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

Most people eligible for Medicaid benefits are “categorically needy” because their income falls below a threshold of eligibility. People with higher income but steep medical expenses are “medically needy” once they spend enough of their own assets to qualify, 42 U.S.C. 1396a(a)(10). Plaintiffs contend that medical expenses they incurred before being classified as “medically needy” should be treated as money spent on medical care, whether or not those bills have been paid, which would increase Illinois's payments for their ongoing care.The Seventh Circuit affirmed the dismissal of their suit. Medicaid is a cooperative program through which the federal government reimburses certain expenses of states that abide by the program’s rules. Medicaid does not establish anyone’s entitlement to receive particular payments. The federal-state agreement is not enforceable by potential beneficiaries. Plaintiffs bypassed their administrative remedies and do not have a judicial remedy under 1396a(r)(1)(A). Section 1396a(a)(8) provides that a state’s plan must provide that all individuals wishing to apply for medical assistance under Medicaid shall have the opportunity to do so and that assistance shall be furnished with reasonable promptness to all eligible individuals; some courts have held that this requirement can be enforced in private suits. If such a claim were available, it would fail. Plaintiffs are receiving benefits. The court also rejected claims under the Americans with Disabilities Act, 42 U.S.C. 12131–34, and the Rehabilitation Act, 29 U.S.C. 794. Plaintiffs receive more governmental aid than nondisabled persons. View "Nasello v. Eagleson" on Justia Law

The False Claims Act, 31 U.S.C. 3729–3733, authorizes relators to file qui tam suits on behalf of the U.S. government. If such an action is successful, the relator receives part of the recovery. The Act prohibits presenting to a federal healthcare program a claim for payment that violates the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), Venari formed 11 daughter companies, each for the purpose of prosecuting a separate qui tam action, alleging essentially identical violations of the False Claims Act by pharmaceutical companies. CIMZNHCA, a Venari company, filed suit alleging illegal kickbacks to physicians for prescribing Cimzia to treat Crohn’s disease in patients who received federal healthcare benefits. The government did not exercise its right “to intervene and proceed” as the plaintiff but moved to dismiss the action, representing that it had investigated the Venari claims and found them to lack merit. The court denied that motion, finding the government’s general evaluation of the Venari claims insufficient as to CIMZNHCA and that the decision to dismiss was “arbitrary and capricious.”The Seventh Circuit reversed with instructions to dismiss, construing the government’s motion as a motion to both intervene and dismiss. By treating the government as seeking to intervene, a court can apply Federal Rule of Civil Procedure 41, which provides: “The Government may dismiss the action” without the relator’s consent if the relator receives notice and opportunity to be heard. View "United States v. UCB, Inc." on Justia Law

Vaughn, a quadriplegic, has received home‐based care for over 30 years. She requires help with personal care, household maintenance, mobility exercises, transportation, medications, suctioning secretions from her tracheostomy, and use of the ventilator. When nursing shifts cannot be staffed, Vaughn has relied on friends. Indiana funded her care through two federally-reimbursed Medicaid programs: A&D waiver and core Medicaid. Vaughn could select her own caregivers to receive A&D waiver funds but could not personally direct nursing care funded through core Medicaid. In 2016, Vaughn was hospitalized with pneumonia. She was cleared to be discharged but the state could not find nurses to provide round‐the‐clock care at home at Medicaid rates Vaughn was transferred to a nursing home and filed suit under the Americans with Disabilities Act, 42 U.S.C. 12132; the Rehabilitation Act, 29 U.S.C. 794; and the Medicaid Act, 42 U.S.C. 1396a(a)(8). The court granted Vaughn summary judgment with an injunction requiring the state to “do whatever is necessary to achieve” round‐the‐clock home‐based care, fully paid for by the state.The Seventh Circuit vacated. Vaughn is not entitled to the services she has requested under Indiana’s version of the Medicaid program, as the program was structured before the state adopted a new pilot program. The state is not obligated to reimburse Vaughn’s providers at rates above the approved Medicaid caps, nor must it use funds outside the Medicaid program to comply with a rule about accommodation within the program. View "Vaughn v. Walthall" on Justia Law

