Health Law Daily Government’s claims supersede relator’s upon intervention in qui tam action
Tuesday, September 15, 2020

Government’s claims supersede relator’s upon intervention in qui tam action

By Jeffrey H. Brochin, J.D.

Although a relator’s FCA claims become duplicative and repetitious once the government intervenes, the relator continues as a party to the action and retaliation claims can proceed.

A federal district court in Virginia denied the motion to dismiss the government’s joint complaint in intervention filed in a False Claims Act (FCA) (31 U.S.C. §3729 et seq) lawsuit, however, one relator’s qui tam action was dismissed as duplicative. The government’s complaint was pleaded with specificity citing numerous examples of fraudulent filing of Medicaid claims, and the relators’ FCA retaliation claims were sustained except against the company’s CEO (U.S. ex rel Fortunate v. NDUTIME Youth and Family Services, Inc., September 11, 2020, Lauck, H.).

Repeated filing of fraudulent claims. NDUTIME Youth and Family Services, Inc. (NDUTIME) is a Virginia provider of mental health services that began operations in 2006. Until 2015, Virginia law allowed non-licensed mental health workers to provide crisis intervention and stability intervention services. However, effective January 30, 2015, the Virginia Department of Medical Assistance Services (DMAS) revised their regulations to require that only licensed mental health professionals could provide crisis intervention services. The provider was informed of the changes, but it was alleged by the relators and subsequently the government as intervenor that NDUTIME disregarded the new requirements. The two relators both previously worked for the provider and objected to billing based on non-compliance, billing that was allegedly fraudulent as to hours actually expended, and lack of supporting documentation. The provider moved to dismiss the government’s complaint filed in intervention as well as the relators’ individual retaliation claims.

Government claims become operative. The provider moved to dismiss the government’s complaint based upon lack of specificity of pleading. However, the court found that the evidence of the provider having altered time expenditure entries, as well as utilizing unlicensed mental health workers and failing to provide the requisite supporting documentation, all supported the government’s claims. As to the provider’s motion to dismiss one relator’s claims, the court referenced the FCA statute wherein it is established that when the government intervenes in a qui tam action, those claims become operative insofar as they are duplicative or repetitious of the claims brought by the relator. Although one relator was permitted to continue as a party to the FCA lawsuit, his own FCA claims against the provider were dismissed.

Retaliation claims allowed to proceed. The court denied the provider’s motions to dismiss two separate relators’ retaliation claims because in both instances, the relators satisfied the three-prong test for an FCA retaliation claim. Both relators properly alleged that (1) the relator engaged in protected activity; (2) the employer knew about the activity; and (3) the employer took adverse action against the employee as a result. The court therefore denied the motions to dismiss the retaliation claims against the provider. However, one retaliation claim against the individual CEO was dismissed because such claims against an individual are barred under the FCA.

The case is Civil Action No.: 3:16cv653.

Attorneys: Robert P. McIntosh, U.S. Attorney's Office, for the United States and Sethina Fortunate. Joseph E. H. Atkinson (Whitney & Whitney PLLC) for NDUTIME Youth & Family Services, Inc.

Companies: NDUTIME Youth & Family Services, Inc.

MainStory: TopStory CMSNews EmploymentNews FCANews FraudNews MedicaidNews MedicaidPaymentNews ProgramIntegrityNews QuiTamNews VirginiaNews

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