In a decision issued on September 30, Judge Andrew Carter of the U.S. District Court for the Southern District of New York denied Anthem Inc.’s motion to dismiss a government lawsuit filed in March 2020 claiming Anthem submitted inaccurate diagnosis data in conjunction with its Medicare Part C plans that resulted in alleged overpayments in violation of the False Claims Act (FCA).
Anthem had urged the court to dismiss the government’s complaint for failure to meet the FCA’s materiality requirement. But the court, evaluating the motion under the framework set out in the Supreme Court’s 2016 decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, found the overpayments to be “substantial and not merely administrative” where they totaled over $100 million. United States v. Anthem Inc., 2022 WL 4815978, at *4 (S.D.N.Y. Sept. 30, 2022). We have previously covered the FCA’s materiality requirement as part of our False Claims Act Fundamentals series.
Judge Carter’s interpretation of Escobar offers compelling considerations for other pending Medicare Advantage cases. Anthem argued that to satisfy the materiality requirement, the government was required to show that CMS would have refused payment had it known of the alleged misrepresentations. But Judge Carter disagreed, reasoning that this interpretation described “materiality’s ceiling, not its floor” and that although the gap between materiality’s ceiling and floor may be small, “there is a gap.” Instead, Judge...
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