United States v. Carell
2011 WL 1060669
M.D. Tenn.2011Background
- United States sues for overpayment of Medicare reimbursements under FCA Counts I–II and common law Counts III–IV.
- Eight 1999–2001 Cost Reports were submitted by VIP, Professional, and University Home Health entities; Carell and Diversified allegedly controlled the entities.
- US alleges a sham ownership by Vining and a scheme with Carell to charge related-party management fees and inflate reimbursements.
- Intermediary Palmetto processed payments; Cost Reports included certifications warning against misrepresentation and potential criminal actions.
- FERA amended FCA provisions after the initial Complaint, affecting the interpretation of the “to get paid” vs. “false record or statement” language; preexisting case law continues to apply to Counts I and II.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count II survives under FCA after FERA amendments | Plaintiff argues 3729(a)(1)(B) applies to false records | Defendants argue retroactivity excludes Count II | Count II plausible under post-FERA framework |
| Whether Allison Engine’s intent standard applies to Count II | Plaintiff contends Government reliance need not be direct | Defendants rely on Allison Engine strict requirement | Plaintiff states plausible Count II without requiring direct intent to have government pay the claim |
| Whether Totten’s presentment rule bars Count I claims | Plaintiff argues Medicaid/Medicare claims may be presented via intermediary | Defendants rely on Totten to limit presentment to direct government submission | Counts I plausibly allege presentment via intermediary to government |
Key Cases Cited
- Allison Engine Co., Inc. v. United States ex rel. Sanders, 553 U.S. 662 (U.S. 2008) (redefines intent for government payment under FCA § 3729(a)(2))
- United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004) (presentment must ultimately reach government; via intermediary possible)
- United States ex rel. Bennett v. Medtronic, Inc., 747 F. Supp. 2d 745 (S.D. Tex. 2010) (claims defined similarly pre- and post-FERA; aid for pleading FCA claims)
- United States ex rel. A+ Homecare, Inc., 400 F.3d 428 (6th Cir. 2005) (Medicare claims fall within broad FCA scope)
- United States v. Drake v. NSI, Inc., 736 F. Supp. 2d 489 (D. Conn. 2010) (post-FERA application; case guidance on claims vs. cases)
- United States ex rel. Ven-A-Care v. Actavis Mid Atl. LLC, 659 F. Supp. 2d 262 (D. Mass. 2009) (post-Totten interpretation of Medicaid/FCA presentment)