by Nolan and Auerbach on February 19, 2013
A federal court in a Florida qui tam lawsuit recently ruled that a plaintiff may bring a False Claims Act anti-retaliation lawsuit against defendants other than his employer. (United States ex rel. Koch v. Gulf Region Radiation Oncology, 3:12cv504/RV-CJK (N.D. Fla. Jan. 30, 2013)).
In 2008, West Florida Medical Center Clinic hired Richard Koch as an administrator/manager. After a series of mergers involving West Florida Medical Center Clinic and Sacred Heart Health System, Mr. Koch eventually became an employee of Gulf Region Radiation Oncology. A couple of years later, in January 2010, Gulf Region fired Mr. Koch, allegedly after he raised concerns that they were defrauding government health care programs.
Mr. Koch subsequently filed a False Claims Act anti-retaliation lawsuit against his employer Gulf Region Radiation Oncology and the two predecessor companies, West Florida Medical Center Clinic and Sacred Heart Health System, which both maintained separate legal entity status.
Sacred Heart and West Florida Medical Center Clinic responded by seeking dismissal, arguing Koch was not their employee so they could not be held liable under the False Claims Act for his firing.
The court determined that the defendants’ defense may have had merit before May 2009. However, at that time, the Fraud Enforcement & Recovery Act of 2009 amended and expanded the False Claims Act’s anti-retaliation provision to reach non-employers. Thus, the court found that because the alleged retaliatory discharge happened after May 2009, Mr. Koch could sue West Florida Medical Center Clinic and Sacred Heart Health System, even though they may not have technically been his employers.
More information for whistleblowers is located at the Nolan Auerbach website.
by Nolan and Auerbach on February 5, 2013
After closing out a record year for False Claims Act recoveries, the government announced today that New Jersey based Cooper Health System and Cooper University Hospital has agreed to pay $12.6 million to resolve allegations that it paid illegal kickbacks to health care providers. This settlement is one of the largest recoveries for New Jersey under its state False Claims Act. It is also one of the largest settlements against a hospital for its involvement in an illegal kickback scheme.
The case was originally filed in 2008 by Dr. Nicholas L. DePace who was a prominent Delaware Valley cardiologist. According to the whistleblower, millions of dollars were being paid to physicians in order that they would refer patients to the Cooper Health System and Cooper University Hospital for expensive in-patient and cardiac services. It is Dr. DePace’s allegations that started the investigation by the United States Department of Justice and the New Jersey Attorney General’s Office that led to this recovery.
Nolan Auerbach believes that violations of the Anti-kickback Statute by illegally paying healthcare providers continues to date and remains a basis for False Claims Act liability as this case illustrates. Taxpayers depend on courageous whistleblowers such as Dr. DePace who have the constitutional fortitude to step up to stop these illegal practices.
More information for whistleblowers is located at the Nolan Auerbach website.
by Nolan and Auerbach on January 31, 2013
Two former employees of the Momence Meadows Nursing Center (MMNC) filed a qui tam action against the nursing home pursuant to the False Claims Act. The relators claimed, among other things, that the care provided by MMNC was so substandard that it was worthless, thus triggering FCA liability. (DOJ filed a statement of interest backing this use of the FCA.)
MMNC filed a summary judgment motion, arguing that the relators’ claim for worthless services should be dismissed. The nursing home argued that it provided “substandard” services, which should be distinguished from not providing any services at all.
The court disagreed and determined that providing substandard services can sometimes blur the line into providing worthless services. With this decision, the court stressed that defendants cannot sidestep FCA liability by simply arguing that they provided some care, albeit woefully substandard.
More information for whistleblowers is located at the Nolan Auerbach website.
by Nolan and Auerbach on January 18, 2013
A sales manager at Takeda Pharmaceuticals brought a qui tam action against his employer under the False Claims Act. (United States ex rel. Nathan v. Takeda Pharmaceuticals America Inc., No. 11-2077 (4th Cir. 2013)).
The whistleblower claimed that his employer violated § 3729(a)(1)(A) of the Act by causing false claims to be presented to the government for payment.
However, to trigger liability under the Act, a claim for payment must have actually been submitted to the federal government. In dismissing the whistleblower’s suit, the Fourth Circuit determined that the whistleblower failed to point to any specific reimbursement claims submitted to the Government that related to the company’s alleged off-label marketing of its drugs.
The whistleblower said that Takeda was seeking reimbursement for the costs of prescriptions targeted at off-label use, which are typically not subject to government reimbursement. To prove his claim, the whistleblower utilized statistical evidence and made general allegations that Takeda engaged in a “scheme” to defraud the government. However, the whistleblower failed to point to even one specific reimbursement claim by Takeda.
The court stressed that while the whistleblower’s claim show that a false claim could have been filed, liability under the False Claims Act attaches only to false claims that were actually submitted to the government for reimbursement.
In ruling for Takeda, the court added that general allegations do not identify with particularity any claims that would trigger liability under the Act.
To learn more about whistleblowers and the False Claim Act, visit the Nolan Auerbach website.
