Category Archives: Lawsuit

Judge dismisses FTC’s antitrust suit against Welsh Carson

Posted on by • Posted in Antitrust, Competition, Dept of Justice (DOJ), Federal Trade Commission, Federal Trade Commission (FTC), Law Enforcement, Lawsuit, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Private Equity • Leave a comment
https://www.healthcaredive.com/news/ftc-welsh-carson-usap-lawsuit-texas-dismissed/716080/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202024-05-15%20Healthcare%20Dive%20%5Bissue:62072%5D&utm_term=Healthcare%20Dive

Regulators sued the PE firm last year for consolidating anesthesiology services in Texas with its portfolio company, U.S. Anesthesia Partners. Now, a judge is holding Welsh Carson blameless.

A Texas federal judge has dismissed the Federal Trade Commission’s antitrust lawsuit against Welsh, Carson, Anderson and Stowe in a big win for the private equity firm. However, the government’s suit against Welsh Carson’s portfolio company U.S. Anesthesia Partners was allowed to continue.

Last year, the FTC sued Welsh Carson and USAP, alleging they pursued a buying spree of anethesiology practices in Texas to create a dominant provider that used its market power to suppress competition and increase the cost of anesthesiology services.

Welsh Carson, which formed USAP in 2012, has since whittled down its ownership of the provider from more than 50% to 23%, and argued that precludes it from being included in the suit. The FTC argued the firm effectively remains in control of USAP.

However, U.S. District Judge Kenneth Hoyt granted Welsh Carson’s motion to dismiss the suit on Tuesday, essentially finding that private equity firms are not liable for the actions of their portfolio companies.

The FTC was unable to prove “any authority for the proposition that receiving profits from an entity that may be violating antitrust laws is itself a violation of antitrust laws,” Hoyt wrote in his opinion.

Hoyt found that Welsh Carson holding a minority share in USAP does not reduce competition, despite USAP’s acquisitions potentially being anticompetitive themselves. In addition, comments from Welsh Carson executives expressing a desire to consolidate other healthcare markets don’t show that the PE firm plans to violate antitrust laws.

If Welsh Carson signals “beyond mere speculation and conjecture” that it’s actually about to violate the law, the FTC can lodge a new lawsuit, the judge wrote.

A spokesperson for Welsh Carson said the firm is “gratified” that the court dismissed the case.

”As we have said from the beginning, this case was without factual or legal basis,” the spokesperson said.

However, Hoyt denied USAP’s motion to dismiss.

The FTC is arguing that USAP — which is the largest anesthesia practice in Texas — leveraged its size to raise prices in the state, resulting in patients, employers and insurers paying tens of millions of dollars more each year for anesthesia services. In addition, USAP allegedly paid a competitor, Envision Healthcare, $9 million to stay out of the Dallas market for five years.

USAP has been criticized for using similar practices to grow in other states, including Colorado.

USAP argued the FTC was overreaching its authority, and regulators’ allegations of anticompetitive conduct were meritless. Hoyt disagreed, pointing out that USAP continues to own the acquired anesthesia groups and continues to charge high prices, including under price-setting agreements. Overall, USAP’s “monopolization scheme remains intact,” according to the opinion.

“The FTC has plausibly alleged acquisitions resulting in higher prices for consumers, along with a market allocation and price-setting scheme. It would be premature to dismiss these claims at this stage,” Hoyt said.

Either way, the dismissal against Welsh Carson is a setback for the FTC, which has taken a more aggressive stance against anticompetitive behaviors in the healthcare industry under the Biden administration.

In December, the FTC and the Department of Justice finalized new guidelines for merger reviews taking aim at previously overlooked practices. Those include private equity roll-ups, when firms acquire and merge multiple small businesses into one larger company — like Welsh Carson’s strategy to grow USAP.

PE firms have acquired hundreds of physician practices across the U.S. in recent years, despite controversy over negative effects on medical quality and cost. One study from 2022 found when private equity took over physician practices, they raised prices by 20% on average.

The FTC declined to comment for this story.

HHS finalizes revised dispute resolution process for 340B program

Posted on by • Posted in Dept of Health and Human Services (HHS), Dispute Resolution, Health System, Hospital, Hospital Industry, Lawsuit, Medicare 340B Drug Discount Program, Pharmaceutical Industry • Leave a comment

https://www.kaufmanhall.com/insights/blog/gist-weekly-april-26-2024

Late last week, the Department of Health and Human Services (HHS) published a final rule establishing a new administrative dispute resolution process for the 340B drug discount program.

