United States: Alleged Medical Double Billing States FCA Claim, But Not Statutory Noncompliance

In Nichols v. Baylor Research Institute, Civil Action No. 3:19-CV-1883-B, 2019 WL 6134043 (S.D. Tex. Nov. 19, 2019), the court ruled that the plaintiff failed to state a retaliation claim in violation of the FCA based upon statutory noncompliance reported internally and to the U.S. Food and Drug Administration (FDA), but did state a claim related to her complaints regarding Medicare double billing. Plaintiff Christy Nichols was employed as an abdominal transplant research registered nurse by the defendant, Baylor Research Institute (Baylor). Nichols began expressing concerns to Baylor management and reported to the FDA that Baylor was not following all federal laws as a condition of receiving federal grants. Nichols also complained multiple times to her supervisors that Baylor was involved in Medicare double-billing practices. In February 2019, Baylor put Nichols' employment on pause, and in March 2019, offered a severance package to Nichols, which she refused. Thereafter, she was fired. The plaintiff filed a civil action, alleging retaliation in violation of the FCA, requiring her to show 1) that she was engaged in protected activity with respect to the FCA, 2) that her employer knew she was engaged in protected activity and 3) that she was discharged because she was engaged in protected activity. The court ruled that the plaintiff adequately pled the first and second element as relates to Medicare double billing. But for a retaliation claim based on statutory noncompliance to be proper, the plaintiff must show that her decision to report the noncompliance itself was motivated by a concern that the noncompliance was defrauding the government and must establish that she said or did something to give the employer a reasonable basis for believing that litigation is a possibility. She failed these tests. The court found that the plaintiff's general concerns about statutory noncompliance and the FDA report were not sufficient to put her employer on notice.

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