Toledo v. HCA Healthcare, 21-20620

Clarisse Toledo worked as Bayshore’s Prospective Payment System Coordinator starting February 2017, entering IRF-PAI data used by CMS to assess the 60/40 compliance rule for inpatient rehab diagnoses.
Audits in May 2017 found etiological and impairment group code (IGC) errors on multiple IRF-PAIs; Bayshore fell below the 60% compliance threshold.
Bayshore/HCA provided training, webinars, and a three-day certification course; post-training audits still identified coding errors, including at least one after certification.
Supervisor Simmons audited Toledo, escalated findings to Carrie Capps and Mark Rozell, and Capps and Rozell decided to terminate Toledo for poor performance.
The day after termination Toledo reported alleged fraud via an ethics hotline; an internal investigation found her allegations unsubstantiated.
Toledo sued alleging retaliation under the False Claims Act and the NDAA; the district court granted defendants’ summary judgment and denied Toledo’s partial summary judgment. The Fifth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Toledo engaged in protected activity under the FCA/NDAA	Toledo claims her complaints to Bayshore/HCA staff about documentation, late discharge paperwork, and missing admit orders were protected disclosures of fraud/violations	Defendants: Toledo’s communications described mistakes or job-related questions, not reports of fraud or violations that would put decisionmakers on notice	Court: Toledo’s communications were at most routine job-related reports or expressions of possible errors, not protected disclosures that alerted decisionmakers
Whether the relevant decisionmakers knew of protected activity	Toledo contends Rozell and others learned of her complaints and thus knew of protected activity	Defendants: Capps and Rozell did not have knowledge of any protected disclosures; Toledo admits she never used terms like "fraud" or "illegal" to Rozell	Court: Capps had no knowledge; Rozell was not put on notice by Toledo’s communications, so decisionmakers lacked knowledge
Causation / contribution to termination (pretext)	Toledo argues her protected complaints contributed to or caused her termination	Defendants: Termination was for non-retaliatory, legitimate performance reasons (repeated coding errors despite training)	Court: Plaintiff failed to show protected activity contributed to termination and did not show defendants’ stated reason was pretextual; summary judgment for defendants affirmed

Diaz v. Kaplan Higher Educ., LLC, 820 F.3d 172 (5th Cir. 2016) (applies McDonnell Douglas burden-shifting to FCA retaliation)
Garcia v. Pro. Cont. Servs., Inc., 938 F.3d 236 (5th Cir. 2019) (requires but-for causation for FCA retaliation)
Armstrong v. Arcanum Grp., 897 F.3d 1283 (10th Cir. 2018) (knowledge element applies to NDAA disclosures)
Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948 (5th Cir. 1994) (no protected activity where complainant did not use words suggesting illegality)
Musser v. Paul Quinn Coll., 944 F.3d 557 (5th Cir. 2019) (distinguishes mere mistake from dishonesty when assessing pretext)
LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d 383 (5th Cir. 2007) (employer need only make non-retaliatory decisions, not necessarily correct ones)