In United States ex rel. Troxler v. Warren Clinic, Inc., the federal court in Oklahoma dismissed the whistleblower’s complaint for failing to state a plausible claim under Rule 12(b)(6). The relator alleged the defendants had used unqualified personnel to “to obtain and record patients’ History of Present Illness (‘HPI’) during office visits” but had billed Medicare and Medicaid for qualified personnel performing such work. The government declined to intervene in the case.
The relator asserted claims under the first two provisions of the False Claims Act. Under the first provision, “a plaintiff must show by a preponderance of the evidence that: (1) a false or fraudulent claim (2) is presented to the United States for payment or approval (3) with knowledge that the claim is false or fraudulent.” (quoting United States ex rel. Trim v. McKean, 31 F. Supp. 2d 1308, 1315 (W.D. Okla. 1998).) Under the second provision, a relator must show “(1) a false record or statement (2) is used to cause the United States to pay or approve a fraudulent claim (3) with the defendant’s knowledge of the falsity of the record or statement.” (quoting Trim, 31 F. Supp. 2d at 1315.)
The court found that the relator’s allegations failed to adequately plead either of his claims. With respect to factual falsity, the court concluded that “none of the allegations in the [c]omplaint indicate that the claim forms required Defendant to identify who performed the HPI,” so the Defendant never told the Medicare/Medicaid programs that individuals with certain credentials were actually obtaining the HPI. As a result, the court observed, nothing in the claim forms was actually false.
As for legal falsity, the court observed that the complaint’s allegations were far too general. The closest the relator came to alleging a legal-falsity theory was a generic allegation that the defendant had certified compliance with Medicare guidelines. Although the relator cited a passage from a non-binding manual to argue that only certain providers could obtain a patient’s HPI, the court found that the guide did not make compliance with such a requirement a condition of payment–the standard for liability in the Medicare context in the Tenth Circuit. (As discussed elsewhere, other circuit courts have expressly limited this type of analysis to the Medicare/Medicaid context, and the Tenth Circuit has favorably cited these cases.)
The court also rejected the relator’s argument that the medical necessity of subsequent procedures could not be established without a properly gathered HPI. The court noted that the patient’s HPI was only one part of the process and that physicians ordered further procedures based on much more information. Because the relator could not point to any contractual or regulatory requirement that the defendant had actually violated, the court found that the relator’s allegations were insufficient.
This decision again highlights the importance of potential whistleblowers engaging experienced counsel who understands the legal elements of a False Claims Act suit and who can conduct the type of investigation necessary to plead the elements of the claims.