18 states sue over Trump-halted ObamaCare payments

http://thehill.com/policy/healthcare/355360-15-states-sue-over-trump-halted-obamacare-payments

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A new multi-state lawsuit has been announced to stop President Trump from halting key ObamaCare payments to insurers.

Eighteen states and Washington, D.C., signed onto the lawsuit filed Friday in federal court in California, according to Sarah Lovenheim, a spokeswoman for California Attorney General Xavier Becerra (D).

On Thursday night, Trump announced he would stop making the payments, which led to an outcry from critics saying he was sabotaging the health-care law.

The complaint will seek a temporary restraining order, preliminary injunction and permanent injunction requiring the cost-sharing reduction payments be made.

The administration, on a monthly basis, had been funding cost-sharing reduction subsidies, which compensate insurers for lowering the out-of-pocket costs of certain ObamaCare enrollees.

Trump has repeatedly signaled he might cut them off, while insurers have been pleading for long-term certainty that they would continue.

“Without the Affordable Care Act [ACA] and its subsidies for these families, millions more would be left in the cold without coverage. California isn’t about to turn its back on hardworking families who are fighting to hold onto their ACA health insurance. We’ve taken the Trump administration to court before and won, and we’re ready to do it again if necessary,” Becerra said in a statement Thursday night, before the lawsuit was officially announced.

Additionally, New York Attorney General Eric Schneiderman (D) said he anticipates proceeding with litigation on a case that’s currently been on hold.

The House sued the Obama administration, arguing the White House was illegally funding cost-sharing reduction subsidies payments to insurers.

Earlier this summer, the U.S. Court of Appeals for the District of Columbia Circuit ruled that a coalition of attorneys general — including Schneiderman and Becerra — can defend the payments.

“The fast track for initial relief will be in the case we’re filing in California,” Schneiderman said, referring to the new lawsuit.

 

Ex-Cleveland Clinic Innovation executive pleads guilty in $2.7M fraud case, prison time likely

http://www.fiercehealthcare.com/antifraud/ex-cleveland-clinics-innovation-executive-pleads-guilty-2-7m-fraud-case-prison-time?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWkRSalkyTXpOV0V4WkRkayIsInQiOiJHQUVNRTJhUmhhSkpXVk80NkJoOWo5R21nNW5iV0hQS3NxRzc4SUQrbmRyMFwveXlBUFEwRm83TXFUemp0ZE9aNWlBTmYzSVJWb0dzbXV0RTczYnZSTEFMaGhEeFZKYk9LMWJuaXNxUlRUd2V6WEZnZ3lqRUpYaWp6SU0rbUhUd0cifQ==

Money, handcuffs and a stethoscope

The former head of Cleveland Clinic Innovations pleaded guilty Tuesday for his role in defrauding the nonprofit academic medical center out of more than $2.7 million via a shell company.

Gary Fingerhut was arraigned in U.S. District Court and pleaded guilty to one count of conspiracy to commit wire fraud and honest services fraud and one count of making false statements, Crain’s Cleveland Business reports.

Although he won’t be formally sentenced until Jan. 30, Fingerhut’s attorney told the publication that federal prosecutors will ask U.S. District Judge Christopher Boyko for a sentence of between 41 and 51 months in federal prison. He may also be ordered to pay restitution to the Cleveland Clinic.

Fingerhut served as the executive director of the clinic’s innovation arm for two years until an FBI investigation revealed in 2015 that he was involved in a fraudulent scheme with the chief technology officer of a spinoff company to contract with a company that never intended to perform or provide any goods and services. The deal was in violation of Cleveland Clinic’s ethics and compliance policies and requirements, which prohibit employees from receiving any financial benefit from companies the Clinic did business with, and the organization fired Fingerhut.

Federal prosecutors said Fingerhut accepted at least $469,000 in payments in return for not disclosing the fraud scheme, which diverted nearly $3 million from the Clinic.

Fingerhut’s attorney, J. Timothy Bender of Bender, Alexander & Broome in Cleveland, told Crain’s that Fingerhut is very sorry for his role in the fraud scheme.

California Suing Trump Administration Over Rollback Of Birth Control Rule

https://www.huffingtonpost.com/entry/california-trump-birth-control_us_59d80b87e4b0f6eed35065d4

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“The California Department of Justice will fight to protect every woman’s right to healthcare, including reproductive healthcare.”

