United States ex rel. Carver v. Physicians Pain Specialists of Alabama, P.C.

          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 7^th, 2013 and March 12^th, 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 27^th, 2013 through August 9^th, 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 ...