Opinion
CIVIL ACTION FILE NO. 1:20-CV-2790-TWT
2021-01-05
Lisa CERVALLI, Plaintiff, v. PIEDMONT HEALTHCARE, INC., et al., Defendants.
David James Worley, James M. Evangelista, Kristi Stahnke McGregor, Evangelista Worley, LLC, Atlanta, GA, Helen Kim Ho, HKH Law LLC, Duluth, GA, for Plaintiff. Edward T. Ellis, Pro Hac Vice, Littler Mendelson, P.C., Philadelphia, PA, Amanda Trull, Littler Mendelson, P.C., Blaze R. Knott, Whitney M. Ferrer, Littler Mendelson, Atlanta, GA, for Defendants.
David James Worley, James M. Evangelista, Kristi Stahnke McGregor, Evangelista Worley, LLC, Atlanta, GA, Helen Kim Ho, HKH Law LLC, Duluth, GA, for Plaintiff.
Edward T. Ellis, Pro Hac Vice, Littler Mendelson, P.C., Philadelphia, PA, Amanda Trull, Littler Mendelson, P.C., Blaze R. Knott, Whitney M. Ferrer, Littler Mendelson, Atlanta, GA, for Defendants.
OPINION AND ORDER
THOMAS W. THRASH, JR., United States District Judge
This is a False Claims Act retaliation case. It is before the Court on the Defendants’ Motion to Dismiss the Plaintiff's Amended Complaint [Doc. 22]. For the reasons set forth below, the Defendants’ Motion to Dismiss the Plaintiff's Amended Complaint [Doc. 22] is DENIED.
I. Background
A. Factual Background
The Plaintiff, Lisa Cervalli, brings these False Claims Act ("FCA") and Georgia False Medicaid Claims Act ("GFMCA") retaliation claims against her former employer, Piedmont Healthcare, Inc. and Piedmont Henry Hospital, Inc. (collectively, "the Defendants"). (Am. Compl. ¶¶ 1–3.) The Plaintiff worked as a Certified Pharmacy Technician at Piedmont Henry Hospital from August 3, 2015 to July 2, 2017. (Id. ¶ 6.) During her employment, the Defendants used EPIC, a suite of software solutions for billing, patient registration, and storing clinical information. (Id. ¶ 30.) The pharmacy utilized an EPIC module, EPIC Willow, to track and bill medications dispensed by the pharmacy. (Id. ¶ 31.) While some comparable software programs bill a patient's account upon administration of a prescribed medicine, EPIC Willow bills a patient's account upon dispensing the prescribed dose. (Id. ¶ 32.) However, there are many reasons a dispensed dose might go unused: the patient could be discharged, transferred to another department, or die before the medicine is administered. (Id. ¶ 42.) If a prescribed dose is dispensed but not administered, the patient's account remains billed for that medication unless someone manually credited to the patient's account for the unused dose. (Id. ¶ 32.) Oftentimes, nurses would neither credit a patient's account for unused doses nor inform the pharmacy that the dispensed doses went unused. (Id. ¶ 33.) In other instances, the pharmacy would receive repeat orders for doses that were misplaced, and the patient would be billed for both the administered and the misplaced doses dispensed by the pharmacy. (Id. ¶¶ 40–41.)
