Dominion Ambulance, L.L.C. v. Burwell

MOTION for Summary Judgment

W.D. Tex.November 22, 2016

1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION DOMINION AMBULANCE, L.L.C. § § Plaintiff, § § v. § EP-16-CV-146-KC § SYLVIA MATHEWS BURWELL IN HER § FILED ELECTRONICALLY OFFICAL CAPACITY AS SECRETARY § OF HEALTH AND HUMAN SERVICES, § § Defendant. § MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM IN SUPPORT THEREOF Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 1 of 22 2 TABLE OF CONTENTS Page Table of Authorities…………………………………………………………….3 Statement of Issues……………………………………………….…………….4 I. Introduction…………………………………………………………….5 II. Factual Background…………………………………………………… 5 III. Argument……………………………………………………………… 5 a. Legal Standard………………………………………………… 5 b. Time to Reopen Claims.……………………………………..… 5 i. Applicable Code of Federal Regulations………………. 5 ii. Revision of the Code of Federal Regulations………..… 6 c. Use of Statistical Sampling and Extrapolation:……………..…. 7 i. Extrapolation in Medical Necessity Cases…………...… 8 ii. Medicare Modernization Act limits to Extrapolation….. 9 iii. Extrapolation when Patients are Individually Liable...… 10 d. Physician Certification Forms…………………………………. 11 e. Medical Necessity………………………………………..……. 15 i. Documentation Sufficiency………………………..….. 15 ii. Standards of Review in Medical Necessity Cases…...… 15 iii. Sufficiency of Denial Rationale ……………………….. 16 f. Documents Submitted for Review………………………...……19 IV. Conclusion…………………………………………………………….. 20 Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 2 of 22 3 TABLE OF AUTHORITIES Federal Cases PAGE Am. Sur. Co. v. Baldwin, 287 U.S. 156, 168 (1932)…………………………………….… 8 Bowen v. Georgetown Univ. Hosp. 488 U.S. 204, 208-209 (1988)……………….…….. 6 Carrera v. Bayer Corp., 727 F.3d 300, 307 (3rd Cir. 2013)………………………………… 8 Duran v. U.S. Bank Nat. Ass’n, 325 P.3d 916, 935-936 (Cal. 2014))………………………8 First Call Ambulance Service Inc. v. DHHS (attached)…………………………………… 12 McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 231-232 (2nd Cir. 2008)………………….8 Momentum EMS Inc., v. Kathleen Sebelius (USDC Southern Dist. TX, 2013)………….. 13 Moorecare Ambulance Service Inc. v. DHHS (attached)…………………………………. 13 U.S. v. Read, 710 F.3d 219 (5th Cir. 2012)……………………………………………….. 14 U.S. ex rel Wall v. Vista Hospice Care No. 3:07-cv-0064M (ND Tx 2016)…………….. 8 Wal-Mart Stores Inc. v. Dukes, 564 U.S. 338,367 (2011)………………………………… 8 Statutes Title XVIII of the Social Security Act (the Act) in §1861(s)(7)…………………………………… 10 U.S. Constitution: Fifth and Fourteenth Amendments…………………………………..… 11 5 U.S.C. § 551; §553 (Administrative Procedures Act)………………………………....… 7 42 U.S.C. 1395ddd(f)(3) (§935 of Medicare Modernization Act)………………………… 9 Miscellaneous 42 CFR §405.980 (b)…………………………………………………………………….... 5 42 CFR §§ 410.40; 410.41………………………………………………………………… 10 Medicare Claims Processing Manual- Publication 100-04…………………………………18 Medicare Program Integrity Manual Section 3.4.3; 3.6.5…………………………………..18 Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 3 of 22 4 STATEMENT OF ISSUES 1. Time to Reopen Claims: Was the correct Code of Federal Regulations applied to determine if the claims at issue should be reopened and a new decision issued? 2. Time to Reopen Claims: Was the revision of the Code of Federal Regulations conducted in accordance with the Administrative Procedures Act? 3. Use of Statistical Sampling and Extrapolation: Is Extrapolation appropriate where medical necessity of each claim should be reviewed? 4. Medicare Modernization Act Limits to Extrapolation: If the Secretary of HHS has not made a finding that there is a “high rate” of payment error, can extrapolation be used? 5. Extrapolation when Patients are Individually Liable: Any Medicare claim denied for ambulance service not meeting medical necessity become the responsibility of the patient to pay, however when claims are extrapolated, there is no individual patient identified and the provider cannot seek payment from the patient. Does this constitute a violation of the provider’s rights to Due Process and/or Equal Protection. 6. Physician Certification Forms: Are correctly completed and signed PCS forms sufficient under the regulations to serve as a prescription for ambulance transport? 7. Medical Necessity and Documentation Sufficiency: Were the patient records in this case sufficient under the applicable regulations and HHS guidance to support payment? 8. Standards of Review in Medical Necessity Cases: Was the application of nursing home regulations to payment of ambulance claims appropriate? 9. Sufficiency of Denial Rationale: Do the applicable regulations require more specific rationale in order to sustain the denial of a claim than that given by the ALJ and other levels of review in this case? 10. Documents Submitted for Review: Were additional documents submitted for review not considered in making the final determination of claims payment in this case? Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 4 of 22 5 INTRODUCTION COMES NOW Plaintiff/Appellant, by and through counsel, and files this Motion and Memorandum in support of Summary Judgment and would show the Court that this case is appropriate for summary judgment as agreed by the parties. FACTUAL BACKGROUND and STANDARD FOR REVIEW This case comes to this court after the exhaustion of administrative remedies available through the Medicare appeals process. At issue is whether ambulance transports of Medicare beneficiaries should be paid to the appellant. These claims were initially determined to be payable and were paid to the appellant. Many years later, an independent auditor decided that the claims at issue should not have been paid. This Court sits as a court of appeals and has appellate review of the issues raised herein as errors of law or abuse of discretion by the ALJ. ARGUMENT 1. Dominion argued the following five issues and ten errors on appeal to the ALJ and to the Medicare Appeals Council (“MAC”) and raises each of these issues before this Court. Each “ERROR” is an independent and alternative basis for reversal of this case: 2. ISSUE #1: Time to reopen: There is a four year limit to the time in which a paid Medicare claim may be revised (see 42 CFR 405.980 (b)). The universe of claims at issue in this case began on 9/1/2007 (see administrative record page 192). The demand letter was issued on 4/25/12 (see administrative record page 225). The claims were not reopened and revised until the receipt of that demand letter according to the Code of Federal Regulations relevant to the time at issue, which stated: 42 CFR 405.980 (b) Time frames and requirements for reopening initial determinations and redeterminations initiated by a contractor. A contractor may reopen and revise its initial determination or redetermination on its own motion— Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 5 of 22 6 (1) Within 1 year from the date of the initial determination or redetermination for any reason. (2) Within 4 years from the date of the initial determination or redetermination for good cause as defined in § 405.986. 3. Therefore, the individual claims selected and the universe of claims that damages were extrapolated from for the eight months between 9/1/07 (the first claim in the sample) and 4/25/08 (four years prior to the revised payment decision letter) are outside of the four year window to reopen and revise claims and should not have been reopened and revised as a matter of law. As a result, those individual claims should remain paid and the entire extrapolation must be dismissed. 4. ERROR #1: The ALJ erred in allowing these claims to be considered and the MAC erred in not reversing the ALJ decision on this point (see administrative record pages 21-22). ALJ decision at page 8 (see administrative record page 144) states that the CFR language regarding the time to reopen claims was changed effective January 8, 2010. It is improper as a matter of law to retroactively apply this change to claims that were at issue in this case from 2007-2009 (see also ALJ decision at p. 18-19; administrative record pages 154-155). (See Bowen v. Georgetown Univ. Hosp. 488 U.S. 204, 208-209 (1988) holding that an administrative agency's power to promulgate regulations is limited to the authority delegated by Congress. As a general matter, statutory grants of rulemaking authority will not be understood to encompass the power to promulgate retroactive rules unless that power is conveyed by express terms.) There was no express rule making or authority to make any change to 42 CFR 405.980 retroactive, therefore, the judge erred as a matter of law and the decision on these claims should be reversed. Furthermore, it is undisputed that if the universe of claims was not proper due to the inclusion of inappropriate dates of service, then the extrapolation is invalid and must be dismissed. (see Report of Dr. Pearson at page 3, paragraph 8; Administrative Record at volume 3, page 1210). 5. ERROR #2: Additionally and alternatively, assuming arguendo that this rule may be retroactive in effect, the new rule still should not apply because the revision should be stricken in its Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 6 of 22 7 entirety. On page 9 of the ALJ decision (see administrative record page 145), the ALJ notes that the CFR was changed by HHS making “two technical corrections”. One of those was to remove the phrase “...and revise” from the regulation (“A contractor may reopen and revise its initial determination or redetermination on its own motion” (emphasis added)). Prior to this change, the regulation required the actual revision of a payment decision to be made within four years. After the change, the regulation only required that the claim be “reopened” within four years. Making such a substantive change without going through the required rule making process is inappropriate as a matter of law and therefore the change should not be considered valid. (see Administrative Procedures Act 5 U.S.C. § 551 et seq. requiring that changes to a federal regulation be made by Notice of Public Rule Making; §553 “General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law.”). It is undisputed that no such notice of public rule making was conducted. The original reading of the statute as quoted above should therefore be applied to this case and the claims that are outside the four year window should be paid. Furthermore, it is undisputed that if the universe of claims was not proper due to the inclusion of inappropriate dates of service, then the extrapolation is invalid and must be dismissed. (see Report of Dr. Pearson at page 3, paragraph 8; Administrative Record at volume 3, page 1210). 6. ISSUE #2: Sampling Methodology and Extrapolation- The plaintiff/appellant relied on the testimony and report of expert Dr. Shirlene Pearson (see administrative record pages 1208-1212) which concluded that the sampling methodology and resulting extrapolation in this case was not sufficient; including but not limited to her testimony that stratification should have been used since there were a number of claims in a higher dollar range that were not selected at all and therefore stratification should have been used (see administrative record 1401-1403). There must be reliability in creating sampling methodology. In this case, 38 denied claims resulted in an extrapolated Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 7 of 22 8 overpayment of $2,259,440 (see administrative record pages 191-193). So each denied claim represents $59,458 worth of claims in the extrapolated universe. The actual claim average is only $195.61, therefore the extrapolated amount is actually more than 285 times the actual overpayment amount. This demonstrates how much value there is in even one claim, and therefore the importance of validity and sufficiency in the sampling methodology. In this case, the sampling was not sufficient and extrapolation should not be allowed as set forth in the errors noted below. 7. ERROR #3: The ALJ erred in concluding that the extrapolation in this case was statistically sound and appropriate for the claims at issue (decision at page 21; administrative record page 157) and the MAC erred in not reversing the ALJ decision on this basis (see administrative record pages 23-24). The ALJ noted that there were properly raised concerns over the use of stratification in the case, but went on to rule that the sampling methodology was sufficient (decision at page 21; see administrative record page 156-157). The damage calculation estimated by use of extrapolation must be such that it is a valid representation of the amount owed by the plaintiff. "The permissibility of statistical sampling turns on 'the degree to which the evidence is reliable,''' and that "[w]here the nature of the claim requires an individualized determination, that determination cannot be replaced by 'Trial by Formula.'” (U.S. ex rel Wall v. Vista Hospice Care No. 3:07-cv-0064M (ND Tx 2016)(attached), citing Wal-Mart Stores Inc. v. Dukes, 564 U.S. 338,367 (2011). “Due process requires that there be an opportunity to present every available defense.” (Am. Sur. Co. v. Baldwin, 287 U.S. 156, 168 (1932)). Thus, “a defendant in a class action has a due process right to raise individual challenges and defenses to claims, and a class action cannot be certified in a way that eviscerates this right or masks individual issues.” (Carrera v. Bayer Corp., 727 F.3d 300, 307 (3rd Cir. 2013) (citing McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 231-232 (2nd Cir. 2008); see also Duran v. U.S. Bank Nat. Ass’n, 325 P.3d 916, 935-936 (Cal. 2014)). It is undisputed that the claims assessment in this case involved a review of patient records and PCS forms, and a discussion of Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 8 of 22 9 patient’s medical conditions (see Administrative Record at page 161-173 & 353-382). Therefore, in the case at bar, this calculation does not have a constitutionally valid level of certainty, there are medical judgements that must be made on an individual patient basis, and therefore the extrapolation should be dismissed as a matter of law. 8. ERROR #4: There was no decision on whether the error rate was “high” after each level of appeal. Under section 935 of the Medicare Modernization Act, extrapolation can not be used unless there is first a finding of a “high rate of error”. The MMA states: SEC. 935. RECOVERY OF OVERPAYMENTS. (a) IN GENERAL- Section 1893 (42 U.S.C. 1395ddd) is amended by adding at the end the following new subsection: `(f) RECOVERY OF OVERPAYMENTS-… `(3) LIMITATION ON USE OF EXTRAPOLATION- A medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines that-- `(A) there is a sustained or high level of payment error; or `(B) documented educational intervention has failed to correct the payment error…. (emphasis added) After the initial payment determination had been made by the Medicare Carrier, Health Integrity, a private Program Safeguard Contractor (“PSC”) reviewed a small sample of claims and determined that many, in its opinion, did not meet Medicare coverage criteria. This decision resulted in a “high error rate” which allowed the PSC to extrapolate the actual overpayment of $7,824.17 to a demand of $2,259,440.00 (see administrative record pages 191-193). The “error rate” determination was made after the initial assessment (see administrative record page 191), but after the QIC’s (see administrative record pages 336-349) and ALJ’s (see administrative records pages 137-174) partially favorable decisions, there was no new error rate calculation nor was there a new determination that the error rate was still “high”, however extrapolation was used again to calculate damages after both of these partially favorable decisions (administrative record is silent). This is not allowed under the MMA. The determination of whether there is a high rate of error must Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 9 of 22 10 be made before extrapolation can be used by the clear and unequivocal -language of the regulation: “A medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines that...a high level of payment error” exists. The defendant/appellee must show in the record where this threshold finding was made in order to justify the use of extrapolation. The revised overpayment amount was extrapolated both after the QIC decision (see administrative record pages 336-349) and after the ALJ decision (see administrative record pages 137-174), but no determination regarding the error rate exists in the record to justify either of these extrapolations, therefore the extrapolation must be dismissed as a matter of law. 9. ERROR #5: Alternatively, extrapolation creates an overpayment demand based on non- specific claims from the “universe” of payment history. The individual patients are responsible for the payment of claims denied for medical necessity (see Title XVIII of the Social Security Act (the Act) in §1861(s)(7): 42 CFR §§ 410.40-410.41). In this case, there were only 39 individual patients originally at issue, with a total actual overpayment of $7,824.27 (see administrative record at page 192). However the universe of claims is 12,718 total claims with an extrapolated demand of $2,259,444.00 (see administrative record at page 192). After subtracting the individual claims denied, there is a remaining extrapolated balance of $2,251,619.73. The use of extrapolation prohibits the plaintiff from being able to identify specific claims that are overpaid and then seek payment of this $2,251,619.73 from the patients as is their right under the Social Security Act. For procedural due process purposes, a deprivation of property occurs when a person has an entitlement and that entitlement is not fulfilled. In this case, the appellant is entitled to payment from any and all patients whom have had claim denied by Medicare and has a property interest in both the money that has already been paid by Medicare for individual claims that they cannot identify or argue against and these amounts due from individual patients if their claims are denied by Medicare, however Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 10 of 22 11 there has been no hearing on these other 12,718 individual claims from the universe and there is therefore no way to seek the money due from these unidentified patients. Therefore, the use of extrapolation violates the plaintiff's right to Due Process and Equal Protection under the US Constitution. (See Fifth and Fourteenth Amendments of the U.S. Constitution). Therefore, the extrapolation in this matter must be dismissed and the ALJ and MAC erred by failing to do so. 10. ISSUE #3: Physician Certification Forms- As stated in the pre-hearing (see administrative record pages 1000-1002) and post-hearing (see administrative record pages 1223-1226) ALJ briefs, 42 CFR 410.40 (d)(2) (which is quoted below) is controlling in this appeal as to the patients in the sample that were transported for non-emergency, scheduled, repetitive ambulance service and where the patient had the required certification of medical necessity. This section of the CFR states: (d)(2) Special rule for nonemergency, scheduled, repetitive ambulance services. Medicare covers medically necessary nonemergency, scheduled, repetitive ambulance services if the ambulance provider or supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary's attending physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met. The physician's order must be dated no earlier than 60 days before the date the service is furnished. (d)(3) Special rule for nonemergency ambulance services that are either unscheduled or that are scheduled on a nonrepetitive basis. Medicare covers medically necessary nonemergency ambulance services that are either unscheduled or that are scheduled on a nonrepetitive basis under one of the following circumstances: (i) For a resident of a facility who is under the care of a physician if the ambulance provider or supplier obtains a written order from the beneficiary's attending physician, within 48 hours after the transport, certifying that the medical necessity requirements of paragraph (d)(1) of this section are met. (ii) For a beneficiary residing at home or in a facility who is not under the direct care of a physician. A physician certification is not required. (iii) If the ambulance provider or supplier is unable to obtain a signed physician certification statement from the beneficiary's attending physician, a signed certification statement must be obtained from either the physician assistant (PA), nurse practitioner (NP), clinical nurse specialist (CNS), registered nurse (RN), or discharge planner, who has personal knowledge of the beneficiary's condition at the time the ambulance transport is ordered or the service is furnished. This individual must be employed by the beneficiary's attending physician or by the hospital or facility where the beneficiary is being treated and from which the beneficiary is transported. Medicare regulations for PAs, NPs, and CNSs apply and all applicable State licensure laws apply; or, Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 11 of 22 12 (iv) If the ambulance provider or supplier is unable to obtain the required certification within 21 calendar days following the date of the service, the ambulance supplier must document its attempts to obtain the requested certification and may then submit the claim. Acceptable documentation includes a signed return receipt from the U.S. Postal Service or other similar service that evidences that the ambulance supplier attempted to obtain the required signature from the beneficiary's attending physician or other individual named in paragraph (d)(3)(iii) of this section. (v) In all cases, the provider or supplier must keep appropriate documentation on file and, upon request, present it to the contractor. The presence of the signed certification statement or signed return receipt does not alone demonstrate that the ambulance transport was medically necessary. All other program criteria must be met in order for payment to be made. Therefore, the language that limits the use of physician certification statements is itself limited to the types of transports at issue in Section 3 (i.e. non-emergency transports that are either unscheduled or non-repetitive). For these types of trips, the physicians’ statement which is obtained within 21 days after the transport, is not sufficient alone to justify medical necessity. This makes sense seeing that it is received after the trip has occurred, and therefore the ambulance crew has had the initial burden of making the medical necessity decision. However, for trips that are scheduled and repetitive under Section 2, and where a physician order has been secured before the trip, there is no such limitation. More importantly, the fact that limiting language exists in Section 3, but is expressly omitted from Section 2, shows that there was no intent for the limiting language to be used in Section 2. NOTE: The CFR has the weight of law, while the Manual is merely interpretation of that law. The incorrect interpretation in the Manual is not binding on this Court, and in fact should not be followed. Therefore, for the trips at issue in this complaint which are non-emergent, scheduled, repetitive transports, (see administrative record page 1000) the physician statements (PCS forms) are sufficient to justify the transports and therefore, no overpayment may be assessed for purposes of medical necessity as a matter of law. (see First Call Ambulance Service Inc. v. DHHS #3:10-cv-00247 (MD Tenn 2012) (attached) holding that “Here, the Court need go no further than subsection (d)(2) – the “special rule” – to determine what the regulation requires in terms of the showing of “medical necessity” Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 12 of 22 13 for nonemergency, scheduled, repetitive ambulance services. In plain and unambiguous language, the regulation states that the ambulance service provider need only provide “a written order from the beneficiary’s attending physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met”; see also Moorecare Ambulance Service Inc. v. DHHS) #1:09-cv-00078 (MD Tenn 2010) (attached) holding under the 42 CFR 410.40(d)(2) “special rule” that “where the service is scheduled and repetitive and the doctors note is sufficient, additional review of the record to determine medical necessity is not called for under the regulations”) 11. ERROR #6: The ALJ in this case found that the First Call court's reading of the applicable regulation was not correct (at page 24-25) (see administrative record pages 160-161) and the MAC failed to reverse that decision (see administrative record page 24). This is an error as a matter of law. While not controlling precedent on the ALJ, the U.S. District Court decision was correct as a matter of law and statutory construction and therefore, should have been followed. Failing to do so and/or the incorrect application of the Regulation is an error on the part of the ALJ and the claims at issue should be paid as a matter of law. 12. The ALJ noted two cases in support of his incorrect interpretation of the Regulation. The case closest to being on point is Momentum EMS Inc., v. Kathleen Sebelius (USDC Southern Dist. TX, 2013) (see administrative records pages 1293-1333). In that case, the court stated that “even where a certificate of medical necessity is on file for a patient, that form must still be able to withstand scrutiny... In other words, evidence that Momentum had a PCS on file for these beneficiaries does not end the analysis. Instead, there must next be a determination as to whether that PCS 'was a timely, signed and sufficiently detailed physician's certificate for each of the claims appealed'.” (Id. @ p. 23) (see administrative record page 159) (citing First Call Ambulance Service Inc. v. DHHS and Moorecare Ambulance Service Inc. v. DHHS). (both unreported cases attached). Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 13 of 22 14 13. Plaintiff does not disagree with the Momentum court. The PCS requirements regarding time, signature and information on the PCS must all be considered. In this case is it undisputed that there are in fact valid PCS forms (see administrative record at pages 161-173), therefore the concerns of the Momentum court are not an issue in this case. It is plaintiff/appellant’s position that, once this is done, the services provided to patients on the dates where plaintiff had a sufficient PCS form are covered as a matter of law. The Momentum decision does not dispute that argument; in fact, it supports plaintiff's position. For transports where there is no PCS or where the PCS is insufficient because it is not properly signed, dated, or does not certify the need for ambulance, the rest of the medical record, including the trip report, should be reviewed to determine why a patient's medical conditions contraindicate transport by means other than ambulance. As set forth in plaintiff’s pre- hearing brief (see administrative records pages 1000-1002) and during the hearing, there are physical, mental, monitoring and intervention reasons that patients' conditions may require them to travel by ambulance versus wheelchair van. 14. The other case, U.S. v. Read, 710 F.3d 219 (5th Cir. 2012) (see administrative record pages 1271-1292), is not on point. In that case, where there were allegations of fraud, the court stated “Possession of a PCS, even one that is legally obtained, does not permit a provider to seek reimbursement for ambulance runs that are obviously not medically necessary”. In this case, there are no allegations of fraud or false information, and the trips do not fall into the area of being “obviously not medically necessary”. Again, plaintiff does not disagree with the Read court. In cases where fraud or false statements are present, the PCS should not be allowed to be used as a shield. However, where the PCS is valid and where the “conditions described in the documentation... are medical conditions for which ambulance transport is commonly required”, the ambulance service should not be required to second guess the medical determination of the ordering physician and the PCS is sufficient to establish medical necessity. Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 14 of 22 15 Therefore, the cases cited by the ALJ do not support his interpretation of the Regulation and again, the decision on this point should be reversed as a matter of law. 15. ISSUE #4: Medical Necessity- For non-emergent transports, medical necessity has been met for the patients in this case per CMS guidelines. CMS has published the Ambulance Condition Codes (see administrative record pages 130-133). These codes make it clear that there are four different categories of patients who may be covered for non-emergent ambulance transport, not just patients who are “bed-confined”. First, patients who have physical conditions that prevent them from traveling in a wheelchair in a moving vehicle (see code #s 71-74) (see administrative record page 132-133). Patients with severe weakness, amputations, contractures, decubitus ulcers, recent fractures and other physical conditions meet these requirements for coverage under these codes. Second, patients who have cognitive conditions that require an attendant (see codes 68-70) (see administrative record page 131-132). Patients with Alzheimer’s, dementia, or other mental issues may meet the coverage criteria under these codes. Third, patients who require monitoring (see code # 61) (see administrative record page 130). Patients that have hypertension and require blood pressure monitoring and/or cardiac monitoring, patients who have COPD and require pulse ox monitoring, would all qualify for coverage under these codes. Fourth, patients who require intervention (see code #s 62-67) (see administrative record pages 130- 131). Patients who require and cannot self-administer oxygen meet coverage criteria according to this code. 16. The ALJ in this case has set a standard for documentation that is both unreasonable and unsupported by CMS regulations and guidance. The documentation submitted for the patients at issue in this case was specific and met all of the documentation requirements of CMS and the above Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 15 of 22 16 referenced codes as set forth below. 17. ERROR #7: 42 CFR section 410.40(d) says: “Nonemergency transportation by ambulance is appropriate if either: the beneficiary is bed-confined, and it is documented that the beneficiary's condition is such that other methods of transportation are contraindicated; or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required.” (emphasis added). The documentation in this case is consistent with all requirements and standard of care for EMS/Ambulance providers, and for the reasons and conditions stated therein, these claims show that the patient's conditions are such that ambulance transport is “medically required” and should remain paid. The ALJ erred in requiring more in terms of patient descriptives than what CMS requires (ALJ decision at page 25-40) (see administrative record pages 161-176). 