The United States District Court for the Northern District of Indiana recently dismissed a case involving allegations of fraudulent Medicaid claims and self-referrals.  The case, United States of America and State of Indiana ex rel. Bradley A. Stephens v. Nuclear Cardiology Associates (“NCA”), serves as a critical reminder of the stringent requirements for pleading fraud under the False Claims Act (FCA) and the Stark Law.

The crux of relator’s allegations was that defendants knowingly made false claims to Medicaid for myocardial stress tests and nuclear imaging services.  The individually named defendant doctors allegedly self-referred their patients to NCA, an entity in which they had ownership interests, thereby violating the Stark Law and the FCA.

One of the pivotal reasons for the dismissal was the failure to meet the heightened pleading standards required for fraud claims under Federal Rule of Civil Procedure 9(b), mandating that allegations of fraud must be stated with particularity, detailing the “who, what, when, where, and how” of the fraudulent activity.  In this case, the court found that the allegations were deemed too broad and conclusory and that relator’s complaint lacked specific representative examples of the alleged fraudulent schemes—the complaint did not identify any specific patients or detailed instances of improper billing.

The dismissal reinforces the precedent that general and broad allegations without representative examples are insufficient to survive a motion to dismiss.

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