Federal Judge Tells U.S. to Try Again in Florida False Claims Act Case

February 9, 2016

Gavel 001 No Credit stockexpert imageOn January 7, 2016, U.S. District Judge Timothy J. Corrigan, granted Liberty Ambulance Service Inc.’s (Liberty) motion to dismiss but allowed the United States leave to amend its complaint. The dismissal was in response to a False Claims Act (FCA) qui tam suit filed against Liberty by a former emergency medical technician (EMT) of the company, Shawn Pelletier. To read Liberty’s motion to dismiss filed on August 7, 2015, click here.

According to Judge Corrigan, the ruling was the result of insufficient allegations pleaded by the U.S. Government to show false claims were actually submitted by Liberty. Judge Corrigan concluded that the complaint lacked particulars on Liberty’s submission of claims and failed to attach relevant exhibits, such as evidence of an actual false claims that was submitted, among other issues.

Did the Government Meet Rule 9(b)’s Particularity Requirements?

Rule 9(b) of the Federal Rules of Civil Procedure provides requirements for pleading fraud or mistake and conditions of mind. See the full language of Rule 9(b) here. In this instance specifically, the Rule states in part that “a party must state with particularity the circumstances constituting fraud or mistake.”

Judge Corrigan found that “the government’s complaint and supporting materials go into great detail regarding a scheme whose purpose may well have been to secure payment from the government based on false claims. But the allegations stop short of describing what happened once the run reports were submitted to the Liberty office for processing.” Furthermore, Judge Corrigan noted that “[w]hile the government is not required to submit any actual claims, without such claims or supporting information from anyone ‘with first-hand knowledge’ of Liberty’s internal billing practices, it is not clear whether the government would be able to meet Rule 9(b)’s particularity requirements.”

Sworn statements from several current and former EMT’s of Liberty and one former dispatcher, “all of whom were familiar with the need to submit run reports which would be payable by Medicare (even if it allegedly meant the reports must be falsified),” accompanied the complaint. However, the court found that none of the individuals touting support of the FCA suit were directly involved with the actual submission of claims to the government or in the receipt and processing of the collateral payments received from the government. The one employee most closely associated with the company’s billing process testified, “I know I’d give [the billing manager] the [original and corrected run reports], and what she did with it after that is beyond me.”

Back to the Drawing Board: What Can the Government Do Better the Second Time Around?

The original suit was filed in 2011, naming Liberty as a defendant along with Southern Baptist Hospital of Florida Inc., Memorial Medical Care Group Inc., Orange Park Medical Center Inc., and Shands Jacksonville Medical Center Inc. The allegations against Liberty and the accompanying defendants were that the ambulance company and medical facilities “routinely” exaggerated patients’ medical conditions on the certificates of medical necessity in order to justify increased billing rates to the federal Medicare and Florida Medicaid programs.  After reaching settlements with all other named defendants, the government filed its intervenor complaint in June 2015 against Liberty. To read the press release issued by the U.S. Department of Justice (DOJ) on May 8, 2015, regarding the settlements reached with the other health care facilities named in the lawsuit, click here.

While the DOJ urged the court not to dismiss the suit in its response to defendants’ motion to dismiss filed in August 2015, Judge Corrigan defended his decision to dismiss based ion the government’s lack of clear time frames, clarity in allegations and legal justification for such, and of course, particularity. Judge Corrigan pointed out that the complaint provided just one claim, “despite an alleged review of 400 randomly selected patient run reports by an expert that purportedly revealed false statements and false claims that were submitted to the government.” Additionally, that one claim seems to be accurately reported as to the patient’s condition noting the patient’s ability ro walk and talk, which would be contrary to the government’s allegations that Liberty falsified reports and exaggerated patients’ conditions.

Judge Corrigan concluded, “[…] it is not clear that the only claim for which billing and payment information is provided is part of the allegedly unlawful scheme.” The judge suggested that the government clarify its allegations and attach all relevant copies of run reports containing the alleged false information in support of its claims.

Liberty’s Take on the Lawsuit.

Michael Assaf, president of Liberty, reported to Law360 that the allegations contained in the complaint are “complete nonsense.” Assaf contended that the relator and former employee, Pelletier, was simply “disgruntled” because his own company that he formed upon leaving Liberty was caught engaging in its own wrongdoing. Assaf told Law360 that Liberty was responsible for tipping off Florida officials about Pelletier’s new ambulance company operating without required certificates and licenses. These allegations, according to Assaf, later turned out to be true.

Tips to Future Whistleblowers.

Check around with your colleges at other groups. The more defendants that are involved in submitting similar false claims, the greater your monetary recovering is liable to be.

  • Keep a diary of events, including training, lectures, seminars, policies, meetings, etc., but keep it at home.
  • Obtain as much information as you can on any false claims activities, especially date, time and location.
  • Write down the names, addresses, telephone numbers and any other contact information you can obtain on any other possible witnesses.