18. ERROR #8: Additionally and alternatively, the ALJ erred in not acknowledging that oxygen administration is sufficient rationale for coverage of ambulance service. The ALJ ruled that oxygen is not sufficient (see page 25 of the ALJ decision, 3rd paragraph) (see administrative record page 161) based on his reading of nursing home regulations. This application of nursing home regulations to ambulance service providers is improper as a matter of law and therefore the case should be reversed or remanded on this point. 19. ERROR #9: The QIC's decision does not state specific reasons for denials (see administrative record pages 353-382). The ALJ’s decision was equally insufficient stating for each and every patient that he "reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see administrative record pages 157-173). Specifically: 20. Beneficiary A. B., date of service 1/2/09, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 16 of 22 17 contraindicated." (see Administrative Record pages 163). However, the patient was documented with altered mental status and deemed a danger to be a danger to himself and others. (Administrative record in vol 2, pages 474-487) 21. Beneficiary W. B., date of service 1/3/10, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 163-164). However, this patient was transported due to end stage renal disease and was on oxygen prior to transportation. Oxygen administration was continued during transport and it was noted that patient was moved via drawsheet. (Administrative Record, vol 2, at pages 462-473) 22. Beneficiary O. B., date of service 5/8/09, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 164). However, the patient’s records noted that the patient was bed-confined with a history of amputation and stroke. The patient was moved via drawsheet. (Administrative Record, vol 2, at pages 514-19) 23. Beneficiary J. B., date of service 1/11/08, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 164-165). However, this patient was a high fall risk and had to be transported with contact precautions due to a diagnosis of C. Diff. (Administrative Record, vol 2, pages 520-526) 24. Beneficiary I. C., date of service 9/23/09, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 165). However, medical records noted the patient had hemiparesis, right below knee amputation and was moved via draw sheet (Administrative record, vol 2 pages 542-563) 25. Beneficiary J. C., date of service 1/4/10, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 166). However, the patient was hemiplegic with severe debility to lower extremities. (Administrative Record, vol 2, at pages 564-571) 26. Beneficiary A. M., date of service 5/29/09, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 170). However, the patient had bilateral amputation to lower extremities and history of severe weakness (Administrative Record, vol 2, pages 724-746) Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 17 of 22 18 27. Beneficiary M. S., dates of service 3/12/08 & 4/4/08, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 171-172). However the patient was transported by ambulance due to severe weakness, end stage renal disease and partial blindness. Medical records also indicated patient was diabetic, was a high fall risk and had poor compliance with medications (Administrative Record, vol 2, at pages 852-883) 28. Beneficiary P. M., date of service 11/26/2007, was determined that the “ALJ reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (see Administrative Record pages 169). However the patient was transported by ambulance to emergency room for abdominal pain, vertigo and emesis x3. (Administrative Record, vol 2, at pages 710-717) 29. Publication 100-04 of the Medicare Claims Processing Manual details instructions to the Quality Independent Contractors (QIC’s) regarding their disposition of cases on appeal. Transmittal 985, dated June 16, 2006, includes the following language relative to the QIC’s explanation of their decision: Explanation of the Decision: Instructions: This is the most important element of the redetermination. Explain the logic/reasons that led to your final determination. Explain what policy (LCD, NCD), regulations and/or laws were used to make this determination. Make sure that the explanation contained in this paragraph is clear and that it includes an explanation of why the claim can or cannot be paid. Statements such as "not medically reasonable and necessary under Medicare guidelines" or "Medicare does not pay for X" provide conclusions instead of explanation, and are not sufficient to meet the requirement of this paragraph. 30. Section 3.4.3 of The Program Integrity Manual(PIM) states: For each claim denied, in full or in part, contractor MR or BI staff must carefully document the basis for the denial in the internal claim record. If there are several reasons for denial, effective 1/1/03, the contractor must document each basis in the internal claim record. 31. Section 3.6.5 of the PIM states, in pertinent part: Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 18 of 22 19 This section applies to all three types of post-payment reviews (error validation reviews, statistical sampling for overpayment estimation reviews, and consent settlement reviews). A. Provider or Supplier Notification Contractor MR staff must prepare a letter to notify each provider or supplier of the results of the post-payment review. These letters may (but are not required to) contain a demand for repayment of any overpayments they may have made. Some contractors may wish to have another department issue the actual demand letter. Contractors must notify the provider(s) that the post-payment review has been completed even in those instances where no corrective actions or overpayments are involved. Contractors must send the Notification of Post-payment Review Results to each provider or supplier within 60 days of the exit conference (for provider or supplier site reviews) or receipt of medical records (for contractor site reviews). If the contractors need more than 60 days, they are to contact their RO (for PSCs, the Primary GTL, Associate GTL, and SME) for an extension. Each letter must include: • A narrative description of the overpayment situation: state the specific issues involved which created the overpayment and any pertinent issues as well as any recommended corrective actions the provider should consider taking; • The findings for each claim in the sample, including a specific explanation of why any services were determined to be non-covered, or incorrectly coded; A list of all individual claims including the actual amounts determined to be non-covered, the specific reason for non-coverage, the amounts denied, the amounts which will not be recovered from the provider or supplier, under/overpayment amounts and the §§1879 and 1870 determinations made for each specific claim. No such specific rationale for denying these claims was stated, therefore the decision to deny these claims must be reversed. Furthermore, the ALJ clearly erred and abused his discretion by ignoring the conditions of the patients as outlined in the medical records. 32. ISSUE #5: The judge acknowledged that the records initially sent to him by the QIC were not complete (decision at page 3) (see administrative record page 139). The case was remanded because of this. The plaintiff also provided additional records when it appeared that the QIC could not locate them, specifically records for B. Russell (see ALJ decision at page 21-22) (see administrative record pages 157-158). These records were part of the exhibit list approved by the parties (see administrative record page 85). Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 19 of 22 20 33. ERROR #10: The judge erred by not acknowledging that additional medical records had been supplied for these patients and in not considering these records in his decision. Specifically: 34. Beneficiary L. M. was found that the record did not identify, describe in any way or establish what services were available at the receiving hospital that were not available in the first (pg 21 ALJ response) (see administrative record page 157). However, in "additional documents" in administrative record on disc 1 vol 3 pg. 1067 it is stated that the patient is going for rehabilitation services. This was also discussed during the ALJ hearing transcripts pg.1507-1508 on disc 1, vol 3. 35. Beneficiary A. R. was found that the submitted documentation from appellant was identified to be from dialysis to residence (pg 21 ALJ decision; see administrative record page 157). In administrative record, disc 2, original records that were submitted, there is only documentation for transports to and from a nursing home to a diagnostic or therapeutic center. This was discussed during ALJ hearing transcripts pg.1508-1512 on disc 1, vol 3. 36. Beneficiary B. R., was found that the record did not contain any documentation relating to the service at issue. (pg 22 ALJ decision; see administrative record page 158) However in "additional documents" in administrative record on disc 1 vol 3 pg. 1068-1070 there is a record for the hospital to nursing home transport. 37. Beneficiary J. C. was denied due to wrong date of service submitted. However, an addendum by the attending EMT was submitted in "additional documents" in administrative record on disc 1 vol 3 pg 1045. In ALJ hearing transcripts the correction as discussed on pg 1485-1486 on same disc 1 vol 3. This error requires reversal and a new decision on the patients at issue. CONCLUSION 38. No genuine issue of material fact being at issue, the ALJ and MAC having committed the errors of law as set forth above, and this Court, having jurisdiction over these decisions; this case should reversed and overturned on any one or all of the errors set forth above. WHEREFORE Plaintiff prays for the following relief: (a) This Court find that claims were reopened outside of the four year limit for reopening and revising claims under the clear reading of the CFR; that these claims should remain paid; and that the extrapolation be dismissed due to the inclusion of the claims in the sample and in the universe. (b) This Court find that the revision of the Code of Federal Regulations was not Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 20 of 22 conducted in accordance with the Administrative Procedures Act and therefore must be stricken; and that therefore claims were opened outside of the four year time to revise; (c) This Court find that the statistical sampling and extrapolation in this case is not supported and that individual claims must be assessed; therefore the extrapolation should be dismissed; (d) That this Court find that there was no determination made regarding a “high rate” of payment error, and therefore extrapolation may not be used according to law; (e) That this Court find that extrapolation is not appropriate where patients are individually liable for denied claims but are not individually identified so that appellant can collect these claims; that this causes a taking without a hearing; and that therefore the extrapolation must be dismissed; (f) That this Court find that Physician Certification Forms for repetitive patients are sufficient as a matter of law and statute to support payment of the underlying claims; (g) That this Court find that the patient records in this case were sufficient under the applicable regulations and HHS guidance to support payment; (h) That this Court find that the application of nursing home regulations to payment of ambulance claims in this case was a clear error and the overpayment should therefore be reversed; (i) That this Court find that the applicable regulations require more specific rationale in order to sustain the denial of a claim than that given by the ALJ and other levels of review in this case, therefore the overpayment should be reversed; (j) That this Court find that additional documents were submitted for review and not considered in making the final determination of claims payment in this case therefore the overpayment should be reversed; and (k) That Plaintiff be awarded such other and further relief to which it may be entitled and that this Court deems appropriate. Signed this 22nd day of November, 2016. _/s/ John Leeper________________________________________ 21 Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 21 of 22 22 JOHN LEEPER Counsel for DOMINION AMBULANCE LLC SBN 12156550 801 N. El Paso St., Suite 225 El Paso, Texas 79902 Tel. (915) 532-3447 Fax (915) 532-3455 CERTIFICATE OF SERVICE I hereby certify that on this the 22nd day of November, 2016, a true and correct copy of the foregoing instrument was electronically filed with the Clerk of the Court using the CM/ECF System which will transmit notification of such filing to the counsel of record in this matter. _/s/ John Leeper________________________________________ JOHN LEEPER Case 3:16-cv-00146-KC Document 14 Filed 11/22/16 Page 22 of 22 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION DOMINION AMBULANCE, L.L.C. § § Plaintiff, § § v. § EP-16-CV-146-KC § SYLVIA MATHEWS BURWELL IN HER § FILED ELECTRONICALLY OFFICAL CAPACITY AS SECRETARY § OF HEALTH AND HUMAN SERVICES, § § Defendant. § PROPOSED STATEMENT OF UNDISPUTED FACTS COMES NOW Plaintiff, by and through counsel, and files this Proposed Statement of Undisputed Facts in support of their Motion For Summary Judgment and states the following: 1. The universe of claims at issue in this case began on 9/1/2007 (Administrative Record at page 192). 2. The demand letter was issued on 4/25/12 (Administrative Record at page 225). 3. The Code of Federal Regulations prior to January 8, 2010 stated in relevant part: 42 CFR 405.980(b) Time frames and requirements for reopening initial determinations and redeterminations initiated by a contractor. A contractor may reopen and revise its initial determination or redetermination on its own motion— (1) Within 1 year from the date of the initial determination or redetermination for any reason. (2) Within 4 years from the date of the initial determination or redetermination for good cause as defined in § 405.986. 4. 42 CFR 405.980(b) was changed effective January 8, 2010. (Administrative Record at 1 Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 1 of 6 page 144) 5. There was no Congressional authority to make any change to 42 CFR 405.980 retroactive in effect. (Administrative Record is silent) 6. 42 CFR 405.980 was changed by HHS to make “two technical corrections”. One of those was to remove the phrase “...and revise” from the regulation. (Administrative Record at page 145) 7. There was Notice of Public Rule Making issued for this “correction” to 42 CFR 405.980. (Administrative Record is silent) 8. If the universe of claims was not proper due to the inclusion of inappropriate dates of service, then the extrapolation is invalid and must be dismissed. (see Report of Dr. Pearson at page 3, paragraph 8; Administrative Record at volume 3, page 1210). 9. Dr. Shirlene Pearson testified that the sampling methodology and resulting extrapolation in this case was not sufficient; including but not limited to her testimony that stratification should not have been used since there were a number of claims in a higher dollar range that were not selected at all and therefore stratification should have been used (Administrative Record at pages 1401-1403). 10. In this case, 38 denied claims resulted in an extrapolated overpayment of $2,259,440 (Administrative Record at pages 191-193). 11. The ALJ noted that there were properly raised concerns over the use of stratification in the case, but went on to rule that the sampling methodology was sufficient (decision at page 21) (Administrative Record at page 156-157). 12. There was no decision on whether the revised error rate was “high” after the QIC’s partially favorable decision changed the error rate. (Administrative Record is silent). 2 Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 2 of 6 13. There was no decision on whether the revised error rate was “high” after the ALJ’s partially favorable decision changed the error rate. (Administrative Record is silent) 14. The revised overpayment amount was extrapolated after the QIC decision. (Administrative Record at pages 336-349) 15. The revised overpayment amount was extrapolated after the ALJ decision. (Administrative Record at pages 137-178) 16. Individual patients are financially responsible for claims denied for medical necessity (Title XVIII of the Social Security Act (the Act) in §1861(s)(7); 42 CFR §§ 410.40-410.41). 17. There are 26 individual claims left at issue in this case. (see Administrative Record at page 161- 173). 18. The actual overpayment amount was $7,824.27 (see Administrative Record at page 192) 19. The total “universe” of claims in this case is 12,718. (see Administrative Record at page 192) 20. The original extrapolated overpayment amount was $2,259,444.00. (see Administrative Record at page 192) 21. Claims assessment involved a review of patient records and PCS forms, and a discussion of patients’ medical conditions (see Administrative Record at page 161-173 & 353-382). 22. The use of extrapolation prohibits the plaintiff from being able to identify individual claims that are overpaid in the “universe” of claims. (Administrative Record at pages 1401- 1403) 23. Some patients in this case were transported for non-emergency, scheduled, repetitive ambulance service (Administrative Record at page 160-161) 24. Plaintiff/appellant had valid PCS forms for repetitive transports at issue in this case (ALJ decision at page 25-39; Administrative Record at page 161-174) 25. In this case, there was no allegation of fraud or false information (Administrative Record 3 Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 3 of 6 is silent). 26. CMS published the Ambulance Condition Codes as guidance for payment of non- emergent ambulance services (Administrative Record at pages 130-133). 27. The ALJ in this case required more information than what is listed in the Condition Codes (ALJ decision at page 25-40) (Administrative Record at pages 161-176). 28. The ALJ found that oxygen administration is not sufficient rationale for coverage of ambulance service. (see page 25 of the ALJ decision, 3rd paragraph) (Administrative Record at page 161) 29. The ALJ based his decision that oxygen administration is not sufficient rationale for coverage of ambulance service on nursing home regulations. (see page 25 of the ALJ decision, 3rd paragraph) (Administrative Record at page 161) 30. The ALJ’s decision for each and every patient stated that he "reviewed the entire record as it pertains to this beneficiary and the Beneficiary's medical condition. Based on the picture painted by the documentation, of the Beneficiary's functionality and acute needs, the ALJ finds that other means of transport were not contraindicated." (Administrative Record at pages 157- 173). 31. According to medical records, Patient A. B., date of service 1/2/09, was documented with altered mental status and deemed to be a danger to himself and others. (Administrative record in vol 2, pages 474-487) 32. According to medical records, Patient W. B., date of service 1/3/10, was on oxygen prior to transportation. Oxygen administration was continued during transport and it was noted that patient was moved via drawsheet. (Administrative Record, vol 2, pages 462-473) 33. According to medical records, Patient O. B., date of service 5/8/09, was bed confined with a history of amputation and stroke. The patient was moved via drawsheet. (Administrative Record, vol 2, pages 514-19) 34. According to medical records, Patient J. B., date of service 1/11/08, was a high 4 Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 4 of 6 fall risk and had to be transported with contact precautions due to a diagnosis of C. Diff. (Administrative Record, vol 2, pages 520-526) 35. According to medical records, patient I. C., date of service 9/23/09, had hemiparesis, right below knee amputation and was moved via draw sheet. (Administrative Record, vol 2 pages 542-563) 36. According to medical records, patient J. C., date of service 1/4/10, was hemiplegic with severe debility to lower extremities. (Administrative Record, vol 2, pages 564-571) 37. According to medical records, patient A. M., date of service 5/29/09, had bilateral amputation to lower extremities and history of severe weakness. (Administrative Record, vol 2, pages 724-746) 38. According to medical records, patient M. S., dates of service 3/12/08 & 4/4/08, was transported by ambulance due to severe weakness, end stage renal disease and partial blindness. Medical records also indicated patient was diabetic, was a high fall risk and had poor compliance with medications. (Administrative Record, vol 2, pages 852-883) 39. According to medical records, patient P. M., date of service 11/26/2007, the patient was transported by ambulance to emergency room for abdominal pain, vertigo and emesis x3. (Administrative Record, vol 2, at pages 710-717) 40. The ALJ acknowledged that the records initially sent to him by the QIC were not complete (decision at page 3) (Administrative Record at page 139). 41. Plaintiff/appellant provided additional records when it appeared that the QIC could not locate them, specifically records for B. R. (see ALJ decision at page 21-22) (Administrative Record at pages 157-158). 42. These records were part of the exhibit list approved by the parties (Administrative Record at page 85). 43. The ALJ did not acknowledge that these additional medical records had been supplied for these patients and did not consider these additional documents. (Administrative Record is silent) 44. Additional records were submitted for patient L. M. stating that the patient was being transported for “rehabilitation services”. (Administrative Record at page 157 and in "additional documents" Administrative Record on disc 1 vol 3 pg. 5 Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 5 of 6 6 1067) 45. For Patient L.M., the ALJ found that the record did not identify, describe in any way or establish what services were available at the receiving hospital that were not available in the first (pg 21 ALJ decision Administrative Record at page 157- 158, hearing transcripts at Administrative Record pg.1507-1508) 46. Additional records were submitted for patient B. R. showing a hospital to nursing home transport (in "additional documents" in Administrative Record at pg. 1068- 1070) 47. For patient B.R., the ALJ found that the record does not contain any documentation relating to the service at issue. (pg 22 ALJ decision; Administrative Record page 158) 48. Additional records were submitted for patient J. C. showing a corrected date of service (see "additional documents" in Administrative Record at page 1045). 49. For patient J.C., the ALJ denied this claim due to wrong date of service. (Administrative Record at page 1485-1486). Respectfully Submitted, _/s/ John Leeper________________________________________ JOHN LEEPER Counsel for DOMINION AMBULANCE LLC SBN 12156550 801 N. El Paso St., Suite 225 El Paso, Texas 79902 Tel. (915) 532-3447 Fax (915) 532-3455 Signed this 22nd day of November, 2016. CERTIFICATE OF SERVICE I hereby certify that on this the 22nd day of November, 2016, a true and correct copy of the foregoing instrument was electronically filed with the Clerk of the Court using the CM/ECF System which will transmit notification of such filing to the counsel of record in this matter. _/s/ John Leeper________________________________________ JOHN LEEPER Case 3:16-cv-00146-KC Document 14-1 Filed 11/22/16 Page 6 of 6 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION FIRST CALL AMBULANCE ) SERVICE, INC., ) ) Plaintiff, ) ) v. ) No. 3:10-0247 ) Judge Sharp THE DEPARTMENT OF HEALTH ) AND HUMAN SERVICES, and ) KATHLEEN SEBELIUS, in her ) official capacity as Secretary of HHS, ) ) Defendants. ) MEMORANDUM This is an administrative appeal from the final decision of the Secretary of the Department of Health and Human Services (HHS) denying certain Medicare payments for ambulance services. The parties have filed cross Motions for Summary Judgment (Docket Nos. 31 & 33) based upon the administrative record. For the following reasons, the motions will be granted in part, and denied in part. I. FACTUAL BACKGROUND1 Plaintiff First Call Ambulance Service, LLC, is a Nashville, Tennessee based ambulance service provider. Defendants are HHS, and its Cabinet Secretary, Kathleen Sebelius. HHS is 1 The following factual recitation is drawn primarily from Defendant’s Statement of Facts (Docket No. 35). Plaintiff incorporated its facts in its Memorandum in support of its Motion For Summary Judgment, instead of in a separate filing as contemplated by Local Rule 56.01(b). Moreover, Plaintiff did not respond to the statement of facts submitted by Defendant, and, under Local Rule 56.01, that failure “indicate[s] that the asserted facts are not disputed for purposes of summary judgment.” In any event, and based upon the record, the specific facts set forth in this Court’s summary appear to be a fair characterization of the facts relevant to the issues presented by the Motions for Summary Judgment. 1 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 1 of 12 PageID #: 216 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 1 of 12 responsible for oversight of the Medicare Act. The Centers for Medicare & Medicaid Services (“CMS”) is a component of HHS, charged with administering Medicare. To process the high volume of claims, CMS contracts out many of Medicare’s audit and payment functions to private Medicare contractors. Those contractors are called fiscal intermediaries (“FIs”) or carriers. Typically, Medicare carriers are private insurance companies. They perform a variety of functions, including making payment determinations in accordance with the Medicare Act, applicable regulations, and certain manuals, such as the Medicare Benefit Policy Manual and the Medicare Claims Processing Manual. Ambulance service providers, such as Plaintiff, submit claims for services rendered to the appropriate Medicare carrier. That carrier, in turn, pays the provider based on an assignment of benefits by the Medicare beneficiary. To streamline the process, claims for services (including ambulance services) under Medicare are paid based upon the claim when first presented, unless the claim contains glaring irregularities. Carriers then conduct post-payment audits to ensure that payments are made in accordance with applicable Medicare payment criteria. When a payment is erroneously made, an “overpayment” is assessed and “recouped” from subsequent payments otherwise due the supplier of the medical goods or services. If a Medicare provider is unsatisfied with the resolution of a claim, it must present its grievance through the designated administrative appeals process and exhaust the administrative remedies available to it. See, 42 U.S.C. § 1395u(b)(3)(C); 42 U.S.C. § 395ff(b). Generally speaking, and with certain exceptions, if the service provider is dissatisfied with the initial determination, it 2 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 2 of 12 PageID #: 217 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 2 of 12 may seek a “redetermination” by the carrier, 42 C.F.R. § 405.940, and, if still dissatisfied, may seek a “reconsideration” from a different Medicare contractor called a Qualified Independent Contractor (“QIC”). 42 C.F.R. §§ 405.902, 405.968. If the provider is not satisfied with the reconsideration results, it may then request a hearing before an Administrative Law Judge (“ALJ”). If the provider is dissatisfied with the ALJ’s decision, it may then appeal to the Medicare Appeals Council (“MAC” or “Council”) and that body’s decision is the final decision of the Secretary of HHS. 42 C.F.R. § 405.1130. Turning to the facts of this case, from January 2005 to September 2006, Plaintiff submitted claims for ambulance transport services that were provided to different Medicare beneficiaries. CIGNA Government Services, the Medicare contractor, initially paid the claims in full. A Medicare Program Safeguard Contractor, AdvanceMed, then conducted a post-payment audit review of a random sample of Plaintiff’s claims for reimbursement and discovered what it believed to be a “high level of payment error” in the reimbursements Plaintiff received. Specifically, AdvanceMed reviewed a 90-claim sample involving medical records of 76 Medicare beneficiaries and 181 billed line items. Using that sample of claims, AdvanceMed found an error rate of 56.67% which yielded an overpayment of $10,763.84. AdvanceMed also projected the total amount of overpayment that Medicare made to Plaintiff and, with the error rate of 56.67%, AdvanceMed “extrapolated” an overpayment of $2,645,585.00. It then notified Plaintiff of the overpayment on March 18, 2008, and CIGNA issued a formal notice of overpayment on March 24, 2008. Plaintiff appealed the decision, prompting CIGNA in June 2008 to issue a redetermination decision in which it upheld the entire overpayment. Plaintiff then appealed the decision to 3 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 3 of 12 PageID #: 218 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 3 of 12 Q2Administrators, LLC, the QIC, which issued a partially favorable reconsideration decision to Plaintiff, finding that a number of the claims should have been reimbursed, some claims should have been reimbursed at a lower amount, and upholding 34 claims that were appealed. The QIC’s decision was next appealed to an ALJ. During proceedings before the ALJ, Plaintiff abandoned many of its claim, presenting 23 claims for consideration by the ALJ. After a hearing, the ALJ found in favor of reimbursement on 12 claims, and against reimbursement on 11 claims. Those 11 claims were then presented to the Council. Before the Council, Plaintiff did not challenge the specific medical necessity decisions made by the ALJ. Rather, it asserted that a physician’s certification alone is sufficient to prove medical necessity and merit Medicare payment for nonemergency, scheduled, repetitive ambulance services. Plaintiff also argued it was denied due process, the QIC and ALJ should have recalculated the error rate, and there was no showing that good cause to reopen the claim for a reimbursement decision. In an opinion dated January 10, 2010, the Council rejected Plaintiff’s argument. So far as relevant to the present litigation, the Council found that physicians’ certifications were insufficient to establish medical necessity, but rather medical necessity must be proven by the beneficiaries’ conditions. On that basis, the Council reviewed the Medicare beneficiaries’ medical documentation and found that “the vital signs of the non-emergency transports were essentially stable” and that “the record does not support that other means of transportation were contraindicated.” (Admin. R. at 13). The Council ultimately concluded that “the ambulance services provided were not medically necessary and are not covered by Medicare.” (Id.). The Council’s decision was the final decision of the Secretary. This appeal followed. 