Last month, the Eleventh Circuit (the “Court”) issued a decision in a False Claims Act (“FCA”) case against a medical supplier that offers welcome clarity for companies facing whistleblower allegations. In Vargas ex rel. Alvarez v. Lincare, Inc., 2025 U.S. App. LEXIS 9084 (11th Cir.), the Court emphasized high pleading requirements FCA plaintiffs must satisfy to survive a motion to dismiss. Specifically, the court held that it is not enough to allege a general scheme; the FCA plaintiff must also plead, with detail, how the scheme caused the actual submission of false claims to the government. The decision is especially significant in the healthcare context with respect to Anti-Kickback Statute (“AKS”) based FCA cases. The court made clear that the plaintiff must do more than include conclusory allegations that one purpose of the payment was to induce referrals—it must include details as to the defendant’s intent.
In Vargas ex rel. Alvarez v. Lincare, Inc., the relators, former employees of medical supplier Lincare, Inc. and its subsidiary Optigen, Inc., alleged that defendants violated the FCA by: (1) improperly billing CPAP accessories under codes for ventilator accessories, or “upcoding”; (2) improperly waiving co-payments through inclusion of a waiver form with every CPAP set-up shipment; (3) automatically shipping CPAP replacement supplies without the required patient or provider request; and (4) making payments to set-up technicians called “CFTs” who were also...
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