Health Law Daily Court dismisses suit against cancer treatment center operator over alleged kickback scheme
Wednesday, September 19, 2018

Court dismisses suit against cancer treatment center operator over alleged kickback scheme

By Brian Craig, J.D.

A relator failed to sufficiently allege False Claims Act (FCA) (31 U.S.C. §3729 et seq.) against U.S. Oncology, Inc., a cancer treatment center that operates in 39 states. A New York district court’s decision to dismiss the complaint ended an action that had previously included several other parties (United States ex rel. Piacentile v. Amgen, Inc., September 17, 2018, Johnson, S.).

Background. A physician brought a qui tam action on behalf of the United States against Amgen, Inc. U.S. Oncology, and other defendants alleging violations of the FCA and various state laws. According to the relator, U.S. Oncology allegedly engaged in kickbacks for prescribing certain Amgen drugs to Medicaid and Medicare patients. After previous settlements and decisions, the cancer treatment center operator was the only remaining defendant. The cancer treatment center operator filed a motion to dismiss the complaint for failing to sufficiently plead fraud.

Causes of action. The court analyzed whether the complaint sufficiently pleaded the four causes of action in violation of the FCA. The court found that the complaint did not adequately identify false claims, state the dates or an approximate rate of dates, or explain the theory of liability. Furthermore, the complaint failed to allege that the cancer treatment center operator knew that the claims it filed on behalf of its customers were false.

The court held that the complaint failed to show that U.S. Oncology knowingly made, used, or caused to be made or used, a false record or statement material to a false or fraudulent claim. The complaint did not specifically allege knowledge that the certifications or representations were false, nor did it present an argument for how false records or statements decrease an obligation to pay money to the government. Finally, the court noted that the complaint did not specify the defendants who allegedly participated in the alleged conspiracy.

The court also found that the state law claims fail to meet the heightened pleading requirement for fraud. Although all claims were dismissed, the relator was given 30 days to amend.

The case is No. 04-CV-3983 (SJ)(RML).

Attorneys: Deborah B. Zwany, U.S. Attorney’s Office, for Joseph Piacentile. Eric Owen Corngold (Friedman Kaplan Seiler & Adelman LLP) for Amgen Inc. Carl H. Loewenson, Jr. (Morrison & Foerster LLP) for U.S. Oncology, Inc.

Companies: Amgen Inc.; U.S. Oncology, Inc.; Amerisource Bergen Corp.; Amerisource Bergen Specialty Group, Inc.; International Physicians Network; International Oncology Network

MainStory: TopStory CMSNews AntikickbackNews DrugBiologicNews FCANews FraudNews ProgramIntegrityNews QuiTamNews NewYorkNews

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