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Eighth Circuit Allows Medicaid Fraud Whistleblower Case Without Specific Examples of False Claims

Recently, a manager of Planned Parenthood clinics brought a qui tam action alleging Planned Parenthood violated the law by submitting fraudulent or false claims for Medicaid reimbursement. However, the trial court dismissed her complaint as not specific enough. The Eighth Circuit Court of appeals reversed, clarifying whistleblower rules for cases alleging Medicaid fraud. medical stethoscope

Medicaid fraud attorneys in Texas knows whistleblowers must provide specific information when filing a qui tam lawsuit under the False Claims Act.  Plaintiffs must provide details of a scheme to submit false claims as well as reliable evidence that creates a strong inference that false claims were actually submitted. The Eighth Circuit decision clarified how specific a plaintiff's information must be in a qui tam case in order to satisfy federal rules requiring plaintiffs to plead their claims with particularity.

How Specific do Medicaid Fraud Allegations Have to Be?

Rule 9(B) of the Federal Rules of Civil Procedure states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally."

Rule 9(B) creates a heightened standard, and plaintiffs who make a qui tam claim and allege Medicaid fraud must meet this standard.

When the Planned Parenthood manager brought her qui tam case, she alleged Medicaid fraud based on personal knowledge of the billing practices of two clinics where she had served as manager. She did not include representative examples of the invoices that she was claiming were fraudulent.

The trial court dismissed her case because she did not include these specific invoices as evidence of fraud. However, the Eighth Circuit found that neither the Rule 9(B) standard nor past case law require that every claim submitted under the False Claims Act require these types of representative examples.

It would be difficult for plaintiffs to always have specific proof of false claims submitted. Plaintiffs who witness or observe Medicaid fraud may know that the government is being defrauded and may want to make a qui tam claim in order to save funds for the taxpayers and recover a portion of the money saved for themselves. If the rule 9(b) requirements were narrowly interpreted and plaintiffs could only come forward if they had representative examples of the purportedly fraudulent behavior, this would limit the ability of whistleblowers to make effective qui tam claims.

The decision made by the Eighth Circuit is similar to decisions made by other circuits that have addressed the issue of how specific the allegations must be in a qui tam claim in order to satisfy the heightened rules for fraud allegations set forth under Rule 9(B). As long as plaintiff can provide particular details about schemes to defraud the government, coupled with reliable indicators that lead to a strong inference fraudulent claims were submitted, it should be sufficient to allow the case to go forward.

The decision one was an important one that makes it easier for whistleblowers to take legal action.

Contact a Houston, TX Medicaid fraud attorney if you believe you have evidence of fraud. Call Brewer & Prichard P.C. today at 800-445-8710 to schedule a consultation.