Joint Appellate Practice Meeting: A Review of SCOTUS Health Law Decisions

by Margaret Heinen

In Aug. 25, 2016, the Appellate Practice Section and Health Law Section co-sponsored a Supreme Court Roundup led by appellate experts Erin Fuse Brown and Merritt E. McAlister. The turnout was good; members of both sections filled a conference room at King & Spalding in Atlanta. The program was also available by webcast at HunterMaclean in Savannah, as well as online for those who wanted to watch from the comfort of their own offices.

Brown and McAlister shared their analysis of several SCOTUS decisions from last term that involved healthcare issues. The bulk of the program was dedicated to three major decisions: Universal Health Services v. Escobar, Zubik v. Burwell, and Gobeille v. Liberty Mutual Insurance Company.

In Universal Health Services v. Escobar (Docket No. 15-7), the parents of a teenage girl who died in the care of her mental health providers filed a False Claims Act lawsuit to hold the facility liable based on a failure to comply with state licensing and supervision regulations. In a unanimous decision written by Justice Thomas, the Court held that when a defendant makes specific representations about the goods or services provided, but fails to disclose non-compliance with material statutory, regulatory, or contractual requirements that make those misrepresentations misleading with respect to those goods or services, the implied false certification theory can be a basis for liability under the False Claims Act, even if those material requirements were not expressly designated as conditions of payment.

Zubik v. Burwell (14-1418) involved the question of whether religious nonprofits such as universities and charities should be exempt from the contraceptive mandate—a regulation adopted by the U.S. Department of Health and Human Services under the Affordable Care Act that requires non- church employers to cover certain contraceptives for their female employees. Interestingly, in a per curiam opinion, the Court made it clear that it “expresses no view on the merits of the case.” But it did remand the case to give the parties an opportunity to reach an agreement that would allow women under those plans to receive contraceptive coverage while still accommodating the nonprofits’ religious exercise.

In Gobeille v. Liberty Mutual Insurance Company (14-181), the Court held that ERISA pre-empts a State of Vermont law requiring comprehensive claims payment information from certain entities for an all-inclusive health care database.

Brown and McAlister also discussed Whole Woman’s Health v. Hellerstedt (15-274). The issue was whether a Texas law that required physicians who perform abortions to have admitting privileges at a nearby hospital, and required abortion clinics to have facilities similar to a surgical center, impose an undue burden on a woman’s right to have an abortion. In a 5-3 decision written by Justice Breyer, the Court held that these requirements were unconstitutional: neither requirement conferred medical benefits sufficient to justify the burden upon access to abortion, and each requirement imposed substantial obstacles.

As for cases to watch, Brown and McAlister talked about a handful of matters that share a common thread: statistical sampling.

In United States ex rel. Martin v. Life Care Centers of America, Inc. (E.D. Tenn.), a nursing home operator allegedly charged Medicare for unreceived services. The government claimed that there are too many cases to litigate individually, so it sought to rely on the findings of a statistical expert who used a random sample of 400 patient admissions (out of 54,396) to determine how many of the claims were fraudulent. The Eastern District of Tennessee recognized that extrapolation was novel in the liability context, but not prohibited by precedent or legislative history.

In United States ex rel. Michaels v. Agape Senior Community, Inc. (D.S.C.; 4th Cir.), relators said that it would cost $16 million – $26 million for experts to review more than 50,000 claims involving a nursing home operator who allegedly charged Medicare for unnecessary services. Rather than litigate each case individually, the relators sought to use statistical sampling to prove damages. The U.S. District Judge would not allow the use of statistical sampling, but did recommend a bellwether trial of 100 claims. The case is now on appeal in the 4th Circuit, which granted review via interlocutory appeal.

The meeting ended with a discussion of the most interesting case on the watchlist: United States House of Representatives v. Burwell (D.D.C.; D.C. Cir.). The House of Representatives, in a 225 to 201 vote (with all 225 votes in favor belonging to Republicans), agreed to file a lawsuit against President Barack Obama in the U.S. District Court for the District of Columbia. The issue was whether the government’s cost-sharing payments under the Affordable Care Act violate the Appropriations Clause. (There is also a sub-issue here: Does the House have standing to sue the executive branch?) On May 12, 2016, Judge Rosemary Collyer ruled in favor of the House, finding that public money cannot be used to fund cost-sharing subsidies because Congress did not specifically appropriate money for that purpose. That ruling has been stayed pending appeal.

Margaret Heinen is the 2016-17 Section chair for the Appellate Practice Section. She is a senior staff attorney with The Appellate Division of the Georgia Public Defender Council and exclusively handles direct appeals from criminal cases in Georgia superior courts.