IN THE UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT 

No. 15-20629 

United States of America, State of California, State of Delaware, District of 

Columbia, State of Florida, State of Georgia, State of Hawaii, State of Illinois, 

State of Indiana, State of Louisiana, Commonwealth of Massachusetts, State 

of Michigan, State of Montana, State of Nevada, State of New Hampshire, 

State of New Jersey, State of New Mexico, State of New York, State of 

Oklahoma, State of Rhode Island, State of Tennessee, State of Texas, 

Commonwealth of Virginia, ex rel, SUSAN RUSCHER, qui tam relator, 

 Plaintiff - Appellant 

v. 

OMNICARE, INCORPORATED; ACCU-MED SERVICES, L.L.C.; ACCUMED SERVICES OF WASHINGTON, L.L.C.; ACCU-MED, 

INCORPORATED; OMNICARE PHARMACY OF TEXAS 2, L.P.; 

OMNICARE PHARMACY OF FLORIDA, L.P.; ARLINGTON ACQUISITION 

I, INCORPORATED; ASCO HEALTHCARE, L.L.C.; BADGER 

ACQUISITION OF TAMPA, L.L.C., doing business as Bay Pharmacy; DR 

PHARMACARE, doing business as Omnicare of Louisville, Kentucky, doing 

business as Omnicare of Lexington, Kentucky; NCS HEALTHCARE OF 

MICHIGAN, INCORPORATED; NCS HEALTHCARE OF MINNESOTA, 

INCORPORATED; NCS HEALTHCARE OF MISSOURI, INCORPORATED; 

NCS HEALTHCARE OF NEW HAMPSHIRE, INCORPORATED; NCS 

HEALTHCARE OF NORTH CAROLINA, INCORPORATED, 

 Defendants - Appellees 

Appeals from the United States District Court 

for the Southern District of Texas 

USDC No. 4:08-CV-3396 

United States Court of Appeals 

Fifth Circuit 

FILED 

October 28, 2016 

Lyle W. Cayce 

Clerk 

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Before JOLLY, HAYNES, and GRAVES, Circuit Judges. 

PER CURIAM:* 

Susan Ruscher (“Relator”) appeals the district court’s grant of summary 

judgment to Omnicare, Inc., on her False Claims Act (“FCA”) claims and 

analogous state law claims (collectively, “FCA claims”) and her Reverse False 

Claims Act (“Reverse FCA”) claim, and denial of four discovery motions. For 

the reasons explained below, we AFFIRM. 

I. Background 

Omnicare is the nation’s largest provider of pharmacy services to longterm care facilities. It specializes in servicing geriatric patients living in 

nursing homes, referred to formally as skilled nursing facilities (“SNFs”), 

among other long-term care institutions. SNFs provide around-the-clock 

medical, nursing, and therapy services to residents, who usually have their 

pharmacy and drug costs reimbursed by Medicare Part A (“Part A”), Medicare 

Part D (“Part D”), or Medicaid. 

Part A benefits last for 100 days. To collect drug costs covered by Part 

A, Omnicare bills the SNFs. SNFs are compensated for Part A costs under a 

prospective system, whereby SNFs are paid a per diem amount for each Part 

A resident to cover the costs associated with caring for the resident, including 

pharmacy services. The per diem amount is based on the historical costs 

reported by all SNFs, and this amount may or may not cover all of the patient’s 

expenses. To track allowable costs and determine per diem amounts, SNFs 

are required to submit annual cost reports identifying the costs incurred for a 

given reporting period, including costs that have yet to be paid. SNFs have 

one year following the end of the cost reporting period in which liability is 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4. 

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incurred to pay providers, such as Omnicare. If providers are not paid within 

one year and the payment period is not extended under an exception, then 

SNFs must amend their cost reports through a “worksheet A-8 adjustment.” 

Once Part A benefits are exhausted, Part D and Medicaid benefits begin 

covering the drug costs incurred by covered patients. 

Omnicare grew rapidly in the early 2000s by acquiring a series of longterm care pharmacies. From 2002 to 2005, Omnicare nearly doubled in size. 

