UNITED STATES OF AMERICA, ex rel. STEVE GREENFIELD, Appellant
MEDCO HEALTH SOLUTIONS, INC.; ACCREDO HEALTH GROUP, INC.; HEMOPHILIA HEALTH SERVICES, INC.
September 27, 2017
Appeal from the United States District Court for the District
of New Jersey (D.C. Civil Action No. 1-12-cv-00522) District
Judge: Honorable Noel L. Hillman
Begelman Marc M. Orlow Regina D. Poserina Begelman Orlow
& Melletz Counsel for Appellant
E. Boehm Enu Mainigi Craig D. Singer Daniel M. Dockery
Williams & Connolly Counsel for Appellees
A. Readler Acting Assistant Attorney General William E.
Fitzpatrick Acting United States Attorney
Katherine T. Allen Michael S. Raab Charles W. Scarborough
United States Department of Justice Counsel for Amicus Curiae
in Support of Neither Party United States of America
Before: AMBRO and KRAUSE, Circuit Judges, and CONTI [*] , Chief District
Health Group, Inc., a specialty pharmacy that provides home
care for patients with hemophilia (a rare condition that
prevents blood from clotting properly), made donations to
charities, two of which allegedly recommended Accredo as an
approved provider for hemophilia patients. This raises
whether the donations came with something expected in return
for the recommendations, which might trigger violations of
the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and,
if so, whether Accredo's healthcare reimbursement claims
for persons who may have received the charities'
recommendations run afoul of the False Claims Act, 31 U.S.C.
§ 3729(a)(1)(A)-(B). No federal agency, however, made a
claim against Accredo. In stepped Steve Greenfield, a private
citizen and a former area vice president of Accredo, who sued
it and affiliates Medco Health Solutions, Inc., and
Hemophilia Health Services, Inc. (for simplicity, all are
referred to as "Accredo") for alleged violations of
the two federal statutes.If Greenfield prevailed, he would get at
least 25% of any civil penalty or damages award.
District Court, at the end of discovery, entered summary
judgment against Greenfield and for Accredo, and the
Government here has chosen not to intervene. It found that
Greenfield failed to provide evidence of even a single
federal claim for reimbursement by Accredo that was linked to
the alleged kickback scheme. As he disagrees, Greenfield
appeals to us.
delivers clotting medication (medically called "clotting
factor") to patients at their homes and provides nursing
assistance that is tailored to hemophilia patients'
needs. Along with its pharmaceutical services, Accredo makes
donations to various charities, including two that are
pertinent to this appeal: Hemophilia Services, Inc.
("HSI"), and Hemophilia Association of New Jersey
("HANJ, " and collectively with HSI,
"HSI/HANJ"). From 2007 to 2012, Accredo's
donations to HSI/HANJ ranged from approximately $200, 000 to
$550, 000 on an annual basis.
contributed funds to HSI, which in turn provided grants to
HANJ. HSI's grants served two purposes- an insurance
program for patients who are not eligible for Medicare or
Medicaid, and support for outpatient hemophilia treatment
centers. Accredo believed its donations went to HANJ's
insurance program, but was aware that HANJ also funded
purportedly recognized Accredo's contributions by
identifying it as an HSI-approved provider or HSI-approved
vendor on its website. It stated HSI-approved vendors
"maintain the highest quality of care while providing
[a] continuity of services and constantly supporting the
community in numerous ways." It also directed users to
"[r]emember to work with our HSI [approved]
providers" and included hyperlinks to the approved
providers' websites. HANJ also provided treatment centers
with lists identifying specialty pharmacies that were
designated as HSI-approved providers. Accredo was noted in
one list as one of four HSI-approved vendors that
"continually contribute to this community."
