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

Medicare Part A reimburses hospitals according to a Prospective Payment System (42 U.S.C. 1395ww(d), which uses a predetermined formula to calculate reimbursement for each patient discharge without regard to the actual cost incurred. The formula includes the average hourly wage of the employees in the geographic region, including paid lunch hours. Hospitals objected to the practice because some hospitals give paid lunch breaks, which depresses the average area hourly wage and, in turn, their Medicare reimbursements. The district court granted summary judgment for the government. The Seventh Circuit affirmed, reasoning that counting all paid hours, for the sake of administrative simplicity, is not arbitrary.

An inmate began suffering from pain in his groin after an injury in 2004. Staff at the prison health unit recognized that his pain was caused by an inguinal hernia but gave him only mild pain medication. The inmate complained and was examined by a doctor who pushed the hernia back into his abdomen and refused a request for surgery. For several months the condition worsened, with a visible bulge and pain, but medical staff continued to refuse surgery. The inmate filed suit under 42 U.S.C. 1983. The district court dismissed prior to service. The Seventh Circuit reversed with respect to the physicians and remanded for determination of whether their response to more than two years of complaints has been blatantly inappropriate in the face of the inmate's pain and the risk the worsening hernia poses to his present and future health.

Defendant was the pharmacy director of a medical center and had influence over decisions concerning which drugs to stock. Levato was the local business manager of a pharmaceutical company. Levato agreed to pay defendant $18,000 not to switch away from his company's drug, and made computer entries recording nine nonexistent speeches given by defendant for the pharmaceutical company; defendant later received another $14,000 for more fictitious speeches. After investigation by an FDA agent, Levato and defendant were indicted. Levato plead guilty and testified against defendant. Defendant was convicted of solicitation and receipt of kickbacks and sentenced to 22 months in prison. The Seventh Circuit affirmed. Memoranda prepared by the Department of Health and Human Services, discovered by the prosecution after trial, did not constitute exculpatory material withheld by the prosecution. The court noted that the documents would have strengthened the prosecution case.

Plaintiff had previously worked for the employer before being hired as a full-time employee in 2005. When budget cuts necessitated layoffs, plaintiff thought his job was secure until he requested leave for surgery and was let go. The district court entered summary judgment for employer on claims under the Family and Medical Leave Act, which guarantees employees 12 workweeks of leave for serious health conditions, including the knee surgery plaintiff had, 29 U.S.C. 2612(a)(1). The Seventh Circuit reversed. Because there was evidence from which a jury could infer that termination was based on the leave request, summary judgment was inappropriate. A memo made by a supervisor, for purposes of discussing the termination with the employer's attorney, did not fit within the crime-fraud exception and is protected by attorney-client privilege.

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees.

A newborn suffered severe brain damage because doctors failed to promptly diagnose and treat an infection contracted at his 2003 birth. He was born prematurely and certain tests, normally done during pregnancy, were not performed by the federally-subsidized clinic where the mother received care. The clinic and its doctors are deemed federal employees under the Federally Supported Health Centers Assistance Act, 42 U.S.C. 233(g)-(n), and shielded from liability under the Federal Tort Claims Act. In 2005 the parents filed suit in state court and, in 2006, HHS denied an administrative claim for damages. Within six months of the denial the case was removed to federal court. In 2010, the district court held that the claim was filed within the two year statute of limitations under the FTCA (28 U.S.C. 2401(b)) and awarded more than $29 million in damages against the government. The Seventh Circuit affirmed. A claim only accrues when a plaintiff obtains sufficient knowledge of the government-related cause of his injury; the plaintiffs were reasonably diligent.

In 2001 plaintiff received prenatal care from a clinic that receives federal funds. Its physicians and the clinic are deemed federal employees for purposes of malpractice liability, so that the United States could be substituted as a party to a suit. 28 U.S.C. 2679(d)(1); claims would be governed by the Federal Tort Claims Act, and neither would face liability. For complex situations, the clinic contracted with UIC for specialists. Plaintiff's baby died following a difficult delivery. She sued the clinic, its doctor, the delivery hospital, and two UIC physicians who assisted. The U.S. Department of Health and Human Services denied claims for damages. The district court entered summary judgment for the UIC doctors under the Illinois Good Samaritan Act, which shields physicians who provide "emergency care without fee to a person," 745 ILCS 49/25, but declined to dismiss the case against the government, which had been substituted for the clinic. The Seventh Circuit reversed, first holding that the district court had derivative jurisdiction. Although the salaried UIC doctors did not receive a direct financial benefit from the delivery, their employer billed the clinic for services. There was evidence that one doctor submitted a billing form with respect to the delivery; the other made a "bad faith" decision not to bill.

When plaintiffs left their jobs, they did not receive notices describing how to extend their health insurance coverage within the period prescribed by statute (COBRA notices). Responding to solicitation from a lawyer, they became named plaintiffs in a proposed class action seeking damages from and statutory penalties against their former employer. The district court declined to certify the class and, on consideration of the individual claims, denied the request for statutory penalties and one of the plaintiffs' requests for damages. The Seventh Circuit affirmed. The district court properly denied class certification because it found the proposed class counsel inadequate to represent the class, based on observations about counsel's diligence, respect for judicial resources, and promptness. Denial of statutory penalties under 29 U.S.C. 1132 was appropriate; there was no evidence of an administrator's bad faith (such as misrepresentations or willful delay in response to requests for information) or gross negligence. The district court was within its discretion in denying damages as compensation for expenses, where there was no evidence to indicate that the expenses were incurred as a result of the failure to provide timely notice of COBRA rights.

Based on her part in billing Indiana Medicaid for ambulance service while running a car service to take patients to medical appointments, defendant was convicted of Medicaid fraud, 18 U.S.C. 1347, and conspiracy to defraud the U.S. government, 18 U.S.C. 371. She was sentenced to 33 months in prison and to pay restitution of $846,115. The Seventh Circuit affirmed. Data relating to time-stamping of bills, which may have established that multiple people submitted bills, was not concealed; the government simply failed to extract (before trial) information to which it and the defense had access. Even if the data was "Brady" material, it would not have changed the outcome. The judge did not err in telling the jury that a scheduled witness was ill without saying that the witness had refused treatment.

Wisconsin inmates challenged the state's Inmate Sex Change Prevention Act, Wis. Stat. 302.386(5m), which prevents the state Department of Corrections from providing transgender inmates with certain medical treatments. The district court ruled in favor of the inmates. The Seventh Circuit affirmed, noting the medical consequences and concluding that the policy violated the Eighth Amendment.