SCOTUS Denies Cert In Cases Addressing FCA Pleadings Requirements

Headlines that Matter for Companies and Executives in Regulated Industries

SCOTUS Denies Cert In Cases Addressing FCA Pleadings Requirements

On Monday, October 17, 2022, the US Supreme Court rejected three petitions asking the Court to resolve a circuit split regarding the Rule 9(b) “particularity” requirements for False Claims Act relators’ allegations of fraud. Whistleblowers and defendants urged the Court to establish a clear standard, whereas the government and the US Solicitor General argued that circuit courts had “largely converged” on a “fact-driven and flexible” approach to the rule. Many believe that as a result of the Court’s decision not to take on these cases, whistleblowers will likely engage in forum shopping to identify jurisdictions with the most lenient pleading requirements.

Sutter Health Settles FCA Claims for $13 Million

Sacramento-based health care services provider Sutter Health and its affiliate Sutter Bay Hospitals have resolved False Claims Act allegations for $13 million. The government alleged that a Sutter Health hospital entered into a contract with Navigant Network Alliance, LLC, whereby Navigant referred toxicology screening tests to Sutter. In turn, Sutter submitted claims, or caused the submission of claims, for reimbursement for qualitative and quantitative lab tests, even though certain quantitative tests were actually performed by third parties.

“Investigating health care fraud and abuse is a priority for the FBI,” said FBI San Francisco Special Agent in Charge Robert K. Tripp. “These cases are often worked in conjunction with our federal law enforcement partners, and this settlement is a great example of the multi-agency investigative team’s hard work to protect the integrity of the Federal Employees Health Benefits Program.”

The USAO’s press release is here.

Home Health Company and Former Officers Settle Two Qui Tam Lawsuits for More than $30 Million

Oklahoma home healthcare provider CHC Holdings, LLC d/b/a Carter Healthcare has agreed to pay $22.9 million to resolve a qui tam lawsuit involving allegations that it violated the Anti-Kickback Statute by providing physicians with medical directorships in exchange for patient referrals. The lawsuit further alleged that the improper referrals resulted in submissions of false claims to the Medicare and TRICARE programs between 2013 and 2020.

“Offering illegal financial incentives to physicians in return for patient referrals undermines the integrity of our health care system,” said US Attorney Robert J. Troester. “Patients deserve care based on good medicine and informed choice that is free from the corrupting influence of money and other motivating enticements. We are committed to pursuing entities and individuals that offer kickbacks and the doctors that solicit or accept them.”

Carter Healthcare, LLC has also agreed to settle a separate qui tam lawsuit for $7.175 million. In that case, the government alleged that between 2014 and 2016, Carter Healthcare submitted claims for medically unnecessary therapy services and overbilled the services by upcoding patients’ diagnoses.

The USAO’s press release is here, and DOJ’s press release is here.

US Attorney for SDNY Files Civil Fraud Lawsuit Against Cigna

On Monday, October 17, the US Attorney for the Southern District of New York announced its decision to intervene in a False Claims Act whistleblower lawsuit against Cigna Corporation. The complaint alleges that Cigna falsified diagnosis codes for services provided to Medicare Advantage Plan members. According to the government, healthcare providers conducting home visits completed a Cigna-created form that was structured for the primary purpose of capturing and recording high-value diagnosis codes. The government alleges that Cigna targeted individuals who were likely to yield the most lucrative diagnosis codes, and allegedly prohibited the healthcare providers from providing any treatment during the home visits. 

The diagnoses documented on the forms were allegedly unsupported, but nevertheless, Cigna allegedly submitted the false claims for increased payments to the government.

The USAO’s press release is here.


Continue Reading