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

Lash, a 60-year-old, obese man with a remote history of smoking and high blood pressure, was traveling when he experienced shortness of breath and chest discomfort. He went to Sparta hospital. An EKG, blood work, and a chest x-ray revealed no signs of a previous heart attack, but his white blood cells and blood sugar were slightly elevated, suggesting a cardiac event. Dr. Panico identified mild congestive failure and an enlarged right hilum, a part of the lung. He recommended a CT scan to rule out a mass. Dr. Motwani, the main physician responsible for treating Lash, diagnosed an “anxiety reaction” and prescribed medications. Lash was not informed of his congestive heart failure nor that an enlarged right hilum could mean heart failure or cancer. One nurse mentioned only that Lash was seen for an “anxiety reaction.” The next evening, Lash went into cardiac arrest. He was taken to the emergency room, where he was pronounced dead.In a malpractice suit by Lash’s estate, the district court granted Sparta hospital summary judgment. Motwani settled the case and was dismissed from the lawsuit. The Seventh Circuit affirmed. . The Illinois Tort Immunity Act provides that “a local public entity,” such as Sparta, is not liable for an employee’s negligent “diagnosis.” Lash never received any treatment, so no doctor could have failed to disclose information that might have changed his decisions. View "Lash v. Sparta Community Hospital" on Justia Law

Tinimbang invested $811,400, founding Donnarich Home Health in 2005 with his then-wife Josephine and their children. In 2006-2007, the others forced him out of management; Tinimbang maintained his equity position. Josephine and their son, Richard, later incorporated two healthcare businesses: Josdan and Patient Home; some of the funding came from Donnarich’s assets. Tinimbang later asserted that he was not compensated for those asset transfers or for his removal as Donnarich’s president.Josephine and others were charged with conspiracy to commit healthcare fraud (18 U.S.C. 1349) and conspiracy to launder the proceeds of healthcare fraud and unlawful payments for patient referrals (18 U.S.C. 1956(h)) by using Donnarich and Josdan to fraudulently bill Medicare and creating shell companies to deposit checks. The government sought the forfeiture of assets involved in or traceable to the conspiracies. Josephine fled. Guerrero, an employee, pled guilty and agreed to forfeit assets. The district court entered a preliminary order of forfeiture.Tinimbang asserted a claim to the assets by instituting ancillary proceedings, citing his investment in Donnarich, his removal without compensation, and the allegedly improper transfers from Donnarich to Josdan and Patient. Tinimbang did not provide any financial tracing. The government “reviewed the movement of funds” and did not trace any of Tinimbang’s investment to the forfeiture assets. The Seventh Circuit affirmed summary judgment in favor of the government. Tinimbang had not carried his burden to show a vested or superior interest in the forfeited assets at the time of the criminal acts. View "United States v. Tinimbang" on Justia Law

During the COVID-19 pandemic, Illinois Governor J. B. Pritzker issued a series of executive orders that first required Illinois residents to shelter in place at their residences, compelled “non-essential” businesses temporarily to cease or reduce their operations and prohibited gatherings of more than 10 people (later increased to 50 people). Believing that these orders violated numerous provisions of the U.S. Constitution, several individuals joined with some Illinois businesses and sued the Governor in his official capacity. After granting the plaintiffs one opportunity to amend their complaint, the district court found that they lacked standing to sue. The court also concluded that it would be futile to allow a second amendment because, even if it had erred about the existence of a justiciable case or controversy, the plaintiffs could not state a claim upon which relief could be granted.The Seventh Circuit affirmed the dismissal of the complaint. With respect to five out of six counts, the plaintiffs have not satisfied the criteria for Article III standing to sue. The remaining count attempts to state a claim under the Takings Clause. The business plaintiffs “may have squeaked by the standing bar” for that theory but have not stated a claim upon which relief can be granted. View "Nowlin v. Pritzker" on Justia Law

