee Replacement Rule is a final agency action. The merits panel will determine whether the Manual provision or the Federal Register publication constitutes the reviewable agency action. The challenge is timely under the six-year statute of limitations, 28 U.S.C. 2401(a); Federal Circuit Rule 15(f), establishing a 60-day time limit for bringing section 502 petitions, is invalid. View "National Organization of Veterans’ Advocates, Inc. v. Secretary of Veterans' Affairs" on Justia Law

Dr. Korban and his medical practice Delta, practice diagnostic and interventional cardiology. In 2007, Dr. Deming filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729(a)(1)(A)–(C), (G) against Korban, Jackson Regional Hospital, and other Tennessee hospitals, alleging “blatant overutilization of cardiac medical services.” The United States intervened and settled the case for cardiac procedures performed in 2004-2012. Korban entered into an Integrity Agreement with the Office of Inspector General, effective 2013-2016 that was publicly available and required an Independent Review Organization. The U.S. Department of Justice issued a press release that detailed the exposed fraudulent scheme and outlined the terms of Korban’s settlement. In 2015, Jackson Regional agreed to a $510,000 settlement. The Justice Department and Jackson both issued press releases.In 2017, Dr. Maur, a cardiologist who began working for Delta in 2016, alleged that Korban was again performing “unnecessary angioplasty and stenting” and “unnecessary cardiology testing,” paid for in part by Medicare. In addition to Korban and Jackson, Maur sued Jackson’s corporate parent, Tennova, Dyersburg Medical Center, and Tennova’s corporate parent, Community Health Systems. The United States declined to intervene. The district court dismissed, citing the FCA’s public-disclosure bar, 31 U.S.C. 3730(e)(4). The Sixth Circuit affirmed. Maur’s allegations are “substantially the same” as those exposed in a prior qui tam action and Maur is not an “original source” as defined in the FCA. View "Maur v. Hage-Korban" on Justia Law

While plaintiffs sought judicial review in federal district court of their denial of Social Security disability benefits, the Supreme Court issued its opinion in Lucia v. Securities and Exchange Commission, 138 S. Ct. 2044 (2018), which elucidated a possible constitutional objection to administrative proceedings pursuant to the Appointments Clause. At issue in this appeal is whether plaintiffs may raise an Appointments Clause challenge in federal court that they did not preserve before the agency.The Fourth Circuit held that claimants for Social Security disability benefits do not forfeit Appointments Clause challenges by failing to raise them during their administrative proceedings. Balancing the individual and institutional interests at play, including considering the nature of the claim presented and the characteristics of the ALJ proceedings, the court declined to impose an exhaustion requirement. Therefore, the court affirmed the judgments of the district courts remanding these cases for new administrative hearings before different, constitutionally appointed ALJs. View "Probst v. Saul" on Justia Law