Health Law Daily Wrap Up, FALSE CLAIMS ACT—D. Ariz.: Court denied in part motion to dismiss ENT health care center in a false claims action, (Jun 10, 2026)

By Sara Cracau, J.D.

A district court denied in part and granted in part the motion to dismiss of an ear nose and throat center in a false claims action finding that the Relator sufficiently alleged personal jurisdiction, presentation of false claims, and conspiracy by the center but did not sufficiently allege conspiracy on behalf of the executives of the center.

A district court in Arizona has granted in part and denied in part the motion to dismiss of an ear, nose, and throat (ENT ) healthcare center in a false claims action brought by a former employee of the center finding that the Relator sufficiently alleged personal jurisdiction and false claims and conspiracy to defraud the government by the center but did not sufficiently allege conspiracy as to the executives of the center. The court granted the Relator leave to amend the conspiracy claim as to the executives. Furthermore, the court found that the Relator sufficiently alleged the “who, what, when, where, and how of the misconduct charged” to meet the requirements of Rule 9(b) (Nemeh v. National Breathe Free Sinus & Allergy Centers LLC, CV-23-02009-PHX-JJT (D. Ariz. June 4, 2026)).

A Relator, who had been employed as a physician’s assistant at an ENT center filed a qui tam action under the False Claims Act (FCA) alleging a nationwide scheme by the center and its affiliates to submit false claims to Medicare, Medicaid, Tricare, and Medicare Advantage. More specifically, she alleged that the center systematically pushed balloon sinuplasties on patients without assessing the medical necessity of those procedures and then falsified records to support claims for payment. A balloon sinuplasty is a procedure which involves inserting and inflating a balloon catheter into the sinus cavity to reduce pressure and improve drainage. A provider submitting a claim to the government must certify by his signature that the services were medically necessary based on the patient’s medical history, complaints, and diagnosis.

The Relator alleged that the center implemented a training protocol that instructed physician assistants and medical assistants inexperienced in the ENT field to use scripted “talk tracks” to promote the procedure during all patient first visits regardless of the specific patient’s complaints or diagnosis. The Relator described a number of policies issued by the center to ensure that the procedure was booked and paid. She also alleged that physician assistants were instructed not to sign medical records so later non-medical “Auth Teams” could edit or add or alter symptoms. Additionally, she alleged that administrative staff affixed forged electronic signatures of physicians to finalize the medical records. The claims were then submitted to the government for payment. The Relator cited ten patient records for patients who each presented with non-sinus complaints or had not attempted less invasive treatment for sinus complaints but agreed to recommendations for balloon sinuplasty. She sued on behalf of the United States for violations of the first three subsections of 31 U.S.C. Section 3729(a)(1): (1) presentation of false claims for balloon sinuplasties and related services under subsection (A); (2) presentation of false records or statements material to false claims under subsection (B); and (3) conspiracy to violate the FCA under subsection (C).

Constitutionality of qui tam provision. The court rejected the ear nose and throat center’s contention that qui tam actions violate the appointments clause under Article III of the U.S. Constitution. Both the Relator and the government disputed the health center’s characterization of the current legal landscape of binding authority. The court found no reason to disregard binding Ninth Circuit authority and the nationwide circuit trend because of a single, outlier trial court decision that whistles past precedent.

Personal jurisdiction. The court agreed with the Relator that the nationwide contacts test was appropriate to determine the ear nose and throat center’s contacts for jurisdictional purposes. The ear nose and throat center did not challenge the three conditions permitting nationwide contacts test established by legal precedent. Accordingly, the court declined to dismiss that Relator’s claims for want of personal jurisdiction.

Rules 12 (B) and 9(B). The court found that the facts showed that the ear nose and throat center and its affiliates were “conscious of a substantial and unjustifiable risk that their claims are false.” The claims were based on allegations showing that the administrative staff inserted facts into patient records and forged physicians’ signatures so that the center could be paid for balloon sinuplasty claims. Those allegations sufficiently state that the claims submitted by the center to the government were false. The Relator sufficiently pleaded that the center was, at minimum, aware of a substantial and unjustifiable risk that the claims they submitted for balloon sinuplasties were false but submitted them regardless. Furthermore, the Relator pleaded that the claims submitted to the government contained a false express or implied certification that balloon sinuplasties were medically necessary and that the government would not have paid these claims absent the false certification. In addition, the Relator sufficiently alleged that the government required a claim submitted for payment to be medically necessary and supported by sufficient documentation, set forth examples of medical documentation that was falsified to meet the required standard for payment, and alleged that the claims were submitted anyway. If these allegations are true, they show fraudulent conduct.

The court was able to infer from the alleged facts that the claims were actually submitted for payment. The Relator identified specific patients that she saw whose records were altered after she saw them and who ultimately received balloon sinuplasties. There were also sufficient and reliable indicia to suggest that a portion of the one to forty procedures eventually billed to the government were not medically necessary due to the elaborate scheme implemented by the center and its executives. The Relator sufficiently alleged the “who, what, when, where, ad how of the misconduct charged” to meet the requirements of Rule 9(b) She alleged that all the healthcare providers and administrative staff who worked for the affiliates received the same training to convince patients to undergo balloon sinuplasty and she alleged that the center and its affiliates incentivized their staff to book as many sinuplasties as possible in accordance with the center’s policy. The court found that the wheel conspiracy theory put forth by the Relator has been recognized by the Ninth Circuit, involving a single member or group separately agreeing with two or more group members. The allegation that each affiliate joined the conspiracy by adopting the same fraudulent policies, procedures, and training was sufficient to plead an FCA conspiracy claim. The Relator did not attempt to distinguish the executives of the center from the center and suggested that they were agents of the center. The court found that this allegation was not sufficient to state a conspiracy claim against the executives but gave the Relator leave to amend.

The case is No. CV-23-02009-PHX-JJT.

Judge: Tulchi, J.

Attorneys: Alina Veneziano (Oberheiden PC) for Michelle Nemeh. Lauren E. Briggerman (Squire Patton Boggs [US] LLP ) for National Breathe Free Sinus & Allergy Centers LLC.

Companies: National Breathe Free Sinus & Allergy Centers LLC

Cases: CaseDecisions CMSNews BillingNews FCANews GCNNews QuiTamNews ArizonaNews