On May 19, 2010, the United States Appeals Court for the Seventh Circuit reversed a lower court decision dismissing the relator’s lawsuit, styled United States ex rel Chovanec v. Apria Healthcare Group, Inc., “with prejudice”. The lawsuit was filed against Apria Healthcare Group, Inc. alleging improper coding of Medicare and Medicaid claims. The district court found that relator Chovanec’s lawsuit contained allegations that were related to two other pending whistleblower lawsuits filed against Apria and dismissed Chovanec’s lawsuit with prejudice based on the provision of the FCA that says, “When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” Although the other two whistleblower actions were in other states, the district court found that they both alleged an ongoing fraud orchestrated by Apria’s national staff, and therefore a decision by any given Apria office to participate in that scheme “is related to those allegations” and barred Chovanec’s lawsuit while the other lawsuits were pending. However, the Appeals Court noted that because the other lawsuits had settled before the lower court issued the final decision dismissing Chovanec’s lawsuit, and because Chovanec may have been able to frame a new complaint that would survive a motion to dismiss, Chovanec’s lawsuit should have been dismissed without prejudice.
As if two whistleblower lawsuits against this organization weren’t enough, this decision opens the doors to a third one. This decision should serve as a reminder to hospitals and other health care providers that whistleblowers are in your midst – compliance and doing the right thing are the best defenses!