GUARDIOLA v. RENOWN HEALTH

Opinion

1 2 3 4

6 DISTRICT OF NEVADA

7 * * * 8 UNITED STATES OF AMERICA, ex rel. Case No. 3:12-cv-00295-LRH-CLB CECILIA GUARDIOLA, Plaintiff/ Relator, 10 v. 11 RENOWN HEALTH, RENOWN REGIONAL 12 MEDICAL CENTER, and RENOWN SOUTH MEADOWS MEDICAL CENTER, 13 Defendants. 14 15 16 Before the court is relator Cecilia Guardiola’s motion to award her a share of the proceeds 17 recovered administratively and separately by the United States from defendants Renown Health, 18 Renown Regional Medical Center, and Renown South Meadows Medical Center (collectively 19 “Renown”). ECF No. 231. The United States (“the Government”) filed a response (ECF No. 232), 20 and Guardiola replied (ECF No. 235). Guardiola argues that the court should award her a share of 21 the proceeds recovered separately by the Government via the Recovery Audit Contractor (“RAC”) 22 and/ or the Medicare Administrative Contractor (“MAC”), as they constitute an “alternate remedy” 23 under the False Claims Act, 31 U.S.C. § 3730(c)(5), (“FCA” or “the Act”). The Government argues 24 that these proceeds are not an alternate remedy because the RAC audits began in 2010, two years 25 before Guardiola brought her qui tam suit, and because the Government’s recovery did not entirely 26 moot or preclude Guardiola’s qui tam suit. The court agrees with Guardiola; it therefore grants her 27 motion and awards her $1,021,448.52, which represents a 29% share of the recovered 2 On June 1, 2012, Guardiola filed this qui tam action alleging that Renown “defraud[ed] 3 government-funded health insurance programs” through improper billing, in violation of the FCA, 4 31 U.S.C. § 3729 et seq. ECF No. 107 at 2-3. Pursuant to 31 U.S.C. § 3730(b)(2), Guardiola filed 5 the complaint under seal, and it was served upon the United States for review. The Government 6 extended the 60-day time period for review several times, ultimately declining to intervene in the 7 action in mid-September 2013. Guardiola filed an amended complaint in January 2014 (ECF No. 8 17), which was served on Renown (ECF No. 18).1 9 “To supplement CMS’s [Centers for Medicare and Medicaid Services] efforts to protect 10 the fiscal integrity of the Medicare program, Congress enacted the RAC program. Congress told 11 the Secretary [of the Department of Health and Human Services] to conduct a demonstration 12 project using RACs to ‘identify underpayments and overpayments and recoup overpayments under 13 the Medicare program.’” Palomar Medical Center v. Sebelius, 693 F.3d 1151, 1156 (9th Cir. 2012) 14 (quoting Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”), 15 Pub.L. No. 108-173, § 306(a), 117 Stat. 2066, 2056 (2003)). This demonstration project ran from 16 March 2005 to March 2008 and culminated in “RACs successfully correcting more than $1 billion 17 in improper Medicare payments.” Id. at 1157. Given this success, “Congress made the RAC 18 program a permanent part of the Medicare Integrity Program and expanded its coverage to all 19 states.” Id. (citing 42 U.S.C. § 1395ddd(h)(1), (3)). 20 Beginning in October 2008, HDI was awarded the contract for RAC Region D, and with 21 the CMS’s approval, “performed patient status reviews, which may have included services billed 22 by Renown.” ECF No. 231-2 at 5; ECF No. 231-4 at 7. The Government’s records show that HDI 23 began sending Renown document requests pertaining to these reviews in 2010. See ECF No. 232- 24 2. The record provides that HDI’s RAC contract was an “options years” contract—there were 25 series of 1-year contracts that ran from 2008 to 2018, which CMS had the option of canceling or 26 extending each year (though it always renewed the contract). ECF No. 231-2 at 6, 8; ECF No. 231- 27 4 at 7. The RAC’s contract was in part governed by the Statement of Work, which, in relevant part, 1 provided that the RAC was to prevent overlap with other contractors, CMS, OGC, DOJ, OIG, and/ 2 or other law enforcement entities performing potential fraud reviews. See ECF No. 231-5. To 3 ensure that more than one entity did not review a claim, the RAC reviewed the “RAC data 4 warehouse” to see if a claim was “excluded” (another entity was reviewing, or had reviewed, the 5 claim) or suppressed (the claim was not to be reviewed). ECF No. 231-4 at 9. CMS additionally 6 had the power to stop an audit by contacting the RAC (ECF No. 231-4 at 12), and it could issue a 7 “stop-work order” which prevented the RAC from performing certain audit activities, including 8 “issuing additional requests for medical records to a provider or issuing additional improper 9 payment notifications,” (ECF No. 231-2 at 7). CMS could also effect a “litigation-hold,” which it 10 did in November 2017 in regards to this litigation. ECF No. 231-2 at 20. As stipulated to by the 11 parties, during the pendency of Guardiola’s qui tam suit, the Government recovered $3,461,612.56 12 from Renown via the RAC.2 ECF No. 221 ¶ 3. 