United States District Court, S.D. Alabama, Southern Division
UNITED STATES OF AMERICA, ex rel. LORI L. CARVER, Plaintiff,
v.
PHYSICIANS PAIN SPECIALISTS OF ALABAMA, P.C., et al., Defendants.
MEMORANDUM OPINION
JEFFREY U. BEAVERSTOCK UNITED STATES DISTRICT JUDGE
This
False Claims Act suit is before the Court on the motion of
Defendant Castle Medical, LLC (“Castle”) to
dismiss the Fourth Amended Complaint (“Motion”).
(Doc. 218). Castle also moves to strike “impermissible
allegations and claims.” (Id.) The Relator
filed a Response to the Motion (Doc. 220), and Castle replied
(Doc. 221). The Motion is ripe for resolution. Pursuant to
the Order dated September 27, 2019 (Doc. 237), and after due
consideration, the Court concludes that the Motion is due to
denied for the reasons set forth in this Memorandum Opinion.
BACKGROUND
I.
Procedural and Substantive History: [1]
The
Relator, Lori Carver, was an employee of Defendant Physician
Pain Specialists of Alabama, P.C. ("Pain"). She
commenced this action in August 2013, after leaving her
employment with Pain. Relator's initial Complaint named
Pain and its owners, Doctors Ruan and Couch, as Defendants.
She filed her First Amended Complaint in August 2014, adding
a pharmacy which was also owned by the two Defendant Doctors.
(Doc. 8). Relator filed a Second Amended Complaint in October
2016, adding Castle and three other Defendants. (Doc. 30).
Castle is the only remaining active Defendant.
The
parties filed their Rule 26(f) report on June 2, 2017. (Doc.
102). Discovery and motion practice ensued shortly
thereafter. On August 2, 2017, Relator filed a motion to
compel responses to discovery propounded on Castle in June
2017. (Doc. 124). On the same day (August 2, 2017), Castle
filed a motion for judgment on the pleadings
("JOP") as to the Second Amended Complaint. (Doc.
125). On August 17, 2017, Castle filed a motion to stay
discovery pending resolution of its motion for JOP. (Doc.
134). The Magistrate Judge denied Castle's motion to stay
discovery and granted Relator's motion to compel. (Doc.
139). The Court affirmed the Magistrate Judge's order.
(Doc. 143).
On
September 22, 2017, Castle produced some 14, 000 pages of
documents in response to Relator's discovery. Castle
produced an additional 313 pages on October 25, 2017. On
October 27, 2017, the Court granted Castle's motion for
JOP as to the Second Amended Complaint. (Doc. 146). The Court
concluded that Relator had failed to plead the actual
submission of a false claim with the particularity required
by Rule 9(b) of the Federal Rules of Civil Procedure.
On
November 22, 2017, Relator moved for leave to file a Third
Amended Complaint (Doc. 156), which the Court granted on
April 2, 2018 (Doc. 175). Relator's Third Amended
Complaint (Doc. 178), filed April 6, 2018, alleged additional
information taken from Castle's discovery responses.
(Docs. 158 and 168). Castle moved to dismiss the Third
Amended Complaint on grounds, inter alia, that
Relator was not entitled to amend her complaint using
discovery produced by Castle, and, that Relator had again
failed to plead submission of a claim with the particularity
required by Rule 9(b). (Doc. 184). Castle's motion to
dismiss the Third Amended Complaint alternatively sought to
strike the allegations in it that were based on Castle's
discovery responses. (Id. at 15).
The
Court granted Castle's motion to dismiss the Third
Amended Complaint on June 26, 2018, once again based on
Relator's failure to satisfy the pleading particularity
requirements of Rule 9(b). (Doc. 197). The Court again
rejected, however, Castle's argument that Relator was not
entitled to use Castle's discovery responses to satisfy
pleading requirements. (Id. at 7 - 10).
The
Court's order dismissing the Third Amended Complaint was
without prejudice to Relator's ability to seek leave to
file a Fourth Amended Complaint. (Id.). Realtor
timely filed her Motion for Leave to File a fourth amended
complaint on (Doc. 199), which was granted (Doc. 214).
II.
The Fourth Amended Complaint:
On
January 4, 2019, Relator filed her Fourth Amended Complaint
(“FAC”) for the stated purpose of “adding
specific factual allegations to paragraph 48(c), submitting a
third supplemental disclosure statement of material evidence,
adding Exhibits B-1 through B-5, and Exhibits C-1 through
C-7.” (Doc. 215). According to Relator, Exhibits C-1
through C-7 address her prior failures to plead the actual
submission of a false claim with sufficient
particularity. Relator states that these Exhibits
“evidence the submission of false claims to the
government by Castle.” (Id. at 30 - 33). At
sub-sections vi. through xii. of paragraph 48. C. of the FAC,
Relator provides the following descriptions and
“Analysis” of Exhibits C-1 through
C-7:[2]
vi. Exhibit C-1: Castle “Claims Tracking
Details” regarding patient having initials __(9)
This document evidences a submission by Castle to the
government (i.e. Healthspring of Alabama, a Medicare HMO
__(10)), for a date of service of 4/3/13 concerning UDS
performed at PPSA with the rendering provider listed as Ruan,
Xiulu MD/Harville, Shanna. The amount billed to the
government is $1, 576.30. The amount currently paid (as of
the date on the report) by the government is $116.27. The UDS
procedures are identified by code and the amount charged per
procedure is listed on the document.
Analysis: This document confirms a
submission/presentment to the government of a claim that
arises out of the illegal kickback scheme addressed above.
Furthermore, the document confirms a partial payment by the
government to Castle pursuant to the illegal kickback scheme
addressed above.
