Labor & Employment Law Daily Wrap Up, RETALIATION—E.D. Pa.: Lack of informed consent rejected as the basis of employees’ FCA retaliation claim, (Mar 17, 2025)

By Patricia K. Ruiz, J.D.

The court stressed that informed consent is a condition of participation, not a condition of payment.

The U.S. District Court for the Eastern District of Pennsylvania granted a motion to dismiss by a hospital accused of violating the antiretaliation provision of the False Claims Act (FCA). The court determined that the plaintiffs’ allegations that the hospital failed to obtain informed consent from its patients did not meet the falsity and materiality requirements of an FCA claim, as informed consent is not a condition of payment (Hall v. Abington Memorial Hospital, No. 22-2429 (E.D. Pa. Mar. 10, 2025)).

Lawsuit. In a lawsuit against Abington Memorial Hospital, d/b/a Abington Hospital-Jefferson Health (Abington), two former employees who worked as sleep technicians alleged Abington fired them in retaliation for their efforts to dissuade Abington’s Sleep Disorders Center from using certain recalled sleep machines, which had not been repaired or replaced, without obtaining patients’ informed consent to do so. The former employees alleged that the firings violated the antiretaliation provisions of the FCA. Abington moved to dismiss for failure to state a claim.

Antiretaliation provision. The antiretaliation provision of the FCA provides relief to any employee discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms of conditions of employment because of lawful acts done by the employee. To state a retaliation claim under the FCA whistleblower provision, the plaintiffs must establish that: (1) they engaged in protected conduct; and (2) they were discriminated against because of their protected conduct. As a threshold matter, the court explained, individuals are engaged in protected conduct when the activity for which they suffered retaliation involves a violation of the FCA. The FCA extends only to claims that are false and material to the government’s payment decision in the relevant statutory senses, the court stated. The court questioned whether Abington’s failure to obtain the informed consent of patients regarding the use of recalled sleep machines is a proper claim within the meaning of the FCA. Under the facts alleged, the court held that the former employees failed to allege a proper FCA claim for two independent reasons.

Falsity. First, the former employees alleged Abington failed to obtain informed consent from its patients regarding the use of recalled sleep machines; by failing to do so, Abington’s claims for payment submitted to Medicare were necessarily predicated on a false certification that the services provided by the claimant were necessary, the former employees argued. It must follow that no service can be necessary when patients do not provide informed consent. However, these allegations do not articulate the type of falsity with which the FCA is primarily concerned, the court found, and the former employees have cited no caselaw to support the proposition that health care providers who submit claims for government payment violate the FCA when they fail to obtain informed consent.

Materiality. Second, the court found the former employees failed to adequately plead materiality, as there is no statutory basis and no caselaw to support finding that the failure to obtain patients’ informed consent would have been material to the government’s payment decisions. This is because the statutory classification for informed consent under Medicare is a condition of participation, not a condition of payment, and because compliance with the informed consent provisions is not the “very essence of the bargain” between Abington and Medicare—the bargain is payment from Medicare in exchange for the medical services Abington provides its patients. Further, the former employees alleged no facts and cited no legal support to permit the court to conclude noncompliance with the informed consent provisions would cause the government to reject payment. Finally, the court found no allegations and no caselaw to suggest the government has ever refused to pay claims based solely on noncompliance with Medicare’s informed consent provisions. Thus, the court granted Abington’s motion to dismiss with prejudice.

The case is Civil No. 22-2429.

Judge: Scott, K.

Attorneys: Scott M. Pollins (Pollins Law Firm) for Matthew W. Hall and Michael F. Carey. Sidney R. Steinberg (Pierson Ferdinand LLP) for Abington Memorial Hospital d/b/a Abington Hospital-Jefferson Health.

Companies: Abington Memorial Hospital d/b/a Abington Hospital-Jefferson Health

Cases: Retaliation Whistleblowers Discharge PennsylvaniaNews