13 Guardiola and Renown eventually reached a settlement agreement in her qui tam suit in 14 July 2016, resulting in a $9.5 million dollar award to the United States, and a stipulated dismissal 15 of Renown with prejudice. ECF Nos. 182 & 183. Guardiola, as the relator in this qui tam action, 16 was awarded a 29 percent share of this settlement recovery, amounting to $1,707,324. ECF No. 17 183-1 at 3. During her qui tam suit, Guardiola discovered that the Government had already 18 recovered a portion of the covered conduct of her qui tam suit via the RAC and MAC. Therefore, 19 she did not pursue these proceeds in her settlement with Renown and reserved the right to claim a 20 relator’s share of these proceeds as an “alternate remedy.” ECF No. 180; ECF No. 183-1 at 6. 21 Following the settlement, Guardiola motioned this court for a share of the alternative 22 remedy. ECF No. 179. The United States did not directly respond to this motion, but instead moved 23 for leave to file an amicus curiae brief in opposition. ECF No. 184. On September 14, 2016, the 24 court ruled it lacked jurisdiction to determine Guardiola’s proceeds because the Government was 25 not a party to the original action. ECF No. 190. When Guardiola moved to amend her complaint 26

27 2 As provided by the parties, because the proceeds recovered by the MAC were “miniscule” in comparison to those recovered by the RAC, the parties reference only the RAC, though they stipulated that the total 1 (ECF No. 191), the court ruled that because sovereign immunity would bar her claim, amendment 2 was futile (ECF No. 197). 3 Guardiola appealed these rulings to the Ninth Circuit (ECF No. 198), where the 4 Government reversed its position and asserted that the FCA acts as a waiver of sovereign immunity 5 (see United States of America ex rel. Cecilia Guardiola v. Renown Health and United States of 6 America (Intervenor), No. 16-17205, Dkt 22-2 (9th Cir. 2017)). Guardiola then moved this court 7 to issue an indicative ruling under Rule 62.1 (ECF No. 204), which the court granted (ECF No. 8 206). Shortly thereafter, the Ninth Circuit remanded the matter to this court for the limited purpose 9 of enabling the court to consider Guardiola’s 60(b) motion (ECF No. 207), and this court vacated 10 its prior rulings (ECF No. 208). Guardiola then voluntarily dismissed her appeal. ECF No. 209. 11 The court allowed limited discovery to be conducted on Guardiola’s alternate remedy 12 theory. ECF Nos. 220 & 224. In relavant part, the parties also stipulated to the following facts:

13 6) The amounts described in paragraphs B.3 and B.4 represent all overpayments recovered by the United States for Inpatient Billing Practices from RAC Recoveries 14 and MAC Recoveries at issue in Relator’s “alternate remedy” claims. But for being recovered by the United States as RAC Recoveries or MAC Recoveries, these 15 amounts would have been recoverable as Covered Conduct as part of the Settlement Agreement. Because these amounts were recovered separately by the United States 16 as RAC Recoveries or Mac Recoveries, they were excluded from the Covered Conduct, Settlement Amount and Settlement Agreement. 17 7) In the event Relator prevails on her “alternate remedy” claims, 18 a. the value of funds recovered by the United States for Inpatient Billing 19 Practices as an “alternate remedy” under the False Claims Act will equal $3,522,236.27; 20 b. the value of the amount to be paid by the United States to Relator will be $1,021,448.52, which represents a 29% share of this amount; and 21 c. the amounts provided in this paragraph 7 will be the amounts awarded in any judgment entered by the Court in favor of Relator on her “alternate remedy” 22 claims. 