Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage organizations fixed monthly amounts for each enrollee. Medicare Advantage organizations have a financial incentive to exaggerate an enrollee’s health risks by reporting diagnosis codes unsupported by the enrollee’s medical records, and therefore, Medicare regulations require a Medicare Advantage organization to certify that the risk adjustment data is submits are accurate and truthful. Qui Tam Relator James Swoben filed a third amended complaint alleging that Medicare Advantage organizations performed biased retrospective medical record reviews, which rendered Defendants’ periodic certifications false, in violation of the False Claims Act. Defendants moved to dismiss Swoben’s claims. In response, Swoben sought to amend his complaint. The district court dismissed the third amended complaint with prejudice, concluding that Swoben failed to allege a claim with particularity as required by Fed. R. Civ. P. 9(b). The court also denied leave to amend, citing both futility of amendment and undue delay. The Ninth Circuit vacated the district court’s judgment, holding that the dismissing Swoben’s third amended complaint without leave to amend based on futility of amendment and undue delay and that leave to amend was proper in this case. View "United States v. United Healthcare Insurance Co." on Justia Law

In 2012, the Wood plaintiffs, who were recipients of health coverage under Arizona's Medicaid demonstration project, filed suit against the Secretary challenging her approval of a new Arizona project that raised copayments for medical visits and medications and that permitted healthcare providers to refuse non-emergency services based on an inability to pay. At issue on appeal is whether the members of the class action were the prevailing parties for purposes of attorneys’ fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412. The court applied the factors in Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., holding that under the EAJA, the Wood plaintiffs are the prevailing party in their procedural Administrative Procedure Act (APA), 5 U.S.C. 706(2)(A), challenge against the Secretary. The court noted that the dispositive question is not whether the plaintiff ultimately obtained some form of substantive relief, but rather whether there is a lasting alteration in the legal relationship between the parties. The court concluded that there was a material alteration in the legal relationship of the parties, to the benefit of the Wood plaintiffs. Finally, the court concluded that the retention of jurisdiction for practical and equitable reasons did not undermine the reality that the Wood plaintiffs were a prevailing party. Therefore, the court reversed and remanded to the district court to consider whether the government’s position was “substantially justified” under the EAJA. View "Wood v. Burwell" on Justia Law

L.J.’s mother filed suit in federal district court to require the school district to provide L.J. with an Individualized Education Plan (IEP) to provide specialized services to assist with what she contends are serious disabilities. The district court reviewed the record and found that L.J. was disabled under three categories defined by the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. Nevertheless, the district court concluded that an IEP for specialized services was not necessary because of L.J.’s satisfactory performance in general education classes. The court concluded that L.J. clearly exhibited behavioral and academic difficulty during the snapshot period where he threatened and attempted to kill himself on three occasions in 2012; in the fall, he frequently acted out at school, and continued to have needs associated with his medication regimen; and the district court should not have discounted these facts. The court concluded that they demonstrate that L.J. required special education services. Because L.J. is eligible for special education, the school district must formulate an IEP. The court also concluded that the school district clearly violated important procedural safeguards set forth in the IDEA. In this case, the school district failed to disclose assessments, treatment plans, and progress notes, which deprived L.J.’s mother of her right to informed consent. The school district also failed to conduct a health assessment, which rendered the school district and IEP team unable to evaluate and address L.J.’s medication and treatment related needs. Accordingly, the court reversed and remanded. View "L. J. V. Pittsburg U.S.D." on Justia Law

Relator filed a qui tam action under the False Claims Act, 31 U.S.C. 3729-3733, alleging that defendants submitted false certifications under 42 C.F.R. 422.504(l)(l)2), by conducting retrospective reviews of medical records designed to identify and report only under-reported diagnosis codes (diagnosis codes erroneously not submitted to CMS despite adequate support in an enrollee’s medical records), not over-reported codes (codes erroneously submitted to CMS absent adequate record support). The district court denied relator leave to file a proposed fourth amended complaint. The court concluded that the district court erred by concluding that amendment would be futile where relator's proposed fourth amended complaint asserts a cognizable legal theory. Relator alleged that Medicare Advantage organizations design retrospective reviews of enrollees’ medical records deliberately to avoid identifying erroneously submitted diagnosis codes that might otherwise have been identified with reasonable diligence. The court also concluded that the district court abused its discretion by denying leave to amend based on undue delay. In this case, leave to amend is proper given the early stage of litigation, relator does not seek to assert a new legal theory, and this is relator's first attempt to cure deficiencies. Therefore, because the district court abused its discretion in denying leave to amend, the court vacated the district court's dismissal and remanded with instructions. View "Swoben v. United Healthcare" on Justia Law

