- A Texas federal judge recently ruled that certain ambulatory surgery centers could not escape Cigna’s claims that they had violated ERISA by waiving payments for out-of-network patients, but billing their insurers as if the patients had in fact paid. The Cigna subsidiaries that brought the suit argued that this practice caused them to overpay the surgical centers by $8 million. For more information on the suit, see Connecticut General Life Insurance Company et al v. Elite Center For Minimally Invasive Surgery LLC et al, case number 4:16-cv-00571, in the U.S. District Court for the Southern District of Texas.
- A U.S. Tax Court judge recently upheld an IRS distinction between individual and corporate taxpayers requesting relief based on economic hardship. Specifically, a nursing home in Oklahoma had argued that under 26 U.S.C.A. 6343 the IRS’s levy would create economic hardship on the facility and, therefore, the “taxpayer” was entitled to relief. The IRS rebutted that corporations are not eligible for relief under the law cited by the nursing home. The Tax Court agreed with the IRS’s interpretation. For more information on the case, see Lindsay Manor Nursing Home Inc. v. Commissioner of Internal Revenue, case number 24596-14L, in the U.S. Tax Court.
- The Ninth Circuit recently ruled that health care providers’ claims against Blue Cross Blue Shield and Anthem Inc. could not proceed under ERISA, because the providers were not beneficiaries. Specifically, the providers argued that they were assigned the right to receive payment by the beneficiaries of the plans. The Ninth Circuit rejected this argument because remuneration for medical services rendered is not a “benefit” under ERISA. For more on the case, see DB Healthcare LLC et al. v. Blue Cross Blue Shield of Arizona Inc., case number 14-16518, in the U.S. Court of Appeals for the Ninth Circuit.
- The Sixth Circuit recently denied the NLRB’s action to require a Michigan nursing home to bargain with a nurses union, saying that, because the nurses had the ability to discipline other employees, the nurses did not qualify for union membership. In other words, the Sixth Circuit held that the nurses in the facility acted as supervisors, not employees, and, therefore, they were not eligible for unionization. For more information on the case, see National Labor Relations Board v. Lakepointe Senior Care & Rehab Center LLC, case number 16-1310, in the United States Court of Appeals for the Sixth Circuit.
- A New Jersey federal district court recently ruled that the New Jersey Charitable Immunities Act, which either provides immunity or caps liability at $250,000 for certain charities, applies to a nonprofit federally funded clinic facing a medical malpractice claim even though the facility lacked many of the traditional markers of a hospital, such as an emergency room and inpatient acute care facilities. For more information on the case, see Mary Mendez et al. v. U.S. et al., case number 1:14-cv-07778, in the U.S. District Court for the District of New Jersey.
- The Third Circuit recently ruled for Genentech Inc. in an FCA suit brought against the company related to payment for its cancer drug Avastin. Specifically, the Court held that the whistleblower failed to show, in accordance with the U.S. Supreme Court’s decision in United Health Services v. Escobar, that Genentech’s alleged noncompliance was “material” to the government’s payment. For more information on the case, see, U.S. ex rel.Petratos et al. v. Genentech Inc. et al., case number 15-3805, in the U.S. Court of Appeals for the Third Circuit.
- The United States Supreme Court recently ruled to overturn the Kentucky Supreme Court’s refusal to send a wrongful death suit to arbitration, stating that the FAA preempts state laws like Kentucky’s, which requires explicit reference to arbitration in a power of attorney document for consent to such arbitration to be valid. For more information on the case, see Kindred Nursing Centers LP v. Clark et al., case number 16-32, in the Supreme Court of the United States.
The list above does not include every proposed or adopted legislation, litigation or guidance document that may impact the health care industry. Instead, it includes only a select few chosen by the authors, and any information in this Update is not intended to provide legal advice. If you are concerned that a proposed or adopted legislation, litigation or guidance document may impact your practice, then you should seek legal advice. Nothing in this Update should be relied upon as legal advice in any particular matter. © 2017 Riker Danzig Scherer Hyland & Perretti LLP.
If you have any questions about the issues discussed in this Update, please contact the following Riker Danzig attorneys:
Glenn A. Clark, Partner
Khaled John Klele, Partner
Stephen M. Turner, Associate