LexisNexis® Legal Newsroom
    New Jersey Judge Dismisses Wrongful Denial Of Benefits Suit Against Health Insurer

    NEWARK, N.J. - A New Jersey federal judge on June 19 granted an insurer's motion to dismiss a wrongful denial of health care benefits suit against it, saying the plaintiffs failed to provide evidence supporting that the treatments were medically necessary for the patients involved and that the treatments were not "experimental/investigational/unproven" (EIU) (Prospect Medical, et al. v. CIGNA Corp., et al., No. 09-5912, D. N.J.; 2013 U.S Dist. LEXIS 85753).

    Georgia High Court Finds Agency Ruling Does Not Preclude Future Criminal Case

    ATLANTA - The Georgia Supreme Court on June 17 held that an agency-level ruling on whether Medicaid payments can be suspended while the state investigates Medicaid fraud criminal violations cannot preclude a future criminal prosecution under the doctrine of collateral estoppel. The state high court concluded that the state did not have the opportunity to fully litigate the alleged criminal conduct before the administrative law judge and, therefore, cannot be barred from filing criminal fraud charges once the investigation was complete (Tyrone Cecil Malloy v. The State, No. S13A0188, Ga. Sup.; 2013 Ga. LEXIS 546).

    Health Plan's Subrogation Action Is Conflict Preempted, Texas Federal Judge Rules

    DALLAS - The Employee Retirement Income Security Act preempts a health plan's action seeking subrogation from several insurers under the plan's coordination of benefits (COB) provision of benefits it paid to its participants, even though ERISA would not preempt a subrogation action brought by the participants, a federal judge in Texas ruled June 13 (Central States, Southeast and Southwest Areas Health and Welfare Fund v. Health Special Risk, Inc., et al., No. 3:11-CV-2910-D, N.D. Tex.; 2013 U.S. Dist. LEXIS 83400).

    Texas Federal Judge Declines To Dismiss Health Insurer's Counterclaims

    HOUSTON - A Texas federal judge on June 17 declined to dismiss a counterclaim brought by a health insurance company against a health care provider for violations of the Employee Retirement Income Security Act and state law claims (Access Mediquip v. UnitedHealth Group Inc., et al., No. 09-2965, S.D. Texas; 2013 U.S. Dist. LEXIS 84343).

    Judge Dismisses Kickback Claims, Allows Off-label Marketing Claim To Continue

    PHILADELPHIA - A Pennsylvania federal judge on June 13 dismissed kickback claims from a qui tam False Claim Act (FCA) case in which a pharmaceutical company is accused of wrongfully marketing one of its prescription drugs, thereby causing the submission of false claims to the government under Medicare and Medicaid, but allowed off-label marketing claims to continue (United States of America, ex rel. Donald R. Galmines, et al. v. Novartis Pharmaceuticals Corp., No. 06-3213, E.D. Pa.; 2013 U.S. Dist. LEXIS 83100).

    Participant May Seek Money Damages As Equitable Relief, 7th Circuit Holds

    CHICAGO - "Appropriate equitable relief" available under Employee Retirement Income Security Act Section 502(a)(3) includes a make-whole recovery of the expenses a plan participant incurred as the direct result of a fiduciary's breach by misrepresenting the plan's coverage, the Seventh Circuit U.S. Court of Appeals ruled June 13, citing the U.S. Supreme Court's ruling in Cigna Corp. v. Amara (131 S.Ct. 1866 $(2011$)) (Deborah A. Kenseth v. Dean Health Plan, Inc., No. 11-1560, 7th Cir.; 2013 U.S. App. LEXIS 12083).

    Supreme Court Affirms Decision In Health Care Class Arbitration Dispute

    WASHINGTON, D.C. - In a unanimous opinion, the U.S. Supreme Court on June 10 affirmed that an arbitrator acted within his powers under the Federal Arbitration Act (FAA) in determining that parties affirmatively "agreed to authorize class arbitration" in a case involving a dispute over a health insurer's reimbursement of physicians' claims (Oxford Health Plans LLC v. John Ivan Sutter, M.D., No. 12-135, U.S. Sup.).

    Judge Finds Breach, Bad Faith Claims Against Administrator Not Preempted By ERISA

    ST. LOUIS - An employer's claims related to an insurer's administering and handling of its employee health care plan are sufficiently pleaded to survive a motion for judgment on the pleadings or preemption under the Employee Retirement Income Security Act of 1974 (ERISA), a Missouri federal judge found June 6, ruling in the insurer's favor (Anheuser Busch Companies Inc., et al. v. Connecticut General Life Insurance Co. d/b/a CIGNA, No. 4:12-cv-01333, E.D. Mo.; 2013 U.S. Dist. LEXIS 79564).

