Eighth Circuit takes Step Towards a Less Stringent Standard for Pleading Fraud Under the False Claims Act

The Eighth Circuit had previously stated that one who files a lawsuit under the False Claims Act must provide examples of the allegedly fraudulent conduct. Last week, the court seemed to back away from this position in United States ex. rel. Thayer v. Planned Parenthood of the Heartland, No. 13-1654 (8th Cir. August 24, 2014) when it held that such specificity is not required for every complaint brought under the FCA.  Rather, examples do not have to be given if the plaintiff is able to provide reliable indicia from which one could infer that false claims were actually submitted to the government.

The plaintiff in Thayer was the manager of two Planned Parenthood clinics and oversaw the defendant’s billing and claims systems.  The court held that given this position, there was a sufficient indicia of reliability to allow the plaintiff to proceed with allegations that the defendant violated the FCA by filing claims for: 1) unnecessary quantities of birth control pills; 2) birth control pills dispensed without examinations or without or prior to a physician’s order; 3) abortion-related services and 4) the full amount of services for which payment had already been provided.  However, the contention that Planned Parenthood violated the FCA by instructing patients who experienced abortion-related complications to give false information to medical professionals at other hospitals, causing those professionals to unknowingly file claims for services performed in connection with abortions was dismissed because there was no indication in the complaint that the plaintiff had access to the billing systems used by these other hospitals or that she know about their billing practices.  As a result, the plaintiff was only able to speculate that false claims were submitted by these other hospitals and this did not provide a factual basis from which the court could infer that this actually occurred.

It remains to be seen how courts in the Eighth Circuit will apply Thayer.  However, with this decision, the majority of the Circuit courts that have addressed this issue have held that a FCA complaint does not necessarily have to provide examples of the false claims which were submitted to the government in order to survive a motion to dismiss.

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