US Attorney Paul Fishman to Address Health Care Fraud

Paul Fishman, United States Attorney for the District of New Jersey, will address the Seton Hall Law community on “Why Prosecuting Health Care Fraud is a Top Priority in New Jersey.”  The public lecture will be provided free of charge on Thursday, September 23, at 6:00 p.m at the Law School.

Since taking office in 2009, U.S. Attorney Fishman has restructured the Criminal Division, appointing new leadership and creating new units, including the Health Care and Government Fraud Unit, which is tasked with investigating and prosecuting crimes involving fraud and abuse in the healthcare industry. The unit will focus on major fraud and abuse against the Medicare, Medicaid and Veterans Administration programs, including the sale of unapproved or altered drugs, illegal kickbacks, improper billing, and improper diversion of controlled substances. To register for this special lecture, click here.

Missouri Votes Against Individual Mandate, May Impact Standing Argument in Federal Court

Recently, Missouri voters overwhelmingly approved a ballot initiative which, according to the AMA’s amednews.com, “ask[ed] voters in part if they want to ‘deny the [federal] government authority to penalize citizens for refusing to purchase private health insurance or infringe upon the right to offer or accept direct payment for lawful health care services.’”

More than 71% of voters approved the initiative which seeks to negate the individual mandate, 29% voted against.

As recent events in California regarding Proposition 8 have shown, a referendum deemed unconstitutional  is without force of law.

In the AMA’s article, it is noted that

Few legal experts consider the state proposals more than symbolic, as federal law generally trumps state law. But lawsuits filed or joined by officials in 21 states challenging the federal government’s authority to require health insurance have the potential to overturn the federal law.

Generalities aside, as is best in this regard, it strikes me that the Missouri initiative may have more than just symbolic value. Importantly, in the recent federal court decision regarding Virginia’s suit against the individual mandate, the judge in that case found standing for the state of Virginia–an exceedingly important, though procedural, ruling. It is exceedingly important because without standing the case could simply not go forward. The judge in the case found standing for Virginia’s 10th Amendment claim largely based upon a law passed subsequent by the state of Virginia. Regarding that matter I wrote:

In deciding the standing issue, Judge Hudson, according to Professor Jack Balkin, made much of the “Virginia Health Care Freedom Act– which asserts that no Virgina citizen may be forced to purchase health care insurance; that this law conflicts with the federal Affordable Care Act, and therefore Virginia has standing to challenge the act under the 10th amendment.”

Virginia’s Act was passed subsequent to the federal law in question; other states challenging the individual mandate do not, at present, have such a law to rely on. As Professor Balkin points out, however, the Virginia Act being deemed sufficient to buttress standing in a States’ rights Tenth Amendment claim is interesting– to say the least. It begs the question.

In more than just symbolic terms, Missouri may have just answered that question–at least in terms of 10^th Amendment standing–if, of course, its federal district court sees the matter in the same way as did Judge Hudson. Certainly not guaranteed– the Missouri Federal Court is not bound by the Federal Court of Virginia– but nonetheless, Missourian’s just laid claim to an argument that has won elsewhere.

An ERISA Defense Conference with Nine “Renowned Federal Judges”

On Health Reform Watch we’ve written quite a bit about transparency, accountability and gifts as it regards Pharma and Physicians. I saw this today on Illness and Insurance Hell, a rather wide ranging and interesting blog devoted to procuring assistance to a spouse with multiple sclerosis. The author takes a macro view, however, and this wound up in her web: A conference held, it seems, yearly now, in October:

“ERISA LITIGATION: Expert defense strategies for leading outside counsel and in-house counsel on litigating today’s key issues involving benefit plans and fiduciaries”

For those of you who don’t know, ERISA stands for the Employee Retirement Income Security Act of 1974. (Pub.L. 93-406, 88 Stat. 829, enacted September 2, 1974. Erisa is a

federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan; by establishing standards of conduct for plan fiduciaries; and by providing for appropriate remedies and access to the federal courts.

