Bachman et al v. Healthcare Liaison Professionals Inc et al

Motion to Dismiss for Failure to State a Claim

N.D. Tex.July 29, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION THE UNITED STATES OF AMERICA § ex. rel. GORDON GRANT BACHMAN, § Plaintiffs, § § vs. § CIVIL ACTION NO. 3:13-cv-0023-P § § HEALTHCARE LIAISON § PROFESSIONALS, INC. d/b/a US § PHYSICIAN HOME VISITS; et al, § Defendants. § ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT AND BRIEF IN SUPPORT Respectfully submitted, SHACKELFORD, BOWEN, McKINLEY & NORTON, LLP 9201 N. Central Expressway, Fourth Floor Dallas, Texas 75231 Telephone: 214/780-1400 Facsimile: 214/780-1401 Email: spawlowski@shackelfordlaw.net By: /s/Steven J. Pawlowski Steven J. Pawlowski State Bar No. 00797226 ATTORNEY FOR DEFENDANT ACUTE HOME HEALTH CARE SERVICES Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 1 of 9 PageID 612 i TABLE OF CONTENTS I. Introduction.......................................................................................................................................... 1 II. Factual Allegations ............................................................................................................................. 1 III. Applicable Law and Standard of Review ........................................................................................ 2 IV. Plaintiff’s Claims Attempting to Allege False Statements or a Fraudulent Course of Conduct Fail to Meet the Pleading Requirements of Rule 9(b) .............. 3 V. Plaintiff’s Claims Attempting to Allege False Statements or a Fraudulent Course of Conduct Fail to Meet the Pleading Requirements of Rule 8 ................... 4 VI. Plaintiff’s Claims Make No Allegations Regarding Scienter ....................................................... 5 VII. Conclusion and Prayer for Relief...................................................................................................... 5 Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 2 of 9 PageID 613 ii TABLE OF AUTHORITIES CASES Ashcroft v. Iqbal, 556 U.S. 662 (2009) ......................................................................................................................... 5 Taylor v. Books A Million, Inc., 296 F.3d 376 (5 th Cir 2002) .............................................................................................................. 1 U. S. ex rel. Farmer v. City of Houston, 523 F.3d 333 (5 th Cir. 2008) ............................................................................................................. 5 U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5 th Cir. 2009) ............................................................................................................. 3 U.S. ex rel. Hebert v. Dizney, 295 F. App’x 717 (5th Cir. 2008) ..................................................................................................... 4 U.S. ex rel. Longhi v. Lithium Power Techs., 575 F.3d 458 (5th Cir. 2009) .................................................................................................... 1, 2, 3 U.S. ex rel. Nunnally v. West Calcasieu Cameron Hosp., 519 F. App’x 890 (5 th Cir. 2013) ...................................................................................................... 4 U. S. ex rel. Rafizadeh v. Cont’l Common, Inc., 553 F.3d 869 (5 th Cir. 2008) ......................................................................................................... 3, 4 U.S. es rel. Spicer v. Westbrook, 751 F.3d 354 (5 th Cir. 2014) ......................................................................................................... 3, 5 U. S. ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262 (5 th Cir. 2010) ..................................................................................................... 1, 2, 3 U. S. ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899 (5 th Cir. 1997) ..................................................................................................... 1, 2, 3 STATUTES § 3729(a)(1) .......................................................................................................................................... 4 RULES Fed. R. Civ. P 9(b) ................................................................................................................................ 1 Fed. R. Civ. P. 8 ................................................................................................................................... 1 Rules 12(b)(6) ..................................................................................................................................... 4 Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 3 of 9 PageID 614 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 1 TO THE HONORABLE BARBARA M.G. LYNN, UNITED STATES DISTRICT COURT JUDGE: Defendant, ACUTE HOME HEALTH CARE SERVICES (“Acute” or “Defendant” for purposes of this Motion) (and incorrectly identified as a misnomer in the complaint as ACUTE HOME HEALTH SERVICES, LLC) files this Motion to dismiss and brief in support. I. Introduction Plaintiff Gordon Grant Bachman (“Plaintiff”) claims that sometime between 2009 and May 2014, he was an employee of a few entities that allegedly participated in what Plaintiff describes as the largest home health care fraud in the history of the United States on behalf of the United States government. The United States Government has declined, however, to intervene in this qui tam suit, in which Plaintiff asserts claims against 74 defendants, including Acute. 