United States District Court, N.D. Alabama, Southern Division
WILLIE BRITTON, for the use and benefit of the United States, Plaintiff,
LINCARE, INC., Defendant.
STACI G. CORNELIUS, Magistrate Judge.
This is a qui tam action brought by Willie Britton on behalf of the United States of America against Lincare, Inc., pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3733 (the "FCA"). (Doc. 1). The action was unsealed after the United States declined to intervene. (Docs. 4 & 5). On November 20, 2013, Lincare filed a motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief may be granted. (Doc. 8). Britton has responded (Doc. 13), and the parties have orally argued their positions ( see Doc. 17 and docket entry dated March 11, 2015). For the reasons discussed below, Lincare's motion to dismiss is due to be granted, and this action is due to be dismissed with prejudice.
I. Pleading Standard
A False Claims Act complaint must meet the heightened pleading standard set forth in Rule 9(b) of the Federal Rules of Civil Procedure, meaning it must allege fraud with particularity. U.S. ex rel. Clausen v. Lab. Corp. of America, Inc., 290 F.3d 1301, 1308-10 (11th Cir. 2002); Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009). "A False Claims Act complaint satisfies Rule 9(b) if it sets forth "facts as to time, place, and substance of the defendant's alleged fraud, " specifically "the details of the defendants' allegedly fraudulent acts, when they occurred, and who engaged in them."'" Hopper, 588 F.3d at 1324 (quoting Clausen, 290 F.3d at 1310). Failure to meet the pleading requirements of Rule 9(b) is grounds for dismissal pursuant to Rule 12(b)(6) for failure to state a claim on which relief may be granted. U.S., ex rel., Shurick v. Boeing Co., 330 Fed.App'x 781, 783 (11th Cir. 2009) (citing Clausen, 290 F.3d at 1310; United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1357 (11th Cir. 2006)). When considering a Rule 12(b)(6) motion, a court accepts the factual allegations of the complaint as true and construes them in the light most favorable to the plaintiff. Chaparro v. Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012). However, a court is not required to accept a plaintiff's legal conclusions unsupported by facts. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plaintiff's factual allegations must support a claim for relief that is plausible on its face and rises above mere speculation. Id.
Lincare is an oxygen respiratory company. (Doc. 1 at ¶ 11). Britton is employed as a service representative for Lincare. ( Id. at ¶ 9). More specifically, Britton delivers nebulizers. ( Id. at ¶ 2). In his capacity as a Lincare service representative, Britton explains prescriptions and demonstrates proper breathing techniques for use with a nebulizer, which are tasks Lincare's internal documents require to be performed by a clinician. ( Id. at ¶¶ 2, 5, 12-13, 15, 17-18). Lincare relies on its service representatives to perform patient education services because it has many more clients in the Birmingham area than the single clinician it employees in that market can serve. (Id. at ¶ 20). The complaint both alleges "[u]pon information and belief, " Lincare bills Medicare for the patient education services Britton performs, and "[t]o the extent" Lincare bills Medicaid for patient education services, Britton performs those services. ( Id. at ¶¶ 3-4, 16). The complaint states a count under § 3729(a)(1), alleging Lincare knowingly presented or caused to be presented false or fraudulent claims for payment by the United States. ( Id. at ¶¶ 21-26). The complaint also states a count under § 3729(a)(2), alleging Lincare knowingly made, used, or caused to be made or used, false or fraudulent statements and certifications to get a false or fraudulent claim paid by the United States. ( Id. at ¶¶ 27-30).
The FCA imposes civil liability on persons who defraud the government. A private citizen, known as a "relator, " may commence an action, known as a " qui tam action, " on behalf of the United States to enforce the provisions of the FCA. § 3730(b). Although the Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, 123 Stat. 1617 ("FERA"), amended and renumbered sections of the FCA,  the complaint in question specifically alleges violations of §§ 3729(a)(1) and (a)(2), the pre-amendment versions of the FCA's "presentment" and "make-or-use" provisions. ( See Doc. 1 at Counts I & II). Counts I and II of the complaint parrot the language of §§ 3729(a)(1) and (a)(2) (1994), respectively. ( Compare Doc. 1 at 4-6, with §§ 3729(a)(1) and (a)(2) (1994)). Furthermore, the parties have briefed the pending motion to dismiss under the pre-amendment version of the FCA. ( See Docs. 8 and 13). Accordingly, the undersigned will address the sufficiency of Britton's complaint under §§ 3729(a)(1) and (a)(2) (1994).
