11th Circuit Dismisses Florida Medicare Fraud FCA Suit for Lack of Specific Allegations

July 18, 2016

health-care-lawOn July 5, 2016, the U.S. Eleventh Circuit Court of Appeals affirmed the dismissal of a former employee’s False Claims Act (FCA) (often call “whistle blower” or “qui tam”) lawsuit which alleged Medicare fraud by a Florida health care provider. The Eleventh Circuit agreed with the trial court that the complaint lacked specific allegations of a false claim being presented to the government.

Lacking in Details

The three‑judge appeals panel said that the former therapy program manager for the Miami-based Sun Healthcare Group Inc., Margaret Jallali, failed to provide required “who, what, where, when and how” details of any false claims for reimbursement from the government. Ms. Jallali was the relator/plaintiff (“whistle blower”) in the case  “Absent an allegation, stated with particularity, that the defendants presented a false claim for payment to the government, Jallali has failed to state a claim for relief under the FCA,” the Eleventh Circuit concluded.

No Factual Allegations

In 2015, after the government declined to intervene, Jallali pursued the suit on her own, claiming a scheme in which certain Sun Healthcare employees changed patient records and partook in other improper documentation practices. She also charged Sun Healthcare with violating the Anti‑Kickback Statute by paying employees for time spent altering the records.

On appeal, Jallali asked that the suit be revived and argued in a brief that U.S. District Judge Kathleen M. Williams erroneously ruled that her complaint lacked sufficient specificity.  She also argued that it was error for the court to ignore records and statements from former employees alleging the company paid them to forge doctors’ signatures, backdate patient files and engage in other crooked billing practices. Click here to read the initial brief.

In response, Sun Healthcare argued to the Eleventh Circuit that the judge thoroughly reviewed all of Jallali’s allegations, including the evidence she used to support her amended complaint.  It argued that the judge properly determined that the relator failed to adequately plead her claims under the FCA and Anti‑Kickback Statute. Additionally, Jallali didn’t sufficiently show the government was actually billed and reimbursed as part of the alleged scheme. Click here to read the appellant’s brief.

Sun Healthcare also stated that the district court properly found that no specific factual allegations supported Jallali’s assertion that Sun Healthcare violated the anti‑kickback act or submitted any claims to the government for payment arising from an illegal referral.

The Final Decision

In its opinion, the Eleventh Circuit said that Jallali alleged personal knowledge of patients being billed for services not rendered and claimed to have personal knowledge of “billing fraud” by Sun Healthcare. The appeals court refused to allow the case to go forward based solely on Jallali’s allegation that she “had a reliable indication that claims were fraudulently submitted to Medicare for payments by defendant because [Jallali] was privy to the internal billing practices [of] defendant as the director of rehab and therapy department for defendant.”

Click here to read the court’s opinion in full.