Broward Health counter-sues former CEO: 5 things to know

https://www.beckershospitalreview.com/legal-regulatory-issues/broward-health-counter-sues-former-ceo-5-things-to-know.html

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Fort Lauderdale, Fla.-based Broward Health’s ex-CEO Pauline Grant sued her former employer in December 2016. The health system fired back in a counter-suit filed Dec. 1, alleging Ms. Grant violated the Anti-Kickback Statute.

Here are five things to know about the litigation.

1. North Broward Hospital District, which does business as Broward Health, claims Ms. Grant violated the system’s code of conduct by serving as secretary of the board of directors of a long-term care provider that had contracts with Broward Health, according to the Sun Sentinel.

2. The health system alleges Ms. Grant’s position on the board violated the terms of a corporate integrity agreement the hospital district entered into with the federal government in 2015. The agreement was put into place after Broward Health paid $69.5 million in September 2015 to settle allegations it violated the False Claims Act by holding improper financial relationships with physicians.

3. Broward Health also claims Ms. Grant violated the Anti-Kickback Statute while she was CEO of Broward Health North in Deerfield Beach, Fla., one of the health system’s six hospitals.

4. Broward Health’s board voted 4-1 on Dec. 1, 2016, to fire Ms. Grant. The board voted to remove Ms. Grant from her position after an independent counsel review showed potential violations of the Anti-Kickback Statute. A subsequent independent investigation found Ms. Grant “ran afoul” of federal anti-kickback law when awarding emergency room contracts to orthopedic physicians seeking to participate in Broward Health North’s on-call emergency department rotation.

5. Following her ouster, Ms. Grant sued Broward Health, accusing the system’s general counsel and four board members of violating the Florida open-meetings law to bring about her termination.

 

Sutter Health destroyed 192 boxes of evidence in antitrust case, judge says

https://www.healthcaredive.com/news/sutter-health-destroyed-192-boxes-of-evidence-in-antitrust-case-judge-says/511300/

Dive Brief:

  • A California superior court judge ruled that Sutter Health intentionally destroyed 192 boxes of documents that were involved in a lawsuit involving employers and labor unions that alleged the health system abused its market power and charged inflated prices, reported California Healthline.
  • The United Food and Commercial Workers and its Employers Benefit Trust initially filed the case in 2014 alleging that Sutter Health required health plans to include all Sutter hospitals in networks.
  • San Francisco County Superior Court Judge Curtis E.A. Karnow said that Sutter knew the evidence “was relevant to antitrust issues” and the company was “grossly reckless.” A Sutter spokeswoman told California Healthline that the incident was a “mistake made as part of a routine destruction of old paper records.”

Dive Insight:

The recent ruling doesn’t put Sutter Health in a great light. The nonprofit system of 24 hospitals based in Sacramento reportedly destroyed documents related to the case —  and its actions miffed the judge in the case.

Of course, this issue goes beyond destroying records, Sutter Health and California. The case involves a growing health system that allegedly increased prices to employers and employees while gaining a larger market foothold.

Mergers and acquisitions continue to become a common way for health systems to reduce costs, resolve inefficiencies and gain a larger market share. However, having one system own a large part of the healthcare market also inflates healthcare prices. Brent Fulton, assistant adjunct professor at Petris Center in the School of Public Health, University of California, Berkeley, recently wrote in a Health Affairs article “reviews of studies of hospital markets have found that concentrated markets are associated with higher hospital prices, with price increases often exceeding 20% when mergers occur in such markets.”

Sutter Health holds more than 45% of the healthcare market share in six Northern California counties. That gives the system leverage over employers. If employers don’t come to an agreement with Sutter Health, employees have limited options in those counties. Sutter Health charges about 25% higher than other California hospitals, according to the University of Southern California.

Those costs are higher if that care is considered out-of-network. Last year, Sutter Health allegedly asked employers to waive their rights to sue and to agree to arbitration following a court ruling that employers and health plans can seek class-action status in a lawsuit pertaining overcharges against Sutter Health. Those who didn’t agree were threatened to lose access to discounted in-network prices and pay higher out-of-network costs.