Mitze unsuccessfully appealed the denial of her application for social security benefits. Several years later, Mitze moved to seal her medical information and all other information pertaining to her case, citing “harassing phone calls from solicitors” who knew her personal medical information because the courts had “publicized” it by issuing opinions. She claims that she and her children have experienced social stigma and that thieves broke into her home to steal pain medication, which publicly available documents revealed that she had been prescribed.The Seventh Circuit affirmed the denial of Mitze’s motion. A strong presumption exists in favor of publishing dispositional orders, even in cases involving substantial privacy interests such as state secrets, trade secrets, and attorney-client privilege. The court acknowledged that the existing remedies of proceeding anonymously, requesting redactions, or sealing records may be inadequate in the social security context. News outlets have the right to publish information obtained from public court records and cannot be ordered to remove articles reporting on the decisions in her case. The court rejected an argument under the Health Insurance Portability and Accountability Act, 42 U.S.C. 1320d-6, which regulates the disclosure of information by only healthcare providers and their affiliates. View "Mitze v. Saul" on Justia Law

HCI, on behalf of the Illinois Department of Aging, coordinates services for low-income seniors in an effort to keep them at home. HCI sometimes referred clients who needed in-home healthcare services to home healthcare companies owned by MPI. Qui tam claims against MPI, its home healthcare companies, and HCI, alleged that they orchestrated an illegal patient referral scheme that violated the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(g), and, by extension, the state and federal False Claims Acts, 31 U.S.C. 3730(b)(1). The district court entered judgment for the defendants.The Seventh Circuit reversed. The evidence showed that MPI made monthly payments to HCI in return for access to the non-profit’s client records and used that information to solicit clients. The Anti-Kickback Statute definition of a referral is broad, encapsulating both direct and indirect means of connecting a patient with a provider. It goes beyond explicit recommendations; the inquiry is a practical one that focuses on substance, not form. The plaintiff’s theory was that MPI’s payments to HCI under the Management Services Agreement constituted kickbacks intended to obtain referrals in the form of receiving access to the HCI files that the defendants then exploited to solicit clients. A factfinder applying an erroneously narrow understanding of "referral "might find those facts, devoid of an explicit direction of a patient to a provider, to fall outside its scope. View "Stop Illinois Health Care Fraud, LLC v. Sayeed" on Justia Law

Until 2010, Reinaas, now in his mid‐fifties, worked as a machine operator. He injured his spine and tore his rotator cuff on the job, and underwent two neck fusion surgeries. Reinaas planned to return to work but continued to suffer from severe headaches (treated with hydrocodone), shoulder pain, and a decreased range of motion. A neurologist diagnosed him with cervicogenic headaches, and his family doctor diagnosed “long term nuchal headaches” and “[p]ermanent pain syndrome post cervical fusion.” Dr. Bodeau, a Mayo Clinic occupational physician, opined that Reinaas could not return to his factory job and suggested surgical intervention. In 2013, Reinaas had shoulder surgery and attended physical therapy; he took naproxen and Vicodin for pain.Reinaas applied for social security disability benefits. Benefits were denied after state‐retained physicians reviewed his records and concluded that Reinaas’s accounts of his symptoms were not fully credible. Dr. Bodeau opined that Reinaas had “deteriorated significantly” and was “highly unlikely to successfully regain employment at any physical demand level.” The ALJ concluded that Reinaas was not disabled. In determining Reinaas’s residual functional capacity, the ALJ afforded great weight to the opinions of the two non‐examining physicians and gave little weight to Dr. Bodeau’s opinion, explaining that Bodeau lacked knowledge of Social Security disability rules and that his report was based on subjective complaints of questionable credibility.The Seventh Circuit vacated. Substantial evidence does not support the ALJ’s decision to discount the treating physician’s opinion and the ALJ did not adequately evaluate Reinaas’s subjective complaints. View "Reinaas v. Saul" on Justia Law

Dolin was prescribed Paxil, the brand-name version of the drug paroxetine, to treat his depression. The prescription was filled with a generic paroxetine product. Six days later, Dolin died by suicide. Federal law preempted an "inadequate labeling" state-law claim against the generic manufacturer. Mrs. Dolin sued GSK, the manufacturer of brand-name Paxil, arguing that GSK was responsible for the labeling for all paroxetine, no matter who made and sold it, and had negligently omitted an adult suicide risk. The Seventh Circuit reversed her jury verdict, based on preemption, citing the complex regulation of drug labels and of Paxil/paroxetine’s label in particular. GSK had attempted to change the Paxil label in 2007 to add an adult suicide warning. The FDA rejected that change. The court concluded that GSK lacked new information after 2007 that would have allowed it to add an adult-suicidality warning under the existing regulations.Eight days after denying Dolin certiorari, the Supreme Court decided another case, further explaining the “clear evidence” standard for impossibility preemption for prescription drug labels. Dolin filed an unsuccessful motion under FRCP 60(b)(6), arguing that the 2018 judgment should be set aside based on a change in law so that GSK could not establish its defense of impossibility preemption. The Seventh Circuit affirmed and did not impose sanctions. The Supreme Court provided important guidance but did not break new ground that would change the result in Dolin’s case. Her motion was not frivolous. View "Dolin v. GlaxoSmithKline LLC" on Justia Law

