• United States ex rel. Charles Wilkins v. United Health Group, Inc.
  • July 14, 2011 | Authors: Justin Gundlach; Arthur N. Lerner
  • Law Firm: Crowell & Moring LLP - Washington Office
  • The Third Circuit Court of Appeals reversed in part the decision of the District Court for the District of New Jersey, which had dismissed two qui tam plaintiffs' allegations that UnitedHealth Group, Americhoice, and Americhoice of New Jersey violated the False Claims Act ("FCA") by falsely and knowingly certifying compliance with Medicare regulations and with the Medicare Anti-Kickback Statute ("AKS"). The plaintiffs had alleged various violations of federal regulations and rules governing the marketing of insurance products reimbursed through Medicare Parts C and D. The panel rejected the first line of argument put forth by appellants, but agreed with the second.

    Appellants first argued that FCA liability should attach because appellees' activities violated conditions of participation in Medicare Part C or D - conditions to which appellees had certified their compliance by signing contracts with Medicare. The panel responded that appellees were not alleged to have violated conditions of payment by Medicare, but only of participation, and further noted that appellants' proffered approach would replace a nuanced scheme for regulating Medicare participation with an overbroad federal judicial remedy.

    Appellants second line of argument was that FCA liability should attach to claims reimbursed to appellees because those claims would not have been reimbursed had Medicare known that appellees' certification of AKS compliance was false. The District Court had rejected this argument on the grounds that appellants did not specify in their pleadings a particular claim for reimbursement that was made false as a result of appellees' certification. The panel - emphasizing that the case was at the pleading stage, and that it was not reviewing appellants' claims under the particularized pleading standard of Rule 9(b) - agreed with appellants on this point, reversing the trial court. The panel explained:

    "We conclude that appellants, in stating a plausible claim for relief at this stage of the proceedings for their complaint to survive a Rule 12(b)(6) motion, need not allege a relationship between the alleged AKS violations and the claims appellees submitted to the Government. Rather, the complaint is sufficient to survive a Rule 12(b)(6) motion to dismiss because appellants have pleaded that appellees knowingly violated the AKS while submitting claims for payment to the Government under the federal health insurance program."