1 Plaintiff’s claims against Acute: (1) fail to meet the particularly standard requirement by Fed. R. Civ. P 9(b); (2) fail to meet with plausibility standard necessary under Fed. R. Civ. P. 8; (3) fail to allege the scienter necessary to support the claims. 2 II. Factual Allegations In the Second Amended Complaint (“SAC”) Plaintiff makes a variety of sweeping and conclusory allegations. Plaintiff alleges the following as to Acute: “In addition to referring to their own USPHV/Parcon owned and/or health care agencies, USPHV and Parcon have referred cases to other home health care agencies throughout the Dallas Fort Worth metroplex that Parcon/USPHV did not own or control.” SAC ¶57 (emphasis added). 1 Notice of Election to Decline Intervention filed by the United States on February 17, 2016 (Dkt. 28). 2 Acute reserves the right to challenge the facts alleged if necessary at a later date. Acute solely argues as though all well-pleaded facts were true here due to the standard for considering dismissal pursuant to a 12(b)(6) motion. Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5 th Cir 2002). Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 4 of 9 PageID 615 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 2 These non-USPHV health care agencies included Acute. USPHV was formed by and employed Dr. Ezukanma, and Dr. Etindi was the associate medical director of USPHV. SAC ¶¶43, 53. Doctors Ezukanma and Etindi would allegedly certify a patient as “homebound” and refer the patient to non-USPHV home health agencies including Acute. SAC ¶57. Acute (and all other home health care agencies) would allegedly pay USPHV for getting this certification for a patient. SAC ¶59. Acute (and all other home health care agencies) “knew that Defendants Etindi and/or Ezukanma had certified their patients as home bound knowing that Defendants Etindi and/or Ezukanma had never seen the patient” so that all claim submitted to Medicare for services rendered by Acute were a False Claim. SAC ¶61. Plaintiff alleges a False Claim Act violation by Acute for “billing Medicare for services rendered knowing that patients for which billings were submitted had been improperly certified as being ‘homebound’ by Defendants Ezukanma and Etindi.” SAC ¶107. III. Applicable Law and Standard of Review The elements of a False Claim Act claim are: “(1) a false statement or fraudulent course of conduct; (2) made or carried out with the requisite scienter; (3) that was material; and (4) that caused the government to pay out money or to forfeit moneys due (i.e., that involved a claim). U.S. ex rel. Longhi v. Lithium Power Techs., 575 F.3d 458, 467 (5th Cir. 2009); United States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 267 (5 th Cir. 2010). Allegations that a defendant violated some other law, rule or regulation does not create a case of action under the FCA. United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5 th Cir. 1997). Claims under the False Claims Act must also comply with the heightened pleading standards of Rule 9(b), which requires the plaintiff to plead “particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 5 of 9 PageID 616 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 3 submitted.” Grubbs, 565 F.3d at 190. A plaintiff must therefore set forth the “who, what, when, where, and how” of the alleged fraud. Spicer, 751 F.3d at 365 (quoting Steury, 625 F.3d at 266)). Rule 9(b) is designed to prevent litigants from “gaining access to a fishing expedition,” is applied to fraud complaints “with bite and without apology” and is used as a “tool to weed out meritless fraud claims sooner rather than later.” Grubbs, 565 F.3d at 185-86, 101 (internal citations and quotations omitted). IV. Plaintiff’s Claims Attempting to Allege False Statements or a Fraudulent Course of Conduct Fail to Meet the Pleading Requirements of Rule 9(b) Plaintiff did not work for Acute and does not allege that he specifically worked for Acute. The “largest home health care fraud committed in the history of the United States” which resulted in “charges against 243 individuals, including 46 doctors, nurses, and other licensed medical professionals… [and] home health care providers”-did not include Acute. SAC ¶40. Essentially, Plaintiff merely takes a shot trying to recover money in a judicial lottery by making allegations against any person or home health provider-such as Acute- merely on the unfounded assumption that Acute must have submitted False Claims if Acute had as a patient anyone who was also a patient of USPHV. Plaintiff merely concludes, without any facts in support, that Acute submitted fraudulent billings, claims, statements or records to the government. Plaintiff alleges no particulars regarding any false claim by Acute- such as the time, place, and contents of the false representations; the identity of the