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U.S. Court In Pennsylvania Dismisses FCA Claim Involving Marketing Scheme Under FRCP 9(b) Particularity Requirement

 
 

HLD, v. 33, n. 9 (September 2005)

U.S. Court In Pennsylvania Dismisses FCA Claim Involving Marketing Scheme Under FRCP 9(b) Particularity Requirement

 

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 requirement.

 

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 laws.    

 

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

 

 

 

 

 

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