There can be major implications for worker benefits, including  health care benefits, in cases brought against employers under ERISA. It is a complex area of law, to say the least. And it is entirely understandable that those charged with the oversight of such plans, should want to meet to discuss how best to discharge their complex duties; how best to comport themselves in a manner in accord and compliance with law; how best, as is their duty if they are attorneys, to zealously represent their clients.

The conference provides a veritable smorgasbord of effective strategies and interesting panels presented by what seems  to be a truly stellar faculty of practitioners:

Senior in-house counsel, top outside defense litigators and renowned

jurists will provide you with winning strategies and practical information on:

• Preventing improper parties from being named as defendants and identifying available remedies

under §502(a)

• Using the claims review process to set up, control and strengthen the defense
• Effective strategies to strengthen the administrative record and memorialize the decision-making

process

• Addressing evidence outside the administrative record, standards of review, conflicts of interest

& discovery once a suit is filed

• The newest theories of liability in 401(k) fee cases and what to do when your plan discovers it has

paid unknown fees

• Defending against stock drop suits and other defined contribution plan claims
• Tibble v. Edison: the trial, theories of the defense, selection of experts, and other practical insights
• ERISA fiduciary litigation: The newest plaintiffs’ liability theories, substantive defenses and trends

in defense pleadings and motions

• How to structure your fiduciary’s role to minimize risk
• Underwriting of fiduciary liability insurance and strategic ideas for litigating and settling cases

when a fiduciary (and their insurance plan) is involved

• Judicial communication: Explaining plan documents and ERISA nuances to the court
• New areas of liability as a result of healthcare reform
• ERISA preemption - the procedural and substantive aspects of the defense
• Defending against age-based and other “recessionary economy” ERISA claims: Cash balance plans,

early retirement, reductions in force, multi-employer plan funding and beyond

If you’re a law geek (I am), a legal practitioner in this area of the law, a representative of an insurer, or a member of a corporation bound by these laws, this conference looks absolutely fascinating (click here, for an overview, download pdf for the full view). And I have no doubt that attendance will be rewarded with a great deal of newly acquired knowledge and an important grasp of methodology. But the faculty also includes nine “renowned federal judges,” who “will help you convey ERISA complexities to a court.”

Having had the benefit of a legal education, I have some idea of the complexity of the matter at hand ( a quick look here will give you some idea as well)  and can fully understand how judges would want to educate practitioners defending claims so as to better execute and expedite the process.  A case, court system or retirement plan riddled with ignorance is in no one’s best interest. And a knowledge of the law enables compliance with the law.

But I would suggest, humbly, that it just doesn’t look good.  It is, after all, a conference designed to “defend against” ERISA claims. I would be at least somewhat surprised if these federal judges were speaking at a conference for impoverished workers who were deprived of their retirement benefits. If am wrong, I am gladly so. And one could make the case that the many federal judges who teach as adjuncts at law schools across the United States are doing just that–taking time out of an arduous schedule to teach law, compliance and process to what will be both defense and prosecution– because we all benefit from an effective legal system. But this conference seems a bit more–or less– than that; at least in the eyes of smart non-lawyers like the author of Illness and Insurance Hell. To her it just looks like “the fix is in.” Like Big Money is courting the Law and those inviolable robes, the buttresses of justice, have shown a slip. I have a great deal more faith in the Law than that. I capitalize the word without apology. And I have no doubt that this is just a matter of appearances–and that appearances can be misleading. But despite my efforts here, I really don’t think she, who has struggled in the legal system against an insurer to get medical help for her very sick husband, and people like her, will believe me. Or the judges. And that’s a problem.

Judge Rules, Virginia Moves Forward Against Individual Mandate

Federal District Court Judge Henry E. Hudson has ruled that Virginia’s suit against the federal government for imposing an individual mandate to purchase health insurance can go forward. Which is to say that the suit survived the motion to dismiss for failure to state a claim. A primary consideration therein being whether or not Virginia had standing to bring such a claim.The judge ruled that it did.

Which means that the judge has ruled that the case can go forward and the issues be heard and then decided on their merits. No small thing, sine qua non in fact, but largely a procedural hurdle in what most believe will be a long and arduous trek through the legal system, subject to myriad appeals culminating, ultimately, before the Supreme Court.

