United States v. Planned Parenthood Gulf Coast, Inc.
21 F. Supp. 3d 825
S.D. Tex.2014Background
- Relator Patricia M. Carroll (former Accounts Receivable Manager at Planned Parenthood Gulf Coast) filed a qui tam FCA and TMFPA complaint alleging Medicaid billing fraud relating to blood/urine testing of youths at a private charter facility (Gulf Coast Trades Center) between 2002–2012.
- Alleged scheme: Planned Parenthood staff collected samples at the Trades Center, returned to the Huntsville clinic and created clinic schedules showing on-site visits, then billed Medicaid using office place-of-service codes and a physician’s provider number to obtain reimbursement for services allegedly ineligible for payment.
- Carroll alleges the billing was false because (a) the provider type/staff who drew blood were ineligible to bill for those services at that location, (b) the place-of-service codes were falsified, and (c) some tests were unnecessary or duplicative.
- The United States and the State of Texas declined to intervene; Carroll proceeds as sole relator.
- Planned Parenthood moved to dismiss under Rules 12(b)(6) and 9(b), arguing (1) the Texas Provider Manual permits billing, (2) fraud not pled with particularity, and (3) statute-of-limitations bars part of the claims.
- The court denied dismissal in part (relator adequately pleaded knowing false claims and met 9(b) for presentment/false-record claims) but granted dismissal without prejudice as to the § 3729(a)(1)(G) (reverse-false-claim) claim tied to a May 4, 2012 letter, ordering an amended complaint to plead that claim with particularity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint plausibly alleges knowing presentment of false claims (Rule 12(b)(6)) | Carroll: invoices/clinic schedules, POS code misuse, provider-number misuse show knowing false claims to obtain Medicaid funds | Planned Parenthood: services were actually provided and Texas Provider Manual permits billing; any code ambiguity defeats scienter/materiality | Held: Plausible. Court found allegations that PP knowingly falsified POS/provider info sufficient to infer knowing false claims and materiality — denial of dismissal on this ground |
| Whether fraud pleaded with particularity for presentment/false-record claims (Rule 9(b)) | Carroll: identifies who, what, where, billing codes, physician number, schedules, amounts, and internal reporting efforts | Planned Parenthood: complaint lacks specifics on dates, claim-level details, patient charts, and individual fraudulent acts | Held: Carroll met Rule 9(b) for § 3729(a)(1)(A) and (B); particularity satisfied |
| Whether reverse-false-claim claim (§ 3729(a)(1)(G)) pleaded with particularity | Carroll: alleges a May 4, 2012 letter to Texas/MCOs relevant to overpayments but concedes lack of clarity and requests leave to replead | Planned Parenthood: seeks dismissal for failure to plead specifics about alleged failure to report/return overpayments | Held: Dismissed without prejudice as to § 3729(a)(1)(G); court granted leave to amend and ordered particularized allegations about the May 4, 2012 letter within 15 days |
| Whether limitations/standing (FCA/TMFPA) bar claims | Carroll: WSLA (Wartime Suspension of Limitations Act) suspends FCA limitations; TMFPA issues unresolved because of amendment timing | Planned Parenthood: six-year FCA limitations and TMFPA intervention rules bar parts of action | Held: Court applied BNP Paribas and Carter reasoning — WSLA suspends FCA statute of limitations here; court declined to resolve contested TMFPA timing/amendment issue now because FCA claims remain viable |
Key Cases Cited
- Swierkiewicz v. Sorema N.A., 534 U.S. 506 (pleading standard — court accepts factual allegations and tests entitlement to offer evidence)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility and inference principles for pleadings)
- United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (Rule 9(b) applies to FCA complaints)
- Benchmark Electronics, Inc. v. J.M. Huber Corp., 343 F.3d 719 (Rule 9(b) particularity elements)
- Gonzalez v. Fresenius Med. Care N. Am., 689 F.3d 470 (elements of FCA claim: falsity, scienter, materiality, claim)
- United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370 (FCA scienter requires knowing presentation of a lie, not negligence)
- United States v. Southland Mgmt. Corp., 326 F.3d 669 (FCA targets knowing fraud, not mere regulatory noncompliance)
- United States v. BNP Paribas SA, 884 F. Supp. 2d 589 (WSLA suspension of limitations applied to FCA claims — district court analysis relied upon)
- United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (Fourth Circuit: WSLA suspends FCA statute of limitations even when United States declines to intervene)