Health Law Daily FCA suit against optometry practice not barred by res judicata
Wednesday, January 6, 2021

FCA suit against optometry practice not barred by res judicata

By David Yucht, J.D.

Prior suits filed by former patient were based on the Sherman and Clayton Acts as well as state law, none of which involved the federal government as a party.

A federal judge in Pennsylvania ruled that an eye patient’s qui tam False Claims Act (FCA) suit filed against an optometry practice was not barred by the doctrine of res judicata because the federal government had not been named as a party in a prior suit brought by the patient against the same practice. Consequently, the court denied a motion to dismiss filed by the practice (U.S. ex rel. Alejandro v. Philadelphia Vision Center, January 4, 2021, Pappert, G.).

Prior lawsuit ended in dismissal. A patient of Philadelphia Vision Center previously asserted claims against the practice, its owner and an optometrist associated with the center under the Pennsylvania Unfair Trade Practice and Consumer Protection Law, the Sherman Act, and the Clayton Act, along with a state law civil conspiracy claim. She alleged the Defendants violated the FCA in the prior suit but did not assert a claim under the FCA. Her prior state law claims were dismissed on summary judgment and thereafter her prior federal claims were dismissed with prejudice based on a stipulation.

Patient filed a new claim under the False Claims Act. Following the dismissal of her previous case, the patient filed a new action based on the FCA. She asserted that the center’s owner submitted claims for Medicare/Medicaid reimbursements under certain doctors’ National Provider Identifier (NPI) numbers where care was provided by other doctors, thereby retaining unlawful payments resulting from false payment requests. The patient also alleged that an optometrist associated with Philadelphia Vision Center received compensation for permitting the wrongful use of her designated NPI number. The patient asserted that this conduct was a violation of the Anti-Kickback Statute. In support of her allegations, she cited "information obtained from the optometrist’s deposition in an unrelated matter." The optometry practice moved to dismiss the new complaint, arguing that the patient failed to state a claim upon which relief could be granted because her allegations "were the subject of litigation in the prior related case that was terminated."

Res judicata. The court denied the dismissal motion. The Vision Center argued that the new complaint was based on a "billing error" that was previously litigated and therefore all possible causes of action related to the billing error were terminated. Consequently, issue and claim preclusion, also known as res judicata, barred these claims. To invoke res judicata one must establish that there was a final judgment on the merits in a prior suit involving the same parties based on the same cause of action. In the prior matter, the U.S. government had not been named a party in the action. Even though the patient’s prior suit referenced the FCA, she did not pursue and could not have pursued a claim on behalf of the U.S. without complying with the FCA’s statutory requirements. Consequently, the court determined that it would be improper to bar the patient’s present qui tam claims as res judicata because the U.S. was unable to participate in the resolution of the previous claims.

The case is No. 2:20-cv-02027-GJP.

Attorneys: Gregory B. David, U.S. Attorney's Office, for the U.S. Steven H. Rubin (West Chester, PA) for Philadelphia Vision Center and Barco Optical, Inc..

Companies: Philadelphia Vision Center; Barco Optical, Inc.

MainStory: TopStory CaseDecisions CMSNews AntikickbackNews FCANews FraudNews QuiTamNews PennsylvaniaNews

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