Health Law Daily Wrap Up, FRAUD AND ABUSE—E.D. Pa.: Marketing consultants unable to weasel out of fraud claims, (Dec 29, 2015)

By Kayla R. Bryant, J.D.

A consultant’s participation in a fraud scheme in a sales and marketing capacity subjects it to liability, even if the consultant did not actually submit false claims. Aetna, Inc.’s complaint against Bluewave Healthcare Consultants, Inc. (Bluewave) survived a motion to dismiss after the Pennsylvania district court found that Aetna’s claims were sufficiently pleaded. Aetna alleged that Bluewave consorted with Health Diagnostic Laboratory, Inc. (HDL) to provide kickbacks to physicians to induce them to use HDL’s services (Aetna, Inc. v. Health Diagnostic Laboratory, Inc., December 28, 2015, Kelly, R.).

Scheme. HDL performs diagnostic blood tests for referring physicians. HDL has paid the federal government at least $47 million to resolve federal False Claims Act (FCA) (31 U.S.C. §3729 et seq.) charges, purportedly stemming from the same type of activity giving rise to this case. Aetna alleged that Bluewave marketed HDL products and services to physicians, offering kickbacks in exchange for referrals. Bluewave then received a commission from the revenue generated from these sales.

HDL’s services were out Aetna’s network, therefore costing more to provide. Aetna claims that HDL waived out-of-pocket expenses, thereby discounting Aetna’s services while causing Aetna to pay more than it should have. Bluewave received at least $200 million in commissions from HDL through the period of the scheme.

Fraud. In its motion to dismiss, Bluewave argued that it was not liable to Aetna for fraud because it never actually submitted any false or fraudulent claims for payment. The district court noted that Pennsylvania case law has repeatedly held that a party who has “participated in” making a false statement can be liable for fraudulent misrepresentation. Aetna’s provision of a sales agreement between Bluewave and HDL shows that Bluewave was directly involved in the scheme. The court also found that Aetna pleaded facts of Bluewave’s fraudulent activity with the required specificity under the heightened pleading requirements associated with fraud.

The case is Civil Action No. 15-1868.

Attorneys: John M. Elliott (Elliott Greenleaf & Siedzikowski PC) for Aetna Inc. Joshua D. Wolson (Dilworth Paxson LLP) for Bluewave Healthcare Consultants, Inc.

Companies: Aetna Inc.; Health Diagnostic Laboratory, Inc.; Bluewave Healthcare Consultants, Inc.

Cases: CaseDecisions BillingNews FCANews FraudNews LaboratoryNews