Health Law Daily Wrap Up, QUI TAM (WHISTLEBLOWER SUITS)—E.D. La.: Still-active 2018 whistleblower suit limited to core claims against wound care firm, (Aug 27, 2025)

By George Basharis, J.D.

The ruling narrows a seven-year-old whistleblower case, preserving only claims tied to the wound care company’s alleged treatment protocols while rejecting broader theories against affiliated hospitals.

A federal judge in Louisiana has dismissed all claims against several long-term acute care hospitals but allowed core allegations to proceed against a wound care management company. The court found that a nurse’s detailed account of company policies mandating unnecessary procedures plausibly supports the False Claims Act (FCA) and state law claims. By contrast, the court concluded that generalized assertions of hospital involvement lacked the particularity required to survive dismissal (Proctor v. Wound Care Management, LLC, No. 18-4234 (E.D. La. Aug. 25, 2025)).

The dispute stems from wound care treatment performed by MedCentris at long-term acute care hospitals across Louisiana. A family nurse practitioner employed by the company between 2016 and 2017 brought a qui tam action alleging that false claims were submitted to Medicare and Medicaid, services were up-coded, and medically unnecessary treatments were performed.

The nurse described the alleged scheme as the “MedCentris Way,” contending that the company’s policies mandated unnecessary debridements, skin substitute procedures, and other lucrative services without individualized clinical assessment. Her suit, filed in 2018, asserted twelve counts under the FCA, federal anti-kickback and referral statues, and the Louisiana Medical Assistance Programs Integrity Law. The federal government declined intervention in late 2024, leaving the nurse to pursue the claims independently.

The hospitals and MedCentris each moved to dismiss, arguing that the complaint lacked the necessary factual detail and, in one instance, that qui tam actions are unconstitutional.

Constitutional challenge. MedCentris and the hospitals argued that private FCA suits violate Article II of the Constitution, specifically the Appointments, Take Care, and Vesting Clauses. They pointed to a recent Middle District of Florida ruling striking down the qui tam framework. The ruling is currently on appeal in the Eleventh Circuit.

The court rejected the argument, noting that the Fifth Circuit had already upheld the constitutionality of FCA relator actions. Although MedCentris and the hospitals pointed to statements by a Fifth Circuit judge and several Supreme Court justices questioning the framework in concurring or dissenting opinions, the district court held it was bound by circuit precedent and declined to revisit the issue.

Claims against the hospitals. The nurse alleged that the hospitals engaged in a fraudulent scheme by marking patient charts with preplanned debridement codes before any clinical evaluation and pressuring providers to perform high-reimbursing procedures. However, the court found the allegations too generalized. Several hospitals were named in the complaint but not tied to any specific conduct, leading to their dismissal. Even where some facilities were mentioned, the pleadings did not sufficiently connect their actions to the submission of false claims.

At one hospital, for instance, the nurse recounted being pressed by administrators to perform deeper debridements and admonished for failing to maximize reimbursement. At another, she was told of the financial consequences of coding practices for short-stay patients. However, the court held that such allegations of pressure and belief that claims were inflated fell short of demonstrating reliable indicia that false claims were actually submitted. Because the claims lacked the particularity required under Rule 9(b), all counts against the hospital operators were dismissed with prejudice.

Claims against the wound care company. The allegations against MedCentris presented a closer call. The nurse described training and policies that directed providers to perform surgical debridements weekly without regard to medical necessity, as well as similar mandates for skin substitute treatments. She provided examples of patients who received unnecessary and aggressive procedures that generated higher reimbursements.

At the pleading stage, the court found these allegations sufficient to establish both the existence of a scheme to submit false claims and the requisite scienter. The nurse’s inability to cite specific billing numbers or amounts was not fatal, as the Fifth Circuit permits FCA claims based on detailed descriptions of the fraudulent process and reliable indicia of claim submission.

Accordingly, the court allowed the FCA claims for presentment and false statements to proceed, along with parallel claims under Louisiana’s Medicaid fraud statute. The Louisiana provisions mirror the FCA in requiring particularized pleading, and the nurse’s allegations were sufficient to support counts for presenting false claims, making false statements, and billing for medically unnecessary services.

Narrowing of other claims. Other counts were dismissed. The nurse’s reverse false claim theory failed because she did not identify any specific false statement used to avoid repayment obligations. Conspiracy, Anti-Kickback Statute, and Stark Law claims were rejected because they relied on the involvement of the hospitals, which had already been dismissed from the case. State law counts paralleling the federal claims also were dismissed.

The Case is No. 18-4234.

Judge: Barbier, C.

Attorneys: Laurence D. LeSueur (Barrasso Usdin Kupperman Freeman & Sarver, L.L.C.) for Brenda Proctor. Brett S. Venn (Jones Walker LLP) for Wound Care Management, LLC.

Companies: Wound Care Management, LLC

Cases: CaseDecisions AntikickbackNews BillingNews FCANews QuiTamNews StarkNews LouisianaNews