A panel, composed of government experts from the Office of Pharmacy Affairs, will resolve claims raised by covered entity providers about drugmakers overcharging them for 340B drugs, as well as claims from pharmaceutical companies that covered entities are diverting or duplicating discounts improperly. The new process, which will go into effect in mid-June, allows the panel to review claims on issues related to those pending in federal court. It’s intended to be “more accessible, administratively feasible, and timely” than a prior process established by HHS in 2020 that was paused after legal challenges.

The Gist: 

This new 340B dispute resolution process is likely to see extensive use, as battles between providers and drugmakers over the drug discount program have heated up significantly in recent years. There are more than 50 ongoing court cases related to the program, many of which concern actions taken by at least 20 major drugmakers to restrict 340B sales to contract pharmacies. Although this new process may provide more effective dispute resolution, none of its decisions can be considered final until courts have settled the myriad cases before them.

    US Anesthesia Partners settles with Colorado regulators

    Posted on by • Posted in Anesthesia, Antitrust, Attorney General, Competition, Federal Trade Commission, Federal Trade Commission (FTC), Lawsuit, Lawsuit Settlement, Monopoly, Monopoly Behavior, Private Equity • Leave a comment

    https://mailchi.mp/fc76f0b48924/gist-weekly-march-1-2024?e=d1e747d2d8

    Dallas, TX-based US Anesthesia Partners (USAP), one of the nation’s largest providers of anesthesia services, reached a settlement with the Colorado Attorney General’s Office, which had alleged that USAP engaged in anticompetitive behavior in the state.

    Although it denies any wrongdoing, USAP agreed to relinquish exclusive contracts with five Colorado hospitals and revise its practice of adding noncompete agreements to its physician contracts.

    This settlement is separate from the similar FTC suit against USAP and its creator-turned-minority owner, private-equity (PE) firm Welsh, Carson, Anderson, and Stowe. That suit, filed in federal district court in Texas in September 2023, alleges that USAP monopolized the Texas anesthesiology market in order to drive up prices unlawfully. 

    The Gist: USAP isn’t the only large anesthesia group in the news this week for allegations of anticompetitive behavior—hospitals in New York and Florida are suing North American Partners in Anesthesia, claiming it stifles competition by forcing its physicians to sign noncompete agreements. 

    Health systems and regulators are increasingly dissatisfied with the highly concentrated anesthesia provider market, which has become dominated by large, PE-backed groups. 

    Because the Colorado case was settled out of court, no precedent has been established for antitrust enforcement, but the result of the ongoing FTC suit against USAP may have significant ramifications for other large, PE-backed physician organizations.

    Humana sued over alleged 340B underpayments in Medicare Advantage

    Posted on by • Posted in Health System, Lawsuit, Medicare 340B Drug Discount Program, Medicare Advantage, Pharmaceutical Industry • Leave a comment
    https://www.healthcaredive.com/news/humana-baptist-health-340B-medicare-advantage-lawsuit/707377/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Healthcare%20Dive:%20Daily%20Dive%2002-17-2024&utm_term=Healthcare%20Dive%20Weekender

    Alabama-based Baptist Health argued the insurer had received a “windfall” due to illegal payment cuts in the 340B drug discount program.

    Dive Brief:

    • An Alabama health system is suing Humana for allegedly underpaying for outpatient drugs provided under the 340B drug discount program to Medicare Advantage patients.
    • Baptist Health said reimbursements for the medications were determined by a payment model that was later invalidated, and the insurer continues to benefit from a “windfall” of underpayments due to the health system, according to the lawsuit. 
    • The suit comes months after the CMS finalized a rule that aimed to fix years of illegal payment cuts in the 340B program. Hospitals had previously argued the solution didn’t consider how MA insurers would benefit financially from the remedy. 

    Dive Insight: 

    The 340B program requires pharmaceutical companies to give discounts — which can range from 25% to 50% of the medication’s cost — to providers who serve low-income communities. 

    The program aims to help safety-net providers better serve vulnerable groups, and it has grown significantly since 340B was created in 1992. 

