The Seventh Circuit says yes. Early this month, the Seventh Circuit reversed and remanded a district court’s holding that a qui tam Relator failed to properly plead a False Claims Act suit where the Complaint did not allege that the defendants sent a claim to the government. In reversing the District Court for the Eastern District of Wisconsin, the Seventh Circuit held that “a plaintiff does not need to present, or even include allegations about, a specific document or bill that the defendants submitted to the government.” U.S. ex rel. Presser v. Acacia Mental Health Clinic, LLC, No. 14-2804, 2016 WL 4555648 (7th Cir. 2016) (citing United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. 2009)).
The Court’s decision was based on the fact that the Relator, a nurse practitioner, did not have “regular access to medical bills” causing the Court to “not see how [the Relator] would have been able to plead more facts pertaining to the billing process.” Id. at *5. And so the Court determined that “an inference is enough” under Fed. R. Civ. P.’s 9(b)’s requirement to plead fraud claims with particularity.
The Relator’s factual pleadings – which were determined to be particular “enough” to make a sufficient “inference” – were mere allegations that the defendant billed Medicare, based on the fact that the defendant told the Relator that “almost all of [the] patients were ‘on Title 19’ and that they dealt with Medicare” coupled with the plausible allegation that an illegal billing practice, upcoding, was applied to all patients. Id.
Hospital and billing administrators should beware of Presser v. Acacia as a reminder to create and enforce carefully crafted coding procedures. Presser demonstrates the unpredictability of civil pleading post-Iqbal and Twombly which problematically promotes not “more clarity and less litigation, but to less clarity and more litigation.” Id. at *11 (Hamilton, J., concurring in part and dissenting in part). Judge Hamilton’s dicta should additionally alert hospital and billing administrators towards stricter billing compliance to avoid False Claims Act litigation as he suggests “[t]he best approach is to let the plaintiff try her best, and then to be liberal in allowing amendments once the court has indicated what is necessary.” Id.