Becerra’s suit comes hours after Trump’s administration announced a new rule that will allow all employers to opt out of including birth control in their health care plans, rolling back an Obama-era mandate that guaranteed 62 million women access to contraception at no cost.

“Donald Trump wants businesses and corporations to control family planning decisions rather than a woman in consultation with her doctor. These anti-women’s health regulations prove once again that the Trump Administration is willing to trample on people’s rights,” Becerra said in a statement Friday. “The California Department of Justice will fight to protect every woman’s right to healthcare, including reproductive healthcare. We’ll see the Trump Administration in court.”

In announcing the decision, the administration argued the coverage requirement created a “substantial burden” on employers’ free exercise of religion as protected by the U.S. Constitution. The new regulations will allow any employer to deny coverage for contraception on religious and/or moral grounds.

This, Becerra argues, violates the Constitution as well as federal law.

The complaint makes the case that the rollback violates the First Amendment’s Establishment Clause by allowing employers to use their religious beliefs to deny women a health care benefit.

Becerra also argues the regulations violate the Fifth Amendment’s Equal Protection Clause.

The new rules “specifically target and harm women,” reads the complaint. “The [Affordable Care Act] specifically contemplated disparities in health care costs between women and men, and specifically sought to rectify this problem by giving women cost-free preventative services. The new [regulations] undermine this action and is discriminatory to women.”

 The suit also contends the rules violate the federal Administrative Procedure Act, which requires a notice and comment period for major policy changes, and that the new rules will harm the state of California by burdening it with additional costs to fill coverage gaps.

“Millions of women in California may be left without access to contraceptives and counseling and the State will be shouldering that additional fiscal and administrative burden as women seek access for this coverage through state-funded programs,” reads the complaint.

Becerra filed the suit Friday in the U.S. District Court for the Northern District of California.

The American Civil Liberties Union filed a similar suit Friday, also arguing the rules violate the Establishment and Equal Protection clauses.

“The Trump administration is forcing women to pay for their boss’s religious beliefs,” ACLU senior staff attorney Brigitte Amiri said in a statement.

Women’s health groups have also pushed back on the move, noting the low unintended pregnancy rates, as well as low abortion rates, since the birth control coverage mandate went into place.

Judge rules against Berkshire Medical Center in court battle over planned nurse strike

https://www.beckershospitalreview.com/human-capital-and-risk/judge-denies-berkshire-medical-center-s-request-to-halt-nurse-strike.html

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Pittsfield, Mass.-based Berkshire Medical Center lost its court battle to avert a planned Oct. 3 nurse strike, according to a report on iBerkshires.com.

The 298-bed community hospital filed a legal request for an injunction to avert the planned strike last month. However, U.S. District Judge Mark Mastroianni in Springfield, Mass., denied Berkshire Medical Center’s request Friday, meaning the 24-hour walkout is still scheduled, according to the report.

In response to the judge’s ruling, the Massachusetts Nurses Association, which represents nearly 800 Berkshire Medical Center nurses, told Becker’s via email: “If the hospital was really serious about doing anything to stop the strike, they would negotiate in good faith over the patient care conditions nurses are seeking. As [the] federal judge’s ruling shows, nurses have a legally protected right to advocate for themselves and their patients. BMC nurses are prepared to strike for 24 hours, but still hope that management does this right thing, returns to the bargaining table and seeks a fair agreement.”

Berkshire Medical Center expressed disappointment in the judge’s ruling.

“This strike does not serve anyone’s best interests — not the nurses, not the hospital’s and not the community’s, and can only serve to harm all three,” the hospital said in an emailed statement to Becker’s. “We are fully prepared to provide uninterrupted care throughout the five-day period and have been preparing for this eventuality for several months. The fact that this is the third such strike by the MNA since June makes it evident that this is a tactic the union is using to promote its statewide political agenda.”

Both sides have been negotiating for about a year, with key sticking points including staffing and health insurance. The 24-hour strike is scheduled to begin at 7 a.m. Oct. 3 and last until 7 a.m. Oct. 4. At that point, hospital officials have said nurses won’t be able to return to work for another four days because Berkshire Medical Center hired replacement workers for a minimum five-day contract. The MNA has also scheduled a “patient safety vigil” Oct. 2 prior to the planned strike.

 

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.

 

U.S. judge finds that Aetna deceived the public about its reasons for quitting Obamacare

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-aetna-obamacare-20170123-story.html

Mergers in the healthcare sector: why you'll pay more

Aetna claimed this summer that it was pulling out of all but four of the 15 states where it was providing Obamacare individual insurance because of a business decision — it was simply losing too much money on the Obamacare exchanges.

