Earlier this summer, the Eighth Circuit was the latest circuit to weigh in on the growing split regarding what precisely a relator must plead to satisfy Rule 9(b)'s particularity requirement. In United States ex rel. Benaissa v. Trinity Health, 963 F.3d 733 (8th Cir. 2020), the Eighth Circuit held that the relator failed to plead presentment of a false claim adequately where he alleged that the defendant's payment for illegal referrals by certain named physicians rendered false every claim for services provided by those physicians.
The relator in Benaissa, a former employee of the defendant health system, alleged that the defendant paid affiliated physicians for referrals in violation of the Stark Law and Anti-Kickback Statute (AKS), who then provided unnecessary services that the defendant billed to Medicare. He claimed that those violations resulted in the presentment of false claims because services provided in violation of those statutes are ineligible for payment. The relator did not plead representative examples of false claims, but instead sought to plead presentment by alleging (1) that the defendant received a large Medicare reimbursement, and (2) if the defendant compensated physicians for illegal referrals in violation of the Stark Law and AKS, every claim submitted for services provided by those physicians would be false. Relator then rhetorically asked, "which is more likely: that [defendant] did not submit any claims for the services associated with these physicians or that [defendant] submitted at least some claims for such services?" The district court dismissed the relator's complaint for failure to plead presentment of a false claim with particularity under Rule 9(b).
The Eighth Circuit affirmed, holding that the relator's generalized allegations that the defendant's compensation scheme "most likely resulted in the presentment of claims for payment or approval" was insufficient under Rule 9(b). The court reasoned that, although a relator need not plead representative false claims, he must provide "reliable indicia that lead to a strong inference that claims were actually submitted." The court stressed that this requires "details about [the defendant's] billing practices" which reflect a "reliable 'basis for knowledge'" regarding the submission of false claims. The court rejected the relator's argument that it was creating a test under which only members of a billing or accounting department could serve as a relator. The court noted that it may well be that an insider has "an easier time obtaining information about billing practices and meeting the pleading requirements under the FCA," but that is the natural consequence of the statutory scheme. Nothing precludes an outsider who possesses such information from bringing suit.
As we have written, federal circuit courts have adopted different views as to a relator's pleading burden under Rule 9(b). Although the Eighth Circuit does not require representative false claims, it yet again has strictly enforced the relaxed "reliable indicia" standard. We likely will continue to see conflicting decisions on this issue unless and until the Supreme Court finally resolves the split.
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