The court filing states the parties should not expect further orders in the case until after mid-December. Industry experts are awaiting the results as the trend of M&A continues and stakeholders question who the activity is benefiting: the companies or the patient?

 

HHS loses abortion lawsuit

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The D.C. Circuit Court of Appeals yesterday rebuffed the Trump administration’s effort to stop an undocumented teenager from getting an abortion, likely bringing an end to one of the stranger legal sagas of the Trump administration so far.

The D.C. Circuit ordered the Health and Human Services Department to let the woman visit an abortion provider immediately, saying the department had violated her constitutional right to obtain an abortion by refusing to let her leave the detention facility where she’s being held.

Go deeperRead the court’s 6-3 decision.

What’s next: HHS can leave it here, or appeal to the Supreme Court.

Be smart: File this case as potential fodder for future Supreme Court confirmation hearings. Because the ruling came from the full D.C. Circuit, it involves several judges who could be future Supreme Court nominees. The majority included Judges Sri Srinivasan and Patricia Millett, both of whom are seen as potential SCOTUS contenders under a Democratic president.

Judge weighs in on whether Jahi McMath is brain dead

Judge weighs in on whether Jahi McMath is brain dead

In this Oct. 2, 2014 file photo Sandra Chatman, left, and Nailah Winkfield look on as a photo of their granddaughter and daughter, respectively, Jahi McMath, 13, is shown during a press conference at Dolan Law Firm in San Francisco, Calif. Christopher Dolan, attorney for Jahi McMath’s family, showed photos and a pair of videos where McMath moves her foot and arm in response to the voice of her mother Nailah Winkfield in a home in New Jersey. She was declared brain-dead in California after tonsil, throat and nose surgeries to relieve her sleep apnea. (Ray Chavez/Bay Area News Group)

Jahi McMath, the Oakland teenager whose brain death case has sparked national debate, may not currently fit the criteria of death as defined by a state law written in conjunction with the medical establishment, a judge wrote in an order Tuesday.

In his ruling, Alameda County Superior Court Judge Stephen Pulido wrote that while the brain death determination in 2013 was made in accordance with medical standards, there remains a question of whether the teenager “satisfies the statutory definition of ‘dead’ under the Uniform Determination of Death Act.”

His ruling comes in the years-long medical malpractice suit against UCSF Benioff Children’s Hospital Oakland and its doctors, which also challenges the hospital’s 2013 brain death diagnosis of the Oakland teenager following a complex nose, throat and mouth surgery.

The judge’s order pertains to the personal injury claim in the lawsuit, which the hospital sought to dismiss, and could result in a trial on whether Jahi is alive. An attorney for the family is arguing Jahi is alive and therefore entitled to more than the cap of $250,000 on medical malpractice lawsuits involving children who die as a result of surgery.

Pulido heavily cited Dr. Alan Shewmon, who concluded in a court declaration that Jahi doesn’t currently fit the criteria for brain death after reviewing 49 videos of her moving specific fingers and other extremities when given commands to do so. Shewmon, a professor emeritus of pediatrics and neurology at UCLA, wrote that Jahi “is a living, severely disabled young lady, who currently fulfills neither the standard diagnostic guidelines for brain death nor California’s statutory definition of death.” Shewmon also reviewed an MRI.

The girl’s family released some of the videos in 2014.

Reached Wednesday, hospital spokeswoman Melinda Krigel referred to a statement issued in July in which Children’s Hospital stood by its position that Jahi “fulfills the legal diagnostic criteria for brain death.” After her December 2013 surgery ended tragically, two doctors declared the teenager dead. An independent and court-appointed doctor from Stanford University later affirmed the diagnosis.

“The videotapes do not meet the criteria set forth in the guidelines” for determining brain death, the hospital said in the statement.

Bruce Brusavich, an attorney for Jahi’s family, did not return a call for comment Wednesday. The family has also filed a federal lawsuit.

Jahi’s story and her family’s fight to remove her from Children’s Hospital captured worldwide attention and inspired other families to question brain death determination of their loved ones.