4 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 4 of 12 PageID #: 219 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 4 of 12 II. STANDARD OF REVIEW “The standard of review for cross-motions for summary judgment does not differ from the standard applied when a motion is filed by only one party to the litigation.” Ferro Corp. v. Cookson Group, PLC, 585 F.3d 946, 949 (6th Cir. 2009). A party may obtain summary judgment if the evidence establishes there are no genuine issues of material fact for trial and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Covington v. Knox County School Sys., 205 F.3d 912, 914 (6th Cir. 2000). A genuine issue exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). In ruling on a motion for summary judgment, the Court must construe the evidence in the light most favorable to the nonmoving party, drawing all justifiable inferences in his or her favor. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). III. LEGAL DISCUSSION Plaintiff invokes this Court’s jurisdiction under 42 U.S.C. § 1395ff(b) which entitles an individual or entity to judicial review of the final decision of the Secretary under 42 U.S.C. § 405(g). See, Heckler v. Ringer, 466 U.S. 602, 615 (1984) (Section 405(g) provides the “sole avenue for judicial review for ‘all claims arising under’ the Medicare Act”). Judicial review of the Secretary’s decision is limited in significant respects. First, it “‘is limited to determining whether the Secretary’s findings are supported by substantial evidence[2] and whether the Secretary employed the proper legal standards in reaching her conclusion.’” Besaw v. Sec. of Health & Human Serv’s., 966 F.2d 1028, 1030 (6th Cir. 1992) (footnote added, citation omitted). Second, “‘[t]he scope of review is limited to an examination of 2 “Substantial evidence is more than a scintilla of evidence but less than a preponderance and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. 5 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 5 of 12 PageID #: 220 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 5 of 12 the record,’” meaning that the Court does “‘not review the evidence de novo, make credibility determinations nor weigh the evidence.’” Id. With those standards in mind, the Court turns to the arguments raised by the parties. The cross-motions for summary judgment essentially present four issues for this Court’s consideration: (1) Is Medicare responsible for paying non-emergency, scheduled, repetitive ambulance services where the need for such services is expressed in a physician’s certification without more?; (2) Was Plaintiff deprived of due process?; (3) Can the Court consider whether the the QIC and the ALJ should have determined whether there was a high rate of payment error (as determined by AdvanceMed), so as to justify utilizing “extrapolation”?; and (4) can the Court determine whether there was good cause to reopen Plaintiff’s requests for reimbursement? This is not the first time that this Court has been presented with these very same issues. In MoreCare Ambulance Service, LLC v. Dept. of Health and Human Serv’s, 2011 WL 839502 (M.D. Tenn. March 4, 2011) (MoreCare II), Judge Trauger was presented with an appeal of a final decision of the Secretary which denied claims for ambulance services which were undertaken by MoreCare Ambulance Service based upon a physician’s certification of medical necessity.3 With respect to the last three issues presented for review in this case, Judge Trauger rejected the very same arguments, writing: The plaintiff makes a series of unavailing arguments. The plaintiff argues that he was denied “due process” because CIGNA “did not in fact make a new and independent decision on the claims at issue” but simply adopted AdvanceMed's findings. . . . Plaintiff has pointed to no recognized, protected property interest that it was deprived of nor has it provided any clear evidence that it has been denied “notice and a meaningful opportunity to be heard,” which is the “core of due process.” LaChance v. Erickson, 522 U.S. 262, 266, 118 S.Ct. 753, 139 L.Ed.2d 695 3 Counsel for present Plaintiff also represented the plaintiff in MoreCare. 6 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 6 of 12 PageID #: 221 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 6 of 12 (1998). Additionally, the limited purpose of this proceeding is to consider the MAC's decision, not CIGNA’s conduct. The plaintiff also argues that the claims never should have been reopened by AdvanceMed in the first place. The initial determination to re-open claims, however, is not reviewable. 42 C.F.R. § 405.926(l). . . . The plaintiff also argues that there is no continuing basis for extrapolation, because the “high rate of error,” initially used to justify extrapolation under the relevant regulations, no longer exists. . . . The court's view is that the proper calculation of the amount that Medicare was overbilled should await the court's determination of how many of the sample claims were actually valid. As discussed below, this stage has not yet been reached. MoreCare II, 2011 WL 839502 at *2 n.2 (citations to record omitted). It is true, as the Government points out, the undersigned is not bound by Judge Trauger decision. But that is not to say that the Court cannot follow that opinion if it is correct under the law. Having considered Judge Trauger’s opinion in relation to the pending motions for summary judgment and the arguments by the parties in this case, the undersigned finds that Judge Trauger reached the right result and, for the reasons expressed in MoreCare, the Court reaches the same conclusion in this case with respect to the last three issues presented for review. Turning to what is really the heart of this case (just as it was in MoreCare), at issue is whether the Secretary applied the relevant regulations in accordance with the law. “[F]ederal courts ‘do not write on a blank slate’ when interpreting agency regulations.” Covenant Me. Ctr, Inc. v. Sebelius, 424 Fed. Appx. 434, 436 (6th Cir. 2011) (quoting, Rosen v. Goetz, 410 F.3d 919, 927 (6th Cir.2005)). As already noted, the Secretary’s decision is entitled to substantial deference, including “an agency’s interpretation of its own regulations.” St. Francis Health Care Ctr. v. Shalala, 205 F.3d 937, 943 (6th Cir. 2000). “In reviewing the Secretary’s interpretation of [the] regulations, courts may overturn the Secretary’s decision only if it is ‘arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.’” Clairborne-Hughes Health Ct. v. Sebelius, 609 F.3d 839, 844 *6th Cir. 7 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 7 of 12 PageID #: 222 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 7 of 12 2010) (citations omitted). The Court’s “task is not to decide which among several competing interpretations best serves the regulatory purpose. Rather, the agency's interpretation must be given ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation.’” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 511 (1994) (citation omitted). “In sum, if ‘it is a reasonable regulatory interpretation ... [a court] must defer to it.’” Id. at 944 (citation omitted). As Judge Trauger observed, the regulations in question, 42 C.F.R. § 410.40, begin with the “basic rule” in subsection (a) that the ambulance “service meets the medical necessity . . . requirement of paragraph[] (d).” 42 C.F.R. § 410.40(a). Paragraph (d) in turn, sets forth a “general rule” and a “special rule” for the medical necessity rule requirement. The “general rule” as set forth in subsection (d)(1) provides: (1) General rule. Medicare covers ambulance services, including fixed wing and rotary wing ambulance services, only if they are furnished to a beneficiary whose medical condition is such that other means of transportation are contraindicated. The beneficiary's condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary. Nonemergency transportation by ambulance is appropriate if either: the beneficiary is bed-confined, and it is documented that the beneficiary's condition is such that other methods of transportation are contraindicated; or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required. Thus, bed confinement is not the sole criterion in determining the medical necessity of ambulance transportation. It is one factor that is considered in medical necessity determinations. For a beneficiary to be considered bed-confined, the following criteria must be met: (I) The beneficiary is unable to get up from bed without assistance. (ii) The beneficiary is unable to ambulate. (iii) The beneficiary is unable to sit in a chair or wheelchair. 42 U.S.C. § 410-40(d)(1). The “special rule” is set forth in subsection (d)(2) which provides: (2) Special rule for nonemergency, scheduled, repetitive ambulance services. Medicare covers medically necessary nonemergency, scheduled, repetitive ambulance services if the ambulance provider or supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary’s attending 8 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 8 of 12 PageID #: 223 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 8 of 12 physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met. The physician’s order must be dated no earlier than 60 days before the date the service is furnished. 42 U.S.C. § 410-40(d)(2). This case indisputably involves nonemergency, scheduled, repetitive ambulance services for which physician certificates were provided.4 The Secretary contends a physician’s certificate is not enough to cause payment, arguing that “a doctor’s note is necessary, but not sufficient to merit coverage for nonemergency, scheduled, repetitive ambulance services.” (Docket No. 38 at 15, italics in original). Instead, she argues that such “ambulance services are reimbursable only if: 1. the patient’s condition must demonstrate that other means of transportation would jeopardize his health; 2. the ambulance service provider must tender a note from the beneficiary’s attending physician certifying that the ambulance transport is required; and 3. the expenses incurred must be reasonable and necessary for the diagnosis or treatment of illness or injury.” (Id., italics in original). In the Court’s opinion the Secretary’s reading simply does not accord with the plain wording of the regulations. “Regulations promulgated to effect the purpose of a statute are to be construed in accordance with the well-established principles of statutory construction[.]” In Re Arctic Exp. Inc., 636 F.3d 781, 792 (6th Cir. 2011). A court “‘look[s] first to the plain and unambiguous meaning of the regulation, if any,’” and “‘with an eye to [its] straightforward and commonsense meaning.’” Id. (citations omitted). If “‘the regulation’s language reveals an unambiguous and plain meaning,’” the Court’s “‘task is at an end.’” Id. If, however, the regulation is ambiguous, the Court “‘look[s] to the regulatory scheme, reading the regulation in its entirety to glean its meaning.’” Id. 4 The Court notes, however, that some of the physician certificates were undated and/or unsigned. 9 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 9 of 12 PageID #: 224 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 9 of 12 Here, the Court need go no further than subsection (d)(2) – the “special rule” – to determine what the regulation requires in terms of the showing of “medical necessity” for nonemergency, scheduled, repetitive ambulance services. In plain and unambiguous language, the regulation states that the ambulance service provider need only provide “a written order from the beneficiary’s attending physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met.” It does not state, as the Secretary argues, that the doctor’s note is insufficient in and of itself. Nor does it state, as the Secretary also submits, that, apart from the physician’s certificate, the provider must show that the “patient’s condition must demonstrate that other means of transportation would jeopardize his or her health.” As Judge Trauger observed: Clearly, the C.F.R. establishes a “special rule” for certain kinds of repetitive services, whereby a sufficiently detailed and timely “doctor’s note” demonstrates medical necessity. Therefore, where the service is “scheduled” and “repetitive” and the “doctor’s note” is sufficient, additional review of the record to determine medical necessity is not called for under the regulations. MoreCare Ambulance Service, LLC v. Dept. of Health and Human Serv’s, Case No. 1:09-00078 Docket No. 24 at 6 (M.D. Tenn. Mar. 4, 2010 (MoreCare I). Thus, the Secretary plainly erred in looking beyond the physician’s certificate to such things as whether the logs of the ambulance runs showed that the patient had normal vital signs. See, MoreCare II, 2011 WL 2682987 at *3 (“where the service is ‘scheduled’ and ‘repetitive’ and the doctor’s note is sufficient, additional review of the record to determine medical necessity is not called for under the regulations”). Although the Court finds the regulations require that there be a physician’s certificate establishing medical necessity, the Court is not in a position to determine whether there was a 10 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 10 of 12 PageID #: 225 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 10 of 12 timely, signed and sufficiently detailed physician’s certificate for each of the claims appealed.5 The same sorts of infirmities were presented in the summary judgment record before Judge Trauger and to address the deficiencies Judge Trauger set forth a supplemental briefing schedule as follows: [T]he first step in supplemental briefing will be for the plaintiff to clearly identify the portions of the record that demonstrate that a specific claim was for a “scheduled” and “repetitive” service. Once the plaintiff does that, it should, as a matter of completeness, point to where in the record a timely PCS exists that “certif[ies] that the medical necessity requirements” are met. Additionally, where evidence on the “scheduled” and “repetitive” nature of the service is lacking, the plaintiff should proceed under the general rule and, for each claim, demonstrate that the MAC erred in finding that the ambulance service was contraindicated. In short, a claim-by-claim analysis, with specific and precise citation to the record, is required for the court to have any chance at fairly determining where the MAC erred. MoreCare I, Case No. 1:9-00078, Docket No. 23 at 8. The undersigned is of the opinion that the same sort of briefing scheduled may be appropriate in this case. However, prior to implementing such a briefing schedule, the Court will provide the parties with an opportunity to consider this Court’s interpretation of the regulations to determine whether some agreement can be reached on the sufficiency of the physician’s certificate with respect to each matter appealed, and (more optimistically) to determine whether this entire matter can be resolved amicably. Accordingly, the Court will set a status conference, at which time the parties can inform the Court as to whether more briefing is necessary and, if so, what issues should be addressed and the time frame for such briefing. IV. CONCLUSION 5 Defendants repeatedly note that Plaintiff does not challenge the “medical necessity” determination of the ALJ and, in fact, in the Complaint before this, Court Plaintiff concedes that it “did not raise the determination of medical necessity for the individual patients” before the ALJ or the MAC. (Docket No. 1, Complaint ¶ 14). However, the Court does not understand this concession to mean that Plaintiff agrees with the ALJ’s determination of the patient’s condition as set forth in the record (including logs of the ambulance runs). Rather, Plaintiff’s position appears to be simply that the ALJ should have considered nothing more than the sufficiency of the physician’s certificate in determining medical necessity. 11 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 11 of 12 PageID #: 226 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 11 of 12 On the basis of the foregoing, the parties’ Motions for Summary Judgment will be granted in part, and denied in part. The Court will grant Plaintiff summary judgment and deny Defendant summary judgment on Plaintiff’s claim under 42 U.S.C. § 410-40(d)(2) that medical necessity for nonemergency, scheduled, repetitive ambulance services can be established based upon a sufficient physician’s certificate alone. The Court will grant Defendant summary judgment and deny Plaintiff summary judgment on Plaintiff’s claims that it was deprived of due process, and that good cause did not exist to reopen its claims for reimbursements. The Court will defer ruling on whether sufficient medical necessity existed for each of the claims appealed and the propriety of extrapolation. Finally, the Court will hold a status conference with the parties to discuss further briefing should the parties be unable to resolve the individual claims or settle this case. An appropriate Order will be entered. _____________________________________ Kevin H. Sharp United States District Judge 12 Case 3:10-cv-00247 Document 43 Filed 03/08/12 Page 12 of 12 PageID #: 227 Case 3:16-cv-00146-KC Document 14-2 Filed 11/22/16 Page 12 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE COLUMBIA DIVISION MOORECARE AMBULANCE SERVICE, LLC., ) ) Plaintiff, ) ) v. ) Case No. 1:09-0078 ) Judge Trauger THE DEPARTMENT OF HEALTH AND HUMAN ) SERVICES and KATHLEEN SEBELIUS, in her ) official capacity as Secretary/Director of D.H.H.S. ) ) Defendants. ) ) MEMORANDUM AND ORDER Pending before the court is the plaintiff’s Motion for Summary Judgment (Docket No. 18), to which the defendants have responded (Docket No. 23). For the reasons discussed herein, the parties’ briefing on key issues is insufficient, and, therefore, the court will direct further briefing as discussed below. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND The plaintiff, MooreCare Ambulance Service, LLC, is an ambulance service with its principal office in Lawrenceburg, Tennessee.1 The defendants are the Department of Health and 1The plaintiff did not attach a Statement of Material Facts to its motion, but rather provided, in list form, a factual summary in its Memorandum in support of its motion. (Docket No. 18 Ex. 1.) The defendants provided a similar summary. (Docket No. 23 at 7-10.) The factual background is drawn from these submissions and from the “Administrative Record (A.R.),” which was filed under seal (Docket No. 9). For purposes of the present round of summary judgment briefing, the parties have agreed that “there are no material facts in controversy.” (Docket No. 17.) 1 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 1 of 9 PageID #: 101 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 1 of 9 Human Services (DHHS) and its Secretary, Kathleen Sebelius, who is sued in her official capacity. The DHHS is the department within the federal government responsible for the administration of the Medicare program. MooreCare provided ambulance services to Medicare beneficiaries, including transporting chronically/terminally ill patients from nursing homes to treatment centers, such as renal care facilities. Following each ride, MooreCare submitted a claim to the relevant Medicare Carrier (CIGNA) for the service, and, after reviewing the submission, CIGNA paid the claim. In May 2007, AdvanceMed, which contracts with Medicare to “safeguard” Medicare from abuse, “requested all medical records and supporting documentation” from MooreCare “that supports the billing of claims for dates of service January 1, 2005 through September 30, 2006.” (A.R. at 321.) After receiving those materials, AdvanceMed reviewed a “random sample of [60] claims” and found a “high level of payment error.” (Id. at 323; Docket No. 23 at 8.) Specifically, in 89.32 percent of the claims examined, AdvanceMed found that Medicare was improperly billed for the ambulance service. (Id. at 323; Docket No. 23 at 8.) On the claims specifically reviewed, AdvancedMed determined that Medicare had been overbilled in the total amount of $19,131.59. (Id.) AdvanceMed extrapolated this finding across all claims submitted to Medicare during this period and determined that Medicare had overpaid the plaintiff $2,114,613.00. (Id.) Through the standard administrative appeals process that is established by statute and regulation, MooreCare appealed, first seeking a “redetermination,” which is a de novo review by 2 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 2 of 9 PageID #: 102 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 2 of 9 the Medicare Carrier, CIGNA. CIGNA determined that the “assessed overpayment” decision by AdvanceMed was “fully valid” and affirmed the overpayment amount. (A.R. at 282.) The plaintiff maintains that CIGNA “did not do a new review, but simply adopted the prior decision” of AdvanceMed. (Docket No. 18 Ex. 1 at 2.) Whatever the case, the plaintiff then appealed to the Qualified Independent Contractor (QIC), Q2 Administrators, which was hired by Medicare to make an “independent decision” regarding the dispute. (A.R. at 202.) The QIC issued a “partially favorable” ruling to the plaintiff, finding that the “actual overpayment amount can be reduced from $19,131.59 to $11,170.33." (Id.) The plaintiff then appealed this ruling to the Administrative Law Judge. (Id. at 119.) In his decision, the ALJ reviewed 23 claims that had been found to be not properly payable and reversed this decision as to 13 claims. (Id. at 64-80.) The plaintiff then appealed to the Medicare Appeals Council (MAC), which is the highest level of administrative review and whose decisions embody the final conclusions of the Secretary. (Id. at 40.) In a September 4, 2009 opinion, the MAC conducted a review of all 23 claims that had been reviewed by the ALJ. The MAC affirmed some findings but also reversed several that had been favorable to the plaintiff. (Id. at 9-33.) The central issue before the MAC was whether the plaintiff had provided sufficient evidence that the ambulance trips under review were medically necessary, which is largely concerned with whether all other forms of transport, such as a wheelchair van, were contraindicated. (See id.) The plaintiff largely relied on Physician Certification Statements 3 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 3 of 9 PageID #: 103 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 3 of 9 (PCS) from the patient’s physician that stated that the patient could only safely travel by ambulance and “run reports,” which are the plaintiff’s report of the details of each trip. (Id.) Relying on its interpretation of the Code of Federal Regulations and the Medicare Benefit Policy Manual (MBPM), the MAC concluded that “a signed physician’s certification alone is insufficient to support Medicare coverage.” (Id. at 11.) The MAC then went on to examine each claim and whether the record supported the use of an ambulance. (Id. at 11.) The MAC found that, in 20 cases, the claim was not properly covered by Medicare, usually because the necessity of an ambulance had not been clearly demonstrated by the record. (Id. at 11-30.) On November 6, 2009, the plaintiff filed its Complaint in this case, asserting that the MAC had made various errors of law in evaluating the claims and that various procedural errors had been made throughout the administrative review process. (Docket No. 1.) ANALYSIS I. Standard of Review Under the Medicare Act, the court’s review of the Secretary’s decision is limited to whether the decision comports with applicable law and its findings of fact are supported by substantial evidence. Brainard v. Secretary of Health & Human Servs., 889 F.2d 679, 681 (6th Cir. 1989). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. II. The Motion for Summary Judgment The plaintiff’s only potentially viable argument at this stage is that, under the relevant 4 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 4 of 9 PageID #: 104 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 4 of 9 federal regulations, the 20 claims at issue were properly billed to Medicare.2 Medicare law and the accompanying regulations provide guidance in determining when an ambulance trip for a patient is reimbursable by Medicare. As a basic rule, ambulance services are covered “where the use of other methods of transportation is contraindicated by the individual’s condition, but . . . only to the extent provided in regulations.” 42 U.S.C. § 1395x(s)(7). The relevant regulation, 42 C.F.R. 410.40(d)(1), provides the “general rule”: Medicare covers ambulance services . . . only if they are furnished to a beneficiary whose medical condition is such that other means of transportation are contraindicated. The beneficiary’s condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary.” Non-emergency transportation via ambulance is “appropriate” where “the beneficiary is bed-confined, and it is documented that the beneficiary's condition is such that other methods of transportation are contraindicated; or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required. Thus, bed confinement . . . is one factor that is considered in 2The plaintiff makes a series of unavailing arguments. The plaintiff argues that he was denied “due process” because CIGNA “did not in fact make a new and independent decision on the claims at issue” but simply adopted AdvanceMed’s findings. (Docket No. 18 Ex. 1 at 7.) The plaintiff has pointed to no recognized, protected property interest that it was deprived of nor has it provided any clear evidence that it has been denied “notice and a meaningful opportunity to be heard,” which is the “core of due process.” LaChance v. Erickson, 522 U.S. 262, 266 (1998). Additionally, the limited purpose of this proceeding is to consider the MAC’s decision, not CIGNA’s conduct. The plaintiff also argues that the claims never should have been re- opened by AdvanceMed in the first place. (Docket No. 18 Ex. 1 at 14-16.) The initial determination to re-open claims, however, is not reviewable. 42 C.F.R. § 405.926(l). Also, while the plaintiff argues that the MAC should have only conducted a review of the portions of the ALJ’s decision that were unfavorable to the plaintiff, the plaintiff requested a broad review of the ALJ’s decision (A.R. at 40), and the MAC is authorized to conduct a “de novo” review of the ALJ’s decision. 42 U.S.C. § 1395ff(d)(2)(A)-(B). The plaintiff also argues that there is no continuing basis for extrapolation, because the “high rate of error,” initially used to justify extrapolation under the relevant regulations, no longer exists. (See Docket No. 18 Ex. 1 at 11.) The court’s view is that the proper calculation of the amount that Medicare was overbilled should await the court’s determination of how many of the sample claims were actually valid. As discussed below, this stage has not yet been reached. 5 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 5 of 9 PageID #: 105 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 5 of 9 medical necessity determinations. The regulations also provide a “special rule” for “nonemergency, scheduled, repetitive ambulance services.” 42 C.F.R. § 410.40(d)(2). Under this rule, “Medicare covers medically necessary nonemergency, scheduled, repetitive ambulance services if the ambulance provider or supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary's attending physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met. The physician's order must be dated no earlier than 60 days before the date the service is furnished.” The plaintiff maintains that the claims at issue here concern patients receiving “nonemergency, scheduled, repetitive ambulance services” and that each patient had a certification of medical necessity provided within the 60-day window. (Docket No. 18 Ex. 1 at 3- 4.) Under the plain language of the regulation, the plaintiff argues, this should be enough for coverage under subsection (d)(2). (Id. at 4-6.) The defendants’ argument on this issue essentially restates the relevant regulations and broadly requests that the court adopt the MAC’s conclusions. (Docket No. 23 at 11-13.) The court agrees with the plaintiff’s interpretation of the regulation. Clearly, the C.F.R. establishes a “special rule” for certain kinds of repetitive services, whereby a sufficiently detailed and timely “doctor’s note” demonstrates medical necessity. Therefore, where the service is “scheduled” and “repetitive” and the “doctor’s note” is sufficient, additional review of the record to determine medical necessity is not called for under the regulations. While the court agrees with the plaintiff’s interpretation of the regulations, the plaintiff’s 6 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 6 of 9 PageID #: 106 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 6 of 9 briefing is insufficient, because it does not point to evidence in the record – for each claim – demonstrating that the service performed on the claim date was “scheduled” and “repetitive.” Without this, the court is left at sea in the administrative record, guessing as to which claims of the 20 are actually covered by the “special rule,” let alone the “general rule.” Therefore, the first step in supplemental briefing will be for the plaintiff to clearly identify the portions of the record that demonstrate that a specific claim was for a “scheduled” and “repetitive” service. Once the plaintiff does that, it should, as a matter of completeness, point to where in the record a timely PCS exists that “certif[ies] that the medical necessity requirements” are met. Additionally, where evidence on the “scheduled” and “repetitive” nature of the service is lacking, the plaintiff should proceed under the general rule and, for each claim, demonstrate that the MAC erred in finding that the ambulance service was contraindicated. In short, a claim-by-claim analysis, with specific and precise citation to the record, is required for the court to have any chance at fairly determining where the MAC erred. To be clear, from its initial review, the court has serious concerns about the MAC opinion. The MAC does not cite the “special rule” and, at times, its opinion on the necessity of the ambulance service appears unsupported. (A.R. at 9-11.) An example from one of the 20 claims illustrates. L.D. was transported by the plaintiff via ambulance on July 11, 2005 from his nursing home to the hospital for a chest x-ray. (Id. at 13.) While the ALJ found the ambulance service appropriate, the MAC did not, stating that, “while the physician stated that the beneficiary required ambulance transport by stretcher, the physician did not describe the beneficiary’s condition or how that condition required ambulance transport. The beneficiary’s 7 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 7 of 9 PageID #: 107 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 7 of 9 vital signs were stable and he was alert to person. . . . Despite the physician’s indication that the beneficiary could not sit, the record shows that the beneficiary was found at his residence sitting in a chair and was returned upon discharge . . . to a chair.” (Id.) The credibility of the MAC’s ruling is undermined by the record. The run report for the July 11, 2005 trip states that, when the ambulance arrived, L.D., who was 89 and had recently suffered a stroke, was “laying in chair. . . . awake but did not respond,” and, when he was returned from the hospital, he was “moved to chair.” (Id. at 431.) The PSC, which is dated July 11, 2005, states that L.D. cannot sit for the “duration of transport without pain and/or possibility of further injury.” (Id. at 442.) There is nothing in the run report or the PSC to suggest that any other form of transport besides an ambulance would have been reasonable under the general rule. In sum, the court is, for many of these claims, sympathetic to the plaintiff’s position but is not, based upon the parties’ briefing, in the position to assess each MAC ruling. Therefore, within 45 days, the plaintiff shall file a supplemental memorandum that addresses in each case, with specific citation to the record, where the MAC erred in applying the special and/or general rule. Additionally, in any case where the MAC reached its decision based upon a technical or procedural issue (see A.R. at 30 for instance), the plaintiff must specifically argue why the MAC’s decision was incorrect. The defendants will have 30 days to file a response brief. The parties may request additional time as needed. 