Accredo donated approximately $363, 000 to HSI/HANJ in 2010,
it informed both charities that it planned to reduce its
annual donation to $175, 000 in the following year. In
response, HSI sent a letter to its members informing them of
Accredo's reduced pledge and encouraging them to request
that Accredo restore funding. HSI's letter focused on the
possible shortfalls to HANJ's private insurance program;
in HSI's view, Accredo's funding cuts would
"place the Insurance Program in jeopardy of being
'phased out' and ceasing to exist in the foreseeable
future." HSI also forwarded a copy of the letter to
treatment centers, stating that "[t]he attached [letter]
is self explanatory. [Hemophilia Health Services]/Accredo has
behaved despicably, while enjoying the fruits of HANJ's
result of HSI's letter, Accredo received approximately 75
letters from HSI members requesting an increase in funding.
It then asked Greenfield (as noted, an area vice president
for Accredo) to analyze the potential return on investment if
it were to increase its annual donation from $175, 000 to
$350, 000. It also requested him to project the "likely
business deterioration to [its New Jersey] market share"
if it opted not to increase funding. Greenfield's
analysis indicated that, absent a funding increase to $350,
000, "all new and existing business [could be] at risk,
" and Accredo could expect to "lose 100% of the
margin" associated with patients who switched out of
Accredo's services. Based on this analysis, Accredo
restored its annual donation to $350, 000 in 2012.
thereafter filed a qui tam suit against Accredo,
alleging it violated the False Claims Act by falsely
certifying it complied with the Anti-Kickback
Statute.Although the statutory scheme gave the
Government the option to intervene in the suit, it declined
to do so. See 31 U.S.C. § 3730(b)(2).
case proceeded to summary judgment, where the parties'
cross-motions presented differing theories on whether
Greenfield had established a False Claims Act violation. He
argued Accredo violated the Act by paying kickbacks to
HSI/HANJ in the form of charitable contributions to induce
recommendations and referrals of Accredo by HSI/HANJ to its
members. In Greenfield's view, Accredo's alleged
kickback scheme amounted to a False Claims Act violation
because at least some referrals or recommendations were
directed to Medicare beneficiaries and because Accredo
falsely certified compliance with the Anti-Kickback Statute
while submitting Medicare claims for payment. Accredo argued
Greenfield could not prove a violation of the False Claims
Act, as there was no evidence any federally insured patient
purchased its prescriptions because of its contributions to
District Court denied Greenfield's motion for summary
judgment while granting that of Accredo. In the Court's
view, his claim required him to (1) "establish that
defendants violated the [Anti-Kickback Statute] through
[their] alleged quid pro quo arrangement with
HANJ/HSI" and (2) "show that, as a result of
defendants' [Anti-Kickback Statute] violation, defendants
received payment from the federal government" in
violation of the False Claims Act. United States ex rel.
Greenfield v. Medco Health Sys., Inc., 223 F.Supp.3d
222, 227 (D.N.J. 2016). For purposes of its analysis, the
Court did not determine whether Greenfield established an
Anti-Kickback Statute violation. Instead, it focused its
analysis on the second prong of the inquiry and concluded
that, even if an Anti-Kickback Statute violation were
assumed, Greenfield did not show sufficient evidence of a
False Claims Act violation.
discovery revealed that Accredo submitted claims for 24
federally insured patients during the relevant time period,
the Court concluded this evidence alone did not provide
"the link between defendants' 24 federally insured
customers and defendants' donations to HANJ/HSI."
Id. at 230. Instead, it explained Greenfield must
show that federally insured patients were referred to Accredo
as a result of its donations to HSI/HANJ. "Absent some
evidence . . . that those patients chose Accredo because of
its donations to HANJ/HSI, " the Court reasoned,
Greenfield could not carry his burden on his claim.
Id. Thus it entered summary judgment for Accredo.
appeals, arguing the District Court erred in requiring him to
prove a direct link between the alleged kickback scheme and
each false claim. The Government appears as an amicus
curiae in support of neither party, contending the Court
erred to the extent it required Greenfield to prove that
patients chose Accredo because of HSI/HANJ's referrals
and recommendations. In its view, all that needed to be shown
was a claim that sought reimbursement for medical care that
was provided in violation of the Anti-Kickback Statute. In
response, Accredo maintains, inter alia, that the
District Court correctly stated Greenfield's burden in
establishing a False Claims Act breach.