Opinion
Case No. 2:00CV748 DAK.
July 21, 2003.
ORDER
This matter is before the court on qui tam relator Debra Kerins' ("Ms. Kerins") Motion for Summary Judgment, her Motion to Strike, and her Motion for Entry of Default Judgment. A hearing on the motions was held on June 10, 2003. At the hearing, Ms. Kerins was represented by Marci Schaap. Defendants Brian T. Riddle, M.D. ("Dr. Riddle") and Marilyn Riddle ("Mrs. Riddle") (collectively referred to as "Defendants") represented themselves. The court had previous entered a default certificate pertaining to Access Health Care, Inc. Before the hearing, the court considered carefully the memoranda and other materials submitted by the parties. Since taking the motions under advisement, the court has further considered the law and facts relating to these motions. Now being fully advised, the court renders the following Order.
Ms. Kerins' Motion for Entry of Default Judgment was not before the court at the June 10, 2003 hearing.
I. BACKGROUND
This is a qui tam action brought pursuant to the False Claims Act. The government declined to intervene, and thus, the case has been prosecuted by the relator, Ms. Kerins. Ms. Kerins claims that Dr. and Mrs. Riddle and Access Health Care, Inc. submitted false claims to Medicaid.
Ms. Kerins and her family were patients of Dr. Riddle, and their medical bills were paid through Medicaid. Ms. Kerins was hired as a receptionist for Access Health Care from August 1999 until March 2000. Before leaving her employment, she made copies of her family's medical charts. Ms. Kerins claims that she compared these charts to her own calendar and memory and concluded that many entries in the medical records were false. According to Ms. Kerins, there are notations of visits for her, her husband, and her children that did not actually happen. For example, Ms. Kerins claims that Dr. Riddle wrote in her husband's chart that Mr. Kerins was seen in the office for three days in a row, when, according to Ms. Kerins, she merely called to ask for a prescription for Paragoric for her husband. Ms. Kerins cites a total of twenty-two allegedly false entries regarding her family. Ms. Kerins claims that she quit because she knew that what Dr. Riddle and his wife were doing was improper.
II. DISCUSSION
A. Ms. KERINS' MOTION TO STRIKE
On June 6, 2003, two business days prior to the hearing on this matter, Defendants filed a "Memorandum against Plaintiff's motion for summary Judgement [sic]." On June 9, 2003, Ms. Kerins moved to strike that document, claiming that it should be stricken (1) because it is not allowed by the local rules, (2) it does not meet the requirements of Rule 56(e) of the Federal Rules of Civil Procedure, and (3) because the United States Attorney was not served with a copy.
The court declines to strike the document filed by Defendants. While it is not technically permitted by the local rules, this court has permitted such late filings under various circumstances, even from attorneys. In this case, Defendants are representing themselves, and believed that their filing was timely under Local Rule 5-1(b). Local Rule 5-1(b) states that "[u]nless otherwise directed by the court, all documents pertaining to a court proceeding must be filed with the clerk a minimum of two (2) business days before the scheduled proceeding." (Emphasis in original). Admittedly, it is not difficult to understand why Defendants would believe that this rule permitted them to make such a filing, and this court will not strike their document for this error.
Additionally, the court finds no merit in Ms. Kerins' argument that the document, which is actually an affidavit, does not comport with Rule 56(e). Indeed, it is unclear to the court what Ms. Kerins believes is deficient in the affidavit so as to render it incompetent summary judgment evidence. In the affidavit, Defendants state that they make the statements based on personal knowledge, it is signed by both Defendants, and it was "subscribed and sworn" before a notary public. Thus, the court will not strike the affidavit on that basis.
Finally, Ms. Kerins urges the court to strike the affidavit for failing to serve it on the United States, who declined to intervene in this action, but remains an interested party. While all filings should be sent to the United States Attorney, Ms. Kerins has offered no support for the argument that Defendants' failure to do so is grounds for striking their document, and the court declines to do so.
Ms. Kerins has requested that sanctions be imposed on Defendants in the form of attorneys fees and costs necessitated by having to address Defendants' June 6, 2003 pleading. The court, however, declines to impose any sanctions.
B. Ms. KERINS' MOTION FOR SUMMARY JUDGMENT
1. Standard of Review
Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In reviewing the factual record, we construe all facts and make reasonable inferences in the light most favorable to the non-moving party. See Byers v. City of Albuquerque, 150 F.3d 1271, 1274 (10th Cir. 1998).
Where the moving party bears the burden of proof on an issue, that party cannot prevail on summary judgment "unless the evidence that he provides on that issue is conclusive." Torres Vargas v. Santiago Cummings, 149 F.3d 29, 35 (1st Cir. 1998). See also Equal Employment Opportunity Comm'n v. Union Independiente De La Autoridad De Acueductor Y Alcantarillados De Puerto Rico, 279 F.3d 49, 55 (1st Cir. 2002) (same); Calderone v. United States, 799 F.2d 254, 258 (6th Cir. 1986) (explaining that if a summary judgment movant has the burden of proof, "his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.") (citation and emphasis omitted); Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) ("[I]f the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.").
