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Eighth Circuit Adds to Rule 9(b) Confusion in Thayer v. Planned Parenthood of the Heartland

Posted by on Thursday, September 25th, 2014

Rule 9(b) in Eighth Circuit

The Eighth Circuit recently held that Rule 9(b) is designed to weed out baseless claims, and a relator with sufficient information and exposure to the fraud can likely withstand a motion to dismiss.
Image source: Wikimedia Commons

If you’ve been following along, you’ll know that the federal Courts of Appeal are engaged in a near-even split with regard to the applicability of Federal Rule of Civil Procedure 9(b) in the False Claims Act context. In general, a civil plaintiff must set forth general facts in a complaint that tend to give rise to an actionable claim under a recognized civil law. However, Rule 9(b) imposes a concept known as “heightened pleading requirements” with regard to certain civil matters, including fraud. The same heightened pleading requirement is not mentioned in the language of the False Claims Act itself, resulting in a conflict between the courts as to the requisite specificity with which a plaintiff must describe the fraud they have witnessed.

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Neurosurgeon Facing False Claims Act Liability following Unnecessary Spinal Implant Procedures

Posted by on Wednesday, September 24th, 2014

Neurosurgeon False Claims Act

In an alarming set of facts, a California neurosurgeon is alleged to have engaged in medically unnecessary spinal fusion procedures in order to overbill Medicare and Medicaid.

It’s another instance of healthcare fraud involving the federal Medicare and Medicaid systems. A prominent California neurosurgeon, his associates, and their distributorship network – Reliance Medical Systems LLC – are facing significant possible liability under the False Claims Act for engaging in unnecessary procedures in order to pad revenue. The allegations involve a complex combination of unlawful billing procedures, medically unnecessary spinal operations, and kickbacks for all involved.

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Massachusetts Attorney General Asks First Circuit to Review Pivotal False Claims Act Ruling

Posted by on Tuesday, September 23rd, 2014

Massachusetts Attorney General Martha Coakley and False Claims Act

Massachusetts Attorney General Martha Coakley recently filed an amicus brief in support of a less rigid interpretation of the False Claims Act.

While many aspects of the False Claims Act are firmly settled by consistent holdings by federal district and appellate courts, other areas are more grey – including how much weight should be given to the difference between a condition of payment and a condition of participation. In today’s article, we explore the merits of an amicus curiae brief filed by Massachusetts Attorney General Martha Coakley. In it, she urges the First Circuit to revive a qui tam lawsuit against Universal Health Services, Inc., citing the District Court’s “overly rigid” conditions for imparting liability under the False Claims Act.

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Department of Justice Files False Claims Act Complaint Against California Nursing Homes

Posted by on Monday, September 22nd, 2014

False Claims Act filing

A recent False Claims Act filing depicts horrific treatment of Medicare and Medicaid patients in a California-area nursing home.
Image source: Wikimedia Commons

On August 29th, the U.S. Department of Justice filed a complaint against two California-based nursing home facilities known as Country Villa Watsonville East and Country Villa Watsonville West – both of which participate in both Medicare and Medicaid (Medi-Cal). The complaint alleges horrific patterns of patient neglect, including the administration of government-reimbursed medications in order to render patients “more manageable” for Country Villa staff. The complaint, which was filed in United States District Court for the Northern District of California, advances the claim that Country Villa not only owes compensatory damages to the government for wrongful conduct toward Medicare and Medi-Cal patients, but seeks damages under the common law theories of unjust enrichment and payment by mistake. In addition, the False Claims Act allows for treble statutory damages ranging from $5,000 to $11,000 per violation.

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Federal Judge Permits False Claims Act Case to Continue Against Vaccine Manufacturer Merck

Posted by on Friday, September 19th, 2014

merck vaccines

Merck has been the sole provider of mumps vaccinations in the United States since 1967, and a recent whistleblower lawsuit is alleging it intentionally falsified to the FDA its rate of success.
Image source: Wikimedia Commons

Medical corporation Merck & Co. will decidedly face the music in the ongoing class action and related anti-trust lawsuit involving its mumps vaccine – a product routinely given to babies and children for generations. The issue, which involves allegations of false compliance with FDA standards for vaccines, prompted a False Claims Act lawsuit: United States v. Merck & Co. This case was commenced by two virologists once employed with Merck, alleges a systematic and long-standing commitment by the company to lying about the efficacy of its mumps vaccination, thereby prompting possible exposure to liability under the federal False Claims Act. The government has not yet opted to intervene, but has reserved its right to join in the case in the future.