In deciding the standing issue, Judge Hudson, according to Professor Jack Balkin, made much of the “Virginia Health Care Freedom Act– which asserts that no Virgina citizen may be forced to purchase health care insurance; that this law conflicts with the federal Affordable Care Act, and therefore Virginia has standing to challenge the act under the 10th amendment.”

Virginia’s Act was passed subsequent to the federal law in question; other states challenging the individual mandate do not, at present, have such a law to rely on. As Professor Balkin points out, however, the Virginia Act being deemed sufficient to buttress standing in a States’ rights Tenth Amendment claim is interesting– to say the least. It begs the question.

Balkin:

Indeed, the logic of the opinion seems to suggest that if Virginia had objections to any other part of the federal tax laws, it could pass a Virgina Tax Freedom Act related to that provision, claiming that the tax provision was beyond the reserved powers of the states under the Tenth Amendment. This new act would give it standing to challenge any other part of the Internal Revenue Code, and it would also get around the tax anti-injunction act. Moreover, under the logic of the opinion, every other state in the Union could also create its own tax freedom act, and each of them would also be entitled to begin a series of tax protest challenges to provisions of the Internal Revenue Code. This cannot be consistent with the purposes of the tax anti-injunction act.

If you have a minute, it would actually be well spent on reading Professor Balkins post. Even if you are not a lawyer, I think you’ll find his writing accessible– and rewarding. He frames the difficulties of the opinion well.

Having said that, in a recent post we recounted the NY Times recap of the government’s argument regarding “inactivity” and the Commerce Clause:

Ian H. Gershengorn, a deputy assistant United States attorney general, countered that the insurance requirement fitted well within the Supreme Court’s parameters for Congressional regulation of interstate commerce. A choice not to obtain coverage, he said, is not inactivity, as Virginia and the other state plaintiffs claim, but an active decision to pay for future medical care out of pocket.  Because many Americans cannot afford the cost of surgeries and hospitalization, their choice to go uninsured shifts the uncompensated cost of their care to hospitals, taxpayers and commercial policyholders.

The argument seems to have not persuaded Judge Hudson. Quoting from the opinion, Daily Finance writes:  “From a legal standpoint, the judge defined the issue as:

‘whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce [by choosing not to buy health insurance.]‘”

For those of you with more interest in the subject, I would suggest these two posts:

1) “Is it Unconstitutional to Mandate Health Insurance? ,” which was originally published here on HRW by Professor Mark Hall and then later cited by the New York Times, Washington Post, etc.

And

2) “The Original Individual Mandate, Circa 1792,” which was originally published here on HRW by Bradley Latino, a Seton Hall Law student, and then by The Health Care Blog and on Maggie Mahar’s Health Beat Blog.

The Original Individual Mandate, Circa 1792

Regardless of one’s opinion on the Patient Protection and Affordable Care Act’s constitutionality, most commentators–and no less an authority than the Congressional Budget Office–agree (or concede, as the case may be) that Congress has never required Americans to purchase a good or service from a private entity as a condition of citizenship.  But, importantly,  they are wrong. The ongoing debate over the mandate’s constitutionality has uncovered an unlikely precedent to the PPACA’s individual mandate to possess health coverage. I recently wrote about this overlooked original individual mandate in an article, “The First Individual Mandate: What the Uniform Militia Act of 1792 Tells Us about Fifth Amendment Challenges to Healthcare Reform.”

The Militia Acts of 1792, passed by the Second Congress and signed into law by President Washington, required every able-bodied white male citizen to enroll in his state’s militia and mandated that he “provide himself” with various goods for the common weal:

[E]ach and every free able-bodied white male citizen of the respective States . . . shall severally and respectively be enrolled in the militia . . . .provid[ing] himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch, with a box therein . . . and shall appear so armed, accoutred and provided, when called out to exercise or into service

This was the law of the land until the establishment of the National Guard in 1903.  For many American families, compliance meant purchasing-and eventually re-purchasing-multiple muskets from a private party.

