Judge Robert B. Kugler of the District of New Jersey on Monday granted the defendants’ motion to dismiss in an individual’s case against her former employer, Alliance Healthcare Management, that alleged that Alliance terminated her position in retaliation after she refused to participate in what she believed was fraudulent activity.
On Aug. 6, 2020, Alliance Healthcare Management LLC and affiliates moved to dismiss Christine Petre’s case, brought in federal court July 16, 2020, that argued she was wrongfully discharged by Atlas Healthcare, a subsidiary of Alliance and owner of several nursing homes throughout the state, for not engaging in the defendants’ alleged scheme. Petre was employed as a clinical liaison, primarily being responsible for facilitating placement and care of patients in facilities owned by Atlas.
Petre alleged that beginning in March 2020, the defendants began engaging in a fraudulent scheme that encouraged potential patients with private health insurance to disenroll from their private plans in order to enroll them in Medicare. Having patients covered under Medicare meant the nursing home would receive $200 to $400 more in reimbursement for services than it would for services rendered for patients with private plans, according to the court.
“Therefore, Defendants had a financial incentive to maximize the number of patients that were covered by Medicare and would make ‘any representation possible’ even though the representations were often ‘false or misleading,’” the court explained, citing the complaint.
The plaintiff claimed that she was instructed by her supervisor to urge prospective patients to opt out of their private insurance plans and enroll in Medicare, but did not comply because she believed it was unlawful; she said that she was urged to resign after continually refusing to engage in the alleged conduct and eventually was let go from the company. She alleged retaliation under the False Claims Act (FCA), which states that “(a)ny employee … shall be entitled to all relief necessary” if the employee is terminated or discriminated against “in furtherance of an action under this section or other efforts to stop 1 or more violations.” The court stated that it is the plaintiff’s burden to prove that their conduct would be protected under the FCA and that they were indeed retaliated against because of the conduct.
The defendants asserted that the plaintiff’s allegations absolutely did not support “plausible” FCA claims, which require that the plaintiff sufficiently show financial loss to the government through the alleged conduct. The court sided with the defendants despite not fully agreeing.
“Unlike Defendants, we are not certain that Plaintiff would be precluded from showing there is a distinct possibility that a viable FCA action could be filed,” the court said.
However — the court said the question of viability is irrelevant here because of a more certain deficiency in the plaintiff’s argument.
“(W)e need not and do not decide this issue because we agree with Defendants’ second point—Plaintiff has failed to adequately allege that she engaged in ‘protected conduct’ and that Defendants were on notice of her ‘protected conduct,’” the court explained, noting that protected activity does not include “an employee’s investigation of nothing more than his employer’s non-compliance with federal or state regulations,” citing Hutchins v. Wilentz, Goldman & Spitzer.
The plaintiff is represented by Karpf, Karpf & Cerutti P.C. The defendants are represented by McDermott Will & Emery.
