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September 12, 2019

Ninth Circuit Panel Revives Decade-Old Whistleblower Suit

On September 6, 2019, a panel of the Court of Appeals for the Ninth Circuit reversed the  district court’s dismissal of a qui tam action in United States ex rel. Godecke v. Kinetic Concepts, Inc., in which an employee of a medical device company alleged FCA violations. The relator alleged that she was terminated in 2007 after sharing her concerns about billing practices with senior management. Specifically, she alleged that the provider delivered medical devices before obtaining a physician’s order, used improper billing code modifiers, and manipulated tracking systems to hide that the medical devices were delivered improperly. The panel held that the employee sufficiently alleged that the company acted with the requisite intent of the FCA: (1) actual knowledge of the information; (2) deliberate ignorance of the truth or falsity of the information; or (3) reckless disregard of the truth or falsity of the information, and that the false presentation of these facts was material in the government’s payment decisions.