In late December 2013, then-family attorney Christopher Dolan was successful in convincing a judge to order Jahi released from the Oakland facility, allowing the family to take her cross-country to a hospital in New Jersey. Unlike California, the Garden State has a law allowing guardians to reject a brain death diagnosis on religious grounds.

After leaving the New Jersey hospital, Jahi has been hooked up to breathing and feeding machines in a nearby apartment she shares with her mother, Nailah Winkfield, and other family members. She has used the machines to breathe and eat for nearly four years, a duration that is believed to be longer than any other U.S. patient declared brain dead.

Taking the Nuclear Option Off the Table

Taking the Nuclear Option Off the Table

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Last Thursday, fifteen states and the District of Columbia moved to intervene in House v. Price, the case about the ACA’s cost-sharing reductions. At the same time, they asked the court to hear the case promptly.

This is a bigger deal than it may seem, and could offer some comfort to insurers that are in desperate need of it. Apologies for the long post, but the law here is complex and uncertain.

* * *

When the House of Representatives sued the Obama administration a few years back, it argued that Congress never appropriated the money to make cost-sharing payments. The district court sided with the House and entered an injunction prohibiting the payments. The court, however, puts its injunction on hold to allow for an appeal.

The Trump administration has now inherited the lawsuit, and the health-care industry is waiting on tenterhooks to see what it will do. For now, the case has been put on hold. But if Trump drops the appeal, which he has threatened to do, the injunction would spring into effect and the cost-sharing payments would cease immediately, destabilizing insurance markets across the country. It’s the nuclear option.

If the states are allowed to intervene, however, they could pursue the appeal even if Trump decides to drop it. With the appeal in place, the injunction couldn’t take effect until the case is heard and decided.

What’s more, the states are very likely to prevail. Not on the merits: as I’ve written before, the House is right that there’s no appropriation to make the cost-sharing payments. But the D.C. Circuit is likely to be skeptical of the district court’s conclusion that the House of Representatives has standing to sue. That’s why the states want to court to decide the case quickly: they hope to get rid of the lawsuit once and for all.

Allowing the states to intervene would not eliminate uncertainty. The D.C. Circuit could always surprise us and affirm the district court’s decision. Premiums for 2018 would still have to rise in response to the risk that payments might stop sometime next year. And even if the House loses, the Trump administration might be tempted to stop making the payments anyhow—although it’s not clear that it has the legal authority to do so without going through the cumbersome process of withdrawing an Obama-era rule.

Still, insurers could breathe a bit easier. If the states are allowed to intervene, Trump couldn’t blow up the individual markets in a fit of pique.

States Seek to Join Appeal of House Obamacare Lawsuit

https://morningconsult.com/2017/05/18/states-seek-join-appeal-house-obamacare-lawsuit/

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More than a dozen states and the District of Columbia filed a motion on Thursday to intervene in the appeal of a lawsuit targeting the Affordable Care Act’s cost-sharing reduction payments, which have become a focal point for how President Donald Trump plans to treat the 2010 health care law.

The 15 states argue that the executive branch is not adequately defending its authority to make the CSR payments and does not represent their interests. They also said that if the appeals court agrees with the previous ruling that the Obama administration unconstitutionally paid the subsidies, states and their residents would be harmed and there would be significantly higher costs for health care.

The subsidies are at the center of a lawsuit brought by the U.S. House of Representatives against the Obama administration, which the Trump administration must now deal with.

“Because of an intervening presidential election, the current parties appear ready to agree to allow the injunction to stand, without giving this Court the opportunity to determine whether the district court had either jurisdiction to enter it or a legal basis to enjoin the permanent appropriation that Congress intended to provide,” the motion reads.

House Republicans argued the Obama administration paid the subsidies — which help lower-income people afford out-of-pocket costs under the ACA — without an appropriation from Congress. A district court judge ruled in favor of the House last year, and the Obama administration appealed the ruling.

The payments have been made while the lawsuit is pending, but the Trump administration has wavered on whether it will continue to make them in the future, worrying insurers as they prepare to set their premium rates for 2018. Insurers say they need to know the payments’ status before filing their requests by the June 21 deadline.