person making the misrepresentation; and what that person obtained - a requirement to properly please a claim under a False Claim Act. United States ex rel. Rafizadeh v. Cont’l Common, Inc., 553 F.3d 869, 873 (5 th Cir. 2008). Nor are there any particular details of a scheme to submit (or cause others to submit) false claims, paired with reliable indicia that lead to a strong Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 6 of 9 PageID 617 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 4 inference that the false claims were actually submitted. See, e.g. Grubbs, 565 F.3d at 190 (a case in which the realtor actually alleged such details). The deficiencies in Plaintiff’s allegations thus fail to meet the standards of Rule 9(b). Plaintiff’s failure to specifically identify any actual false “claim” by Acute to the Medicare program resulting from a false statement or fraudulent course of conduct fails to state an FCA claim pursuant to Rules 12(b)(6) and 9(b). Instead, Plaintiff’s “allegations of a scheme to submit fraudulent claims are entirely conclusory, do not offer factual information with sufficient indicia of reliability, and do not demonstrate a strong inference that the claims were presented to the Government in violation of § 3729(a)(1).” Nunnally, 519 F. App’x at 895; U.S. ex rel. Hebert v. Dizney, 295 F. App’x 717, 722-24 (5th Cir. 2008) (same). The complaint fails to provide reliable indicia showing a strong inference that false claims were ever submitted. “[T]he time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what that person obtained thereby must be stated in a complaint alleging violation of the FCA in order to satisfy Rule 9(b).” Rafizadeh, 553 F.3d at 873 (quotations omitted; emphasis added). Regarding Acute, the complaint is devoid of any allegations regarding the time, place and contents of any false representation or the person who allegedly made the representation. Accordingly, Plaintiff’s False Claims Act cause of action against Acute should be dismissed. V. Plaintiff’s Claims Attempting to Allege False Statements or a Fraudulent Course of Conduct Fail to Meet the Pleading Requirements of Rule 8 Plaintiff’s allegations as to Acute completely “stop short” of the line between possibility and the facial plausibility required by Rule 8. There is no way to decipher the requisite basics of who, what, when, where and how, must less discern any plausible claim that includes the necessary elements of the FCA allegations Plaintiff purports to make against Acute. There is simply no short Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 7 of 9 PageID 618 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 5 and plain statement of the allegations against Acute; the allegations thus fail to state claims that are plausible on the face of the complaint. This fails to comply with the requirements of Rule 8. VI. Plaintiff’s Claims Make No Allegations Regarding Scienter “[T]hough the FCA is plain that ‘proof of specific intent to defraud’ is not necessary, [the mens rea] requirement is not met by mere negligence or even gross negligence.” United States ex rel. Farmer v. City of Houston, 523 F.3d 333, 338 (5 th Cir. 2008) (internal citations omitted). Because “[c]onclusory allegations of fact are not accepted as true;” and “factual allegations that are ‘merely consistent with the defendant’s liability … stop[] short of the line between possibility and plausibility of entitlement of relief;” and “complaint[s that] contain[] only “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” must be dismissed, Plaintiff’s claim must be dismissed on this ground as well. Iqbal, 556 U.S. at 679, 681; Spicer, 751 F.3d at 365. VII. Conclusion and Prayer for Relief Plaintiff’s Second Amended Complaint against Acute should be dismissed for failure to state an FCA claim because his allegations against Acute are conclusory and the Complaint is devoid of any facts to support the essential elements of an FCA claim. Plaintiff’s conclusory fraud allegations also fail to meet the heightened pleading requirement under Rule 9(b). As such, Plaintiff’s Complaint against Acute should be dismissed. Defendant Acute respectfully requests that this Court grant its Motion to Dismiss in full, dismiss with prejudice all claims against it, and grant it any other and further relief to which it is entitled. Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 8 of 9 PageID 619 ACUTE HOME HEALTH CARE SERVICES MOTION TO DISMISS AND BRIEF IN SUPPORT- Page 6 Respectfully submitted, SHACKELFORD, BOWEN, McKINLEY & NORTON, LLP 9201 N. Central Expressway, Fourth Floor Dallas, Texas 75231 Telephone: 214/780-1400 Facsimile: 214/780-1401 Email: spawlowski@shackelfordlaw.net By: /s/Steven J. Pawlowski Steven J. Pawlowski State Bar No. 00797226 ATTORNEY FOR DEFENDANT ACUTE HOME HEALTH CARE SERVICES CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing was served on all counsel and parties of record who have appeared herein via the Court’s ECF filing system and/or the Federal Rules of Civil Procedure on all counsel of record on July 29, 2016. /s/Steven J. Pawlowski Steven J. Pawlowski Case 3:13-cv-00023-M Document 99 Filed 07/29/16 Page 9 of 9 PageID 620