MDTN denies motion to dismiss common-law counts in False Claims Act suit

by Ben Vernia | March 1st, 2010

District Judge Thomas A. Wiseman, Jr., in Nashville, Tennessee, ruled on February 17 against home health care providers on a motion to dismiss which argued that the government’s common-law claims for fraud and unjust enrichment were not unripe.

The United States sued the defendants for fraud in connection with eight home health care cost reports. At the time, HHS typically issued a Notice of Provider Reimbursement (NPR) upon determining that a provider should make an overpayment, and the agency followed this procedure with respect to two of the eight reports. When HHS discovered problems with the defendants’ reports, it suspended the processing of the remaining six.

The defendants argued that all of the common-law claims were barred by the six-year general statute of limitations applicable to such actions (28 U.S.C. § 2415), or, in the alternative, that the government’s claims for the six reports which lacked NPRs were not ripe.

In October, 2009, Judge Wiseman had ruled that the event which triggered the government’s False Claims Act statute of limitations was the NPR, because it was only that the agency could ask a provider to repay the overpayment. He ruled that this reasoning applied as well to the common-law claims.

He also rejected the defendants’ argument regarding ripeness, finding it “patently untenable as a matter of common sense and public policy: It would mean that, in cases in which a file is suspended and an NPR is never issued, the Government’s claims would never accrue.”

As an alternative ground, Judge Wiseman agreed with the U.S. that responsible officials charged with acting (i.e., in the Department of Justice) learned of the claim only within the preceding six years, so the tolling provision (28 U.S.C. § 2416) applied.

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