Court Nixes Nurses’ Medicare Fraud Claim

(CN) - The 9th Circuit dismissed a lawsuit accusing Horizon Health Corp. and Summit Medical Center of committing Medicare fraud by admitting elderly dementia patients to a psychiatric program, despite knowing that the program would not help them.

The three-judge panel voted 2-1 that the case must be dismissed for lack of subject-matter jurisdiction, because the allegations had already surfaced during a 1999 wrongful-termination suit brought by the former program director of Senior Bridges.

Senior Bridges is a geropsychiatric unit managed by Horizon at a building owned by Summit. The program's admission practices were challenged in 2000 by two psychiatric nurses, who said the program admitted patients who didn't need the program in order to claim an extra $745 per patient in Medicare reimbursement. The nurses filed their action under the False Claims Act, on behalf of the government.

Former program director Vicki Weatherford initially joined the lawsuit, but later withdrew as a plaintiff. She had sued the same defendants the previous year for wrongful termination.

The federal appeals court in San Francisco noted that the Act bars lawsuits based on the public disclosure of allegations, "unless the action is brought by the Attorney General or the person bringing the action is an original source of the information."

Because the allegations had been disclosed by the 1999 suit, Judge Bright concluded, the plaintiff nurses were not the "original source" of the information, and were thus barred from filing suit.

Dissenting Judge Reinhardt agreed that Weatherford's case constituted a public disclosure, but argued that at least one of the plaintiff nurses qualified as an "original source."

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