The False Claims Act (“FCA”) is one of the United States Government’s most powerful tools for fighting fraud. In fact, the Department of Justice recovered nearly $1.8 billion under the FCA for health care fraud and $1.6 billion in FCA qui tam relator cases in the 2020 fiscal year. Keeping the enforcement of fraud in mind, underlying all FCA qui tam suits is successfully pleading with particularity under Federal Rule of Civil Procedure 9(b). This requirement has led many U.S. District Courts to dismiss qui tam cases at the pleading stage and U.S. Courts of Appeals to affirm those decisions. The upshot is that amid changes to the Stark Law and Anti-Kickback law, the continuation of COVID-19 related fraud, and the continuing splits in the Federal Circuit regarding pleading standards, the ground may begin to shift for compliance officers, attorneys, and general counsels in health care organizations.
Finance Director for UnitedHealth Group brought qui tam suit against UnitedHealth Group, Inc. alleging that the organization upcoded risk adjustment data resulting in increased payments (more than $1.14 billion) to UnitedHealth Group. The Department of Justice (DOJ) intervened in the case, yet UnitedHealth Group was successful in getting the primary False Claims Act Claims dismissed by arguing that the Centers for Medicare & Medicaid Services (CMS) would not have refused to make the adjustment payments had they known of the errors in the risk adjustment. The Escobar materiality standard helps clarify threshold level of risk to Managed Care Providers in attesting to their risk adjustment payments; the falsities must have had an impact on the respective payment.