Judge Dismisses Whistleblower Lawsuit Filed by Collection Agency Employees

Sep 21, 2020

A District Court judge in Illinois has dismissed a whistleblower lawsuit filed against a healthcare provider, medical debt collection agency, and a medical billing company, alleging they engaged in a “ghost payroll” scheme that resulted in a larger Medicare payment from the federal government than the provider was entitled to.

A copy of the ruling in the case of USA, Kenya Sibley, Jasmeka Collins, and Jessica Lopez v. University of Chicago Medical Center (UCMC), Medical Business Office Corp., and Trustmark Recovery Services Inc. can be accessed by clicking here.

The whistleblowers also alleged that the defendants engaged in a “bad debt” scheme where Medical Business Office would write off Medicare bad debts for amounts a Medicare beneficiary owed without conducting a reasonable collection effort. The debt would then be sent to Trustmark for further collection efforts.

The whistleblowers, known as relators for the purpose of this lawsuit, alleged that management at all of the defendants knew of the schemes.

In alleging the defendants violated the False Claims Act, though, the relators have to satisfy heightened pleading requirements that detail particular circumstances detailing fraud or mistakes. That is where the relators’ argument started to fail, ruled Judge Henry Leinenweber of the U.S. District Court for the Northern District of Illinois. The relators do identify regulations that may have been violated, but do not “allege that any Defendant certified compliance with any regulation.” As well, the determination of whether a collection effort was “reasonable” or not is subject to interpretation, Judge Leinenweber noted, adding that the relators also failed to establish that UCMC knew of the alleged ghost payroll scheme.

As for the alleged bad debt scheme, the allegations do not satisfy the heightened pleading requirements “to show that MBO and Trustmark or its clients submitted improper claims for bad debt reimbursements to the Government,” Judge Leinenweber ruled.

By AccountsRecovery.net