Holland & Hart Healthcare Law Blog

VIRGINIA HEALTHCARE REFORM DECISION: TAX OR PENALTY, INDIVIDUAL RIGHTS OR COLLECTIVE RESPONSIBILITY?

      One of the interesting components of the evisceration of the the “Minimum Essential Coverage” provision in the health care reform bill, (“ACA”) by Virginia Federal District Court Judge Henry E. Hudson, recently is his rejection of the government’s assertion that the “penalty” contained in Section 1501 of the ACA for the failure to purchase health insurance was not a viable “excise tax” under the Constitution.  The Taxation Power of the Congress is as broad as any of its enumerated powers.  Article I, Section 8, Cause 1 gives the Congress the power to lay and collect taxes and judicial review of the Congressional power to lay and collect taxes is narrow and limited.

 

VIRGINIA HEALTHCARE LAW DECISION: CAN CONGRESS REGULATE ECONOMIC INACTION?

      Judge Hudson’s decision invalidating Sec. 1501 of the recent health reform bill, the “Accountable Care Act” or “ACA” in Commonwealth of Virginia v. Sebelius, in the U.S. District Court for the Eastern District of Virginia, addresses the key question as to whether Congress can regulate “economic inactivity” under the provisions of the Commerce Clause of the Constitution. The inactivity is of course the action by individuals in not obtaining mandated health insurance under the ACA and the regulation is the imposition of excise taxes upon those who fail to obtain the required insurance. There are no specific precedents that directly address this issue although logical arguments can be made on both sides.

 

YELPING DENTIST BIT BY FEDERAL COMPUTER DECENCY LAW.

Glen Reit, D.D.S. a dentist practicing in Manhattan received a number of favorable reviews from the online consumer reviewing service, “Yelp.”  All was well until an anonymous post by a “Michael S.” described his office as “small,” “old,” and “smelly.”   Judging from the name of the web site, there was an expected short, sharp, painful cry by either the reviewer or perhaps the reviewed. The post described Dr. Reit’s office equipment as “old” and “dirty.”  Dr. Reit leaped to the courts to obtain an injunction requiring the removal by Yelp of the offending review.  He claimed a substantial reduction in patient appointments. Yelp appFarently removed the good reviews and kept the unfavorable review posted for a while. 

OKLAHOMA FEDERAL JUDGE AUTHORIZES SUBSTITUTE USE OF NEMBUTOL TO AID IN EXECUTIONS.

 

There has been a shortage of thiopetal sodium recently, the anesthetic of choice in executions by lethal injections, which has temporarily halted executions in a number of jurisdictions that unlike, Texas,  have not stocked up on the drug. The manufacturer of the drug Hospira, Inc. of Illinois has indicated that it has had manufacturing issues with the drug and replacement supplies would not be available until early 2011.  Hospira, which markets its drugs, under the tag line of “Advancing Wellness” has indicated that it does not favor the “off-label” use of its drug in state sponsored executions. Death penalty opponents have been objecting to the substitution of other drugs because of the potential for pain and suffering by the prisoner in potential violation of the Eighth Amendment prohibition against cruel and unusual punishment.

 

“Barking” Radiologist Bites Hospital for $4 Million Dollars.

On March 4, 2008, this blog published a story about St. James Healthcare in Butte, Montana and its having obtained an injunction against a radiologist, Dr. Jesse Cole, enjoining him from allegedly threatening staff and contacting prospective radiologists being recruited to St. James. The article was entitled “Montana Court Muzzles Barking Radiologist.”  Well, the tide has turned and Dr. Cole has taken a bite out of the hospital and its parent company, the Sisters of Charity of Leavenworth Health System to the tune of $4 Million dollars.

