HITECH Incentives Alone Do Not Establish Federal-Officer Removal Jurisdiction over Patient-Portal Claims

1. Introduction

This decision addresses the boundary between complying with federal health-care policy and acting on behalf of the federal government. The Seventh Circuit held that private health-care providers did not qualify for federal-officer removal merely because they established patient portals in response to federal electronic-health-record requirements and financial incentives.

The central principle is that advancing federal policy through regulated private activity is not equivalent to carrying out a delegated governmental task. The providers’ participation in the federal Meaningful Use Program did not establish the relationship necessary to remove state-law privacy litigation under 28 U.S.C. § 1442(a)(1).

The parties and consolidated proceedings

Although the supplied case title identifies Kaitlin Lamarr’s action against Goshen Health System, Inc., the opinion resolves four surviving consolidated appeals:

• Brian and Annie Elkins against Southeastern Indiana Health Management, Inc., doing business as Columbus Regional Health;
• Kaitlin Lamarr against Goshen Health System, Inc., doing business as Goshen Health;
• Jennifer Fleece against the Board of Trustees of the Hancock Regional Hospital; and
• Keith Chiaro and Jane Doe against Methodist Hospitals, Inc.

A fifth appeal, Doe v. Sarah Bush Lincoln Health Center, was initially consolidated but subsequently dismissed. The court expressly made its holding applicable to all four remaining appeals.

Factual and statutory background

The opinion uses the Elkins litigation as its principal factual example. The Elkinses alleged that Columbus Regional Health embedded Facebook’s “Meta Pixel” tracking software in its online webpage and thereby shared their health information without consent. Their proposed class action asserted breach of implied contract, unjust enrichment, and violations of the Indiana Deceptive Consumer Sales Act and Indiana Wiretapping Act. The consolidated cases presented materially similar allegations and the same jurisdictional question.

The providers connected their patient portals to the Health Information Technology for Economic and Clinical Health Act, commonly called the HITECH Act. Enacted in 2009, that statute encouraged the adoption of electronic health records through incentive payments to qualifying Medicare-participating providers. Beginning in 2015, it also required reductions in Medicare reimbursements for providers that failed to satisfy the program’s requirements.

Regulations issued by the Centers for Medicare and Medicaid Services established the Meaningful Use Program. Among its objectives was timely electronic access to patients’ health information. Providers developed patient portals through which patients could review their records and communicate with health-care professionals.

The providers argued that developing and maintaining these portals meant they were “acting under” the Department of Health and Human Services. The district courts rejected that argument and remanded the actions to state court.

2. Summary of the Opinion

The Seventh Circuit affirmed the remand orders. Its decision rested on two related conclusions:

1. The providers were conducting private business, not performing a delegated governmental task. Their portals served their own patients and staff. Although the portals furthered federal policy, that benefit did not transform private health-information services into government work.
2. The federal relationship lacked sufficiently close supervision and control. The regulations prescribed general access objectives rather than detailed portal-design or operational requirements. Additional federal guidance consisted of nonbinding recommendations.

Because the providers failed to establish the “acting under” requirement, the court did not decide whether the challenged conduct sufficiently related to federal authority or whether the providers possessed a colorable federal defense.

The decision concerns the proper forum, not liability. It does not determine whether unlawful disclosure occurred, whether the tracking technology violated state law, or whether the patients’ substantive claims will succeed.

3. Governing Jurisdictional Framework

Section 1442(a)(1) permits removal of certain actions against federal officers and private persons acting under them. Under the Seventh Circuit’s formulation, the removing defendant must establish that it:

1. is a “person” within the statute;
2. is acting under the United States, a federal agency, or a federal officer;
3. is acting under color of federal authority; and
4. has a colorable federal defense.

Only the second requirement was dispositive here. The providers bore the burden of establishing federal jurisdiction, and the appellate court reviewed the jurisdictional determination de novo.

Although remand orders generally face statutory restrictions on appellate review, 28 U.S.C. § 1447(d) allowed review in these federal-officer removal cases.

4. Precedents Cited and Their Influence

A. Appellate review and the removal standard

BP P.L.C. v. Mayor & City Council of Balt., 593 U.S. 230 (2021)

The court cited this decision to support appellate jurisdiction under § 1447(d). Its role was procedural: it explained why the Seventh Circuit could review the remand orders. It did not supply the substantive answer to whether the providers were acting under federal authority.

Baker v. Atl. Richfield Co., 962 F.3d 937 (7th Cir. 2020)

Baker supplied the standard of review, the removing party’s burden, and the four-part federal-officer removal test. It also furnished a substantive comparison. There, the defendant supplied wartime raw materials to the government under continuous supervision and detailed specifications. That arrangement involved producing something for governmental use, unlike operating patient portals for a private provider’s patients.

