United States of America, ex rel Rafik Benaissa, M.D., Relator, Plaintiff - Appellant v. Trinity Health; Trinity Hospital; Trinity Kenmare Community Hospital; Trinity Hospital - St. Joseph‘s, Defendants - Appellees
No. 19-1207
United States Court of Appeals For the Eighth Circuit
June 25, 2020
Before LOKEN, BENTON, and KELLY, Circuit Judges.
Appeal from United States District Court for the District of North Dakota - Bismarck. Submitted: February 12, 2020.
KELLY, Circuit
This is a qui tam action brought by Dr. Rafik Benaissa against Trinity Health, Trinity Hospital, Trinity Kenmare Hospital, and Trinity Hospital – St. Joseph‘s (collectively, Trinity). Dr. Benaissa alleges that Trinity violated the
I. Background
Trinity operates a regional healthcare system based in Minot, North Dakota. Dr. Benaissa was a trauma surgeon at one of Trinity‘s hospitals from 2003 to 2015. In his Amended Complaint, Dr. Benaissa alleges that Trinity paid physicians for referrals in violation of the federal Stark and Anti-Kickback laws.2 He asserts that these underlying violations of the Stark and Anti-Kickback laws resulted in the presentment of false or fraudulent claims to the government, in violation of the FCA, because “services provided in violation of the Stark and Anti-Kickback laws are ineligible for government payment,” see
To support his claim that Trinity violated the Stark and Anti-Kickback laws, Dr. Benaissa identifies five physicians whom Trinity paid in excess of the 90th percentile of compensation for their specialties. He contends that these physicians’ high salaries were not merited by their skills, credentials, or personal productivity. Instead, he alleges that Trinity paid them in part for illegally referring patients for additional services at Trinity. He asserts that, if these physicians were not making illegal referrals, Trinity would have lost money by paying their high salaries.
Dr. Benaissa further alleges that, as a consequence of Trinity‘s compensation scheme, these physicians performed unnecessary surgeries to justify their high salaries. He states that two dental surgeons performed reconstructive surgeries that were within “the field of a plastic surgeon or an ENT surgeon” and not usually performed by dental surgeons. He also asserts that a cardiologist performed unnecessary vascular surgeries that were not within the standard of care. And he describes five instances in which an orthopedic surgeon, Dr. Joshi, performed operations
Dr. Benaissa alleges that he and others complained about Dr. Joshi‘s unnecessary surgeries. In 2012, he reported to Trinity‘s leadership that Dr. Joshi was “not ethical and was doing a large number of unnecessary surgeries,” and he requested that leadership review one of Dr. Joshi‘s surgeries. He was told, “Don‘t say that in public.” A member of Trinity‘s leadership later informed Dr. Benaissa that there were “problems” with Dr. Joshi‘s care, but the results of Trinity‘s review were confidential. In 2015, a neurosurgeon told Dr. Benaissa that Trinity knew Dr. Joshi was performing unnecessary surgeries, but it was difficult to prove. Later that year, an operating-room technician told Dr. Benaissa that Dr. Joshi was “out of control” and was doing an unnecessary surgery to repair ankle fractures. A medical-device representative also told Dr. Benaissa that he believed some of Dr. Joshi‘s operations were not “kosher.” And Dr. Joshi‘s former nurse sent Dr. Benaissa a letter alleging that Dr. Joshi was performing unnecessary surgeries, some of which had resulted in deaths, and that Trinity “simply covered up all his mistakes and let them go.” The nurse later repeated these allegations to Dr. Benaissa in person.
Another physician told Trinity‘s CEO that Dr. Joshi was writing abnormally long consults so he could bill Medicare at a higher rate. Dr. Benaissa alleges that, after this meeting, the physician told him that Dr. Joshi was “untouchable” because he was “a big money maker.” Dr. Benaissa also alleges that, after he was in a dispute with Dr. Joshi, the Chief of Surgery “fabricated” a story about Dr. Benaissa behaving in an unprofessional manner. A few weeks later, Dr. Benaissa was informed that Trinity would not be renewing his contract.
Dr. Benaissa argues that these allegations give rise to a plausible inference that Trinity paid these five physicians for referrals in violation of the Stark and Anti-Kickback laws. See
The district court granted Trinity‘s motion to dismiss for failure to state a claim. As to the
II. Analysis
“Because the FCA is an anti-fraud statute, complaints alleging violations
“This court reviews de novo the district court‘s dismissal of a claim under Rule 9(b), accepting the allegations contained in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.” United States ex rel. Strubbe v. Crawford Cty. Mem‘l Hosp., 915 F.3d 1158, 1162–63 (8th Cir. 2019) (cleaned up).
A. The § 3729(a)(1)(A) Claim
The FCA imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.”
