The district court denied the defendant’s motion to dismiss a claim of retaliation, finding that the claim did not have to meet the more stringent particularity requirements of Rule 9(b), but only the standard at Rule 8(a), which says a short and plain statement of the claim is sufficient. The court also found the plaintiff had specifically characterized her concerns about the defendants’ provision of hospice care as concerns about fraud on Medicare and that her audit findings and report sufficiently put her employer on notice of her protected activity. However, the court denied the plaintiff’s motion for attorneys’ fees, finding that the question of which pleading standard applied to retaliation claims was still open in the Fifth Circuit and that the defendant’s counsel had not filed the motion to dismiss frivolously.
AM Hospice Inc. moved to dismiss a complaint of healthcare fraud, as well as the plaintiff’s motion for attorneys’ fees.
Plaintiff Andrea Procter Paige alleged that her former employer AM Hospice admitted patients for hospice care when they did not qualify and then fraudulently billed Medicare for these services. Paige’s complaint did not directly address the fraud, but alleged retaliation in response to her efforts to report it, including the termination of her employment.
In its motion to dismiss, AM Hospice argued the complaint failed to satisfy the particularity standard. Paige argued that Rule 9(b) does not apply to retaliation claims under the FCA. The court sided with the plaintiff, finding that her claims need only satisfy the requirements of Rule 8(a), which provide that a short and plain statement of the claim showing that the pleader is entitled to relief is sufficient.
More specifically, the defendant argued Paige failed to allege that she was engaged in a protected activity or that the hospice was aware that she engaged in this activity.
However, the court found the complaint alleged the plaintiff audited the hospice’s admissions and reported her findings to her supervisors, specifically stating she believed the facility admitted patients who did not qualify for hospice services and then fraudulently billed Medicare. The court found this action qualified as protected activity, because she characterized her concerns as involving illegal or fraudulent behavior.
Further, taking the facts as true, the court found that when the plaintiff informed her superior of her concerns, AM Hospice was put on notice of her protected activity. Therefore, the court denied the motion to dismiss the complaint.
Paige also moved the court to award her attorneys’ fees, arguing that the motion to dismiss was frivolous. However, the court noted that the question of whether the Rule 8 or Rule 9 pleading standard applies to retaliation claims under the FCA had not been addressed by the 5th Circuit, although it had been addressed by other circuits and by other district courts in the 5th circuit. Therefore, the court could not conclude that the defendant’s motion to dismiss was unreasonable as a point of law. The court also could not conclude the defendant’s counsel acted with reckless disregard.