Betzner v. Boeing Co., 910 F.3d 1010 (7th Cir. 2018)

Betzner was another source of the governing removal framework. Substantively, it involved manufacturing heavy bomber aircraft for the United States Air Force under detailed and ongoing military control. The present opinion repeatedly used that relationship to illustrate the governmental direction missing from the Meaningful Use Program.

B. The controlling distinction: regulation versus delegation

Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (2007)

Watson provides the opinion’s central doctrinal foundation. Philip Morris sought federal-officer removal of a consumer action by relying on the Federal Trade Commission’s detailed supervision of cigarette testing. The Supreme Court rejected removal because the relationship remained an ordinary regulator–regulated relationship.

Two principles from Watson controlled here. First, “acting under” ordinarily entails subjection, guidance, or control. Second, the private party must assist in carrying out the federal superior’s duties or tasks. Even extensive regulation does not establish that second requirement.

The Seventh Circuit applied the same distinction to patient portals. Meeting federally prescribed electronic-access objectives constituted compliance, not the assumption of governmental responsibilities. The court’s concluding description—“regulation, not delegation”—captures that reasoning.

Colorado v. Symes, 286 U.S. 510 (1932)

Cited through Watson, this case supplied the principle that the federal-officer removal statute should be liberally construed. The Seventh Circuit nevertheless emphasized that liberal construction has limits grounded in statutory text, context, history, and purpose. It does not eliminate the need to establish an actual qualifying federal relationship.

Winters v. Diamond Shamrock Chemical Co., 149 F.3d 387 (5th Cir. 1998)

Discussed through Watson, Winters concerned production of Agent Orange for the Department of Defense. It illustrated work arguably substituting for a task the government otherwise would have performed itself. That example helped distinguish supplying government-needed products from operating private websites that merely support a public policy objective.

C. Seventh Circuit applications of the distinction

Ruppel v. CBS Corporation, 701 F.3d 1176 (7th Cir. 2012)

In Ruppel, a manufacturer produced turbines for an aircraft carrier according to government specifications. The opinion also highlighted allegations that the Navy closely controlled the relevant asbestos-related supply process. The case illustrated both elements absent here: a private entity helping accomplish a governmental undertaking and close governmental direction of its work.

Martin v. Petersen Health Operations, LLC, 37 F.4th 1210 (7th Cir. 2022)

This was the closest Seventh Circuit health-care analogy. A nursing home sued over allegedly inadequate COVID-19 precautions argued that extensive federal regulation supported removal. The court rejected that position because regulation does not transform a private entity into a public actor.

The present opinion applied the same reasoning: providers retain their private character when federal rules influence their conduct. The reference to private character supports the statutory removal analysis; it does not establish a separate constitutional state-action holding.

Panther Brands, LLC v. Indy Racing League, LLC, 827 F.3d 586 (7th Cir. 2016)

The court cited this case as an additional limit on qualifying federal relationships. A private marketing agent’s relationship with the Army National Guard fell short of the closely monitored relationship required for removal. Its significance is that an association with a federal undertaking, without sufficient direction and supervision, does not itself satisfy § 1442(a)(1).

D. Agreement with other circuits on patient portals

The court expressly joined five other circuits that had rejected materially similar removal arguments:

Doe v. BJC Health Sys., 89 F.4th 1037 (8th Cir. 2023)

This decision emphasized that designing private websites is not a basic governmental task. It supported the Seventh Circuit’s conclusion that the portals remained private infrastructure despite their policy benefits.

Mohr v. Trs. of Univ. of Pa., 93 F.4th 100 (3d Cir. 2024)

Mohr recognized that operating a portal advances government policy but treated that activity as compliance with federal law. It directly reinforced the distinction between furthering a federal objective and undertaking delegated federal work.

Martin v. LCMC Health Holdings, Inc., 101 F.4th 410 (5th Cir. 2024)

This case rejected the proposition that compliance with Meaningful Use regulations amounts to acting pursuant to a federal officer’s directive. Its reasoning closely matched the Seventh Circuit’s treatment of the same program.

Doe v. Cedars-Sinai Health Sys., 106 F.4th 907 (9th Cir. 2024)

The Ninth Circuit found that the HITECH Program’s requirements did not demonstrate an express delegation to accomplish a basic governmental task on the National Coordinator’s behalf. The Seventh Circuit cited that conclusion as further support for rejecting the providers’ delegation theory.

Doe v. Integris Health, Inc., 123 F.4th 1189 (10th Cir. 2024)

This decision stressed that the government neither required tracking technology nor otherwise controlled how the provider supplied electronic-record access. It reinforced the importance of actual governmental control. The Seventh Circuit nevertheless resolved its own appeals on the “acting under” requirement, without separately deciding the relationship between the challenged disclosures and asserted federal authority.

5. Analysis of the Court’s Legal Reasoning

A. Federal policy alignment is not governmental delegation

The providers characterized electronic patient access as a fundamental governmental task. The court rejected that characterization by examining what the providers actually did and whom their work directly served.

