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LOS ANGELES-Federal judges in two states have dismissed more than 30 cases in the first rulings to emerge among more than 50 lawsuits accusing hospitals of Medicare fraud. Wilkes & McHugh, the Tampa, Fla.-based plaintiffs’ firm best known for elder abuse claims against nursing homes, filed suits on behalf of plaintiffs who brought private rights of action seeking reimbursements from several hospitals that billed Medicare for alleged medical mistakes caused by their doctors. They are filing claims as whistleblowers of government fraud, or qui tam claims, which allow them to receive a share of the anticipated recoveries. They are also suing under a law that says Medicare is not required to pay a patient’s medical costs if other providers, like insurance companies, could provide payment. The suits, filed in federal and state courts in Arkansas, California, Florida, Pennsylvania and Tennessee, come as a government agency, the Centers for Medicare & Medicaid Services (CMS), steps up efforts to lower payments for doctor mistakes. They also follow recent dismissals of two similar cases filed under the same Medicare law by smokers against the nation’s top tobacco companies. “What these plaintiffs wanted to do is come out and allege tort liability and contract liability before any determination is made of medical negligence or insurance obligations to pay for that care,” said Gregory Luce, a partner and co-head of the health care practice in the Washington office of Jones Day. “That’s nothing like what Congress or the statute even contemplated.” No standing In California, Wilkes & McHugh filed more than 30 suits in federal and state courts on behalf of Erin Brockovich, the legal researcher who was the subject of the 2000 film Erin Brockovich. Most of those cases have been removed to the Central District of California in Santa Ana, Calif. Two other cases are pending in San Diego. Wilkes & McHugh also has suits pending in several federal courts on behalf of a plaintiff named Douglas Stalley: two in Arkansas, seven in Tennessee, one in Florida and two in Pennsylvania. James Wilkes, name partner of the firm, said another 10 suits are pending in state courts. “Hospitals are Medicare providers,” Wilkes said. “We’ve alleged that these providers knowingly billed Medicare and received money when they in fact created the injuries that necessitated the treatment.” The suits were brought under the Medicare Secondary Payer Act, which allows individuals to file private rights of action to recover double damages for alleged improper Medicare reimbursements. In May, the CMS announced it was working with Congress to find ways to trim Medicare payments for “never events,” or serious errors such as mismatched blood transfusions or surgery on the wrong body part. On Nov. 7, U.S. District Judge David Carter in California dismissed 24 lawsuits filed against various health care institutions. Brockovich v. Manor Care Inc., No. 8:06-cv-00714 (C.D. Calif.). The judge had dismissed five other cases on Oct. 24. The judge said that Brockovich lacked standing to pursue a claim under the Medicare Secondary Payer Act because she wasn’t injured. He also rejected her argument that the Medicare Secondary Payer Act is a whistleblower, or qui tam, claim. “This was attempt to litigate on behalf of the U.S. with no permission to do so under the law,” said Barry Landsberg, a partner and co-chairman of the litigation division of Los Angeles-based Manatt, Phelps & Phillips, who argued for the defense. Wilkes said he plans to appeal to the 9th U.S. Circuit Court of Appeals. “This is a qui tam statute,” he said. “The injury is that the government paid when the insurance plan or self-insured was supposed to have paid. Who’s injured? The government. That’s why you bring it in the name of the government.” The tobacco parallel The California ruling followed a similar dismissal by U.S. District Judge George Howard in an Arkansas case against Catholic Healthcare Initiatives and others. Stalley v. Catholic Health Initiatives, No. 4:06-cv-00629 (E.D. Ark.). In that case, the judge rejected the same arguments made by the plaintiff. The judge also cited recent decisions in similar cases against tobacco companies. In August, a federal judge in Boston dismissed a case against five tobacco companies seeking Medicare reimbursement for smoking-related illnesses. Earlier that month, the 11th U.S. Circuit Court of Appeals found that the plaintiffs in another case failed to prove the tobacco companies were liable for their illnesses. Glover v. Philip Morris USA, 459 F.3d 1304.

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