Recently, Simon et al, v. Healthsouth of Sarasota Limited Partnership, et al, the Eleventh Circuit held that for a plaintiff to qualify as engaging in “protected activity,” the plaintiff must demonstrate that they had both a subjectively reasonable belief of fraud and an objectively reasonable belief of fraud.
Background
The plaintiff in this action was a physiatrist who operated an outpatient medical practice. In addition to her practice, she was also an attending physician with admitting privileges in the defendant’s inpatient rehabilitation facility. The plaintiff alleged that during her time working with the defendant she and other providers were encouraged to use a certain diagnostic code for their patients. She speculated that this was to increase the defendant’s ability to meet certain thresholds required by CMS to receive funding. The plaintiff became outspoken in her belief that this diagnostic code was nothing more than “a fraudulent diagnosis.” While she never complained in writing, she allegedly made numerous verbal complaints and “publicly objected” during a group presentation. In response, the defendant investigated these concerns and subsequently procured an expert report indicating that this diagnostic code is both clinically accurate and appropriate for patients. Eventually, in February 2012, the plaintiff’s agreement to serve as medical director was terminated. She subsequently let her privileges expire.
Retaliation Under the FCA
The plaintiff brought a retaliation claim against the defendant under the FCA alleging that she was retaliated against for engaging in protected activity. Under the FCA, conduct is considered “protected activity” if it was in furtherance of FCA litigation, or in efforts to stop violations of the FCA. 31 U.S.C. § 3730(h)(1). Because the plaintiff’s actions fall into this second category, she must prove that her belief of fraud is both subjectively and objectively reasonable.
In this case, both parties agreed that the plaintiff possessed a subjectively reasonable belief but disagreed as to whether her belief was objectively reasonable. To prove this, the Eleventh Circuit explicitly stated that the plaintiff must have presented facts showing that a “reasonable person” may have believed that the defendant was submitting false claims to the government, but this evidence must be more than a difference in opinion among physicians.
The Eleventh Circuit agreed with the trial court that the plaintiff had not produced evidence to show that her belief was objectively reasonable. On the contrary, evidence in the case showed that the plaintiff herself used this code and admitted to diagnosing patients with the disease. Further, she acknowledged that it is possible for different medical providers to have different medical opinions in diagnosing patients with this disease. Because the plaintiff’s belief of fraud was not objectively reasonable, her actions were not considered protected activity. Thus, her claim of retaliation under the FCA failed.
Practical Takeaways
Whistleblowers often sincerely believe that medical providers are engaging in fraudulent activities. However, this subjective belief of fraud is not enough to qualify for protection under the FCA. A plaintiff’s belief must also be objectively reasonable. Medical providers should work with their attorneys to properly investigate all concerns of fraud that are brought to their attention and ensure compliance with federal and state law. Additionally, employers may consider engaging in efforts to educate their employees on the company’s billing practices ensuring that everyone is informed and aware of compliant billing procedures.
For more information on retaliation claims, please contact:
- Jonathon Rabin at (248) 457-7835 or jrabin@hallrender.com;
- Jessica Biondo at (248) 457-7851 or jbiondo@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer an individual’s questions that may constitute legal advice.