The portals were private websites created by private providers for their patients and staff. Their contribution to a national electronic-records policy did not establish that the providers were carrying out HHS’s own operational responsibilities.

This distinction prevents an expansive interpretation under which almost any regulated business could claim federal-officer status by demonstrating that its conduct promoted a federal objective. Government frequently encourages private activity without assuming responsibility for performing that activity itself.

The court’s reasoning does not make private benefit an automatic bar to removal. Government contractors may also benefit commercially from their work. Rather, the portals’ private function helped demonstrate the absence of a delegated governmental undertaking in these cases.

B. Financial incentives do not supply the missing relationship

The HITECH framework used both rewards and reimbursement reductions to encourage electronic-record adoption. The court treated those mechanisms as instruments of regulation, not evidence that participating providers had become governmental assistants.

The decision therefore does not depend simply on calling participation voluntary. Economic pressure and detailed eligibility conditions can influence business decisions without creating the subordinate, task-performing relationship contemplated by § 1442(a)(1).

The critical inquiry remains the nature of the work and relationship—not merely whether federal money changes hands.

C. Outcome requirements are different from operational control

The court also examined the specificity of federal direction. The relevant regulatory provision required patients to be able to view, download, and transmit health information within four days after it became available to the eligible professional. That requirement identified an access outcome; it did not prescribe detailed methods for constructing or maintaining the portals.

By contrast, the wartime manufacturing precedents involved government specifications and continuing supervision over production. Those comparisons demonstrated why the providers’ relationship lacked the unusually close direction contemplated by the cited cases.

The analysis must be read alongside Watson: detailed regulation is not independently sufficient for removal. Close supervision matters when connected to assistance with governmental duties, rather than ordinary oversight of private activity.

D. Nonbinding guidance did not establish federal command

The providers relied on the Office of the National Coordinator for Health Information Technology’s Patient Engagement Playbook. The court emphasized the document’s own description as a collection of “tips and best practices” and its invitation to use the material in whatever way suited an individual practice.

Those statements demonstrated flexibility rather than obligatory direction. The Playbook could assist providers in implementing federal policy, but it did not establish the detailed governmental control associated with the successful contractor cases.

E. The court preserved the limits of its holding

Failure to establish one necessary jurisdictional element ended the inquiry. The court therefore did not address whether the alleged conduct related sufficiently to federal authority or whether a federal defense was colorable.

Nor did it hold that health-care providers can never qualify for federal-officer removal. A materially different arrangement involving actual governmental tasks and sufficiently close direction would require its own analysis. What failed here was reliance on the Meaningful Use framework and the guidance presented in these cases.

6. Potential Impact

Patient-privacy litigation

Within the Seventh Circuit, providers facing comparable state-law patient-portal tracking claims cannot establish federal-officer removal merely by pointing to HITECH incentives, Meaningful Use compliance, or general federal support for electronic access. The ruling supports adjudication in state court where no other valid basis for federal jurisdiction exists.

Greater consistency across circuits

The opinion extends existing Seventh Circuit principles to a recurring technology-and-privacy dispute rather than announcing an entirely new removal framework. Its agreement with five other circuits substantially reinforces the distinction between federally encouraged portal development and delegated government work.

Other regulated industries

The reasoning may inform disputes involving other incentive programs. A business does not become a federal officer’s subordinate simply because it receives federal financial benefits or helps implement national policy. Future removal arguments must identify the governmental undertaking and the actual relationship of direction or assistance.

No substantive privacy ruling

The decision does not establish a new privacy cause of action, resolve the legality of Meta Pixel, or decide the merits of federal defenses. Its practical consequence is jurisdictional: these defendants did not establish entitlement to the federal forum under the asserted removal provision.

7. Complex Concepts Simplified

Removal

A defendant’s transfer of a lawsuit from state court to federal court when a statute permits it.

Remand

A federal court’s return of a removed lawsuit to state court.

Subject-matter jurisdiction

The court’s legal authority to hear the category of dispute before it. It is separate from whether a party should win.

“Acting under” a federal officer

Assisting a federal superior in carrying out governmental duties within a qualifying relationship of direction or control—not simply obeying federal rules.

Regulation versus delegation

Regulation tells private actors how to conduct their activities. Delegation entrusts them with helping perform governmental work.

Colorable federal defense

A plausible defense grounded in federal law. It need not already be proven successful. The court did not decide whether such a defense existed here.

De novo review

Independent appellate review of the legal question, without deference to the district court’s legal conclusion.

Putative class action

A lawsuit proposed on behalf of a broader group before the court has certified that group as a class.

8. Conclusion

The Seventh Circuit reaffirmed that federal encouragement is not federal delegation. Establishing patient portals to satisfy Meaningful Use objectives did not make these providers assistants performing governmental duties under sufficiently close federal direction.

The affirmed remand orders leave the underlying privacy claims unresolved. The opinion’s broader significance lies in preserving a meaningful boundary between regulated private activity and the governmental relationship required for federal-officer removal.