Dist. Ct. did not err in dismissing portions of plaintiffs qui tam action under False Claims Act, alleging that defendants-hospital and certain debt collectors submitted false claims to government for collection of “bad debts” that patients owed under circumstances where, according to plaintiffs, said debts were submitted before time they could be considered bad debts that were eligible for reimbursement by government. Plaintiffs failed to adequately plead that defendant-hospital had declined to conduct its own collection efforts so as to establish that hospital failed to comply with applicable regulations. Moreover, with respect to defendants- hospital and two of three debt collectors, plaintiffs failed to provide specific examples of defendants’ submission of bad debts that were not eligible under applicable regulations for reimbursement as bad debts. However, plaintiffs could proceed against defendant-third debt collector, where plaintiffs alleged three examples of debts being submitted for bad debt reimbursement without compliance with relevant regulations. Also, two plaintiffs stated valid retaliation claims against defendants-debt collectors, where there were sufficient allegations to support inference that it was objectively reasonable for plaintiffs to believe that their employers were committing fraud against government, and that their complaints to their employers resulted in their terminations.
Federal 7th Circuit Court
False Claims Act