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Post 4980
Qui tam relators sued 316 private insurers and the Insurance Services Office, Inc., purportedly on behalf of the United States of America and several states. Relators alleged that Defendants had engaged in a scheme to defraud Medicare and Medicaid.
In United States Of America ex rel. State Of Michigan, et al., No. 24-1379, United States Court of Appeals, Sixth Circuit (January 15, 2025) resolved the dispute.
QUI TAM SUIT
The Medicare Secondary Payer Act of 1980 made the private insurer the primary payer and Medicare or a non-governmental Medicare Advantage Organization (MAO) the secondary payer.
Relator Michael Angelo owns and operates a lawyer referral service, as well as health care facilities nationwide, including a medical transportation company, radiology clinics, a pharmacy, and a surgery center.
Relators filed a qui tam action against 316 private insurers (the Insurer Defendants) and ISO asserting a “reverse False Claims Act (FCA)” violation.
The district court granted the insurers motion to dismiss in its entirety.
THE APPEAL
A reverse FCA claim is one where a false record or statement material to an obligation to pay or transmit money or property to the Government.
In contrast a reverse FCA claim is premised on a party’s false or fraudulent effort to avoid a payment owed to the government.
In United States ex rel. Angelo v. Allstate Insurance Co., the same relators (MSP WB and Angelo) and the USCA held that the allegations against Allstate were insufficient to state a reverse FCA claim.
Dismissal of Relators’ conspiracy claim was appropriate because Relators failed to establish a FCA violation and there was no injury and no viable conspiracy claim.
ZALMA OPINION
Qui Tam suits allow a citizen to sue on behalf of the government. They are not designed, nor is it appropriate to file a qui tam suit to profit the relators. Since the Relators were unable to establish a violation of the False Claims Act, the FCA. Without an FCA violation, there is no injury and no viable conspiracy claim. The relators were apparently concerned that the insurers were proactively paying the excessive claims of the health care entities the Relators owned.
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