Court of Appeals reinstates False Claims Act case

This is a case brought under the False Claims Act in which the plaintiffs allege that a home health and hospice care company in Louisiana with facilities around the country falsely certified unqualified patients for home health care, provided unnecessary and improper treatment, falsified time records, and manipulated patient records. These schemes resulted in fraudulent bills to the government for reimbursement under Medicare, Medicaid, and other government-funded healthcare programs. Following plaintiffs' whistleblowing, they suffered retaliation. The district court rejected the case, but the Court of Appeals brings it back.

The case is Pilat v. Amedisys, Inc., a summary order issued on January 17. The district court said that plaintiffs did not engage in protected activity, a necessary prerequisite to any retaliation claim. Under the statute, you engage in protected activity by engaging "in efforts to stop one or more violations of' the FCA. Such efforts can include both complaining internally to supervisors about suspected fraudulent practices and refusing to engage in such practices."

Both plaintiffs engaged in protected activity. "After Maniscalco’s supervisors had already overruled his recommendations for a specific Medicare patient twice and recertified the patient after two six-week programs, Maniscalco 'refused instructions by his supervisors to recertify a third time, insisting that she was completely independent and it would be unethical to do so.'” That qualifies as protected activity under the statute. While Maniscalco objected to "unethical" behavior as opposed to "illegal" behavior, "his comments support the inference that he was attempting to prevent Amedisys from providing, and overbilling for, unneeded treatment."

Pilat also engaged in protected activity, as he "repeatedly expressed his concerns to his supervisor over email 'about the inability of the nurses and therapists to keep up with Amedisys’s extensive volume of patients.'”

The trial court said these objections concerned the quality of patient care and not fraud. The Court of Appeals (Lohier, Robinson and Nathan) does not see it that way. The Court of Appeals writes:

Overscheduling clinicians and cramming in patient visits results in poor quality care, but the TAC also explains how those acts are fraudulent: “Amedisys still billed for the services . . . as if the clinician had actually fully performed them,” even though many patients were seen only “for a few minutes rather than an amount of time commensurate with the Government billing,” That is fraud, and the TAC adequately alleged that Pilat engaged in protected activity by voicing concerns about this fraud to his supervisors.

Plaintiffs also have to plead with particularity that defendant engaged in fraud. They "have identified multiple specific instances in which a clinician was instructed either to document patient information falsely to allow for treatments for which the patient did not qualify, or to recommend an unnecessary course of treatment." The decision provides specific examples that will be useful for attorneys writing up these lawsuits. "For example, Maniscalco’s supervisors instructed him in early 2017 to fraudulently write that a 50-year-old man he was treating was not independent and needed assistance to use stairs, even though that wasn’t true." Plaintiffs also identified multiple specific instances when defendant falsified time sheets.