The Sixth Circuit Court of Appeals recently held that the statute of limitations period for retaliation claims under the False Claims Act (“FCA”) begins to run on the date of the alleged retaliatory event, and not the date the plaintiff discovers the retaliatory event.
Case Background
In 2008, the plaintiff physician joined a Michigan-based health system (the “Hospital”) as a member of its medical staff. Plaintiff, and all members of the staff, were required to regularly reapply for medical staff privileges which could be granted for up to two years at a time by the Hospital. In 2015, the plaintiff’s application for reappointment and for medical staffing privileges was rejected by the Hospital.
Plaintiff subsequently participated in the Hospital’s administrative appeal process in accordance with medical staff bylaws. The Hospital’s Joint Conference Committee (“JCC”), which was vested with final authority to issue a non-appealable decision, held its final hearing on September 22, 2016. The JCC voted that evening to affirm the previous decision to deny the application for reappointment and for medical staffing privileges. The decision was considered final and was subsequently communicated to the plaintiff days later on September 27, 2016.
Retaliation Under the FCA
On September 27, 2019, the plaintiff brought suit against the Hospital alleging that the Hospital violated the whistleblower protection provision of the FCA. Plaintiff alleged that his application for reappointment and for medical staff privileges was rejected in retaliation for his “whistleblowing” to the federal government. Specifically, the physician plaintiff reported that Hospital’s employees allegedly submitted fraudulent Medicare claims.
The Hospital argued that the suit was time-barred under the three-year statute of limitations which would have expired on September 22, 2019, when the alleged retaliatory action (i.e., JCC vote) took place. The plaintiff argued that the suit was timely as the statute of limitations should not begin to run until the plaintiff discovered, or had notice of the alleged retaliatory action (i.e., written letter) on September 27, 2016.
The U.S. District Court dismissed the plaintiff’s claim as time-barred, and the Sixth Circuit Court of Appeals affirmed. The Court stated that the statute of limitations begins to run on the date of the alleged retaliatory event, and not the date in which the plaintiff discovers the event. The Court noted that the FCA is “unequivocal” in stating that the “limitations period commences when the retaliation actually happened” which is in keeping with the “standard rule” stating that this “limitations period begins when the plaintiff can file suit and obtain relief.” Further, the Court noted that there is no provision within the FCA that requires notice, whether actual or constructive, of the retaliatory action which would act to toll the limitations period.
Practical Takeaways
“Delays” between a hospital’s adverse decision in denying or restricting medical staff privileges, and its formal notification to a physician, can certainly vary in length. While relatively short delays in notice of these types of decisions do not appear concerning, hospitals should be wary of extended delays that essentially burn time on the statute of limitations. A court may consider equitable tolling arguments if there is concealment or an extended delay expressly designed to disadvantage a physician provider.
If you have any questions, please contact:
- Larry Jensen at ljensen@wp.hallrender.com or (248) 457-7850;
- Jessica Biondo at jbiondo@wp.hallrender.com or (248) 457-7851; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
