October 2017

The U.S. Court of Appeals for the Sixth Circuit recently heard oral argument in connection with a decision by the U.S. District Court for the Eastern District of Tennessee that primarily raised two FCA questions:

  1. Did the relator’s amended complaint satisfy the FCA’s first-to-file rule?
  2. Did the amended complaint adequately plead fraud under Rule 9(b) of the Federal Rules of Civil Procedure? U.S. ex rel. Armes v. Garman, 2016 WL 3562062 (E.D. Tenn. June 24, 2016).

Continue Reading Sixth Circuit Hears Oral Argument in FCA Appeal

The U.S. Court of Appeals for the Fifth Circuit vacated a $663 million judgment, concluding that the Supreme Court’s opinion in Escobar doomed the plaintiff’s FCA claims on the issue of materiality.

FCA Allegations: Highway Guardrail Systems Had Unapproved Design Modifications

Trinity Industries, a manufacturer of highway guardrail systems, faced FCA allegations brought by a former competitor based on the theory that federally subsidized purchases of Trinity’s guardrail systems resulted in false claims as a result of unapproved design modifications. Prior to the filing of the relator’s qui tam lawsuit, the relator met extensively with Federal Highway Administration (FHWA) officials during which he presented his allegations regarding the design modifications and his assertions that those modifications rendered Trinity’s guardrail systems ineligible for federal reimbursement. FHWA met separately with Trinity to discuss the relator’s allegations. Following those meetings, FHWA confirmed that state purchases of the Trinity guardrail system were eligible for federal reimbursement notwithstanding the design modifications.Continue Reading Fifth Circuit Relies on Escobar in Vacating $663 Million FCA Judgment

Background

The U.S. District Court for the Central District of California recently dismissed a complaint-in-intervention filed by the U.S. Department of Justice (DOJ) in U.S. ex rel. Swoben v. Secure Horizons.  As previously reported, in this significant test case, DOJ filed its complaint on May 1, 2017, as to the UnitedHealth Group parties (collectively, UnitedHealth), marking the first time that DOJ joined a whistleblower suit alleging FCA violations regarding Medicare Advantage.  The complaint alleged that the “risk adjustment” payments, which account for the severity of patient conditions as compared to an average Medicare fee-for-service beneficiary, were boosted by ignoring questionable diagnoses.Continue Reading Dismissal of Medicare Advantage FCA Suit Marks Significant Defeat for Government

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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