U.S. ex rel. Herron v. Indianapolis Neurosurgical Group, Inc. (Summary)

QUI TAM – FALSE CLAIMS ACT

U.S. ex rel. Herron v. Indianapolis Neurosurgical Group, Inc., No. 1:06–cv–1778–JMS–DML (S.D. Ind. Feb. 21, 2013)

The United States District Court for the Southern District of Indiana granted in part a medical group’s motion to dismiss a qui tam action brought by two medical coding experts (the “relators”) who alleged that the group violated the False Claims Act (“FCA”) by billing for services not provided or provided at a lower intensity than claimed.

In partially dismissing the suit, the court held that Indiana’s state version of the FCA did not apply retroactively to conduct that occurred prior to the act’s passage.  Therefore, any state-based FCA claims against former members of the medical group who left prior to the enactment of Indiana’s FCA could not survive.  In addition, the surviving state-based FCA claims against remaining members of the group would be limited to conduct that occurred after the statute’s enactment.

The court also dismissed all claims based on conduct that occurred more than six years prior to the filing of the case’s first complaint, finding that such claims were barred by the statute of limitations.

Finally, the court dismissed a retaliation claim brought by one of the relators, finding insufficient allegations that the medical group was on notice that the relator had filed a qui tam complaint against the group.  The relator argued that his retaliation claim should survive because the medical group knew that he believed that it was engaging in illegal billing practices.  However, the court rejected this argument as insufficient, holding that the notice requirement in a retaliation claim related to a qui tam action is only satisfied if the defendant is aware that the relator is pursuing a qui tam action or has reported the defendant’s conduct to the government.