Articles Posted in Government & Administrative Law

After Family Rehabilitation was assessed about $7.6 million for Medicare overpayments, it filed suit for an injunction against recoupment until it received an ALJ hearing. The Fifth Circuit reversed the district court's dismissal for lack of subject matter jurisdiction and remanded in regard to Family Rehabilitation's procedural due process and ultra vires claims. The court held that exhaustion of administrative review was waived because Family Rehabilitation asserted a collateral challenge that could not be remedied after the exhaustion of administrative review. In this case, Family Rehabilitation sought only the suspension of recoupment before a hearing, which was plainly collateral to the result of that hearing, and the combined threats of going out of business and disruption to Medicare patients were sufficient to show that it would suffer irreparable injury. The court affirmed in all other respects. View "Family Rehabilitation, Inc. v. Azar" on Justia Law

After Family Rehabilitation was assessed about $7.6 million for Medicare overpayments, it filed suit for an injunction against recoupment until it received an ALJ hearing. The Fifth Circuit reversed the district court's dismissal for lack of subject matter jurisdiction and remanded in regard to Family Rehabilitation's procedural due process and ultra vires claims. The court held that exhaustion of administrative review was waived because Family Rehabilitation asserted a collateral challenge that could not be remedied after the exhaustion of administrative review. In this case, Family Rehabilitation sought only the suspension of recoupment before a hearing, which was plainly collateral to the result of that hearing, and the combined threats of going out of business and disruption to Medicare patients were sufficient to show that it would suffer irreparable injury. The court affirmed in all other respects. View "Family Rehabilitation, Inc. v. Azar" on Justia Law

Business groups challenged the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and the Internal Revenue Code, 26 U.S.C. 4975. The business groups alleged the Rule’s inconsistency with the governing statutes; DOL’s overreaching to regulate services and providers beyond its authority; DOL’s imposition of legally unauthorized contract terms to enforce the new regulations; First Amendment violations; and the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The Fifth CIrcuit vacated the district court’s rejection of all of those challenges. DOL’s interpretation of “investment advice fiduciary” relies too narrowly on a purely semantic construction of one isolated statutory provision and wrongly presupposes that the statutory provision is inherently ambiguous. Congress intended to incorporate the well-settled meaning’” of “fiduciary.” In addition, the Fiduciary Rule renders the second prong of ERISA’s fiduciary status definition in tension with its companion subsections. DOL therefore lacked statutory authority to promulgate the Rule with its overreaching definition of “investment advice fiduciary.” View "Chamber of Commerce of the USA v. United States Department of Labor" on Justia Law

Legacy, a Federally Qualified Health Center (FQHC), filed suit against the Commission, alleging that Texas's reimbursement scheme violated the Medicaid Act. The Fifth Circuit reversed the district court's grant of summary judgment for Legacy, holding that the Commission's requirement that Managed Care Organizations (MCOs) fully reimburse FQHCs did not violate the Medicaid Act; Legacy lacked standing to challenge the Commission's lack of a policy that the state directly reimburse an FQHC if it is not fully reimbursed by the MCO; and Legacy was not entitled to reimbursement for the non-emergency, out-of-network services about which it complained. Accordingly, the court remanded with instructions. View "Legacy Community Health Services, Inc. v. Smith" on Justia Law

Legacy, a Federally Qualified Health Center (FQHC), filed suit against the Commission, alleging that Texas's reimbursement scheme violated the Medicaid Act. The Fifth Circuit reversed the district court's grant of summary judgment for Legacy, holding that the Commission's requirement that Managed Care Organizations (MCOs) fully reimburse FQHCs did not violate the Medicaid Act; Legacy lacked standing to challenge the Commission's lack of a policy that the state directly reimburse an FQHC if it is not fully reimbursed by the MCO; and Legacy was not entitled to reimbursement for the non-emergency, out-of-network services about which it complained. Accordingly, the court remanded with instructions. View "Legacy Community Health Services, Inc. v. Smith" on Justia Law

