Ninth Circuit Panel Reverses Lower Court Dismissal Allowing Suit to Proceed

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Eisenberg Gilchrist & Cutt announces that a Ninth Circuit panel recently reversed a lower court’s dismissal of whistleblower and former QTC Medical Services Inc. claims file analyst, Dr. David Vatan’s False Claims Act suit, allowing his case to proceed.

A Ninth Circuit panel has reversed a lower court dismissal, allowing a False Claims Act suit against former Lockheed Martain health care subsidiary, QTC Medical Services Inc. to proceed (US ex rel. David Vatan v. QTC Medical Services, Inc., et al Case No. 16-55406).

The unpublished decision came down on Friday, January 12, 2018 in an appeal from whistleblower and former QTC claims file analyst, Dr. David Vatan, whose suit was dismissed for failure to state a claim. In the suit, Vatan alleges that QTC submitted false claims to the United States Department of Veterans Affairs for evaluating Vietnam War veteran’s symptoms of Agent Orange-related diseases.

A 1991 settlement that is still in effect, stemming from a class action lawsuit, requires the VA to take certain actions whenever it recognizes a new disease as linked to Agent Orange exposure. These actions include reviewing previously denied claims and paying disability and death benefits to affected veterans or their survivors.

QTC was hired by the VA to review 65,000 files for Agent Orange-related Parkinson’s disease, ischemic heart disease, and hairy cell leukemia, as well as 95,000 files for peripheral neuropathy. QTC was to flag files that merited a second review and final decision by the VA.

The lawsuit brought by Vatan in 2014 alleges that claims that QTC, “created and executed a scheme to incentivize” analysts to review as many files as possible, and that this rush to close files came at the expense of accuracy and completeness. He further alleges that he and other analysts were not formally trained and were not given the VA’s training guide. QTC was paid between $300 and $350 for each file reviewed. According to McClatchy News in 2015, QTC’s various contracts with the VA exceeded $175 million.

In February of 2016, it appeared that the case might be dead in the water after a lower court judge threw out two of Vatan’s claims against Lockheed and QTC based on the fact that Vatan did not have access to the full contract between the company and the government and therefore could not prove that the company misrepresented its work. Vatan’s appeal said the court overly relied on this fact and reversed the decision.

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Kelsey Eisenberg
Eisenberg Gilchrist & Cutt
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