Because EPIC Willow has no automated means for crediting a patient's account, pharmacy technicians were responsible for "breaking down" the unused doses and manually crediting the patient's account. (Id. ¶¶ 43–44.) Shortly after her employment began, the Plaintiff noticed a backlog of these unused medications and that crediting a patient's account for these unused doses was "rare." (Id. ¶ 45.) In response to this backlog, the Plaintiff informed her supervisors she was willing to work through the backlog to credit patient accounts for the unused drugs. (Id. ¶ 47.) This offer was refused because other employees were already working on the backlog, but the Plaintiff soon came to believe that these medications were still not being credited back to the patients’ accounts. (Id. ) Given her previous work experience, the Plaintiff believed many of the patients affected by these practices were government-insured individuals. (Id. ¶ 46.) Because of her concerns regarding the Defendants’ billing practices, the Plaintiff began to report these practices to the Defendants’ executives in January 2016. (Id. ¶ 49.) First, the Plaintiff reported these concerns to the Piedmont Henry Hospital's interim CEO, who referred her to Jana Warren, the head of the Piedmont Henry Hospital's human resources department. (Id. ¶¶ 48–50.) In speaking with Warren, the Plaintiff "stated she believed Piedmont was engaging in insurance fraud." (Id. ¶ 50.) The Plaintiff's supervisor, Celeste Fowler, then learned that the Plaintiff had raised her concerns to others. (Id. ¶ 51.) Soon thereafter, the Plaintiff "began being harassed, yelled at, disparately treated, and threatened repeatedly at work until her termination." (Id. ) As an example of her disparate treatment, the Plaintiff alleges that she was required to carry dozens more cases of IVs than other pharmacy technicians, and that she experienced last-minute schedule changes and threats of termination if she did not arrive on-time. (Id. ¶¶ 53–54.) After her concerns went unaddressed, the Plaintiff reached out to another executive, Piedmont Henry Hospital CFO Sherry Henderson, in February 2016. (Id. ¶ 55.) As a result, Henderson called a meeting of pharmacy staff in an effort to end any ongoing issues. (Id. ¶ 56.) Shortly after this meeting, the pharmacy instituted a "Three-Day Rule," which the Plaintiff was told would result in an automatic credit for any medication not administered within three days of being dispensed. (Id. ¶ 57.) However, the Plaintiff believed these automatic credits were impossible on EPIC Willow, and her subsequent attempts to manually credit accounts were stopped by supervisors. (Id. ¶¶ 57, 61–62.)
Because the Plaintiff saw no further corrective action, she again reported her concerns in November 2016, this time to Piedmont Healthcare Chief Compliance Officer Mark Guza. (Id. at ¶ 65.) Soon thereafter, the pharmacy underwent an audit, and the Plaintiff alleges that retaliation against her increased. (Id. ¶¶ 66–72.) For example, the Plaintiff alleges that a manager "threatened to fire her if she ever reported to HR again." (Id. ¶¶ 67, 72.) However, a few months later without sufficient perceived changes, the Plaintiff "began exploring the possibility of blowing the whistle to the government by pursuing a qui tam lawsuit under the False Claims Act." (Id. ¶ 73.) In June 2017, she also approached Piedmont Henry Hospital's new CEO, Deborah Armstrong, with her concerns. (Id. ¶¶ 75, 77.) Armstrong referred the Plaintiff to Amy Stroup, Piedmont Healthcare's Director of Employee Relations. (Id. ¶ 77.) The two women spoke by phone and in person on June 30, 2017. (Id. ¶ 78.) They arranged to speak again July 2, but when they met, Stroup "informed Plaintiff that ‘the problems’ Plaintiff was having in the pharmacy were ‘not going to get resolved.’ " (Id. ¶ 79.) Stroup then told the Plaintiff that the Defendants had decided to terminate her employment. (Id. )
B. Statutory Background
As a result of her treatment and termination, the Plaintiff has filed these FCA and GFMCA retaliation claims against the Defendants. The FCA penalizes those who "knowingly present[ ], or cause[ ] to be presented, a false or fraudulent claim for payment or approval" to the federal government. 31 U.S.C. § 3729(a)(1). Private individuals can bring civil actions for FCA violations on behalf of the government. 31 U.S.C. § 3730(a). One such type of FCA violation is a "reverse false claim," where an individual identifies an "overpayment" made by the federal government but fails to return the excess amount paid within sixty days. See 31 U.S.C. § 3729(a)(1)(G) ; 42 C.F.R. §§ 401.305(a) – (b) ; United States ex rel. Matheny v. Medco Health Sols., Inc. , 671 F.3d 1217, 1221–22 (11th Cir. 2012) (defining reverse false claims).
