Bon Secours Embroiled in Latest Rule 9(b) Discrepancy Within Federal Fourth Circuit

As we have reported in the past, the federal Courts of Appeal are engaged in a near-even split over the applicability of Federal Rule of Civil Procedure 9(b) to filings under the False Claims Act. Fed. R. Civ. P. Rule 9(b) reads as follows:

In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.

Also known as a “heightened pleadings requirement,” the general rule is that any lawsuit alleging fraud – which naturally encompasses all FCA lawsuits – must contain specific information, details, and facts asserting that a fraudulent event took place. However, in the context of the FCA, this requirement – taken literally – could prove significantly burdensome for the plaintiff, who would be, practically speaking, required to include an itemized account of all defendants’ wrongdoings – which often number in the tens of thousands, particularly pertaining to healthcare fraud.

As a result, several Courts of Appeal have held that a complaint which alleges fraud with particularity, but not necessarily including an itemized, detailed account, will suffice for Rule 9(b) purposes. Other Courts have taken the Rule much more seriously, outright dismissing complaints that do not comport. The Fourth Circuit is one of these Courts.

Bon Secours Succeeds in Its Motion to Dismiss – For Now

Bon Secours is a not-for-profit healthcare system that owns, operates, or has engaged in a joint venture with dozens of hospitals, specialists, and other medical facilities. Some of its affiliates include psychiatric units, hospice care centers, assisted living facilities, and skilled nursing units.

According to a complaint, unsealed late last year, a whistleblower has targeted Bon Secours’ “concierge program” as running afoul of the FCA. The relator, a temporary employee assigned to work within the concierge program at Bon Secours Richmond, alleged seven separate counts of fraud as pertaining to the concierge services, which include communication with patients, setting up appointments, and arranging for payment. The relator specifically alleges the concierge service providers were instructed to steer patients toward certain procedures or courses of treatment that would be reimbursed by government healthcare providers (e.g., Medicare or Medicaid) versus those that would not.

Despite the realtor’s assertions, the Fourth Circuit granted Bon Secours’ motion to dismiss based on failure to meet the heightened pleading requirements of Rule 9(b). The holding discusses the confusion plaguing the federal courts with regard to this pivotal “gatekeeping” issue. The relator was given an opportunity to file an amended complaint.

Contact a Reputable Whistleblower Attorney Today

If you are aware of possible healthcare fraud or believe your employer may be engaging in conduct similar to that described above, we encourage you to contact an experienced whistleblower attorney today. Under the FCA, successful plaintiffs may receive up to 30 percent of the total settlement or judgment recovered by the federal government.