Court Dismisses POD Lawsuit Against OIG (press release)
On February 5, 2014, a federal court dismissed a challenge to the U.S. Department of Health and Human Services' Office of Inspector General's ("OIG") March 26, 2013 Special Fraud Alert ("2013 SFA") on physician-owned distributors ("PODs"). The lawsuit was filed in the U.S. District Court in the Central District of California by Reliance Medical Systems, LLC ("Reliance"), which had historically included physician owners, and was considering a return to the POD business model. Reliance filed suit against the OIG on October 8, 2013, alleging that the 2013 SFA violated (i) the First Amendment right of speech, (ii) due process rights under the Fifth and Fourteenth Amendments, and (iii) the Administrative Procedures Act.
The Court dismissed Reliance's claims, without reaching the merits, by holding that Reliance had no standing because it had not suffered an injury-in-fact. Specifically, the 2013 SFA had not been enforced in any way against Reliance. The Court made much of the fact that Reliance was not, at the time of the lawsuit, a POD, and, as such, could not conceivably have suffered any injury.
Additionally, and perhaps most si...
