U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., No. 6:09-cv-1002-Orl-31DAB (M.D. Fla. Mar. 19, 2012)

The United States District Court for the Middle District of Florida denied a hospital’s motion to dismiss a qui tam False Claims Act (“FCA”) lawsuit being pursued against it by theUnited Statesgovernment.  The suit began after a relator brought claims to the government alleging that the hospital had been involved in several illegal compensation relationships and physician referral schemes in connection with its Medicaid patients.  Consequently, the government filed a claim against the hospital for violation of the FCA via violation of the Stark law.  Before trial, however, the hospital filed a motion to dismiss, contending that the government had not pled enough facts for the case to proceed to trial.

In arguing the motion, the hospital contended that the government’s FCA action was not valid for the following reasons: Medicaid involved reimbursement for services by the state government not the federal government and therefore the Stark law did not prohibit the resulting reimbursement payments from Florida and could not serve as the basis for a claim under the FCA; the government did not specify whether the improper relationship was “direct” or “indirect;” the government did not show that the hospital did not meet certain exceptions to Stark; and the government did not plead that the hospital had specific intent to violate Stark.  The court disagreed on all counts.  First, the court found that the Medicaid statute prohibited payments to a state for medical services resulting from improper referrals, as defined under Stark.  Consequently, a violation of the Medicaid statute could give rise to a claim under the FCA.  Furthermore, the court found that Stark did not require the government to establish whether the improper relationship was direct or indirect in the complaint. Also, the court found that the government was not required to plead that the hospital did not meet Stark exceptions.  Finally, the court found that Stark does not require proving specific intent to violate the law.  Consequently, the court denied the hospital’s motion to dismiss.

U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., No. 6:09-cv-1002-Orl-31TBS (M.D. Fla. Jan. 8, 2014) ; and

U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., No. 6:09-cv-1002-Orl-31TBS (M.D. Fla. Feb. 6, 2014), in which the United States District Court for the Middle District of Florida denied Halifax’s motion for judgment on the pleadings, concluding that the relator possessed standing to pursue her claim for a civil penalty and that the False Claims Act’s qui tam provisions did not run afoul of the Appointments Clause in the United States Constitution.