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January 21, 2022

Lacking Particularity, Whistleblower’s Qui Tam Case Dismissed with Prejudice in Pennsylvania

On January 11, the U.S. District Court for the Eastern District of Pennsylvania dismissed with prejudice an action brought by a licensed nurse under the False Claims Act against an operator of treatment facilities for disabled individuals. The whistleblower alleged the FCA claim under two theories: (1) factually false worthless services and (2) implied certification. A worthless services claim requires a demanding standard that, as stated in Mikes v. Straus, “the performance of service [must be] so deficient that for all practical purposes it is the equivalent of no performance at all.” 274 F.3d 687, 703 (2d Cir. 2001), abrogated on other grounds, 136 S.Ct. 1989 (2016). An implied certification claim also imposes a demanding requirement that the alleged noncompliance must be material.  As described in Universal Health Services, Inc. v. United States ex. rel. Escobar, meaning that the government “would not have paid these claims, had it known of these violations.” Universal Health Servs., Inc. v. United States ex. rel. Escobar, 579 U.S. 176, 196 (2016). When examined under the demanding standards of both theories, the whistleblower’s allegations fell short of providing detailed and particular facts. For instance, the whistleblower alleged that the facility operated during a staff shortage, resulting in nonexistent services. However, this conclusion was not substantiated with details about the gravity of the staff shortage, the lack of patient care, and any resulting harm to the patients. The court dismissed the case following the whistleblower’s second attempt in court, after the nurse was allowed to amend the initial complaint.