Many of the new pharmacies, however, used disparate billing systems, some of 

which failed to closely track and record payments to invoices. The SNFs 

involved in this lawsuit began actively auditing their Omnicare bills to identify 

erroneous charges, and these disputes sometimes took years to resolve. 

Relator worked in Omnicare’s collections department from July 2005 

until August 2008, collecting past-due accounts receivables from SNFs. 

According to the parties, Omnicare and SNFs routinely entered into preferred 

provider agreements, which designated Omnicare as the SNFs’ preferred 

provider of pharmacy services and set forth, among other things, pricing, 

payment terms, and billing mechanisms. Relator became suspicious of 

Omnicare’s contract negotiations with clients owing past-due accounts 

receivables and expressed her concerns about potential Medicare fraud to 

superiors. She claims that her “resistance” to Omnicare’s contract negotiations 

eventually led to her termination. 

Relator filed a qui tam action on behalf of the United States and twentytwo states against Omnicare and its affiliates,1 alleging that Omnicare violated 

the FCA and twenty-two analogous state statutes by purportedly making, and 

causing SNFs to make, false claims for Medicare and Medicaid 

 

1 Relator also included the SNFs as defendants in her original complaint but later 

dismissed them from the lawsuit. 

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reimbursements that allegedly resulted from kickbacks in violation of the AntiKickback Statute (“AKS”).2 Relator also brought a claim under the Reverse 

FCA, alleging that Omnicare violated an obligation to disclose a “reportable 

event” of Medicare fraud to the Office of the Inspector General for the 

Department of Health and Human Services (“OIG-HHS”) pursuant to a 2006 

Corporate Integrity Agreement (“CIA”).3 The district court limited the 

relevant time period for the FCA claims to those arising out of alleged 

kickbacks paid between January 1, 2005, and December 31, 2008. The United 

States and the twenty-two state governments declined to intervene. 

The district court granted summary judgment to Omnicare and 

dismissed all of Relator’s claims. Relator timely appealed. 

II. Standard of Review 

This court reviews “an order granting summary judgment de novo, 

applying the same standard as the district court.” Cooley v. Hous. Auth. of City 

of Slidell, 747 F.3d 295, 297 (5th Cir. 2014). Summary judgment is appropriate 

when “there is no genuine dispute as to any material fact and the movant is 

entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A disputed fact 

is material if it has the potential to “affect the outcome of the suit under the 

governing law.” See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

A district court’s discovery decisions are reviewed for an abuse of discretion. 

Moore v. Willis Indep. Sch. Dist., 233 F.3d 871, 876 (5th Cir. 2000). 

 

2 “The AKS provides no private right of action; therefore, a private plaintiff may not 

sue a health care provider under the AKS alone.” United States ex rel. Nunally v. W. 

Calcasieu Cameron Hosp., 519 F. App’x 890, 893 n.5 (5th Cir. 2013) (citing 42 U.S.C. § 1320a–

7b(b)(1–2)); see also Ameritox, Ltd. v. Millennium Labs., Inc., 803 F.3d 518, 522 (11th Cir. 

2015) (noting that the AKS does not provide a private right of action). 

3 Relator also alleged a “False Records or Statements” claim and a “Conspiracy” claim 

under the FCA, but does not challenge the dismissal of those claims on appeal. 

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III. Discussion 

A. Discovery Motions 

Relator claims that she was deprived of the necessary discovery to 

support her claims; she alleges that the district court abused its discretion 

when it denied relief on four separate discovery motions: (1) a motion to compel 

Omnicare to produce all documents regarding potential CIA violations; (2) a 

motion to “reopen the 30(b)(6) deposition” due to too many objections from 

Omnicare in the original deposition; (3) a motion for leave to depose Omnicare’s 

former Chief Compliance Officer, who headed an internal committee 

responsible for CIA compliance; and (4) a motion seeking in camera review of 

Omnicare’s privilege log because a transcript from a prior Omnicare case 

indicated Omnicare may have improperly asserted privilege in the present case 

(“Privilege Log Motion”). 

