Burke v. Amedisys, Inc.

Decision Date10 August 2022
Docket Number17-cv-9232
PartiesTHERESE BURKE, Plaintiff, v. AMEDISYS, INC., Defendant.
CourtU.S. District Court — Northern District of Illinois

Steven C. Seeger United States District Judge

Plaintiff Therese Burke worked as the Vice President of Operations for a home health care company, Defendant Amedisys, from 2013 until 2017. Before Burke came on board, Amedisys paid $150 million to settle lawsuits that the company had overbilled Medicare in violation of the False Claims Act. As Burke tells is, the more things changed, the more they stayed the same.

Burke alleges that the company implemented new quotas for home health care patients. The targets were so high that employees could not hit them without submitting fraudulent Medicare claims. The quotas for medical care outpaced the actual need for medical care. But Amedisys kept a singular focus on hitting the numbers, by any means necessary.

Burke began to speak up about Amedisys's practices. She voiced her concerns to her manager, but the concerns fell on deaf ears. She encountered nothing but resistance. Burke then refused to participate in a process geared toward overbilling. She declined to fire a subordinate who wasn't hitting her numbers, because the subordinate explained that she was providing only the medical care that was necessary. So Amedisys fired Burke.

Burke later filed this lawsuit, bringing a retaliation claim under the False Claims Act. She alleged that Amedisys fired her for speaking up about Amedisys's practices and refusing to terminate an employee who was playing it straight.

Amedisys in turn, moved to dismiss. For the reasons explained below the motion is denied.


At the motion to dismiss stage, the Court must accept as true the well-pleaded allegations of the complaint. See Lett v City of Chicago, 946 F.3d 398, 399 (7th Cir. 2020). The Court “offer[s] no opinion on the ultimate merits because further development of the record may cast the facts in a light different from the complaint.” Savory v Cannon, 947 F.3d 409, 412 (7th Cir. 2020).

The case is about whether Amedisys retaliated against Burke for raising concerns about the company's practices when billing Medicare for home health coverage. The Court will begin with a short overview of the Medicare Home Health Benefit program, and then will dive into the allegations about Burke's experiences at Amedisys.

I. Medicare Home Health Coverage

Medicare provides health insurance for eligible citizens. See Second Am. Cplt., at ¶ 8 (Dckt. No. 33). Coverage includes reimbursement for home health care services through the Medicare Home Health Benefit program. Id. at ¶ 9. To qualify, a patient must (1) be homebound, (2) need part-time skilled nursing services, speech therapy, physical therapy, or continuing occupational therapy as determined by a physician, and (3) be under a plan of care established and reviewed by a physician and administered by a qualified home health agency. Id. If a patient qualifies, Medicare will pay for a variety of services, including part-time skilled nursing care, therapy, counseling, part-time home health care, and medical equipment and supplies. Id. at ¶ 10.

As the name suggests, home health agencies provide home health care to eligible patients, and then bill Medicare for their services. Id. at ¶ 11. Before billing Medicare, home health agencies must independently assess and verify whether a patient qualifies for the program. Id. They must assess the patient and verify the need for care.

Typically, a home health agency completes this assessment and verification at an initial assessment with the patient. Id. at ¶ 15. After a physician's referral, a registered nurse with a home health agency makes an initial assessment visit to assess the patient's clinical, functional, and service characteristics. Id. These characteristics include the patient's observable medical condition, physical capabilities, and expected therapeutic needs. Id. The nurse also evaluates the patient's eligibility for Medicare home health care - including homebound status. Id.

Based on the initial assessment, the home health agency determines the patient's “case mix assignment” and assigns the patient to one of eight Home Health Resource Groups, depending on the patient's care needs. Id. This assignment is then coded as a Health Insurance Prospective Payment System code, which Medicare uses to determine the rate of payment for a given patient. Id.

Medicare pays for home health care on 60-day cycles through the Prospective Payment System. Id. So, to continue receiving care after the first 60 days, the patient must be re-certified with a new comprehensive assessment within the final five days of the cycle. Id. at ¶ 16. In addition to regular assessments, the home health agency must maintain clinical notes documenting the patient's condition, homebound status, and receipt of services. Id.

II. Amedisys and Home Health Care Fraud

Unfortunately, the Medicare home health benefit is no stranger to fraud. Id. at ¶ 17. And Amedisys is no stranger to allegations of fraud, either.