This was no small thing.  Although anywhere from 40 to 79% of American households owned a firearm of some kind, the Militia Act specifically required a military-grade musket.  That particular kind of gun was useful for traditional, line-up-and-shoot 18th century warfare, but clumsy and inaccurate compared to the single-barrel shotguns and rifles Americans were using to hunt game.  A new musket, alone, could cost anywhere from $250 to $500 in today’s money.  Some congressmen estimated it would cost £20 to completely outfit a man for militia service-about $2,000 today.

Perhaps the most surprising aspect of the militia mandate is how uncontroversial it was.  For instance, although the recently-ratified Bill of Rights was certainly fresh on Congress’ mind, not one of militia reform’s many opponents thought to argue the mandate was a government taking of property for public use. Nor did anyone argue it to be contrary to States’ rights under the Tenth Amendment. Rather, the mandate was criticized as an unfair burden upon the poor, who were asked to pay the same amount to arm themselves as the rich.  Indeed, the Militia Acts did nothing to defray costs, although a few years later Congress did appropriate funds to pay militia members for the use of their time and goods-in effect subsidizing the purchases.

All this history is potentially important to the health insurance mandate’s upcoming legal challenges, such as those recently filed by the Thomas More Law Center and the citizens of Mississippi.  Both lawsuits assert Fifth Amendment-based rights the Supreme Court has, up to this point, never recognized.  The Court could change its position on these issues, but only if context permits.  These are the situations where historical precedent, or the lack thereof, can make or break a constitutional argument.

For example, one interesting complaint in the Mississippi class action asserts that the plaintiffs “have the constitutional right to be free from entering a private contract or an involuntary association.”  The complaint considers such a right as an element of “substantive due process,” a set of constitutionally-protected “fundamental rights” that may not be expressly mentioned in the   the Constitution itself, but are read as expressed through the word “Liberty” and are held to be  ”deeply rooted in the history and traditions of the United States.”  Many healthcare issues fall under the substantive banner.  Through this doctrine, for example, the Fifth and Fourteenth Amendment due process guarantees have been read to protect privacy and reproductive choices.

The 1792 mandate directly contradicts the notion that longstanding American values somehow establish a freedom from government-mandated purchases.   If such rights truly are deeply rooted in our history and traditions, Americans throughout the several states saw little need for legal recourse:   in fact, many states updated their militia laws in the early 19th century specifically to conform with the federal statutory requirements. The Militia Acts’ roots reach back to colonial New England, where it seems Massachusetts lead the way again in 1632 with its own firearm mandate.

The Militia Acts may be less applicable to other constitutional issues.  Both of the aforementioned class actions, as well as Florida Attorney General Bill McCollum’s suit, also argue that Congress simply cannot regulate interstate commerce by requiring Americans to participate in it. Of course, the procurement of supplies under the Militia Acts did require Americans to engage in commerce, and, perhaps, Interstate Commerce. But it is not particularly tenable to cite the Commerce Clause as the power under which Congress and President Washington moved. More apt would be the Militia Clause, wherein Congress may “call forth the Militia” coupled with the Necessary and Proper Clause:  ”Let the end be legitimate, let it be within the scope of the constitution,” as Justice Marshall famously wrote in McCulloch v. Maryland “and all means which are appropriate, which are plainly adapted to that end . . . are constitutional.”   Importantly, McCulloch is still good law (for some idea of the breadth of the Necessary and Proper Clause power, See U.S. v. Comstock, recently decided by the Supreme Court). And yes, the Necessary and Proper Clause may work in tandem with the Commerce Clause.

What is “Necessary and Proper” to the execution of one power (Militia Clause), however, may not be ultimately determined by the Court to be constitutionally so for another (Commerce Clause). But as Constitutional Law Professor Edward Hartnett of Seton Hall Law has pointedly queried, “At least so long as McCulloch v. Maryland is good law, why would the necessary and proper clause in aid of the militia power allow for an individual mandate, while the necessary and proper clause in aid of the commerce power would not?”

Either way, however, it is simply wrong to say that Congress has never required Americans to purchase a good or service from a private entity as a condition of citizenship. In fact, in light of the Militia Acts, the individual mandate to purchase goods or services to protect oneself and one’s neighbors can readily be described as “deeply rooted in the history and traditions of the United States.”  The debate needs to be altered to accommodate this history.

