4th Circuit SpotlightRecently, the United States Court of Appeals for the Fourth Circuit issued two opinions of interest to health care providers, False Claims Act (FCA) litigators, insurance carriers, and other appellate court observers. The first case, U.S. ex rel Complin v. North Carolina Baptist Hospital, shined additional light on a requirement under the FCA that a party “knowingly” presents a false claim. The second case, Affinity Living Group v. StarStone Specialty Insurance Co., provided clarity on whether certain insurance policies can help providers cover the costs of FCA litigation.

Knowledge Cannot Be Implied From Parties’ Sophistication

A whistleblower filed a qui tam action in the United States District Court for the Middle District of North Carolina against North Carolina Baptist Hospital and the Charlotte-Mecklenburg Hospital Authority, alleging that the hospitals knowingly engaged in Medicare fraud in violation of the FCA. The whistleblower alleged that they failed to properly disclose or reduce the costs they reported for health care benefits provided to their own employees, and that they provided said benefits through self-funded health benefit plans, administered by a jointly owned entity.

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