Health Law Daily Claim fails where parties aren’t put on notice of their alleged role in fraudulent scheme
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Monday, September 16, 2019

Claim fails where parties aren’t put on notice of their alleged role in fraudulent scheme

By Rebecca Mayo, J.D.

A False Claims Act complaint must present more evidence than a general scheme allegedly carried out by multiple defendants without specifying who participated in what acts.

A district court dismissed claims against six health care organizations for alleged violations of the False Claims Act (FCA) after finding that the relators’ complaint failed to specify what acts violated the FCA and who committed them. According to the court, the facts of a FCA claim should include sufficient information to inform each defendant of the nature of its alleged participation in the fraud. A complaint that alleges a number schemes without specifying which acts of the scheme violated the FCA and which parties were involved in the acts, was not pled with the particularity required for a FCA claim (U.S. ex rel. Isabell v. Kindred Healthcare, September 12, 2019, Whittemore, J.).

False claims. An area vice president for Kindred Healthcare, Inc. and an account manager for Senior Home Care came together to file a qui tam action against six health care organizations, including the organizations they worked for. The relators alleged that the organizations engaged in various billing, fraudulent document, understaffing, and kickback schemes that were carried out through the presentation of false claims, making and using false records and statements to get false claims paid, and retaliation. After the government declined to intervene, the relators filed their second amended complaint and the organizations moved to dismiss.

Decision. To plead a FCA complaint, a relator must allege "facts as to time, place, and substance of the defendant’s alleged fraud, specifically the details of the defendant’s allegedly fraudulent acts, when they occurred, and who engaged in them." The court noted that the complaint asserted 4 claims against the organizations for at least 11 different ways the organizations allegedly violated the FCA. However, the complaint did not make it clear which alleged scheme or what specific allegations relate to which FCA count. It further failed to specify the conduct of each defendant and impermissibly lumped all of the organizations together making it impossible to determine which factual allegations relate to which organization and leaving the organizations unable to frame a response.

To plead the submission of a false claim a relator must "identify the particular document and statement alleged to be false, who made or used it, when the statement was made, how the statement was false, and what the defendants obtained as a result." Here, the complaint’s lack of specificity made it impossible to determine the "who, what, where, when, and how" that must be presented to show the submission of a false claim. The court dismissed the claims, holding that the claims failed to meet the particularity requirements of pleading a FCA claim. However, the court granted leave to allow the relators time to amend their complaint.

The case is No. 8:15-cv-2076-T-27CPT.

Attorneys: Michael Kenneth, US Attorney's Office, for the United States. Stephen Sean Stallings (The Law Offices of Stephen S. Stallings) for Donna Isabell. Jack E. Fernandez, Jr. (Zuckerman Spaeder, LLP) for Kindred Healthcare Inc d/b/a Kindred at Home., Gentiva Health Services, Inc. and Kindred Systems, Inc.

Companies: Kindred Healthcare Inc d/b/a Kindred at Home; Gentiva Health Services, Inc.; Kindred Systems, Inc.

MainStory: TopStory CMSNews AntikickbackNews BillingNews FCANews FraudNews FloridaNews

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