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Saturday, January 25, 2020

Two-time whistleblower loses case at Eighth Circuit

By John O'Brien | Jan 22, 2014


ST. LOUIS (Legal Newsline) - A hospital whistleblower has lost his False Claims Act lawsuit brought against a Minneapolis health care provider.

Michael Dunn brought a qui tam action against North Memorial Medical Center in November 2010. He and the federal government alleged that North Memorial knowingly submitted fraudulent claims to the government.

These claims concerned Medicare payments for cardiac and pulmonary rehabilitation services. Dunn alleged North Memorial received an extra $2 million from the government than it was owed.

However, the trial court and a federal court of appeals have ruled Dunn's complaint falls short.

"Although Dunn identified the North Memorial officials involved in the alleged fraudulent billing and provided the names of the physicians who purportedly never supervised the rehabilitation services, Dunn's complaint fails to identify even one example of an actual false claim submitted to CMS for reimbursement," wrote Judge Bobby Shepherd of the U.S. Court of Appeals for the Eighth Circuit.

"Thus, Dunn's complaint is insufficient to state a claim for relief for purposes of the FCA."

The Eighth Circuit's ruling affirmed a December 2012 decision by U.S. District Judge Michael L. Davis, who granted North Memorial's motion to dismiss.

"Defendants argue that Relator's complaint should be dismissed because it fails to state a regulatory violation that would give rise to a violation of the False Claims Act," Davis wrote in his decision.

"The Court agrees with the Defendants and finds that Relator (Dunn) failed to plead a violation of the False Claims Act."

Representing the United States was D. Gerald Wilhelm, Assistant U.S. Attorney. Representing Dunn were the law firms Hilliard Munoz Gonzales LLP of Corpus Christi, Texas, and Yira Law Office of Hutchinson, Minn.

Representing the defendants was the law firm Fredrikson & Byron in Minneapolis.

Dunn was the administrator for Cardiovascular Consultants from 1996-2008, working at both CVC and North Memorial.

He alleged North Memorial was not operating its cardiac and pulmonary rehabilitation programs in accordance with Medicare by not providing any physician supervision of the programs as required.

He said the members of the staff handling Medicare claims were non-physicians and that forms submitted to the Centers for Medicare and Medicaid Services falsely identified four physicians as supervisors.

"Dunn's complaint misses the mark," Shepherd wrote for the Eighth Circuit. "Although 'neither this court nor Rule 9(b) requires [Dunn] to allege specific details of every alleged fraudulent claim forming the basis of [his] complaint...' Dunn may not simply rely on the generalized conclusion that North Memorial engaged in noncompliant conduct, and in doing so, caused thousands of instances of fraudulent billing.

"Nor may Dunn rely on the broad allegation that every claim submitted from 1996 until the present is false in order to satisfy the particularity requirement."

Dunn filed a separate False Claims Act lawsuit in 2011 that alleged there was no direct physician supervision of the cardiac and pulmonary rehab programs at either Mercy or Unity hospitals.

In March, Dunn and his attorneys filed a stipulation of dismissal of the suit after the defendants filed a motion to dismiss the case. The case was dismissed without prejudice as to the United States.

From Legal Newsline: Reach editor John O'Brien at

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