Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

To compensate teaching hospitals for the extra financial burden of providing training, the Medicare program provides additional reimbursement for expenses beyond the immediate costs of patient care, including for “indirect medical education” (IME) costs to account for the time medical interns and residents spend in ways that enhance their ability to provide patient care but that are not connected to the treatment of any particular patient, 42 U.S.C. 1395ww(d)(5)(B)(ii). The district court held that time spent by interns and residents in research activities wholly unrelated to the diagnosis or treatment of patients could be counted as part of this indirect-education time and that Rush University Medical Center, was entitled to Medicare reimbursements for these activities between the years 1983 and 2001. The Seventh Circuit reversed and remanded, noting that the Secretary of Health and Human Services has interpreted the Medicare Act consistently since 1983 to exclude pure research activities from compensable IME costs. Congress codified this exclusion for Fiscal Years 2001 onward in the Patient Protection and Affordable Care Act of 2010, but explicitly declined to lay down a rule for the years 1983 to 2001. The Secretary has now promulgated a regulation excluding pure research from the IME cost calculation for all years since 1983. View "Rush Univ. Med. Ctr v. Sebelius" on Justia Law

The Educational Rate Program, a subsidy program authorized by the Telecommunications Act of 1996, is implemented by the FCC, which established USAC, a private non-profit corporation, to administer the Program. USAC provides subsidies to eligible school districts for the cost of telecommunication services. FCC regulations require that providers offer schools the “lowest corresponding price” (LCP) for their services: the “lowest price that a service provider charges to non-residential customers who are similarly situated to a particular school, library, or library consortium for similar services.” Heath operates a business that audits telecommunications bills and was retained by Wisconsin school districts. Heath found that certain schools paid much higher rates than others for the same services. As a result, many districts did not receive the benefit of LCP and the government paid subsidies greater than they should have been. Heath informed Wisconsin Bell of the discrepancy, but it refused to provide the more favorable pricing. Heath also learned of an even lower price charged to the Wisconsin Department of Administration (DOA). Heath filed a qui tam lawsuit. The government declined to intervene. The district court dismissed for lack of subject matter jurisdiction, finding that the public disclosure bar applied and that Heath was not saved by the original source exception, because the DOA pricing was on its website. The Seventh Circuit reversed, stating that the claim was not based on the DOA website information and that Heath was not an opportunist plaintiff who did not contribute significant information. View "Heath v. WI Bell, Inc." on Justia Law

Fuqua, a computational linguist, was hired by SVOX in 2009 to help market linguistic products. A few months later, SVOX approached Fuqua with a new employment contract that contained an inventions assignment clause that required Fuqua to disclose and assign to SVOX intellectual property that he made, conceived, or developed in the past and required assignment of his rights to patents, copyrights, trademarks, trade secrets, and royalties to SVOX. Fuqua believed that the disclosure required by the new agreement would violate state and federal laws and refused to sign the contract. SVOX terminated Fuqua’s employment. Fuqua filed a complaint with the Office of Inspector General of the Department of Defense (OIG), alleging violation of the American Recovery and Reinvestment Act of 2009, which prohibits reprisals for disclosures of wrongdoing relating to covered funds under the act. The OIG found that SVOX did not receive Recovery Act funds and declined to investigate further. The district court dismissed, finding that SVOX did not receive covered funds. The Seventh Circuit affirmed. View "Fuqua v. SVOX USA, Inc." on Justia Law

Northern, operated by VanDuinen, was a general contractor on public construction projects, legally required to obtain surety bonds. Hanover was Northern’s bonding agent and required Northern to enter into an Indemnity Agreement, which VanDuinen signed in his individual capacity and as Northern’s President. The Midway Airport Project was financed by the FAA and managed by Parsons. In 2008 Northern won the bid and began subcontracting. in 2009 subcontractors complained that Northern failed to pay them in accordance with the bonds and contracts. Work was halted, resulting in a separate complaint, by Parsons, for failure to complete the Project as required. The FAA opted to retain possession of remaining contract funds, $127,086.00, pending resolution of the disputes and completion of the work. Hanover received claims from subcontractors McDaniel ($127,452.78) and Rex Electric ($78,495.00) and a claim for performance from Parsons. Hanover demanded collateral under the Agreement. Northern refused to post collateral or to indemnify Hanover. In 2009 McDaniel filed for bankruptcy; the bankruptcy trustee sued Hanover seeking payment for work performed. In 2012, Hanover paid the trustee $127,452.78 to resolve both McDaniels’s and Rex Electric’s claims. Hanover resolved Parson’s claim by stepping in as general contractor and arranging for completion of the Project. Parsons paid Hanover the $127,086.00 of contract funds the FAA had withheld. Hanover sued Northern and VanDuinen. The district court granted summary judgment in Hanover’s favor. The Seventh Circuit affirmed. The Agreement is unambiguous. Northern breached it, and Hanover is entitled to contractual damages. View "Hanover Ins. Co. v. Northern Bldg. Co." on Justia Law