The first element of a
Dr. Benaissa concedes that he has not alleged representative examples of false claims that Trinity presented for payment or approval. However, he argues that “two facts” show that his allegations satisfy the second method of pleading with particularity that false claims were submitted. First, he alleges that Trinity received a large Medicare reimbursement representing approximately 28-29% of its annual revenue. Second, he asserts that, if Trinity compensated physicians for illegal referrals in violation of the federal Stark and Anti-Kickback statutes, every claim submitted for services provided by those
We have previously rejected allegations of this sort as insufficient. In Joshi, the plaintiff argued that he had alleged presentment with particularity “by his allegations that ‘all the nurse anesthetists’ work was illegal,’ and that ‘every invoice for nurse anesthetist work was fraudulent because no nurse anesthetist was medically supervised or directed.‘” 441 F.3d at 556. We held that “Rule 9(b) requires more than such conclusory and generalized allegations.” Id. To support this conclusion, we cited the Eleventh Circuit‘s rule that the plaintiff‘s allegations of presentment must contain “indicia of reliability” to satisfy Rule 9(b)‘s particularity requirement. See id. at 557 (citing Corsello v. Lincare, Inc., 428 F.3d 1008, 1013 (11th Cir. 2005)). The Eleventh Circuit had held that, because “[t]he act of submitting a fraudulent claim to the government is the sine qua non of a False Claims Act violation,” it was insufficient to “describe[] in detail a private scheme to defraud” and then speculate that claims “must have been submitted, were likely submitted or should have been submitted to the Government.” Corsello, 428 F.3d at 1012–13 (cleaned up). However, it had allowed claims to go forward where the plaintiff had an “underlying basis” for asserting that false claims had been presented, such as “firsthand information’ about the billing practices of the defendant.” Id. at 1013–14 (citation omitted).
Applying this rule in Joshi, we concluded that the plaintiff‘s allegations lacked sufficient “indicia of reliability” because the plaintiff “was an anesthesiologist . . . , not a member of the billing department, and his conclusory allegations [we]re unsupported by specific details of [the defendants‘] alleged fraudulent behavior.” 441 F.3d at 557. In Thayer, by contrast, we concluded that the plaintiff‘s allegations contained sufficient “indicia of reliability” because the plaintiff oversaw the defendant‘s billing and claims systems and pleaded personal, firsthand knowledge of the defendant‘s submission of false claims. See United States ex rel. Thayer v. Planned Parenthood of the Heartland, 765 F.3d 914, 917 (8th Cir. 2014).
As a trauma surgeon, Dr. Benaissa does not have firsthand knowledge of Trinity‘s billing practices. He also has not pleaded details about Trinity‘s billing practices indicating a reliable “basis for knowledge” regarding the submission of fraudulent claims. See Joshi, 441 F.3d at 558. For example, he has not provided dates and descriptions of particular services coupled with “a description of the billing system that the records were likely entered into.” See Strubbe, 915 F.3d at 1165 (quoting United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir. 2009)). Instead, he relies solely on two general facts—Trinity‘s receipt of a large Medicare reimbursement and his allegation that every claim submitted by certain physicians was false or fraudulent—to draw the conclusion that Trinity most likely submitted false claims to the government.
This sort of general inference is “not specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” See Joshi, 441 F.3d at 557 (quoting Costner, 317 F.3d at 889). As a result, it is not sufficient to satisfy Rule 9(b)‘s particularity requirement. See Thayer, 765 F.3d at 919-20 (affirming the dismissal
Dr. Benaissa argues that this means that “only members of the billing department or the financial services department of a hospital could qualify as a relator,” which is “wildly contrary to the purposes of the [FCA].” We disagree. We have recognized that “an insider might have an easier time obtaining information about billing practices and meeting the pleading requirements under the FCA.” Joshi, 441 F.3d at 560 (cleaned up). But we have not precluded others with reliable allegations from serving as relators. See Strubbe, 915 F.3d at 1164 (noting that claims by paramedics and EMTs were “close to meeting this standard“). Other courts applying this same standard have allowed individuals outside of a hospital‘s billing department to serve as relators where they were able to plead “particular and reliable indicia that false bills were actually submitted as a result of the scheme—such as dates that services were fraudulently provided or recorded, by whom, and evidence of the department‘s standard billing procedure.” See Grubbs, 565 F.3d at 189 (psychiatrist); see also United States ex rel. Walker v. R&F Props. of Lake Cty, Inc., 433 F.3d 1349, 1360 (11th Cir. 2005) (nurse practitioner); United States ex rel. Dicken v. Nw. Eye Ctr., No. 13-CV-2691, 2017 WL 2345579, at *2–3 (D. Minn. May 30, 2017) (ophthalmologist).
There is no requirement that a relator must be a member of a hospital‘s billing or financial-services department. However, a relator must allege representative examples of false claims or particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted. Strubbe, 915 F.3d at 1163. Dr. Benaissa‘s general allegations that Trinity‘s compensation scheme most likely resulted in the presentment of claims for payment or approval are insufficient to meet this requirement.
B. The § 3729(a)(1)(B) Claim
Next, Dr. Benaissa alleges that Trinity falsely certified in its provider agreement and cost reports that it would comply with the Stark and Anti-Kickback laws. The FCA imposes liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”
There is no “presentment” requirement for a
C. The Retaliation Claim
Finally, Dr. Benaissa alleges that Trinity retaliated against him in violation of
Dr. Benaissa alleges that he complained, on two occasions, that Dr. Joshi was performing unnecessary surgeries. However, he does not allege that he connected his complaints to a concern over improper billing or the submission of false claims to the government. Rather, his concern was with the medical propriety and ethical ramifications of Dr. Joshi‘s procedures. Even assuming that complaining about these issues constitutes “protected activity” under the FCA, Dr. Benaissa has not alleged that he told Trinity the “behavior was fraudulent or potentially subjected it to FCA liability.” See id. Therefore, his allegations are insufficient to establish that Trinity knew he was engaged in a protected activity.
III. Conclusion
The district court‘s judgment is affirmed.