healthcare Archives - Home Safety Tech Pros

Gorsuch dissents in Mrugeshkumar Shah restitution case

homesafetytechpros — Tue, 25 Feb 2025 12:31:16 +0000

Justice Neil Gorsuch poses for an official portrait in the East Conference Room of the Supreme Court building on October 7, 2022 in Washington, D.C. (Photo by Alex Wong/Getty Images.)

The U.S. Supreme Court denied the appeal of a more than $82 million restitution order imposed on a group of doctors convicted of a massive fraud scheme in Texas, but Justice Neil Gorsuch dissented from his fellow justices’ decision, saying that he would have chosen to review the lower court’s upholding of the restitution sentence.

Forest Park Medical Center was a physician-owned hospital in Dallas that was not part of any insurance company’s network and did not accept payments via Medicare or Medicaid. The practice made money by steering lucrative patients — those that distributed high reimbursements for out-of-network procedures — to its facility with the help of kickbacks paid to referring physicians. Forest Park’s owners were prosecuted and criminally convicted of a $200 million bribery scheme for its practice of illegally incentivizing doctors to perform surgery at the facility with referral kickbacks falsely characterized as “marketing money” or consulting fees.

The practice owners were prosecuted and convicted under the federal Anti-Kickback Statute (AKS). Seven of the defendants were sentenced to a combined more than 74 years in prison and ordered to pay a total of $82.9 million in restitution.

Mrugeshkumar Shah, Shawn Mark Henry, Michael Bassem Rimlawi, Douglas Sung Won, Jackson Jacob, and Iris Kathleen Forrest appealed the restitution portion of their sentence. They argued that the Mandatory Victims Restitution Act (MVRA) does not apply to their conviction because it was not “an offense against property.” Both the district court and the U.S. Court of Appeals for the Fifth Circuit ruled against them

The defendants did not dispute that their conduct deprived private insurance companies of property by means of fraud or deceit, but they claimed that under the correct analysis, their actual conduct is not what matters. Rather, they said, the court must employ the “categorical approach,” and examine the statutory elements of the crime. Given that no element of the applicable statute involves fraud or deceit, the MVRA does not apply, according to the defendants.

The Fifth Circuit was unconvinced. Writing for the appellate court, Chief U.S. Circuit Judge Priscilla Richman, a George W. Bush appointee, ruled that under the MVRA, the manner in which a crime was carried out is what matters for purpose of restitution — not the precise definition of the crime under the prosecuting statute.

“The categorical approach is inappropriate for this [restitution] statute and ‘the [district] court may look to the facts and circumstances of the offense of conviction to determine if the MVRA authorizes a restitution order,”” wrote Richman.

The justices denied certiorari in the case Monday, thereby leaving the Fifth Circuit’s decision standing as the final word on the issue of restitution.

Gorsuch, however, penned a brief dissenting statement in which he expressed, “I have my doubts” about a judge’s ability to legally order restitution in a criminal case based on their own factual findings, without the aid of a jury.

Gorsuch argued that the Sixth Amendment guarantees a trial by jury, and that this means that only a jury is entitled to make a finding on facts with the propensity to increase a defendant’s penalties. According to the justice, the founders agreed.

“And more than a little evidence suggests that, at the time of the founding, juries found the facts needed to justify criminal restitution awards,” Gorsuch wrote.

Gorsuch said that he would have granted review in the case to answer the question of whether the Fifth Circuit handled its analysis properly under applicable precedent, “and the Constitution’s original meaning.”

The justice ended his brief statement with something of a warning: “In the absence of this Court’s review, I can only hope that federal and state courts will continue to consider carefully the Sixth Amendment’s application to criminal restitution orders.”

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Schmidtknechts sue Walgreens, OptumRx for asthma death

homesafetytechpros — Wed, 29 Jan 2025 15:46:06 +0000

Background: Cole Schmidtknecht (Patient Protector). Inset: Bil Schmidtknecht, Shanon Schmidtknecht (Patient Protector).

The parents of a young Wisconsin man have sued Walgreens and pharmacy benefit manager OptumRx over their son’s death from an asthma attack after his medication price rose from $66 to $539.

Cole Schmidtknecht, 22, had lived with chronic asthma since he was an infant, his parents Shanon and William “Bil” Schmidtknecht said in a lawsuit filed in federal court. To combat the condition, Cole used a daily steroid inhaler as preventive medication. However, when the cost of his inhaler unexpectedly rose beyond what Cole was able to afford, he went without the medication for several days, according to the lawsuit.

Cole then suffered a severe asthma attack and died.