    But in 2018, the CMS cut Medicare payments for certain drugs acquired under the 340B program, setting off a legal challenge that hospitals eventually won in front of the Supreme Court four years later. 

    To fix the underpayments, regulators decided to pay each hospital in 340B a lump sum that would total $9 billion overall. But the fix needed to be budget neutral, so the CMS would cut payments to all hospitals for non-drug items and services over 16 years. 

    In comments on the proposal, the American Hospital Association argued there was a “significant problem” with the plan, noting many MA insurers pay hospitals according to traditional Medicare rates.

    Payers would benefit from reducing the non-drug payments to hospitals, and wouldn’t be required to repay 340B providers for the lower payments between 2018 and 2022, commenters argued on the rule, which was finalized in November. 

    In response, regulators said they appreciated the concerns, but that they were outside the scope of the rule and “CMS cannot interfere in the payment rates that MAOs [Medicare Advantage organizations] set in contracts with providers and facilities.”

    In the Baptist lawsuit, the health system reported it contacted Humana multiple times about retroactive adjustments and remedy payments, but the insurer’s counsel disputed any obligation to make those payments.

    “Humana’s refusal to act has worked a substantial windfall to Humana as it continues to hold funds provided by CMS for Humana’s Medicare Advantage plans without reimbursing Baptist Health for the amounts owed to it under the Agreement,” the system said in the lawsuit.

    Humana said it does not comment on ongoing litigation.

    Two Lawsuits. Two Issues. One Clear Message.

    Posted on by • Posted in Business Practices, Community Benefit, Competition, Health System, Hospital, Hospital Industry, Lawsuit, Market Consolidation, Market Power, Pharmacy Benefits Management, Price Transparency, Profit Motive, Public Good, Public Trust, Self Insured Employer Liability, Self Insured Employers • Leave a comment
    Two Lawsuits. Two Issues. One Clear Message.

    Last Monday, two lawsuits were filed that strike at a fundamental challenge facing the U.S. health system:

    In the District Court of NJ, a class action lawsuit (ANN LEWANDOWSKI v THE PENSION & BENEFITS COMMITTEE OF JOHNSON AND JOHNSON) was filed against J&J alleging the company had mismanaged health benefits in violation of the Employee Retirement Income Security Act (“ERISA”). As noted in the 74-page filing “This case principally involves mismanagement of prescription-drug benefits. “Over the past several years, defendants breached their fiduciary duties and mismanaged Johnson and Johnson’s prescription-drug benefits program, costing their ERISA plans and their employees millions of dollars in the form of higher payments for prescription drugs, higher premiums, higher deductibles, higher coinsurance, higher copays, and lower wages or limited wage growth… Defendants’ mismanagement is most evident in (but not limited to) the prices it agreed to pay one of its vendors—its Pharmacy Benefits Manager (“PBM”)—for many generic drugs that are widely available at drastically lower prices.”

    The issue is this: what liability risk does a self-insured employer have in providing health benefits to their employees?

    Is the structure of the plan, the selection of providers and vendors, and costs and prices experienced by employees subject to litigation? What’s the role of the employer in protecting employees against unnecessary costs?

    On the same day, in the District Court of Eastern Wisconsin, an 85-page class action lawsuit was filed against Advocate-Aurora Health (AAH) claiming it “uses its market power to raise prices, limit competition and harm consumers in Wisconsin:

    • Forces commercial health plans to include all its “overpriced facilities” in-network even when they would prefer to include only some facilities.
    • Goes to “extreme efforts to drive out innovative insurance products that save commercial health plans and their members money.”
    • Suppresses competition through “secret and restrictive contract terms that have been the subject of bipartisan criticism.”
    • Acquires new facilities, which then allows it to raise prices due to reduced competition

    … without intervention, the health system will continue to use “anticompetitive contracting and negotiating tactics to raise prices on Wisconsin commercial health plans and their members and use those funds for aggressive acquisitions and executive compensation.”

    The issue is this: is a health system’s liable when its consolidation activities result in higher prices for services provided communities and employers in communities where they operate?

    Is there a direct causal relationship between a system’s consolidation activities and their prices, and how should alleged harm be measured and remedied?

    Two complicated issues for two reputable mega-players in the U.S. health system. Both lawsuits were brought as class actions which guarantees widespread media attention and a protracted legal process. And each contributes directly to the gradual erosion of public trust in the health system since the plaintiffs essentially claim the business practices of J&J and Advocate-Aurora willfully harm the individuals they pledge to serve.