8 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 8 of 9 PageID #: 108 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 8 of 9 It is so ordered. Enter this 4th day of March 2011. ALETA A. TRAUGER United States District Judge 9 Case 1:09-cv-00078 Document 24 Filed 03/04/11 Page 9 of 9 PageID #: 109 Case 3:16-cv-00146-KC Document 14-3 Filed 11/22/16 Page 9 of 9 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE COLUMBIA DIVISION MOORECARE AMBULANCE SERVICE, LLC., ) ) Plaintiff, ) ) v. ) Case No. 1:09-0078 ) Judge Trauger THE DEPARTMENT OF HEALTH AND HUMAN ) SERVICES and KATHLEEN SEBELIUS, in her ) official capacity as Secretary/Director of D.H.H.S. ) ) Defendants. ) ) MEMORANDUM The parties have now completed court-ordered supplemental briefing (Docket Nos. 24- 26) on the plaintiff’s Motion for Summary Judgment (Docket No. 18). In its present form, this briefing concerns whether the plaintiff’s ambulance transports for 14 Medicare beneficiaries were properly payable by the defendants. (See Docket Nos. 25-26.) As the court finds in favor of the plaintiff on most, but not all, of these claims, the plaintiff’s Motion for Summary Judgment will be granted in part and denied in part. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND The court provided the factual background of this case in its March 4, 2011 Memorandum and Order that directed further briefing. Therein, the court stated: The plaintiff, MooreCare Ambulance Service, LLC, is an ambulance service with its principal office in Lawrenceburg, Tennessee. The defendants are the Department of Health and Human Services (DHHS) and its Secretary, Kathleen Sebelius, who is sued in her official capacity. The DHHS is the department within the federal government responsible for the administration of the Medicare program. 1 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 1 of 20 PageID #: 145 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 1 of 20 MooreCare provided ambulance services to Medicare beneficiaries, including transporting chronically/terminally ill patients from nursing homes to treatment centers, such as renal care facilities. Following each ride, MooreCare submitted a claim to the relevant Medicare Carrier (CIGNA) for the service, and, after reviewing the submission, CIGNA paid the claim. In May 2007, AdvanceMed, which contracts with Medicare to “safeguard” Medicare from abuse, “requested all medical records and supporting documentation” from MooreCare “that supports the billing of claims for dates of service January 1, 2005 through September 30, 2006.” After receiving those materials, AdvanceMed reviewed a “random sample of [60] claims” and found a “high level of payment error.” Specifically, in 89.32 percent of the claims examined, AdvanceMed found that Medicare was improperly billed for the ambulance service. On the claims specifically reviewed, AdvancedMed determined that Medicare had been overbilled in the total amount of $19,131.59. AdvanceMed extrapolated this finding across all claims submitted to Medicare during this period and determined that Medicare had overpaid the plaintiff $2,114,613.00. Through the standard administrative appeals process that is established by statute and regulation, MooreCare appealed, first seeking a “redetermination,” which is a de novo review by the Medicare Carrier, CIGNA. CIGNA determined that the “assessed overpayment” decision by AdvanceMed was “fully valid” and affirmed the overpayment amount. . . . [T]he plaintiff then appealed to the Qualified Independent Contractor (QIC), Q2 Administrators, which was hired by Medicare to make an “independent decision” regarding the dispute. The QIC issued a “partially favorable” ruling to the plaintiff, finding that the “actual overpayment amount can be reduced from $19,131.59 to $11,170.33." The plaintiff then appealed this ruling to the Administrative Law Judge. In his decision, the ALJ reviewed 23 claims that had been found to be not properly payable and reversed this decision as to 13 claims. The plaintiff then appealed to the Medicare Appeals Council (MAC), which is the highest level of administrative review and whose decisions embody the final conclusions of the Secretary. In a September 4, 2009 opinion, the MAC conducted a review of all 23 claims that had been reviewed by the ALJ. The MAC affirmed some findings but also reversed several that had been favorable to the plaintiff. The central issue before the MAC was whether the plaintiff had provided sufficient evidence that the ambulance trips under review were medically necessary, which is largely concerned with whether all other forms of transport, such as a wheelchair van, were contraindicated. The plaintiff largely relied on Physician Certification Statements (PCS) from the patient’s physician that stated that the patient could only safely travel by ambulance and “run reports,” which are the plaintiff’s report of the details of each trip. 2 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 2 of 20 PageID #: 146 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 2 of 20 Relying on its interpretation of the Code of Federal Regulations and the Medicare Benefit Policy Manual (MBPM), the MAC concluded that “a signed physician’s certification alone is insufficient to support Medicare coverage.” The MAC then went on to examine each claim and whether the record supported the use of an ambulance. The MAC found that, in 20 cases, the claim was not properly covered by Medicare, usually because the necessity of an ambulance had not been clearly demonstrated by the record. (Docket No. 24 at 1-4)(internal citations omitted) On November 6, 2009, the plaintiff filed its Complaint and, as noted above, on November 1, 2010, the plaintiff moved for summary judgment, seeking reversal of the MAC’s decision and “adjustment” of the overpayment. (Docket No. 18 Ex. 1 at 18.) In ruling on that motion, the court found that the plaintiff had only one “potentially viable argument,” which is that “under the relevant federal regulations,” the claims at issue “were properly billed to Medicare.” (Docket No. 24 at 4-5.) The court rejected as “unavailing” a series of other arguments advanced by the plaintiff, which largely challenged the conduct of various entities during the investigation, claim review, and appeals process. (Id.) The court also recognized that “the plaintiff [] argues that there is no continuing basis for extrapolation, because the ‘high rate of error,’ initially used to justify extrapolation under the relevant regulations, no longer exists.” (Id. at 5.) The court left this issue for another day, after it was clear “how many of the sample claims were actually valid.” (Id.) The court then attempted to determine which of the claims at issue were properly billed to Medicare. The court recognized that there is a “basic” rule governing whether ambulance services are covered by Medicare laid out in the statute, and then the regulations provide further guidance with a “general” rule and a “special” rule. (Id. at 5-6.) The “basic” rule is that ambulance services are covered “where the use of other methods of transportation is 3 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 3 of 20 PageID #: 147 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 3 of 20 contraindicated by the individual’s condition, but . . . only to the extent provided in regulations.” 42 U.S.C. § 1395x(s)(7). The general rule found in 42 C.F.R. § 410.40(d)(1) states: Medicare covers ambulance services . . . only if they are furnished to a beneficiary whose medical condition is such that other means of transportation are contraindicated. The beneficiary’s condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary. Non-emergency transportation via ambulance is appropriate if either: the beneficiary is bed-confined, and it is documented that the beneficiary's condition is such that other methods of transportation are contraindicated; or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required. Thus, bed confinement . . . is one factor that is considered in medical necessity determinations. The regulation then goes on to list three prerequisites of bed confinement – that is, inability to sit in a chair or wheelchair, inability to ambulate, and inability to get up from bed without assistance. Id. And, finally, the “special rule” exists for “nonemergency, scheduled, repetitive ambulance services.” 42 C.F.R. § 410.40(d)(2). Under this rule, “Medicare covers medically necessary nonemergency, scheduled, repetitive ambulance services if the ambulance provider or supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary's attending physician certifying that the medical necessity requirements of paragraph (d)(1) of this section are met. The physician's order must be dated no earlier than 60 days before the date the service is furnished.” Id. In the initial round of summary judgment briefing, the parties disputed whether a timely PCS and evidence of “nonemergency, scheduled, repetitive ambulance services” was sufficient for coverage under Medicare. (Docket No. 24 at 6.) The court “agree[d] with the plaintiff’s interpretation of the regulation.” (Id.) That is, “where the service is ‘scheduled’ and ‘repetitive’ 4 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 4 of 20 PageID #: 148 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 4 of 20 and the ‘doctor’s note’ is sufficient, additional review of the record to determine medical necessity is not called for under the regulations.” (Id.) The court then ordered supplemental briefing in light of these findings. The court directed the plaintiff to point to evidence in the Administrative Record (A.R.) showing – for each challenged claim – that the service at issue was “scheduled and repetitive” and that a valid PCS existed. (Id. at 7.) Where such evidence was lacking, the court stated that “the plaintiff should proceed under the general rule and, for each claim, demonstrate that the MAC erred in finding that the ambulance service was contraindicated.” (Id.) Citing specific examples, the court raised “serious concerns” about the MAC opinion, including that it ignored the special rule “and, at times, its opinion on the necessity [or lack thereof] of the ambulance service appears unsupported.” (Id.) ANALYSIS The parties have now provided supplemental briefing as ordered by the court. The court will discuss each beneficiary in turn. I. Standard of Review Under the Medicare Act, the court’s review of the Secretary’s decision is limited to whether the decision comports with applicable law and its findings of fact are supported by substantial evidence. Brainard v. Secretary of Health & Human Servs., 889 F.2d 679, 681 (6th Cir. 1989). In the March 4, 2011 Memorandum, the court, in essence, found that the MAC’s failure to recognize and apply the “special rule” did not comport with applicable law. Therefore, 5 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 5 of 20 PageID #: 149 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 5 of 20 for claims advanced under the “special rule” here, the MAC decision is of no moment. For claims advanced under the general rule, the court is guided by the substantial evidence standard, and the court will consider whether there was “such relevant evidence as a reasonable mind might accept as adequate” for the MAC decision as to each “general rule” claim. Id. II. Individual Claims A. D.B. The claim at issue concerns a June 19, 2006 ambulance trip to a renal care clinic for dialysis treatment, and the plaintiff maintains that this trip falls under the “special rule.” (Docket No. 25 at 2.) As support from the administrative record, the plaintiff points out that D.B.’s claim was denied by AdvanceMed under “denial code #6,” (A.R. 293) which is AdvanceMed’s code indicating that the claim was denied under the “special rule,” for lack of a timely and valid PCS. (A.R. at 319.) This denial code, the plaintiff argues, shows that the service was “scheduled and repetitive,” but the claim was denied for an insufficient PCS. (Docket No. 25 at 2.) The plaintiff then points to a signed PCS dated May 18, 2006 (that is, within 60 days prior to the trip at issue) stating that D.B. met some of the conditions of bed confinement and attesting that the “ambulance transportation is medically necessary.” (A.R. at 410.) The defendants argue that there is generally insufficient evidence in the record that the ambulance service was “repetitive,” which under the defendant’s guidelines, is an ambulance transport “furnished three or more times during a ten day period or once a week for three weeks.” (Docket No. 26 at 4.) The defendants concede that dialysis is an example of such a “repetitive” treatment, but they still urge that the record must demonstrate repetitiveness before a 6 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 6 of 20 PageID #: 150 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 6 of 20 claim is payable, and “the plaintiff did not point to any evidence in the administrative record regarding the number of ambulance transports provided to each beneficiary.”1 (Id.) The defendants’ demands on the plaintiff are unreasonable. There is a timely PCS in the record affirming the medical necessity of the ambulance trip, and there is no indication from the record that the trip was not scheduled and “repetitive,” given that it was for dialysis treatment and AdvanceMed implicitly recognized that the claim was for scheduled and repetitive treatment. The defendants’ proposed additional requirements on the plaintiff in order to receive payment are not supported by the statute or the regulations. The court therefore finds that this claim is valid under the “special rule.” B. C.F. (also referred to as C.W.) The claim at issue concerns an August 29, 2005 trip, and the plaintiff invokes the “special rule.” (Docket No. 25 at 2.) The plaintiff provides a (timely) August 2, 2005 PCS that, as above, attests to the medical necessity of ambulance transport, and the plaintiff again points to AdvanceMed’s use of “denial code 6" to deny the claim. (Docket No. 25 at 2; A.R. 173, 295.) It is also worth noting that the run report from the trip states that C.F. was transported to her 1The defendants then launch into a lengthy discussion that, in essence, argues for a different interpretation of the “special rule.” (Docket No. 26 at 4-7.) The court did not invite supplemental briefing on this settled issue. Also, the plaintiff apparently misunderstood the court’s direction in the March 4, 2011 Memorandum and Order to explain why the MAC’s decision was incorrect “in any case where the MAC reached its decision based upon a technical or procedural issue,” that is, where the decision did not rest on an application of the “general rule.” (Docket No. 24 at 8.) Indeed, the plaintiff uses this instruction as a basis to discuss matters already ruled upon by the court concerning the MAC’s authority to review the ALJ decision before moving on to list the claims it is challenging under the “general rule.” (Docket No. 25 at 3-4.) 7 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 7 of 20 PageID #: 151 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 7 of 20 “routine dialysis.” (A.R. at 448.) The defendants’ only specific challenge to the evidence supporting the plaintiff’s “special rule” claim here is that the PCS states that C.F. will be transported to “Baptist,” while the run report states that she was taken to “Renal Care Group.” (Docket No. 26 at 8.) Again, there is every suggestion from the record that C.F.’s trip was scheduled and repetitive, and there is a timely PCS in the record declaring the medical necessity of ambulance use. The court fails to see the relevance of the “Baptist” versus “Renal Care Group” issue for purposes of the “special rule.” The court therefore determines that this claim is valid under the “special rule.” C. L.Gi. Three trips, June 15, 2005, November 23, 2005, and February 15, 2006 are at issue here, and the plaintiff again invokes the “special rule.” (Docket No. 25 at 2.) Each run report associated with these trips mentions that the trip was for dialysis treatment. (A.R. at 483-488.) And the plaintiff once again points out that AdvanceMed used denial code #6 to deny these claims. (A.R. at 296.) Also, the plaintiff points to (timely) PCSs dated May 3, 2005, October 18, 2005, and February 8, 2006, all of which attest to L.Gi’s inability to get up from bed without assistance, her inability to ambulate and the medical necessity of ambulance transport. (A.R. at 489-93.) In response, the defendants find fault, again, with the fact that a different destination is listed on the PCSs than the destination indicated on the run report and that, on two of the PCSs, it is not entirely clear who the doctor who signed the PCS was. (Docket No. 26 at 9.) There is no doubt these PCSs could have been filled out in more detail by L.Gi’s doctors. However, there 8 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 8 of 20 PageID #: 152 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 8 of 20 is no suggestion that the PCSs are fraudulent or were not signed by L. Gi’s doctors, and the PCSs are still orders, signed by physicians, attesting to the medical necessity of ambulance transport, as required under the “special rule.” As above, there is nothing in the record to counsel against the eminently logical conclusion that these trips were “scheduled and repetitive.” Therefore, these claims are valid under the “special rule.” D. K.G. Four ambulance trips (January 25, 2005, February 28, 2005, December 5, 2005, and March 20, 2006) are at issue here, and, once again, the plaintiff invokes the “special rule.” (Docket No. 25 at 2.) The grounds are the same: the run reports indicate that K.G. was a dialysis patient (A.R. at 517-522), “denial code #6" was used to deny the claims (A.R.at 296-297), and there are timely, signed PCSs attesting to the medical necessity of ambulance transport (in light of K.G’s paraplegia and “end stage renal disease”) dated December 7, 2004, February 1, 2005, October 25, 2005, and February 2, 2006. (A.R. at 514, 527-28, and 534.) The defendants’ challenges to the “special rule” claim are weak here. They note that the “date of service” indicated on one PCS is unclear and that another PCS “lacked any information on K.G.’s physician,” although there can be no dispute that all four PCSs are signed, and there is nothing to suggest fraud. (Docket No. 26 at 10-11.) As above, these objections do not challenge the basic substantive point – the plaintiff obtained a signed statement of medical necessity for each transport at issue. Given the other evidence showing that the transports were “scheduled and repetitive,” the court concludes that these claims are covered by the “special rule.” E. C.L. 9 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 9 of 20 PageID #: 153 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 9 of 20 This claim concerns a June 7, 2006 trip, and the plaintiff invokes the “special rule.” (Docket No. 25 at 2.) In addition to the “denial code” evidence, the case that C.L’s transport was “scheduled and repetitive” is particularly strong here, as the run report states that the trip was for C.L.’s “weekly dialysis.” (A.R. at 654.) The problem here, however, is that the only PCS the plaintiff can provide is dated June 8, 2006, one day after the trip. (A.R. at 660.) Under the plain language of the special rule, the PCS offered is not valid for this trip. Therefore, the only apparent basis for coverage is under the general rule, which requires a showing that all other means of transport are contraindicated. 42 C.F.R. 410.40(d)(1). The court has little difficulty concluding that the MAC’s opinion – which denied the plaintiff’s claim – was not supported by substantial evidence. (A.R. at 21-22.) The PCS, signed one day after the transport at issue, states that C.L. was bed confined and unable to sit in a chair or wheelchair for the duration of the trip without risk of pain or further injury. (A.R. at 660.) Additionally, the run report indicates that C.L suffered from end stage renal disease and required a stretcher due to that condition. (A.R. at 654-55.) Also, on the ride to the care clinic, C.L. complained of “severe pain” in his right ribs whenever he breathed. (A.R. at 654.) While the defendants are correct that the run report also indicates that, on the return trip, C.L. was able to sit and even walk with assistance, the court still has no difficulty, in light of the run report and the PCS, which documented the patient’s fragile state, concluding that all other forms of transport were contraindicated.2 Therefore, the court concludes that the MAC’s decision on this 2In the absence of expert testimony, further evidence, or even much case law interpreting these regulations, the court is, as a few other courts have been, left to use its common sense and general understanding to evaluate whether an ambulance was the only viable form of transport, 10 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 10 of 20 PageID #: 154 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 10 of 20 claim was not supported by substantial evidence. F. G.P. This claim concerns a September 15, 2006 trip, and the plaintiff invokes the “special rule.” (Docket No. 25 at 2.) It is clear from the Administrative Record that the treatment at issue was “scheduled and repetitive,” as the record contains an April 26, 2006 “to whom it may concern” letter from G.P.’s nurse, stating that G.P. receives dialysis three times a week. (A.R. at 728.) Moreover, there is a (timely) August 23, 2006 signed PCS stating that G.P. cannot get up from bed without assistance and has end stage renal disease. (A.R. at 725.) The defendants’ only challenge here is that the PCS states that the “dates of service” for the PCS are August 16, 2006 to October 16, 2006, but the PCS was not signed until August 23, 2006, after its “dates of service” began. (A.R. at 725; Docket No. 26 at 12.) It should be clear from the discussion above that the court finds these types of objections irrelevant to the applicability of the special rule. There is a timely, signed PCS and clear evidence that the service was “scheduled and repetitive.” Therefore, this claim is covered by the “special rule.” G. R.C. This claim involves an April 20, 2005 trip for a follow-up evaluation of R.C.’s right wrist injury, and the plaintiff challenges the MAC’s decision under the general rule. (Docket No. 25 with an eye toward the patient’s general medical condition and whether the patient risked further injury if he or she did not travel by ambulance. See Am. Ambulance Serv. of Pa. v. Sullivan., 761 F. Supp. 1211, 1218 (E.D. Pa. 1991). The court’s basic understanding from the record and briefing is that an ambulance provides a heightened level of safety and security for the patient, but that security comes at a significant additional cost for the defendants. The court therefore is weighing the benefits and the costs when it assesses the MAC’s application of the general rule. 11 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 11 of 20 PageID #: 155 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 11 of 20 at 4; A.R. at 418.) The run report indicates that R.C. had schizophrenia and dementia, among other conditions. (A.R. at 418.) R.C. was apparently in no distress during the trip, and the trip was largely uneventful. (Id.) There is a PCS, dated April 26, 2005, stating that ambulance transport is medically necessary, but also stating that R.C. did not meet the conditions for bed confinement. (A.R. at 420.) During the administrative review process, the ALJ determined that the trip was covered, and the MAC reversed this decision. (A.R. at 12-13.) In somewhat conclusory fashion, the MAC determined that, “despite the beneficiary’s medical history, the evidence in the record did not demonstrate that other means of transportation were contraindicated,” particularly given R.C.’s stable condition and lack of complications during transport. (A.R. at 13.) The court concludes that the MAC’s decision was supported by substantial evidence. The trip at issue was to address a relatively minor medical problem, and there is no indication that the patient was in any distress such that an ambulance would be required. While the patient may have suffered from mental illness, there is no suggestion that this illness manifested itself (or threatened to manifest itself) in a way that would necessitate the use of an ambulance over another form of transport, such as a wheelchair van. While the PCS does state that an ambulance is medically necessary, as noted above, under the general rule, the MAC is not required to accept this as “gospel” and may consider the entire record. Considering that record, the court concludes that there is substantial evidence to support the MAC’s conclusion. Therefore, the court affirms the MAC’s decision as to this claim. H. L.D. 12 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 12 of 20 PageID #: 156 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 12 of 20 This claim concerns a July 11, 2005 trip for a chest x-ray on L.D, and the plaintiff challenges the MAC’s finding under the general rule. (Docket No. 25 at 4; A.R. at 431.) The run report for the trip states that, when the plaintiff’s employees arrived to take L.D. to his appointment, he was “laying in chair,” awake but not responsive. (A.R. at 431.) He was then taken by stretcher to and from his appointment. (Id.) A PCS, signed July 11, 2005, states that L.D. is bed-confined, cannot sit for the duration of the trip without pain, and ambulance transport is medically necessary. (A.R. at 442.) The ALJ found this transport to be covered by Medicare, but the MAC disagreed. (A.R. at 13.) In the March 4, 2011 Memorandum and Order, the court cited L.D.’s case as one of the reasons that the court had “serious concerns” about the MAC’s decision. (Docket No. 24 at 7-8.) The court’s analysis is unchanged. In suggesting that L.D. could sit in a chair and was alert, the MAC’s opinion on this claim simply misreads the run report, and the conclusion that another method of transport here (besides ambulance) was appropriate is not supported by substantial evidence. Indeed, there is every indication, as discussed in the March 4, 2011 Memorandum, that L.D., given his bed confinement and weak state, required the safety and security of an ambulance. Therefore, the court finds that the MAC’s analysis of this claim was not supported by substantial evidence. I. L. Ga. This claim concerns a September 12, 2005 ambulance trip for a follow-up appointment on L. Ga’s fractured hip, and the plaintiff challenges the MAC’s decision under the “general rule.” (Docket No. 25 at 4.) The run report indicates that L. Ga was a 96-year-old woman with a 13 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 13 of 20 PageID #: 157 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 13 of 20 variety of end-stage illnesses, and a stretcher was required to take her to and from the ambulance due to “muscle disuse.” (A.R. at 466.) The report further indicates that vitals on L. Ga could not be obtained during the trip because L. Ga was “combative.” (Id.) Among others, there is an August 13, 2005 PCS in the record stating that an ambulance is medically necessary in light of the fact that, while L.Ga could sit, she could not do so for the duration of the trip without pain, could not ambulate or get out of bed without assistance, and was recovering from a total hip replacement. (A.R. at 470.) The ALJ determined that this ambulance trip was covered by Medicare, and the MAC disagreed, focusing on the fact that, as indicated on the PCS, L. Ga could sit in a wheelchair and was, therefore, not bed-confined. (A.R. at 16.) The MAC noted that L. Ga was “combative” during the trip but concluded that “the documentation fails to support that the beneficiary’s condition precluded transport by wheelchair van or that her health would be jeopardized if she were not transported by ambulance.” (A.R. at 16.) The court finds that this conclusion is not supported by substantial evidence. This was a 96-year-old woman with a myriad of conditions, including a mending fractured hip, from whom vital signs could not be taken because she was too combative when approached. As noted above, “bed confinement” is only one factor in “medical necessity” determinations under the general rule. Here, given L. Ga’s age, conditions, and inability to refrain from fighting with her transporters, the court is convinced that all other less intensive means of transport are 14 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 14 of 20 PageID #: 158 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 14 of 20 contraindicated by the record.3 That is, the safety and security of an ambulance was required. Therefore, the MAC’s decision on this claim was not supported by substantial evidence. J. B.H. This claim involves a June 7, 2005 ambulance trip for a chest x-ray on B.H., and the plaintiff challenges the MAC’s analysis under the “general rule.” (Docket No. 25 at 4.) A June 7, 2005 PCS for B.H states that ambulance transport is medically necessary as, among other things, B.H. was bed-confined,“schizo” and had “senile delirium.” (A.R. at 579.) The run report describes the plaintiff’s representatives loading B.H. from her bed to a stretcher and then to an ambulance and states that the stretcher was required due to decreased “LOC” (unclear) and B.H.’s “morbid obesity.” (A.R. at 576.) The run report states that B.H. had “no complaints” and that the trip was uneventful. (Id.) The MAC reversed the ALJ’s finding that the ride was covered. (A.R. at 18.) The MAC focused on the fact that, given B.H.’s relative stability, even though she was bed-confined, there is no suggestion from the record that she should not have been transferred via wheelchair van or other less intensive conveyance. (Id.) Although it is close, the court concludes that this finding is supported by substantial evidence. While B.H. does appear to have been bed-confined, as noted above, bed confinement 3With this case, and with the case of L.J. (discussed below), the court finds the MAC’s hindsight bias to be particularly unreasonable. Where there is a history of combative behavior, it is most unfair to deny the plaintiff’s claim for reimbursement essentially because, in the end, the ride was relatively uneventful. Indeed, it does not require a great leap of logic to conclude that, with a combative patient, perhaps the ride was relatively uneventful because the patient was transported using the safety and security of an ambulance. 