Now a federal judge has ruled that that was a rank falsehood. In fact, says Judge John D. Bates, Aetna made its decision at least partially in response to a federal antitrust lawsuit blocking its proposed $37-billion merger with Humana. Aetna threatened federal officials with the pullout before the lawsuit was filed, and followed through on its threat once it was filed. Bates made the observations in the course of a ruling he issued Monday blocking the merger.

Aetna executives had moved heaven and earth to conceal their decision-making process from the court, in part by discussing the matter on the phone rather than in emails, and by shielding what did get put in writing with the cloak of attorney-client privilege, a practice Bates found came close to “malfeasance.”

The judge’s conclusions about Aetna’s real reasons for pulling out of Obamacare — as opposed to the rationalization the company made in public — are crucial for the debate over the fate of the Affordable Care Act. That’s because the company’s withdrawal has been exploited by Republicans to justify repealing the act. Just last week, House Speaker Paul Ryan (R-Wisc.) cited Aetna’s action on the “Charlie Rose” show, saying that it proved how shaky the exchanges were.
Bates found that this rationalization was largely untrue. In fact, he noted, Aetna pulled out of some states and counties that were actually profitable to make a point in its lawsuit defense — and then misled the public about its motivations. Bates’ analysis relies in part on a “smoking gun” letter to the Justice Department in which Chief Executive Mark Bertolini explicitly ties Aetna’s participation in Obamacare to the DOJ’s actions on the merger, which we reported in August. But it goes much further.

Former Non-Profit Health Clinics CEO Sentenced to 18 Years for Funneling Millions in Grant Money to Private Companies

https://www.justice.gov/usao-ndal/pr/former-non-profit-health-clinics-ceo-sentenced-18-years-funneling-millions-grant-money

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The former CEO of two Alabama health clinics has been sentenced to 18 years in prison for his role in a fraud scheme, according to the Department of Justice.

According to the DOJ, 53-year-old Jonathan Dunning left his post as CEO of Birmingham (Ala.) Health Care and Central Alabama Comprehensive Health in Tuskegee in 2008. However, he continued to exercise control over the two nonprofit health clinics and diverted government funds meant for the clinics to his own for-profit companies, according to the DOJ.

In June, a federal jury convicted Mr. Dunning of 62 counts of wire fraud, 33 counts of money laundering and two counts of bank fraud. A jury also found him guilty of one count of conspiracy, finding that he conspired with another person to commit wire fraud, bank fraud and money laundering.

Over a seven-year period, Mr. Dunning defrauded HHS, the Health Resources and Service Administration, the two clinics, a credit union and others out of more than $16 million, according to the government’s sentencing memorandum.

Justice Department joins lawsuit against Prime Healthcare

http://www.healthcaredive.com/news/justice-department-joins-lawsuit-against-prime-healthcare/419849/

Judges Gavel

The U.S. Justice Department recently filed notice in U.S. District Court in Los Angeles that it is partly intervening in a whistle-blower case against Prime Healthcare Services. The whistle-blower lawsuit alleges that Prime Healthcare fraudulently billed Medicare for beneficiaries admitted as inpatients instead of treating them as outpatients.

http://www.healthcaredive.com/news/doj-accuses-prime-of-driving-up-medicare-admissions/421800/

DOJ Sues Carolinas HealthCare Over Steering Restrictions

http://www.healthleadersmedia.com/leadership/doj-sues-carolinas-healthcare-over-steering-restrictions?spMailingID=9041425&spUserID=MTMyMzQyMDQxMTkyS0&spJobID=940977537&spReportId=OTQwOTc3NTM3S0#

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Federal and state officials claim that the healthcare system used its market power to leverage steering restrictions in its contracts with major insurers, resulting in higher costs for consumers.

SRHS legal showdown ends in $150 million-plus settlement

http://www.sunherald.com/news/special-reports/singing-river-health-system/article81375622.html

TIM ISBELL/SUN HERALD Members of Singing River Health System's pension plan join hands and pray before entering the federal courthouse in Gulfport on Monday, May 16, 2016, for a hearing on a proposed class-action settlement involving their retirement benefits. A federal judge approved the settlement Thursday.

More than 200 feisty retirees wanted to pursue lawsuits against Singing River Health System over its failed pension plan, but U.S. District Court Judge Louis Guirola Jr. has signed off on a settlement proposed by attorneys for other pension-plan members.