2. Ms. Kerins' Arguments
Ms. Kerins claims that Defendants knowingly submitted false claims for payment to Medicaid. Relying on the alleged irregularities in her family's medical records, she claims that the United States Government was overbilled in the amount of $1,077 for false claims submitted by Defendants for treatment Defendants claim was rendered to Ms. Kerins and her family. Under the False Claims Act, damages are trebled, and therefore, Ms. Kerins seeks a total of $3,231. Further, she claims that there are twenty-two separate acts of submitting false claims, and the False Claims Act provides for a civil penalty of $5,000 to $10,000 per false claim, amounting to a total penalty of not less than $110,000 and not more than $220,000. Thus, she requests judgment in an amount not less than $113,231 and not more than $223,231.
3. Defendants' Arguments
In response to Ms. Kerins' motion, Defendants filed what is essentially a letter to the court, in which they take issue with many allegations made by Ms. Kerins, but the letter is not in the form of an affidavit. As discussed above, however, Defendants later submitted another response in June 2003, which is an affidavit. In this affidavit, Defendants testify that "everything stated in the first response is a true statement of material fact." In their June 2003 affidavit, Defendants also further dispute many of Ms. Kerins' statements.
4. Analysis
Section 3729(a)(1) of Title 31 of the United States Code provides:
(a) Liability for certain acts. — Any person who —
(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false of fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;
. . . .
is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person. . . .31 U.S.C. § 3729(a) (2003).
The statute defines the terms "knowing" and "knowingly" to mean that a person, with respect to information:
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent is required.31 U.S.C. § 3729(b) (2003).
While Ms. Kerins emphasizes that she is entitled to summary judgment because Defendants have failed to meet their burden on summary judgment, it is actually Ms. Kerins who has failed to satisfy her burden. As the Relator, she bears the burden of proof at trial, and thus she cannot prevail on summary judgment unless she presents conclusive evidence to satisfy every element of her claim. In other words, her showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for Ms. Kerins. She has fallen far short of satisfying this burden.
First, Ms. Kerins has assumed that Dr. and Mrs. Riddle, as opposed to Access Health Care, Inc. would be personally liable for a violation of the False Claims Act. Ms. Kerins has not even pleaded a cause of action for piercing the corporate veil, but even setting that issue aside, she has not offered any evidence that Dr. and Mrs. Riddle owned Access Health Care, Inc. While it might be clear to Ms. Kerins that Dr. and Mrs. Riddle were owners of Access Health Care, Inc., she has not presented sufficient evidence for the court to so conclude. She merely testifies that she "worked for Dr. Brian T. Riddle and Access Health Care, Inc." See Affidavit of Debra Kerins at ¶ 4. Her claim that "Defendants owned and operated a family medical practice in Vernal, Utah" is not supported by her affidavit. Moreover, she has not established that the corporate form should be disregarded, particularly in light of her failure to produce evidence regarding either of the Riddle's personal participation in or knowledge of any alleged fraud, as discussed below.
Additionally, Ms. Kerins has not come forward with any evidence that Mrs. Riddle knowingly submitted any false claims to Medicaid or that she created any false records to support a false claim. Moreover, through their affidavit, Defendants have created a genuine issue of disputed fact pertaining to whether Mrs. Riddle had anything to do with billing Medicaid. Thus, it is clear that summary judgment cannot be granted against Mrs. Riddle.
Also, while Ms. Kerins alleges that Dr. Riddle created false records and that he billed Medicaid for visits that did not happen, there is simply not sufficient evidence to conclude that the entries are false. Detailed chart entries appear to exist for all of the allegedly false billings that occurred. Thus, the court cannot conclude that False Claims Act violations occurred based on Ms. Kerins' insistence that various appointments that allegedly occurred one to three years before this lawsuit was filed actually did not happen. In other words, the court cannot say as a matter of law that the chart entries are false under the False Claims Act.
Even if such evidence were enough, Ms. Kerins has offered no evidence that the entries were "knowingly" false or that the submitted claims were "knowingly" false. She has provided no evidence that Dr. Riddle personally billed Medicaid for these allegedly false entries, that he directed anyone else to bill for these entries, or that it was the regular office procedure to bill for any entry made in a chart. Thus, there is no evidence creating a nexus between Dr. Riddle and the allegedly false chart entries being used to fraudulently obtain reimbursement from Medicaid. The False Claims Act requires that "some request for payment containing falsities made with scienter (i.e., with knowledge of the falsity and with intent to deceive) must exist." United States ex rel Hopper v. Anton, 91 F.3d 1261, 1265 (9th Cir. 1996), cert. denied, 519 U.S. 1115 (1997).