The states in the lawsuit say their “concerns are concrete and immediate,” due to the urgency insurers face. If the payments are not made, insurance premiums would likely rise and insurers could abandon the individual market, which could trigger a “death spiral” and cause people to lose health coverage, the states warned.

Trump is using the payments as “political bargaining chips,” meaning states and their residents can’t rely on the administration to represent their position, they said.

“The public record makes clear that the current Administration does not represent the States’ interests,” according to the motion jointly filed by California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Vermont, Washington state and the District of Columbia.

The Kaiser Family Foundation has estimated that the average premiums for silver plans sold on the ACA exchanges would increase by about 19 percent to compensate for insurers’ lack of funding without the CSR payments.

The Trump administration and the House are set to update the court on Monday on how they plan to proceed with the case. In February, an appeals court agreed to keep the case on hold while both sides continued to work toward a resolution.

DOJ sues UnitedHealth over $1B+ in Medicare claims

http://www.beckershospitalreview.com/payer-issues/doj-sues-unitedhealth-over-1-billion-in-medicare-false-claims-again.html

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The Justice Department sued Minnetonka, Minn.-based UnitedHealth Group Tuesday, alleging the payer defrauded Medicare at least $1 billion in false claims.

In the 103-page lawsuit filed in a Los Angeles federal court, the Justice Department alleged the payer knowingly inflated risk adjustment payments by providing the government inaccurate data about the health status of its beneficiaries. Department officials cited UnitedHealth’s “one-sided” chart review process that reportedly didn’t address errors elevating its revenues.

The department also alleges the payer ignored “invalid diagnoses from healthcare providers with financial incentives to furnish such diagnoses.

The move follows the department’s decision to intervene in a whistle-blower suit filed by James Swoben in 2009. That suit alleges UnitedHealth billed Medicare higher payments for patients by “making patients look sicker than they” were. In an earlier statement to Star Tribune, UnitedHealth spokesperson Matt Burns said the payer denied the claims and has “been transparent with [CMS] about our approach under its unclear policies. We reject these claims and will contest them vigorously.”

This is the second lawsuit the department has filed against the insurer this month. The other lawsuit concerns separate but similar allegations filed under seal in 2011 by Benjamin Poehling, former finance director of UnitedHealthcare Medicare and Retirement.

Mylan Sued by Consumers claiming PBM Rebates Are Just Kickbacks

http://www.realclearhealth.com/articles/2017/04/03/mylan_sued_by_consumers_claiming_pbm_rebates_are_just_kickbacks_110528.html?utm_source=RealClearHealth+Morning+Scan&utm_campaign=2ee066e433-EMAIL_CAMPAIGN_2017_04_04&utm_medium=email&utm_term=0_b4baf6b587-2ee066e433-84752421

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Three consumers filed a lawsuit accusing Mylan Pharmaceuticals of paying kickbacks to pharmacy benefits managers in order to boost EpiPen sales, which caused them to unfairly overpay for the allergy-reaction device that has been at the center of the national debate over the high cost of medicines.

Their allegations take aim at the convoluted interplay between drug makers and pharmacy benefit managers, which are middlemen that negotiate favorable insurance coverage for medicines on behalf of insurers. The PBMs attempt to extract the best prices from drug makers and, for their trouble receive rebates, some of which are held back as fees.

The lawsuit, which charges Mylan engaged in racketeering, seeks class action status and claims that Mylan “gamed the system” and pretended to blame PBMs for demanding ever-higher rebates for its decisions to regularly raise the price for EpiPen.

The consumers maintain that Mylan paid continually higher rebates in order to book larger sales and ensure favorable insurance coverage, especially as competition to EpiPen arrived. The lawsuit, however, argued that the rising rebates “saddled” consumers who either did not have insurance or have high-deductible plans with “crushing out-of-pocket expenses.”

One of the women who brought the suit, Lisa Vogel of Takoma Park, Md., purchased EpiPen Jr. two-packs several time for her son, who is allergic to peanuts and amoxicillin, according to the lawsuit. Her family has a high-deductible plan from Aetna and, on June 13, 2014, her out-of-pocket cost was $351.73. A year later, on June 22, 2015, her share of the cost $453.49, the lawsuit stated.

