The relator alleged the defendant overcharged Medicare for medical services. The relator’s allegations were based on a comparison of the national average of rates charged for these services and the defendant’s rates. The court dismissed the complaint. An FCA violation cannot be based on mathematical probability alone. 

United States ex rel. Winona v. Lozano, D.D.C. No. 17-2433
  • Alleged Fraud – A relator brought a qui tam against her former employer. She alleged the defendant illegally paid physicians for referrals, overcharged Medicare for medical services, and billed costs to Medicare that were not medical expenses. The defendant moved to dismiss for failure to state a claim
  • Illegal Remuneration – The court found the plaintiff had not pleaded with illegal payments with particularity. The complaint contained only conclusory allegations about a scheme. The complaint had not identified which referrals were improper.
  • Overcharges – The relator alleged the defendant overcharged Medicare for services. But the relator’s theory was based on a comparison between nationwide pay rates for skilled nurses and the rates the defendants changed Medicare. The defendant’s rates were much higher. However, the court reasoned that mathematical probability alone does not satisfy the heightened pleading standard. The relator needed to provide more detail about the methodology used to inflate rates.
  • Improper Charges – The relator alleged that non-medical costs—specifically, for repairs on a yacht and a private pilot—were wrongly charged to Medicare. But the relator failed to provide specific factual allegations about the charges. Her complaint merely stated that she “believed” the defendant made improper charges.

–Case summary by Craig LaChance, Senior Editor