Tennessee Judge dismisses qui tam complaint against hospital with prejudice for lack of particularity

by Ben Vernia | December 3rd, 2013

On November 18, District Judge Todd Campbell of the Middle District of Tennessee, in U.S. ex rel. McMullen v. Ascension Health, et al., granted the defendant hospital company’s motion to dismiss the declined qui tam on the grounds that it fell short of the requirements that fraud be pleaded with particularity, under Fed. R. Civ. P. 9(b).

In the case, the whistleblower – who had worked at one of three defendant hospitals for a total of 10 months – alleged that the company submitted false claims for noninvasive vascular diagnostic studies performed non-accredited and/or non-certified technicians. The company argued that the relator had failed to identify a single false claim.

Judge Campbell agreed with the company, noting the relator had not identified a single specific false claim submitted to Medicare for payment, nor one in which the defendants made a false statement. In addition, the accreditation/certification requirement on which he based his case was imposed by contractors, and he failed to cite to any statute or regulation that conditions Medicare payment on compliance with it. Judge Campbell concluded that the complaint required the court to assume too much: the existence of the requirement, the receipt of the studies by Medicare patients, and the submission of claims for those studies. The complaint, he wrote comprised “assumptions, stacked on assumptions, stacked on more assumptions,” which failed to give rise to a strong inference of a fraudulent scheme and presentment of claims that would justify relaxing Rule 9(b)’s requirements.

The Court also found that amendment would be futile, and it dismissed the complaint with prejudice.

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