The pre-amendment version of the FCA's "presentment" provision imposes civil liability on any person who "knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval." § 3729(a)(1) (1994). The pre-amendment version of the FCA's "make-or-use" provision imposes civil liability on any person who "knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government." § 3729(a)(2) (1994). Lincare argues Britton fails to plead the presentment of a claim under § 3729(a)(1) or the payment of a claim under § 3729(a)(2) sufficiently. (Doc. 8 at 5-12). In the alternative, Lincare argues Britton fails to allege the violation of any Medicare or Medicaid billing or supplier requirement. ( Id. at 12-15). In response to this alternative argument, Britton cites guidelines for billing Medicare published by the American Academy of Respiratory Care and claims to proceed under an implied false certification theory. (Doc. 13 at 2-4). Although there is some question whether Britton has alleged a basis for the falsity or fraudulence of any claim for patient education services performed by a Lincare service representative that was submitted for Medicare or Medicaid reimbursement, the undersigned need not address this issue because, regardless, Britton has failed to plead the other elements of his claims sufficiently.
A. § 3729(a)(1) Claim
The pre-amendment version of the FCA's "presentment" provision requires the actual submission of a false or fraudulent claim to the government. Clausen, 290 F.3d at 1311. Rule 9(b) "does not permit a False Claims Act plaintiff merely to describe a private scheme in detail but then to allege simply and without any stated reason for his belief that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to the Government." Id. Rather, "some indicia of reliability must be given in the complaint to support the allegation of an actual false claim for payment being made to the Government." Id. (emphasis in original). Whether a complaint contains indicia of reliability to support the allegation of an actual false or fraudulent claim that satisfies Rule 9(b) is determined on a case-by-case basis. Atkins, 470 F.3d at 1358. The Eleventh Circuit has recently synthesized case law articulating the standard for pleading the actual submission of a false or fraudulent claim:
Providing exact billing data-name, date, amount, and services rendered-or attaching a representative sample claim is one way a complaint can establish the necessary indicia of reliability that a false claim was actually submitted. However, there is no per se rule that an FCA complaint must provide exact billing data or attach a representative sample claim. Under this Court's nuanced, case-by-case approach, other means are available to present the required indicia of reliability that a false claim was actually submitted. Although there are not bright line rules, our case law has indicated that a relator with direct, first-hand knowledge of the defendants' submission of false claims gained through her employment with the defendants may have a sufficient basis for asserting that the defendants actually submitted false claims. By contrast, a plaintiff-relator without first-hand knowledge of the defendants' billing practices is unlikely to have a sufficient basis for such an allegation. Additionally, a corporate outsider likely does not have the required access to learn enough about the defendants' billing practices. At a minimum, a plaintiff-relator must explain the basis for her assertion that fraudulent claims were actually submitted. It is not enough for the plaintiff-relator to state baldly that he was aware of the defendants' billing practices, to base his knowledge on rumors, or to offer only conjecture about the source of his knowledge.
U.S. ex rel. Mastej v. Health Mgmt. Assocs., Inc., 591 Fed.App'x 693, 704-05 (2014) (internal citations omitted), petition for cert. docketed, No. 14-1154 (U.S. Mar. 23, 2015).
For example, in Mastej, the relator claimed a hospital operator and its subsidiary violated the FCA by seeking Medicare reimbursement for patients referred to a medical center through pay-for-referral schemes that violated federal statutes. Id. at 697. The operative complaint summarily stated the defendants submitted Medicare claims for patients referred through the schemes without providing the date or amount of any claim submitted or paid or alleging the frequency of claims. Id. at 706. Nonetheless, because the relator was a corporate insider with "highly significant employment roles and duties" and alleged "he was not only in a position to know but also gained access to the relevant information during his employment, " the Eleventh Circuit held the operative complaint contained sufficient indicia of reliability to support the relator's allegation he had personal knowledge the defendants actually submitted Medicare claims for patients referred through the schemes during the time he was employed by the defendants. Id. at 708-09. However, the court held the complaint did not satisfy Rule 9(b) with respect to the allegation the defendants sought and received Medicare reimbursement for patients referred through the schemes ...