HLD, v. 32, n. 11 (November 2004)
U.S. Court In Illinois Allows Plaintiff To Amend Complaint To
Allege Fraud With Particularity
In 2003, Xandra Jarl (plaintiff), an employee of Apria Healthcare
(defendant) at its Chicagoland Billing Center, noticed that defendant was billing
Medicare and Medicaid with assignment of benefits forms that had not been signed
by the patients. Plaintiff claimed she informed several of defendant's employees
of the problem, but at least one employee told plaintiff not to worry. A few
months later plaintiff was demoted and as a result suffered clinical depression.
Plaintiff felt work conditions were intolerable and resigned.
Plaintiff sued defendant in federal district court on claims defendant
submitted false payment claims to Medicare in violation of the False Claims
Act (FCA) and discriminated against her by demoting her for repeatedly discussing
the alleged fraudulent billings with other employees. Defendant filed a motion
to dismiss Counts I and III of the complaint for failure to state a claim upon
which relief could be granted. Plaintiff responded by admitting that Count III
should be dismissed, and requesting leave to amend Count I if it was dismissed.
The U.S. District Court for the Northern District of Illinois granted
defendant's motion to dismiss Counts I and III, and granted plaintiff's motion
to amend Count I. Under Fed. R. Civ.
P. 9(b) a plaintiff must plead a claim of fraud with particularity. The
court concluded plaintiff failed to meet the requirements of Rule 9(b), because
she merely alleged defendant's employees were manipulating defendant's computer
system. Plaintiff failed to identify individual employees or the roles they
had in the alleged fraudulent activities. Even if plaintiff cannot specifically
identify individual employees, said the court, plaintiff must identify the role
the employees had in the fraudulent activities. Plaintiff claimed that, if necessary,
she could connect her allegations of fraud to specific Medicare and Medicaid
patients, and she identified the place and time period of the alleged fraudulent
activities. Therefore, the court granted defendant's motion to dismiss and granted
plaintiff motion to amend Count I to allege more specific facts.
Jarl v. Apria Health, No. 04 C 50118, 2004 WL 2075119 (N.D.
Ill. Sept. 13, 2004). To read the case, go to http://www.ilnd.uscourts.gov/RACER2/index.html