Amedisys is home health and hospice service corporation based in Baton Rouge, Louisiana. Id. at ¶ 3 The company operates in 45 states and Puerto Rico. Id. But analysts and whistleblowers have singled out Amedisys for using methods of record-keeping and billing, including a proprietary software, as a “secret sauce” to squeeze an artificially high profit margin from Medicare. Id. at ¶ 23.

In 2014, whistleblowers brought seven qui tam lawsuits on behalf of the United States, accusing Amedisys of submitting false claims to Medicare in violation of the False Claims Act. Id. at ¶¶ 3, 19; see also United States ex rel. CAF Partners et al. v. Amedisys, Inc., No. 10-cv-2323 (E.D. Pa.); United States ex rel. Brown v. Amedisys, Inc., No. 13-cv-2803 (E.D. Pa.); United States ex rel. Umberhandt v. Amedisys, Inc., No. 13-cv-2789 (E.D. Pa.); United States ex rel. Doe v. Amedisys, Inc., No. 13-cv-3187 (E.D. Pa.); United States ex rel. Ognen v. Amedisys, Inc., No. 13-cv-4232 (E.D. Pa.); United States ex rel. Lewis v. Amedisys, Inc., No. 13-cv-3359 (E.D. Pa.); United States ex rel. Raven v. Amedisys, Inc., No. 11-cv-0994 (N.D.Ga.). Amedisys eventually resolved those suits through a $150 million settlement. See Second Am. Cplt., at ¶¶ 3, 19 (Dckt. No. 33); see also Amedisys Home Health Companies Agree to Pay $150 Million to Resolve False Claims Act Allegations, Department of Justice, https://www.justice.gov/opa/pr/ amedisys-home-health-companies-agree-pay-150-million-resolve-false-claims-act-allegations (last visited August 10, 2022). As part of the settlement agreement, Amedisys entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. See Second Am. Cplt., at ¶ 19.

The Corporate Integrity Agreement imposed certain compliance obligations on Amedisys for five years (from 2014 until 2019). Id. Some of those obligations involved what to do if Medicare overpaid. Id. at ¶¶ 19-20. Under the Agreement, Amedisys had a duty to notify the Office of the Inspector General if it became aware of a substantial overpayment. Id. at ¶ 20. Amedisys needed to repay any overpayment within 60 days of identification and take further remedial steps to correct the problem within 90 days. Id. at ¶ 19. Additionally, Amedisys had to submit an annual report that summarized all reported events and overpayments. Id. at ¶ 20. The report needed to include a certification that the company had complied with its obligations.

According to Therese Burke, Amedisys did not comply with the settlement agreement. Instead, Burke alleges that Amedisys continued to defraud the United States after 2014 by submitting false claims to Medicare.

III. Burke's Allegations of Fraud

Therese Burke has worked in the health care industry for over 20 years. Id. at ¶ 5. In 2013, Amedisys hired Burke as Area Vice President of Operations for Illinois, Wisconsin, and Indiana. Id. She quickly was promoted. In 2014, Amedisys promoted Burke to General Manager of the area. Id. at ¶ 55. In that role, she oversaw the sales, operations, and clinical divisions. Id.

Burke performed well. She won the “Most Improved Pod” and received an award from Amedisys's Vice President of Operations. Id. Amedisys also asked Burke to train new Area Vice Presidents and travel to poorly performing areas as a trouble-shooter. Id.

Soon after Burke came on board, Amedisys started running into issues. After the 2014 settlement, Amedisys's growth stagnated. Id. at ¶ 26. In the spring of 2015, Amedisys CEO Paul Kusserow informed management - including Burke - that “there ‘may only be five years of non-managed Medicare remaining' and that the company should ‘get what it could now.' Id. Burke interpreted this statement to mean that Amedisys thought that “the Medicare home health gravy train might be pulling into the station permanently in the near future,” and that the company needed new strategies to boost profits. Id.

In early 2016, Amedisys announced a “major shakeup” at the executive level. Id. at ¶ 27. It replaced much of its senior management team, including its General Counsel, Chief Medical Officer, Chief Financial Officer, Chief Information Officer, Chief Strategy Officer, and Chief Operating Officer. Id. Soon after, Amedisys reported that its Chief Compliance Officer was taking 12 months of paid leave. Id. But he never returned. Id. Burke's colleagues and supervisors told her that the Chief Compliance Officer was terminated because “compliance had swung too far the other way and was inhibiting growth.” Id.

Amedisys also restructured Burke's position. Id. at ¶ 56. She became the Area Vice...

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