Martin, a 67-year-old woman, sought Social Security Disability benefits. Her persistent back pain stems from two car accidents; she also suffers from depression, anxiety, bipolar disorder, panic disorder, and PTSD. These conditions caused Martin to stop working in 2009. Before then she had worked as a home health aide, data entry clerk, and administrative assistant. An ALJ determined that Martin’s severe impairments left her capable of performing only a limited range of sedentary jobs. The district court remanded for a more thorough consideration of Martin’s mental health problems. A new ALJ then found that Martin had no physical limitations whatsoever and declined to award benefits.The Seventh Circuit reversed, finding the second ALJ’s decision not supported by substantial evidence, and took “the rare step of ordering the award of benefits.” The court rejected Martin’s argument that the ALJ’s residual functional capacity determination failed to translate her mental health symptoms into limitations related to concentration, persistence, and pace but the record is clear that Martin’s physical limitations leave her unable to perform any work above the light level. Given her restricted range of motion and symptoms of pain, light exertion would likely be a challenge for Martin because it requires “a good deal of walking or standing.” View "Martin v. Saul" on Justia Law

The Drug Enforcement Administration investigated Dr. Ley and his opioid addiction treatment company, DORN, conducted undercover surveillance, and decided Ley did not have a legitimate medical purpose in prescribing Suboxone. Indiana courts issued warrants, culminating in arrests of four physicians and one nurse and seven non-provider DORN employees. Indiana courts dismissed the charges against the non-providers and the nurse. Ley was acquitted; the state dismissed the charges against the remaining providers. DORN’s providers and non-provider employees sued, alleging false arrest, malicious prosecution, and civil conspiracy. The district court entered summary judgment for the defendants, holding probable cause supported the warrants at issue. The Seventh Circuit affirmed as to every plaintiff except Mackey, a part-time parking lot attendant. One of Ley’s former patients died and that individual’s family expressed concerns about Ley; other doctors voiced concerns, accusing Ley of prescribing Suboxone for pain to avoid the 100-patient limit and bring in more revenue. At least one pharmacy refused to fill DORN prescriptions. Former patients reported that they received their prescriptions without undergoing any physical exam. DORN physicians prescribed an unusually high amount of Suboxone; two expert doctors opined that the DORN physicians were not prescribing Suboxone for a legitimate medical purpose. There was evidence that the non-provider employees knew of DORN’s use of pre-signed prescriptions and sometimes distributed them. There were, however, no facts alleged in the affidavit that Mackey was ever armed, impeded investigations, handled money, or possessed narcotics. View "Vierk v. Whisenand" on Justia Law

States may provide certain home-based services through Medicaid's Home and Community Based Waiver program, 42 U.S.C. 1396n(c). Illinois operates a waiver under which it contracts with non-profit organizations (ISCs) to provide case management services for adults with developmental disabilities receiving home- and community-based services as part of Medicaid. Illinois awarded 17 ISC contracts through a non-competitive, annual renewal process. The plaintiffs had received contracts for at least 25 years. In 2018, the state announced a new competitive bidding process to begin on July 1, 2019. The plaintiffs submitted bids but learned in January that their contracts would not be renewed. They sued under 42 U.S.C. 1983, alleging violations of Medicaid’s free-choice-of-provider provision, 42 U.S.C. 1396a(a)(23). On June 5, 2019, with new contracts to go into effect in less than 30 days, they sought a preliminary injunction. The district court denied their motion on June 25, reasoning that ISCs were not “qualified providers” under the statute. The plaintiffs appealed that same day. Four days later, they sought emergency injunctive relief pending appeal, which the Seventh Circuit denied. Months later, at oral argument, plaintiffs’ counsel acknowledged that vacating the new contracts would be too disruptive. The Seventh Circuit dismissed the appeal. With the plaintiffs no longer challenging the denial of their preliminary injunction, it is unnecessary to address the meaning of “qualified providers” or determine what kinds of services the plaintiffs provide. The passage of time has rendered the issue moot. View "Western Illinois Service Coordination v. Illinois Department of Human Services" on Justia Law