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HealthFirst Successfully Dismisses Lawsuit Concerning Allegations

HealthFirst Inc. ("HealthFirst"), a nonprofit healthcare insurance provider based in New York, is the subject of a qui tam lawsuit for allegedly violating the False Claims Act ("FCA"). A whistleblower is claiming that HealthFirst gave kickbacks and other incentives to doctors to encourage them to refer patients to HealthFirst. It is alleged that doctors were given access to exclusive investment opportunities in HealthFirst facilities, supplied with free medical products, and paid handsomely as medical directors for minimal work in outpatient programs. In return for these benefits, doctors told their patients to use HealthFirst's services.

This scheme financially benefitted HealthFirst by increasing its patient load and allowing it to submit reimbursement claims to the government for services provided to those patients. The federal government was defrauded as these referrals led patients to use their government healthcare programs at HealthFirst facilities. That is, doctors referred patients to HealthFirst and but for the illegal kickbacks, they would not have referred for subsequent medical procedures. HealthFirst was then able to submit reimbursement claims to the government for services provided to those patients.

In response to the lawsuit, HealthFirst was quick to point out that there were no specific instances detailed in the complaint, nor was the whistleblower able to identify any exact false claims or instances of kickbacks being used. HealthFirst filed a motion to dismiss the complaint, arguing the whistleblower's claims did not meet the level of specificity the FCA requires.

Judge Roy B. Dalton dismissed the charges, agreeing that the claims were not specific enough. He ruled that the complaint was mostly full of opinions, conclusions and allegations that had no evidential support. However, Judge Dalton did give Plaintiff time to amend the complaint, with a reminder that there is a six-year statute of limitations on the misconduct that allegedly took place.

The legal team at SFMS has significant experience litigating FCA matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

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Hale, Nathan. "Health First Beats Whistleblower's 'Shotgun-Style' FCA Suit." Law360. Portfolio Media, Inc. 22 July 2016. Web. 

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