    In the November 2023 Keckley Poll, I asked the sample of 817 U.S. adults to assess the health system overall. The results were clear:

    • 69% think the system is fundamentally flawed and in need of major change vs. 7% who think otherwise.
    • 60% believe it puts its profits above patient care vs. 13% who disagree.
    • 74% think price controls are needed vs. 7% who disagree.
    • 83% believe having health insurance that’s ‘affordable and comprehensive’ is essential to financial security vs 3% who disagree.
    • 52% feel confident in their ability to navigate the U.S. system “when I have a problem” vs. 32% who have mixed feelings and 16% who aren’t.
    • And 76% think politicians avoid dealing with healthcare issues because they’re complex and politically risky vs/ 6% who think they tackle them head-on.

    The poll also asked their level of trust and confidence in five major institutions “to develop a plan for the U.S. health system that maximizes what it has done well and corrects its major flaws.”

    Clearly, trust and confidence in the health system is low, and expectations about solutions fall primarily on hospitals and doctors. Lawsuits like these widen suspicion that the industry’s dominated first and foremost by Big Businesses focused on their own profitability before all else. And they pose particular problems for sectors in healthcare dominated by not-for-profit and public ownership i.e. hospitals, home care, public health agencies and others.

    My take

    These lawsuits address two distinct issues: the roles of employers in designing their health benefits for employees including the use of PBMs, and the justification for consolidation of hospital and ancillary services in markets. 

    But each lawsuit s predicated on a legal theory that prices set by organizations are geared more to corporate profits than public good and justifiable costs.

    Pricing is the Achilles of the health system. Pushback against price transparency by some, however justified, has amplified exposure to litigation risk like these two  and contributed to the public’s loss of trust in the system.

    It is unlikely greater price transparency and business practice disclosures by J&J and Advocate-Aurora could have avoided these lawsuits, but it’s clearly a message that needs consideration in every organization.

    Healthcare organizations and their trade groups can no longer defend against lack of transparency by defaulting to the complexity of our supply chains and payment systems. They’re excuses. The realities of generative AI and interoperability assure information driven healthcare that’s publicly accessible and inclusive of prices, costs, outcomes and business practices. In the process, the public’s interest will heighten and lawsuits will increase.

    P.S. Nashville is known as a hot spot for healthcare innovation including transparency solutions. Check out this meeting February 29: https://www.eventbrite.com/e/leaping-into-the-future-of-healthcare-2024-insights-tickets-809310819447

    Resources

    Lawsuit 119120873885 (documentcloud.org)

    Microsoft Word – Aurora Class Action Complaint (FINAL filed Feb. 5 2024) (aboutblaw.com) February 5, 2024

    Nurse sues UPMC over alleged labor abuses

    Posted on by • Posted in Antitrust, Class Action Lawsuit, Health System, Hospital, Hospital Industry, Labor Abuses, Labor Relations, Labor Spend Management, Lawsuit, Market Consolidation, Market Power, Market Share, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Nurses, Unfair Business Practices, Unfair Labor Practices • Leave a comment
    https://www.healthcaredive.com/news/nurse-sues-upmc-monopoly-labor-abuse-pennsylvania/705287/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202024-01-23%20Healthcare%20Dive%20%5Bissue:58423%5D&utm_term=Healthcare%20Dive

    The lawsuit filed in federal court seeks to represent thousands of other UPMC employees.

    Dive Brief:

    • A nurse is suing the University of Pittsburgh Medical Center for allegedly leveraging its monopoly control over the employment market in Pennsylvania to keep wages down and prevent workers from leaving for competitors, all while increasing their workload.
    • The lawsuit, filed late last week in a federal court, seeks class action status to represent other staff at the nonprofit health system. Plaintiff Victoria Ross, who worked as a nurse at UPMC Hamot in Erie, Pennsylvania, seeks damages and is asking the judge to enjoin UPMC from continuing its unfair business practices.
    • If granted class action status, the lawsuit could represent thousands of current and former UPMC workers, including registered nurses, medical assistants and orderlies. UPMC has denied the allegations in statements to other outlets but did not respond to a request for comment by time of publication.