As I continue researching the Militia Acts and the militia system, what surprises me most, and what seems most relevant to the current populist arguments against healthcare reform in general, is how invested Americans once were in the idea of personal sacrifice.  My favorite quotation comes from James “Left Eye” Jackson, an antifederalist-leaning congressmen who was no friend of the Washington Administration:

“Though it may prove burthensome to some individuals to be obliged to arm themselves, yet it would not be so considered when the advantages were justly estimated . . . . [A]s this nation is rising fast in manufactures, the arts and sciences, and from her fertile soil may expect great affluence, she ought to protect that and her liberties from within herself.”

[Bradley Latino is a third-year student at Seton Hall Law School and a guest blogger at Health Reform Watch. He graduated cum laude from Butler University in 2005, where he majored in literature.  He is currently working with the New Jersey Appleseed Public Interest Law Center on an overview of potential conflicts between New Jersey private health insurance regulation and the newly-passed federal law.]

Fast Food, Childhood Obesity & the Hidden Costs of that Free Toy

Late last month, a consumer advocate group called the Center for Science in the Public Interest (CSPI) announced its intention to sue McDonald’s for using toys to market Happy Meals to children.  In an open letter to McDonald’s, CSPI litigation director Stephen Gardner alleged the toys were part of an unfair and deceptive marketing tactic which gave children “pester power” and taught them unhealthy eating habits.  Mr. Gardner further alleged the company violated Massachusetts, New Jersey, Texas, and California consumer protection laws.  Apparently McDonald’s recent Shrek 3 toy promotion was the final straw (and, somehow, the risk of cadmium exposure isn’t a concern here).  In a follow-up press release, Mr. Gardner also compared McDonald’s to:

… the stranger in the playground handing out candy to children.  McDonald’s use of toys undercuts parental authority and exploits young children’s developmental immaturity — all this to induce children to prefer foods that may harm their health.  It’s a creepy and predatory practice that warrants an injunction.

McDonald’s must decide later this month whether it will continue its Happy Meal toys or succumb to pressure.  So far the company believes that “[g]etting a toy is just one part of a fun, family experience….”

Before you completely write-off this lawsuit and characterization as over-the-top theatrics, just remember that CSPI already has a proven track record.  In 2006, the group sued KFC for using partially hydrogenated oils to deep-fry its food.  KFC subsequently switched to a trans-fat-free frying oil.  That same year CSPI also negotiated a settlement agreement with the Kellogg Company which set certain nutrition standards for marketing to children.  Better not tell CSPI about Cracker Jack and removable tattoos or Topps baseball cards and chewing gum.

In all fairness, CSPI isn’t the only group focusing on marketing to children.  Earlier this year in California, the Santa Clara County Board of Supervisors banned the inclusion of toys with meals numbering 485 calories or more.  Granted, Supervisor Donald Gage voted against the ordinance because “[i]f you can’t control a 3-year-old child for a toy, God save you when they get to be teenagers.”  The Los Angeles Times has reported on the increasing number of fast food television advertisements directed at children, particularly non-white children.  Likewise, CNN has reported on successful junk food marketing campaigns through the use of cartoon characters.  Perhaps CSPI and its supporters should go after DreamWorks and other studios whose agents negotiate these marketing agreements.  Just a thought.

This concern over McDonald’s Happy Meals and developing good eating habits in children coincides with the Trust for America’s Health (TFAH) report “F as in Fat: How Obesity Threatens America’s Future 2010.”  The report found that 38 states have adult obesity rates above 25 percent, a sharp increase from 20 years ago when no state had an obesity rate above 20 percent.  (Click here to see how your state weighs in.)  According to TFAH executive director Jeffrey Levi:

[o]besity is one of the biggest public health challenges the country has ever faced, and troubling disparities exist based on race, ethnicity, region, and income….  Millions of Americans still face barriers — like the high cost of healthy foods and lack of access to safe places to be physically active — that can make healthy choices challenging.

The report suggested a connection between income disparities and adult obesity: “35.3 percent of adults earning less than $15,000 per year were obese compared with 24.5 percent of adults earning $50,000 or more per year.”  The report also showed that “more than 12 million children and adolescents are considered obese” and half of Americans believe this is an important issue to address.  However, rather than suggesting that consumers sue fast food and junk food companies, the report recommended investing in public health initiatives and prevention programs.