In addition to complaints related to false claims, the FCA also allows employees to seek relief from an employer where the employee "is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of" protected activity, or "lawful acts done by the employee ... in furtherance of an action under this section or other efforts to stop [one] or more violations" of the FCA. 31 U.S.C. § 3730(h)(1) ; see also United States v. HPC Healthcare, Inc. , 723 F. App'x 783, 791 (11th Cir. 2018) (defining the "protected activity" and "unlawful discrimination" requirements). Further, Georgia courts have noted that "[t]he statutory language in the GFMCA ... mirrors the language in the federal False Claims Act, and courts generally look to federal case law to decide issues under the GFMCA." Murray v. Cmty. Health Sys. Prof'l Corp. , 345 Ga. App. 279, 283, 811 S.E.2d 531 (2018). Therefore, the federal and state retaliation claims rely upon identical requirements. Compare 31 U.S.C.§ 3730(h)(1) with O.C.G.A. § 49-4-168.4 ; see, e.g., Reddick v. Jones , Civ. A. No. 1:14-CV-0020, 2015 WL 1519810, at *6 (N.D. Ga. Mar. 11, 2015) ("Because [the Plaintiff] has met the FCA's anti-retaliation pleading requirements, the Court finds that she has met the GFMCA's pleading requirements.").
II. Legal Standards
A complaint should be dismissed under Rule 12(b)(6) only where it appears that the facts alleged fail to state a "plausible" claim for relief. Ashcroft v. Iqbal , 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ; Fed. R. Civ. P. 12(b)(6). A complaint may survive a motion to dismiss for failure to state a claim, however, even if it is "improbable" that a plaintiff would be able to prove those facts; even if the possibility of recovery is extremely "remote and unlikely." Bell Atlantic v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In ruling on a motion to dismiss, the court must accept the facts pleaded in the complaint as true and construe them in the light most favorable to the plaintiff. See Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A. , 711 F.2d 989, 994–95 (11th Cir. 1983) ; see also Sanjuan v. American Bd. of Psychiatry & Neurology, Inc. , 40 F.3d 247, 251 (7th Cir. 1994) (noting that at the pleading stage, the plaintiff "receives the benefit of imagination"). Generally, notice pleading is all that is required for a valid complaint. See Lombard's, Inc. v. Prince Mfg., Inc. , 753 F.2d 974, 975 (11th Cir. 1985), cert. denied , 474 U.S. 1082, 106 S.Ct. 851, 88 L.Ed.2d 892 (1986). Under notice pleading, the plaintiff need only give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. See Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).
III. Discussion
In their Motion to Dismiss, the Defendants argue that the Plaintiff has failed to allege two required elements of FCA and GFMCA retaliation claims. First, the Defendants claim that the Amended Complaint "does not contain a factual basis for Plaintiff to have an objectively reasonable belief that Defendants actually submitted false or fraudulent bills to a federal or state agency for payment." (Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss, at 8.) Second, the Defendants argue that the Plaintiff fails to sufficiently allege the necessary protected activity to survive a motion to dismiss. (Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss, at 10.) The Plaintiff responds by arguing her Amended Complaint adequately pleads all necessary facts. (Pl.’s Br. in Opp'n to Defs.’ Mot. to Dismiss, at 10.)
The parties agree that because the Plaintiff does not bring a fraud claim under the FCA or GFMCA, the heightened pleading standard of Federal Rule of Civil Procedure 9(b) does not apply here. (Defs.’ Br. in Supp. of Defs.’ Mot to Dismiss, at 15); (Pl.’s Br. in Opp'n to Defs.’ Mot. to Dismiss, at 11.) Therefore, the Plaintiff only need to make a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To adequately plead an FCA and GFMCA retaliation claim, the Plaintiff must allege "unlawful discrimination," a "protected activity," and "a causal connection" between the discrimination and protected activity. HPC Healthcare, Inc. , 723 F. App'x at 791–92. "Unlawful discrimination includes discharge ... and harassment," and the Defendants do not challenge the sufficiency of the Plaintiff's allegations that she was terminated or harassed. Id. at 791. Therefore, the issue before the Court is whether the Plaintiff has adequately alleged that she was engaged in protected activity and that the protected activity resulted in her termination.