A district court’s discovery decisions are reviewed for abuse of discretion, 

and this court “will affirm such decisions unless they are arbitrary or clearly 

unreasonable.” Moore, 233 F.3d at 876. We have held that there was “nothing 

arbitrary or unreasonable” about denying a discovery motion for additional 

discovery when the lawsuit was pending for fourteen months before summary 

judgment, and the plaintiffs made a conclusory argument that “they should 

have been allowed to ‘fully explore the Defendants’ conduct . . . by taking their 

depositions,’ but d[id] not state what relevant evidence they expected to 

uncover with additional discovery.” Id.; see also United States ex rel. TaylorVick v. Smith, 513 F.3d 228, 233 (5th Cir. 2008) (similar). 

Relator argues that the district court’s denial of her discovery motions 

seeking evidence “central to her claims” constitutes reversible error. But she 

fails to “state what relevant evidence [she] expected to uncover with additional 

discovery.” See Moore, 233 F.3d at 876. Instead, her arguments as to the first 

three motions amount to conclusory assertions that she “should have been 

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allowed to ‘fully explore [Omnicare’s] conduct.’” See id. Relator also failed to 

show that the district court abused its discretion in rejecting her claims of 

Omnicare’s non-compliance with discovery obligations. She instead offered 

evidence demonstrating, at most, a difference of opinion with the district court. 

Relator’s case was pending for more than seven years before summary 

judgment; absent evidence showing what she expected to uncover with 

additional discovery, it was neither arbitrary nor unreasonable for the district 

court to deny Relator’s discovery motions. See id. 

As to the Privilege Log Motion, the district court declined to order in 

camera review based on conduct in another Omnicare case because there was 

not enough information about the other case to infer misconduct in the present 

case. The district court’s order also reveals that “Relator identified only seven 

individual documents that she believed may have been improperly withheld as 

privileged,” and Omnicare promptly determined that two of the seven 

documents were not privileged and gave those documents to Relator. 

Omnicare explained the basis of privilege for the remaining five documents, 

“and Relator [did] not challenged those explanations.” The district court 

refused to infer improper conduct from the two wrongly withheld emails 

because “even a careful privilege review could misclassify some documents.” 

The record does not reflect arbitrary or clearly unreasonable decision making. 

Accordingly, we hold that the district court did not abuse its discretion in 

denying these motions. We thus turn to the merits of the summary judgment 

rulings. 

B. FCA Claims 

The FCA imposes civil liability and treble damages on any person who 

“knowingly presents, or causes to be presented, a false or fraudulent claim for 

payment or approval” to the United States government. 31 U.S.C. 

§ 3729(a)(1)(A); see also United States ex rel. Steury v. Cardinal Health, Inc., 

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625 F.3d 262, 267 (5th Cir. 2010). We have required plaintiffs to prove four 

elements to prevail on an FCA claim: “(1) . . . there was a false statement or 

fraudulent course of conduct; (2) made or carried out with the requisite 

scienter; (3) that was material; and (4) that caused the government to pay out 

money or to forfeit moneys due (i.e., that involved a claim).” United States ex 

rel. Longhi v. United States, 575 F.3d 458, 467 (5th Cir. 2009) (quotation marks 

omitted). 

FCA claims can be either legally false or factually false. E.g., United 

States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010) 

(recognizing factually false claims as “the paradigmatic case” and legally false 

claims as the “certification theory”). A claim is factually false when the 

information provided to the government for reimbursement is inaccurate. See, 

e.g., United States ex rel. Conner v. Salina Reg’l Health Ctr., Inc., 543 F.3d 

1211, 1217 (10th Cir. 2008). A claim is legally false when “a claimant . . . falsely 

certifies compliance with [a] statute or regulation.” See United States ex rel. 

Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5th Cir. 

1997). 

Here, Relator primarily argues that Omnicare made legally false 

Medicare and Medicaid claims. She contends that Omnicare knowingly made, 

or caused SNFs to make, false certifications of compliance with the AKS when 

submitting claims for reimbursement. For the alleged Part A claims, however, 

Relator also contends that Omnicare caused the SNFs to submit factually false 

claims. In support of this contention, she points to evidence purportedly 

showing that the SNFs failed to accurately report drug costs on Part A cost 

reports. 

