HLD, v. 33, n. 9 (September 2005)
U.S. Court In Pennsylvania
Dismisses FCA Claim Involving Marketing Scheme Under FRCP 9(b) Particularity
A federal court in Pennsylvania
dismissed a qui tam action brought by
an orthopedic surgeon against a manufacturer, seller, and distributor of
orthopedic implants under the False Claims Act (FCA), finding the relator's
complaint did not meet the Federal Rule of Civil Procedure 9(b) particularity
Richard G. Schmidt, M.D., filed an action against Zimmer,
Inc. alleging that Zimmer violated the FCA by causing approximately 1600
unnamed defendant hospitals to submit false claims for Medicare benefits.
Schmidt contracted with the hospitals via a purchasing cooperative (Premier
Purchasing Partners, L.P.) whereby the company allegedly contracted to provide
certain remuneration, disguised as incentives and/or bonuses, to each hospital
as part of a marketing scheme designed to induce the order and/or purchase of
Zimmer orthopedic hardware implants.
This violated the FCA, Schmidt alleged, when the
participating hospitals then submitted Form HCFA-2552 cost reports to Medicare
certifying that services provided were in compliance with healthcare laws and
regulations, when in fact, they were in violation of Anti-Kickback and Stark
The court held that the complaint failed to plead with particularity
as required by 9(b), finding that Schmidt failed to include any circumstances
surrounding the claims. Specifically, the court noted that Schmidt failed to
identify which out of the 1600 hospitals submitted claims as well as any
specific instances where a false claim was submitted.
United States ex
rel. Schmidt v. Zimmer, Inc., No. Civ. A.00-1044, 2005 WL 1806502 (E.D.
Pa July 29, 2005). To read the case, go to http://www.paed.uscourts.gov/documents/opinions/05D0906P.pdf