Dist. Ct. erred in dismissing plaintiff’s qui tam action under False Claims Act (FCA), alleging that defendant submitted false claims for Skilled Nursing Facility (SNF) services at time when defendant was neither providing said services as required by its contract with Medicaid officials nor made said services available through any third party. While Dist. Ct. dismissed case on finding that defendant insufficiently alleged that defendant knew that SNF services were material to its contract with Medicaid program, Ct. of Appeals held that complaint adequately alleged that defendant, as sophisticated player in medical-services industry, was aware that SNF services played material role in delivery of Medicaid benefits, where: (1) complaint alleged that defendant enrolled new people in skilled nursing tier at time it was not providing SNF services, and thus said allegation was sufficient to allege direct factual falsity for purposes of FCA; (2) any promise made by defendant to provide SNF services during contract renewal process with government at time it was not providing said services was fraudulent on its face; and (3) instant complaint was sufficient to state claim for implied false certification, where defendant’s contract with government, indicating that there was large gap between defendant receiving $3,127 per month per person for SNF services and only $54 per month per person for less skilled services, supported finding of materiality with respect to false claims seeking payments for SNF services. (Dissent filed.)
Federal 7th Circuit Court
Civil Court
False Claims Act