Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
Sept. 14 — The race to the end of 2016 is on, and many headline-grabbing health-care related cases remain on court dockets.
Here is a sampling of lawsuits filed, argued and/or awaiting decision that will impact the way providers are paid and how the industry meets new business and regulatory goals.
The mother lode of cases focus on one controversial piece of reform legislation: the Affordable Care Act. A goodly number, though, concern closely watched consolidations in the hospital and insurance industries.
Obamacare survived early challenges, as well as Republican efforts to derail it. But people are questioning if it will die a painful death anyway, given the numerous problems in programs designed to keep insurers from going broke while offering affordable plans.
Widespread failures of the ACA's Consumer Operated and Oriented Plans (CO-OPs) and insurers' abandonment of the health-insurance exchanges are being viewed as further evidence of the ACA's impending demise.
Not all plans are giving up, though. Many sued the administration, arguing it has botched the three R—risk corridor, risk adjustment and reinsurance—programs designed to help them cope with losses everyone knew were coming.
Discrimination claims under the ACA's Section 1557 are on the rise, but could get derailed by litigation challenging the law.
This has been an active year for antitrust issues in the health-care industry. Some of the biggest cases are still to be decided. Currently, a federal trial court in Washington, D.C., is reviewing two Department of Justice challenges to mergers that would reduce the number of major health insurance companies in the country from five to three.
Two federal appeals courts are expected to rule on whether to allow the Federal Trade Commission to stop mergers of major hospitals in Chicago and Pennsylvania. After more than a decade of success challenging hospital mergers in federal court, the FTC ran into two consecutive roadblocks in analyzing hospital markets.
The fight between nursing homes and consumers over arbitration agreements goes on. It's now moving, once again, into the Supreme Court. Kindred Nursing Centers has asked the court to review a Kentucky Supreme Court decision that a resident's representative can't waive the resident's right to a jury trial unless the resident expressly gave the representative that right ( Kindred Nursing Ctrs. LP v. Clark, U.S., No. 16-32, petition for review filed 7/1/16 ). Opponents Sept. 6 urged the court to deny review.
The Biologics Price Competition and Innovation Act (BPCIA) is getting a lot of attention these days. Created to allow abbreviated approval of biologically similar versions of biologic drugs that are anticipated to be less expensive that the original biologic, the BPCIA is being tested in various courts.
A few cases to watch in this area:
Evidentiary questions, whistle-blower suits and off-label marketing complaints are just some of the fraud-related issues facing courts in the latter part of 2016.
In life sciences patent litigation, Athena Diagnotics, Inc. v. Mayo Collaborative Servs., D. Mass., 15-cv-40075, filed 6/2/15 , is generating buzz because it bucked the trend of federal district and appeals courts in considering the validity of diagnostic method patent clams.
Rather than dismiss Athena's infringement suit in light of the Supreme Court's decision in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 2012 BL 66018 (U.S. 2012), which held invalid claims similar to Athena's because they were derived from laws of nature, the district court allowed the case to go forward. The case also is interesting because of Mayo's challenge to the patent invalidated in the landmark Mayo decision.
Medicaid-eligible patients are asking whether the way states are operating the federally funded health care program for needy patients violates portions of the Social Security Act.
The Seventh Circuit Sept. 7 heard oral argument on whether Illinois's Medicaid agency must continue to provide in-home shift nursing services to Medicaid-eligible children while a federal trial court entertains a challenge by representatives for those children to the manner in which the state has administered its program ( O.B. v. Norwood, 7th Cir., No. 16-2049, scheduling order 7/11/16 ).
Calculating disproportionate share hospital payments and reimbursement under the now-rescinded two-midnight rule are two of the hottest issues in litigation involving Medicare.
The Pennsylvania Supreme Court will consider whether a third-party medical provider that contracts with a hospital waives peer review protection for documents when it shares them with the hospital ( Reginelli v. Boggs, Pa., No. 20 WAP 2016, review granted 7/7/16 ).