 

PHYSICIAN FINGERED IN INSIDER TRADING FRAUD

 

Police arrested Dr. Yves M. Benhamou,  a French physician,  in Boston recently, charging him with leaking information to Front Point Partners a hedge fund owned by the investment bank, Morgan Stanley.  Benhamou, one of five physician overseeing a clinical trial of the drug Allbuferon developed by Human Genome Sciences, Inc. for the treatment of Hepatitis C. He  is alleged to have tipped off Front Point that there were problems involving the death of several patients in the trial.  Dr. Benhamou was apparently on retainer as a medical consultant to the hedge fund, while he was overseeing the clinical trials. Its kind of like having your mother on the jury. Chris Skowron, a doctor employed by Front Point to oversee its health care investments, is on administrative leave.

 

ANOTHER STATE TAX EXEMPTION DECISIONS SEPARATES FROM “LIBERAL” FEDERAL DEFINITION OF CHARITABLE PURPOSE.

 

With perhaps some eye toward the Illinois decision in Provena Covenant Medical Center et al. v. Department of Revenue, 2010 WL 9668858 (2010), an Ohio appellate court affirmed the denial of property tax exemption to a dialysis company that had been granted a federal Section 501(C)(3) tax exemption, finding that the liberal standard adopted by the IRS had no impact on Ohio tax exempt statutes and precedent.    The case, Dialysis Clinic, Inc v. Levin, Slip Op. Ohio 5071 is a direct appeal from the Ohio Board of tax appeals.  The case is of interest because it reflects the direction in which Sen. Grassley and others have been pushing nonprofit hospitals in the Patient Protection and Accountable Care Act enacted into law in March of this year.

 

ARMENIAN GANGSTERS RIP MEDICARE FOR $35 MILLION DOLLARS PLUS.

 

 

Is this a great country or what?  Newly arrived immigrant gangsters from Armenia have helped themselves to the largess of Medicare to the tune of $35 million dollars and more by creating a loose network of false health clinics, staffed by real physicians and patients whose identities had been stolen.  The gang operated 118 of the non-clinics in 25 states.  In matching the stolen identities of physicians with the stolen identities of patients the thieves were able to bilk the federal government of millions by submitting false claims that were paid without pre-verification, which is the way Medicare works.

 

BRING ENOUGH “CHARITY” IN HUNT FOR HOSPITAL TAX EXEMPTION?

 

Robert Ruark, the novelist and big game hunter, used to encourage his fellow hunters to “use enough gun” when hunting dangerous animals.  If the reasoning of the Illinois Supreme Court recently in Provena Covenant Medical Center V. Department of Revenue 2010 WL966858 (2010) gains traction beyond the state court ruling on local property tax exemptions and spills over into the analysis of federal and state income tax exemptions, not-for-profit hospitals may be in for some rough sledding with the Internal Revenue Service and Sen. Charles Grassley (R) Iowa.  Senator Grassley who inserted the enhanced “community benefit” requirements into the Patient Protection and Affordable Care Act enacted last fall has been anxious to hold non-for profit hospitals accountable for the very lucrative tax exemptions that they receive under the Internal Revenue Code.

 

“Jumping Jelly Beans” and Surgeon’s “very bad day” lead to Summary Suspension and NPDB Report.

 

“Pitching a fit”  in a hospital operating room can land a  surgeon in the National Practitioner Data Bank. In Leal, M.D. v. Secretary, U.S. Dept. of HHS issued on September 22, 1010, the Eleventh Circuit Court of Appeals affirmed the decision of the trial court upholding the determination by the Secretary of HHS that Dr. Leal’s 60 day suspension for disruptive conduct was accurately reported and required to be reported to the data bank. When notified that there would be a delay in the start time for a urological surgery case, Dr. Leal broke a telephone, shattered the glass on a copier, shoved a metal cart into the OR doors causing damage, threw jelly beans down the hallway, threw a patient chart on the floor and verbally abused a nurse. In his review petition to the Secretary he suggested that he had merely been clumsy, a portrayal the Court was reluctant to accept from a urological surgeon.