United States of America, ex rel. Family Clinic of New Albany, Inc. v. Chartspan Medical Technologies, Inc.
3:21-cv-00139
N.D. Miss.Aug 14, 2025Background
- The Family Clinic of New Albany and its co-owners, including a nurse practitioner, brought suit under the False Claims Act (FCA) and Anti-Kickback Act (AKA) against Chartspan Medical Technologies and its CEO, Jon-Michial Carter.
- Plaintiffs alleged that Chartspan induced clinics to submit false or fraudulent Medicare claims for chronic care management (CCM) services by providing kickbacks and not meeting Medicare requirements for CCM services.
- The suit contended that Chartspan offered CCM services at about half the Medicare rate, allowing clinics to retain the remainder, and that the services were performed by unqualified or unsupervised personnel.
- Plaintiffs claimed Chartspan also offered prescription discount cards to induce patients into CCM enrollment, constituting improper remuneration under the statutes.
- Defendants moved to dismiss under Rule 12(b)(6), contesting the sufficiency of the pleadings for both legal and factual FCA/AKA violations and challenging the individual liability of Carter.
- Plaintiffs conceded their conspiracy claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| AKA violation | Defendants offered/payed remuneration to induce referrals for CCM services, violating the Anti-Kickback Act | No referral; clinics simply purchased outsourced CCM services for a fee | Plaintiffs’ claim plausible; motion to dismiss denied |
| Factual FCA violation (CCM unqualified staff & supervision) | Chartspan used unlicensed/unsupervised personnel for CCM, failing Medicare requirements | Auxiliary staff need not be licensed; general supervision suffices | Plaintiffs stated plausible claim; motion to dismiss denied |
| Factual FCA violation (failure to provide required CCM) | CCM services didn’t meet 20-minute/month threshold; alleged record falsification | Chartspan staff met requirements via allowed activities, not just patient contact | Plaintiffs pled sufficient facts; motion to dismiss denied |
| Prescription card remuneration | Offered patients discount cards to induce CCM enrollment, violating FCA/AKS | Discount cards are nominal value and do not constitute improper remuneration | Allegations sufficient; motion to dismiss denied |
| Individual liability (Carter) | Carter designed/executed the business model, directly liable under FCA/AKS | No specific acts by Carter tied to false claims; insufficient pleading | Claims against Carter dismissed |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleadings must show plausible claim to relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must provide enough factual content for reasonable inference of liability)
- Cook County v. United States ex rel. Chandler, 538 U.S. 119 (2003) (FCA is to be read expansively)
- United States v. Neifert-White Co., 390 U.S. 228 (1968) (FCA applies to any fraud causing government financial loss)
- United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899 (5th Cir. 1997) (Medicare claims can support FCA liability)
- Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) (court views facts in light most favorable to plaintiff on motion to dismiss)
- Melder v. Morris, 27 F.3d 1097 (5th Cir. 1994) (Rule 9(b) specificity for FCA/ fraud claims required)
- Dorsey v. Portfolio Equities, Inc., 540 F.3d 333 (5th Cir. 2008) (fraud allegations need specific factual support)
- Jones v. Greninger, 188 F.3d 322 (5th Cir. 1999) (dismissal inappropriate if claim could be supported by any set of facts consistent with allegations)