    FTC, Hospitals Agree To Preliminary Injunction Halting Merger

    ALBANY, Ga. - A federal judge in Georgia on June 5 approved the terms of a preliminary injunction agreed to by the Federal Trade Commission and Putney Health System Inc., enjoining the further integration of Georgia hospitals (Federal Trade Commission, et al. v. Phoebe Putney Health System Inc., et al., No. 1:11-cv-58, M.D. Ga.; 2013 U.S. Dist. LEXIS 68658).

    Plan Is Exempt From ERISA As Governmental Plan, Judge Rules; Retirees Will Appeal

    NEW ORLEANS - Retirees on June 6 gave notice of their intent to appeal to the Fifth Circuit U.S. Court of Appeals a ruling dismissing their claims that they were wrongfully denied benefits owed them under their employee welfare plan in violation of the Employee Retirement Income Security Act because the plan was exempt from ERISA as a governmental plan (Mary Smith, et al. v. Regional Transit Authority, et al., No. 2:12-cv-03059, E.D. La.).

    New Jersey Federal Judge Declines To Dismiss Medicare False Claims Case

    NEWARK, N.J. - In an unpublished opinion, a New Jersey federal judge on May 31 denied a motion by a seller of spinal cord stimulation systems to dismiss a Medicare False Claims Act suit against it, saying the qui tam plaintiffs had pleaded the claims with the required particularity (United States of America ex rel. et al. v. Boston Scientific Neuromodulation Corp., No. 11-1210, D. N.J.; 2013 U.S. Dist. LEXIS 76612).

    Federal Judge Allows Suit Over Deductions From Pharmacy Accounts To Continue

    OAKLAND, Calif. - A California federal judge on May 31 declined to dismiss a contract dispute involving allegations that a pharmacy benefit manager withdrew deductions from multiple pharmacies' accounts without authorization (Jajco Inc. v. Leader Drugs Stores Inc., et al., No. 12-5703, N.D. Calif.; 2013 U.S. Dist. LEXIS 77830).

    Texas Medicare Beneficiary Denied TRO In Nursing Home Residency Status Dispute

    HOUSTON - U.S. Judge Lee H. Rosenthal of the Southern District of Texas, Houston Division, on May 31 denied a Medicare beneficiary a temporary restraining order (TRO) in her federal lawsuit against Select Specialty Hospital Houston, saying federal courts cannot issue a restraining order enjoining an ongoing state court proceeding. Select had filed its own TRO, seeking a court order requiring Catalina Blanco to vacate the premises and be moved to a lower-level nursing care facility (Catalina Blanco v. Select Specialty Hospital, Houston L.P., No. H-13-1591, S.D. Texas, Houston Div.; 2013 U.S. Dist. LEXIS 77169).

    Federal Judge Dismisses Dispute Over Termination Of Medicare Provider Agreement

    SCRANTON, Pa. - A Pennsylvania federal judge on May 31 granted the government's motion to dismiss a Medicare dispute arising from the termination of a skilled nursing facility's provider agreement for failure to substantially comply with care requirements (Athens Healthcare Inc. v. Kathleen Sebelius, et al., No. 13-1443, M.D. Pa.; 2013 U.S. Dist. LEXIS 77192).

    Judge Denies Injunction To Halt Termination Of Medicare Provider Agreement

    GREENVILLE, Tenn. - A Tennessee federal judge on May 31 denied a motion for a preliminary injunction brought by a nursing home facility seeking to postpone the termination of its Medicare and Medicaid provider agreement (Bristol Health Care Investors v. Mark Emkes, et al., No. 13-137, E.D. Tenn.; 2013 U.S. Dist. LEXIS 76644).

    9th Circuit Affirms Denial Of Dental Services Under Medicare

    PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on May 31 affirmed a district court's judgment affirming the secretary of the U.S. Department of Health and Human Services' (HHS) decisions denying benefits under Medicare for dental services (Ronald Fournier, et al. v. Kathleen Sebelius, No. 12-15478, 9th Cir.; 2013 U.S. App. LEXIS 10997).

    D.C. Court: Stark Act Bars Doctor Group From Self-Referring Patients

    WASHINGTON, D.C. - A federal judge in the District of Columbia on May 24 granted summary judgment to the U.S. Department of Health and Human Services' (DHHS) Centers for Medicare and Medicaid Services (CMS) in a challenge to a Stark Act-based regulation barring physician groups from self-referring patients for "designated health services" (DHS) at a hospital with which the groups have a financial arrangement (Council for Urological Interests v. Kathleen Sebelius, in her official capacity as Secretary of the Department of Health and Human Services, et al., No. 09-cv-0546, D. D.C.; 2013 U.S. Dist. LEXIS 73610).