In the 35-page complaint filed on Jan. 21 against OptumRx, Inc., Walgreens Boots Alliance, Inc., and Walgreens Pharmacy, Cole’s parents explain that OptumRx is a “Pharmacy Benefit Manager” or “PBM”— one of a number of entities “that act as middlemen between health insurers, prescription drug companies, and pharmacies.”

The family further alleged that Optum is one of the nation’s three largest PBMs and is responsible for servicing drug prescription claims for over 66 million Americans.

“Their market share has been steadily rising over the past decade as the industry has consolidated into a powerful oligopoly,” say the plaintiffs, who argued that PBMs “artificially drive up healthcare costs for Americans in a myriad of ways.”

According to the Schmidtknechts, OptumRx forces patients to fill prescriptions with expensive brand-name drugs when cheaper alternatives exist. They also allege the company sets artificial requirements whereby patients are required to try more expensive drugs before cheaper alternatives — all to pad the company’s own pockets.

Cole Schmidtknecht took daily doses of a corticosteroid inhaler Advair Diskus to manage his asthma, the lawsuit said. The medication was covered by Cole’s employer-provided health insurance under a United Health-OptumRx Plan, at a cost ranging from $35 to $66.86. However, plaintiffs said that when Cole went to a Walgreens pharmacy in Appleton to fill a prescription on Jan. 10, 2024, he was told that the medication was no longer covered by his insurance and would cost a massive $539.19 out of pocket.

According to the complaint, OptumRx did not give Cole a 30-day notice of any change, as is required under Wisconsin law.

“As a result, he did not have the opportunity to ask for an exception to the OptumRx’s re-classification of the medication under its formulary that suddenly made his normal medication prohibitively expensive,” the lawsuit said.

According to the lawsuit, OptumRx excluded Advair Diskus and its generic equivalents, but would cover Advair HFA or Breo Ellipta, two newer brand drugs whose manufacturer “had paid OptumRx substantial kickbacks (euphemistically called ‘rebates’ and/or ‘compensation’).”

The Schmidtknechts argue that this practice, called “non-medical switching,” is made in the financial interests of PBMs, and is not in the best medical interests of patients. Further, they say, Wisconsin law would have allowed a pharmacist to substitute a generic equivalent for a brand-name drug, but would not have allowed a substitution of one brand for another brand without prescriber approval. Further, they said, because Advair Diskus is an inhaler, it was not available in a short-term supply such that Cole might have been able to purchase a small amount while he secured prior authorization for a drug substitution.

The plaintiffs said that the Walgreens pharmacist should have contacted Cole’s prescribing physician about drug alternatives to Advair HFA, but that the pharmacist failed to do so. Neither, they say, did the pharmacist contact OptumRx or Cole’s doctor to request an exception, provide Cole with a free sample or discounted inhaler, or do anything meaningful to help the situation.

Unable to cover the unexpected drug cost, Cole left the pharmacy without his medication.

“The insurance company changed the formulary, raised the price of it to over $500,” Cole’s father said. “He walked out. Chose rent over his medicine.”

A generic version of Advair Diskus has been available since 2019 and is typically available to patients for $20 or less.

The complaint detailed the circumstances of Cole’s death from a resulting asthma attack:

Over the next five days, Cole repeatedly struggled to breathe, relying solely on his old “rescue” (emergency) inhaler to limit his symptoms, because he did not have a preventive inhaler designed for daily use. On January 15, 2024, five days after visiting the OptumRx-Walgreens pharmacy, Cole had a severe asthma attack and began to asphyxiate. His roommate, Mitchell Huiting, immediately drove him to the Emergency Room at ThedaCare Regional Medical Center-Appleton, located at 1818 North Meade Street, Appleton, Wisconsin 54911. Cole became unresponsive and pulseless in the car, about two minutes before they arrived. When he presented to the ER, practitioners recorded that Cole was unconscious, pulseless, and appeared blue. Emergency medical staff immediately gave Cole two rounds of epinephrin and performed two rounds of Cardiopulmonary Resuscitation, lasting over four minutes, to try to get him to regain consciousness. Despite their best efforts, Cole never woke up again.

Cole’s parents raised claims for negligence and wrongful death, and they seek compensatory and punitive damages from all defendants.

The case is proceeding before U.S. District Judge Byron Browning Conway, a Joe Biden appointee.

The Schmidtknechts’ attorney told local NBC and CW affiliate WMTV, “Our hope is that this lawsuit and Cole’s death will lead them to kind of introspect on their own policies and change their policies going forward.”

Walgreens and OptumRx did not immediately respond to request for comment.

You can read the full lawsuit here.

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