Health Law Daily Relator’s representative chart, insider status was sufficient to allege that false claims were presented
Monday, July 8, 2019

Relator’s representative chart, insider status was sufficient to allege that false claims were presented

By Jeffrey H. Brochin, J.D.

Despite meeting the pleading requirements, relator’s "shotgun" complaint that lumped many defendants together made it impossible for the court to discern to which parties certain actions were attributable.

A federal district court in Florida has granted in part, and denied in part the motions to dismiss filed by several of the twenty-two parties alleged to have participated in a kickback scheme involving the vending of compounded prescriptions that were billed to various government healthcare programs. Although the relator’s evidentiary chart, standing on its own, was insufficient to establish that he had first-hand knowledge that claims were submitted to the government, that evidence taken in conjunction with his insider status as an officer of one of the companies was sufficient to meet the pleading requirement. However, the second amended complaint failed due to the fact that he pleaded in a shotgun fashion, lumping the various defendants together, thereby making it impossible for the court to discern to which parties certain actions were attributable (Thornton v. National Compounding Company, Inc.July 1, 2019, Honeywell, C.).

Prescriptions generated through kickbacks. The relator served as Vice President of Pharmacy Operations and as Director of Operations/Pharmacy Services for Soothe Pharmacy, Inc., and other entities using the "Soothe" name, including National Compounding Company, Inc. His tenure lasted from June 2014 through April 2015. He alleged that the twenty-two parties named in his False Claims Act (FCA) (31 U.S.C. §3729 et seq) complaint knowingly submitted, or caused to be submitted claims to Medicare, Tricare, and other government programs to pay for compound pharmaceutical products for which prescriptions were generated through kickbacks and illegal marketing practices, many of which were not wanted by the patients or medically necessary.

Shotgun pleading. The court defined a shotgun pleading as one where multiple claims are asserted against multiple defendants. It found that the instant Second Amended Complaint impermissibly lumped all of the entities together in the counts, and reincorporated each preceding count into each subsequent count, which rendered the complaint an impermissible shotgun pleading. It was therefore impossible for the defendants or the court to discern which actions were attributable to which defendant. Accordingly, the Second Amended Complaint was dismissed, and the court directed that in the event the relator chose to amend the complaint, the pleading would have to attribute various acts to a specific defendant. If one party’s actions were attributed to another, the relator would be required to explain why, and provide a factual basis for such attribution.

Requirement of first-hand knowledge. The court also addressed the objection that the complaint failed to state facts as to time, place, and substance of the alleged fraud, specifically the details of the allegedly fraudulent acts, when they occurred, and who engaged in them. The defendants argued that the relator’s representative chart was not sufficient to provide specific examples because it showed only compounds dispensed by unidentified pharmacies without information on the alleged subsequent submission of reimbursement claims to the government. They also asserted that the relator simply assumed certain information without having first-hand knowledge of the information.

However, the court ruled that although certain information was indeed omitted from the representative chart, when taken in conjunction with the relator’s insider status, and review of Soothe’s billing records, the evidence was sufficient to allege that false claims were presented to the government.

For the foregoing reasons, the court dismissed all counts of the relator’s Second Amended Complaint as they pertained to certain entities that were lumped together, but granted in part, and denied in part the motions to dismiss of the other entities.

The case is No. 8:15-cv-2647-T-36JSS.

Attorneys: Anthony Charles Munter (Price Benowitz, LLP) for Dwayne Thornton. Oliver Benton Curtis, III (McDermott, Will & Emery, LLP) for National Compounding Co., Inc., Fort Myers Beach Pharmacy Holdings, LLC and Fort Myers Beach Pharmacy, LLC.

Companies: National Compounding Co., Inc.; Fort Myers Beach Pharmacy Holdings, LLC; Fort Myers Beach Pharmacy, LLC

MainStory: TopStory CaseDecisions FCANews FraudNews ProgramIntegrityNews QuiTamNews FloridaNews

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