23 ECF No. 221 at 4. 24 Guardiola again filed a motion for share of the alternate remedy, the instant motion. ECF 25 No. 231. She argues that these proceeds were recovered after she commenced her qui tam action. 26 She argues that because these proceeds would have been recoverable in her qui tam suit but for 27 having been recovered by the Government through the RAC and/or MAC, the proceeds constitute 1 an “alternate remedy” under the FCA. Of which, she argues, she is entitled to the same 29 percent 2 share as she received in her initial suit. 3 The United States filed its response, arguing that the overpayments recovered from 4 Renown via the RAC process did not constitute an “alternate remedy” under the FCA. ECF No. 5 232. The Government argues that because the RAC began its audit in 2010, two years prior to 6 Guardiola commencing her qui tam suit (“pre-existence”), and because the RAC recovery did not 7 entirely preclude or fully release or moot Guardiola’s suit, it cannot constitute an “alternate 8 remedy” under the FCA. ECF No. 232 at 9. The Government also motioned the court to seal 9 Exhibit A to its response (ECF Nos. 232 & 233), which the court granted (ECF No. 234). 10 Accordingly, Guardiola then replied. ECF No. 235. 11 Upon review of the instant motion, it became apparent to the court that though the 12 Government had filed a motion to intervene while this suit was on appeal before the Ninth Circuit, 13 the Court did not rule on that motion before the appeal was voluntarily dismissed and the case was 14 returned to this court. See United States of America ex rel. Cecilia Guardiola v. Renown Health 15 and United States of America (Intervenor), No. 16-17205 (9th Cir. 2017). Additionally, the 16 Government’s response to the instant motion was docketed as an amicus but appeared to be filed 17 as an intervenor. See ECF No. 232. Therefore, the court summoned the Government to clarify its 18 position in this case. ECF No. 236. Accordingly, the Government filed a response adopting and 19 incorporating its intervention motion before the Ninth Circuit as its unopposed motion to intervene 20 in the matter before this court. ECF No. 237. With good cause appearing, the court granted the 21 Government’s motion to intervene on February 14, 2020. ECF No. 238. 22 The court now rules on Guardiola’s pending motion to award her a share of proceeds 23 recovered administratively and separately by the United States from Renown. 25 “The FCA, 31 U.S.C. § 3729 et seq., is an anti-fraud statute that prohibits the knowing 26 submission of false or fraudulent claims to the federal government.” U.S. ex rel. Bledsoe v. 27 Community Health Systems., Inc., 342 F.3d 634, 640 (6th Cir. 2003). “The FCA establishes a 1 a civil action alleging fraud on the Government.” U.S. ex rel. Eisenstein v. City of New York, New 2 York, 556 U.S. 928, 932 (2009). If the private individual, known as the relator, brings the qui tam 3 suit, he or she must file the complaint under seal and serve it on the Government. 31 U.S.C. 4 § 3730(b)(2). The complaint remains under seal for at least 60 days while the Government decides 5 whether to intervene in the suit. Id. The Government may request an extension of the 60-day period 6 with a showing of good cause. § 3730(b)(3). “If the Government elects not to proceed with the 7 action, the person who initiated the action shall have the right to conduct the action.” § 3730(c)(3). 8 If successful, the relator is entitled to a 25-30 percent share of the eventual proceeds recovered, as 9 well as reasonable expenses, attorney’s fees and costs. § 3730(d)(2). If the Government declines 10 to intervene, it “may elect to pursue its claim through any alternate remedy available to the 11 Government, including any administrative proceeding to determine a civil money penalty.” 12 § 3730(c)(5). “If any such alternate remedy is pursued in another proceeding, the person initiating 13 the action shall have the same rights in such proceeding as such person would have had if the 14 action had continued under this section.” Id. 15 “In any action brought under section 3730, the United States shall be required to prove all 16 essential elements of the cause of action, including damages, by a preponderance of the evidence.” 