United States v. APS Healthcare, Inc. (Summary)

FALSE CLAIMS ACT

United States v. APS Healthcare, Inc., No. 2:11-cv-01454-MMD-GWF (D. Nev. Jan. 30, 2013)

In a False Claims Act (“FCA”) case, the United States District Court for the District of Nevada granted in part, and denied in part, a motion to dismiss filed by a company providing care management and care coordination services to Medicaid beneficiaries.  The Relator, a former employee of the company, brought the FCA suit claiming that the company had enrolled patients in the program without their consent and had enrolled “ghost patients,” then billed Medicaid.

The district court held that some of the allegations made by the Relator did not involve the company submitting false billing statements to Medicaid which is an essential element under the FCA.  Thus, allegations that the company was understaffed as required by its contract with Medicaid, or that patient assessments were inadequate, or that patients received out-of-date telephone referrals, might constitute a breach of contract claim but were not actionable under the FCA or its state equivalent.   The court dismissed these claims.

However, the court found that some of the Relator’s allegations were sufficient to demonstrate that the company submitted false claims to Medicaid.  Specifically, the Relator alleged that the company billed Medicaid for cases that had been inactive as if services were provided and had a policy of billing Medicaid for “ghost patients.”

The Relator alleged that while she was an employee, she investigated what she believed to false claims or could lead to an FCA action. The Relator spoke to her then supervisor about her concerns. Thereafter, the Relator experienced workplace taunting and was assigned retaliatory tasks.  According to the court, the company’s behavior “is reasonably likely to deter employees from raising concerns about a potential FCA violation.”   Thus, the court refused to dismiss the Relator’s retaliation claim.