The issue is of national importance because hospitals are employing more independent contractors, often through affiliated groups. The two want to be able to share information, but most state peer review laws don't address waiver in this context, a health-care attorney told Bloomberg BNA.
A full panel of judges of the U.S. Court of Appeals for the Eleventh Circuit June 21 heard oral argument on whether Florida's Firearm Owners Privacy Act violates the First Amendment rights of doctors by prohibiting them from asking patients about firearm ownership ( Wollschlaeger v. Governor of Fla., 11th Cir., No. 12-14009, oral arguments 6/21/16 ).
The U.S. District Court for the Southern District of Florida in 2011 held the law unconstitutional, but a three-judge panel of the Eleventh Circuit thrice said it passed constitutional scrutiny. The Eleventh Circuit finally granted en banc review. A decision is expected before the end of the year.
A question about whether hospital employee pension plans are exempt from regulation under the Employee Retirement Income Security Act's church-plan exemption is headed to the Supreme Court. The issue is whether the exemption applies to pension plans maintained by qualified church-affiliated organizations, like hospitals, or whether the exemption applies only if a church initially established the plan ( Advocate Health Care Network v. Stapleton, U.S., No. 16-74, petition for review filed 7/15/16 ); Saint Peter's Healthcare Sys. v. Kaplan, U.S., No. 16-86, petition for review filed 7/18/16 ; Dignity Health v. Rollins, U.S., No. 16-258, petition for review filed 8/29/16 )
About three dozen lawsuits filed throughout the U.S. accuse large hospitals and health systems of using ERISA's church plan exemption to underfund their pension plans by hundreds of millions of dollars. The challengers are now 3-0 in the federal appellate courts. The response petition was due Sept. 14.
Funding for Planned Parenthood is the target of the moment, both in Congress and in the state legislatures.
So far, federal courts have blocked three states—Florida, Ohio and Utah—from enforcing laws that withhold funding used by Planned Parenthood affiliates to pay for non-abortion related programs ( Planned Parenthood of Sw. & Cent. Fla. v. Philip, 2016 BL 272830 (N.D. Fla. 2016); Planned Parenthood of Greater Ohio v. Hodges, 2016 BL 262243, S.D. Ohio, No. 1:16-cv-539, 8/12/16 ; and Planned Parenthood Ass'n of Utah v. Herbert, 2016 BL 222779, 10th Cir., No. 15-cv-4189, 7/12/16 ).
The Tenth Circuit case could be headed to the Supreme Court, but there's no word on that yet. Florida hasn't yet appealed the district court's decision, while Ohio Sept. 6 filed a notice of appeal to the U.S. Court of Appeals for the Sixth Circuit.
Bloomberg Philanthropies provides financial support for Planned Parenthood.
Hospitals that rely on a charitable purposes exemption from property taxes have been closely watching recent cases that are testing whether cash-strapped state and local governments can strip away those exemptions and start taxing the hospitals.
In particular, the Illinois Supreme Court is considering whether a state law that allows nonprofit hospitals to accumulate charity care credits to use in qualifying for the exemption violates the state constitution's restrictions on exemptions from property tax ( Carle Found. v. Cunningham Twp., Ill., No. 120427, leave to appeal granted 5/25/16 ).
A federal appeals court is considering an antitrust case brought by one of the largest telemedicine providers in the country against the Texas Medical Board.
Teledoc Inc. alleged that the board violated the federal antitrust laws when implementing a rule requiring in-person consultation before a doctor can prescribe certain drugs. A federal trial judge denied the board's claim that it was exempt from such a suit under the state-action doctrine. The board appealed to the U.S. Court of Appeals for the Fifth Circuit ( Teladoc v. Texas Med. Bd., 5th Cir., No. 16-50017, notice of appeal 1/8/16 ).
The federal appeals court is currently accepting briefs on the matter, although at least one friend of the court brief has questioned whether the Fifth Circuit has jurisdiction to hear the case, since the trial court's denial of the board's motion to dismiss wasn't a final, dispositive order.
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