15 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 15 of 20 PageID #: 159 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 15 of 20 is not the sole test. There is little suggestion from the record that B.H.s condition on the day of transport was such that she actually required an ambulance. That is, there is no suggestion that she was in any acute distress or that her mental illnesses precluded any form of transportation that did not provide the support that an ambulance would. Therefore, the court affirms the MAC’s decision with regard to this claim. K. M.H. This claim concerns a September 20, 2005 ambulance trip for an x-ray on M.H.’s arm, and the plaintiff challenges the MAC’s analysis under the “general rule.” (Docket No. 25 at 4.) The PCS for this trip states that ambulance transport is medically necessary in light of the fact that M.H. could not get up from bed without assistance, could not ambulate, and could not sit for the duration of transport without pain. (A.R. at 595.) The PCS also states that M.H. suffered from “senile delusion” and osteoporosis. (Id.) The run report describes that, when M.H. was picked up for the trip, she was sitting in a wheelchair, was moved to the ambulance, and the ride was uneventful. (A.R. at 593.) The MAC again reversed the ALJ’s finding that the ride was covered, finding that the record indicated that M.H. was stable throughout the trip and, therefore, could have been transferred by less intensive means. (A.R. at 19-20.) The court, upon reviewing the record, finds that this conclusion is supported by substantial evidence. Again, there is little suggestion from the record that M.H’s specific condition created a situation in which the enhanced safety and security of an ambulance was required. Therefore, the court affirms the MAC’s conclusion as to this claim. 16 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 16 of 20 PageID #: 160 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 16 of 20 L. L.J. This claim concerns a November 18, 2005 ride, and the plaintiff challenges the MAC’s decision under the “general rule.” (Docket No. 25 at 4.) The run report states that L.J. had dementia and was senile, and a stretcher was required because of L.J.’s “altered mental status.” (A.R. at 610.) Otherwise, the run report describes an unremarkable trip. (Id.) The signed PCS for the trip states that an ambulance (with its restraining devices) was required for transport due to L.J.’s “history of combative behavior,” and the record further indicates that L.J. was 89 at the time and had been admitted to a psychiatric hospital just 11 days earlier with a “poor” long-term prognosis. (A.R. at 612-18.) In reversing the ALJ’s finding that the ride was covered, the MAC focused entirely on the fact that the ride happened to be uneventful and ignored all the concerns found in the record regarding L.J.’s mental health. (A.R. at 20.) The court finds that the conclusion that an ambulance ride here was not “medically necessary” is not supported by “substantial evidence.” In so doing, the court notes L.J.’s recent admission to a psychiatric care facility and the fact that her history of combative behavior was specifically alluded to. While the ride was ultimately uneventful, it is clear from the record that L.J. had considerable psychiatric problems at the time of her transport and that the safety and security provided by an ambulance was necessary. Therefore, the court concludes that the MAC’s finding on this claim was not supported by substantial evidence. M. C.O. This claim concerns a July 14, 2006 trip for C.O.’s dialysis treatment, and the plaintiff 17 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 17 of 20 PageID #: 161 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 17 of 20 challenges the MAC’s decision under the “general rule.”4 The PCS asserts that C.O. can ambulate and sit but also states that an ambulance is medically necessary due to a decrease in function caused by end stage renal disease and dementia. (A.R. at 711.) Additionally, another undated doctor’s note states that C.O. may not put any pressure on her right heel and that she is on oxygen therapy, which further necessitates an ambulance. (Id. at 712.) The run report describes a largely uneventful trip in which C.O. was moved by EMTs to and from a chair and onto a stretcher. (A.R. at 708-709.) The ALJ found the claim covered, and the MAC reversed, again focusing on the stability of C.O. during the trip and the fact that the run report indicated that she was sitting when she was picked up for her trip and that she sat through dialysis. (A.R. at 24.) The court concludes that the MAC’s finding is not supported by substantial evidence, because it simply ignores the medical information in the record. There is an explicit doctor’s note providing several, seemingly compelling justifications for requiring an ambulance. The note reads, “[C.O] has [] congestive heart failure and chronic renal failure. She goes to kidney dialysis three times per week. [She] also has a large ulcer on her right heel. She is not to bear any weight or put any pressure on her right foot. She is also on oxygen therapy. It is medically necessary for [her] to be transported by ambulance.” (A.R. at 712.) To the court, this note shows that, especially given the frequency of C.O.’s trips for dialysis and her fragile mental and physical condition, it was not at all medically advisable for C.O. to travel by any manner other than ambulance. For 4The court assumes that the plaintiff did not invoke the “special rule” because the PCS is undated. (A.R. at 714.) 18 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 18 of 20 PageID #: 162 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 18 of 20 instance, an ambulance attendant could ensure that, especially given C.O.’s dementia, her foot and oxygen source were always protected, in a way that the driver of a wheelchair van could not. As the MAC’s opinion essentially ignored this evidence and focused only on the end results of the trip, the court cannot conclude that the opinion was supported by substantial evidence. N. M.R. This claim involves a February 20, 2006 trip for an x-ray, and the plaintiff challenges the MAC’s decision under the “general rule.” (Docket No. 25 at 4; Docket No. 26 at 17; A.R. at 373.) The PCS states that ambulance transport is medically necessary because M.R. cannot get up from bed without assistance, ambulate, or sit for the duration of the trip without pain. (A.R. at 759.) The run report describes an unremarkable trip in which M.R. was able to sit while waiting for the ambulance to arrive and had no complaints during the trip. (A.R. at 756.) The MAC reversed the ALJ’s finding that the claim was covered because of M.R.’s ability to sit and the lack of complications during the trip. (Id. at 26.) This conclusion appears to be supported by substantial evidence. There is little indication from the record that M.R. was in any distress or that, on the day of the transport, there was any specific condition that required the safety and security of an ambulance. Therefore, the court affirms the MAC’s ruling on this claim. O. Summary The court finds a considerable number of the MAC’s decisions to be either inconsistent with applicable law or unsupported by substantial evidence. The appropriate next step is for the 19 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 19 of 20 PageID #: 163 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 19 of 20 parties to confer as to how they wish to proceed with this litigation, including whether an interlocutory appeal, settlement discussions, or briefing on the continuing basis for extrapolation is appropriate. Within 20 days of the Order that accompanies this Memorandum, the parties should submit a status report, indicating how they wish to proceed. An appropriate Order will enter. _______________________________ ALETA A. TRAUGER U.S. District Court Judge 20 Case 1:09-cv-00078 Document 27 Filed 07/11/11 Page 20 of 20 PageID #: 164 Case 3:16-cv-00146-KC Document 14-4 Filed 11/22/16 Page 20 of 20 UNITED STATES OF AMERICA, ex rel. MISTY WALL, Relator, Plaintiffs, v. VISTA HOSPICE CARE, INC. d/b/a VISTACARE, and VISTACARE, INC., Defendants. No. 3:07-cv-00604-M. United States District Court, N.D. Texas, Dallas Division. June 20, 2016. MEMORANDUM OPINION AND ORDER BARBARA M. G. LYNN, Chief District Judge. Before the Court are Defendants' Motion for Summary Judgment [Docket Entry #235], Motion to Strike the Testimony of Dr. Kriegler [Docket Entry #229], and Motion to Strike the Testimony of Dr. Karl Steinberg [Docket Entry #232], as well as Relator's Motion to Strike the Opinion of Dr. Michael Salve [Docket Entry #246], Motion to Strike the Opinions of Drs. Bull and Hughes [Docket Entry #249], and Motion to Exclude Witnesses Pursuant to Rule 37(c)(1) [Docket Entry #254]. The Court held a hearing on the Motions on May 6, 2016. For the reasons stated on the record and in this Opinion, the Defendants' Motions to Strike the Testimony of Drs. Kriegler and Steinberg are GRANTED in part, the Defendants' Motion for Summary Judgment is GRANTED in part and DENIED in part, and Relator's Motions are DENIED as moot.[1] Defendants also filed objections to Relator's summary judgment evidence [Docket Entry #336]. To the extent the objections are not addressed below, they are DENIED as moot. I. BACKGROUND Relator Misty Wall brings this qui tam action on behalf of the United States for alleged violations of the False Claims Act, 31 U.S.C. §§ 3729, et seq. ("FCA"), in connection with claims for the Medicare Hospice Benefit ("MHB"), between 2003 and 2012. Defendants Vista Hospice Care, Inc. and VistaCare, Inc. ("the VistaCare entities" or "Defendants")[2] provided hospice services in fourteen states during the relevant period, as to all of which Relator makes claims.[3] Approximately 93% of Defendants' patients are Medicare beneficiaries. Relator, a social worker employed at Defendants' Denton, Texas office from April 2003 until April 2005, claims Defendants violated the FCA by: (1) causing patients who were not eligible for the MHB to be certified as eligible, and then submitting claims for ineligible patients; Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 1 of 36 (2) certifying compliance with the Anti-Kickback Statute ("AKS"), while engaging in schemes to pay kickbacks to promote hospice enrollment; and (3) retaliating against Relator for lawful acts taken in furtherance of the Relator's FCA claims. Relator claims such retaliation also violated the Texas Medicaid Fraud Prevention Act. II. PROCEDURAL HISTORY Relator filed suit on April 6, 2007 [Docket Entry #1]. The Court dismissed a number of Relator's claims, and Relator filed a Second Amended Complaint, asserting claims the Court had dismissed without prejudice [Docket Entry #58]. In light of new Fifth Circuit case law, the Court later granted Relator leave to reassert a claim previously dismissed with prejudice, and Relator filed a Third Amended Complaint [Docket Entry #81]. On July 23, 2012, the Court dismissed more of Relator's claims [Docket Entry #91]. On August 30, 2013, Relator and Defendants jointly moved for leave for Relator to file a Fourth Amended Complaint. Other relators—Elizabeth Lattanzi and Barbara Huffstetler (nurses who had been employed by Defendants' Montgomery, Alabama location)—had filed another suit against the VistaCare entities, for alleged FCA violations that occurred after Relator's employment by the Defendants ended. The parties signed an agreement, dated August 30, 2013, by which Lattanzi and Huffstetler agreed to dismiss their case, and Defendants agreed to allow Relator to file her Fourth Amended Complaint, extending the relevant period in this case to 2012, and not to challenge Wall's status as Relator for the extended time period [Docket Entry #260, at A20]. Lattanzi and Huffstetler are not parties to this case, but they have signed an agreement with Relator that entitles them, collectively, to 35% of any recovery in this case. III. THE MEDICARE HOSPICE BENEFIT The MHB is a benefit under Medicare Part A, a 100% federally subsidized health insurance program. The MHB is administered by the Centers for Medicare and Medicaid Services ("CMS") on behalf of the Department of Health and Human Services ("HHS"). The MHB pays a predetermined fee, based on the type of care provided by the hospice provider, for each day an eligible patient receives hospice care.[4] The government conditions reimbursement to providers of hospice services on certification of hospice eligibility.[5] The MHB provides two 90-day benefit periods for eligible patients, followed by an unlimited number of 60-day benefit periods.[6] At the end of each period, the patient can be recertified for hospice care if the patient still meets the requirements for eligibility.[7] During the first 90 days, a hospice provider must obtain a written certification that the patient is "terminally ill" from (1) the hospice medical director or a physician in the hospice interdisciplinary group ("IDG"),[8] and (2) the individual's attending physician (if any).[9] For subsequent periods, certification of terminal illness may be from either the hospice medical director or a physician in the hospice IDG.[10] The hospice provider is to obtain the written certification "at the beginning of the period,"[11] and "must obtain the written certification before it submits a claim for payment."[12] The regulations provide that "[i]f the hospice cannot obtain the written certification within 2 calendar days, after a period Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 2 of 36 begins, it must obtain an oral certification within 2 calendar days and the written certification before it submits a claim for payment."[13] A patient is terminally ill when "the individual has a medical prognosis that his or her life expectancy is 6 months or less if the illness runs its normal course."[14] The attending physician and medical director must certify that the patient is terminally ill based on their clinical judgment of normal course of the patient's illness.[15] "Clinical information and other documentation that support the medical prognosis must accompany the certification and must be filed in the medical record. . . . Initially, the clinical information may be provided verbally, and must be documented in the medical record and included as part of the hospice's eligibility assessment."[16] The certification also must include a narrative description of the patient, and the certifying physician must "confirm[ ] that he/she composed the narrative based on his/her review of the patient's medical record or, if applicable, his/her examination of the patient."[17] "[E]ligibility for hospice services under the [MHB] has always been based on the prognosis of the individual, not [the] diagnosis. . . ."[18] The prognosis takes into account the diagnoses and all other things that relate to a patient's life expectancy.[19] Thus, "the medical director must consider the primary terminal condition, related diagnoses, current subjective and objective medical findings, current medication and treatment orders, and information about unrelated conditions when considering the initial certification of the terminal illness."[20] CMS recognizes that prognostication is "uncertain" and not "an exact science." In a Program Memorandum to Intermediaries/Carriers, CMS has stated: Recognizing that prognoses can be uncertain and may change, Medicare's benefit is not limited in terms of time. Hospice care is available as long as the patient's prognosis meets the law's six month test. This test is a general one. As the governing statute says: "The certification of terminal illness of an individual who elects hospice shall be based on the physician's or medical director's clinical judgment regarding the normal course of the individual's illness." CMS recognizes that making medical prognostication of life expectancy is not always an exact science. Thus, physicians need not be concerned. There is no risk to a physician about certifying an individual for hospice care that he or she believes to be terminally ill.[21] CMS has not created clinical benchmarks that must be satisfied to certify a patient as terminally ill. In 2008, CMS announced a rule specifying what a hospice medical director "must consider" in making an initial certification.[22] CMS initially proposed a rule labeling considerations as "criteria," but removed that word, explaining: In the proposed rule, we called [areas to consider] "criteria," and we believe that this term may have been the source of commenter concern. Our intent was to ensure that medical directors carefully examine all relevant information that is gathered about the patient before making this determination. . . . We have removed the term "criteria" in order to remove any implication that there are specific CMS clinical benchmarks in this rule that must be met in order to certify terminal illness.[23] Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 3 of 36 CMS guidance also states that a patient who stabilizes or improves may nevertheless remain eligible for hospice care. [B]eneficiaries in the terminal stage of their illness that originally qualify for the [MHB] but stabilize or improve while receiving hospice care, yet have a reasonable expectation of continued decline for a life expectancy of less than 6 months, remain eligible for hospice care. The [hospice medical director] must assess and evaluate the full clinical picture of the Medicare hospice beneficiary to make the determination whether the beneficiary still has a medical prognosis of 6 months or less, regardless of whether the beneficiary has stabilized or improved.[24] See also 75 Fed. Reg. 70372, 70448 (Nov. 17, 2010) ("A patient's condition may temporarily improve with hospice care."); 74 Fed. Reg. 39384, 39399 (Aug. 6, 2009) ("We also acknowledge that at recertification, not all patients may show measurable decline."). CMS administers Medicare through Medicare Administrative Contractors ("MACs"), private companies that process and pay Medicare claims. MACs issue Local Coverage Determinations ("LCDs"), which are "administrative and educational tools to assist providers in submitting correct claims," and they also give "guidance to the public and medical community."[25] Each LCD covers only a specific geographical area,[26] and LCDs specify different clinical criteria depending on the primary terminal diagnosis of the patient. Meeting the clinical criteria in LCDs for the patient's primary diagnosis is one path to eligibility under the MHB, but hospices may "otherwise demonstrate to the [MAC] that the patient has a terminal prognosis."[27] Thus, although a patient may not meet an LCD's criteria for a primary diagnosis, evidence of terminal decline or other comorbidities, like additional diagnoses, could justify a prognosis of less than six months.[28] Hospice providers use various clinical tools to document eligibility, specifically the Functional Assessment Staging Scale ("FAST"), the Palliative Performance Scale ("PPS"), and Mid-Arm Circumference ("MAC"). The FAST scoring, generally used for Alzheimer's and dementia patients, ranges from one to seven, with one indicating fully functional, and seven representing complete loss of function.[29] The PPS also measures functionality, with 100% representing fully functional, and 0% death.[30] MAC is used to measure a decline in weight. CMS does not require particular FAST or PPS scores or a change in MAC for eligibility, and the parties agree that, although some LCDs use such scores to determine automatic coverage, they are not necessary for eligibility. As Relator's expert acknowledged, determination of terminal illness is not based on any set of clinical benchmarks.[31] In order to receive the MHB, an eligible patient must file an election statement acknowledging that the patient "has been given a full understanding of the palliative rather than curative nature of hospice care, as it relates to the individual's terminal illness."[32] Palliative care is "patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering" and "involves addressing physical, intellectual, emotional, social, and spiritual needs and . . . facilitat[ing] patient autonomy, access to information, and choice."[33] The election must also acknowledge that "certain Medicare services" are waived by the election, namely "Medicare services that are related to the treatment of the terminal condition for which hospice care was elected or a related Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 4 of 36 condition," except for services provided by the designated hospice or the individual's attending physician.[34] As long as a particular treatment does not extend a patient's life expectancy beyond six months, the regulations do not specify that the decision to receive any treatment renders a patient ineligible. An election of hospice care continues through the initial election period and through subsequent election periods without a break in care as long as the individual: (1) remains in the care of a hospice; (2) does not revoke the election; and (3) is not discharged.[35] A patient is free to revoke the election of the MHB at any time and for any reason.[36] IV. RELATOR'S EVIDENCE Relator's evidence consists of: (1) documents and testimony alleged to establish "a culture of admitting and maintaining patients who were ineligible for hospice," including depositions of Wall, Lattanzi, Huffstetler, and some of Defendants' other employees, who describe pressure allegedly imposed on them and others to falsify information in patient charts, which allegedly resulted in such information being falsified, and physicians certifying patients without reviewing patient files;[37] (2) a report by Relator's expert, Dr. Steinberg, a hospice physician, summarizing his review of 291 patient files and conclusion that a large percentage of those patients were not eligible for the MHB for at least some days they were on the MHB, because they did not have a prognosis of six months or less; and (3) a report by Dr. Kriegler, Relator's expert statistician, in which he extrapolates from Dr. Steinberg's report to draw conclusions about the number of false claims submitted for approximately 12,000 patients. A. DEFENDANTS' BUSINESS PRACTICES AND CULTURE 1. "Open Access" Policy Relator points to Defendants' "Open Access" philosophy, arguing "VistaCare educated its employees to admit patients `early' in their illness, thereby extending the period of time during which a patient could receive the benefits of hospice care."[38] Relator notes that hospice providers with open access philosophies are the most profitable providers, and that Defendants adopted the philosophy in part to increase profits. Defendants admit they hoped to have a profitable business, but claim they did not admit patients before they reached eligibility, instead attempting to enroll patients as soon as they were eligible. Indeed, Defendants advertised the Open Access philosophy as a "philosophy of care . . . that accepts all eligible patients, regardless of medical complexity, hope for recovery, environment of care, or financial restrictions."[39] Defendants claim that, because CMS pays a per diem regardless of the cost of services, some providers would not admit patients with expensive care needs, while Defendants would admit such patients.[40] 2. Admitting Patients Before Determining Eligibility Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 5 of 36 Relator alleges Defendants had a policy of admitting patients prior to determining their eligibility, with the intention of discharging ineligible patients before the first benefit period expired. Wall testified, "I was often told to admit people, and we will determine eligibility later,"[41] and Dr. Priscu, a contract doctor at the Indianapolis location, stated that he believed "it came from corporate that [nurses] were supposed to admit the patient and then we would determine eligibility very soon thereafter,"[42] and that, as a result, he "was recommending discharge on an awful lot of patients that had been admitted whenever, a day before, three days before."[43] Lattanzi testified that, during her training, she watched "a computer module on eligibility that said it's okay to admit people who are not eligible because we can watch them."[44] She claimed bills were submitted for such patients, but later admitted she "[was]n't involved in billing" and "did not know the specifics of billing" and that she believed bills were submitted for those patients because it "just makes sense."[45] Lattanzi's conclusion regarding the submission of bills is inadmissible as speculative, and not based on personal knowledge, and thus will not be considered on the pending motions. Charlene Ross, a former VistaCare compliance officer, stated the company "would say [to] admit a patient . . . if you found the patient, based on the referral, based on the verbal certification of the physician, prognosis was six months or less," but if after additional observation employees concluded "that the patient wasn't eligible," to discharge the patient.[46] Relator claims that, because of this policy, Defendants were submitting claims for ineligible patients, pointing to a 2006 email in which one of Defendants' employees advised Ross, "[t]he sites have been instructed that when in doubt they can admit the patient and then if after two months the patient is not eligible, do a [Discharge Medically Ineligible ("DMI")]." Ross responded: We should always err on the side of a patient when admitting to hospice. VistaCare has a standard of 7 days to help as a guideline to determine on best judgment if the patient is eligible or not on admission. It is to give us time to gather the necessary supporting information for eligibility. If we feel at that time that the patient does not meet eligibility, then we discharge and do not bill Medicare. However, our assessment for eligibility should be ongoing, not to wait for 2 months and then decide. . . . In general, the supporting documentation does not have to be present prior to admission. However, you do have to obtain documentation which goes back to our standard of 7 days to finalize our determination of admission eligibility.[47] Ross explained Defendants' policy in her deposition, saying: [T]here's shades of gray related to eligibility. And our philosophy was to err on the side of the patient. If the physician believed the patient had [a] prognosis of six months or less, they would admit them because the physicians gave us our certification. And then we would gather the information to help support it.[48] In a 2004 email, VistaCare CEO Richard Slager explained VistaCare's policy to Chief Medical Officer Dr. Bruce Chamberlain: If a patient is eligible, we should take them in. If the eligibility is gray, we want to error [sic] on the side of the patient (in all sites). Morally, ethically and philosophically I believe that this is the right thing to do. I would rather find myself on the side of the patient th[a]n on the Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 6 of 36 side of refusing a patient who is in the vast gray zone of hospice eligibility. . . . When someone is brought to our door that is in the gray zone, our question should be how is this person eligible, help me legitimately build a case for eligibility, not the reverse. . . . I would never advocate taking on an ineligible patient, but I'd hate even more denying eligibility to someone who if we just dug a little deeper, asked the right questions, physically visited with the patient or listened more attentively to the attending physician or our gut, we would find to be eligible.[49] 3. Policy for Discharging Patients Relator claims that Defendants knowingly kept ineligible patients on hospice by making it difficult to discharge them. Hospice providers may discharge patients based on (1) a patient's choice to move to another hospice or to revoke the MHB, (2) because the patient is dangerous or disruptive, or (3) because the patient is not eligible for the MHB.[50] Relator points to a 2004 email, from Dr. Chamberlain to Defendants' Chief Compliance Officer, Roseanne Berry, stating, "[w]e have an excellent live discharge process in place that gives the patient two and often three or four reviews before the live discharge takes place."[51] From his review of corporate documents, Relator's expert, Dr. Steinberg, concluded that several weeks before it was time to recertify a patient for eligibility, a nurse employed by Defendants would review the patient's condition, and, if the nurse was not sure whether the patient was eligible, the nurse would discuss the patient's condition with the attending physician "to determine if there [wa]s additional support for eligibility."[52] Then, if the patient appeared ineligible, his or her records would be sent to the Medical Review Team, which could "direct [nurses] to assess the patient's eligibility under other diagnos[e]s, suggest a diagnostic or laboratory test, or recommend a visit from [a] Medical Director for further evaluation. . . . to ensure that all eligible patients receive[d] the hospice benefit they deserve[d]."[53] A patient's medical records would then be reviewed by the Defendants' Area or Regional Medical Director and, in some cases, by Area Vice Presidents and Executive Directors.[54] An email sent by a Medical Clinical Review Advisor to Ross stated that review by an Area Medical Director significantly increased percentages of patients found eligible.[55] 4. Training on Charting and Prognoses Relator claims Defendants trained their staff to use charting practices to make ineligible patients appear eligible for the MHB. VistaCare's Care Process Guideline stated that "documentation should justify that the patient is terminally ill with a prognosis of 6 months or less. . . . Compile forms in the patient's medical record that will assist in supporting eligibility," and that, "on each visit, [Defendants' employees were to] document information related to the patient's terminal diagnosis."[56] The form instructed employees not to use vague or general terms, using as examples terms that would undermine eligibility—e.g., "stable," "having a great day," and "offers no complaints."[57] VistaCare's Admission Eligibility Worksheet stated that users should paint a picture of the person and factors contributing to a limited prognosis.[58] Lattanzi testified that "they teach you . . . in orientation how that note needs to be written. They tell you to `paint a picture of eligibility.'"[59] She Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 7 of 36 claimed that, when filling out patient evaluations, "[y]ou couldn't make statements like [`stable,' or `no change' or `doing well']."[60] Relator also cites a presentation given by VistaCare's Chief Medical Director, Dr. John Manfredonia, at VistaCare's Western Regional Medical Directors Symposium, on January 20, 2017, which included a slide stating ">90% of prognoses are over-estimated; Greater than half the time, life expectancy is over-estimated by more than twice the observed life span; Based on this, if a clinician feels an individual's life expectancy is: 6 months, it is likely considerably shorter; 12 months, true life expectancy likely meets the HMB definition."