    Dive Insight:

    UPMC has grown steadily over the past few decades into the largest private employer in Pennsylvania, employing 95,000 workers overall.

    From 1996 to 2018, the system acquired 28 competing healthcare providers, greatly expanding its market power, according to the lawsuit. The acquisitions also shrunk the availability of healthcare services. Over the same period, UPMC closed four hospitals and downsized operations in three other facilities, eliminating 1,800 full- and part-time jobs, the lawsuit said.

    UPMC relied on “draconian” mobility restrictions and labor law violations to lock employees into lower pay and subcompetitive working conditions, according to the 44-page complaint.

    Specifically, the system enacted restraints like noncompete clauses and “do-not-rehire blacklists” to stop workers from leaving. Meanwhile, UPMC allegedly suppressed workers’ labor law rights to prevent them from unionizing.

    “Each of these restraints alone is anticompetitive, but combined, their effects are magnified. UPMC wielded these restraints together as a systemic strategy to suppress worker bargaining power and wages,” the lawsuit said. “As a result, UPMC’s skilled healthcare workers were required to do more while earning less — while they were also subjected to increasingly unfair and coercive workplace conditions.”

    According to the complaint, UPMC has faced 133 unfair labor practice charges since 2012, and 159 separate allegations. Roughly 74% of the violations were related to workers’ efforts to unionize, the lawsuit said.

    Meanwhile, UPMC workers’ wages have fallen at a rate of 30 to 57 cents per hour on average compared to other hospital workers for every 10% increase in UPMC’s market share, said the lawsuit, citing a consultant’s economic analysis.

    The lawsuit also noted that UPMC’s staffing ratios have been decreasing, even as staffing ratios on average have increased at other Pennsylvania hospitals.

    The alleged labor abuses and UPMC’s market power are linked, according to the complaint.

    “Had UPMC been subject to competitive market forces, it would have had to raise wages to attract more workers and provide higher staffing levels in order to avoid degrading the care it provided to its patients, and in order to prevent losing patients to competitors who could provide better quality care,” the lawsuit said.

    UPMC is facing similar labor allegations. In May, two unions filed a complaint asking the Department of Justice to investigate labor abuses at the nonprofit.

    Hospitals were plagued by staffing shortages during the COVID-19 pandemic. Many facilities still bemoan the difficulty of hiring and retaining full-time workers, and point to shortages (of nurses in particular) as the reason for overworked employees and poor staffing ratios.

    Yet some studies suggest that’s not the case. One recent analysis of Bureau of Labor Statistics data found employment in hospitals — including registered nurses — is now slightly higher than it was at the start of the pandemic.

    Despite the controversy, UPMC — which now operates 40 hospitals with annual revenue of $26 billion — continues to try and expand its market share. Late last year, the system signed a definitive agreement to acquire Washington Health Care Services, a Pennsylvania system with more than 2,000 employees and two hospitals. The deal faces pushback from local unions.

    Seattle Children’s sues Texas attorney general

    Posted on by • Posted in Attorney General, Gender-affirming Care, Health System, HIPAA, Hospital, Hospital Industry, Lawsuit, Patient Privacy, Protected Health Information (PHI), Reproductive Care, The Shield Law • Leave a comment
    https://www.beckershospitalreview.com/legal-regulatory-issues/seattle-childrens-sues-texas-attorney-general.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

    Seattle Children’s Hospital has filed a lawsuit against the Texas Office of the Attorney General after the agency requested documents related to gender transition policies and such care provided to Texas children, NBC affiliate KXAN reported Dec. 20.  

    In a lawsuit filed Dec. 7, Seattle Children’s argues that the Texas attorney general does not have the jurisdiction to demand patient records from the hospital. It also states that Washington’s Shield Law, signed by Gov. Jay Inslee on April 27, protects it from requests made by states that “restrict or criminalize reproductive and gender-affirming care,” according to the report. 

    The Shield Law creates a cause of action for interference with protected healthcare services, which protects against lawsuits filed in other states related to reproductive or gender-affirming care that is lawful in Washington. Those harmed by such out-of-state lawsuits can also file a countersuit in Washington for damages and recover their costs and attorneys’ fees.