I’m not a parent, so I won’t preach about better parenting skills when it comes to “pester power” and how a child’s eating habits are determined as much by their parents as the cartoon characters selling the food.  I’ll just say that there was seldom any debate with my parents over the foods that I ate as a child.  Admittedly, there sometimes are no other alternatives.  Whether you’re a high school athlete on the road, a parent with no time to make dinner, or looking for an inexpensive meal, fast food is the cheap and easy way to go.  Perhaps the key is moderation?

Does this mean CSPI should hold the fast food (and junk food) companies responsible for the development of our eating habits, from childhood to adulthood?  The TFAH report also referred to obesity liability laws in 24 states protecting restaurants, manufacturers, and marketers from weight-related lawsuits.  Take note, CSPI.  (And you, dear reader, take note of Michael Ricciardelli’s post containing some staggering numbers relating to the healthcare costs of managing Type-2 diabetes, in which obesity plays a factor, and Professor Pasquale’s beverage tax utilitarian calculus.)

Former UN Special Rapporteur Paul Hunt on International Law & Health as a Human Right & the Human Rights Responsibilities of Pharmaceutical Companies

During his week-long visit to Seton Hall Law School, Paul Hunt, Professor of Law, University of Essex School of Law, provided several lectures to students and faculty on international human rights law and health law.  These guest lectures included “Health as a Human Right” in Professor Elizabeth Defeis’ International Law class; “On Human Rights Guidelines for Pharmaceutical Companies” in Professor Kathleen Boozang’s Pharmaceutical and Medical Device Marketing and Compliance Class; a faculty colloquium on “GlaxoSmithKline and the Human Right to Healthcare;” and participation in classroom discussion of human rights issues raised by hospitals’ repatriation of indigent aliens in Professor Lori Nessel’s Immigration & Human Rights Clinic.

In his public presentation, “The Human Rights Responsibilities of Pharmaceutical Companies,” Professor Hunt argued that pharmaceutical companies have certain social/human rights responsibilities, including the duty to take reasonable steps to enhance equitable access to medicines. You can find an audio recording of this presentation below as well as copies of Professor Hunt’s Reports to the UN General Assembly regarding “the right of everyone to the enjoyment of the highest attainable standard of physical and mental health,” and “the responsibilities of pharmaceutical companies, including innovator, generic and biotechnology companies, with regard to the right to health in relation to access to medicines.”

Professor Hunt practiced as a litigation solicitor in London before specializing in international and domestic human rights law.  He has undertaken human rights work in Europe, the Middle East, Africa and the South Pacific.  From 2002-2008, he served as a UN Special Rapporteur on the right to the highest attainable standard of health, and in 2008, was awarded Honorary Doctorate by the Nordic School of Public Health.  He is a member of the Human Rights Centre at Essex University and Adjunct Professor at Waikato University, New Zealand.

Professor Hunt’s lecture can be streamed to your browser by clicking on the link below. Clicking on this link will also provide you with a link to download the mp3. Click here to listen to Paul Hunt’s Lecture

The two UN reports mentioned by Mr. Hunt can be accessed by clicking on the thumbnails or captions below:

UN Report on Right to Health	UN Report on GlaxoSmithKline

Newsweek’s Fineman: Justice Stevens to Retire in 2010

This not Health Law per se, but to say that it will have ramifications which affect Health Law and Health Care Reform is an understatement. Via calchala on the Daily Kos: on the “Tell Me Something I Don’t Know Portion” of this weekend’s Chris Matthews Show, Newsweek’s Senior Washington Correspondent, Howard Fineman, stated that according to former clerks, it is  “definite” that Supreme Court Justice John Paul Stevens will retire in 2010. Born in April of 1920, Justice Stevens is 89 years old. There has been recent speculation that he would soon retire sparked by his failure to hire clerks for the coming term in a timely manner.

Let the speculation begin. Laurence Tribe anyone? Akhil Reed Amar?

Chris Matthews Show, weekend of Sept. 12-13 (go almost to end).

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