[61] 5. Employee Testimony Regarding Falsifying Medical Records As a social worker, Wall was a member of the IDG, and claims she "weighed in on admissions and a patient's eligibility."[62] She claims physicians at the Denton location knowingly "allowed ineligible patients to be admitted to hospice and maintained on hospice"[63] and says that in IDG meetings, employees "routinely" discussed withdrawing services from ineligible patients to see if they "bec[a]me eligible once they deteriorated."[64] She alleges that IDG meetings sometimes took place, and patients would be certified, with no medical director present, although she did not personally witness this conduct, and could not associate it with any claim or patient.[65] She claims an admissions coordinator forged a physician's signature on a certification for one identified patient, but did not witness this conduct, and testified that she had no knowledge of whether the certification was subsequently approved by a physician or whether a claim was submitted for the patient.[66] Regarding specific patients, Wall alleges a patient, J.M., was admitted with a primary diagnosis of breast cancer, but Defendants did not simultaneously obtain records supporting the diagnosis, and two years later received records showing J.M. did not have cancer.[67] Wall does not know who certified the patient as eligible, whether the patient had an attending physician, or where the referral came from.[68] She also claims another patient, P.G., was admitted for an unverified terminal cancer diagnosis, that patient C.B. was admitted to the MHB, but did not meet LCD criteria for chronic obstructive pulmonary disease, and that patient G.G. was admitted to the MHB, despite not meeting certain criteria for dementia.[69] Lattanzi and Huffstetler testified that they falsified patient records when instructed to do so by Defendants' supervisors, and that doctors relied on those false records to certify patients as eligible for the MHB. As a result, they claim ineligible patients were regularly admitted and maintained on hospice. Specifically, they allege that the Montgomery, Alabama patient care manager, executive director, and quality assurance nurse routinely placed sticky notes on patients' paperwork, instructing them to change data in patient evaluations.[70] Huffstetler testified she was "forced to change information" and changed PPS and FAST scores "all the time" to make patients "look more eligible,"[71] and that she "couldn't begin to count the number[] of times that [her] paperwork was returned [for her to change it] both as a case manager and especially as the admissions nurse."[72] She recalled one instance where she "scored [a patient as an 80 on the PPS scale] from objective material, and [a supervisor] . . . said to change it to 50 percent. [The physician] said it will not go as a certification unless it Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 8 of 36 is under 50 percent. . . . So, [the supervisor] said, `Change your paperwork."[73] Huffstetler claims she then reduced the PPS score, but cannot remember if she told the physician she did so. She alleged another patient was admitted even though the patient was "with it all the way around mentally, physically," and she described an instance where a patient was discussed in an IDG meeting and recertified, although the nurse responsible for that patient was not present and had not completed an assessment of the patient.[74] Lattanzi also claimed she was "told to change . . . objective data on a visit so it looks like someone's eligible" and to "make these people look really bad so we get payment."[75] She alleged "you'd say something about a patient, about them being ineligible, and [a supervisor] would kind of just say `make it work.' And what `make it work' meant was make that paperwork [meet LCD guidelines]."[76] As a result, she says the physicians got "bad information. . . . we fed it to [the physician] and he signed it."[77] Lattanzi also claims one of the Montgomery physicians "would sign anything."[78] 6. Focus on Census Relator claims Defendants placed pressure on employees to certify patients in order to meet admissions and census goals for the number of patients admitted or on hospice during a particular time. In support, she points to evidence that, during the relevant period, Defendants had a live discharge rate that was approximately twice the national average,[79] which, according to an email from Defendants' regional medical director, was due to "the pressure on the sites to convert high percentages of referrals to admissions."[80] 7. Employee Bonuses for Referrals Relator presents evidence that Defendants offered financial incentives to all classes of its employees to generate admissions and retain patients, by paying bonuses to employees for meeting admission and census goals. These programs most frequently rewarded salespeople, but sometimes rewarded all staff. For example, the 2004 "Growth Incentive Plan" provided cash incentives to all site employees if the site reached a "target goal" for new admissions.[81] Site executive directors received $1000 for hitting the admissions quota, and $75 for each additional admission, and admission coordinators would receive $500 for reaching the quota, and $50 for each additional admission.[82] A "March Madness" plan awarded $500 weekend getaways to the top executive directors, area vice presidents, and regional vice presidents in each region who exceeded admissions goals for the month, while a "Spring Madness" promotion awarded the same to patient care managers and admissions coordinators at sites in each area achieving the highest average compared to the plan for achieving admissions goals over three months.[83] These policies were apparently instituted, despite the expressed discomfort of Defendants' compliance personnel with paying bonuses to clinical staff. With reference to Defendants' program called "Shooting for the Stars," in which employees could receive $25 gift cards for referring eligible patients, Chief Compliance Officer Roseanne Berry stated she "was not comfortable with providing a one for one gift to . . . employees [for] bringing in an admission. A pizza party for the team, okay. Movie tickets for the team, okay. One for one, not so okay."[84] Meeting notes from a 2006 meeting of Defendants' Compliance Committee also Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 9 of 36 confirm that Committee members were concerned that rewarding non-sales staff for individual referrals could be a "conflict of interest" that might "encourage inappropriate behaviors."[85] Relator claims these bonuses caused employees to falsify patient records to get ineligible patients certified.[86] However, Relator does not identify any ineligible patient who was enrolled so that an employee could get a bonus, nor does she provide testimony from an employee who falsified information to get a bonus.[87] Huffstetler and Lattanzi concluded, in testimony Relator tendered, that supervisors in the Montgomery office were rewarded with bonuses for admitting patients, but this testimony is based on hearsay and speculation from the spending habits of supervisors in the Montgomery office that they received bonuses.[88] That speculation is not admissible. 8. Gifts to Referral Sources Relator claims Defendants also rewarded their external referral sources. Wall testified she saw referral sources being given gift certificates, "swag," and lunches,[89] and corporate documents state that referral sources could be given $25 gift certificates, fresh cookies, and "golf kits."[90] In one marketing initiative, referral sources who completed a survey were entered into a raffle to win a $100 gift card.[91] Quarterly Sales Planners of Defendants budgeted for a happy hour, ladies tea, and quarterly luncheon for residents and staff at a nursing home.[92] B. EXPERT TESTIMONY 1. Dr. Kriegler Dr. Kriegler, a statistician, identified a patient population ("the Population"), defined as: (1) VistaCare patients who were discharged on or after January 1, 2004 and admitted on or before December 31, 2012; and (2) on hospice for a total of at least 365 days. Of the approximately 700,000 patients who received services from Defendants during the relevant time, approximately 12,000 met these parameters and were included in the Population.[93] Dr. Kriegler categorized patients in the Population into three strata based on their discharge dates: before Odyssey acquired Defendants ("the VistaCare period"), after the Odyssey acquisition ("the Odyssey period"), and after the Gentiva acquisition ("the Gentiva period"). Dr. Kriegler then selected a stratified sample of 291 patients for Dr. Steinberg to evaluate ("the Sample").[94] Dr. Kriegler extrapolated from Dr. Steinberg's analysis to form an opinion as to the total number of claims submitted by Defendants for the approximately 12,000 patients in the Population that were false.[95] 2. Dr. Steinberg Dr. Steinberg, a practicing geriatrician, hospice and palliative care specialist and family physician, (1) provided an overview of the hospice industry; (2) reviewed Defendants' policies and practices, including their "Open Access" policy, training on charting, and live Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 10 of 36 discharge policy; (3) offered the opinion that these policies likely affected eligibility determinations, leading to the submission of false claims; and (3) reviewed files for patients in the Sample and offered an opinion on whether the patients were eligible for the MHB, concluding that more than 90% of them were not eligible for at least some days they were receiving hospice care from Defendants. Dr. Steinberg offered one opinion on eligibility, applying standards he claimed a neutral third-party reviewer, such as a reviewer from the Office of Medicare Hearings and Appeals, would use to review claims (which he also characterized as "how a reasonably prudent hospice" would review patients). Then, he offered a second "broader" and more "lenient" view of each patient's chart, "giving VistaCare the benefit of the doubt, and making all assumptions in VistaCare's favor," which he characterized as an opinion on when no reasonable physician could determine a patient was eligible.[96] Relator alleges that all claims were false that were submitted for a patient during a time when no reasonable physician could have concluded the patient was eligible for hospice. Dr. Steinberg stated that "other than the life expectancy of six months or less," he is not aware of any clinical benchmarks that must be used to determine whether a patient is terminally ill.[97] To determine eligibility, he considered a variety of factors. He testified that, "focus[ing] on the clinical question of whether or not patients met eligibility requirements for hospice services on the basis of their medical conditions and their stated or apparent goals of care,"[98] he: assessed each case objectively, keeping in mind not only the regulatory framework, standard practice and local coverage determinations for hospice eligibility (LCDs . . .) but also the practical, real-life issues involved in the day-to-day operations of a hospice[, and] . . . the evolution of hospice standards for eligibility and retention on service.[99] V. ANALYSIS A. MOTION TO STRIKE RELATOR'S STATISTICAL EXPERT Relator claims Dr. Kriegler's sampling and extrapolation is sufficient to show both damages and liability for the Population, because Dr. Kriegler's proposed testimony is the only evidence regarding those patients and claims. The Court is not persuaded that Dr. Kriegler's extrapolation evidence is reliable and consequently will not rely on, or allow testimony about, conclusions Dr. Kriegler reached through such extrapolation. In this context, statistical sampling of the type done by Dr. Kriegler (and assisted by Dr. Steinberg's analysis), cannot establish liability for fraud in submitting claims for ineligible patients, as the underlying determination of eligibility for hospice is inherently subjective, patient-specific, and dependent on the judgment of involved physicians. Even if extrapolation could support a False Claims Act claim for submitting MHB claims for patients with greater than six month prognoses, the facts do not justify such extrapolation here. "[T]he essence of inferential statistics is that one may confidently draw inferences about the whole from a representative sample of the whole." United States v. Pena, 532 F. App'x 517, Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 11 of 36 520 (5th Cir. 2013). As a general matter, "the applicability of the science of inferential statistics has long been recognized by the courts." Id. (citing In re Chevron U.S.A., Inc., 109 F.3d 1016, 1017 (5th Cir. 1997)). However, extrapolation is not always appropriate. The permissibility of statistical sampling turns on "the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action." Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1046 (2016); see In re Chevron U.S.A., Inc. 109 F.3d at 1017 (disapproving of a trial court's plan in a mass tort action to hold a trial on thirty selected cases and extrapolate liability to 3,000 plaintiffs, because the trial court did not "explain how the verdicts in the thirty (30) selected cases are supposed to resolve liability for the remaining 2970 plaintiffs" and did not identify "variables . . . that will impact on both the property and personal injury claims in this litigation"). Where the nature of the claim requires an individualized determination, that determination cannot be replaced by "Trial by Formula." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (rejecting plaintiffs' attempt to establish liability by selecting a random sample of class members "as to whom liability for sex discrimination . . . would be determined" and applying the "percentage of claims determined to be valid . . . to the entire remaining class"). No circuit has resolved whether statistical sampling and extrapolation can be used to establish liability in an FCA case where falsity depends on individual physicians' judgment regarding individual patients.[100] A district court, however, recently rejected such extrapolation in a case similar to this one. In U.S. ex rel. Michaels v. Agape Senior Cmty., Inc., claims were alleged to be false because patients were not eligible for the MHB, and the court held, on a discovery motion, that statistical sampling and extrapolation could not be used to establish liability. 2015 WL 3903675, at *2 (D.S.C. June 25, 2015).[101] Because "each and every claim at issue" was "fact-dependent and wholly unrelated to each and every other claim," and determining eligibility for "each of the patients involved a highly fact- intensive inquiry involving medical testimony after a thorough review of the detailed medical chart of each individual patient," the court found the case was not "suited for statistical sampling." Id. at *2, *8. See also United States v. Medco Phys. Unlimited, No. 98-C-1622, 2000 U.S. Dist. LEXIS 5843, at *23 (N.D. Ill. Mar. 15, 2000) (on motion for summary judgment, rejecting extrapolation of expert's findings from a sixteen-claim sample to support a conclusion that every claim defendant submitted to Medicare was fraudulent and noting lack of "case law or other authority to support such a request"). Some district courts have allowed extrapolation in similar circumstances. See United States v. Life Care Centers of Am., Inc., 114 F. Supp. 3d 549, 556 (E.D. Tenn. 2014); United States v. Robinson, 2015 WL 1479396, at *5-6 (E.D. Ky. Mar. 31, 2015); United States v. AseraCare Inc., 2015 WL 8486874 (N.D. Ala. Dec. 4, 2014).[102] Only AseraCare is a case involving hospice care. The question here is not whether Defendants provided services that were reasonable and necessary, but whether, "based on the physician's or medical director's clinical judgment regarding the normal course of the individual's illness" a patient had a life expectancy of 6 months or less.[103] Although Life Care and Robinson involved the clinical picture of individual patients, they did not require examination of the subjective clinical judgment of a number of certifying physicians applying the "uncertain," "change[able]," and "[in]exact science" involved in predicting an individual's life expectancy.[104] Robinson is further distinguishable, because the defendant was a single optometrist, so extrapolation was not used to make determinations about numerous physicians at multiple locations. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 12 of 36 To the extent these cases are not distinguishable from this case, this Court disagrees with their conclusions if they stand for the proposition that sampling and extrapolation are always reliable, regardless of the nature of the data and the nature of the claim. The Supreme Court and the Fifth Circuit have made clear that sampling and extrapolation cannot always be used to prove liability, and courts are required to engage in a particularized analysis of the whether extrapolation from a particular data set can reliably prove the elements of the specific claim. See Dukes, 564 U.S. at 367; In re Chevron U.S.A., Inc. 109 F.3d at 1017. In Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), the Supreme Court acknowledged that, "[i]n many cases, a representative sample is the only practicable means to collect and present relevant data establishing a defendant's liability." Id. at 1046. But Tyson Foods concluded that the permissibility of statistical sampling turns on "the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action." Id. Here, Relator's statistical evidence is not reliable in proving that false claims were submitted.[105] Further, statistical evidence was not the only practicable means to present data establishing Defendants' liability. Relator declined to evaluate the claims for the 12,000 patients in issue. If individual review of each chart were impractical, Relator was not required to pursue all potential false claims submitted in fourteen states over nearly a decade, of which she did not have personal knowledge. These choices, made by Relator, do not reduce her burden to produce reliable evidence of liability. As did the court in Michaels, this Court finds that when a relator alleges the falsity of MHB claims because various doctors improperly found patients were terminally ill, the relator cannot extrapolate based on an expert's after-the-fact examination of the medical charts of a sample of patients. As Dr. Steinberg recognized, "in the practice of hospice medicine, you have to look at the individual patient,"[106] and "certainly you can't extrapolate" from how one physician assessed a patient's eligibility to make conclusions about another physician.[107] Thus, proof regarding one claim does not meet Relator's burden of proof regarding other claims involving different patients, different medical conditions, different caregivers, different facilities, different time periods, and different physicians. Even if extrapolation were sufficient to prove the kind of FCA violations alleged here, Dr. Kriegler's analysis is deficient, because his methodology was fundamentally flawed.[108] "[I]n order to fairly and reliably draw . . . an inference" from a sample, "the sample must be randomly selected and . . . representative of the whole." Pena, 532 F. App'x 517, 520-21. Dr. Kriegler's sample was not randomly selected from the entire Population, and he did not control for variables even Dr. Steinberg identified as important.[109] Dr. Kriegler recognized that, generally, if "a sample is not selected in a random fashion, then scientifically valid extrapolations and margin of error calculations are no longer valid" and stated that a correctly defined population and a random sample drawn from that population are "critical to one's ability to make valid statistical inferences about the population."[110] Yet he admittedly selected the sample from a Population that contained duplicates, and he randomly excluded patients from the Population.[111] He also misclassified approximately 1,100 patients when he stratified the Population, placing patients from the Odyssey period in the Gentiva period.[112] He testified he stratified the sample "so that each stratum [would be] represented in proportion with the [P]opulation,"[113] but, because his stratification was erroneous, misclassified patients had a zero probability of Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 13 of 36 being selected in the Odyssey period (thus increasing the probability of selection for other patients in the Odyssey period), and instead had a positive probability of being selected in the Gentiva period (thus decreasing the probability of selection for patients actually discharged in the Gentiva period). Dr. Kriegler's errors in selecting the sample are fatal to his conclusions. Although he claims to have later corrected these errors, he does not sufficiently explain how he did so, and thus there is no way for opposing counsel or the Court to check his work. See Elsholtz v. Taser Intern., Inc., 2007 WL 2781664, at *2-3 (N.D. Tex. Sept. 25, 2007) (a court cannot "determine whether an expert's opinions are reliable when he fails to provide any details regarding the methodology he used to conduct the tests that give rise to those opinions."); United States v. Aegis Therapies, Inc., 2015 WL 1541491, at *3 (S.D. Ga. Mar. 31, 2015) ("The expert's assurances that he has utilized generally accepted scientific methodology are insufficient"). Dr. Kriegler also failed to control for relevant variables: he did not differentiate geographically across the fourteen states where VistaCare operated, with different clinical staffs and doctors,[114] or by disease type. By ignoring these variables, Dr. Kriegler ignored the testimony of Relator's hospice expert, who testified that the predictability of life expectancy varies based on types of terminal illness (for example, cancer outcomes are more predictable than Parkinson's),[115] that different physicians and clinical staffs assess eligibility differently,[116] and that he was sure practices "vari[ed] among the different specific sites."[117] Dr. Kriegler could have controlled for these relevant variables. For example, in Life Care Centers, the relator's statistical expert performed a series of pre-sampling design tasks to determine the "frequencies and distributions of certain variables" so as to identify variables that needed to be controlled, and performed hundreds of pre-sampling simulations to mitigate variability. 2014 WL 4816006, at *5-6 (E.D. Tenn. 2014). Relator does not dispute that Dr. Kriegler could have controlled for these variables when designing the sample, but he did not. Given the nature of the underlying data, the nature of liability under the FCA, and Dr. Kriegler's failure to select a random sample or to account for relevant variables, his extrapolation is unreliable, even if it is assumed to be generally allowable. See U.S. ex rel Trim v. McKean, 31 F. Supp. 2d 1308, 1314 (W.D. Okla. 1998) ("[I]n light of the admittedly subjective nature of coding, the relatively small sample size, and the variation in years covered, . . . the audits are not a reliable or accurate representation of all EPBS claims."). Thus, the Court will not permit him to extrapolate beyond the 291 patients.[118] B. MOTION TO STRIKE RELATOR'S MEDICAL EXPERT As discussed at the hearing, the Motion to Strike Dr. Steinberg is GRANTED in part. Insofar as Dr. Steinberg summarized documents and testimony regarding Defendants' marketing and business practices and then opined on how those practices impacted Defendants' employees and the physicians who certified patients for hospice, such testimony is based Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 14 of 36 on improper speculation, which the Court would not allow at trial, and thus the Court will not consider it. "Before a district court may allow a witness to testify as an expert, it must be assured that the proffered witness is qualified to testify by virtue of his `knowledge, skill, experience, training, or education.'" United States v. Cooks, 589 F.3d 173, 179 (5th Cir. 2009). Dr. Steinberg has no specialized knowledge, training, or experience that supports his conclusions about Defendants' business practices, and it would not be helpful to a jury for him to surmise how such practices may have impacted the conduct of Defendants' employees and others. Daubert, 509 U.S. at 579 ("The adjective `scientific' implies a grounding in the methods and procedures of science. Similarly, the word `knowledge' connotes more than subjective belief or unsupported speculation."). Thus, Dr. Steinberg would not be allowed to testify that, among other things, "pressure from corporate would have caused ineligible patients to be admitted." Steinberg Rept. at 31. Further, "characterizations of documentary evidence" are not proper subjects for expert testimony, "because the trier of fact is entirely capable of determining whether or not to draw such conclusions without any technical assistance from . . . experts." City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir. 1998). A large section of Dr. Steinberg's report summarizes and describes documents produced by Defendants in the course of this litigation. See, e.g., Steinberg Rept. at 28 ("It is clear from VistaCare's documents that they had a formal, company-wide policy to have their Medical Review Team review all potential live discharges due to medical ineligibility."); id. at 31 ("Based on the documents and witness testimony I have reviewed, VistaCare appears to have put immense pressure on its employees to maintain census."). These summaries and characterizations would not be helpful to jurors, who are able make their own determinations about what relevant documents show, and such testimony therefore would not be allowed, and will not be considered here. The Motion is also GRANTED insofar as Dr. Steinberg opines on Defendants' intent. Although Relator maintains Dr. Steinberg did not comment on Defendants' subjective intent, in fact, he testified that he could "opin[e] on the intent" of VistaCare.[119] He then did so, stating that Defendants: "intentionally" overstated PPS scores; "intentionally" misrepresented patient information to make them look eligible; "intentionally" overstated FAST scores; and had marketing materials that were "intentionally" deceptive.[120] Dr. Steinberg's opinions on intent are inadmissible. See U.S. ex rel. Ruscher v. Omnicare, Inc., 2015 WL 5178074, at *6, *11 (S.D. Tex. Sept. 3, 2015) (an expert "will not be permitted to testify about . . . intent, motive, or state of mind, as that is typically held to be within the province of the jury"). The Court also would not allow Dr. Steinberg to make statements regarding standards for hospice eligibility that are belied by the record. Thus, the Court would not permit him to say that a patient must show measurable decline in order to remain eligible for the MHB,[121] that LCDs reflect criteria that patients must meet to be eligible, as opposed to constituting guidance,[122] and that patients are ineligible if they have not adopted a "hospice philosophy" (a mental orientation toward hospice beyond electing the MHB).[123] The Court DENIES the remainder of the Motion to Strike Dr. Steinberg. C. SUMMARY JUDGMENT STANDARD Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 15 of 36 Summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. A dispute as to a material fact is genuine if the evidence is sufficient to permit a reasonable factfinder to return a verdict for the nonmoving party. Crowe v. Henry, 115 F.3d 294, 296 (5th Cir. 1997). A fact is material if its resolution could affect the outcome of the action. Weeks Marine, Inc. v. Fireman's Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). The substantive law determines which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). A party seeking summary judgment who does not have the burden of proof at trial, like Defendants here, need only point to the absence of admissible evidence supporting the nonmovant's claim. See Duffy v. Leading Edge Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995). Once the movant meets its initial burden, the burden shifts to the nonmoving party to produce evidence or designate specific facts in the record showing the existence of a genuine issue for trial. See Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). D. THE FALSE CLAIMS ACT The FCA establishes liability for "[a]ny person who . . . knowingly presents or causes to be presented, a false or fraudulent claim for payment or approval . . . [or] knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim." 31 U.S.C. § 3729(a)(1-2). When a qui tam suit is brought by a private relator and the government declines to intervene, the relator is entitled to approximately 30% of the recovery, § 3730(d)(2), as well as attorneys' fees. Not all fraudulent conduct affecting the government is actionable under the FCA. U.S. ex rel. Bennett v. Boston Sci. Corp., 2011 WL 1231577, at *1 (S.D. Tex. Mar. 31, 2011) (Rosenthal, J.). "Evidence of an actual false claim is the `sine qua non of a False Claims Act violation.'" Id. at 2 (quoting U.S. ex rel. Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301, 1311 (11th Cir. 2002)). Generally, in considering liability under the FCA, the Fifth Circuit focuses on "(1) whether there was 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)." Gonzalez v. Fresenius Med. Care N. Am., 689 F.3d 470, 475 (5th Cir. 2012). Under a false certification theory, a defendant may be liable where a claimant "falsely certifies compliance with [a] statute or regulation." U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 188 (5th Cir. 2009) (quoting U. S. ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5th Cir. 1997)). To prevail on such a claim of "legal falsity," a relator must demonstrate that the defendant has improperly certified compliance with a statute or regulation (whether explicitly or impliedly), and that improper certification is material to the government's payment decision. Bennett, 2011 WL 1231577, at 13 (citing Thompson, 125 F.3d at 902); see also Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 579 U.S. ___ (2016).[124] Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 16 of 36 E. RELATOR'S CLAIM THAT DEFENDANTS VIOLATED THE FCA BY ADMITTING AND MAINTAINING INELIGIBLE PATIENTS ON HOSPICE Relator claims some of Defendants' patients were not eligible for the MHB, because they were not "terminally ill," or because documentation supporting a six-month prognosis was not filed in their medical records. Fourth Am. Compl. [Docket Entry #121] at ¶82-83. Relator claims that as a result, the necessary certifications of eligibility and the Medicare claims for these patients were false.[125] Medicare conditions reimbursement to hospice providers on certification that a patient "is terminally ill . . . based on the physician's or medical director's clinical judgment regarding the normal course of the individual's illness."