December 14, 2017

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Fundamental Right to be a Federal Healthcare Provider?

Rejecting a contrary holding in the Fourth Circuit, the Sixth Circuit decided a healthcare provider has no “fundamental right to participate in federal health care programs.” Accordingly, the Department of Health and Human Services (HHS) was correct to exclude a pharmacist from federal healthcare programs simply because he was convicted of misdemeanor misbranding.

Pharmacist Parrino pleaded guilty to introducing misbranded drugs into interstate commerce (21 U.S.C. §§ 331(a) and 352(a)) because he consistently filled prescriptions for Pulmicort with a less potent amount of budesonide. Because misdemeanor misbranding is a strict liability crime, Parrino did not need to admit that he intended to prepare the medications incorrectly as part of the plea. HHS nevertheless decided that the offense fell within the mandatory provision of its exclusion authority, ordered Parrino not to participate in federal healthcare programs for five years, and effectively ended Parrino’s livelihood as a pharmacist during that time. Parrino appealed the decision, arguing that permissive (rather than mandatory) exclusion authority applied to misbranding and that HHS acted arbitrarily in violation of his fundamental right to property.

The Sixth Circuit agreed with the Ninth, Tenth, and First Circuits that no property right exists because the government made “no clear promises” of entitlement to the providers and because federal health care programs are not intended to benefit the providers. The court decided the type of exclusion was not crucial, and HHS needed only a rational basis to justify exclusion of the pharmacist. Once it decided Parrino had no property right in being a provider, the court readily upheld the rationality of excluding a pharmacist who filled sub-potent medications and wasted government funds.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Thomas E. Zeno, Squire Patton Boggs, Healthcare Fraud Lawyer, Economic Crimes Attorney
Of Counsel

Thomas Zeno has more than 25 years of experience in the US Attorney’s Office for the District of Columbia. During that time, Tom investigated and prosecuted economic crimes involving healthcare, financial institutions, credit cards, computers, identity theft and copyrighted materials. As the office’s Healthcare Fraud Coordinator for the last eight years, Tom supervised investigation strategies of agents from the Federal Bureau of Investigation, the Department of Health and Human Services, the Drug Enforcement Administration and the Medicaid Fraud Control Unit regarding...

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