A. Protected Activity
Protected activity, as defined in the statute, is either "lawful acts done by the employee ... in furtherance of [a civil action for false claims brought on behalf of the government] or other efforts to stop [one] or more violations of this subchapter." 31 U.S.C. § 3730(h)(1). A 2009 amendment to the statute created the "other efforts" prong of protected activity, and though it clearly expanded the definition of protected activity, the Eleventh Circuit has not defined the bounds of what constitutes "other efforts." See, e.g., Katterheinrich v. Al-Razaq Computing Svcs. , Civ. A. No. 5:17-cv-1797, 2020 WL 5847648, at *5 (N.D. Ala. Oct. 1, 2020) (noting the lack of circuit precedent defining "other efforts" and currently pending appeal before the Eleventh Circuit). However, the Eleventh Circuit has held that § 3730(h) protects "an employee from retaliation where there [is] at least ‘a distinct possibility’ of litigation under the False Claims Act at the time of the employee's actions." United States ex rel. Sanchez v. Lymphatx, Inc. , 596 F.3d 1300, 1303 (11th Cir. 2010) (quoting Childree v. UAP/GA AG Chem., Inc. , 92 F.3d 1140, 1146 (11th Cir. 1996) ). Put another way, "[i]f an employee's actions, as alleged in the complaint, are sufficient to support a reasonable conclusion that the employer could have feared being reported to the government for fraud or sued in a qui tam action by the employee, then the complaint states a claim for retaliatory discharge under § 3730(h)." Id. at 1304. For example, the Eleventh Circuit found that a plaintiff had sufficiently stated a retaliation claim when she alleged the defendants had performed " ‘unlawful actions’ and [the plaintiff] warned them that they were ‘incurring significant criminal and civil liability." Id. By contrast, the Eleventh Circuit has affirmed the dismissal of a retaliation claim where the plaintiff only raised "ethical concerns about adherence to advance medical directives," and these actions are "not related to a False Claims Act violation." HPC Healthcare, Inc. , 723 F. App'x at 792. In the absence of a more specific definition of "other efforts," this Court will follow Eleventh Circuit precedent and apply the longstanding "distinct possibility" standard. (Defs.’ Reply Br. in Supp. of Defs.’ Mot. to Dismiss, at 4); Brown v. Morehouse Coll. , 829 F. App'x 942, 945 (11th Cir. 2020) (applying the "distinct possibility" standard to alleged protected activity while noting it has not yet had occasion to address the potential effects of the statutory amendment).
The Plaintiff's allegations here, taken as true, "support a reasonable conclusion that the employer could have feared being reported to the government for fraud or sued in a qui tam action by the employee." Sanchez , 596 F.3d at 1304. The Plaintiff alleges that she noticed unused medications were not being properly credited back in the EPIC Willow module, that she believed some of these accounts were held by government-insured individuals, that she expressed concerns of "insurance fraud" to internal executives, that her complaints were followed by admonitions from senior staff and changes to pharmacy processes, and that her complaints led to an internal audit. (Am. Compl. ¶¶ 45–46, 49–50, 56–57, 66.) Oftentimes—and in many of the cases cited by the Defendants—FCA retaliation claims fail because the conduct described does not fall under the FCA. See, e.g., Brown , 829 F. App'x at 946 ("The FCA is not a panacea, and for [the plaintiff's] alleged injuries, it provides no cure."); United States v. LifePath Hospice, Inc. , Civ. A. No. 8:10-cv-1061-T-30TGW, 2016 WL 5239863, at *9 (M.D. Fla. Sept. 22, 2016) (rejecting a retaliation claim where the plaintiff only alleged unethical medical practices). Here, the Plaintiff's allegations describe conduct that could constitute "reverse false claims," and as a result, the Plaintiff has alleged sufficient facts to indicate a distinct possibility of FCA claims. See 31 U.S.C. § 3729(a)(1)(G). With this standard met, the Plaintiff has adequately pleaded that her internal reports of insurance fraud concerns constituted protected activity.
