A federal judge in Kansas dismissed a False Claims Act lawsuit against HCA Healthcare, ruling that the whistleblower didn't have specific enough information about the alleged fraud.
U.S. District Judge John Lungstrum in Kansas City this week granted motions to dismiss from Nashville-based HCA, HCA Midwest Health and HCA practices College Park Physical Therapy and College Park Family Care Center Physicians Group. He added the caveat that the plaintiff, Edward Ernst, has until Dec. 14 to resubmit his claims.
Ernst sued HCA and its subsidiaries in February 2019, accusing them of submitting false claims to Medicare and Tricare for physical therapy services provided in Overland Park and Olathe, Kansas from April 2017 to August 2018. The federal government declined to intervene in the case in April 2020.
In his Nov. 23 ruling, Lungstrum wrote that Ernst's complaint contained "precious little" of the necessary details of the alleged fraud, such as the time, place and content of the false representations.
"In other words, the who, what, where, when, and how of the alleged fraud," the judge wrote.
In a statement, HCA said it was pleased with the district court's decision to dismiss the lawsuit. The investor-owned hospital company has grown its profit this year despite the challenges of the COVID-19 pandemic.
Ernst outlined four specific schemes: Falsely billing Medicare and Tricare for services provided by physical therapy aides or techs instead of by therapists or by physical therapy assistants, falsely billing Medicare for aquatic therapy services provided by a physical therapy assistant without supervision of a therapist, falsely billing Tricare for services provided by physical therapy assistants without oversight by a therapist and falsely billing Medicare for services provided without complying with the 8-minute billing rule. Under the 8-minute rule, therapists must provide direct treatment for at least eight minutes in order to be reimbursed for a time-based code.
With respect to the aquatic therapy claims, the judge wrote that Ernst failed to identify a liability theory. In other words, it wasn't clear whether he was accusing the providers of falsely claiming a therapist supervised the services, or something else.
The judge also cited the lack of information Ernst provided on the alleged Tricare scheme, pointing out that he didn't identify a specific therapist or patient.
"The pleading of this scheme falls woefully short of the required standard of particularity, especially in conjunction with the lack of any detail concerning the actual claims submitted to the government," Lungstrum wrote.
Ernst did give names for two specific examples of the alleged "8-minute rule" violations, but the judge said the scope of that conduct is still unclear.
And "even more egregiously," Lungstrum wrote, Ernst consistently refers to conduct by "defendants" without specifying which one in each case.
The defendants argued against giving the plaintiff one more shot at rewriting his claims, arguing Ernst had already submitted an amended complaint following their motion to dismiss. But Lungstrum noted this is his first ruling on the sufficiency of the allegations, so he'll grant the plaintiff an additional opportunity to state his claims.
Ernst won't get another shot at his claims against a fifth defendant, College Park Family Care Center, P.A. Lungstrum agreed with defendants that the practice can't be sued because HCA bought it in 2013 and formerly dissolved the former corporation in 2015, before the alleged fraud occurred.
Ernst's attorneys did not respond to a request for comment on the ruling, or whether they plan to resubmit the complaint.