Chhibber, an internist, operated a walk‐in medical office on the south side of Chicago. For patients with insurance or Medicare coverage, Chhibber ordered an unusually high volume of diagnostic tests, including echocardiograms, electrocardiograms, pulmonary function tests, nerve conduction studies, carotid Doppler ultrasound scans and abdominal ultrasound scans. Chhibber owned the equipment and his staff performed the tests. He was charged with eight counts of making false statements relating to health care matters, 18 U.S.C. 1035, and eight counts of health care fraud, 18 U.S.C. 1347. The government presented witnesses who had worked for Chhibber, patients who saw him, and undercover agents who presented themselves to the Clinic as persons needing medical services. Chhibber’s former employees testified that he often ordered tests before he even arrived at the office, based on phone calls with staff. Employees performed the tests themselves with little training, and the results were not reviewed by specialists; normally, the tests were not reviewed at all. Chhibber was convicted of four counts of making false statements and five counts of health care fraud. The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings. View "United States v. Chhibber" on Justia Law

Orillo, her husband (a doctor), and another owned Chalice, a home health care provider. Chalice was an enrolled provider with Medicare and could seek reimbursement of home health care through that program. Orillo falsified forms by altering the codes and information that had been completed by the Chalice nurses to make the patient’s condition appear worse and the health care needs greater than the actuality. Those alterations caused Medicare software to generate different reimbursement rates Orillo also aided her husband in paying kickbacks to a Chicago doctor in return for referrals of Medicare patients. Orillo pled guilty to healthcare fraud, 18 U.S.C. 1347 and paying kickbacks to physicians for patient referrals under a federal health care program, 42 U.S.C. 1320a-7b and 18 U.S.C. 2, and was sentenced to 20 months’ imprisonment. Orillo conceded that her scheme caused a loss, to Medicare, in excess of $400,000, and agreed to entry of a $500,000 forfeiture judgment.The district court determined that the loss amount for the healthcare fraud count was $744,481 and ordered her to pay that amount in restitution. The Seventh Circuit affirmed, rejecting Orillo’s argument that the loss and restitution amount should be limited to only those stemming from visible alterations. View "United States v. Orillo" on Justia Law

The pro se plaintiff sued her former employer, a private recipient of federal funding, alleging violation of the Rehabilitation Act of 1973, 29 U.S.C. 794, by requiring her to complete certain duties as a dental assistant that she was incapable of performing due to an unspecified disability that limits her strength and mobility, and then firing her because of her disability. The district judge dismissed for failure to exhaust administrative remedies. The Seventh Circuit reversed. A plaintiff under the Rehabilitation Act against a recipient of federal money is not required to exhaust the administrative remedies that the Act provides; an employee or former employee of a private company, such as the plaintiff, is not required Act to even file an administrative charge or complaint. View "Williams v. Milwaukee Health Servs., Inc." on Justia Law

Health and Hospital Corporation of Marion County, Indiana is a municipal corporation that operates a major hospital and other facilities, including a health center operated in partnership with Citizens Health to serve the medically under-served population in Indianapolis. The health center was funded in part by a Section 330 Grant, awarded by the federal Health Resources and Services Administration, which is part of the Department of Health and Human Services. Section 330 grants fund qualifying health centers that provide primary health care services to medically under-served populations, 42 U.S.C. 254b. A In 2012, Health and Hospital decided to terminate the partnership with Citizens and relinquish the federal grant, which still had several years of funding remaining. Citizens sued Health and Hospital, HRS, and others in an effort to retain the grant funds. The district court granted defendants summary judgment, concluding that Citizens had no contractual, statutory, or constitutionally cognizable interest in the grant. The Seventh Circuit affirmed, finding that Health and Hospital was the grantee; Citizens had no constitutionally-protected entitlement to the grant; and the terms of the contract between Health and Hospital and Citizens clear; there was no obligation to renew. View "Citizens Health Corp. v. Sebelius" on Justia Law

In 2009 the Fire Protection District passed an ordinance under which it took over fire alarm monitoring for all commercial properties in the District. Private alarm companies that had previously provided that service sued, alleging interference with their business, illegal monopoly, violations of constitutional rights, and exceeding statutory powers. Before the district court issued an opinion on remand, the District repealed the 2009 ordinance. Under a new ordinance, the District would not own any transmitters and would permit property owners to contract with private companies for alarm transmission, monitoring, and equipment; signals would still be transmitted via the District’s network to the District’s receiver. The district court entered a modified permanent injunction, requiring the District to permit alarm companies to receive and transmit signals directly from property alarm boards, independently of the District. The injunction barred the District from requiring that fire signals be sent to its station, charging residents for fire protection services, or selling or leasing fire alarm system equipment. It required the District to allow alarm companies to use any technology equivalent to wireless transmission and compliant with the NFPA code, to adopt the most current version of the NFPA code, and to refund fees. The Seventh Circuit affirmed as modified. The new injunction sets appropriate boundaries and does not contravene the earlier decision in most ways. The court struck provisions requiring refunds to subscribers and requiring the District to adopt the most current versions of the NFPA code. View "ADT Sec. Servs., Inc. v. Chicago Metro. Fire Prevention Co." on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law