17 31 U.S.C. § 3731(d). While the statute is not clear that this standard applies to suits in which a 18 relator seeks a share of an alternate remedy, the court agrees with the parties that a preponderance 19 of the evidence standard is appropriate and uses that standard in reaching its decision. See Grogan 20 v. Garner, 498 U.S. 279, 286 (1992) (“Because the preponderance-of-the-evidence standard results 21 in a roughly equal allocation of the risk of error between litigants, we presume that this standard 22 is applicable in civil actions between private litigants[.]”). 23 To the court’s knowledge, no court has yet ruled on whether a RAC and/ or MAC audit, 24 which recovers proceeds that would have been covered-conduct recoverable in a simultaneously 25 occurring qui tam suit, constitutes an “alternate remedy” under the FCA. The court therefore 26 conducts a statutory interpretation inquiry beginning with “the plain language of the statute.” U.S. 27 ex rel. Barajas v. United States, 258 F.3d 1004, 1010 (9th Cir. 2001). 2 The court grants Guardiola’s motion. 3 First, the court addresses what the Government calls the “pre-existence” requirement. The 4 Ninth Circuit determined that, “[a]n alternate remedy under § 3730(c)(5) is a remedy achieved 5 through the government’s pursuit of a claim after it has chosen not to intervene in a qui tam 6 relator’s FCA action.” Barajas, 258 F.3d at 1010. The Government argues that because the audit 7 process began in 2010, two years before Guardiola brought her qui tam action and more than three 8 years before the Government decided not to intervene, the “pre-existence” requirement fails. 9 Guardiola argues that while the audit process may have begun in 2010, the RAC contracts were 10 not a “single, unbroken and unchanging process,” but rather were a series of contracts that could 11 have been stopped or paused by the Government at any time. ECF No. 235 at 3. Additionally, she 12 argues that CMS had control over all RACs and could suppress claims so that the RAC could not 13 review them while other fraud investigations occurred. 14 In considering whether the Government began pursuing the RAC recovery before or after 15 it decided not to intervene, the court looks at the RAC audit process and the relationship between 16 the RAC and CMS. As provided by the record, HDI was awarded the RAC Region D contract in 17 2008 and began sending Renown document requests based on CMS approved new issues in 2010. 18 While the Government argues that HDI was pursuing the same audit of the “inpatient-outpatient 19 New Issue” since 2010, it points to nothing in the record to support this conclusion. The record 20 does not make clear that a document request made in 2010 pertained to the same audit as one made 21 in 2012 or 2013. It appears that the Government is asking the court to find that document requests 22 made regarding one issue in one year and those document requests made in a different year on a 23 potentially new or different issue, pertain to the same continuous audit. The record cannot support 24 such a conclusion. Furthermore, such a conclusion would mean that no relator could ever recover 25 on these types of claims because the Government began auditing providers in 2010 and presumably 26 will continue auditing providers for the foreseeable future. 27 The Government further argues that HDI did not elect to audit Renown beginning in 2012 1 court agrees that HDI did not make this choice, however, the record provides that the Government 2 did. Based on the Statement of Work provided to HDI along with each RAC contract, the RACs 3 are to take precautions to ensure that they are not reviewing claims that are either suppressed or 4 excluded. In part, this is to prevent overlap between RACs and CMS, OGC, DOJ, OIG, and/or 5 other law enforcement fraud investigations. The Government argues that even if the Department 6 of Justice (“DOJ”) was aware of the qui tam suit (which as the entity that decides whether to 7 intervene in a qui tam suit it would have been), no statute imposes a duty on them to stop or 8 interfere with the RAC’s statutorily mandated work. The court disagrees. 