Labor & Employment Law Daily Wrap Up, RETALIATION—N.D. Ohio: Retaliation claim to proceed in False Claims Act case alleging hospice billing fraud, (Aug 6, 2025)

By George Basharis, J.D.

A federal court rejected a motion to dismiss a registered nurse’s employment retaliation claim against an Ohio-based hospice operator, finding that the complaint plausibly alleged protected activity under the False Claims Act and adverse employment action in response.

An Ohio health care provider must face a False Claims Act retaliation claim after a federal judge denied its motion to dismiss allegations brought by a former registered nurse who said she was disciplined for raising concerns about billing practices and patient care. The nurse filed the qui tam action under the False Claims Act, naming three Village of Saint Edward locations in northeast Ohio and a hospice provider, Northeast Ohio Hospice. She alleged she was disciplined after reporting fraudulent billing and medically unnecessary treatments intended to prolong hospice eligibility. The U.S. district court in Ohio found that these allegations, taken as true, were sufficient to support a plausible retaliation claim at the pleading stage (U.S. ex rel. Ford v. Village of Saint Edward, No. 1:24-cv-00724 (N.D. Ohio July 31, 2025)).

Fraud and reprisal over hospice and billing practices. According to the complaint, the nurse began working at Village of Saint Edward in November 2023. During her employment, she allegedly identified a series of irregularities in medical and billing records. These included improper patient weighing procedures that produced artificially low weight measurements, allegedly allowing patients to remain eligible for hospice care and enabling continued Medicare reimbursements.

She also reported observing hospice patients falsely recertified for continued care, instances of double billing to Medicare and private insurers, and questionable medication practices. One patient, she claimed, had been recertified for hospice care more than two dozen times without valid medical justification. The complaint further alleged that staff routinely ordered duplicate prescription eyeglasses under suspicious circumstances and billed for procedures that were never performed.

In addition, the complaint described efforts by supervisory staff to pressure employees to steer patients to Northeast Ohio Hospice after hospice certification, regardless of patient preference or the legitimacy of the referral. The nurse asserted she was told that Village of Saint Edward received kickbacks for these referrals and that she was instructed to encourage families to select the affiliated hospice provider.

She alleged that after raising concerns internally about these practices, she was subjected to disciplinary actions, verbal reprimands, and other adverse employment consequences in retaliation for engaging in protected activity under the False Claims Act.

Dismissal of claims against Northeast Ohio Hospice. The nurse’s initial complaint included claims under the substantive provisions of the False Claims Act, the Stark Law, and the Anti-Kickback Statute, along with a retaliation claim under the Act’s whistleblower provision. After the government declined to intervene, she voluntarily dismissed all claims except the retaliation claim. In response, Northeast Ohio Hospice moved to be dropped from the case. The court granted the unopposed motion, finding no basis for the hospice provider to remain in the litigation after the nurse limited her claims to retaliation against Village of Saint Edward

Court declines to dismiss claims against village locations. Village of Saint Edward moved to dismiss, arguing that the complaint failed to allege sufficient facts to support a plausible retaliation claim. The health care provider contended that the nurse’s allegations lacked dates, times, and specific details, and failed to establish a connection between her internal complaints and the adverse employment actions taken against her.

The court rejected that argument, noting that at the motion-to-dismiss stage, the nurse was not required to present detailed evidence. The complaint’s allegations that supervisors reprimanded her and began preparing for her termination after she raised concerns about Medicare billing were sufficient to state a claim under the False Claims Act’s anti-retaliation provision, assuming the facts to be true.

The court also declined to consider Village of Saint Edward’s argument that its Green and Wadsworth locations were not proper defendants because they were legally distinct from the Fairlawn facility where the nurse worked. The court explained that the complaint described Village of Saint Edward as a single entity operating across three locations, and that the corporate records submitted by the defendants, which were attached for the first time in their reply brief, could not be considered at this stage of the proceedings.

New arguments raised in reply brief waived. In a further attempt to defeat the retaliation claim, Village of Saint Edward raised additional arguments in its reply brief, asserting for the first time that the nurse had not engaged in protected activity and had failed to provide sufficient notice of a potential qui tam action. The court declined to consider these arguments, finding they were waived because they were not included in the original motion to dismiss.

The court emphasized that challenges to the sufficiency of a complaint must be raised in the opening brief, not withheld until reply, particularly when doing so prevents the opposing party from responding. The court also reiterated that its ruling was confined to the adequacy of the pleadings and that no heightened pleading standard applies to retaliation claims.

The case is No. 1:24-cv-00724.

Judge: Calabrese, J.

Attorneys: Kathryn Gaughan Andrachik, Office of the U.S. Attorney, for the U.S. Donald M. Gallick (Donald M. Gallick, Attorney at Law) for Kelly Ford. Beth A. Sebaugh (Weston Hurd) for Village of Saint Edwards.

Companies: Village of Saint Edwards

Cases: Retaliation Whistleblowers Procedure OhioNews