The hotel occupancy tax applies only to the discounted room rate paid by the online travel company (OTC) to the hotel. The Fifth Circuit vacated the district court's judgment in a class action asserting that the service fee an OTC charges for facilitating a hotel reservation was included in the "cost of occupancy", and thus subject to the municipalities' hotel occupancy tax ordinances. The court applied City of Houston v. Hotels.com, L.P., 357 S.W.3d 706, 707, and held that OTCs in this case were not liable because the only monetary amounts at issue in this class action were those not included in the scope of the hotel occupancy tax base. The Houston court explained that, under the plain meaning of the ordinance, the cost of occupancy was the amount for which three conditions were satisfied: the consideration at issue must have been paid or charged for the use or possession, or the right to use or possess, a hotel room; the amounts to be taxed must have been paid by the occupant of such room; and the amount to be taxed must have been paid to such hotel. Therefore, the court rendered judgment for the OTCs in this case. View "City of San Antonio, Texas v. Hotels.com, L.P." on Justia Law

ExxonMobil’s 859-mile long Pegasus Pipeline transports crude oil from Patoka, Illinois to Nederland, Texas. In March 2013, it ruptured, spilling several thousand barrels of oil near Mayflower, Arkansas. The Pipeline and Hazardous Materials Safety Administration, within the U.S. Department of Transportation, conducted an investigation and concluded that ExxonMobil violated several pipeline safety regulations under the Pipeline Safety Act, 49 U.S.C. 60101. Specifically, the agency found that the integrity management program (IMP) plan had not properly accounted for the risk of longitudinal seam failure and that this was a contributing factor in the Mayflower release. The agency assessed a $2.6 million civil penalty and ordered ExxonMobil to take certain actions to ensure compliance with those regulations. The Fifth Circuit vacated certain items in the order. Finding that it owed no deference to the agency’s interpretation of the regulation, the court concluded that ExxonMobil reasonably applied 49 CFR 195.452(e)(1)’s instruction to “consider” all relevant risk factors in making its pipeline susceptibility determination. The court remanded with an instruction to reevaluate the basis for the penalty associated with another violation. View "ExxonMobil Pipeline Co. v. United States Department of Transportation" on Justia Law

Claimants appealed the denial of civil claims under the Settlement Program that was established following the Deepwater Horizon oil spill. Claimants submitted Individual Economic Loss (IEL) claims for lost wages as employees of their architectural firm. The firm had already received a Business and Economic Loss (BEL) award under the Settlement Program. The Fifth Circuit held that the BEL framework, by compensating the business for the owners' lost wages through the fixed-cost designation of their wages, precluded compensating those same owners for the same wages through an IEL claim. Because the Settlement Program did not contemplate the requested compensation, the court affirmed the judgment. View "In Re: Deepwater Horizon" on Justia Law

Maxmed sought judicial review of the Secretary of Health and Human Services' determination that the Medicaid program overpaid Maxmed by almost $800,000 for home health care services rendered to Medicare beneficiaries. The Fifth Circuit held that the failure to record the random numbers used in the sample did not necessarily invalidate the extrapolation methodology; the Secretary did not act arbitrarily and capriciously in rejecting the challenge to the independence of the sampling units; Congress clearly envisioned extrapolation in overpayment determinations involving home health agencies like Maxmed, and the Secretary's reliance on extrapolation as a tool was justified; the district court did not abuse its discretion in denying Maxmed's motion to amend or alter the judgment; and the district court properly rejected Maxmed's due process claim. Accordingly, the court affirmed the district court's grant of summary judgment to the Secretary. View "Maxmed Healthcare, Inc. v. Price" on Justia Law

Total Gas and two of its trading managers filed a declaratory judgment action against the Commission arguing that the Commission was precluded from adjudicating violations or imposing civil penalties because the Natural Gas Act (NGA) vests authority for those activities exclusively in federal district courts. The Fifth Circuit affirmed the Commission's motion to dismiss, holding that Total's suit was not ripe for review in light of controlling precedent, Energy Transfer Partners, L.P. v. FERC. In this case, instead of objecting to any actions FERC has already taken, Total seeks to preemptively challenge a FERC order that may never be issued. The court explained that all of Total's arguments were predicated on future events and were brought before FERC has even scheduled the matter for a hearing—let alone issued an order finding a NGA violation and imposing a civil penalty. View "TOTAL Gas & Power North America, Inc. v. FERC" on Justia Law