Illinois Insurance Guaranty Fund is a state-created insolvency insurer; when a member insurer becomes insolvent, the Fund pays covered claims. In cases involving insolvent health insurance, many claims are for patients who are eligible for both Medicare benefits and private health insurance. The Fund sought a determination that it is not subject to reporting requirements under section 111 of the 2007 Medicare, Medicaid, and SCHIP Extension Act, 42 U.S.C. 1395y(b)(7) & (b)(8), which is intended to cut Medicare spending by placing financial responsibility for medical costs with available primary plans first. Because time may be of the essence in medical treatment, the government may make conditionally cover medical expenses for Medicare beneficiaries insured by a primary plan, subject to later reimbursement from a primary plan. Section 111 imposes reporting requirements so that the government can identify the primary plan responsible for payment. The Fund believes that it is not an “applicable plan.”The district court dismissed for lack of subject-matter jurisdiction, reasoning the government had not made a final decision through its administrative processes. The Seventh Circuit affirmed. The Fund can obtain judicial review of its claim in a federal court only by channeling its appeal through the administrative process provided under 42 U.S.C. 405(g). The usually-waivable defense of failure to exhaust administrative remedies is a jurisdictional bar here. View "Illinois Insurance Guaranty Fund v. Becerra" on Justia Law

Jennings, who was not a medical professional, ran Results Weight Loss Clinic in Lombard, Illinois. Jennings paid Mikaitis, who was working full‐time for a hospital in Lockport, Illinois cash to secure a Drug Enforcement Agency registration number for the clinic and to review patient charts. Over the next two years, Jennings ordered over 530,000 diet pills (controlled substances) for over $84,000 using Mikaitis’s credit card and DEA number. Mikaitis appeared at Results weekly to get $1,750 cash and review four to eight charts. Results also gave drugs—in person and by mail— to many patients whose charts he never reviewed. A nurse practitioner who worked at the clinic later testified she noticed almost immediately that Jennings was unlawfully distributing drugs. Jennings paid Mikaitis about $98,000 cash, in addition to reimbursement for drug costs.Mikaitis was tried on 17 counts. He denied knowing about illegal activity. The district judge issued a deliberate avoidance (ostrich) instruction. Convicted, Mikaitis was sentenced to 30 months. The Seventh Circuit affirmed. Ample evidence demonstrated that Mikaitis subjectively believed that there was a high probability he was participating in criminal activity and that he took specific, deliberate actions to avoid learning that fact. Mikaitis was a medical professional with corresponding duties. The jury was free to conclude the red flags were obvious to him. View "United States v. Mikaitis" on Justia Law

In a suit under the False Claims Act (FCA), Proctor alleged that Safeway knowingly submitted false claims to government health programs when it reported its “retail” price for certain drugs as its “usual and customary” price, although many customers paid less than the retail price because of discount and price-matching programs. The district court granted Safeway summary judgment, concluding that Safeway’s pricing practices were “objectively reasonable” and no “authoritative guidance” cautioned against its interpretation of Medicare and Medicaid regulations.While the case was pending, the Seventh Circuit held that a defendant does not act with reckless disregard as long as its interpretation of the relevant statute or regulation was objectively reasonable and no authoritative guidance warned the defendant away from that interpretation. Failure to satisfy that standard for reckless disregard precludes liability under FCA’s actual knowledge and deliberate indifference provisions, which concern higher degrees of culpability.The Seventh Circuit then affirmed summary judgment in favor of Safeway. A footnote in a Centers for Medicare and Medicaid (CMS) manual does not constitute “authoritative guidance.” CMS can (and did) revise the manual at any time, and a single footnote in a lengthy manual does not support treble damages liability in this case. The other sources of guidance Proctor identified are unpersuasive because they do not come from the agency. View "Proctor v. Safeway, Inc." on Justia Law