The lawsuit also pointed to recent research in the Journal of the American Medical Association that found between January 2007 and December 2014, out-of-pocket spending for each EpiPen patient rose nearly 124 percent, to $75.50 from $33.80. “Mylan’s list price has become an artificial and phony price established and driven up as part of a kickback scheme from Mylan to the PBMs,” the lawsuit argued.

“Mylan is no victim,” the lawsuit continued. “Instead, Mylan participated in and benefited from the high list price scheme and from paying high rebates or kickbacks to PBMs to ensure EpiPen’s market dominance. In fact, from at least 2008 until 2011, when Mylan stopped reporting this information, EpiPen had a 95 percent market share” for auto-injector allergy devices.

There are no PBMs named as defendants. A Mylan spokeswoman declined to comment.

 

Antitrust Not Always Available in Competitor Disputes in the Healthcare Sector

Antitrust Not Always Available in Competitor Disputes in the Healthcare Sector

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The antitrust injury and antitrust standing defenses/doctrines are alive and well in healthcare.  A recent case, SCPH Legacy Corp. et al. v. Palmetto Health et al., shows that a competitor is not always the most legally appropriate plaintiff to bring an antitrust case, especially when the competitor’s alleged harm stems from increased competition.  This article explains the court’s reasoning and makes some predictions for similar arguments in the future.

On February 24, 2017, Judge Joseph F. Anderson of the District of South Carolina, granted a motion to dismiss all federal antitrust claims brought by a small hospital chain against its larger competitor for lack of antitrust injury and antitrust standing.  The court held that poaching a group of doctors is not the type of injury that the antitrust laws are designed to protect when the suit is brought by a competitor, and that more direct plaintiffs exist.

Providence Hospitals, which operates a small hospital system in the midlands of South Carolina, alleged that Palmetto Health was a monopoly that secretly recruited employees of Providence’s orthopedic services business—the only competitive advantage that Providence had over Palmetto.  Palmetto allegedly orchestrated for 300 orthopedic physicians, executives and staff to simultaneously quit Providence and move to Palmetto in mid-2015.

 

Cigna ends merger with Anthem, sues for more than $14B

http://www.fiercehealthcare.com/payer/cigna-ends-merger-anthem-sues-for-more-than-14b?mkt_tok=eyJpIjoiTm1Nd1lUTXdNRGxsTm1SaCIsInQiOiJqVTFQMklENmVyckE1T0RUUVdJOXlXUmVQS21VY09IR0dcL2VlUnEwd09Fa0tlamZhdUtDM21zc0gwMFZcL01xYmllZmVoWjJib3U4aUFxNU11NDk3YUZNM1J1UndFQ1k3NlE1cTZ4UU5mS0hjMlF0b29mRkZUSldXT1I0QkFQQ0NZIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Lawsuit document

In a move that defies Anthem’s push to fight for their deal, Cigna has terminated its merger agreement with Anthem and filed suit against the larger insurer.

Earlier this month, a federal judge ruled against the two insurers’ planned merger, saying it would violate antitrust law by lessening competition in the national accounts market. Anthem responded by saying it intends to appeal the ruling.

But in a statement issued Tuesday, Cigna said that given the court’s decision, it “believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna’s shareholders.”

Thus, Cigna filed a suit against Anthem in the Delaware Court of Chancery, seeking a declaratory judgment that Cigna has lawfully terminated the merger agreement and that Anthem is not permitted to extend the termination date.

The suit also asked the court to compel Anthem to pay Cigna the $1.85 billion termination fee outlined in the merger agreement, plus additional damages of more than $13 billion. Those damages “include the lost premium value to Cigna’s stockholders caused by Anthem’s willful breaches of the merger agreement,” according to a question-and-answer document filed with the Securities and Exchange Commission.

For its part, Anthem maintains that “under the terms of the merger agreement, Cigna does not have a right to terminate the agreement. Therefore, Cigna’s purported termination of the merger agreement is invalid,” a company spokesperson said in an emailed statement. “Anthem will continue to enforce its rights under the merger agreement and remains committed to closing the transaction.”