New York, NY—Global law firm Hogan Lovells obtained a rare ruling on interlocutory appeal from the United States Court of Appeals for the Ninth Circuit, which held that the district court should have dismissed a False Claims Act complaint at the outset for failure to plausibly plead the claims.
Hogan Lovells represented Nuance Communications (formerly known as J.A. Thomas & Associates, or JATA), a company that provides clinical documentation support and products for hospitals to help them ensure patient medical records capture the full severity of patients’ conditions.
Integra Med Analytics, a data analytics company, brought a qui tam action under the False Claims Act, alleging that Providence Health & Services, certain affiliated hospitals, and JATA submitted false claims to Medicare.
Integra based its complaint primarily on a statistical analysis of Medicare claims data that it said demonstrated Providence hospitals had submitted proportionally more claims with three higher paying diagnosis codes than other hospitals.
The district court ruled that the plaintiff’s pleadings were sufficient to move forward to discovery.
The Hogan Lovells team petitioned the Ninth Circuit to accept the case on interlocutory appeal, and Hogan Lovells partner Jessica Ellsworth argued the case on appeal. The Defendants argued that the statistical analysis and other complaint allegations did not plausibly plead fraud, given the “obvious, alternative explanation.”
The Ninth Circuit agreed. It held that Integra failed to state a plausible claim for relief. In its decision, the Ninth Circuit noted that the plaintiffs’ allegations “do not eliminate an obvious alternative explanation.”
The Ninth Circuit reversed the district court’s order denying the Defendant’s motion to discuss, and remanded the case. It then denied Integra’s motion for rehearing en banc.