9 It is clear from the record that CMS directed the RAC’s actions. In order to prevent overlap, 10 the RAC was required to review the RAC data warehouse to determine whether it could review 11 specific claims and attempt to recover overpayment. However, a review of the data warehouse is 12 only as good as the data input into the data warehouse. If the RACs, CMS, OGC, DOJ, OIG and 13 other law enforcement do not update the data warehouse based on claims they are reviewing and 14 for which they are attempting to recover overpayment, RACs will presumably be interfering with 15 other fraud reviews. To find that the DOJ holds no duty to keep a RAC from interfering in a qui 16 tam suit in which the Government declines to intervene, when such a suit will involve great 17 expense to the relator, would be counter to the very purpose of the FCA. See Bledsoe, 342 F.3d at 18 648 (quoting S. Rep. 99-345 at 23-24, 1986 U.S.C.C.A.N. at 5288-89) (“Congress made it clear 19 that its ‘overall intent in amending [§ 3730] [was] to encourage more private enforcement suits.’”). 20 This reasoning is directly in line with the Ninth Circuit’s reasoning in Barajas: “[t]he use 21 of the term ‘alternate remedy’ makes clear that the government must choose one remedy or the 22 other; it cannot choose both.” 258 F.3d at 1010. The Statement of Work makes clear that the 23 Government does not want overlap in investigations and overpayment recovery. Therefore, these 24 contracts do not contemplate a time when the RAC is recovering proceeds that are covered conduct 25 in another fraud investigation or cause of action like Guardiola’s qui tam suit.3 This is a logical 26

27 3 See also Bledsoe, 342 F.3d at 648 (quoting S. Rep. 99-345, at 27, 1986 USCCAN at 5292) (“Specifically, the Senate Report made clear that ‘[w]hile the Government will have the opportunity to elect its remedy, it 1 conclusion—if the Government had intervened, it too would not want to have spent time and 2 taxpayer resources investigating the claims only to find that the RAC had already recovered the 3 funds. To find that a relator is not entitled to the same protections is, again, directly contrary to the 4 plain purpose of the FCA. 5 The Government further argues that section 1395ddd(h)(7) of the Medicare Integrity 6 Program provides that the RAC audits do not impede an FCA suit. The statute provides: “A 7 recovery of an overpayment to [an] individual or entity by a recovery audit contractor under this 8 subsection shall not be construed to prohibit the Secretary or the Attorney General from 9 investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from such 10 overpayment.” 42 U.S.C. § 1395ddd(h)(7). A plain reading of this statute provides that the 11 Government is not precluded from investigating or filing suit against a provider that a RAC has 12 recovered overpayment from if, after recovering payment, the Government determines there may 13 be fraud. Nothing in this statute can be read to say that RAC recovery of overpayment made while 14 a simultaneous qui tam suit is pending in which the Government declined to intervene is precluded 15 as an alternate remedy. 16 Here, Guardiola filed her suit in June 2012, and in mid-September 2013, the Government 17 declined to intervene. After declining to intervene, the record provides that the Government did 18 not suppress the RAC’s claim review of the covered conduct of Guardiola’s qui tam suit, and it 19 did not provide a stop-work order or litigation-hold to the RAC until 2017. The record further 20 provides that from late September 2013 until February 2014, the RAC continued sending 21 document requests to Renown. The court finds these new document requests, which the 22 Government failed to suppress when it had the authority and ability to do so, constituted a pursuit 23 of the claim after the Government had declined to intervene in the qui tam suit. Therefore, the 24 “pre-existence” requirement is met. 25 Next, in determining whether recovery by a RAC could constitute an alternate remedy, the 26 court looks again to the Ninth Circuit’s reasoning in Barajas. The Ninth Circuit explained: 27 declines to intervene in a qui tam action, it is estopped from pursing [sic] the same claim administratively, 1 The language of § 3730(c)(5) places no restrictions on the alternate remedies the government might pursue. It specifies broadly that the government may pursue 2 “any alternative remedy available to [it]” (emphasis added). The term “any” is generally used to indicate lack of restrictions or limitations on the term modified. 