Opinion ID: 857921
Heading Depth: 3
Heading Rank: 2

Heading: Aspect 2 of the Fraudulent Scheme

Text: As stated supra, Relator's complaint alleges that one component of Millennium's fraudulent billing scheme included directing and encouraging the physician defendants to test excessively in a manner that was not medically necessary, represent[ing] to the physician that by simply ordering one (1) test per day and billing Medicare at the rate of $19.24 per panel for nine (9) units, the physician can earn $173.18 per day . . . . Millennium also informs the physician that if she or her were to order twenty (20) tests per day and bill Medicare at the rate of $16.67 per panel for nine (9) unites, the earnings would be $3,463.20 per day. . . . The allegations thus involve testing patients with an unnecessary frequency while incentivizing that testing through providing revenue sheets that break down the gross revenues a physician could earn by ordering multiple tests rather than one test per day. Neither Millennium's California complaint nor the e-mails attached thereto mention this kind of excessively frequent testing as part of Millennium's fraudulent scheme. The first e-mail from Williams only references allegations pertaining to Aspect 1 of Relator's complaint, and the other two e-mails and attached Q & A -29- Sheets reference facts pertaining only to Aspects 1 and 3 of Millennium's billing practices. However, while Relator's factual allegations pertaining to Aspect 2 of Millennium's model may not be subject to the FCA's public disclosure bar, Relator must still sufficiently plead the fraud associated with those allegations to survive dismissal under Fed. R. Civ. P. 12(b)(6) and 9(b). While Millennium's motion to dismiss Relator's complaint included alternative grounds to dismiss the complaint pursuant to Rules 12(b)(6) and 9(b), the district court never reached those questions since it dismissed the complaint on jurisdictional grounds. The parties did not fully brief those issues on appeal.9 For deficiencies under Fed. R. Civ. P. 9(b), leave to amend is often given, at least for plausible claims. N. Am. Catholic Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8, 16 (1st Cir. 2009). Accordingly, we vacate the order dismissing Relator's complaint as to Relator's Aspect 2 allegations and remand to allow the district court to consider whether Relator's complaint should be dismissed under Rules 12(b)(6) and 9(b). Singleton v. Wulff, 428 U.S. 106, 120 (1976) 9 Millennium mentions pleading deficiencies as to Relator's allegations of medically unnecessary testing under Rule 9(b) in its opposition brief, but that argument was cursorily incorporated into its broader argument that Relator's amended complaint only alleged a single theory of fraud in the FCA count that remained following amendment from the original complaint. Relator, for his part, limited his briefing to the district court's jurisdictional grounds for dismissing his complaint. -30- (It is a general rule . . . that a federal appellate court does not consider an issue not passed upon below.).