    The Texas attorney general said it is investigating misrepresentations involving gender transitioning and reassignment treatments and procedures that allegedly violated the Texas Deceptive Trade Practices-Consumer Protection Act. It has demanded that Seattle Children’s provide the following documents:

    • All medications prescribed by the hospital to Texas children
    • The number of Texas children treated by the hospital
    • Diagnosis for every medication provided by the hospital to Texas children
    • Texas labs that performed tests for the hospital before prescribing medications
    • Protocol/guidance for treating Texas children diagnosed with gender identity disorder, gender dysphoria or endocrine disorders
    • Protocol/guidance on how to “wean” a Texas child off gender transitioning care

    Seattle Children’s maintains that it does not have property, accounts, nor employees who provide gender-affirming care or administrative services for that care in Texas, according to affidavits obtained by KXAN. Hospital leaders also said that Seattle Children’s has not marketed or advertised this type of care in Texas either. 

    Attorneys for the hospitals argue that the demands are an “improper attempt” to enforce Texas’ SB 14 bill — signed June 2 by Gov. Greg Abbott — and investigate healthcare services that did not occur in Texas.

    “Seattle Children’s took legal action to protect private patient information related to gender-affirming care services at our organization sought by the Texas attorney general,” a spokesperson for the hospital told Becker’s. “Seattle Children’s complies with the law for all healthcare services provided. Due to active litigation, we cannot comment further at this time.”

    The Texas attorney general’s office did not respond to Becker’s request for comment.  

    Indiana system to pay $345M in case tied to physician pay

    Posted on by • Posted in Corporate Integrity Agreement, Dept of Health and Human Services (HHS), False Claims Act, Health System, Lawsuit, Lawsuit Settlement, Leadership Integrity, Leadership Intent, Patient Referrals, Patient Volume, Physician Compensation, Whistleblower Lawsuit • Leave a comment
    https://www.beckershospitalreview.com/legal-regulatory-issues/indiana-system-to-pay-345m-in-case-tied-to-physician-pay.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

    Indianapolis-based Community Health Network has agreed to a $345 million settlement to resolve allegations that, dating back to 2008, it violated the False Claims Act and Stark law.

    The settlement, announced Dec. 19, stems from a whistleblower complaint filed in 2014 by the nonprofit health system’s former CFO and COO under the qui tam provisions of the False Claims Act. 

    The United States filed suit against CHN in 2020, alleging that the system violated the False Claims Act by knowingly submitting claims to Medicare for services that were referred in violation of the Stark law, which requires that the compensation of employed physicians be fair market value and cannot account for the volume of referrals. 

    The U.S. complaint alleged that, starting in 2008, CHN’s senior management engaged in a scheme to recruit physicians for employment with outsized pay in an effort to secure profitable referrals. The salaries offered to cardiologists, cardiothoracic surgeons, vascular surgeons, neurosurgeons and breast surgeons for CHN employment were sometimes up to double what physicians earned in private practices, the complaint alleged. 

    The government alleged that CHN provided false compensation information to a valuation firm, ignored the consultants’ warnings about legal risks of overcompensation and awarded bonuses to physicians based on their referrals to providers within the CHN network. 

    CHN said the $345 million settlement will be paid from its reserves, which reported operating revenue of $3.1 billion in 2022. The nonprofit system has more than 200 sites of care and affiliates throughout Central Indiana, including 10 hospitals. 

    “This is completely unrelated to the quality and appropriateness of the care Community provided to patients,” CHN Spokesperson Kris Kirschner said in a statement shared with Becker’s. “This settlement, like those involving other health systems and hospitals, relates to the complex, highly regulated area of physician compensation. Community has consistently prioritized the highest regulatory and ethical standards in all our business processes.” 

    The system said it “has always sought to compensate employed physicians based on evolving industry best practices with the advice of independent third parties” and “has always sought to provide complete and accurate information to our third-party consultants.” 

    “When doctors refer patients for CT scans, mammograms or any other medical service, those patients should know the doctor is putting their medical interests first and not their profit margins,” Zachary Myers, U.S. attorney for the Southern District of Indiana, said in the Justice Department news release. 

    “Community Health Network overpaid its doctors. It also paid doctors bonuses based on the amount of extra money the hospital was able to bill Medicare through doctor referrals,” Mr. Myers said. “Such compensation arrangements erode patient trust and incentivize unnecessary medical services that waste taxpayer dollars.”  

    Under the settlement, CHN will enter into a five-year corporate integrity agreement with HHS in addition to its $345 million payment to the U.S.