As to her claim that Omnicare falsely certified compliance with the AKS, 

Relator bears the burden at the summary judgment stage to create a genuine 

issue of material fact about whether Omnicare violated the AKS. See Malacara 

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v. Garber, 353 F.3d 393, 404 (5th Cir. 2003) (“To survive summary judgment, 

the nonmovant must submit or identify evidence in the record to show the 

existence of a genuine issue of material fact as to each element of the cause of 

action.”). To this end, Relator primarily contends that Omnicare paid unlawful 

kickbacks to SNFs by both not collecting Part A debt and offering prompt 

payment discounts (“PPDs”) “to induce the SNFs to refer patients to Omnicare 

who were covered under Part D and Medicaid.”4 

The AKS prohibits the following conduct: 

knowingly and willfully offer[ing] or pay[ing] any 

remuneration (including any kickback, bribe, or 

rebate) directly or indirectly, overtly or covertly, in 

cash or in kind to any person to induce such person . . . 

to refer an individual to a person for the furnishing . . . 

of any item or service for which payment may be made 

in whole or in part under a Federal health care 

program. 

42 U.S.C. § 1320a-7b(b)(2)(A). “This statute criminalizes the payment of any 

funds or benefits designed to encourage an individual to refer another party to 

a Medicare provider for services to be paid for by the Medicare program.” 

United States v. Miles, 360 F.3d 472, 479 (5th Cir. 2004). Relator need only 

show that one purpose of the remuneration was to induce such referrals. See

United States v. Davis, 132 F.3d 1092, 1094 (5th Cir. 1998). There is no AKS 

 

4 Relator’s other arguments are too speculative to create a fact issue as to Omnicare’s 

intent. Simmons v. Willcox, 911 F.2d 1077, 1082 (5th Cir. 1990) (“[S]peculative allegations 

. . . are insufficient to create a genuine issue of material fact precluding summary 

judgment.”). For example, Relator claims that Omnicare’s intent to induce referrals can be 

inferred from evidence of negotiations for pharmacy acquisitions occurring simultaneously 

with negotiations over provider agreements, and evidence of large accounts receivables 

occurring simultaneously with an SNF’s purchase of new facilities. But Relator provides no 

evidence linking these disparate activities and circumstances. Absent such evidence, 

Relator’s arguments amount to mere speculation and are therefore insufficient to create a 

genuine issue of material fact as to Omnicare’s intent. 

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violation, however, where the defendant merely hopes or expects referrals from 

benefits that were designed wholly for other purposes. E.g., United States v. 

McClatchey, 217 F.3d 823, 834 (10th Cir. 2000). Accordingly, the OIG-HHS 

explained in comments to the AKS’s safe harbor provision that PPDs were not 

included among the safe harbors because “by definition, [PPDs] are designed 

to induce prompt payment, and thus do not appear to violate the statute.” 

Medicare and State Health Care Programs: Fraud and Abuse; OIG AntiKickback Provisions, 56 Fed. Reg. 35952, 35979 (July 29, 1991). 

 Here, Relator’s evidence regarding Omnicare’s treatment of SNFs’ Part 

A debt does not support a finding that Omnicare offered benefits to SNFs that 

were designed to induce Medicare and Medicaid referrals. Relator’s evidence 

primarily shows Omnicare trying to collect verifiable debt and settle billing 

disputes without unnecessarily aggravating SNF clients in the midst of 

ongoing or anticipated contract negotiations. At best, the evidence supports a 

finding that Omnicare did not want unresolved settlement negotiations to 

negatively impact its contract negotiations with SNF clients and was, likewise, 

avoiding confrontational collection practices that might discourage SNFs from 

continuing to do business with Omnicare.5 None of the evidence, however, 

 

5 For example, Omnicare’s email about an SNF named Shoreline shows that resolving 

billing disputes between Omnicare and Shoreline was difficult, and failing to resolve the 

dispute “ha[d] the potential to derail [Omnicare’s] efforts to secure the [Shoreline] business.” 