(9) See Bates-stamped Castle Medical 13033. Produced by
Castle on September 26, 2017. Within Castle's production
are a number of other “Claims Tracking Details”
documents regarding a number of other patients. This exhibit
is attached as a representative sample from Castle's
document production. Moreover, the email communications and
other documents referenced above refer to hundreds of such
submissions monthly.
(10) Healthspring of Alabama (now known as Cigna
Healthspring) is an authorized and approved Medicare HMO
(i.e. government) health insurance plan. Importantly, Castle
clearly knew Healthspring was a Medicare HMO health insurance
plan per an internal Castle e-mail dated 6.12.13 which states
(concerning the PPSA account) Castle is to bill __- (Castle
07712). Said document is also attached to Exhibit C-1 and
incorporated by reference herein.
vii. Exhibit C-2: Castle “Claims Tracking
Details” regarding patient having initials __(11)
This document evidences a submission by Castle to the
government (i.e. Healthspring of Alabama, a Medicare HMO),
for a date of service of 4/1/13 concerning UDS performed at
PPSA's West Mobile location with the rendering provider
listed as Ruan, Xiulu MD/Harville, Shanna. The amount billed
to the government is $1, 970.20. The amount currently paid
(as of the date on the report) by the government is $81.97.
The UDS procedures are identified by code and the amount
charged per procedure is listed on the document.
Analysis: This document confirms a
submission/presentment to the government of a claim that
arises out of the illegal kickback scheme addressed above.
Furthermore, the document confirms a partial payment by the
government to Castle pursuant to the illegal kickback scheme
addressed above.
(11) See Bates-stamped Castle Medical 13026. Produced by
Castle on September 26, 2017. Within Castle's production
are a number of other “Claims Tracking Details”
documents regarding a number of other patients. This exhibit
is attached as a representative sample from Castle's
document production.
viii. Exhibit C-3: Castle “Claims Tracking
Details” regarding patient having initials __(12)
This document evidences a submission by Castle to the
government (i.e. Healthspring of Alabama, a Medicare HMO),
for a date of service of 4/2/13 concerning UDS performed at
PPSA's West Mobile location with the rendering provider
listed as Ruan, Xiulu MD/Parker, Bridgette. The amount billed
to the government is $1, 970.20. The amount currently paid
(as of the date on the report) by the government is $0. The
UDS procedures are identified by code and the amount charged
per procedure is listed on the document.
Analysis: This document confirms a
submission/presentment to the government of a claim that
arises out of the illegal kickback scheme addressed above.
(12) See Bates-stamped Castle Medical 13028. Produced by
Castle on September 26, 2017. Within Castle's production
are a number of other “Claims Tracking Details”
documents regarding a number of other patients. This exhibit
is attached as a representative sample from Castle's
document production.
ix. Exhibit C-4: Castle “Claims Tracking
Details” regarding patient having initials __(13)
This document evidences a submission by Castle to the
government (i.e. Healthspring of Alabama, a Medicare HMO),
for a date of service of 4/4/13 concerning UDS performed at
PPSA with the rendering provider listed as Couch, Patrick
MD/Parker, Thomas, J. The amount billed to the government is
$1, 925.20. The amount currently paid (as of the date on the
report) by the government is $65.65. The UDS procedures are
identified by code and the amount charged per procedure is
listed on the document.
Analysis: This document confirms a
submission/presentment to the government of a claim that
arises out of the illegal kickback scheme addressed above.
Furthermore, the document confirms a partial payment by the
government to Castle pursuant to the illegal kickback scheme
addressed above.
(13) See Bates-stamped Castle Medical 13039. Produced by
Castle on September 26, 2017. Within Castle's production
are a number of other “Claims Tracking Details”
documents regarding a number of other patients. This exhibit
is attached as a representative sample from Castle's
document production.
x. Exhibit C-5: Castle “Claims Tracking
Details” regarding patient having initials __(14)
This document evidences a submission by Castle to the
government (i.e. Healthspring of Alabama, a Medicare HMO),
for a date of service of 5/7/13 concerning UDS performed at
PPSA's West Mobile location with the rendering provider
listed as Ruan, Xiulu MD/Harville, Shanna. The amount billed
to the government is $1, 576.30. The amount currently paid
(as of the date on the report) by the government is $0. The
UDS procedures are identified by code and the amount charged
per procedure is listed on the document.
Analysis: This document confirms a
submission/presentment to the government of a claim that
arises out of the illegal kickback scheme addressed above.
The marking “__ ” was added to avoid errors made
by Castle employees in billing PPSA for Medicare recipients -
which is confirmed by correspondence (Castle 07300) from Jess
Smith of Castle to Jennifer Blair of PPSA (which is attached
as the last page to Exhibit C-5).
(14) See Bates-stamped Castle Medical 12793. Produced by
Castle on September 26, 2017. Within Castle's production
are a number of other “Claims Tracking Details”
documents regarding a number of other patients. This exhibit
is attached as a representative sample from Castle's
document production.
xi. Exhibit C-6: Castle e-mails to PPSA employee
Debi Phillips dated March 7th, 2013 and March
12th, 2013 listing the UDS billing codes. (15)
The documents list the billing codes that are seen on
Exhibits C-1 through C-5 under the heading
“Proc.”.
Analysis: This document confirms the
“Proc.'s” listed on Exhibits C-1 through C-5
are UDS panel codes that providers like Castle use to support
claims to the government.
(15) See Bates-stamped Castle Medical 06950-06952 and Castle
Medical 07596-07598. Produced by Castle on September 26,
2017.
xii. Exhibit C-7: Castle Sales Report for PPSA's
2 locations for the period through July 27th, 2013
through August 9th, 2014. (16)
These Castle documents list the names of a number of
government funded healthcare plans (i.e. GA Medicare, VIVA
Medicare, Healthsprings, etc.), gross numbers of patients per
...