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Court of Appeals Reinstates Whistleblower Action Against Medco Health

The 11th U.S. Circuit Court of Appeals has reinstated a qui tam action filed against Medco Health Solutions (“Medco”) and its subsidiaries by whistleblowers Lucas Matheny and Deborah Loveland. The qui tam complaint had previously been dismissed by the U.S. District Court for the Southern District of Florida for failure to state a claim.

The Complaint, filed under the False Claims Act, alleged that Medco, and its subsidiaries Liberty Healthcare Group Inc. and Liberty Medical Supply Inc., failed to disclose and refund $69 million in overpayments made to Medco by the federal government. According to the Complaint, from at least 2006, Medco transferred overpayments to unrelated patient accounts, created fictitious patient accounts and then altered the records using a computer program. The Complaint also claims that Medco filed a false compliance certificate with the federal government knowingly concealing millions of dollars in overpayments.

The U.S. District Court for the Southern District of Florida had previously ruled that the Complaint did not meet the heightened pleading requirements for False Claims Act cases. The whistleblowers subsequently appealed the dismissal.

The appellate court reinstated the whistleblower Complaint after concluding that: 1) the whistleblowers had sufficiently alleged the existence of a false statement or record; 2) Medco knew the statement or record was false; 3) the false statement or record was made to avoid financial obligations to the government; and 4) that the false statement was material.

The whistleblowers stand to receive between 25-30% of any settlement or judgment against Medco by the government.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

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