U.S. ex rel. Guardiola v. Renown Health (Summary)

FALSE CLAIMS – QUI TAM RELATOR

U.S. ex rel. Guardiola v. Renown Health, No. 3:12-cv-00295-LRH-VPC (D. Nev. Aug. 20, 2014)

The United States District Court for the District of Nevada denied a hospital’s motion to dismiss a former employee’s False Claims Act (“FCA”) claim, holding that the complaint adequately alleged a plausible claim for relief against the hospital. The relator, a registered nurse and former compliance professional at defendant, hospital, alleged that she discovered a fraudulent billing scheme while employed at the hospital. Relator brought the scheme to upper management’s attention, but nothing was resolved. Specifically, the relator alleged that the hospital incorrectly coded outpatients as inpatients, resulting in higher Medicare payouts.

The court held the relator’s allegations should not be dismissed because the relator adequately set forth the details of an alleged scheme and its falsehoods, as well as the manner in which the allegedly false claims were submitted to Medicare for payment. The court stated that the relator provided 579 inpatient claims that were allegedly incorrectly billed because they were discharged from the hospital in the same calendar day making them outpatients. Furthermore, the relator sufficiently alleged that the hospital had actual knowledge of the fraud, or, at a minimum, acted in deliberate ignorance of the falsity of the inpatient claims because an audit of the hospital’s billing and documentation practices revealed a “significant” problem that the hospital was submitting inaccurate outpatient claims as inpatient claims and it failed to take appropriate corrective measures.