United States Court of Appeals For the Seventh Circuit ____________________ No. 19-3117 UNITED STATES OF AMERICA ex rel. JOHN MAMALAKIS, Plaintiff-Appellant,

v. ANESTHETIX MANAGEMENT LLC d/b/a ANESTHETIX OF TEAMHEALTH, et al., ∗ Defendants-Appellees. ____________________

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 14-CV-349 — David E. Jones, Magistrate Judge. ____________________

ARGUED APRIL 13, 2020 — DECIDED DECEMBER 8, 2021 ____________________

Before SYKES, Chief Judge, and HAMILTON and ST. EVE, Circuit Judges.

∗The parties misspelled the defendant’s name as “Anesthestix Manage- ment LLC” in the case caption. We use the correct spelling. 2 No. 19-3117

SYKES, Chief Judge. Dr. John Mamalakis, a Wisconsin anes- thesiologist, filed this qui tam lawsuit under the False Claims Act, 31 U.S.C. §§ 3729 et seq., alleging that Anesthetix Man- agement LLC, his former employer, fraudulently billed Medicare and Medicaid for services performed by its anes- thesiologists. His central allegation is that the anesthesiolo- gists regularly billed the government using the code for “medically directed” services when their services qualified for payment only at the lower rate for services that are “medically supervised.” A magistrate judge dismissed the case, ruling that the complaint did not provide enough factual particularity to satisfy Rule 9(b)’s heightened plead- ing standard for fraud claims. FED. R. CIV. P. 9(b). The judge gave Mamalakis a chance to amend, directing him to pro- vide representative examples of the alleged fraudulent billing. Mamalakis obliged, filing an amended complaint that in- cluded ten specific examples of inflated billing. Each exam- ple identified a particular procedure and anesthesiologist and provided details about how the services did not qualify for payment at the medical-direction billing rate. Six of the ten examples included a specific allegation that the anesthe- siologist billed the services using that code; the other four relied on general allegations regarding the group’s uniform policy of billing at the medical-direction rate. The judge held that the amended complaint still fell short under Rule 9(b) and dismissed the case with prejudice. That was error. Although Rule 9(b) imposes a high pleading bar to protect defendants from baseless accusations of fraud, Mamalakis cleared it. The ten examples, read in context with the other allegations in the amended complaint, provide No. 19-3117 3 sufficient particularity about the alleged fraudulent billing to survive dismissal. We reverse and remand for further pro- ceedings. I. Background We begin with the government’s billing rules for anes- thesiologists. Under Medicare and Medicaid regulations, anesthesiologists may submit claims for payment to the government under one of three billing codes corresponding to the level of services provided. 42 C.F.R. § 414.46(b). The highest billing rate is reserved for cases in which the anes- thesiologist “personally performed” the procedure. This rate applies if the anesthesiologist (1) performed the anesthesia services alone; (2) was the teaching physician directing a resident or intern physician during the procedure; or (3) continuously participated in a single procedure involving a certified registered nurse anesthetist, an anesthesiologist assistant, or a student nurse anesthetist. Id. § 414.46(c). The “medical direction” rate is half the personal- performance rate. Id. § 414.46(d)(3)(v). An anesthesiologist may bill at the medical-direction rate if he directed a re