United States Ex Rel. Dunn v. North Memorial Health Care
739 F.3d 417
8th Cir.2014Background
- Dunn filed a qui tam action under the FCA alleging North Memorial submitted fraudulent CMS claims for outpatient cardiac and pulmonary rehabilitation without proper physician supervision.
- Medicare requires supervision by a physician or nonphysician practitioner for these services, and providers must submit reimbursement claims to CMS.
- From 1996 to 2008 Dunn was Administrator for Cardiovascular Consultants, who provided services at North Memorial, and he alleged ongoing noncompliance.
- Dunn claimed North Memorial continued the noncompliant practices and submitted false claims, resulting in approximately two million dollars paid by the government.
- The district court dismissed under Rule 12(b)(6); the Eighth Circuit affirmed on the alternative ground that the complaint failed Rule 9(b).
- The FCA attaches liability to the claim for payment, and Rule 9(b) requires particularity, including time, place, content, and participants of fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule 9(b) adequacy of fraud pleading | Dunn asserts systemic fraudulent billing and supervision failures. | North Memorial contends no specific false claims were pleaded. | Affirmed; insufficient Rule 9(b) particularity. |
Key Cases Cited
- United States ex rel. Vigil v. Nelnet, Inc., 639 F.3d 791 (8th Cir. 2011) (FCA protects the federal fisc by focusing on false claims for payment)
- In re Baycol Prods. Litig., 732 F.3d 869 (8th Cir. 2013) (liability attaches to the claim for payment, not underlying conduct)
- Costner v. URS Consultants, Inc., 153 F.3d 667 (8th Cir. 1998) (central principle that FCA is an anti-fraud statute requiring pleading)
- United States ex rel. Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552 (8th Cir. 2006) (relator must allege specific fraudulent claims with particularity)
- Phipps v. FDIC, 417 F.3d 1006 (8th Cir. 2005) (well-established rule that failure to provide specifics defeats 9(b))
- Ketroser v. Mayo Found., 729 F.3d 825 (8th Cir. 2013) (systematic fraud pleading requires representative examples)