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False Claims Act — Sufficiency of the complaint

By: WISCONSIN LAW JOURNAL STAFF//December 4, 2014//

False Claims Act — Sufficiency of the complaint

By: WISCONSIN LAW JOURNAL STAFF//December 4, 2014//

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U.S. Court of Appeals For the Seventh Circuit

Civil

False Claims Act — Sufficiency of the complaint

Where a relator alleged no facts from which it could be determined who defrauded the government, the relator’s qui tam action was properly dismissed.

“The complaint alleges two occasions on which the defendant pharmacy billed Medicare or Medicaid for drugs that patients never picked up. Grenadyor alleges that even after it became apparent that they would never pick up the pills, the pharmacy failed to ‘reverse[]’ the charges for the pills— that is, erase its claim for reimbursement of all or part of the charges. This adequately pleads that the pharmacy submitted claims to Medicare and Medicaid for reimbursement of drugs that customers failed to take home, but not that the pharmacy failed to reverse the charges and did so with the intention of defrauding the government. Thus, for example, the complaint alleges that ‘at the Bogacheks’ orders and direction Kharlamova [the manager of the Ukrainian Village Pharmacy] directed that the charges for the antihistamine and amoxicillin not be reversed. Accordingly, neither Kharlamova nor the pharmacy technicians working at her direction (Irina Milovanova, Oleksandra Polovinko, and Nadia Gnopko) ever reversed the charges for the antihistamine or amoxicillin, even though Patient H never received them.’ This allegation is insufficient because there is nothing to indicate when Kharlamova directed that the charges not be reversed, whether Grenadyor was present, and if not how he learned that the charges were never reversed. These are all things that Grenadyor, if he isn’t fabricating the incident, would know without having to conduct discovery. And if he can’t allege how he learned that the charges had not been reversed, what basis has he for alleging they were never reversed? ‘I know they were never reversed, but I don’t know how I know they were never reversed,’ is nonsense.”

Affirmed in part, and Reversed in part.

13-3383 U.S. ex rel. Grenadyor v. Ukrainian Village Pharmacy, Inc.

Appeal from the United States District Court for the Northern District of Illinois, Leinenweber, J., Posner, J.

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