3 See Hertzberg v. Dignity Partners, Inc., 191 F.3d 1076, 1080 (9th Cir. 1999) (“According to Webster’s Third New Int’l Dictionary (3d ed. 1986), ‘any’ means 4 ‘one, no matter what one’; ‘ALL’; ‘one or more discriminately from all those of a kind.’ This broad meaning of ‘any’ has been recognized by this circuit.” (citations 5 omitted)); Turner v. McMahon, 830 F.2d 1003, 1007 (9th Cir. 1987) (“[U]se of the adjective ‘any’ indicates that Congress intended that overpayments must be 6 recouped without restriction.”). 7 Barajas, 258 F.3d at 1010-11. The Ninth Circuit’s broad reading of the statute therefore supports 8 a finding that RAC and/ or MAC recoveries can constitute an “alternate remedy” under the FCA. 9 The Government next argues that to be an alternate remedy, the effect of the alternate 10 remedy must be to “discontinue, and thereby preclude, the relator’s qui tam suit.” ECF No. 235 at 11 14. As the Ninth Circuit noted in Barajas, “[i]f the government chooses not to intervene in the 12 relator’s action, but, instead chooses to pursue ‘any alternate remedy,’ the relator has a right to 13 recover a share of the proceeds of the ‘alternate remedy’ to the same degree that he or she would 14 have been entitled to a share of the proceeds of an FCA action.” 258 F.3d at 1010 (emphasis 15 added). The parties’ stipulation reads: “But for being recovered by the United States as RAC 16 Recoveries or MAC Recoveries, these amounts would have been recoverable as Covered Conduct 17 as part of the Settlement Agreement.” ECF No. 281 ¶ 6 (emphasis added). This stipulation 18 therefore provides that had the Government not conducted the RAC and MAC recoveries, 19 Guardiola would have been entitled to a 29 percent share of those proceeds in her FCA qui tam 20 action. The stipulation language is exactly the situation the alternate remedy provision was 21 designed to protect against: when a relator would have recovered a share of the proceeds in her qui 22 tam action but for the Government proceeding in a different manner without her, and not sharing 23 those proceeds. See Barajas, 258 F.3d at 1012 (“It would be inconsistent not only with the plain 24 meaning of the broad language employed in the statute, but also with the purpose of the statute, to 25 allow the government to obtain from a qui tam defendant a remedy that could have been obtained 26 in an already-filed FCA action, and then to argue that the proceeds of that remedy need not be 27 shared with the whistleblower because the remedy was not an ‘alternate remedy’ within the 1 The Government argues that to be an alternate remedy, the alternative must have entirely 2 precluded Guardiola from all recovery. The court disagrees—that is not the law of this Circuit. 3 First, the Ninth Circuit’s opinion in Barajas, the Circuit’s most precedential case on FCA 4 “alternate remedy” claims, does not support this reasoning. See id. While in Barajas the relator 5 was ultimately prohibited from pursuing its qui tam suit due to the Government recovering 6 alternatively, the Court never held that preclusion is a base requirement to recover on an alternative 7 remedy theory. Id. at 1012-13. Second, the Ninth Circuit’s opinion in United States v. Van Dyck 8 does not lend support to this reasoning. 866 F.3d 1130 (9th Cir. 2017). Van Dyck starts at a different 9 procedural posture than this action—there, the Court was deciding whether a relator could 10 intervene in a criminal proceeding and it did not even reach the conclusion of whether a criminal 11 forfeiture constituted an alternate remedy under the statute. Id. at 1135. Additionally, simply 12 because the Court found that “conclusion of the criminal forfeiture action does not preclude 13 Relators from going forward with the qui tam action and receiving a portion of the proceeds,” that 14 does not mean that total preclusion is required to constitute an alternate remedy. Id. Third, the 15 Government cites to the Fourth Circuit’s opinion in United States ex rel. LaCorte v. Wagner, in 16 support of this reasoning. 