Anderson, a relator, alleged that the defendants engaged in a scheme to bill Medicare and Medicaid for medically unnecessary kidney dialysis and vascular procedures in exchange for kickbacks. He claimed the hospital and affiliated physician groups used referral software to steer patients to dialysis centers where they received financial incentives, violating federal anti-kickback statutes and healthcare fraud laws.
The core of Anderson’s case relied on allegations previously raised by James Kent in a 2017 lawsuit, United States ex rel. Kent v. St. Elizabeth Medical Center. Kent’s complaint detailed a conspiracy involving Davita Healthcare Partners and the Kidney and Hypertension Center to pay physicians for unnecessary dialysis referrals. Kent’s estate voluntarily dismissed that suit after Kent passed away, and the government did not intervene.
Anderson argued that his complaint added new details, including the identification of specific physicians and allegations of a separate fraud involving vascular treatments like catheter placements and angioplasty. He contended these additions constituted a "later-developing architecture" of fraud that was not publicly disclosed in the earlier Kent litigation.
The Sixth Circuit rejected this argument, finding that Anderson’s allegations were "loosely similar" to Kent’s and did not materially add to the public record. The court held that the FCA’s public-disclosure bar required dismissal because the essence of the fraud had already been exposed in the Kent complaint, which was a matter of public record.
Regarding Anderson’s specific allegations about vascular treatments, the court found they failed to meet the heightened particularity standard required for fraud claims under the Federal Rules of Civil Procedure. The opinion noted that Anderson provided only four sentences describing the vascular scheme, lacking details about the nature of the financial stake or specific examples of referrals.
The district court had also dismissed Anderson’s claim under Kentucky’s negligence per se statute and the state’s criminal false claims code, ruling that these statutes did not create a private cause of action. The Sixth Circuit affirmed this dismissal, agreeing that Kentucky law did not offer a qui tam-like device for private plaintiffs to sue on the government’s behalf.
The United States declined to intervene in Anderson’s suit. The government did intervene in the underlying motion for judgment on the pleadings only to defend the constitutionality of the FCA’s qui tam mechanism, but the courts resolved the case on non-constitutional grounds.