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U.S. Court In Illinois Allows Plaintiff To Amend Complaint To Allege Fraud With Particularity

 
 

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

 

    

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