185 F.3d 188 (4th Cir. 1999). Like Van Dyke, LaCorte starts from a 17 different procedural posture—there, the Court was deciding whether a relator from a prior qui tam 18 suit could intervene in a different relator’s qui tam suit. Id. at 190. Because this is expressly 19 prohibited under the FCA, the would-be intervenors argued that the new qui tam suit was an 20 “alternate remedy.” Id. at 191. The Government cites to one portion of the Court’s opinion, in 21 which the Court discusses its alternative reasoning if it were to believe that the FCA permits 22 intervention: “Section 3730(c)(5) assumes that the original qui tam action did not continue.” Id. at 23 192. The LaCorte Court cites to no authority for this reasoning, and therefore, the court respectfully 24 disagrees—the alternative remedy provision does not presume that the qui tam suit does not 25 proceed, it simply provides that if the Government does not intervene and proceeds with an 26 alternative remedy, the relator is entitled to a portion of the proceeds recovered.4 27 1 Finally, in considering whether the RAC and/ or MAC proceeds constitute an “alternate 2 remedy” under the FCA, the court considers whether Guardiola has established that there exists 3 “overlap between the conduct alleged in [her] qui tam suit and the conduct” on which the 4 Government recovered with the RAC. See Bledsoe, 342 F.3d at 650-51. Again, the court looks to 5 the parties’ stipulation which provides the necessary finding: “But for being recovered by the 6 United States as RAC Recoveries or MAC Recoveries, these amounts would have been 7 recoverable as Covered Conduct as part of the Settlement Agreement.” ECF No. 281 ¶ 6. The court 8 finds that because Guardiola would have been able to recover the proceeds recovered by the RAC 9 as covered conduct in her qui tam suit, there is sufficient overlap between the two that Guardiola 10 is entitled to recover. 11 The court finds that this conclusion is properly in line with the purpose of the FCA. As the 12 Sixth Circuit noted in Bledsoe, Congress “emphasized its belief that ‘[i]n the face of sophisticated 13 and widespread fraud . . . only a coordinated effort of both the Government and the citizenry will 14 decrease this wave of defrauding public funds.’” Bledsoe, 342 F.3d at 648 (quoting S.Rep. 99-345 15 at 23-24, 1986 U.S.C.C.A.N. at 5288-89)). Qui tam suits are costly, and if the government declines 16 to intervene, the relator takes all the risk and bears all the costs in pursuing the suit. It would be 17 inconsistent with the plain meaning of the broad language of the FCA to allow the Government to 18 obtain recovery from the RAC and/ or MAC processes that would have been recoverable in the 19 qui tam action, and then exclude the relator from those proceeds. It would also hinder the purpose 20 of the FCA—relators will be less likely to engage in costly qui tam suits if, after years of litigation, 21 they find out their claims have already been recovered by a RAC or MAC and that they are unable 22 to recover. The Government declined to intervene but continued pursuing the same claims via the 23 administrative RAC procedure. This is exactly what the “alternative remedy” provision was 24 designed to prohibit. Therefore, because Guardiola would have been entitled to her relator’s share 25 of the proceeds recovered by the RAC and MAC in her qui tam action, the court finds Guardiola 26 is due her relator’s share of these recovered proceeds as an alternate remedy. 27 /// 1 || IV. CONCLUSION 2 IT IS THEREFORE ORDERED that Cecilia Guardiola’s motion to award her a share of 3 || proceeds recovered administratively and separately by the United States from Renown (ECF No. 4 || 231) is GRANTED. Guardiola is hereby AWARDED $1,021,448.52, which represents a 29% 5 share of $3,522,236.27, as stipulated to by the parties. 6 IT IS FURTHER ORDERED that the parties are to file a JOINT STATUS REPORT 7 || within 30 DAYS of the date of this Order informing the court of any further issues, or foreseeable 8 || issues that may be raised, in this case. If there are none appearing, the parties should provide the 9 || court with good cause why this case should not be closed. 10 12 DATED this 4th day of March, 2020. 13 14 LA . HICKS 5 UNITED STATES DISTRICT JUDGE

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