June 3, 2011
Guest Blogger Vickie J. Williams: Recent Non-Health-Care SCOTUS Decisions That Will Impact Health Care Litigation in a Big Way
This is my last post for the month. I want to thank Prof. Van Tassel and the other editors of the Health Law Profs Blog for allowing me to be the May guest blogger. I have enjoyed it so much that I am planning to return with a few posts in December to help break up everybody’s grading tedium again.
On May 16, the SCOTUS decided two non-health-care cases that will have major impacts on health care litigation. The first is Cigna Corp. v. Amara, a unanimous decision (Justice Sotomayor did not participate) in an ERISA case. In Amara, beneficiaries of Cigna’s pension plan challenged Cigna’s adoption of a new pension plan as violating ERISA’s notice and disclosure obligations. The SCOTUS made two significant rulings in the case: (1) the “summary plan description,” which is usually all that beneficiaries of an ERISA plan bother to read, does not set forth the terms of the benefit plan for purposes of ERISA, and is not part of the elusive ERISA “plan.” Therefore, an incomplete or misleading summary plan description cannot give rise to a claim for benefits due under the terms of an ERISA plan; and (2) ERISA §502(a)(3), which authorizes “appropriate equitable relief” against fiduciaries for violations of ERISA, can be used to support a monetary award against a plan trustee for breach of duty, as long as such award is deemed “compensatory” and is part of “make-whole” relief. Justices Scalia and Thomas did not join in the second part of the holding, by the way.
Let’s put aside the irony that a major national insurance company, which presumably administers ERISA health benefit plans for other employers, apparently doesn’t know how to comply with ERISA in its own benefit plans. More significantly, the holding regarding the nature of the summary plan description is likely to increase confusion (if that is possible) about what state-law tort claims are preempted by ERISA. If the summary plan description is not itself part of the plan, but is merely information about the plan, can a misleading or incomplete summary plan description give rise to an independent state-law tort claim for negligent misrepresentation or fraud, or is such a claim preempted? Because this would be a remedy that supplements remedies available against a plan fiduciary under ERISA, I would think preemption applies, but when it comes to ERISA preemption litigation, it is hard to predict outcomes. Certainly, this decision should allow plan administrators who write summary benefit plans to breathe a sigh of relief if the summary benefit plans are not quite as accurate or complete as they should be.
But what was given to plan administrators by one hand may be taken away by the six justices who joined in the second part of the holding. In that holding, the SCOTUS took the bait that was dangled by Justice Ginsburg in her concurrence in Aetna v. Davila to interpret the types of “equitable relief” available under ERISA §502(a)(3) to persons injured by plan fiduciaries to include some types of monetary compensation. Although the Court goes to great pains to explain that it is not expanding the relief currently available under Section 502(a)(3), the Court is clearly trying to alleviate Justice Ginsburg’s dismay, as expressed in her Davila concurrence, about the “cramped construction” of equitable relief previously given to the statute by the Court. This potentially opens the door for increased availability of monetary damages under ERISA for plan beneficiaries injured by decisions by a plan fiduciary. For example, if a plan beneficiary does not receive medical care in a timely manner due to the action of, or inaction by, a plan fiduciary (failure to authorize care promptly, for example) and can show injury due to the action, for the first time, she may be able to sue the plan fiduciary for compensatory damages under ERISA. Nevertheless, the SCOTUS has opened the ERISA door a crack in the past, as it did in Pegram v. Herdrich, and then slammed it shut, as it did in Davila. We will see how wide this opening is as lower courts try to apply this decision to requests for money damages in future ERISA cases, in both health care and other types of benefit plans.
And now I will close with the“f” word (fraud). Also on May 16, in a 5-3 opinion (Justice Kagan not participating) the SCOTUS decided Schindler Elevator Corp. v. U.S. ex rel. Kirk, a government contracting case interpreting the civil False Claims Act’s (FCA) public disclosure bar. In that case, the SCOTUS resolved a split in the circuits and determined that written responses to Freedom of Information Act (FOIA) requests, and documents attached to such responses, are “reports” for purposes of applying the FCA’s public disclosure bar. Therefore, a qui tam relator who obtains information about fraud against the United States from government responses to FOIA requests will be unable to maintain an FCA suit, unless he can prove that he is the original source of the information. This seems unlikely, since a person who was the original source of the information would presumably have no need to make a FOIA request to get the very same information he presumably already had. For a person who is an original source and did not make the FOIA request, this merely puts another arrow in the quiver of defendants who will do everything in their power to show that the information was disclosed to somebody in a FOIA request (including perhaps making the FOIA request themselves), and that the case is therefore jurisdictionally barred. As Justice Thomas noted, there is a split among the circuits regarding whether such a disclosure would bar a suit by somebody who was not a party to the disclosure. Therefore, this decision is most likely a prelude to another case in which the split will be resolved. Stay tuned.