Another email shows that Omnicare wanted to continue negotiating an acceptable payment 

plan for a delinquent Shoreline facility rather than “immediately” cutting off services to that 

facility because of its relationship to the larger Shoreline business and the ongoing 

negotiations for a new provider agreement with Shoreline. Similarly, an email about an SNF 

named Five Star shows that Omnicare adjusted its collection practices for “extremely old 

balances” but continued normal collection practices for immediate balances because it did not 

want the “extremely old balances that are in dispute” to become a “source of division.” In 

another instance, with an SNF named Harborside, Omnicare decided not to issue a demand 

letter on a delinquent account because it did not want to “introduce an irritant that might 

impede progress on picking up [Harborside’s] newly acquired KY facilities.” Instead, it opted 

to wait another month before addressing the issue with Harborside because Omnicare 

already had a meeting scheduled with Harborside that next month. 

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shows that Omnicare designed its settlement negotiations and debt collection 

practices to induce SNF clients to continue making Medicare and Medicaid 

referrals to Omnicare.6 Indeed, there is no evidence that the SNFs were told 

they were getting special benefits from Omnicare’s settlement negotiations and 

debt collection practices, let alone that any such benefits were tied to Medicare 

and Medicaid referrals.7 If the purported benefits were designed to encourage 

SNFs to refer Medicare and Medicaid patients to Omnicare, one might expect 

to find evidence showing that the SNFs at least knew about those benefits. 

Although Omnicare may have hoped for Medicare and Medicaid referrals, 

absent any evidence that Omnicare designed its settlement negotiations and 

debt collection practices to induce such referrals, Relator cannot show an AKS 

violation. 

 Similarly, the PPDs offered by Omnicare did not violate the AKS because 

there is no evidence that they were designed to induce referrals. Much of 

Relator’s evidence simply shows that PPDs were offered in contract 

 

6 The closest question involves a two-year contract for monthly credit payments 

between Omnicare and Harborside. Relator argues that a March 2004 email shows that 

there was a billing dispute between Omnicare and Harborside, and that Omnicare wanted to 

resolve the dispute by offering monthly credits against Harborside’s future bills contingent 

upon a multi-year contract renewal. Omnicare and Harborside ultimately entered into a twoyear provider agreement, effective October 1, 2004, whereby Omnicare promised to pay 

Harborside $37,500 in monthly credits for a maximum of twenty-four months. Even if we 

were to assume arguendo that this evidence shows that Omnicare designed its promise of 

monthly credit payments to induce a multi-year contract for future referrals, the alleged 

inducement occurred in 2004, which is outside the relevant time period for this litigation. 

Moreover, Relator points to no evidence showing how the agreement was carried out, if at all, 

during the relevant time period. Accordingly, this evidence does not support an AKS 

violation during the relevant time period and thus cannot support her FCA claims in this 

litigation. 

7 Relator also points to an email that says that settling billing disputes might give 

Omnicare the “‘goodwill’ necessary to receive serious consideration for the Seacrest business.” 

This comment alone, without more, is not enough to show that Omnicare designed its 

negotiations to encourage Medicare and Medicaid referrals. It does not indicate, for example, 

that Omnicare planned to offer special benefits to produce this result, or that Seacrest 

believed Omnicare was offering special benefits. 

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negotiations and included in new contracts. But these documents fail to show 

that the PPDs were offered for the illegitimate purpose of inducing referrals 

rather than the legitimate purpose of inducing payments. See Medicare and 

State Health Care Programs: Fraud and Abuse; OIG Anti-Kickback Provisions,

56 Fed. Reg. at 35979. Moreover, where PPDs were taken despite late 

payment, there was either additional consideration provided in the form of 

prompt payment of past-due accounts receivables or billing disputes that 

prevented SNFs from making prompt payments. Relator cannot survive 

summary judgment on this record. 

