Where a relator pleads a complex and far-reaching fraudulent scheme with particularity, and provides examples of specific false claims submitted to the government pursuant to that scheme, a relator may proceed to discovery on the entire fraudulent scheme.
A federal district court in Tennessee has denied the Motion to Dismiss filed by Murphy Medical Center, Inc., d/b/a Erlanger Western Carolina Hospital (Erlanger or Hospital) in a False Claims Act (FCA) lawsuit brought by Relators who claimed that the Hospital violated the FCA and the Stark Law. The claims were based on allegations that physicians who had a financial relationship with the Hospital made referrals to the Hospital, that they were compensated with salaries and bonuses well above fair market value, and that the Hospital then presented claims to Medicare based on those services. The government’s Complaint in intervention cited six specific examples of such conduct in support of a more complex and far-reaching scheme in violation of the Stark Law and this was sufficient to satisfy the Rule 9(b) particularity pleading requirements (U.S. ex rel. Sullivan v. Murphy Medical Center, Inc., No. 1:25-cv-155 (E.D. Tenn. Feb. 26, 2026)).
Stark Law summarized. The Stark Law, also known as the Physician Self-Referral Act, was designed to prevent abusive self-referrals by physicians. A doctor is prohibited from referring Medicare or Medicaid patients for inpatient or outpatient services to hospitals with which the doctor has...
Welcome to Reality Check, NewsGuard’s newsletter that tracks the false claims and conspiracy theories that shape our world — and who’s behind them. Help us by becoming a premium member or sharing o...