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United States v. Pekin Memorial Hospital

May 15, 2007


The opinion of the court was delivered by: Joe Billy McDade United States District Judge


Before the Court is Defendant's Motion to Dismiss (Doc. 24) and accompanying Memorandum (Doc. 25) filed on January 24, 2007. Plaintiff filed a Response (Doc. 28) on February 22, 2007. For the following reasons, Defendant's Motion to Dismiss is GRANTED.


Plaintiff is the relator in this qui tam suit brought under the False Claims Act, 31 U.S.C. § 3729, against Pekin Memorial Hospital (the "Hospital"). Plaintiff alleges in the Complaint (Doc. 1) and Amended Complaint (Doc. 21) that the Hospital submitted false claims to the government's Medicaid program to increase the amount of money the Hospital received as reimbursement for services it provided to Medicaid beneficiaries. Specifically, the Complaint alleges that the Hospital: (1) Miscoded "preoperative testing" for outpatients as diagnostic tests (Count 1 and 7); (2) Miscoded routine tests for prostate specific antigen ("PSA"), a non-covered procedure for Medicaid beneficiaries under age 50, as a covered procedure to diagnose for an enlarged prostate (Count 2); (3) Miscoded routine mammograms to indicate diagnostic examination for a lump in the breast (Count 3); and (4) Signed unauthorized signatures of Hospital employees to the Medicare forms (Count 4). Plaintiff's also makes additional common law claims that are not the subject of the Motion to Dismiss before the Court.

The Court notes that it took nearly two years for the United States to decline to intervene in this qui tam action. (See Doc. 15.) As a result, even though this case is over two years old, it is still at the initial pleading stage of litigation. Now, Defendant has moved to dismiss under Federal Rules of Civil Procedure 9(b), 12(b)(1) and 12(b)(6).


When considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must view the Complaint in the light most favorable to the plaintiff and the Complaint's well-pled factual allegations must be accepted as true. Williams v. Ramos, 71 F.3d 1246, 1250 (7th Cir. 1995). Therefore, a complaint can only be dismissed if a plaintiff cannot prove any set of facts upon which relief can be granted. Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1429- 30 (7th Cir. 1996). However, the Court is not bound by a plaintiff's legal conclusions. Baxter by Baxter v. Vigo County School Corp., 26 F.3d 728, 730 (7th Cir. 1994). The province of Rule 12(b)(6) motions is to question the availability of a legal formula justifying relief on the alleged facts, not to test or determine the facts themselves. Maple Lanes, Inc. v. Messer, 196 F.3d 823, 824-25 (7th Cir. 1999).


Jurisdiction in this Court is based upon federal claims which Plaintiff brings under the False Claims Act. 31 U.S.C. § 3729. Defendant seeks to dispose of Plaintiff's federal claims by arguing that Plaintiff has not satisfied the specificity requirements of Federal Rule of Civil Procedure 9(b). Defendant then seeks to get the remaining common law claims dismissed by suggesting that the Court not exercise supplemental jurisdiction over the remaining claims.

Federal Rule of Civil Procedure 9(b) states that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Defendant argues based upon United States ex rel. Clausen v. Laboratory Corp. of America, Inc., 290 F.3d 1301, 1310 (11th Cir. 2002), that a complaint alleging violations of the False claims Act must state the following:

(1) precisely what statements were made in what documents or oral representations or what omissions were made; (2) the time and place of each statement and the person responsible for making (or, in the case of omission, not making same); (3) the content of such statements and the manner in which they misled the plaintiff; and (4) what the defendants obtained as a consequence of the fraud.

Defendant states that the Complaint falls short of this standard by alleging a generalized scheme, and fails to identify the amounts, dates or details of any specific claim ever submitted to the government.

While Defendant has the applicable law incorrect, even under the applicable law, Plaintiff does not sufficiently articulate the appropriate legal standard.

Under the applicable law, states of mind may be pleaded generally, while the "circumstances" must be pled in detail. This means "the who, what, when, where and how. . ." of the alleged fraudulent activity. DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990). This does not mean that courts are ...

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