U.S. ex rel. Bingham v. HCA, Inc. — Oct. 2016 (Summary)

FRAUD & ABUSE/FALSE CLAIMS ACT

U.S. ex rel. Bingham v. HCA, Inc.
Case No. 13-23671-Civ-COOKE/TORRES (S.D. Fla. Oct. 14, 2016)

The United States District Court for the Southern District of Florida granted a health care services provider’s motion to dismiss an insider’s claims that a national health care services provider violated both the Stark Law and the Anti-Kickback Statute, thus creating liability under the False Claims Act.

A certified general real estate appraiser employed by a large, third-party property management firm that contracted with the health services provider, claimed to be an “insider” with knowledge of an alleged scheme involving a health services provider and a hospital owned by that provider. The insider claimed that after an interest in a hospital owned by the health services provider was sold, referring physicians stood to gain from the sale, as they had an equity interest in the hospital and because referring physicians received free parking benefits. The hospital provides inpatient and outpatient services to patients covered by federal and state sponsored health care programs. If the physicians were referring patients to a hospital in which they had a financial interest, they would be violating the Stark Law. If the physicians were receiving financial inducements to refer Medicare patients to the hospital, they would be violating the Anti-Kickback Statute. A violation of either statute forms a basis for liability under the False Claims Act.

As noted by the court, in order for the insider to state a valid claim under the False Claims Act, he must state with particularity the circumstances constituting fraud, and his knowledge of the circumstances of the fraud must be independently obtained. The court held that the insider’s claims failed because it heavily relied on information obtained through discovery to support the allegations against the health care services provider and, as noted by the court, information obtained through discovery is not independently obtained knowledge. Without the information obtained through discovery, the insider’s claim lacked the particularity necessary to state a valid claim of fraud. As a result, the court concluded that the insider was unable to state a claim under the False Claims Act.