    9th Circuit Panel Vacates Injunctions Over Medicaid Reimbursement Reductions

    SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel withdrew a previous decision and published a new opinion on May 24 that reverses a district court's decision in four cases and vacates preliminary injunctions prohibiting the California Department of Health Care Services and its director from implementing Medi-Cal reimbursement reductions authorized by the California Legislature and approved by the secretary of the Department of Health and Human Services Managed Pharmacy Care, et al. v. Kathleen Sebelius, et al., Nos. 12-55067, 12-55068, 12-55103, 12-55315, 12-55331, 12-55332, 12-55334, 12-55335, 12-55550, 12-55554, 9th Cir.; 2013 U.S. App. LEXIS 10718).

    Ga. Federal Judge Rules ERISA Preempts Claims; Order Certified For Appeal

    COLUMBUS, Ga. - A health plan's and plan sponsor's state law claims against a medical provider to recover benefits erroneously paid by the plan because of the provider's alleged fraudulent misrepresentations are completely preempted under the Employee Retirement Income Security Act, a federal judge in Georgia ruled May 22 (Aflac, Inc., et al. v. Richard Bloom, No. 4:12-CV-331, M.D. Ga.; 2013 U.S. Dist. LEXIS 72106).

    Rhode Island Federal Judge Finds For Providers In Health Care Contract Dispute

    PROVIDENCE, R.I. - A Rhode Island federal judge on May 22 found in favor of two health care providers in a contract dispute with a health insurer, finding that the plaintiff failed to establish that the treatment provided by the defendants was not a form of mechanical traction covered by the plan (Blue Cross and Blue Shield of Rhode Island v. Jay S. Korsen, et al., No. 09-317L, D. R.I.; 2013 U.S. Dist. LEXIS 72463).

    U.S. Supreme Court Declines To Hear Planned Parenthood Funding Case

    WASHINGTON, D.C. - The U.S. Supreme Court on May 28 declined to reconsider the Seventh Circuit U.S. Court of Appeals' affirmation of a trial court's grant of a preliminary injunction against the Indiana State Department of Health in enforcing a state law stripping Medicaid funds from Planned Parenthood of Indiana Inc. because the agency provides abortions (Secretary of the Indiana Family and Social Services Administration, et al. v. Planned Parenthood of Indiana Inc., Nos. 12-1039, 12-1159, U.S. Sup.).

    Health Insurer Granted Summary Judgment In Denial Of Benefits Suit

    NEWARK, N.J. - A New Jersey federal judge on May 22 granted summary judgment in favor of a health insurer in a wrongful denial of benefits suit, saying that the defendant's decision to deny benefits was not arbitrary and capricious (Montvale Surgical Center LLC v. Aetna Insurance Co., No. 12-2874, D. N.J.; 2013 U.S. Dist. LEXIS 72927).

    Federal Judge Denies Class Certification To Insurance Agents' Fraud Lawsuit

    LEXINGTON, Ky. - A Kentucky federal judge on May 22 denied class certification in a fraud lawsuit between insurance agents and an insurance agency regarding withheld commissions on sold Medicare Advantage plans (Harold David Cowden, et al. v. Parker & Associates Inc., et al., No. 09-323, E.D. Ky.; 2013 U.S. Dist. LEXIS 72253).

    Missouri Federal Judge: Relator's Fraud Suit Based On Nonpublic Information

    ST. LOUIS - A Missouri federal judge on May 20 dismissed a summary judgment motion filed by defendants in a qui tam Federal False Claims Act suit, saying the claims of Medicare and Medicaid fraud filed by relator Health Dimensions Rehabilitation Inc. against RehabCare Group and Rehab Systems Inc. (RSM) are not solely based upon publicly disclosed information but on an investigation by the relator over the course of a year (United States of America ex rel. Health Dimensions Rehabilitation Inc. v. RehabCare Group Inc., et al., No. 4:12CV00848, E.D. Mo., Eastern Div.).

    FTC Entitled To TRO In Merger Case, Georgia Federal Judge Rules

    ALBANY, Ga. - A federal judge in Georgia on May 15 granted the Federal Trade Commission's motion to temporarily enjoin Phoebe Putney Health System Inc. from taking any further steps to consolidate Georgia hospitals and from making any price changes to existing contracts following the U.S. Supreme Court's recent ruling that the state-action doctrine does not immunize the merger from antitrust scrutiny (Federal Trade Commission, et al. v. Phoebe Putney Health System Inc., et al., No. 1:11-cv-58, M.D. Ga.; 2013 U.S. Dist. LEXIS 68658).