Dac Surgical Partners P.A. v. United Healthcare Servs., Inc., CIVIL ACTION NO. 4:11-CV-1355

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
Writing for the CourtMELINDA HARMON UNITED STATES DISTRICT JUDGE
PartiesDAC SURGICAL PARTNERS P.A., WELLNESS SURGICAL ASSOCIATES, P.A., PROFESSIONAL FOOT and ANKLE SURGICAL CENTER, P.A., SSPA SURGICAL CENTER, P.A., LAKE BREEZE SURGICAL AFFILIATES, P.A., SURGERY PRO, P.A., MAISLOS PODIATRY, P.A., HOPESTAR FOOT & ANKLE SURGERY CENTER, P.A., LIBERTY FOOT & ANKLE SURGERY CENTER, P.A. CADENZA SPECIALTY CARE, P.A., GOOD FEET SURGERY, P.A., PREMIER SURGICAL GROUP, P.A., FSS-HOUSTON FOOT, P.A. MANZANO SURGICAL AFFILIATES, P.A. MMN ENTERPRISE SURGERY CENTER, P.A. SPRINT FOOT & ANKLE SURGERY CENTER, P.A., FAIRWAY SURGICAL LCENTER, P.A. SJS SURGERY, P.A. ASPEN SURGICAL CENTER, P.A. REDBIRD FOOT & ANKLE SURGERY CENTER, P.A. KLA FOOT & ANKLE SURGICAL CENTER, P.A. ALEX SURGICAL CENTER, P.A. ELITE SURGICAL CENTER, P.A. LONESTAR SURGERY CENTER, P.A. LYNN SURGICAL AFFILIATES, P.A. LSO SURGERY CENTER, P.A., SOUTH SIDE ENT, P.A. AMS SURGICAL CENTER, P.A. GALLERIA SURGICAL ASSOCIATES, P.A. CC HOUSTON SURGICAL CENTER, P.A. ANKLE AND FOOT SURG EXCEL, P.A. STARBOARD SPECIALTY CARE, L.L.P. JMB SURGICAL AFFILIATES, P.A. RDJ SURGICAL CENTER, P.A. IRISH SURGICAL CENTER, P.A. GATOR SURGICAL, P.A. COMPREHENSIVE SURGICARE CENTER, LLC, Plaintiffs, v. UNITED HEALTHCARE SERVICES, INC. and INGENIX, INC. Defendants and Counter-Plaintiffs, v. DAC SURGICAL PARTNERS, P.A., CONG THU NGUYEN, M.D., FAIRWAY SURGICAL CENTER, P.A., KEVIN R. SMITH, M.D., LAKE BREEEZE SURGICAL AFFILIATES, P.A., ROY S. LEWIS, M.D., LONESTAR SURGICAL CENTER, P.A., BECKY MCGRAW-WALL, M.D., LYNN SURGICAL AFFILIATES, P.A., LARRY P. CONRAD, M.D., MANZANO SURGICAL AFFILIATES, P.A., MARK A. NICHOLS, M.D., SOUTH SIDE ENT, P.A., ALFREDO JIMENEZ, M.D., SURGERY PRO, P.A., JAMES H. LIU, M.D., ANKLE AND FOOT SURG EXCEL, P.A., JERRY MILES, D.P.M. CC HOUSTON SURGICAL CENTER, P.A., CHAD C. CLAUSE, D.P.M., ELITE SURGICAL CENTER, P.A. BRYAN YUEH LEE, D.P.M., FSS-HOUSTON FOOT, P.A., SHERMAN NAGLER, D.P.M., GATOR SURGICAL, P.A., MARCO VARGAS, D.P.M., GOOD FEET SURGERY, P.A., ROBERT J. MOORE, III, D.P.M., HOPESTAR FOOT & ANKLE SURGERY CENTER, P.A., GREGORY L. MANGUM, D.P.M., KLA FOOT & ANKLE SURGICAL CENTER, P.A., STEPHEN G. EICHELSDORFER, D.P.M., MAISLOS PODIATRY, P.A., GABRIEL MAISLOS, D.P.M., MMN ENTERPRISE SURGERY CENTER, P.A., MEYNARD M. NUSSBAUM, D.P.M. PREMIER SURGICAL GROUP, P.A., MARK H. MOSS, D.P.M., PROFESSIONAL FOOT & ANKLE SURGICAL CENTER, P.A., DAVID S. JENSON, D.P.M., RDJ SURGICAL CENTER, P.A., D. SEAN SWEENEY, D.P.M., REDBIRD FOOT & ANKLE SURGERY CENTER, P.A., BRIAN W. ZALE, D.P.M., SPRINT FOOT & ANKLE SURERY CENTER, P.A., JEFFREY J. PENSO, D.P.M., SSPA SURGICAL CENTER, P.A., ELIZABETH A. KROBORTH-LYON, D.P.M., WELLNESS SURGICAL ASSOCIATS, P.A., MARKUS GIACOMUZZI, D.P.M., ASPEN SURGICAL CENTER, P.A., STEVEN D. THOMPSON, M.D., IRISH SURGICAL CENTER, P.A., MICHAEL C. MAIER, M.D. JMB SURGICAL AFFILIATES, P.A., SJS SURGERY, P.A., EUGENE LOU, M.D., LIBERTY FOOT & ANKLE SURGERY CENTER, P.A., BRUCE MILLER, M.D., LSO SURGERY CENTER, P.A., KENNETH G. BERLINER, M.D., ALEX SURGICAL CENTER, P.A., RICHARD GARZA, M.D., GALLERIA SURGICAL ASSOCIATES, P.A., RAFAEL A. LUGO, M.D., AMS SURGICAL CENTER, P.A., AHMED KHALIFA, M.D., COMPREHENSIVE SURGICARE CENTER, LLC, RICHARD M. WESTMARK, M.D., CADENZA SPECIALTY CARE, P.A., STARBOARD SPECIALTY CARE, LLP, ROBERT A. MOORE, JR., M.D., EUSTON ASSOCIATES, PLLC, PAR SURGICAL PLLC, SCOTT A. COHEN, M.D., Counter-Defendants
Decision Date08 December 2016
Docket NumberCIVIL ACTION NO. 4:11-CV-1355

DAC SURGICAL PARTNERS P.A., WELLNESS SURGICAL ASSOCIATES, P.A.,
PROFESSIONAL FOOT and ANKLE SURGICAL CENTER, P.A.,
SSPA SURGICAL CENTER, P.A., LAKE BREEZE SURGICAL AFFILIATES, P.A.,
SURGERY PRO, P.A., MAISLOS PODIATRY, P.A.,
HOPESTAR FOOT & ANKLE SURGERY CENTER, P.A.,
LIBERTY FOOT & ANKLE SURGERY CENTER, P.A.
