Foglia v. Renal Ventures Management, LLC
830 F. Supp. 2d 8
D.N.J.2011Background
- This is a qui tam action under the False Claims Act arising from allegedly fraudulent Medicare claims against Renal Ventures Management, LLC.
- The court grants in part and denies in part Renal Ventures' Rule 12(c) motion for partial judgment on the pleadings.
- Relator Thomas G. Foglia, a former nurse at the Sewell, New Jersey dialysis center, alleges violations including improper staffing ratios and various regulatory noncompliances.
- Relator asserts the defendant submitted false claims for payment based on NJ staffing regulations and Zemplar vial usage practices, among other alleged violations.
- The amended complaint asserts federal FCA claims and state claims under New Jersey and Texas fraud statutes, with allegations premised on both staffing deficiencies and medication-use practices.
- The court analyzes whether the claims are legally sufficient under Rule 9(b) and determines the viability of express and implied false certification theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether express or implied false certification claims survive | Foglia pleads express and implied theories under Paragraph 16 and 26. | Renal Ventures argues no valid false certification theory; implied theory not satisfied. | Express theory survives; implied theory dismissed for lack of payment-conditions support. |
| Whether NJ staffing violations support federal FCA liability | Foglia contends NJ staffing regs are preconditions for payment. | Renal Ventures contends no regulatory precondition tying staffing to payment. | Staffing claims dismissed as legally insufficient preconditions of payment under FCA. |
| Whether reuse of Zemplar vials supports FCA liability | Foglia alleges improper reuse of leftover Zemplar aliquots to bill for full vials. | Renal Ventures argues no specific rule makes vial reuse a payment precondition and cites lack of factual specifics. | Zemplar reuse claim dismissed for failure to identify a precondition for payment and lack of specific instances. |
| Whether Texas Medicaid/State False Claims Act claims are viable | Foglia asserts claims against TX Medicaid based on center activity in TX. | Renal Ventures asserts lack of facts tying TX claims to true false-claim payments or specific falsities. | State FCA claims dismissed for failure to plead claims with Rule 9(b) specificity and proper nexus to payments. |
| Whether New Jersey False Claims Act claims are viable | Foglia asserts NJ Medicaid/claims based on NJ center operations. | Renal Ventures argues lack of specific, false-state payments and reliance on NJ regs without payment nexus. | NJ FCA claims dismissed for failure to plead preconditions for payment and precise false claims; leave to amend granted. |
Key Cases Cited
- U.S. ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295 (3d Cir. 2011) (recognizes express and implied false certification liability under FCA)
- U.S. ex rel. Kosenske v. Carlisle HMA, Inc., 554 F.3d 88 (3d Cir. 2009) (establishes express false certification liability)
- U.S. ex rel. Conner v. Salina Regional Health Ctr., Inc., 543 F.3d 1211 (10th Cir. 2008) (defines factually and legally false claims; materiality considerations)
- Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001) (false certification theory background for FCA)
- U.S. ex rel. Loughren v. Unum Group, 613 F.3d 300 (1st Cir. 2010) (discusses retroactivity and the scope of FCA certification concepts)
- U.S. v. Sci. Applications Int’l Corp., 653 F. Supp. 2d 87 (D.D.C. 2009) (defines scope of “claim” for purposes of FCA analysis)