United States ex rel. Silingo v. Wellpoint, Inc.
904 F.3d 667
| 9th Cir. | 2018Background
- Anita Silingo, a former MedXM compliance officer, sued several Medicare Advantage (MA) organizations under the False Claims Act alleging MedXM produced and the MA plans submitted inflated risk-adjustment diagnosis data from in‑home assessments (2010–2014).
- Silingo alleges MedXM used editable Word templates and typed signatures, falsified or recycled diagnoses (including complex conditions not reasonably diagnosable in-home), and produced suspiciously high daily assessment volumes and duplicate vitals.
- MA organizations contracted with MedXM to obtain risk adjustment data and certified to CMS that submitted data were "accurate, complete, and truthful," an express payment condition under 42 C.F.R. § 422.504(l)(2).
- District court twice dismissed Silingo’s claims against the MA organizations for undifferentiated group pleading; Silingo amended and re‑pleaded allegations seriatim but the court again dismissed with prejudice on the same ground.
- On appeal the Ninth Circuit reviewed Rule 12(b)(6) and Rule 9(b) pleading standards, treating the scheme as a "wheel" pattern (MedXM as hub, MA plans as spokes) and considered whether group pleading could suffice and whether allegations plausibly supported MA plans’ submission and knowledge of false claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Silingo's group pleading against multiple MA orgs failed Rule 9(b) because it did not differentiate individual roles | Silingo: MA orgs had the same role (contracting with MedXM and submitting MedXM data), so collective allegations suffice | MA orgs: Differing entities require defendant‑specific allegations; group pleading impermissible | The Ninth Circuit: group pleading permissible where defendants are alleged to have engaged in precisely the same conduct (Swoben governs); reversal in part |
| Whether complaint sufficiently alleges MA orgs actually submitted false claims / certifications to CMS | Silingo: multi‑year contracts, thousands of exams, and circumstantial facts create a strong inference that plans submitted and certified MedXM data | MA orgs: complaint lacks concrete allegations about their claims‑submission/verification processes and representative false claims | Held: Complaint adequately alleges MA orgs submitted and certified the challenged risk‑adjustment data; dismissal improper |
| Whether complaint plausibly alleges MA orgs’ knowledge, reckless disregard, or deliberate ignorance of falsity | Silingo: signatures, editable records, use of non‑physician examiners, clinically implausible diagnoses, duplicate data, and controversial nature of in‑home assessments supply facts to infer knowledge/recklessness | MA orgs: allegations are speculative and insufficient to plead scienter under Rule 8/9(b) | Held: Allegations are plausible and sufficient to plead scienter (knowledge/recklessness) to proceed to discovery |
| Whether Silingo may revive abandoned reverse false‑claim and implied‑false‑certification claims on appeal | Silingo: (did not defend some claims below or on appeal) | MA orgs: dismissal of abandoned claims appropriate | Held: Court affirms dismissal of abandoned reverse false‑claim and declines to address implied‑certification because Silingo abandoned/challenged neither on appeal |
Key Cases Cited
- United States ex rel. Swoben v. United Healthcare Ins. Co., 848 F.3d 1161 (9th Cir. 2016) (collective allegations may be proper where multiple defendants are alleged to have engaged in precisely the same conduct)
- United States ex rel. Ebeid v. Lungwitz, 616 F.3d 993 (9th Cir. 2010) (distinguishes express and implied false certification and discusses pleading standards for FCA claims)
- Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001) (framework for factually false versus legally false claims under the FCA)
- United States ex rel. Grubbs v. Ravikumar Kanneganti, 565 F.3d 180 (5th Cir. 2009) (requirement to allege reliable indicia that claims were actually submitted)
- United States v. Corinthian Colleges, 655 F.3d 984 (9th Cir. 2011) (standards for pleading scienter and review of Rule 12(b)(6) dismissals)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for complaints)
- Cafasso v. General Dynamics C4 Sys., 637 F.3d 1047 (9th Cir. 2011) (Rule 9(b) requires the who, what, when, where, and how of fraud)
- Bly‑Magee v. California, 236 F.3d 1014 (9th Cir. 2001) (purposes of Rule 9(b): notice and prevention of fishing expeditions)