[126] To show the certifications and related claims were false, Relator points to: (1) Dr. Steinberg's opinions on patient eligibility; and (2) evidence of a corporate "scheme" to admit and maintain patients, including a practice of admitting patients earlier than competitors, before determining their eligibility, requiring layers of review before discharging patients, and instructing staff to document evidence supporting eligibility, along with anecdotal evidence from a few of Defendants' employees that some information in patient charts was falsified. Because a physician must use his or her clinical judgment to determine hospice eligibility, an FCA claim about the exercise of that judgment must be predicated on the presence of an objectively verifiable fact at odds with the exercise of that judgment, not a matter of questioning subjective clinical analysis.[127] "Expressions of opinion, scientific judgments, or statements as to conclusions about which reasonable minds may differ cannot be false." U.S. ex rel. Morton v. A Plus Benefits, Inc., 139 Fed. App'x 980, 982-83 (10th Cir. 2005); U.S. ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). For example, a relator could present evidence that a certifying physician was not, in fact, exercising the physician's clinical judgment when certifying a patient, because the physician never reviewed the patient's medical condition nor saw the patient, or that the physician did not actually believe that if the patient's disease ran its normal course, the patient had a prognosis of six months or less. See Geschrey, 922 F. Supp. 2d at 703; U.S. ex rel. Landis v. Hospice Care of Kansas, LLC, 2010 WL 5067614, at *4 (D. Kan. Dec. 7, 2010) (finding a relator adequately pled that claims were false by alleging "physicians could not legitimately exercise their medical judgment because defendants provided false information on which the physicians relied"). A testifying physician's disagreement with a certifying physician's prediction of life expectancy is not enough to show falsity. See United States v. AseraCare Inc., 2016 WL 1270521, at *1 (N.D. Ala. Mar. 31, 2016); see also U.S. ex rel. Fowler v. Evercare Hospice, Inc., 2015 WL 5568614, at *9 (D. Colo. Sept. 21, 2015) ("[I]f the complaint was based entirely on disagreements with . . . certifying physicians in specific cases, . . . references to these six patients would be insufficient to state a claim."). In AseraCare, the government relied on the testimony of an expert physician who reviewed patient files and opined that certain patients were ineligible for hospice. 2016 WL 1270521. Finding that the "case boil[ed] down to conflicting views of physicians about whether the medical records support . . . certifications that the patients at issue were eligible for hospice care," the court entered Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 17 of 36 judgment for the defendant, concluding "the opinion of one medical expert alone cannot prove falsity without further evidence of an objective falsehood." Id. Here, Dr. Steinberg's opinions are based on his subjective clinical analysis. Although he recognized that a certification for hospice is based on a "physician's own clinical judgment," and that, as a general matter "reasonable clinicians/physicians can disagree about things and not necessarily be wrong,"[128] he found patients ineligible based on his own evaluation of their life expectancies, opining that patients who were admittedly "clearly not paragons of good health" and were suffering from "serious, progressive conditions" were not sick enough to be eligible.[129] Relator characterizes this as an "objective finding about eligibility."[130] Yet the subjective nature of Dr. Steinberg's conclusions is obvious; he recognized that, in many cases, "there was not a single, clear date on which hospice services were appropriate or inappropriate," and offered two different opinions on eligibility for nearly every patient whose file he reviewed, yet he claimed physicians whose eligibility determinations fell outside the range he selected were objectively incorrect.[131] In fact, Medicare regulations require physicians making eligibility determinations to consider "subjective . . . medical findings," and do not provide objective standards or criteria to cabin such determinations.[132] Dr. Steinberg's subjective opinion is insufficient to prove certifying physicians erred in evaluating life expectancies, and says nothing about whether physicians certified patients without exercising their own clinical judgment or without finding patients to be terminally ill.[133] As Relator conceded, Dr. Steinberg "did not make a decision about falsity." Hr'g Tr. at 9. As the court held in AseraCare, "[a]llowing a mere difference of opinion among physicians alone to prove falsity would totally eradicate the clinical judgment required of the certifying physicians." AseraCare, Inc., 2:12-cv-00245 at *3. If all that was necessary to prove falsity was to put up a medical expert to review medical records and provide an opinion at odds with that of the certifying physician, hospice providers would be subject to potential FCA liability "any time [a relator] could find a medical expert who disagreed with the certifying physician's clinical judgment." Id. at 3-4. That situation would be directly at odds with the assurances given by CMS that doctors need not fear the exercise of their medical judgment as to the future course of a terminal patient. Dr. Steinberg's opinion that certain of Defendants' patients were ineligible for hospice is insufficient to create a fact issue as to whether physician certifications and resulting claims were false.[134] Relator argues that, when viewed together with evidence regarding Defendants' corporate culture, including anecdotal evidence from Wall, Lattanzi, and Huffstetler of a few false entries, a jury could infer that claims submitted for the 291 patients Dr. Steinberg reviewed were false. Hr'g Tr. at 10-12. Although Relator has produced some evidence of the Defendants' pressure on their employees to admit large numbers of hospice patients, and that a few employees falsified data on a few specified patient charts, a practice that could jeopardize the proper exercise of physician judgment, she has not tied that evidence to the patients whose charts Dr. Steinberg evaluated, nor to the submission of a single false claim. Relator concedes that she cannot do so. See Hr'g Tr. at 13, 64, 79 (conceding "there is not a nexus between Latanzzi and Huffstetler and Wall and the patients in the 291 sample"). Without any evidence about the nurses and doctors involved in treating or certifying the sampled patients for hospice, for Relator to prevail at trial, jurors would have to take an Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 18 of 36 impermissible inferential leap to conclude that those patients' certifications were not based on the proper clinical judgment of physicians. AseraCare reached the same conclusion as this Court does. There, after hearing evidence at a jury trial, the Court granted judgment, limiting the government to the evidence at trial and finding it insufficient, as a matter of law, to prove falsity. At trial, in addition to the physician's testimony, the government presented evidence of objectively verifiable facts inconsistent with the exercise of physician judgment, including evidence that a doctor "wasn't participating" during IDG meetings, and instead "was doing his drawings" with crayons and colored pencils, and that nurses would present him papers with "little stickies" to sign if he was present, or would use a pre-signed form if he was not at the IDG meeting.[135] The government relied on this evidence to show the existence of a scheme, not tied to specific patients or claims. As the court held, had the government linked this evidence to its expert physician's testimony, that evidence may have supported the jury's verdict. The government did not do so, and the physician's opinion, considered together with the scheme evidence, without the "necessary connection" between the two, did not create a fact issue as to falsity. United States v. AseraCare Inc., 2015 WL 8486874, at *2, 8-9 (N.D. Ala. Nov. 3, 2015). Relator seemingly suggests she is only required to prove Defendants operated with reckless disregard as to falsity, and not that the certifications or claims were actually false or fraudulent. This view reflects a misunderstanding of the FCA's falsity element, confusing the FCA's scienter requirement—which requires knowledge or reckless disregard—with the necessity to show that records or claims were false.[136] The FCA's knowledge element is an independent, additional hurdle for Relator, not a shortcut around proof of falsity.[137] Without evidence linking Relator's "scheme" evidence to the 291 patients whose files Dr. Steinberg analyzed, there is no evidence that the certifying physicians for the 291 patients were not exercising their best clinical judgments nor that they did not believe the subject patients were terminally ill when they certified them as such, and thus there is no evidence of the falsity required to establish liability. No reliable evidence is presented by Relator that any patient was not terminally ill. Wall, Lattanzi, and Huffstetler claim they were involved in or observed the certification of patients who were medically ineligible, but eligibility depends on physician judgment, and thus, their allegations about patient health cannot support a conclusion that any patient for whom a claim was submitted had a medical prognosis of more than six months.[138] See Geschrey, 922 F. Supp. 2d at 703 ("[T]hat Relator Janus, a social worker, and a nurse agreed that the patient was not appropriate for hospice because she could walk, eat, and talk does not suffice to allege that the doctor's certification that A.W. was appropriate for hospice was fraudulent; it merely alleges that Relator Janus and others disagreed with the doctor's assessment. Relators have not alleged facts demonstrating that the certifying physician did not or could not have believed, based on his or her clinical judgment, that the patient was eligible for hospice care."). Relator argues that she should survive summary judgment on her scheme evidence alone, contending she is not required to point to specific false records or claims.[139] She concedes that, other than Dr. Steinberg's testimony, she has "no proof" that corporate pressure or some nurses altering a few identified patient charts "resulted in a particular claim within the Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 19 of 36 relevant period," and that she has not linked any patient discussed by Wall, Lattanzi, or Huffstetler to a patient file or claim.[140] However, citing to the Fifth Circuit's decision on a motion to dismiss in Grubbs, she argues that she has done enough to raise a fact issue by presenting evidence of a scheme and proving that 93% of Defendants' patients were covered by Medicare. Although Relator's contention of a scheme and anecdotal evidence were sufficient to survive a motion to dismiss, without evidence that such practices led to false certifications or claims, Relator cannot prevail on summary judgment. In Grubbs, a case opining on sufficient pleading standards in a false claims case, the court stated, in dicta, that if "at trial a qui tam plaintiff proves the existence of a billing scheme and offers particular and reliable indicia that false bills were actually submitted as a result of the scheme—such as dates that services were fraudulently provided or recorded, by whom, and evidence of the department's standard billing procedure—a reasonable jury could infer that more likely than not the defendant presented a false bill to the government." 565 F.3d at 189-90. The court stated that, a "plaintiff does not necessarily need the exact dollar amounts, billing numbers, or dates to prove to a preponderance that fraudulent bills were actually submitted," although "the exact dollar amounts fraudulently billed . . . will in most cases be necessary to sufficiently prove actual damages." Id. Grubbs acknowledged that "[f]raudulent presentment requires proof . . . of the claim's falsity, not of its exact contents." Id. at 189. The Grubbs complaint alleged facts which, if proven, would support a finding of falsity: the defendants stated that they regularly created medical bills to bill Medicare for services that were never provided. Id. at 184-85. In Grubbs, defendant physicians explained to the relator, a new doctor, that, during weekend on-call shifts, they billed for face-to-face visits that did not occur. Id. During the relator's first weekend on call, nurses attempted to help him bill for face-to-face visits of patients he did not see. Id. at 184. Bills for services not actually provided are factually false, so falsity was not at issue in Grubbs. Grubbs merely concluded that when the pleadings state that defendants "continually recorded unprovided services," intentionally creating false bills to defraud Medicare, an inference that those bills were presented is allowed. Id. at 190, 192 ("It would stretch the imagination to infer. . . that the defendant doctors go through the charade of meeting with newly hired doctors to describe their fraudulent practice and that they continually record unprovided services only for the scheme to deviate from the regular billing track at the last moment so that the recorded, but unprovided, services never get billed."). Here, Relator asks the Court to conclude, from evidence that Defendants had a corporate policy to aggressively seek to enroll and maintain eligible patients, that Defendants enrolled and maintained ineligible patients. Relator does not explain how Defendants' alleged policies to (1) admit patients earlier than competitors, before determining their eligibility, and (2) require multiple layers of review before discharging patients ultimately found ineligible, while (3) instructing staff to document evidence supporting eligibility for eligible patients, supports an inference that Defendants billed for ineligible patients. Even if Defendants' aggressive marketing and enrollment policies were ill-advised, they are not sufficient to prove falsity under Grubbs or otherwise. Even "[m]ismanagement . . . of programs that receive federal dollars is not enough to create FCA liability." U.S. ex rel. Farmer v. City of Houston, 523 F.3d 333, 339 (5th Cir. 2008); see also U.S. ex rel. Willard v. Humana Health Care Plan of Tex. Inc., 336 F.3d 375, 381 (5th Cir. 2003) (explaining that liability attaches to Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 20 of 36 a false claim, not "improper internal policies."); Barys ex rel. U.S. v. Vitas Healthcare Corp., 298 F. App'x 893, 895-96 (11th Cir. 2008) (concluding that "requiring an additional layer of review before a . . . patient is discharged does not support an inference that patients are being fraudulently re-certified" and that paying "cash bonuses to administrators who maintained high patient populations" was insufficient to support an inference of fraud "without allegations of instances in which these administrators fraudulently re-certified patients"); AseraCare, 2016 WL 1270521, at *4-5 ("[P]ractices that may be improper, standing alone, are insufficient to show falsity without proof that specific claims were in fact false when submitted to Medicare."). Further, Relator did not present sufficient evidence tying the alleged scheme to particular records or claims. Relator has not produced "reliable indicia that false bills were actually submitted," as Grubbs suggests is required. 565 F.3d at 189-90. Other than through Dr. Steinberg, she has provided no "dates that services were fraudulently provided or recorded, [or] by whom," id., instead relying on the percentage of Defendants' patients who were Medicare patients. At the pleading stage, the complaint in Grubbs averred at least one overt act of false billing—including date and physician—for each defendant who allegedly submitted false claims. Id.; see United States v. Solvay, 2016 WL 1258401, at *13 (S.D. Tex. Mar. 31, 2016) ("The court agrees, to some extent, with Relators' contention that they are not required to provide the court. . . with a precise universe of claims to survive summary judgment. . . . However, since the Relators cannot provide any claims data that would be admissible at trial . . . they cannot highlight any evidence of claims submission."); Barys, 298 F. App'x at 895-96 (dismissing a complaint because substantial allegations of a corporate scheme were not tied to particular patients or false claims). What Relator is missing here is a causal link between Defendants' policies, a few instances where medical information was allegedly falsified, and actual false or fraudulent certifications and claims. Compare U.S. ex rel. Hockett v. Columbia/HCA Healthcare Corp., 498 F. Supp. 2d 25, 66 (D.D.C. 2007) (rejecting a relator's argument that "since there is evidence of a general nature that [defendant] tried to hold patients longer than necessary, and since relator's experts opine that the average length-of-stay spiked during the . . . period in a way that is statistically significant and not random, then the Court should assume that all patients in the subject range were held too long."). Thus, Defendants' Motion for Summary Judgment is GRANTED as to the false claims allegations, and they are DISMISSED with prejudice. F. CLAIM FOR FALSE CERTIFICATION OF COMPLIANCE WITH THE ANTI-KICKBACK STATUTE Relator also contends Defendants violated the FCA by falsely certifying compliance with the Anti-Kickback Statute ("AKS"). The AKS criminalizes the knowing or willful paying or offering to pay any remuneration to induce: (1) the referral of an individual for items or services that may be paid for by a federal health care program; or (2) the purchasing, leasing, ordering, or arranging for purchasing, leasing, or ordering any item or service that may be paid for by a federal health care program. 42 U.S.C. § 1320a-7b(b)(1-2); see U.S. ex rel. Nunnally v. W. Calcasieu Cameron Hosp., 519 F. App'x 890, 893 (5th Cir. 2013); Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 21 of 36 Thompson, 125 F.3d at 901. To show an AKS violation, a relator must present evidence that a defendant: (1) knowingly and willfully (2) solicited or received, or offered or paid remuneration (3) in return for, or to induce, referral or program-related business. 42 U.S.C. § 1320a-7b(b)(1-2). The AKS does not create a private right of action, but a violation of it can form the basis of an FCA claim. Nunnally, 519 F. App'x at 893; Thompson, 125 F.3d at 901; Bennett, 2011 WL 1231577, at *32. Relator's AKS claim is not based on any gifts or payments to third parties.[141] Instead, she argues Defendants' program to bonus employees for "obtaining patients and retaining them on census" violated the AKS,[142] contending that the program constitutes paying or offering to pay remuneration "for the purpose of inducing a referral or arranging for a service compensated by Medicare."[143] Relator contends that Defendants' offers to pay employees bonuses for hitting admissions targets and census goals is sufficient to support a verdict that claims made while such incentives were in place were based on false certifications of compliance with the AKS.[144] i. The Bona Fide Employee Exception The AKS states that there is no violation of the statute for a payment "by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services." 42 U.S.C. 1320a-7b(b)(3)(B); U.S. ex rel. Parikh v. Citizens Med. Ctr., 977 F. Supp. 2d 654, 669 (S.D. Tex. 2013) (Costa, J.). The bona fide employee safe harbor is further codified in 42 C.F.R. § 1001.952(i), which provides that payments to employees "for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs" are not remuneration and therefore cannot form the basis of an Anti-Kickback Act violation. 42 C.F.R. § 1001.952(i). The bona fide employee exception is an affirmative defense on which Defendants bear the burden of proof. Relator asserts Defendants have not carried that burden, as they have not presented evidence showing the exception applies. However, Relator has stipulated that her AKS theory is based solely on the making of payments to Defendants' employees. Rel. Resp. Br. [Docket Entry #279-2] at 42 ("VistaCare violated the AKS by routinely paying kickbacks to its own employees."); Hr'g Tr. at 93 ("Our theory on the kickback claim is this: The evidence in the summary judgment record . . . demonstrates that for a period of years, [Defendants] had a comprehensive, pervasive program to bonus employees, all of them, at times, but certainly and regularly the sales employees, for the purpose of obtaining patients and retaining them on census."). Thus, Defendants need not present further evidence showing that they had a bona fide employment relationship with the individuals to whom they provided bonuses. Instead, this question turns on a disputed legal question—can bonuses to Defendants' own employees constitute an improper payment under the AKS, rendering a certification of compliance false? Relator claims the bona fide employee exception does not apply, because Defendants have not shown that bonuses to employees were "for employment in the provision of covered items or services." Rel. Supp. Br. [Docket Entry #404] at 3. Defendants, on the other hand, claim all of their employees were employed in the provision of covered services: hospice services eligible for reimbursement under the MHB. Def. Sup. Br. [Docket Entry #405] at 7. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 22 of 36 The text of the statute supports Defendants' position. The statutory exception applies to payments for employment in the provision of covered services, not for providing covered services. 42 U.S.C. 1320a-7b(b)(3)(B); see Hericks v. Lincare, Inc., 2014 WL 1225660, at *14 (E.D. Penn. Mar. 25, 2014) (rejecting the argument that the bona fide employee safe harbor did not apply to cash bonuses for referrals paid to employees because bonuses were not "for employment in the provision of covered items or services," finding that "the [defendant's] employees [we]re employed in the provision of covered items and services" regardless of the specific task compensated by the bonuses). On its face, therefore, the exception protects payments to employees of entities in the business of providing covered services of hospice care, not only for specific direct patient care for which bills can be submitted to Medicare. Further, the structure of the statute supports this reading of it. If the exception did not apply to payments intended to induce referrals or business for the program, it would be superfluous. The court in U.S. ex rel. Baklid-Kunz v. Halifax Hospital Medical Center rejected the argument that a bonus paid to employees to induce referrals was not protected by the safe harbor: [T]he Bona Fide Employment Exception provides that the normal prohibition on payments to induce referrals does not apply where the payments are made to a (for lack of a better word) legitimate employee. The Relator would change that to read that the prohibition on payments to induce referrals does not apply where the payments are made to a legitimate employee unless they are payments to induce referrals. The exceptions set forth in the Anti- Kickback Statute and accompanying regulations "provide immunity from prosecution for behavior that might have violated the Anti-Kickback Statute.". . . The Relator's interpretation of the Bona Fide Employment Exception would eviscerate it. 2013 WL 6196562 (M.D. Fl. 2013) (emphasis added). The codifying regulation's history makes clear that Relator's interpretation is incorrect. In adopting the regulation, HHS stated that the exception is based on an assumption that employers, who are responsible for the acts of their employees, will appropriately supervise those employees to prevent referrals of ineligible patients. When proposing the rule codified at 42 C.F.R. § 1001.952(i), HHS did not define "covered items or services," but, in discussing the bona fide employee safe harbor, it stated: This statutory exemption permits an employer to pay an employee in whatever manner he or she chooses for having that employee assist in the solicitation of Medicare or State health care program business. The proposed exemption follows the statute in that it applies only to bona fide employee-employer relationships. . . . [M]any commenters suggested that we broaden the exemption to apply to independent contractors paid on a commission basis. We have declined to adopt this approach because we are aware of many examples of abusive practices by sales personnel who are paid as independent contractors and who are not under appropriate supervision. We believe that if individuals and entities desire to pay a salesperson on the basis of the amount of business they generate, then to be exempt from civil or criminal prosecution, they should make these Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 23 of 36 salespersons employees where they can and should exert appropriate supervision for the individual's acts.[145] A contrary reading would make all payments to hospice providers' sales, marketing, and other staff for involvement in patients securing hospice services from their employer illegal for Medicare providers, leaving such providers unable to promote their businesses by rewarding employees based on success. The cases cited by Relator do not persuade the Court otherwise. Relator relied on several criminal cases, which the Court finds unpersuasive in this case. In United States v. Njoku, 737 F.3d 55 (5th Cir. 2013) and in the unpublished case of United States v. Jackson, 220 Fed. App'x. 317 (5th Cir. 2007), there is no discussion of the bona fide employee exception, and it is not at all clear that the affirmative defense was ever raised. The defendants in United States v. St. Junius, 739 F.3d 193, 199 (5th Cir. 2013) were independent contractors, not employees, and in another unpublished case, United States v. Robinson, 505 Fed. App'x. 385, 387-88 (5th Cir. 2013), the court concluded the individuals who received payments were not bona fide employees. Relator also relies on United States v. Starks, in which the Eleventh Circuit stated that defendants were not bona fide employees, but, even if they were, "they were not providing `covered items or services,'" because they "received payment . . . only for referrals and not for any legitimate service for which the Hospital received any Medicare reimbursement." 157 F.3d 833, 839 (11th Cir. 1998). Starks engaged in no substantive analysis of the exception, and commented on the "covered items or services" clause without relying on it— the defendants in that case clearly were not bona fide employees, clandestinely receiving checks or cash for their referrals in parking lots to avoid detection. See United States v. Crinel, 2015 WL 3755896, at *5 (E.D. La. 2015) (disagreeing with Starks and stating that the Starks court engaged in no substantive analysis of the statute). Here, it is uncontested that the payments at issue were to bona fide employees. The Court also is not persuaded by United States v. Borrasi, where the Seventh Circuit held that where "at least part of the payments to [a defendant were] `intended to induce' him to refer patients," the bona fide employee safe harbor did not apply. 639 F.3d 774, 781 (7th Cir. 2011); see also United States v. Luis, 966 F. Supp. 2d 1321, 1330 (S.D. Fl. 2013) (finding it "irrelevant whether the [defendants] were bona fide employees paid for `covered items or services' because the payments to them were, at least in part, for their illegal patient referrals"). As Crinel concluded, this reading "focuse[s] on the wrong statutory provision," and does not give independent meaning to the safe-harbor provision, as it states that "if a particular payment violates a substantive provision of the anti-kickback statute, the safe-harbor provision does not apply. This reading allows the rule to swallow the exception." 2015 WL 3755896. Finally, Relator relies on a 1992 letter concerning hospitals acquiring physician practices, from the Associate General Counsel of the HHS Office of the Inspector General to an assistant in the Office of the Associate Chief Counsel of the IRS. The letter includes a footnote stating: "payments to employees which are for the purpose of compensating such employees for the referral of patients would likely not be covered by the employee exemption."