U.S. ex rel. v. LHC Group, Inc.
24-5393
6th Cir.Apr 14, 2025Background
- VIB Partners and LeAnn Marshall filed a qui tam action under the False Claims Act (FCA) against LHC Group, alleging fraudulent Medicare billing practices.
- The complaint alleged LHC Group altered patient OASIS assessments to overstate patient needs and inflate Medicare reimbursements.
- The district court dismissed the suit, citing the FCA’s first-to-file bar; the relators appealed.
- On appeal, the court elected to address whether the complaint met Federal Rule of Civil Procedure 9(b)’s heightened pleading standards.
- The government declined to intervene in the case.
- The relators requested leave to amend their complaint only in a single footnote, without providing specific proposed amendments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule 9(b) Particularity | Alleged systemic fraud and manipulated data supports strong inference of false claims | Complaint fails to specify particulars of any false claims submitted | Complaint fails under Rule 9(b) for lack of specificity |
| First-to-File Bar | Claims not barred; prior case may not be "pending" | First-to-file bar precludes this action due to similar prior case | Did not address; resolved on Rule 9(b) grounds |
| Leave to Amend | Requested in a single footnote; should be allowed if deficiencies exist | Opposed, arguing request was insufficient and not formally made | Request inadequate; no leave to amend granted |
| Relaxed Rule 9(b) Standard | Should apply due to LHC control of billing data | Even relaxed, more details needed to infer plausible claim | Relaxed standard not met; complaint still deficient |
Key Cases Cited
- United States ex rel. Bledsoe v. Community Health Sys., Inc., 342 F.3d 634 (6th Cir. 2003) (explains Rule 9(b)'s particularity requirement for FCA complaints)
- United States ex rel. Bledsoe v. Community Health Sys., Inc., 501 F.3d 493 (6th Cir. 2007) (further clarifies Rule 9(b) pleading standards for FCA claims)
- Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir. 2011) (reiterates FCA’s application to Medicare claims)
- United States ex rel. Ibanez v. Bristol-Myers Squibb Co., 874 F.3d 905 (6th Cir. 2017) (requires identification of representative false claim in FCA cases)