An analysis of just a few examples from among the twenty-two instances of alleged fraud demonstrate that no reasonable jury could conclude that Dr. Riddle had violated the False Claims Act based on the evidence now before the court. First, Ms. Kerins contends that her husband was not seen on June 24, 1999, but that there is an entry in Mr. Kerins chart for that date, and Medicaid was billed for that date. However, the chart note does not indicate that Mr. Kerins was seen for an office visit; rather, it states that Dr. Riddle spoke with Dr. Job regarding Mr. Kerins' MRI. Ms. Kerins has presented no evidence that such a claim for payment is fraudulent. Moreover, there is also an entry for June 25, 1999, for which Dr. Riddles did not bill Medicaid. Thus, it is unclear whether the June 24, 1999 billing is meant to seek reimbursement for his discussion with Dr. Job on June 24 or for his appointment with Mr. Kerins on June 25. It is not inconceivable that a physician's chart entries or billings may occasionally be misdated, and such an error would not necessarily constitute fraud.
Also, several of the entries for which Ms. Kerins seeks to recover are deficient on their faces. Ms. Kerins states that there is one entry for Erin and one for Maddison that were not billed, but they were "in the chart to be billed." Ms. Kerins offers no evidence to support her speculation that Dr. Riddle somehow meant to bill for these allegedly false chart entries. She also admits on one of Maddison's visits that she is" not sure if Maddison was seen on that date." Such claimed instances of fraud are not sufficient to obtain summary judgment under the False Claims Act.
Moreover, Defendants have created a genuine dispute regarding many of the entries. For example, regarding Ms. Kerins March 22, 1997 visit, which entry she claims is false, Dr. Riddle has testified that he specifically remembers seeing Ms. Kerins as a patient while her son was in the hospital. He claims that he examined her with her permission and wrote a prescription for medication for her while she was with her son. He testified that he was doing Ms. Kerins a favor by not taking her over to his office and billing her for an after-hours office visit. Several of the claimed violations could plausibly be based on Ms. Kerin's misunderstanding about when a physician is able to charge Medicaid for talking to or examining a patient. She has offered no evidence regarding what the various billing codes mean or that such billing codes are improper. In addition, Defendants have created a disputed fact regarding several of the allegedly false entries pertaining to both Mr. Kerins and Matthew Kerins.
Overall, given Ms. Kerins' failure to satisfy her burden on summary judgment, coupled with the many genuine issues of fact created by Defendants, this court cannot conclude as a matter of law that Ms. Kerins has established any violations of the False Claims Act. Further, not only has Ms. Kerins failed to satisfy her burden regarding liability under the False Claims Act, but she has also failed to satisfy her burden regarding damages.
Ms. Kerins has requested damages for twenty-two allegedly false billings to Medicaid. However, she has requested the entire amount billed, without accounting for the discount that Access Health Care was almost always required to take from Medicaid, as evidenced by the documents provided by Ms. Kerins. For example, many of the visits were billed at $40.00. The Medicaid discount was $14.78, thus entitling Access Health Care to $25.22. Ms. Kerins, however, has improperly requested the full amount billed on every alleged false billing.
Moreover, Ms. Kerins has also assumed that she is entitled to $5,000 to $10,000 for each of the twenty-two allegedly false submissions to Medicaid. This court is unaware of any authority to support such a request. The court, however, is aware that at least one court has found that each HCFA-1500 form submitted to Medicaid constituted one claim, regardless of the number of codes on the form. See United States ex rel. Mikes v. Straus, 274 F.3d 687, 695 (2d Cir. 2001); United States v. Krizek, 111 F.2d 934 (D.C. Cir. 1997); See also Hays v. Hoffman, 325 F.3d 982 (8th Cir. 2003) (finding that government auditor did not have first-hand knowledge about method or frequency of submitting claims, and thus court found that penalty for 200 false claims was excessive and reduced number of claims to eight for purposes of calculating penalty). In this case, Ms. Kerins has not addressed this issue, except to incorrectly assume that she would be entitled to a statutory penalty for each allegedly false billing code submitted to Medicaid.
C. Ms. KERINS' MOTION FOR ENTRY OF DEFAULT JUDGMENT
Because of the insufficiency of Ms. Kerins' evidence regarding alleged violations of the False Claims Act and the insufficiency of her damages and penalty requests, this court cannot at this time enter Ms. Kerins' proposed default judgment against Access Health Care, Inc., as the court has no basis from which to determine the amount of damages or penalties, if any.
III. CONCLUSION
For the foregoing reasons and good cause appearing, IT IS HEREBY ORDERED that Ms. Kerins' Motion to Strike [docket # 32] is DENIED, Ms. Kerins' Motion for Summary Judgment [docket # 20] is DENIED, and Ms. Kerins' Motion for Entry of Default [docket # 35] is DENIED. The parties are directed to confer about possible trial dates and then to call the court to set a final pretrial conference and a trial date. The parties should also consider whether a jury trial or bench trial would be most appropriate in this case.