LexisNexis® Legal Newsroom
    Pharmacies' Monopsony Challenge To Medco, Express Scripts Merger Is Dismissed

    PITTSBURGH - A federal judge in Pennsylvania on June 28 dismissed claims made by pharmacies and pharmacy trade groups that the consummated $29 billion merger of pharmaceutical benefit management (PBM) companies Express Scripts Inc. (ESI) and Medco Health Solutions Inc. gave the merged PBMs monopsony power as purchasers of retail community pharmacy services in state markets (National Association of Chain Drug Stores, et al. v. Express Scripts, Inc., et al., No. 2:12-cv-00395-CB, W.D. Pa.; 2013 U.S. Dist. LEXIS 90763).

    Judge: Challenge To Health Act's Individual Mandate Fails To State Proper Claims

    WASHINGTON, D.C. - A District of Columbia federal judge on June 28 granted the government's motion to dismiss an amended complaint challenging the Patient Protection and Affordable Care Act (PPACA), holding that the suit was foreclosed by a U.S. Supreme Court decision governing the individual mandate and that the act was properly introduced in the House of Representatives (Matt Sissel v. United States Department of Health and Human Services, et al., No. 10-1263, D. D.C.; 2013 U.S. Dist. LEXIS 91071).

    10th Circuit Reverses Denial Of Preliminary Injunction In Birth Control Suit

    DENVER - The 10th Circuit U.S. Court of Appeals on June 27 reversed and remanded with instructions to the lower court an appeal brought by the arts and craft company Hobby Lobby Stores Inc. and its owners, who were challenging a decision denying their request for a preliminary injunction to halt the implementation of a mandate contained in the Patient Protection and Affordable Care Act (PPACA) related to the provision of birth control (Hobby Lobby Stores Inc., et al. v. Kathleen Sebelius, et al., No. 12-6294, 10th Cir.; 2013 U.S. App. LEXIS 13316).

    Plan Administrator That Didn't Supervise TPAs Is Hit With $1.8M COBRA Penalty

    INDIANAPOLIS - A class of 741 former Visteon Corp. employees is entitled to more than $1.8 million in penalties based on the company's failure to provide them with timely notices of their rights to continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a federal judge in Indiana ruled June 25 (Darryl Pierce, et al. v. Visteon Corporation, et al., No. 1:05-cv-01325, S.D. Ind.; 2013 U.S. Dist. LEXIS 88817).

    High Court: Ban On Benefits For Same-Sex Married Couples Unconstitutional

    WASHINGTON, D.C. - In a 5-4 vote, the U.S. Supreme Court on June 26 struck down as unconstitutional Section 3 of the federal Defense of Marriage Act (DOMA), which defines marriage as the legal union between one man and one woman as husband and wife for purposes of all federal statutes. The decision means that same-sex couples married in states that recognize same-sex marriage as legal cannot be denied federal benefits under federal laws in which marital or spousal status is addressed (United States v. Edith Windsor, executor of the estate of Thea Spyer, No. 12-307, U.S. Sup.).

    Summary Reversal Denied In Birth Control Suit; Case Held In Abeyance

    WASHINGTON, D.C. - A panel of the District of Columbia Circuit U.S. Court of Appeals on June 21 denied a motion for summary reversal made by several Catholic groups appealing the dismissal of their case challenging a provision in the Patient Protection and Affordable Care Act (PPACA) mandating that all health plans provide preventive services for free, including those for birth control (Roman Catholic Archbishop of Washington, et al. v. Kathleen Sebelius, et al., No. 13-5091, D.C. Cir.).

    Fla. Appeals Court Reverses Decision, Says Evidence Of Full Medicare Rates Allowed

    LAKELAND, Fla. - In a personal injury case stemming from an automobile accident, a Florida appeals court on June 21 held that a trial court erred in not allowing an insurance company to introduce evidence that future medical expenses could be calculated at lower reimbursement rates under the Medicare program (State Farm Mutual Automobile Insurance Co. v. John Joerg Jr., individually and as natural father and guardian of Luke Augustine Joerg, Nos. 2D11-6229, 2D12-1246, Fla. App., 2nd Dist.; 2013 Fla. App. LEXIS 9840).

    Federal Judge Grants Self-Funded Insurer Judgment In Suit Against Plan Member

    NEW HAVEN, Conn. - A Connecticut federal judge on June 19 granted summary judgment in favor of a self-funded health insurance plan in its suit seeking reimbursement from a plan member, saying that the plan unambiguously foreclosed the application of the equitable defenses asserted by the defendants (Quest Diagnostics v. Talib Bomani, et al., No. 11-951, D. Conn.; 2013 U.S. Dist. LEXIS 85747).

    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).