Bass Berry & Sims recently secured dismissals on behalf of healthcare providers in three separate False Claims Act (FCA) qui tam lawsuits in a matter of a week’s time.
Each separate case involved allegations that the defendant healthcare providers violated the Anti-Kickback Statute and, as a result, submitted false claims to federal healthcare programs in violation of the FCA. Following declination by the government and the filing of motions to dismiss by the defendants in each case, the respective district courts issued written opinions granting our clients motions and dismissing the relators’ FCA allegations. These cases reflect the continued proliferation of FCA lawsuits based on alleged violations of the Anti-Kickback Statute and the increased willingness of FCA relators to litigate qui tam lawsuits following declination by the government. Prevailing at the motion to dismiss stage brings these matters to a conclusion without the need for costly and time consuming discovery that otherwise would follow in a typical FCA lawsuit.
U.S. ex rel. Wilkerson v. RCHP-Florence d/b/a Shoals Hosp., No. 2:21-cv-00569-ACA, 2023 WL 2730259 (N.D. Ala. Mar. 30, 2023)
On March 30, 2023, the United States District Court for the Northern District of Alabama granted the motion to dismiss filed on behalf of Shoals Hospital and other defendants concerning the relator’s allegations that the relator was pressured to improperly admit and retain patients in the hospital’s psychiatric unit in violation of Medicare regulations, as well as allegations that the hospital violated the Anti-Kickback Statute in connection with relator’s medical directorship payments. Applying Eleventh Circuit precedent, the district court concluded that the relator failed to plead a sufficient indicia of reliability that Shoals Hospital (or any other defendant) submitted any false claims to federal healthcare programs and failed to meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). The district court also dismissed relator’s claims for violation of the FCA’s reverse false claims and conspiracy provisions. The Bass, Berry & Sim team included Matt Curley, John Eason and Charlotte Elam.
U.S. ex rel. Waters v. Envision Healthcare Corporation, No. 2:19-cv-00873, 2023 WL 2636461 (E.D. Cal. Mar. 24, 2023)
On March 24, 2023, the United States District Court for the Eastern District of California dismissed a qui tam lawsuit alleging that defendants’ surgery centers violated the Anti-Kickback Statute by requiring certified registered nurse anesthetists to accept a per diem rate for their services far below the revenue generated from those services and then kicking back the anesthesia profits to physicians who ordered the services. The district court held that the relator’s qui tam lawsuit was barred under the FCA’s Public Disclosure Bar because substantially similar allegations or transactions had been raised in a prior qui tam lawsuit in Florida and in the defendants’ Securities and Exchange Commission disclosures, and because the relator did not allege any material additional information beyond the public disclosures. Of particular interest in the ruling is the question of when disclosures of information in securities filings, prior lawsuits, or the news media may be sufficient to bar the prosecution of qui tam lawsuits. These questions carry particular nuances for publicly traded companies or companies that face serial FCA lawsuits. The firm’s team included Brian Roark, Jim Jenkins, Danielle Sloane, Taylor Sample, Emily Fountain, and Mallie Myers.
U.S. ex rel. Cook v. Integrated Behavioral Health, Inc., No. 2:20-cv-877, 2023 WL 2617399 (N.D. Ala. Mar. 23, 2023)
On March 23, 2023, the United States District Court for the Northern District of Alabama dismissed a qui tam lawsuit against 23 defendants alleging that a psychiatrist provided free nursing services to nursing homes in exchange for patient referrals in violation of the Anti-Kickback Statute and the Stark Law. The district court determined that the relators’ complaint represented a “shotgun pleading” in violation of Eleventh Circuit standards and also failed to plead that any of the defendants submitted or caused false claims to be submitted with a sufficient indicia of reliability and failed to meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). We represented Brookdale Senior Living, Diversicare and NHC HealthCare in the lawsuit. The Bass, Berry & Sims team included Matt Curley, Brian Roark, Anna Grizzle, Glenn Rose, Angie Bergman, Wes Love and Peter Rathmell.
About the Healthcare Fraud & Abuse Task Force
The firm’s Healthcare Fraud & Abuse Task Force is made up of more than 50 attorneys from across the firm. Over the past decade, members have represented healthcare providers in virtually every state and litigated and/or resolved False Claims Act allegations in jurisdictions located in more than 25 states around the country. They have obtained groundbreaking legal rulings in key decisions by the U.S. Courts of Appeal in the Fourth, Sixth, Eighth and Ninth Circuits, and numerous district courts throughout the country. Clients have included hospitals and health systems, physician practices, ambulatory surgery centers, post-acute providers, Medicare Advantage companies, pharmaceutical and device companies, and other healthcare providers and life sciences companies. Read more here.