Posted on November 19, 2010 by Lisa Baird

Federal Court Holds That Voluntary Refund Programs Can Defeat Class Certification Under Rule 23(b)(3)'s Superiority Requirement

This post was written by James C. Martin and Colin E. Wrabley. 

Class action defense litigators should be aware of a recent federal district court decision that endorsed and accepted a creative option for defeating class certification—the defendant’s implementation of a voluntary refund and replacement program providing a comparable remedy to what the putative class might recover in court. See In re Aqua Dots Prods. Liab. Litig., 2010 WL 3927611 (N.D. Ill. Oct. 4, 2010). In so doing, the decision in Aqua Dots extends a growing and important trend in class action jurisprudence concerning the scope of Federal Rule of Civil Procedure 23(b)(3)’s requirement that class litigation be “superior to other available methods for fair and efficient adjudication of the controversy.” While the notion of a refund or replacement program as an alternative to class actions has been around for decades, Aqua Dots provides a new impetus to consider this approach.

For more information, read the full alert.

Tags: , , , , ,
Posted on November 16, 2010 by Lisa Baird

Medicare Secondary Payer (MSP) Mandatory Insurer Reporting: MMSEA section 111--Delay Announced for Liability Insurance (Including Self Insurance) Mandatory Reporters

This post was written by Carol C. Loepere and Catherine A. Hurley.

In an “Alert” dated November 9, 2010, the Centers for Medicare and Medicaid Services (CMS) has published a revised implementation timeline applicable to liability insurance (including self-insurance) “responsible reporting entities” (RREs) under Section 111 of the Medicare, Medicaid and SCHIP Extension Action of 2007 (MMSEA). Specifically, the obligation to report “total payment obligation to claimant” (TPOC) amounts subject to the reporting requirement has been extended from the first calendar quarter of 2011 to the first calendar quarter of 2012. Moreover, under the revised implementation timeline, only TPOC amounts established on or after October 1, 2011 (instead of October 1, 2010) must be reported. Earlier reporting (i.e., reporting prior to the first calendar quarter of 2012), and reporting of TPOC amounts established prior to October 1, 2011 is now optional. CMS has also delayed the staggered phase-out of its interim threshold dollar amounts for TPOC amounts that liability insurance (including self-insurance) and workers’ compensation RREs must report by one year. 

Mandatory reporting of ongoing responsibility for medicals (ORM) by liability insurance (including self-insurance) RREs has not been delayed. Similarly, mandatory reporting by other types of RREs (such as group health plans, no-fault insurance, and workers’ compensation) has not been delayed. Finally, this implementation delay does not affect liability insurance (including self insurance) RREs’ status as “primary payers” under section 1862(b) of the Social Security Act.

According to CMS, this Alert will be incorporated into a forthcoming revision to CMS’s MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting “User Guide” for Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation. 

Tags: , , , , , , , , , ,
Posted on November 1, 2010 by Lisa Baird

New Guidance on the OIG's Ability To Exclude Owners, Officers and Managing Employees; Related FDA Statements on Pharmaceutical Executives

This post was written by Elizabeth B. Carder-Thompson, Jennifer A. Goldstein, Thomas W. Greeson, Laura A. Mastrangelo, Katie C. Pawlitz, and Paul W. Pitts.

On October 20, 2010, the Office of Inspector General (OIG) of the Department of Health and Human Services issued significant new guidance for implementing its permissive exclusion authority under section 1128(b)(15) of the Social Security Act. Section 1128(b)(15) specifically authorizes the OIG to exclude an owner, officer or managing employee of a sanctioned entity, i.e., health care provider, supplier, or manufacturer, from participation in federal health care programs. The OIG’s new guidance sets out non-binding factors that the OIG intends to consider in deciding whether to impose exclusion on owners, officers and managing employees.

In addition, there have been recent statements by officials of the Food & Drug Administration concerning the bringing of misdemeanor charges against executives of entities that promote off-label uses of their products. Taken together, these OIG and FDA developments clearly signal that increasing investigative and enforcement activity is forthcoming regarding the owners, officers and managing employees of providers, suppliers, and manufacturers alike.

For a more detailed summary of the OIG’s new guidance and the need to take proactive measures against potential abuses and misconduct, read our full alert.

Tags: , , , , , , ,