Relator also claims that Omnicare caused one SNF to submit factually 

false Part A cost reports because it did not pay for the reported costs within 

one year following the end of the reporting period. As Relator’s expert 

explained, all reported costs must be paid “within 1 year after the end of the 

cost reporting period in which the liability is incurred.” Relator provided 

evidence that one of the SNFs filed a cost report reflecting $30,191 in drug 

expenses for the reporting period of November 1 to December 31, 2007, but 

paid nothing to Omnicare during that period. She argues that a September 

2008 Omnicare aging report showing that this SNF “owed $228,774.17 past 

due by 271+ days” proves that it never paid the drug expenses within one year 

after the cost reporting period ended. 

Relator’s evidence does not support her argument. The SNF had until 

the end of 2008 to pay the $30,191 in drug expenses because the reporting 

period for those expenses ended on December 31, 2007. But Relator’s evidence 

only shows past-due accounts receivable through September 2008. It does not 

address the remaining three months of the 2008 calendar year, and thus does 

not show whether the SNF paid the drug expense before the end of the year. 

Relator provides no additional evidence in support of this claim. We therefore 

agree with the district court that Relator’s claim cannot survive summary 

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judgment because her evidence fails to support a finding that the drug costs 

were not paid within the legally authorized time period. 

Relator additionally argues that evidence showing pre-2006, past-due 

accounts receivables also supports her factual falsity claim. This evidence, 

however, merely shows a settlement agreement regarding allegations that 

Omnicare overcharged an SNF for pharmacy services. It does not show that 

the SNF filed cost reports on the disputed overcharges. Even if it did, the 

evidence would still fail to support Relator’s factual falsity claim because it 

does not show that the SNF failed to file a worksheet A-8 adjustment after the 

one-year payment period ended. Accordingly, this evidence also fails to 

support a finding that the cost reports were factually false. 

For the foregoing reasons, we affirm the district court’s dismissal of 

Relator’s FCA claims. 

C. Reverse FCA Claim 

The Reverse FCA imposes liability on “any person who . . . knowingly 

makes, uses, or causes to be made or used, a false record or statement to 

conceal, avoid, or decrease an obligation to pay or transmit money or property 

to the Government.” United States ex rel. Bain v. Ga. Gulf Corp., 386 F.3d 648, 

652–53 (5th Cir. 2004) (quoting 31 U.S.C. § 3729(a)(7)). “In a reverse false 

claims suit, the defendant’s action does not result in improper payment by the 

government to the defendant, but instead results in no payment to the 

government when a payment is obligated.” Id. at 653. 

Under Omnicare’s 2006 CIA with the OIG-HHS, Omnicare was required 

to disclose to the OIG-HHS in writing any “reportable events,” and then 

summarize such events in an annual report at the end of every reporting 

period. Reportable events include any “matter that a reasonable person would 

consider a probable violation of criminal, civil, or administrative laws 

applicable to any Federal health care program.” 

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Relator claims that her December 2007 email alleging that one of 

Omnicare’s customers was committing Medicare fraud constituted a 

“reportable event” under the CIA. Accordingly, the argument continues, 

Omnicare’s failure to disclose this “reportable event” in its annual report to the 

OIG-HHS made the report a false record used to conceal an obligation to pay 

money to the government. 

The email Relator relies on relates to purported fraudulent Part A cost 

reports. Relator’s email, however, does not show a probable violation of federal 

health care laws. It says, in relevant part, that customers with past-due 

accounts receivables will be committing Medicare fraud if Omnicare forgives 

their debt because “[t]hey have been reimbursed a[n]d they need to pay.” But 

cost reports use accrual-based accounting, which requires the participant to 

report costs incurred during the reporting period, regardless of when payment 

occurs. If costs are not liquidated within one year and the payment period is 

not extended under an exception, then an amended cost report should be filed 

through a worksheet A-8 adjustment. Thus, even assuming that the Part A 

debt was never paid, there is still no “probable violation” of the Part A health 

care program unless Relator had information to believe that the customer in 

question would not be submitting a worksheet A-8 adjustment to reflect 

changes made to its reported Part A costs. The email does not indicate Relator 

had this information, and Relator provides no evidence indicating otherwise. 

We therefore affirm the district court on the Reverse FCA claim. 

For the foregoing reasons, we AFFIRM the summary judgment, and we 

AFFIRM the denial of Relator’s discovery motions raised in Relator’s brief on 

appeal. 

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