Court Cuts Back FCA Coverage For Medicaid Fraud

Following the lead of the D.C. Circuit in U.S. ex rel. Totten v. Bombardier Corp. (Aug. 27, 2004) [see C&M Bullet Point 9/16/2004), in U.S. ex rel. Atkins v. McInteer (Oct. 27, 2004), the Northern District of Alabama dismissed a qui tam complaint for lack of subject matter jurisdiction because, among other reasons, the complaint did not allege that the defendant health care providers “presented” claims to the federal Government for payment when making claims (or conspiring to make claims) to the Alabama Medicaid Agency, even though that agency receives 70% of its funding from the federal Government. Unwilling to wait for the then-pending (now-denied) motion for en banc rehearing of Totten, and staking out a position with far-reaching implications for contractors doing business with federal grantees, particularly Medicaid providers, the District Court broadly held: “If the Totten court is correct, fraud perpetrated upon a non-federal agency cannot form the basis for an FCA claim just because the non-federal agency thereafter presents a claim for payment to a federal official.”