Plaintiff was awarded social security disability benefits due to her bipolar disorder. Plaintiff was disabled as of April 15, 2007, but had medically improved to the point she was no longer disabled beginning on March 24, 2009. The court concluded that in closed period cases an ALJ should compare the medical evidence used to determine that the claimant was disabled with the medical evidence existing at the time of asserted medical improvement. Although the ALJ in this case made the appropriate comparison, the court concluded that substantial evidence does not support the ALJ’s finding of medical improvement. The ALJ erroneously focused on only temporary periods and isolated aspects of plaintiff's improvement that were not representative of the continuing severity of her symptoms. In this case, plaintiff's improvement was not sustained and was considerably limited in scope. Accordingly, the court reversed and remanded with instructions. View "Attmore v. Colvin" on Justia Law

Student and Guardian seek reimbursement from the district for the cost of Student's private education, claiming that the district failed to comply with the procedural requirements of the Individuals with Disabilities Education Act, 20 U.S.C. 1400–1491o (IDEA), and thus failed to provide a free appropriate public education (FAPE) in the least restrictive environment (LRE) for Student. The district court affirmed the ALJ's denial of reimbursement. In regard to the June 2009 individualized education program (IEP), the court agreed with the lower courts that any procedural failure on the part of the district was caused by Guardian, and that, in any event, the Jordon Intermediate School placement was a FAPE. In regard to the June 2011 IEP, the court concluded that the IDEA does not require the school district to conduct all assessments possible. In this case, the district court did not violate the IDEA by failing to assess Student for anxiety and failing to determine the baseline for Student's speech and language goals. Finally, the Buena Park placement offer was a FAPE in the LRE for Student. Accordingly, the court affirmed the judgment. View "Baquerizo v. Garden Grove USD" on Justia Law

Plaintiff appealed the denial of his social security benefits. In a case of first impression, the court held that the law of the case doctrine and the rule of mandate apply to social security administrative remands from federal court in the same way they would apply to any other case. In this case, the court concluded that, given the new evidence - highly probative testimony about plaintiff's ability to perform his past work and a new finding supporting that testimony - the district court did not abuse its discretion in declining to apply the law of the case doctrine. Given the expansive remand orders in this case, the ALJ did not violate the rule of mandate. The court also held that the ALJ properly categorized plaintiff’s past work and correctly found that he was still able to perform that work as it is generally performed in the national economy. Accordingly, the court affirmed the judgment. View "Stacy v. Colvin" on Justia Law

Paso Robles was responsible for providing Luke, a child with autism, with a free appropriate public education (FAPE) under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400–1487. At the time of Luke’s initial evaluation, Paso Robles was aware that Luke displayed signs of autistic behavior, and therefore, autism was a suspected disability for which it was required to assess him. Paso Robles chose not to formally assess Luke for autism because a member of its staff opined, after an informal, unscientific observation of the child, that Luke merely had an expressive language delay, not a disorder on the autism spectrum. The court held that, in so doing, Paso Robles violated the procedural requirements of the IDEA and, as a result, was unable to design an educational plan that addressed Luke’s unique needs. Accordingly, the court held that Paso Robles denied Luke a free appropriate public education, and remanded for the determination of an appropriate remedy. View "Timothy O. v. Paso Robles USD" on Justia Law

Claimant appealed the denial of her application for supplemental security income. At issue is whether the ALJ erred in according “limited weight” to the opinion of a nurse practitioner. The court held that an ALJ errs when he discounts an other source’s entire testimony because of inconsistency with evidence in the record, when the ALJ has divided the testimony into distinct parts and determined that only one part of the testimony is inconsistent. Thus, the ALJ’s determination in this case that the nurse practitioner’s opinion regarding Claimant’s “exertional and postural” limitations was inconsistent with other evidence in the record was an insufficient reason to reject her testimony regarding Claimant’s manipulative and mental limitations. That error was not harmless, because the vocational expert opined that a person with the mental limitations identified by the nurse practitioner could not work. The court concluded that further proceedings are required to reconcile all the record evidence and to consider additional issues. Therefore, the court reversed and remanded. View "Dale v. Colvin" on Justia Law

Mission purchased the assets of South Coast and attempted by an assets-only purchase to avoid South Coast's potential liabilities under South Coast's Medicare provider agreement. These liabilities encompassed potential mandated reimbursement to Medicare for any previous overpayments made to South Coast. The Secretary determined that Mission was not entitled to bill Medicare for patient services at its new facility until that facility had a provider agreement of its own. Mission appealed the Secretary's decision. The court rejected Mission's assertion that former 42 C.F.R. 489.13(d)(1)(i) permitted it to avoid South Coast’s Medicare liabilities. The court cited to the Fifth Circuit's opinion in United States v. Vernon Home Health, Inc.: “federal law governs cases involving the rights of the United States arising under a nationwide federal program such as the Social Security Act. The authority of the United States in relation to funds disbursed and the rights acquired by it in relation to those funds are not dependent upon state law.” It is equally true that private parties have no power to alter their legal obligations with Medicare under their provider agreements. The court also rejected Mission's argument that it is entitled to the benefit of the retroactivity provision in 42 C.F.R. 489.13(d)(2). The court concluded that the Secretary's interpretations and decisions rendered by the DAB in this case were reasonable. Accordingly, the court affirmed the judgment. View "Mission Hosp. Reg'l Med. Ctr. v. Burwell" on Justia Law