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Plaintiff Wants Appeal of Years-Long Claims, Defendant Opines to ‘Get on with It’

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Normally, the plaintiff likes to see a lawsuit conclude quickly while defendants tend to drag them out. In this case, however the respective motivations appear to be reversed.

San Francisco, CAA years-long healthcare fraud whistleblower lawsuit remains an apt example of just how long in the tooth litigation can extend. And while the current version of a health care fraud lawsuit does not resemble the characterization of the original litigation, attempts at various appeals could extend the litigation well beyond 2018.

At least, that’s the position of the defendant. Last month Kinetic Concepts Inc. (KCI) urged a federal court in California to deny plaintiff Geraldine Godecke’s petition for an interlocutory appeal of fraud claims to the US Court of Appeals for the Ninth Circuit. In so doing, KCI said, all activity on the plaintiff’s retaliation claims and counterclaims by KCI would have to stop while the proposed appeal is heard.

KCI said the appeal would unnecessarily extend a case already a decade old. KCI, in sum, wants to get on with it.

In deference to the defendant’s position, Godecke’s legal counsel said in a statement to Law360 (12/20/17) that the plaintiff has every right to ask for an appeal and has legal grounds to justify such an appeal.

Ten years on, little has been resolved

According to Court documents Godecke is a former employee of KCI who was ousted from her position allegedly for blowing the whistle on KCI for billing code fraud, or so Godecke claims. Godecke, along with Steven J. Hartpence – another former employee of KCI – accused the wound treatment specialist of employing a modifier billing code that allowed for automatic reimbursement from Medicare, which is alleged to have been inappropriate for the VAC Therapy accelerated wound healing devices to which the automatic billing code was attached. Godecke and Hartpence opined that the correct Medicare billing code for the products in question would have required individual review for each claim, thus delaying payment.

Godecke claims she was terminated from her job at KCI after bringing the billing code issue to the attention of her employer. KCI, in response brought counterclaims against Godecke for breach of contract and conversion related to documents Godecke is alleged to have in her possession and retained after she was terminated from her job.

Appellate panel overturned precedent in favor of plaintiffs

Godecke and Hartpence originally filed their whistleblower healthcare fraud lawsuit in federal court in California in 2008. Four years later their case was dismissed, with the lower court finding that plaintiff claims were based upon documents that were publicly available. They appealed to the Ninth Circuit, which came back in 2015 with a finding in favor of the plaintiffs – in so doing reversing 23 years of precedent by ruling en banc that it matters little if whistleblowers also held a role in the public disclosure of their claims.
(US ex rel. Steven Hartpence et al. v. Kinetic Concepts Inc., Case No. 12-55396, and US ex rel. Godecke v. Kinetic Concepts Inc., Case No. 12-56117, both in the US Court of Appeals for the Ninth Circuit).

In so doing, the 11 justices on the Ninth Circuit panel repealed its own precedent from Wang ex rel. US v. FMC Corp. (1992).

While that 2015 win was sweet for the plaintiff side, subsequent rulings went against Godecke for failing to prove to the Court’s satisfaction that KCI had actually submitted false claims to Medicare. Those allegations were permanently set aside last August, leaving only Godecke’s retaliation claim against KCI for terminating her from her job, together with outstanding counterclaims made by KCI.

The defendant argued in California last month that if Godecke’s instant request for an appeal is granted by the Ninth Circuit, the latter might wind up undertaking an appeal of the plaintiff’s claims of fraud, followed by an appeal of Godecke’s retaliation claim and KCI’s counterclaims.

Defendant wants to wrap it up

Then there is the matter of co-plaintiff Hartpence. KCI argues that should Godecke’s appeal be granted, it could also cause her case to splinter from Hartpence, whose own claims could also wind up in the Ninth Circuit – further extending the life of the whistleblower healthcare fraud lawsuit by another two years.

“KCI is advocating for an informed resolution of both related cases on fully developed facts in the coming calendar year; Godecke is advocating for a halt to all potential resolution of Godecke’s case and to all fact development unless and until the Ninth Circuit accepts and resolves a forthcoming appeal challenging an order that was entered four months ago,” KCI said.

“KCI is not the party preventing an informed resolution.”

Godecke is nonetheless confident in her grounds for appeal.

The healthcare fraud whistleblower lawsuit is US ex rel. Godecke v. Kinetic Concepts Inc. et al., Case No. 2:08-cv-06403, in the US District Court for the Central District of California.

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