KCI Wins Summary Judgment in False Claims Act Dispute

Over a decade after the original complaint was filed, on June 14, a federal judge in Los Angeles granted Skadden’s motion for summary judgment in a 2008 action brought by a former employee as a whistleblower (or relator) against firm clients Kinetic Concepts, Inc. and KCI USA, Inc. (KCI). The relator argued that KCI committed fraud by allegedly billing patient claims to Medicare in ways that did not comply with the written guidance promulgated by Medicare regional contractors. The relator sought to recover approximately $500 million in single damages. Relying prominently on the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, the court held that, because “KCI has presented evidence of payment in full by the government on [those claims] despite the government’s knowledge of KCI’s noncompliance,” the motion for summary judgment should be granted.