On August 15, 2010, Gov. Paterson signed into law amendments to New York’s FCA recently passed by the New York State legislature. The amendments became effective August 29. The amendments – which closely track amendments to the federal FCA contained in the 2009 Fraud Enforcement and Recovery Act – significantly increase the scope of New York’s FCA. Click here for a discussion of some of the key changes contained in the amendments.
In United States v. Hawley, No. 08-2992, 2010 WL 3292710 (8th Cir. Aug. 23, 2010), the Eighth Circuit reversed the District Court’s grant of summary judgment to the Defendants (Hawley), finding that the government had cognizable claims under the FCA prior to the expansion of the scope of the FCA by the Fraud Enforcement and Recovery Act (FERA).
Continue Reading...On August 16, 2010, the United States District Court for the Northern District of Texas held that a key provision of the recent Fraud Enforcement and Recovery Act (FERA) amendments to the federal FCA intended to overturn the Supreme Court’s 2008 decision in Allison Engine Co. v. United States ex rel Saunders does not apply retroactively. See United States ex rel. Davis v. Lockheed Martin Corp., No. 4:09-CV-645-Y (N.D. Tex. Aug. 16, 2010).
Continue Reading...In a July 28, 2010 report, the Department of Human Services, Office of Inspector General (OIG) estimated that incorrect place-of-service coding on claims for physician services under the Medicare Part B program has resulted in millions of dollars in overpayments to providers nationwide. The report, titled “Review of Place-of-Service Coding for Physician Services Processed by Medicare Part B Carriers During Calendar Year 2007,” recommended that the Centers for Medicare & Medicaid Services (CMS) instruct its contractors to reopen the claims identified during the audit, recover overpayments from providers, and to take other steps to prevent incorrect place-of-service coding.
Continue Reading...On August 9, 2010, the District Court for the Middle District of Tennessee in Smith v. C.R. Bard, Inc., Civil Action Number 3-09-0139, dismissed a claim alleging wrongful discharge in retaliation for actions taken in furtherance of an FCA claim, holding that plaintiff had failed to show that his actions were "sufficiently connected to exposing fraud or false claims against the federal government."
Continue Reading...The Ninth Circuit recently joined the Second, Sixth, Tenth, and Eleventh Circuits in endorsing the theory of implied certification under the federal FCA. See Ebeid ex rel. United States v. Lungwitz et al., No. 09-16122, 2010 WL 3092637 (Aug. 9, 2010). The implied false certification theory was first recognized by the Court of Federal Claims in Ab-tech Construction, Inc. v. United States, 31 Fed. Cl. 429 (Fed. Cl. 1994), aff’d mem., 57 F.3d 1084 (Fed. Cir. 1995), and is “based on the notion that the act of submitting a claim for reimbursement itself implies compliance with governing federal rules that are a precondition to payment.” United States ex rel. Mikes v. Straus, 274 F.3d 687, 699 (2d Cir. 2001).
Continue Reading...The Tenth Circuit reversed the District Court’s dismissal of a relator’s action, holding that the District Court should have applied a more lenient pleading standard. See United States ex rel. Lemmon v. Envirocare of Utah, Inc., No. 09-4079, 2010 WL 3025021 (10th Cir. Aug. 4, 2010). In Lemmon, the relator brought claims under the FCA, alleging that Envirocare made express and implied false certification claims by repeatedly violating its contractual and regulatory obligations. The Tenth Circuit held that the relator had viable express and implied false certification claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Notably, the Tenth Circuit further held that, under Rule 9(b), the relator’s complaint need only “provide enough information to describe a fraudulent scheme to support a plausible inference that false claims were submitted.” The relator did not need to allege the specifics of every alleged false claim submitted to the government. The Tenth Circuit’s holding that Rule 9(b) joins the recent trend of other circuits, including the First, Fifth, Seventh, Ninth, and Eleventh Circuits. By contrast, the Eighth Circuit and certain District Courts like the District of Maryland, require allegations of specific false claims. See, e.g., Maryland Court Dismisses Complaint Alleging Medicaid Rebate Fraud.
On July 20, 2010, the District Court of the Southern District of Texas in United States ex. rel. King v. Solvay S.A., Civil Action H-06-2662, held that relators could amend their complaint to add factual allegations based on documents obtained by state governments pursuant to investigative powers while the case was under seal. The relators used these documents to bolster their factual allegations in order to cure pleading deficiencies under Rule 9(b) of the Federal Rules of Civil Procedure.
Continue Reading...On June 29, 2010, in Missouri v. Spilton, No. SC 90586 (Mo. June 29, 2010), an action brought by the Attorney General, the Supreme Court of the State of Missouri issued a unanimous decision affirming a penalties award under the Missouri False Claims Act, Mo. Rev. Stat. § 191.905 (2009), in the amount of $1,625,000, where the actual damages allegedly suffered by the State were only $45,385.
Continue Reading...In United States ex rel. Loughren v. Unum Group, Case No. 09-1606, 2010 WL 2951175 (1st Cir. July 29, 2010), the First Circuit vacated a jury verdict and remanded the case for a new trial because the District Court improperly excluded evidence relevant to the materiality element of the FCA. The relator alleged that Unum Group, a long-term disability insurer, caused claimants to submit false claims for Social Security Disability Insurance (SSDI) by requiring them to apply for SSDI benefits in order to receive long-term disability benefits from Unum. The Government did not intervene in this action.
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