Category

Rule 9(b)

28 February 2019

Government Sufficiently Pleads Florida Pharmacy Owner Caused Submission of False Claims through Kickback Scheme; Suit Will Go Forward

The U.S. District Court for the Northern District of Florida recently held that a False Claims Act suit can proceed against a Florida pharmacy and its owner, rejecting in particular the owner’s arguments that the complaint did not sufficiently allege that he acted with improper intent or caused the submission of false claims.

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19 February 2019

8th Circuit Reaffirms FRCP 9(b)’s Demanding Pleading Standard

The U.S. Court of Appeals for the Eighth Circuit joined a growing trend among courts in tightening False Claims Act (“FCA”) pleading requirements, affirming the dismissal of a qui tam action brought against a nonprofit hospital because the relators failed to meet the “particularity” standard set forth under Rule 9(b) of the Federal Rules of Civil Procedure. In doing so, the court reminded FCA litigants that Rule 9(b) requires either “representative samples” of false claims plead with adequate specificity, or particular details of a scheme to submit false claims paired with reliable indicia that they were submitted. United States ex rel. Strubbe v. Crawford Cnty. Mem’l Hosp., No 18-1022, 2019 WL 512190 (8th Cir. Feb. 11, 2019).  (more…)

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20 August 2018

AKS Safe Harbor Defeats FCA Claim in Eleventh Circuit

In Carrel v. AIDS Healthcare Foundation, No. 17-13185 (August 7, 2018) the Eleventh Circuit affirmed summary judgment for the defendant on Anti-Kickback Statute-based FCA claims, holding that incentives to employees for referring patients for its services were covered by the employee safe harbor to the Anti-Kickback Statute, and that these payments in particular served the congressional intent of the Ryan White Act to provide AIDS patients with ease of access to services. The Court also upheld the prior dismissal of all other allegations for a lack of particularity, noting that the only instances that relators alleged with particularity were actually covered “services” under the Ryan White Act and that they would not “infer fraud from instances of lawful conduct.” (more…)

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05 May 2017

Unethical Investigative Work By Relator’s Counsel Leads to Dismissal of FCA Claims

On April 28, 2017, the District Court for the District of Massachusetts dismissed a qui tam complaint alleging off-label promotion against a pharmaceutical manufacturer.  Dismissal was a sanction for relator’s counsel having devised and implemented what the Court called “an elaborate scheme of deceptive conduct in order to obtain information from physicians about their prescribing practices, and in some instances about their patients.”

Relator filed his initial complaint in 2012, alleging that the manufacturer was promoting off-label use of two drugs and paying physicians kickbacks for prescribing those drugs.  While the case was under seal, the relator filed an amended complaint adding detail to his allegations and including a reference to a third drug.  After the United States declined to intervene and the case was unsealed in April 2014, relator filed a second amended complaint that focused only on alleged off-label promotion of the third drug.

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27 March 2017

Additional Details Not Sufficient To Save Complaint From Public Disclosure Bar

On March 22, 2017, the District Court for the Northern District of California dismissed a False Claims Act, 31 U.S.C. §3729 complaint against several hospitals for alleged Medicare, Medicaid, Tricare claims submission schemes.  United States ex rel. Cherry Graziosi v. Accretive Health, Inc., et al, No. 13-cv-1194 (N.D. Ill. Mar. 22, 2017).

The relator alleged that each of the Defendant hospitals submitted a claim for payment to federal health insurance programs for hospital admissions. When submitting this form, Relator alleged, the hospital must certify that inpatient admissions were determined to be medically necessary by a licensed physician with personal knowledge of the medical necessity.  She alleged that the hospitals submitted forms for reimbursement for inpatient treatment in circumstances where the Emergency or Hospital Staff physicians had previously determined that inpatient treatment was not required.  According to Relator, these fraudulent submissions were generated or recommended by Accretive Health, Inc., a consultant.

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14 February 2017

First Circuit Affirms Strict Limits of FCA Reach

In U.S. ex rel. Alex Booker and Edmund Hebron v. Pfizer, Inc., the U.S. Court of Appeals for the First Circuit affirmed two district court judgments rejecting allegations of the defendant’s sales and marketing activities related to its drug Geodon, noting that, after 6 years of litigation, the whistleblowers failed to provide sufficient evidence to show that defendant’s alleged conduct resulted in the actual submission of fraudulent claims.

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24 October 2016

FCA Case Against Nursing Home Remanded After Sixth Circuit Applies Relaxed FCA Pleading Standard for the First Time

On September 30, 2016, the Sixth Circuit remanded a False Claims Act (“FCA”) lawsuit against Brookdale Senior Living Solutions (the “defendant” or “Brookdale”), which alleges, among other things, that physician signatures on home care certifications and care plans were late and that Brookdale paid physicians to provide certifications for patients that did not require home care.  Specifically, the Sixth Circuit reversed and remanded the district court’s dismissal of United States ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., Case No. 15-6377, holding that the relator “sufficiently plead the submission of particular claims to the government because she provided a detailed description of the alleged fraudulent scheme, and included her own personal knowledge of the review of Medicare claims for submission.”

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13 September 2016

Seventh Circuit Holds Allegations of Specific Claims Not Required to Satisfy Rule 9(b), but Sets High Bar For Pleading Claims Based on Allegations of Medically Unnecessary Services

In another recent False Claims Act (“FCA”) case decided on Rule 9(b) grounds, the Seventh Circuit rejected the contention that allegations regarding specific claims submitted are necessary to survive a motion to dismiss, but set a very high bar for pleading FCA claims premised on a lack of medical necessity.

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01 September 2016

Seventh Circuit Offers Guidance on Post-Escobar Pleading

In a recent case, affirming the dismissal of an FCA complaint against the City of Chicago, the Seventh Circuit provided guidance to those seeking to understand the pleading requirements for an implied certification claim after the Supreme Court’s recent decision in Escobar.  In United States ex rel. Hanna v. City of Chicago, No. 15-3305 (7th Cir. Aug. 22, 2016), the Court held that the relator failed to provide sufficient detail on the alleged statutory and regulatory violations and the link between those violations and the alleged false certification to meet the heightened Rule 9(b) standard.

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10 August 2016

Ninth Circuit Cautions Against Allowing Relators to Assert Expansive Claims Based Only On Specific Incidents of Alleged Wrongdoing

In a ruling earlier this week, the Ninth Circuit emphasized the demanding standard Federal Rule of Civil Procedure 9(b)’s particularity requirement imposes on qui tam relators alleging fraud, particularly when seeking to pursue an expansive scope of claims based on limited information.  In United States ex rel. Driscoll v. Todd Spencer M.D. Medical Group, Inc., No. 13-17624 (9th Cir. Aug. 9, 2016), a former radiologist employed by the defendant medical group, alleged that the group and its principal violated the FCA by submitting claims to Medicare for “unnecessary CT scans” and, separately, by “unbundling” single procedures into multiple claims to “increase billings artificially.”  Id. (slip op. at 3).  The relator alleged that this conduct persisted for at period of several years, from at least 2007 to 2010, and perhaps longer.  United States ex rel. Driscoll v. Todd Spencer M.D. Med. Grp., Inc., No. 1:11-cv-1776, 2013 WL 6243858, *5 (E.D. Cal. Dec. 3, 2013).  After allowing the relator one opportunity to amend his complaint, the district court dismissed the first amended complaint with prejudice, concluding that these allegations were insufficiently specific to withstand Rule 9(b)’s particularity requirement.  Id.

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