    Former Kaiser nurse awarded $41M in retaliation lawsuit

    Posted on by • Posted in Health System, Hospital, Hospital Industry, Kaiser Permanente, Lawsuit, Lawsuit Retaliation, Nurse Registered (RN), Nurses, Patient Safety, Quality, Quality of Care • Leave a comment
    https://www.beckershospitalreview.com/nursing/former-kaiser-nurse-awarded-41m-in-retaliation-lawsuit.html?origin=PayerE&utm_source=PayerE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

    A Los Angeles jury awarded $41.49 million to a former nurse who said Kaiser Permanente’s hospitals and health plan retaliated against and eventually terminated her for raising issues with patient safety and care quality, MyNewsLA reported Dec. 12.

    The former nurse, Maria Gatchalian, was awarded $11.49 million in compensatory damages, including $9 million for emotional distress, and $30 million in punitive damages.

    “We stand by her termination and are surprised and disappointed in the verdict,” Murtaza Sanwari, senior vice president and area manager for Kaiser Permanente Woodland Hills/West Ventura County, told Becker’s in a statement. “Kaiser Permanente plans to appeal this decision and will maintain our high standards in protecting the health and safety of all our patients.” 

    Before her termination in 2019, Ms. Gatchalian had worked at the Kaiser Permanente Woodland Hills Medical Center since 1989, first as a registered nurse in the neonatal intensive care unit and later as a charge nurse in that unit.

    According to MyNewsLA, Ms. Gatchalian said she had repeatedly raised concerns with Kaiser management about patient safety and care quality related to alleged understaffing and was discouraged from submitting formal complaints. Oakland, Calif.-based Kaiser argued in court that Ms. Gatchalian admitted she had placed her bare feet on equipment in the NICU, and the organization made the decision to terminate her following her conduct.

    “We work hard to make Kaiser Permanente a great place to work and a great place to receive care,” Mr. Sanwari said. “The allegations in this lawsuit are at odds with the facts we showed in the courtroom.” 

    “To be clear, this charge nurse’s job was to be a leader for other nurses, ensure the standards of care were followed and to protect the neonatal babies entrusted to our care. She was terminated in 2019 following an incident where she was found sitting in a recliner in the neonatal intensive care unit, on her personal phone and resting her bare feet on an isolette with a neonatal infant inside. Neonatal intensive care units are critical care units designed for critically ill babies most often born prematurely and very susceptible to infections.

    The isolette, where this nurse placed her bare feet, is a protective environment designed to shield the infant from infection causing germs. Placing her bare feet on the isolette may have created risk to the infant which could have been life threatening. Her actions were egregious and in violation of our infection control policies and standards.”

    The ACA’s Promise of Free Preventive Health Care Faces Ongoing Legal Challenges

    Posted on by • Posted in ACA, Dept of Health and Human Services (HHS), District Court, District Court of Appeals, Health Policy, Lawsuit, Medicaid, Preventable Disease, Preventative Care, Prevention, Preventive Screening, Public Health, Quality of Care, Supreme Court, United States Preventive Services Task Force (USPSTF) • Leave a comment
    https://www.commonwealthfund.org/blog/2023/acas-promise-free-preventive-health-care-faces-ongoing-legal-challenges?utm_campaign=Achieving%20Universal%20Coverage&utm_medium=email&_hsmi=279218032&_hsenc=p2ANqtz-9zDeEtOawTu_XlAtH44MhtF0pskow9Np3hYpbHYjISSFzah0E6zBTL84n3AeOQ8gGyhdTdr6AtdEF017WhYC8AnMM58A&utm_source=alert

    An ongoing legal challenge is threatening the guarantee of free preventive care in the Affordable Care Act (ACA).

    Six individuals and the owners of two small businesses sued the federal government, arguing that the ACA provision “makes it impossible” for them to purchase health insurance for themselves or their employees that excludes free preventive care. The plaintiffs argue that they do not want or need such care. They specifically name the medication PrEP (used to prevent the spread of HIV), contraception, the HPV vaccine, and screening and behavioral counseling for sexually transmitted diseases and substance use; however, they seek to invalidate the entire ACA preventive benefit package.

    A federal trial court judge agreed with some of their claims and invalidated free coverage of more than 50 services, including lung, breast, and colon cancer screenings and statins to prevent heart disease.

