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Kane ex rel. United States v. Healthfirst, Inc.
United States District Court for the Southern District of New York
120 F. Supp. 3d 370 (2015)
In 2005, the New York State Department of Health (DOH) contracted with Healthfirst (defendant) to provide services to Medicaid-eligible individuals for a flat monthly payment. Healthfirst operated by paying healthcare providers in exchange for performing services, with the understanding that the providers could not seek additional payment from Medicaid. However, an error in the electronic system Healthfirst used to pay its providers led to providers believing that they could submit claims to both Healthfirst and Medicaid. In 2010, government officials noticed the incorrect Medicaid billing and met with Continuum Health Partners, Inc. (defendant), which operated several hospitals within Healthfirst’s network. Following the meeting, the electronic glitch was discovered, and Continuum tasked an employee, Robert P. Kane (plaintiff) with reviewing all claims that had been affected. Five months later, Kane provided Continuum with a list of more than 900 claims that he believed Medicaid had mistakenly paid. Four days later, Kane was terminated, and Continuum did no further investigation. Kane filed a qui tam action under the False Claims Act (FCA) and a similar state statute, which the United States government and New York government (plaintiffs) intervened. Healthfirst moved to dismiss the government’s intervention on the ground that the government did not comply with Federal Rule of Civil Procedure 9(b) because the government had not properly pleaded that Healthfirst had an obligation of payment.
Rule of Law
Holding and Reasoning (Ramos, J.)
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