A putative class of medical providers sued, alleging a conspiracy to drive up the prices of syringes and safety IV catheters (Products). Their first complaint, alleging a hub‐and‐spokes conspiracy ( Sherman Act, 15 U.S.C. 1) between manufacturer, BD, group purchasing organizations, and four distributors, was dismissed because the Providers failed to allege that the distributors coordinated with each other in furtherance of the conspiracy. In an amended complaint, the Providers abandoned their horizontal conspiracy allegations and alleged two vertical conspiracies, one between BD and McKesson and another between BD and Cardinal Health.The district court dismissed, noting that because the named plaintiffs do not purchase the Products directly from Cardinal, they lack “antitrust standing” to sue Cardinal. The Seventh Circuit affirmed. . The Providers cannot sue Cardinal under Article III because their injury is not fairly traceable to Cardinal’s conduct; precedent precludes the suit because they do not purchase the Products from either member of the BD‐Cardinal conspiracy. The Providers did not plausibly establish that vertical conspiracies involving just two distributors and BD could influence the prices that the Providers pay, regardless of which distributor they purchase from, and regardless of the fact that there are at least four major distributors. View "Marion Diagnostic Center, LLC v. Becton Dickinson & Co." on Justia Law

Mamalakis, a Wisconsin anesthesiologist, filed a qui tam lawsuit (False Claims Act, 31 U.S.C. 3729), alleging that Anesthetix, his former employer, fraudulently billed Medicare and Medicaid for services performed by its anesthesiologists. His central allegation is that the anesthesiologists regularly billed the government using the code for “medically directed” services when their services qualified for payment only at the lower rate for services that are “medically supervised.” A magistrate judge held that the complaint did not provide enough factual particularity to satisfy the heightened pleading standard for fraud claims, FED. R. CIV. P. 9(b). Mamalakis filed an amended complaint that included 10 specific examples of inflated billing, each identifying a particular procedure and anesthesiologist and providing details about how the services did not qualify for payment at the medical-direction billing rate. Six examples included a specific allegation that the anesthesiologist billed the services using that code; the other four relied on general allegations regarding the group’s uniform policy of billing at the medical-direction rate. The judge dismissed the case with prejudice.The Seventh Circuit reversed. Although Rule 9(b) imposes a high pleading bar to protect defendants from baseless accusations of fraud, Mamalakis cleared it. The examples, read in context with the other allegations in the amended complaint, provide sufficient particularity about the alleged fraudulent billing to survive dismissal. View "Mamalakis v. Anesthetix Management LLC" on Justia Law

Vargas received extensive medical care from the Veterans Administration. In his suit under the Federal Tort Claims Act, 28 U.S.C. 2671–80, he argued that a VA nurse was negligent in failing to order additional tests after receiving the results of urinalysis in October 2015. More testing, Vargas contended, would have revealed that he suffered from a urinary tract infection; failure to diagnose that infection led to a heart attack, which led to extended hospitalization, which led to pain and inflammation.The Seventh Circuit affirmed the rejection of his claims, upholding the district judge’s decision to allow testimony from a board-certified urologist. Federal Rule of Evidence 702 governs the admissibility of expert evidence in suits under the FTCA. The district judge was entitled to consider the urologist’s view that the applicable standard of care did not require follow-up testing to look for a urinary tract infection. If even a board-certified urologist would not have seen anything in the test result calling for further lab work, then a nurse practitioner’s identical decision cannot be negligent. Illinois does not hold nurses to the higher standard of specialists. View "Love v. United States" on Justia Law

The Association of American Physicians & Surgeons (AAPS), is a nonprofit organization of physicians and surgeons. The American Board of Medical Specialties, a nonprofit provider of medical certification services, is an umbrella organization for 24 member boards, each dedicated to a particular medical practice area. The Board deems physicians who meet its requirements to be “Board-certified.” To remain certified, physicians must comply with the Board’s Maintenance of Certification (MOC) program and continuing education requirements. All states permit physicians who are not Board-certified to practice medicine.According to AAPS, the Board conspired with its member boards, hospitals, and health insurers to condition the granting of staff privileges and in-network status on physicians’ continued participation in the MOC program so that physicians find themselves forced to participate in the program to practice medicine, at least if they wish to do so in hospitals or to accept certain forms of insurance. The Seventh Circuit affirmed the dismissal of its suit under section 1 of the Sherman Act and claiming negligent misrepresentation on the Board’s website to “create the false impression that [the MOC program] is indicative of the medical skills of physicians.” The complaint does not plausibly allege an agreement between the Board, hospitals, and insurers. Mere legal conclusions are “not entitled to be assumed true.” View "Association of American Physicians & Surgeons, Inc. v. American Board of Medical Specialties" on Justia Law