United States v. Planned Parenthood of the Heartland
765 F.3d 914
8th Cir.2014Background
- Relator Susan Thayer, former center manager at two Planned Parenthood Iowa clinics (1991–2008), sued under the federal False Claims Act (FCA) and Iowa FCA alleging Medicaid billing fraud by Planned Parenthood of the Heartland.
- Thayer alleged four main fraudulent schemes (2006–Dec. 2008): unnecessary quantities of birth-control pills; dispensing or billing without exams/physician orders; obtaining reimbursement for abortion-related services (including instructing patients to report miscarriages to hospitals); and billing paid services as unpaid ("donations") and upcoding.
- Complaint asserted centralized access to and knowledge of Planned Parenthood’s billing system but did not include specific examples of false claims submitted for Medicaid reimbursement.
- Planned Parenthood moved to dismiss under Rule 9(b) for lack of particularity; the district court dismissed for failure to plead representative examples of false claims.
- The Eighth Circuit evaluated Rule 9(b) standards for FCA suits, distinguished prior precedent (Joshi), and reviewed which allegations in Thayer’s complaint met the particularity / indicia-of-reliability standard; some claims were allowed to proceed, others were dismissed.
Issues
| Issue | Thayer's Argument | Planned Parenthood's Argument | Held |
|---|---|---|---|
| Rule 9(b) pleading standard for FCA suits | Joshi’s representative-example rule need not always apply; relators with direct billing knowledge can plead scheme details + reliable indicia instead of individual claims | Rule 9(b) (per Joshi and later Eighth Circuit cases) requires representative examples of false claims for systemic fraud allegations | Court: Rule 9(b) is flexible; relator may satisfy it by pleading particular scheme details plus reliable indicia that claims were submitted (adopting Grubbs approach) |
| Sufficiency of allegations re: (1) unnecessary quantities of pills; (2) dispensing/billing without exams or orders; (3) billing for paid services via coerced "donations"; and (4) abortion-related services at Planned Parenthood | Thayer: pleaded names of instructing individuals, participating clinics, two-year time frame, billing practices, and her personal access to centralized billing — sufficient indicia of reliability | Planned Parenthood: allegations are conclusory and lack representative false-claim examples | Held: These four categories (except certain abortion-related claims discussed below) pleaded with sufficient particularity and indicia of reliability to survive Rule 9(b) |
| Allegation that Planned Parenthood caused third-party hospitals to submit false Medicaid claims by instructing patients to report miscarriages | Thayer: Planned Parenthood directed patients to tell hospitals they had miscarriages, causing hospitals to submit Medicaid claims | Planned Parenthood: relator lacks access/knowledge of hospitals’ billing; allegation speculative and lacks factual basis that hospitals submitted false claims | Held: Dismissed — allegations lack indicia of reliability and are speculative; Rule 9(b) not satisfied for claims against hospitals |
| Upcoding allegations (billing higher-level CPT problem-visit codes when only family-planning or brief/absent physician contact occurred) | Thayer: Planned Parenthood scheduled many patients into physician windows and billed problem-visit CPT codes even when physicians minimally saw or did not see patients | Planned Parenthood: allegations too generalized; no examples, dates, actors, frequency, or damages shown | Held: Dismissed — upcoding claims are conclusory, lack particulars (who, when, how often, amounts) required by Rule 9(b) |
Key Cases Cited
- United States ex rel. Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552 (8th Cir. 2006) (articulated representative-examples requirement for systemic FCA fraud allegations)
- In re Baycol Prods. Litig., 732 F.3d 869 (8th Cir. 2013) (Rule 9(b) review standard on FCA-related pleadings)
- United States ex rel. Costner v. United States, 317 F.3d 883 (8th Cir. 2003) (Rule 9(b) particularity: who, what, where, when, how)
- United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009) (relator may satisfy Rule 9(b) by pleading scheme details plus reliable indicia that claims were submitted)
- Corsello v. Lincare, Inc., 428 F.3d 1008 (11th Cir. 2005) (complaint must include some indicia of reliability to support that false claims were submitted)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim under Rule 12(b)(6))