[146] This Court finds that prediction of likelihood to be the equivalent of dictum, Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 24 of 36 and that, in this Courts' view, is inaccurate. The only other case of which the Court is aware considering the letter found it "inapposite" to cases involving "bona fide employees receiving payment from their employer while working for that employer." Hericks, 2014 WL 1225660, at *14. Relator's interpretation reads the bona fide employee exception out of the statute and is inconsistent with the text, structure, and purpose of the exception. No binding case law supports such an interpretation, and the Court rejects it. Therefore, because Relator relies on bonuses paid to Defendants' bona fide employees for employment in the provision of hospice services, Relator cannot prevail on her AKS theory. ii. Insufficient Proof That Any AKS Violation Led to an FCA Violation Even if paying bonuses to legitimate employees were a violation of the AKS, that is not enough to show a violation of the FCA. An FCA claim dependent on the AKS needs to meet all of the other elements of an FCA claim. Nunnally, 519 F. App'x at 894-95; see also U.S. ex rel. Hartwig v. Medtronic, Inc., 2014 WL 1324339, at *12 (S.D. Miss. Mar. 31, 2014). In other words, Relator must show not only that Defendants paid, or offered to pay, remuneration in exchange for referrals, but also that payments led to false certifications or claims. See Nunnally, 519 F. App'x at 894-95. Relator has not provided any evidence of false certifications for submitted claims. First, Relator "has not provided reliable indicia that [Defendants] actually falsely certified compliance" with the AKS. Bennett, 2011 WL 1231577, at *33. Courts have found claims properly stated where they cite "Medicare enrollment application Form CMS 855-As, . . . [which] expressly certif[y] compliance with the AKS." Parikh, 977 F. Supp. 2d at 665. However, at summary judgment, Relator cannot rely on mere assertions that such certifications exist, and her evidence does not include any certifications of AKS compliance. Even if she were not required to provide the certifications themselves, she has not provided reliable indicia of such certifications, as she has not identified individuals who made such certifications, or dates on which they were made. See Nunnally, 519 F. App'x at 894 (noting the complaint failed "to allege with particularity an actual certification to the Government that was a prerequisite to obtaining the government benefit"); Bennett, 2011 WL 1231577, at *33 (dismissing a complaint where the relator "fail[ed] to identify any hospitals or physicians who certified compliance with the antikickback statute"); U.S. ex rel. Kennedy v. Aventis Pharms., 610 F. Supp. 2d 938, 945 (N. D. Ill. 2009) (the relators "identified a number of hospitals to which Aventis allegedly gave kickbacks" but failed to allege "that one or more of the hospitals falsely certified, in connection with a Medicare claim, that it had complied with the anti-kickback statute; the failure to identify "any certification by a hospital," caused dismissal). Second, Relator did not sufficiently link the payment of a bonus to a referral, patient, or claim. The extent to which a relator must tie a particular claim to a particular kickback is unresolved. Parikh, 977 F. Supp. 2d at 665. However, the Fifth Circuit has indicated that an FCA violation based on an AKS violation must involve some connection between kickbacks, referrals, and claims. U.S. ex rel. Nunnally v. W. Calcasieu Cameron Hosp., 519 F. App'x Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 25 of 36 890, 894 (5th Cir. 2013). Even at the pleading stage, the Fifth Circuit has held that alleging a violation "requires pleading that [a defendant] knowingly paid remuneration to specific [referral sources] in exchange for referrals" and that a referral was "actual[ly] induce[d]." Id.; U.S. ex rel. Grenadyor v. Ukrainian Vill. Pharmacy, Inc., 772 F.3d 1102, 1107 (7th Cir. 2014), cert. denied, 136 S. Ct. 49 (2015) ("To comply with Rule 9(b) [relator] would have had to allege either that the pharmacy submitted a claim to Medicare (or Medicaid) on behalf of a specific patient who had received a kickback, or at least name a [individual] who had received a kickback"). Yet Relator points to no evidence that any particular bonus led to a referral, which in turn led to a false certification of compliance with the AKS. Third, Relator did not direct the Court to evidence of any claim that was false based on an AKS violation, asking the Court to assume that all claims submitted while Defendants were paying incentive bonuses were false. In Nunnally, the court affirmed dismissal of an FCA action in part because the complaint did "not identify a single claim submitted . . . for services rendered pursuant to an illegal referral, let alone one for which [the defendant] expressly certified its compliance with federal law." 519 F. App'x at 894; Hericks, 2014 WL 1225660, at *1, 7 (dismissing a claim because, although relator pled defendants provided remuneration to specific physicians, and those physicians referred patients, the relator did "not connect these referrals to any claims made to Medicare"). Here, Relator has engaged in years of discovery, but has not presented evidence of such a claim. The Court will not assume the key element Relator is required to prove. The mere fact that 93% of Defendants' patients are Medicare patients is not sufficient to show Defendants submitted claims that falsely certified compliance with the AKS. Courts regularly reject FCA claims which rely on probability arguments like Relator's. See e.g., U.S. ex rel. Crews v. NCS Healthcare of Illinois, Inc., 460 F.3d 853, 857 (7th Cir. 2006) (affirming the district court's decision to grant summary judgment because, although the relator proved it was "statistically unlikely" that improper practices had not led to false claims, the relator had not provided evidence linking the practice to any claim); Hockett, 498 F. Supp. 2d at 66. For example, in Hericks, the court found a relator failed to state a claim when she alleged claims were false because they "were submitted when [defendant's] illegal practices were in effect, and [did] not explain how the[] submissions related to any specific illegal activity." 2014 WL 1225660, at *8. The court found that the relator's "claim that roughly 60% of [defendant's] revenue comes from Medicare and Medicaid is not indicative of wrongdoing and does not lead to the conclusion that most of [defendant's] revenues derive from fraudulent activity." Id. The same is true here. Because Defendants have established the bona fide employee safe harbor applies, and because Relator has failed to provide evidence linking any AKS violation to a false or fraudulent certification or claim, Defendants' Motion for Summary Judgment on Claim II is GRANTED, and Relator's claim based on alleged AKS violations is DISMISSED with prejudice. G. RETALIATION Relator asserts claims for retaliation under the FCA, 31 U.S.C. § 3730(h), and the Texas Medicare Fraud Prevention Act ("TMFPA"), Tex. Hum. Res. Code § 36.115(a), alleging she was discharged because she engaged in protected activity. The FCA and TMFPA both Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 26 of 36 prohibit an employer from retaliating against an employee because of lawful acts, including investigating, initiating, testifying, or assisting in an action filed "in furtherance of an action" under either statute.[147] The "in furtherance" language in both provisions requires a "nexus" between the protected activity and the filing or potential filing of a qui tam suit."[148] Relator must prove (1) she engaged in protected activity; (2) her employer knew about the activity; and (3) her employer retaliated against her because of the protected activity. Robertson v. Bell Helicopter Textron, 32 F.3d 948, 951; see also McKenzie v. BellSouth Telecomms., 219 F.3d 508, 514 (6th Cir. 2000). The retaliation provisions of the FCA protect whistleblowers who voice concerns "about the company defrauding the government." Robertson, 32 F.3d at 951. Without a suggestion from the employee that she is "attempting to expose illegality or fraud within the meaning of the FCA," activity is not of the "protected" variety. Id. The protected activity need not be clearly in furtherance of a qui tam action, id., but must include steps "towards the exposure of the false claims, such as investigating or complaining about the fraud." Guerrero, 2012 WL 899228, at *4; See Gonzalez v. Fresenius Med. Care N. Am., 689 F.3d 470, 479 (5th Cir. 2012). Whether Defendants retaliated against Relator turns on disputed questions of fact. Relator testified that she complained to numerous supervisors and Defendants' human resources department expressing concerns that Defendants were admitting and maintaining ineligible patients, and that employees were committing fraud in connection with Medicare.[149] The Court previously held that, because Relator "characterized her concerns as involving fraud that violated federal and state regulations," her allegations, if proven, could show that she engaged in a protected activity and that Defendants knew she engaged in a protected activity.[150] There is also sufficient evidence of a connection between Relator's protected activity and her termination. She provided uncontroverted evidence that she had never received a negative performance review before raising these concerns, and that she was demoted and fired within months of doing so.[151] The issue thus turns on Relator's and other Defendants' employees' credibility, and thus it cannot be resolved at summary judgment.[152] Despite Defendants' arguments to the contrary, the FCA does not require Relator to prevail on her false claims causes of action to succeed on her retaliation claim. See U.S. ex rel Bias v. Tangipahoa Parish Sch. Bd., No 15-30193 (5th Cir., Mar. 9, 2016) (allowing plaintiff to proceed on his retaliation claim, although his only other FCA claim had settled and been dismissed); Diaz v. Kaplan Higher Ed., No. 15-50655 (5th Cir., Apr. 13, 2016) (allowing plaintiff to proceed on only a retaliation claim under the FCA).[153] Defendants argue that the alleged violation of the TTMFPA should be dismissed for all the reasons the FCA retaliation claim should be dismissed and because absent a predicate violation of the FCA, pendent state law claims arising under the TMFPA should be dismissed. As Relator has presented sufficient evidence to survive summary judgment on her federal retaliation claim, her claims under the TMFPA also survive summary judgment. Therefore, Defendants' Motion for Summary Judgment is DENIED as to retaliation. VI. CONCLUSION Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 27 of 36 Defendants' Motions to Strike the Testimony of Drs. Kriegler and Steinberg are GRANTED in part, Defendants' Motion for Summary Judgment is GRANTED as to all Relator's claims except retaliation, and Relator's Motions are DENIED as moot. SO ORDERED. [1] At the hearing, the Court also DENIED Defendants' Motion to Strike Sur-Rebuttal Expert Testimony [Docket Entry #233], and Motion to Strike Testimony of Elizabeth Lattanzi and Barbara Huffstetler [Docket Entry #332] and will not address those Motions here. [2] Defendants have been acquired multiple times during this suit. Odyssey Healthcare, Inc. acquired the VistaCare entities in 2008. Gentiva Health Services acquired Odyssey in 2010, and Kindred Healthcare merged with Gentiva in early 2015. Only the VistaCare entities are named as defendants. [3] The states are Alabama, Arizona, Colorado, Georgia, Indiana, Massachusetts, New Mexico, Nevada, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, and Utah. [4] That per diem payment is limited by two caps: the first limits the total amount a hospice provider can receive annually from Medicare for a particular patient, and the second limits the total amount a hospice provider can receive annually for all of its Medicare patients. [5] 42 U.S.C. § 1395f. [6] 42 U.S.C. § 1395d(a)(4). [7] Id. § 1395f(a)(7). [8] The IDG must include at least one physician, one registered professional nurse, one social worker employed by the agency or organization, and at least one pastoral or other counselor. 42 C.F.R. § 418.56. [9] 42 U.S.C. § 1395f(a)(7)(A)(i). The attending physician is a physician, who may or may not be employed by the hospice, "whom the individual identifies as having the most significant role in the determination and delivery of medical care to the individual at the time the individual makes an election to receive hospice care." 42 U.S.C. § 1395x(dd)(3)(B). [10] 42 U.S.C. § 1395f(a)(7)(A)(ii). [11] 42 U.S.C. § 1395f(a)(7)(A). [12] 42 C.F.R. § 418.22. [13] 42 C.F.R. § 418.22. [14] 42 U.S.C. § 1395x(dd)(3)(A); 42 C.F.R. § 418.3. [15] 42 U.S.C. § 1395f(a)(7). [16] 42 C.F.R. § 418.22. [17] 418.22(b)(3)(iii). [18] 78 Fed. Reg. 48234, 48245 (Aug. 7, 2013). [19] 78 Fed. Reg. 48234, 48245-46. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 28 of 36 [20] 73 Fed. Reg. 32088, 32138 (June 5, 2008); 42 C.F.R. § 418.25(b) ("In reaching a decision to certify that the patient is terminally ill, the hospice medical director must consider at least the following information: (1) Diagnosis of the terminal condition of the patient; (2) Other health conditions, whether related or unrelated to the terminal condition; (3) Current clinically relevant information supporting all diagnoses."). [21] Program Memorandum Intermediaries/Carriers, Subject: Provider Education Article, CMS-Pub. 60AB (Mar. 28, 2003) (quoting 42 U.S.C. § 1395f(a)(7)) (A1275-81). [22] 42 C.F.R. § 418.102(b) ("The physician must consider the following when making this determination: (1) The primary terminal condition; (2) Related diagnosis(es), if any; (3) Current subjective and objective medical findings; (4) Current medication and treatment orders; and (5) Information about the medical management of any of the patient's conditions unrelated to the terminal illness."). [23] 73 Fed. Reg. 32088, 32138 (June 5, 2008). [24] 79 Fed. Reg. 50452, 50471 (Aug. 22, 2014) (emphasis added). [25] Medicare Program Integrity Manual, Ch. 13.1.3, available at https://www.cms.gov/Regulations-and- Guidance/Guidance/Manuals/downloads/pim83c13.pdf. [26] The MACs at issue here are Palmetto GBA and National Government Services ("NGS"). See Kriegler Report, Def. Appx. at 524. [27] Steinberg Report, Rel. Appx. at 8. The parties agree that, at least under the LCDs at issue, failure to meet criteria in an LCD does not mean a patient is ineligible. See Resp. to Mot. for Summary J. [Docket Entry #302-1] at 3 (referring to LCDs as "guidance" and "a key tool."); Steinberg Rebuttal Report, Rel. Appx. at 497-98 ("If the patient met the LCDs, in general I found them to be per se eligible. . . . I concluded in some cases that patients could be eligible even when they clearly did not meet the LCDs after looking at the patient's decline, comorbidities, and other clinical factors."); Steinberg Depo, Docket Entry #239-2, at A 973 (stating that LCDs are "guidelines," are "not requirements," and patients "definitely can" be eligible for the MHB if they do not satisfy all the criteria in an LCD). [28] Def. Appx. at 972-73. [29] Steinberg Report, Rel. Appx. at 8-9. [30] Id. [31] Steinberg Depo., Docket Entry #239-2, at A 973-94. [32] 42 C.F.R. § 418.24. [33] 42 C.F.R. § 418.3. [34] 42 C.F.R. § 418.24; see also 42 U.S.C. § 1395y(a)(1)(c) ("[N]o payment may be made . . . for any expenses incurred for items or services . . . in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness."). [35] 42 C.F.R. § 418.24. [36] 42 C.F.R. § 418.28. [37] Relator also points to evidence which does not appear relevant to any false claim, specifically, evidence that Defendants withdrew expensive services from patients after enrollment and encouraged patients to revoke hospice care if they wanted to pursue expensive treatments. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 29 of 36 [38] Resp. at 5. [39] Resp. at 5-6 (emphasis added). [40] Id. [41] Rel. Appx. at 1673. [42] Id. at 2109. [43] Id. at 2111. [44] Id. at 1934-40. [45] Id. at 1941-42. [46] Rel. Appx. at 1305. [47] Rel. Appx. at 1479-80. [48] Rel. Appx. at 1309. [49] Rel. Appx. at 2601. [50] 42 C.F.R. § 418.26. [51] Rel. Appx. 2602. [52] Rel. Appx at 29-30 [53] Id. (quoting Phyllis Rust, RN, former head of the Medical Review Team). [54] Id. [55] Id. at 30. [56] Id. at 932-33. [57] Id. at 582-85, 932. [58] Id. at 38-40, 1318. [59] Id. at 1806-07. [60] Id. 1861-62. [61] Id. at 1100. [62] Id. at 1676-77. [63] Id. at 1630, 1636-37. [64] Id. at 1695. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 30 of 36 [65] Id. at 1702-06. [66] Id. at 1710-17 [67] Id. at 1722-29. [68] Id. at 1726. [69] Id. at 1731-36, 40-44. [70] Rel. Appx. 1561-63; 1509-10 ("I would get my admissions paperwork back with sticky notes, `Change this. Change that.' I had IDG meetings where the physician would say, `the PPS has got to be lower than this.' I would score it as an 80 or a 60, and [the supervisor] would make me drop it to a 50, and the doctor told me, `they won't admit on a 50 PPS. It's got to be lower,' so, [the supervisor] . . . told me `Change your paperwork. Make it work.'"); Rel. Appx. 1806-07. [71] Rel. Appx. 1584, 1518. [72] Rel. Appx. 1509. [73] Rel. Appx. 1519. [74] Rel. Appx. 1506-07. [75] Rel. Appx. 1928. [76] Id. at 1809. [77] Id. at 1788, 1802. [78] Id. at 1907, 1960, 1962-64. [79] Id. at 27-28. [80] Id. at 1250. [81] Id. at 2611. [82] Id. Relator claims that some hospice medical directors were employees and would have also received bonuses, but does not produce competent evidence to that effect. See Rel. Br. [Docket Entry #302-1] at 18 n. 108 (stating that "Wall testified that she had been told on more than one occasion that VistaCare medical directors received a bonus based on maintenance of average daily census"). [83] Rel. Appx. 945-52; see also Rel. Br. [Docket Entry #302-1] at 18-22 [84] Rel. Appx. 1192-95; Rel. Appx. 940. [85] Id. at 720-22. [86] Wall Depo. at 173, Rel. Appx. 1674. [87] See Rel. Appx. 1567. [88] Rel. Appx. 1567-69, 1884-89. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 31 of 36 [89] Rel. Appx. 1679. [90] Rel. Appx. 1167-68. [91] Rel. Appx. at 954. [92] Rel. Appx. 2452. [93] Hr'g Tr. at 11. [94] In selecting a stratified sample, a statistician divides a population into subpopulations and draws a sample from each subpopulation. Here, Dr. Kriegler initially randomly selected a small sample from each period, and requested that Defendants provide files for those patients. Defendants were not able to locate and produce some of the requested files. A greater number of missing files were from the VistaCare period than from the other two periods. As Dr. Kriegler explained, when a population contains such missing units, a non-stratified sample may include "over- representation from certain sub-groups and under-representation from others" which may lead to "biased inferences about the whole population." Kriegler Rept. at 16-31, Def. Appx. 513-517. Thus, Dr. Kriegler chose to select a stratified sample. Id. [95] 291 is approximately 2.4% of 12,000. Dr. Kriegler selected the sample size based on the resources available, but says it is "well beyond the minimum sample size criteria that statistics textbooks recommend." Kriegler Rept. at 5-6, Def. Appx. 501-02. [96] Steinberg Rep. at 40; Steinberg Depo. at 967 ("As a general statement . . . reasonable clinicians/physicians can disagree about things and not necessarily be wrong. . . I gave sort of what a reasonably prudent hospice would do, and then I kind of extended that to, like, you know, the absolute at which, you know, my more liberal eligibility periods were that which no reasonable clinician would—would think that person was hospice eligible."). [97] Steinberg Depo. at 972 [98] Steinberg Rept. at 42. [99] Id. at 40. [100] Extrapolation has been used to establish damages in FCA cases. See U.S. v. Fadul, 2013 WL 781614, at *14 (D. Md. Feb. 28, 2013). It has also been used in administrative decisions regarding overpayments on Medicare claims and to establish liability in cases where the defendant has consented to its use. See U.S. v. Krizek, 859 F. Supp. 5, 7 (D.D.C. 1994); United States ex. rel. Loughren v. UnumProvident Corp., 604 F.Supp.2d 259 (D. Mass. 2009). One court allowed extrapolation to prove liability at the default judgment stage. United States v. Cabrera-Diaz, 106 F. Supp. 2d 234, 234 (D.P.R. 2000). These cases are distinguishable. To show liability, unlike damages, a relator must meet each element of an FCA claim. Life Care Centers of Am., Inc., 114 F. Supp. 3d at 563. Using statistical sampling to determine overpayment amounts in administrative cases is explicitly authorized by the overpayment statute, but not by the FCA. Id. at 562-63 (citing 42 U.S.C. § 1395ddd(f)(3)). In cases where defendants consented to extrapolation, there is no basis for assuming there was a court analysis, and thus, those cases are not instructive. Extrapolation from sampling may also be appropriate where the evidence establishes that a defendant's objective approach was similar in all cases, making the sample a reasonable basis for extrapolation to the whole. That is not the case here. [101] This decision is on appeal to the Fourth Circuit. U.S. ex rel. Michaels v. Agape Senior Cmty., Inc., 15-2145. [102] In U.S. ex rel. Ruckh v. Genoa Healthcare, LLC, a case involving upcoding at rehabilitation centers, the relator moved in limine to admit evidence of a statistical sample that had not yet been created. 11-cv-01303-SMD-TBM (M.D. Fla. Apr. 28, 2015). Citing LifeCare and Robinson, the court rejected the defendant's position that a sample could never be used to demonstrate falsity in an FCA case. The opinion does not contain a detailed significant analysis, but relies on citations to the cases described above, and simply defers ruling on the admissibility of extrapolation in that case until the evidence can be considered. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 32 of 36 [103] 42 U.S.C. § 1395f(a)(7). [104] Program Memorandum Intermediaries/Carriers, Subject: Provider Education Article, CMS-Pub. 60AB (Mar. 28, 2003) (quoting 42 U.S.C. § 1395f(a)(7)) (A1275-81) ("There is no risk to a physician about certifying an individual for hospice care that he or she believes to be terminally ill." (emphasis added)). [105] Because the Court will not allow Dr. Kriegler to testify as to the results of extrapolation for the reasons addressed above, the Court does not reach Defendants' argument that extrapolation to show liability would violate Defendants' due process rights. [106] Steinberg Depo. at 956. [107] Steinberg Depo., Def. Appx. 978. [108] Federal Rule of Evidence 702 provides that a "witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise." Fed. R. Evid. 702. The expert's testimony may be admissible under Rule 702 if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case. Fed. R. Evid. 702; see also Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 590 (1993) (scientific testimony or evidence must be relevant and reliable). To determine reliability of the evidence, the Court must make a threshold determination that the expert is testifying as to scientific knowledge and that such knowledge will assist the trier of fact. U.S. ex rel. Martin v. Life Care Centers of Am., Inc., 2014 WL 4816006, at *2 (E.D. Tenn. Sept. 29, 2014) (citing Daubert, 509 U.S. at 590). The burden is on the proponent of the expert testimony to establish its admissibility by a preponderance of the evidence. Daubert, 509 U.S. at 592. [109] The Court notes that on April 13, 2016, a California state court decertified a class in a class action after "entirely reject[ing]" a report authored by Dr. Kreigler as "clearly invalid and unreliable." Williams v. Allstate Ins., No. BC382577 (Cal. App. Dep't Super. Ct. Apr. 13, 2016) ("Kriegler strains to reach results favorable to his client"). [110] Kriegler Decl. ¶10, ¶23, Def. Appx. at 799, 805. [111] Dr. Kriegler wrongly assumed a patient could only have one ID number, when in fact a patient could have multiple IDs, which led to duplicate patients in the Population, some of whom were selected in the Sample. Kriegler Depo. at 139-41, 164; Def. Appx. at 919, 921. Further, the Population excluded patients because Dr. Kriegler wrongly assumed patients with common names were duplicates, and then removed them. Id. at 215, 218. [112] Kriegler Depo. at 42-43; Rel. Appx. at 905. [113] Resp. Br. at 3 (citing to Kriegler Rep. ¶¶41-4). [114] As a result, in the VistaCare period, five of the fourteen states VistaCare operated in are not represented in the sample; in the Odyssey period, four of the fourteen states are not represented; and in the Gentiva period, one state is not represented. [115] Def. Appx. 981. [116] Def. Appx. 978. [117] Def. Appx. 1039. [118] Because the Court is granting summary judgment as to Relator's FCA claims, the Court need not reach the question of whether Dr. Kriegler could give testimony about claims submitted for the 291 patients whose files Dr. Steinberg evaluated. Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 33 of 36 [119] Steinberg Depo. Def. Appx., at A 1064. [120] Steinberg Depo., Def. Appx., at A 1064-65. [121] See 79 Fed. Reg. 50452, 50471 (Aug. 22, 2014) (patients may stabilize or improve and remain hospice eligible). [122] See Resp. at 3 (referring to LCDs as "guidance" and "a key tool"); Steinberg Depo, Def. Appx., at A 973 (stating that LCDs are "guidelines," are "not requirements," and patients "definitely can" be eligible for the MHB if they do not satisfy all the criteria in an LCD). [123] 42 C.F.R. § 418.24 (not requiring patients to have a particular mental state or orientation). [124] Relator's only remaining claims rely on legal falsity. Relator originally asserted claims of factual falsity—that Defendants submitted an inaccurate description of goods or services provided or a request for reimbursement for goods or services never provided—but all such claims have been dismissed with prejudice. Opinion, Docket Entry #91, at 3 n. 15. [125] The Supreme Court recently approved an implied false certification theory, under which FCA liability may attach when a defendant submits a claim for payment that "makes specific representations about the goods or services provided, but knowingly fails to disclose the defendant's noncompliance with a statutory, regulatory, or contractual requirement," when such an "omission renders those representations misleading." Universal Health Servs., Inc., 579 U.S. ___. Relator's Fourth Amended Complaint asserts that claims submitted for payment were "also false because [they] concealed the material fact that the individual for whom VistaCare was billing Medicare was not in fact eligible for hospice care or was certified for hospice care with deliberate indifference or a reckless disregard for whether that person was actually eligible for such care." Compl. ¶ 84. The implied certification theory was not directly addressed by the parties in the briefing on the Motion for Summary Judgment, but, as Relator did not show Defendants admitted patients who were not properly certified to be terminally ill, the Court finds Relator cannot prevail under the implied certification theory set forth in her Complaint. [126] 42 U.S.C. § 1395f (a)(7). [127] Opinion [Docket Entry #52] at 10; Opinion [Docket Entry #91] at 7 ("To state an FCA claim properly, a plaintiff contending that patients were falsely certified for hospice care must rely on objectively verifiable facts inconsistent with the exercise of a physician's clinical judgment, not on a subjective clinical analysis as to which prudent doctors might disagree."). [128] Steinberg Depo. at 965, 967. [129] Rel. Appx. at 43. [130] Hr'g Tr. at 9. [131] See Rel. Appx. at 41. [132] 73 Fed. Reg. 32088 (June 5, 2008) (emphasis added). [133] Steinberg Rept., Appx. 43. [134] Further, Dr. Steinberg's methodology is rife with errors, as discussed on the record at the hearing, and would be excluded for that reason. Hr'g Tr. 23-37. For example, as he admitted in his deposition, his report contained these errors and overstatements: his opinion that "patients who might still want treatment" were ineligible for the MHB was incorrect, Def. Appx. A 1052, his opinion that patients "must agree to give up life prolonging and/or curative treatment" to be eligible was "stated too strongly," id. at A 962, his opinion that attending physicians "did not use any medical judgment when signing the certificate of terminal illness" was "stated too strongly" as "there's certainly some judgment involved," id. at A 970, and his opinion that "LCDs specify what specific clinical criteria patients must meet" was "bad language" and incorrect, id. at 1025-26. Further, his report claimed to apply the standard a "third-party Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 34 of 36 reviewer" would apply, but he later admitted he "[didn't] know [the] specific protocols" of various third-party reviewers whose standards he claimed to be applying. Id. at A 1000-01. [135] United States v. AseraCare Inc., 2015 WL 8486874, at *6 (N.D. Ala. Nov. 3, 2015) ("Even assuming, arguendo, that the Government could present this testimony to prove falsity . . ., the Government failed to make the necessary connections to the 123 patients to show that the claims were objectively false. For example, the testimony of . . . AseraCare's Patient Care Coordinator at the Milwaukee agency . . . illustrates the Government's lack of connection. She testified about how the medical director of that agency, Dr. Mateo, `was doing his drawings' and `wasn't participating' during the interdisciplinary team meetings. She further testified that she prepared for meetings by setting up Dr. Mateo's sketch pad, crayons, and coloring pencils and would present papers to Dr. Mateo with `little stickies' where he should sign if he was present to sign them or would use a pre-signed form if he was not at the meeting. But, here is the rub: Dr. Liao identified two patients from Milwaukee as being ineligible—patient # 46 Ingeborg D. and patient # 123 Yvonne Y. The jury did not find that AseraCare's claims for hospice service for patient # 123 Yvonne Y. were false. The jury found Ingeborg D. was ineligible; however, she was not admitted to hospice until November 4, 2010—two-and-a-half years after [the patient care coordinator] left AseraCare. Furthermore, the court has reviewed Ms. Ingeborg D.'s medical records and cannot find Dr. Mateo's name in them. Therefore, Ms. Manley's testimony does not explain why the opinions of the certifying doctors for Ms. Ingeborg D. lack reliability. Thus, the Government has presented nothing more than Dr. Liao's different opinion as to Ms. Ingeborg D.'s eligibility."). [136] See, e.g., Hr'g Tr. at 78 ("We believe . . . evidence of the scheme would allow a jury to infer that those claims submitted were submitted and paid in reckless disregard for the truth or falsity of the information in the claim, even though the evidence of the scheme does not specifically relate to the claims . . . that Steinberg will testify were based on periods when the patients were not eligible for the benefit."). [137] 42 U.S.C. §3729(a)(1)(A), (B). [138] These witnesses also testified that they based their eligibility opinions in significant part on LCDs. See Rel. Appx. 1549, 1678, 1970. Relator and her hospice expert concede LCDs do not establish a standard. Resp. at 3; Steinberg Depo, Def. Appx., at A 973. Relator also produced declarations and affidavits from several VistaCare employees who said ineligible patients were admitted. However, they did not provide any factual support for these conclusory allegations, and did not show that the declarants were qualified to reach such conclusions. See e.g., Rel. Appx. Ex. 27, Ryan Aff., Ex. 28, Castro Decl. The Court will not rely on unsupported, conclusory statements. [139] Resp. at 32-39. [140] Hr'g Tr. at 14, 78. [141] Id. [142] Hr'g Tr. at 93. [143] Id. [144] Id. at 93-94. [145] Medicare and Medicaid Programs; Fraud and Abuse OIG Anti-Kickback Provisions, 54 FR 3088-01 (Jan. 23, 1989) (emphasis added). [146] Letter from D. McCarty Thornton, Associate General Counsel, HHS OIG, to T.R. Sullivan, IRS, (Dec. 22, 1992), at n. 2, available at http://oig.hhs.gov/fraud/docs/safeharborregulations/acquisition122292.htm. [147] Tex. Hum. Res. Code § 36.115(a); 31 U.S.C. § 3730(h). [148] See United States v. City of Dallas, Tex., 2011 WL 4912590 (N.D. Tex. Sept. 27, 2011) report and recommendation adopted sub nom. Moore v. City of Dallas, Tex., 3:09-CV-1452-O, 2011 WL 4907303 (N.D. Tex. Oct. 14, 2011) (evaluating TMFPA action based upon the same evidence and arguments offered with respect to FCA Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 35 of 36 retaliation claim); see also United States v. Thorek Hosp. & Med. Ctr., 2007 WL 2484333 at *4 (N.D. Ill. Aug. 29, 2007) (evaluating FCA action and Illinois Whistleblower Reward and Protection Act actions together). [149] Rel. Appx. 1645-72. [150] Opinion, [Docket Entry #91] at 11. [151] Rel. Appx. 1645-72. [152] The Fifth Circuit recently made clear that an FCA retaliation claim is analyzed under the McDonnell Douglas burden-shifting standard. Diaz, No, 15-50655 at 4 n. 3. The relator must provide evidence of retaliation, then the defendant must show a non-retaliatory motive, and the burden shifts back to the relator to show that the defendant's explanation is pretextual. The Fifth Circuit affirmed summary judgment against a relator on a retaliation claim because the relator did not allege pretext. Id. at 5-6. Here, relator alleges pretext and provides evidence sufficient for a jury to find Defendants' explanation—reducing social workers due to overstaffing—pretextual: she was the only social worker with a master's degree and the most senior social worker at her location. [153] Defendants also argued that Relator's retaliation claims should be dismissed because Relator had not adequately explained the damages she claims resulted from the alleged retaliation. The Court rejected this argument at the hearing. Hr'g Tr. at 90; CQ, Inc. v. TXU Min. Co., L.P., 565 F.3d 268, 279 (5th Cir. 2009). Case 3:16-cv-00146-KC Document 14-5 Filed 11/22/16 Page 36 of 36