On December 15, 2015, the U.S. District Court for the Northern District of Illinois dismissed Relator’s claims against two individual defendants in United States ex rel. Sibley v. A Plus Physicians Billing Service, Inc., No. 13C 7733, 2015 WL 8780548 (N. D. Ill. Dec. 15, 2015). The court granted the individuals’ (Laurie Gentile and Eric Schoewe’s) 12(b)(6) motions to dismiss based on, in Ms. Gentile’s case, insufficient allegations to show any sort of kickback, and, in Mr. Schoewe’s case, a lack of specificity on “‘the who, what, when, where, and how’ of the alleged fraud.”
Ms. Gentile, Mr. Schoewe and Relator were employees of A Plus Physicians Billing Service. Mr. Schoewe was a co-owner of the business and primarily responsible for submitting claims to payors. Ms. Gentile was Relator’s supervisor and partially responsible for submitting claims to payors. Relator alleged that Mr. Schoewe and Ms. Gentile trained Relator and other medical billers to complete, without supporting documentation from physicians’ offices, required claims submission details, then submitted those claims to payors.
Relator claimed that this was billing fraud, and, in Mr. Schoewe’s case, that this alone was sufficient to prove a false claim. The court disagreed, holding that Relator’s claim lacked the specificity required to plead a false claim. The relator provided no or insufficient detail on what the false claim allegedly was (i.e., what claims the individual defendants submitted that were incorrect). The relator provided insufficient information on when Mr. Schoewe allegedly submitted a false claim (i.e., Relator claimed that Mr. Schoewe provided her with medical records that were missing necessary claims information over an 11 month period, but did not say when Mr. Schoewe allegedly had her fill in information without adequate records or what that information was). Similarly, the relator did not even say which, if any, of these allegedly “fraudulent” claims the defendant presented to the government for payment.
Regarding Ms. Gentile, the relator attempted to claim that she got a kickback because the relator saw a check from a client to Ms. Gentile. Later, Ms. Gentile allegedly told the relator that she too could “get checks like this” once she took over the client account. However, the court found that, based on the pleadings, it was “not reasonable to infer” that Ms. Gentile was referring to the check the relator saw, or, more to the point, to infer that the check was any type of kickback.
There will continue to be no shortage of False Claims Act (FCA) claims against individuals—whether brought by the government directly or, as here, by a relator on the government’s behalf. While this was an un-intervened case, in a post-Yates Memorandum world, claims against individuals, and the prospect of such claims, are receiving a heightened focus as a general matter. But the legal standards that must be met to proceed and prevail against such individuals are the same as they always were. If complaints fail to plead claims under Rule 9(b) and/or 12(b)(6), they will be dismissed.