    This ruling, which is currently being appealed, strips free preventive services coverage from more than 150 million privately insured people and approximately 20 million Medicaid beneficiaries who are covered under the ACA’s Medicaid expansion.

    This suit was first filed in 2020. The plaintiffs in the case, Braidwood Management v. Becerra, continue to oppose the entire preventive benefit package, which consists of four service bundles: services rated “A” or “B” by the United States Preventive Services Task Force (USPSTF); routine immunizations recommended by the Advisory Committee on Immunization Practices (ACIP); evidence-informed services for children recommended by the Health Resources and Services Administration (HRSA); and evidence-informed women’s health care recommended by HRSA. The trial judge invalidated all benefits recommended by the USPSTF after March 23, 2010, the date the ACA became law. (The court also exempted the plaintiffs on religious grounds from their obligation to cover PrEP.) The Fifth Circuit put the trial court’s decision on temporary hold while the case is on appeal.

    The Fifth Circuit, one of the nation’s most conservative appeals courts, will hear the Biden administration’s appeal of the trial court’s USPSTF ruling and the entirety of the plaintiffs’ original challenge, thereby putting all four coverage guarantees in play. The court also will hear whether the ruling should apply only to the plaintiffs or to all Americans.

    The trial court held that the USPSTF lacks the legal status necessary under the Constitution to make binding coverage decisions, and that the Secretary of the U.S. Department of Health and Human Services (HHS) — who can make such binding decisions — lacks the power to rectify matters by formally adopting USPSTF recommendations. The judge concluded that federal law fails to require that members be presidential nominees confirmed by the Senate under the Appointments Clause; in the judge’s view, this means that members are not politically accountable for their decisions, which is constitutionally problematic. The judge also ruled that federal law makes the USPSTF the final coverage arbiter, which means that the HHS Secretary, who is nominated and confirmed under the Appointments Clause and thus politically accountable, cannot cure the constitutional problem by ratifying USPSTF recommendations.

    On appeal, the Biden administration argues that the USPSTF passes constitutional muster because the HHS Secretary, who oversees the Task Force, is a nominated and confirmed constitutional officer. Alternatively, the administration argues the appeals court should interpret the statute as allowing the HHS Secretary to ratify USPSTF recommendations, since the law specifies that USPSTF members are independent of political pressure only “to the extent practicable.” The administration makes similar arguments on behalf of ACIP and HRSA.

    The plaintiffs argue that secretarial ratification cannot cure the constitutional problems with all three advisory bodies. According to the plaintiffs, none of the advisory bodies has the status of constitutional officers demanded by the Appointments Clause, and so their recommendations must remain recommendations only, unenforceable by HHS on insurers, health plans, and state Medicaid programs.

    The second issue is the scope of the remedy if the law is found unconstitutional. The trial court did not limit its holding to the four individual plaintiffs and two companies who sued, but instead applied its order nationwide. The Biden administration argues that, if the coverage guarantee is unconstitutional, the court only should prohibit HHS from enforcing the preventive services provision against the plaintiffs who brought the lawsuit and should allow the coverage guarantee to remain in force for the rest of the country. Citing an amicus brief filed by the American Public Health Association and public health deans and scholars, the administration argues that barring HHS from enforcing the preventive services requirement nationwide “pose[s] a grave threat to the public health” by decreasing Americans’ access to lifesaving preventive services. The plaintiffs argue that a nationwide prohibition is necessary, the broader public interest in free preventive coverage is irrelevant, and insurers will voluntarily continue to offer free preventive coverage if people want it.

    The administration’s arguments on appeal have attracted amicus briefs by bipartisan economic scholars, organizations concerned with health equity and preventive health, health care organizations, and 23 states.

    Crucially, the economists point out that, prior to the ACA, comprehensive free preventive coverage was extremely limited because it is not in insurers’ interest to make a long-term economic investment in members’ health. Indeed, prior to the ACA, insurers did not even uniformly cover the basic screenings for newborns to detect treatable illnesses and conditions.

    Amicus briefs supporting the plaintiffs have been filed by Texas and an organization dedicated to “protecting individual liberties . . . against government overreach.” All briefing will be complete by November 3, 2023, with oral argument thereafter. A decision is likely in early to mid-2024. Whatever the outcome, expect a Supreme Court appeal given the size of the stakes in the case.