The Eleventh Circuit agreed with a Florida district court’s ruling that an employee needs “at least an objectively reasonable belief” that they engaged in protected conduct to recover for retaliation under the False Claims Act (FCA), and the FCA does not cover general fraud allegations. As such, the Eleventh Circuit affirmed a summary judgment against Florida doctor Emese Simon.
In 2012, Dr. Simon initiated a qui tam action against HealthSouth of Sarasota LP (HealthSouth) for alleged various acts of fraud and fraudulently diagnosing patients with disuse myopathy. Included in Dr. Simon’s FCA claims, she alleged HealthSouth retaliated against her under 31 U.S.C. § 3730(h). The government settled with HealthSouth in 2019 for $48 million and dismissed, with prejudice, all of Dr. Simon’s FCA claims except for retaliation.
According to Dr. Simon’s Third Amended Complaint, HealthSouth harassed and demoted her for engaging in protected conduct under the FCA. Dr. Simon specifically alleged she was retaliated against for filing an FCA claim and objecting to HealthSouth’s practice of falsifying diagnoses to ensure patients would be admitted and to meet HealthSouth’s 60% rule for Inpatient Rehabilitation Facility claims. After discovery, both parties moved for summary judgment. HealthSouth argued that Dr. Simon could not establish a prima facie case of retaliation under the FCA because she had not shown an objectively reasonable belief that they submitted false claims based on diagnosing patients with disuse myopathy. Dr. Simon testified that she believed the disuse myopathy diagnosis was generally illegitimate, but she offered no evidence that doctors who used the foregoing did so to fraudulently receive federal funds. In fact, Dr. Simon admitted to personally using the disuse myopathy diagnosis.
The Eleventh Circuit’s three-judge panel opined that Dr. Simon did not engage in statutorily protected activity under the FCA. The Court noted that the FCA anti-retaliation provision protects employees or contractors from being discriminated against for (1) “lawful acts done . . . in furtherance of an action under [the FCA]” and (2) “other efforts to stop 1 or more violations of this subchapter.” 31 U.S.C. § 3730(h)(1). Dr. Simon alleged that she engaged in “other efforts” to stop false claims from being submitted and the Court applied the objectively reasonable belief standard. The Eleventh Circuit noted that Dr. Simon’s allegation that HealthSouth fabricated diagnoses of disuse myopathy was a subjective belief rather than objective. Thus, she could not meet the burden of showing she had an objectively reasonable belief that HealthSouth submitted false claims.
The Eleventh Circuit highlighted language from its recent ruling in Hickman. According to Hickman, “[employees are] at a minimum, required to show that the activity they were fired over had something to do with the False Claims Act—or at least that a reasonable person might have thought so. And the False Claims Act requires a false claim; general allegations of fraud are not enough. […] An organization might commit, and its employees might believe it has committed, any number of legal or ethical violations—but the Act’s retaliation provision only protects employees where the suspected misdeeds are a violation of the False Claims Act, not just of general principles of ethics and fair dealing. It is not enough for an employee to suspect fraud; it is not even enough to suspect misuse of federal funds.” Hickman, 985 F.3d at 1289. The Court also specifically noted that it did not consider HealthSouth’s settlement with the government as evidence of FCA violations as Dr. Simon argued. Consequently, the summary judgment against Dr. Simon was affirmed.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to False Claims Act litigation. If you need assistance with such a matter, please contact us today.