U.S. ex rel. Rector v. Bon Secours Richmond Health Corp. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Rector v. Bon Secours Richmond Health Corp., No. 3:11-CV-38 (E.D. Va. Apr. 14, 2014)

The United States District Court for the Eastern District of Virginia dismissed a False Claims Act (“FCA”) suit brought by a former employee (the relator) against a health system operating a concierge program to refer patients to physicians, holding that the relator failed to plead his complaint with sufficient particularity to support an FCA claim because, although he alleged a general scheme which perhaps could have resulted in false claims if it resulted in claims being submitted to the government for reimbursement, he did not allege any specific “claims” or bills that were actually submitted to the government.

After being terminated from his position as concierge for insubordination and falsifying a physician signature in violation of company policy, the relator filed a qui tam complaint against his former employer alleging that, as a concierge for the health system, his job was to provide concierge services (including processing orders for tests, obtaining pre-authorizations from the patients’ insurers, communicating with patients and testing facilities, and collecting copayments from patients) on behalf of physician practices that referred patients to the health system for diagnostic testing and other services.  He claimed that physicians routinely failed to complete the necessary order forms and that he, as a concierge, was instructed not to call the physicians’ offices for clarification but, instead, to use “cheat sheets” developed by the health system to select appropriate and reimbursable ICD codes and, if necessary, to call patients to obtain information about their diagnoses and the tests the doctors may have ordered.  Further, the relator alleged that if the physician’s signature was missing, he was instructed to copy and paste a signature from a prior order that was on file.  The relator complained that, as a result of these unlawful practices, the health system, though its concierge service and through its conspiracy with physician practices and other health care facilities, made false certifications to the government in order to cause claims to be paid, presented false claims to the government, violated the Anti-Kickback Statute, and violated Virginia’s Fraud Against Taxpayers Act.

The court dismissed the relator’s suit on the basis that it failed to plead the claims of fraud (such as the claims of violation of the FCA) with sufficient particularity.  Specifically, the court noted that fraud claims must be pled with greater particularity than other types of legal claims.  In the case of an FCA case, the relator must at least describe, for some of the alleged false claims, the time, place, and contents of the false representations, the identity of the person making the misrepresentation, and facts supporting the notion that an actual claim for reimbursement was submitted to the government.

In this case, the relator submitted, in support of his claims, a log of patients that he created while working as a concierge, which included patient names, procedures scheduled, dates of procedures, facilities in which procedures were completed, the names of the referring physicians, and the type of insurance held by the patient.  However, the relator failed to provide any evidence showing that bills for such services were generated and/or submitted to the government for reimbursement.  In the absence of any information indicating that actual claims were submitted (such as a copy of a bill, documents showing the amounts of charges, policies about billing), the court held that dismissal was appropriate.