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New York District Court Adds to Rule 9(b) Confusion

Posted by on Thursday, September 18th, 2014

Rule 9(b) case in NY (Wiki)

A recent New York District Court case has added increasing confusion to the applicability of Rule 9(b) in False Claims Act cases.

As we have reported in previous posts, Federal Rule of Civil Procedure 9(b) has emerged as an obstacle in some jurisdictions when applied to the pleadings submitted in False Claims Act cases. In sum, Rule 9(b) imposes heightened specificity requirements in certain federal filings. The rule is often applied in negligence cases, and specifically mentions fraud filings as within its purview. However, courts across the United States are split on exactly how specific False Claims Act pleadings must be, with some Circuits holding that Rule 9(b) does not apply to False Claims Act cases at all. Other Circuits have held that Rule 9(b) requires itemized, explicit, specific examples, at a transactional level, of intentional fraud in order for a False Claims Act case to survive a motion to dismiss.

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Spinal Surgeon Pays Millions to Settle False Claims Act Allegations

Posted by on Wednesday, September 17th, 2014

DOJ settles False Claims Act allegations

The DOJ announced that an Indiana spinal surgeon has agreed to pay $2.6 million to resolve allegations of fraudulent kickbacks with Texas-based Omni Surgical, L.P.
Image source: Wikimedia Commons

An Elkhart, Indiana-based spinal surgeon has agreed to pay $2.6 million to settle allegations under the False Claims Act. The surgeon and Texas-based Omni Surgical, L.P. were allegedly engaged in an unlawful kickback scheme in violation of the False Claims Act’s anti-kickback provisions. In general, any claim for reimbursement to a government healthcare agency (e.g., Medicare, Medicaid or Tricare) that arose due to an inappropriate financial arrangement between one or more healthcare providers could trigger False Claims Act liability for all parties involved. As is reiterated by the government following most resolutions of the kickback allegations, patients deserve honesty and candor from their provider, and should be not be referred to certain clinics or physicians based on an underlying financial arrangement.

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Seventh Circuit Takes Aim at ‘Worthless Services’ False Claims Act Allegations

Posted by on Tuesday, September 16th, 2014

Seventh Circuit

The Seventh Circuit recently dismissed a case involving allegations of “worthless services” by a nursing home facility.
Image source: Wikimedia Commons

On the heels of a provocative op-ed in the New York Times discussing the nexus between Medicare and the expenses of nursing home care, the U.S. Court of Appeals for the Seventh Circuit issued its much-anticipated opinion in United States ex rel. Absher v. Momence Meadows Nursing Center, which involves the collision between the False Claims Act and nursing home providers’ submission of invoices for reimbursement. In its opinion, the Court reversed an expansive interpretation of one oft-cited trigger for FCA liability: worthless services. The opinion registers as pro-provider.

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Fox, Rx Loses False Claims Act Bid against Omnicare, et al.

Posted by on Monday, September 15th, 2014

Ohio-based Omnicare, Inc. recently dodged a False Claims Act case alleging the unlawful distribution of expired drugs in violation of state laws.


Repeat offender Omnicare, a nationwide pharmacy services organization, was recently pitted against Fox, Rx, a Medicare Part D program sponsor, in a False Claims Act lawsuit, alleging several counts of fraud involving government healthcare programs. Unlike the liability faced by Omnicare in several other lawsuits, it was able to avoid facing civil consequences in this particular suit. This was primarily due to the fact that United States District Court for the Southern District of New York’s judge Denise Cote categorized Omnicare’s conduct as “irrelevant” to government “disbursement decisions.”

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DOJ Opts to Intervene in Whistleblower Case Against United Healthcare

Posted by on Friday, September 12th, 2014

Whistleblower lawsuit

Nationwide hospice management company Evercare is facing whistleblower allegations it admitted ineligible patients in order to intentionally defraud Medicare.

In a recent False Claims Act case filed in Colorado, the federal government has decided to intervene after engaging in a preliminary investigation of the relator’s claims. The government, which intervenes in approximately 25 percent of all filed False Claims Act cases, will join as an active participant against Evercare Hospice and Palliative Care – a group accused of engaging in fraud against Medicare and Medicaid. There are actually several lawsuits ongoing against the group, which is run by parent company United Healthcare – also named in the suit.

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