More immediately, this ruling may be a major impediment to the efforts of data-mining companies to use publicly reported Medicare and Medicaid data to support FCA cases against health care providers, such as occurred in the Pneumonia DRG upcoding case filed by Health Outcomes Technology in the 1990s. That case, which was based on publicly available data, resulted in a government investigation of over 100 hospitals and a recoupment of millions of dollars in alleged overpayments. I would anticipate that health care providers will be very pleased with this ruling, as it severely curtails the ability of whistleblowers to pursue cases against them when the government has declined to intervene (as is true in a majority of cases). As the dissent notes, this decision leaves whistleblowers caught between the rock of Federal Rule of Civil Procedure 9(b), which requires knowledge of detail for fraud to be plead with particularity, and the hard place of this decision, which limits their ability to substantiate their allegations and fill in detail through information received in response to a FOIA request before commencing suit. Perhaps Congress will accept the dissent’s invitation to amend the FCA in response to this decision, but right now it appears that Congress has bigger fish to fry.
That’s all for now. I will now have to turn my full attention to preparing for my summer class. Happy summer, everybody.
Worth Reading This Week
Mark Rothstein, Constitutional Right to Informational Health Privacy in Critical Condition, SSRN/JLME
Sam Halabi, The Patient Protection and Affordable Care Act of 2010: Rulemaking in the Shadow of Incentive-Based Regulation, SSRN/Rutgers Law Record
Dayna Bowen Matthew, Implementing American Health Care Reform: The Fiduciary Imperative, SSRN/Buffalo L.Rev.
Gregory D. Curfman et al, Prescriptions, Privacy, and the First Amendment, NEJM
The Minimal Effect of Tort Reform on Healthcare Costs
Clear data (and charts), available here.
I’m not going to disagree that the malpractice system needs fixing. Far too many claims are filed that have no merit. In addition, many more are never brought to trial that absolutely do. I completely support efforts at malpractice reform. … But it’s not the solution to our high health-care spending. Tort reform does not equal cost control.
Excellent piece from the Washington Post by Aaron Carroll. [NPT]
June 2, 2011
Hospital-Acquired Conditions and Medicaid
According to ACA Section 2702
The Secretary ... shall identify current State practices that prohibit payment for health care- acquired conditions and shall incorporate the practices identified, or elements of such practices, which the Secretary determines appropriate for application to the Medicaid program in regulations.
The purpose of this provision was to better align Medicaid policies with the Medicare position taken in 2008. That is, there should be no remuneration for so-called "never events," a subset of "Hospital-Acquired Conditions" (HACs). Examples include retained objects and some falls and infections.
The new Medicaid rule is now available here. As noted in the Background section of the new rule (at 17) there are considerable differences among the 21 states that already have HAC reimbursement prohibitions, even though many states do use the Medicare HAC list, available here. As a result the new Medicaid rule adopts a federal floor and permits states to have some more stringent requirements. The compliance date for the new regulation has been pushed back to July 1, 2012
June 1, 2011
Review of Reconsidering Law and Policy Debates: A Public Health Perspective
Reconsidering Law and Policy Debates: A Public Health Perspective, edited by John Culhane, is a superb collection of thought-provoking essays which features some of the most well-regarded health law scholars in the US. It also includes contributors from schools of public health, public affairs, and public administration. The chapters are uniformly well-written and instructive. Though I cannot in this brief review give consideration to all of the essays, I will try to highlight contributions related to some of my own areas of interest in the intersection between public health and medico-legal research.
Several authors focus on the difficult questions raised by extreme inequality. For example, Vernellia R. Randall’s Dying While Black in America reflects on the disturbing disparity between white and black death rates in the US. A black American male can expect to live seven years less than a white American male, and black women face a four-year gap. Randall explores a number of potential explanations, including discriminatory policies and practices, lack of language and culturally competent care, inadequate inclusion in healthcare research, and hidden discrimination in rationing mechanisms. Randall argues that these disparities will never be addressed effectively until the legal system develops doctrines that can deter not only intentional discrimination, but also “negligent discrimination in healthcare:”
Negligent discrimination in healthcare would occur when healthcare providers failed to take reasonable steps to avoid discrimination based on race when they knew or should have known that their actions would result in discrimination. An example of this would be decisions to close inner-city hospitals and move them to the suburbs. (86)
Randall expertly characterizes race as a key “social determinant of health” in the United States. Countering the many current legal doctrines that promote the legitimation of discrimination, Randall envisions the type of guarantees of equality that will be necessary to realize the antisubordination and antisubjugation principles that animate the 14th Amendment properly understood.
Diane E. Hoffman also addresses stunning inequalities, this time on a global level. Hoffman’s long engagement with end-of-life care informs a consistently sensitive and insightful public health perspective. Considering the situation in the United States, Hoffman concludes that “it is not as all clear that we would want to give the state a public health justification for taking on end-of-life care,” because “we might have trouble reining in the government and preventing it from implementing increasingly more coercive measures” (59). This judgment is particularly pertinent in a political environment where extreme inequality and ever-lower taxes on the wealthiest have imperiled many important health programs for the aged.
