The Second Circuit Court of Appeals recently issued a significant ruling in the case of United States v. AmerisourceBergen Corp. (Docket No. 25-2950), affecting how allegations of healthcare fraud are handled under the False Claims Act (FCA). The court's decision, made on August 28, 2026, allows some claims against AmerisourceBergen Corporation and its affiliates to move forward while dismissing others. This ruling is crucial as it addresses the complexities of fraud allegations in the healthcare sector, particularly regarding overpayments made by government programs.
The case centers around Patsy Gallian, a former employee of AmerisourceBergen, who alleged that the company engaged in fraudulent practices by overcharging government healthcare programs and concealing these overpayments. The court's ruling has implications for whistleblowers and the enforcement of the FCA, which aims to combat fraud against the government.
Background
Patsy Gallian, the plaintiff in this case, worked for AmerisourceBergen as a Reimbursement Manager and later as a Senior Reimbursement Manager. During her tenure, she claimed to have discovered a scheme where the company overcharged various government healthcare programs, including Medicare, and failed to report these overpayments.
Gallian's allegations included instances where AmerisourceBergen billed the government for services that were either not provided or for patients who no longer required medication. She also claimed that overpayments were hidden within internal systems and eventually converted into company revenue. After filing her original complaint in May 2016, Gallian faced a series of legal challenges, culminating in a motion to dismiss by AmerisourceBergen.
The Ruling
The Second Circuit Court of Appeals ruled on several key issues in this case. First, the court affirmed the dismissal of Gallian's direct FCA claims under 31 U.S.C. § 3729(a)(1)(A)–(B), stating that she failed to meet the pleading requirements necessary to support these claims. The court noted, "Gallian failed to identify specific misrepresentations to the government, nor did she adequately allege that the information she needs to make such specific allegations is peculiarly in the hands of Appellees."
However, the court vacated the dismissal of Gallian's reverse FCA claim under 31 U.S.C. § 3729(a)(1)(G), allowing it to proceed. The ruling emphasized that Gallian had sufficiently alleged that AmerisourceBergen had an obligation to report overpayments and that the company knowingly concealed this obligation from the government. The court stated, "Gallian has adequately alleged a specific 'obligation' owed to the government," referencing the requirement for companies to return overpayments received from government programs.
Impact
This ruling has significant implications for future FCA cases, particularly those involving healthcare fraud. By allowing Gallian's reverse FCA claim to proceed, the court underscores the importance of holding companies accountable for failing to report overpayments, which can have serious financial consequences for government healthcare programs.
The decision also highlights the challenges faced by whistleblowers in proving their claims, particularly in cases where specific documentation may not be readily accessible. The court's ruling may encourage more individuals to come forward with allegations of fraud, knowing that certain claims can still be pursued even if they lack specific details.
What's Next
The case will now return to the lower court for further proceedings regarding Gallian's reverse FCA claim. It remains to be seen how this ruling will influence the outcome of the case and whether AmerisourceBergen will face further legal challenges related to these allegations.