The Defendants’ arguments against this conclusion are unpersuasive. The Defendants contend that the Plaintiff could not be engaged in a protected activity because she had no "basis to believe that the pharmacy inefficiencies she may have observed translated into the deliberate presentment of false claims to the government." (Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss, at 16.) In the Defendants’ view, the Plaintiff must demonstrate her allegations were objectively reasonable, and she could have no reasonable basis for making these claims because she "did not have access to the bills as sent to the government and insurance carriers." (Id. at 16.) In support, the Defendants cite to nonbinding authority that an FCA retaliation plaintiff's beliefs about alleged violations must be reasonable. (Id. at 12 (collecting cases).)
However, this argument distorts what is required of the Plaintiff at this stage. The cases cited by the Defendants came before courts on motions for summary judgment. See, e.g., Halley v. Sw. Ohio Reg'l Transit Auth. , 376 F. Supp. 3d 793, 797–98 (S.D. Ohio 2019) ; Hickman v. Spirit of Athens Ala., Inc. , Civ. A. No. 5:16-cv-01595, 2019 WL 861131, at *1 (N.D. Ala. Feb. 22, 2019) ; Miller v. Abbott Labs. , 648 F. App'x 555, 555 (6th Cir. 2016). Regardless of whether this requirement exists at the summary judgment stage, any application of an "objectively reasonable basis" requirement here would conflict with Rule 8(a)(2) ’s "short and plain statement" standard, which applies to the Plaintiff's Amended Complaint. Furthermore, where the Eleventh Circuit has required "an indicia of reliability" in a plaintiff's FCA complaint, the requirement has only been applied to fraud allegations, which are subject to heightened pleading standards. See HPC Healthcare, Inc. , 723 F. App'x at 789 (requiring that a complaint include " ‘some indicia of reliability’ to support the allegation that an actual false claim was submitted" to state a claim under 31 U.S.C. § 3729(a)(1)(A)–(B) ). Therefore, at this stage, the Plaintiff has adequately pleaded protected activity.
B. Causal Connection Between Protected Activity and Treatment
Beyond alleging unlawful discrimination and protected activity, the Plaintiff must allege a causal connection between them. In a recent FCA retaliation case, the Eleventh Circuit held that a "but-for causation standard applies to False Claims Act retaliation claims." Nesbitt v. Candler Cty. , 945 F.3d 1355, 1360 (11th Cir. 2020). Under this standard, a plaintiff must "show that the harm would not have occurred in the absence of, that is, but for his protected conduct." Id. at 1358 (internal quotations marks and punctuation omitted). And at this stage, the Plaintiff has satisfied this standard. In her Amended Complaint, the Plaintiff alleges that her disparate treatment began after her supervisors learned of her complaints, that colleagues threatened her as a result of her complaints, and that a manager threated to fire her if she ever complained to HR again. (Am. Compl. ¶¶ 51–52, 67.) These allegations, taken as true and construed in the light most favorable to the Plaintiff, indicate the Plaintiff has sufficiently pleaded that her protected activity was the but-for cause of her treatment and termination. Thus, the Plaintiff has adequately pleaded all necessary elements of an FCA retaliation claim.
C. The Plaintiff's GFMCA Claim
Finally, because the FCA and GFMCA mirror each other with regards to retaliation claims, and because the Plaintiff has stated an FCA retaliation claim, she has also stated a GFMCA retaliation claim. See Reddick , 2015 WL 1519810, at *6 ; (see also Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss, at 10 n.5 (acknowledging the identical statutory language and parallel analyses).) Thus, the Plaintiff has successfully pleaded both of her claims, and the Defendants’ Motion to Dismiss must be denied.
IV. Conclusion
For the reasons set forth above, the Defendants’ Motion to Dismiss the Plaintiff's Amended Complaint [Doc. 22] is DENIED.
SO ORDERED, this 5 day of January, 2021.