However, Hoffman comes to a different conclusion in the case of many developing countries, where the question is less one of rationing access to life extending technologies than it is one of extending access to basic treatments for pain. In a sobering series of statistics, Hoffman presents a tragic panorama of human suffering. In India, only 1% of the 1.6 million people enduring cancer pain each year are likely to receive any type of pain medication. Morphine dispensaries are rare; Calcutta, with 14 million residents, has only one. Though nearly half its population is extremely poor, India is not an outlier. While developing countries account for 80% of world population, they use only 6% of the morphine consumed each year. Sometimes, shortages of medical personnel help explain the problem: for example, in Sierra Leone, there is only one doctor for every 54,000 people (as opposed to a 1:350 ratio in the US). But Hoffman gives several examples of easily preventable policies and business practices that keep painkillers out of the hands of the world’s poorest individuals. This is a truly neglected global crisis, generating levels of suffering that are rarely encountered or even imagined in the developed world.
Returning to the US, the last two chapters in the book are very interesting contributions to ongoing debates about the nature and role of tort doctrine. Elizabeth Weeks Leonard expertly deconstructs the usual dichotomy between tort law’s individualism and the population focus of public health. As she notes, cases involving asbestos, lead paint, silicone breast implants, the Dalkon shield, hazardous autos, tobacco, firearms, Phen-Fen, OxyContin, and Vioxx have all combined efforts by individuals to secure compensation for injuries with broader strikes against destructive products and practices. Weeks succeeds in demonstrating the “counterintuitive fit between tort law and public health law” (189), arguing that each “offers approaches to addressing inevitable conflicts in organized society between individual interests and community needs.”
Jean Macchiaroli Eggen tries to make the fit better by focusing on punitive damages. Toward the end of her chapter, she proposes that states solve the “plaintiff windfall problem” in punitive damages by requiring that “the portion of the punitive award the plaintiff does not receive [due to split-recovery statutes and other measures] be allocated to a state or private program that will enhance the deterrence of the conduct that gave rise to the warden the particular case.” The contributions of both Weeks Leonard and Macchiaroli Eggen would be of great interest to tort classes and seminars considering the difficult issues raised by judicial efforts to address public health concerns.
John Culhane is to be commended for bringing together such an illustrious group of contributors to address public health, an issue that has been neglected in law schools. Knowing full well that factors like income, race, pollution, and even commute length may have a far greater impact on health than, say, dispute resolution methods used by insurance companies, law professors nevertheless tend to focus on purely legal topics. (I am as guilty of this as anyone, and credit this book (and many interventions by Daniel Goldberg) for pushing me to do more to consider the social determinants of health in my own work.) Well after the sturm und drang surrounding the constitutionality of the ACA has dissolved, we will still face problems of balancing liberty, equality, and welfare that this book’s thoughtful contributors address. Their voices deserve to be heard in those future, more substantive, debates. [FP]
X-Posted: Health Reform Watch.
May 31, 2011
Environmental Public Health Law
In the Spring 2011 Special Supplement to the Journal of Law, Medicine & Ethics, Richard J. Jackson and Timothy F. Malloy explore the emerging field of Environmental Public Health Law (EPH). In “Environmental Public Health Law: Three Pillars,” 39 J.L. Med. & Ethics 34 (2011) the authors point out how the protection of human populations (a focus of Public Health law) and the protection of plant and animal species, the oceans, and other natural systems (the focus of environmental law) are often inextricably linked. They argue that more resources should be put in studying the role of the environment in disease genesis and prevention, and developing the law to incorporate those scientific findings. EPH threats are “immense and complex”, and “cross many disciplines and bureaucratic jurisdictions.” The article concludes by applying organizing principles of prevention, systems thinking, and an interdisciplinary framework, a partnership between science and the law “will yield substantial public health benefits for the future.”
This brief but insightful article is a good reminder that environmental laws, whose stated purposes are often to protect human health, belong in the health law debates. Lawyers from environmental agencies need to better liaise with scientists in public health agencies and practitioners, who have long acknowledged the need to reduce environmental health threats. The World Health Organization long ago acknowledged the links between environment and public health in its Health and Environment Linkages Initiative. The mission of the National Institutes of Environmental Health Sciences is to “reduce the burden of human illness and disability by understanding how the environment influences the development and progression of Human disease.” So environmental agencies are working on the front lines of public health protection.
The Environmental Protection Agency (EPA) has a division that conducts research on health and environmental effects. Four of EPA’s seven priorities mention actions to protect human health. Despite this, the major political discourse on EPA administered laws like the Clean Air Act and the Clean Water Act is often dominated by debates about the laws’ adverse effects on business or the economy. The programs and laws that the EPA administers need to be analyzed in the discussions about public health care and disease prevention approaches in a more comprehensive way. The growth of the EPH Law field, by creating platforms for interdisciplinary and cross-agency interaction, will hopefully provide EPA with more support in its mission to protect the public.