CADENZA SPECIALTY CARE, P.A., GOOD FEET SURGERY, P.A.,
PREMIER SURGICAL GROUP, P.A., FSS-HOUSTON FOOT, P.A.
MANZANO SURGICAL AFFILIATES, P.A. MMN ENTERPRISE SURGERY CENTER, P.A.
SPRINT FOOT & ANKLE SURGERY CENTER, P.A.,
FAIRWAY SURGICAL LCENTER, P.A. SJS SURGERY, P.A.
ASPEN SURGICAL CENTER, P.A. REDBIRD FOOT & ANKLE SURGERY CENTER, P.A.
KLA FOOT & ANKLE SURGICAL CENTER, P.A.
ALEX SURGICAL CENTER, P.A. ELITE SURGICAL CENTER, P.A.
LONESTAR SURGERY CENTER, P.A. LYNN SURGICAL AFFILIATES, P.A.
LSO SURGERY CENTER, P.A., SOUTH SIDE ENT, P.A.
AMS SURGICAL CENTER, P.A. GALLERIA SURGICAL ASSOCIATES, P.A.
CC HOUSTON SURGICAL CENTER, P.A. ANKLE AND FOOT SURG EXCEL, P.A. STARBOARD SPECIALTY CARE, L.L.P.
JMB SURGICAL AFFILIATES, P.A. RDJ SURGICAL CENTER, P.A.
IRISH SURGICAL CENTER, P.A. GATOR SURGICAL, P.A.
COMPREHENSIVE SURGICARE CENTER, LLC, Plaintiffs,
v.
UNITED HEALTHCARE SERVICES, INC. and INGENIX, INC.
Defendants and Counter-Plaintiffs,
v.
DAC SURGICAL PARTNERS, P.A., CONG THU NGUYEN, M.D.,
FAIRWAY SURGICAL CENTER, P.A., KEVIN R. SMITH, M.D.,
LAKE BREEEZE SURGICAL AFFILIATES, P.A.,
ROY S. LEWIS, M.D., LONESTAR SURGICAL CENTER, P.A.,
BECKY MCGRAW-WALL, M.D., LYNN SURGICAL AFFILIATES, P.A.,
LARRY P. CONRAD, M.D., MANZANO SURGICAL AFFILIATES, P.A.,
MARK A. NICHOLS, M.D., SOUTH SIDE ENT, P.A.,
ALFREDO JIMENEZ, M.D., SURGERY PRO, P.A., JAMES H. LIU, M.D.,
ANKLE AND FOOT SURG EXCEL, P.A., JERRY MILES, D.P.M.
CC HOUSTON SURGICAL CENTER, P.A., CHAD C. CLAUSE, D.P.M.,
ELITE SURGICAL CENTER, P.A. BRYAN YUEH LEE, D.P.M., FSS-HOUSTON FOOT, P.A.,
SHERMAN NAGLER, D.P.M., GATOR SURGICAL, P.A., MARCO VARGAS, D.P.M.,
GOOD FEET SURGERY, P.A., ROBERT J. MOORE, III, D.P.M.,
HOPESTAR FOOT & ANKLE SURGERY CENTER, P.A.,
GREGORY L. MANGUM, D.P.M., KLA FOOT & ANKLE SURGICAL CENTER, P.A.,
STEPHEN G. EICHELSDORFER, D.P.M., MAISLOS PODIATRY, P.A.,
GABRIEL MAISLOS, D.P.M., MMN ENTERPRISE SURGERY CENTER, P.A.,
MEYNARD M. NUSSBAUM, D.P.M. PREMIER SURGICAL GROUP, P.A.,
MARK H. MOSS, D.P.M., PROFESSIONAL FOOT & ANKLE
SURGICAL CENTER, P.A., DAVID S. JENSON, D.P.M.,
RDJ SURGICAL CENTER, P.A., D. SEAN SWEENEY, D.P.M.,
REDBIRD FOOT & ANKLE SURGERY CENTER, P.A., BRIAN W. ZALE, D.P.M.,
SPRINT FOOT & ANKLE SURERY CENTER, P.A., JEFFREY J. PENSO, D.P.M.,
SSPA SURGICAL CENTER, P.A., ELIZABETH A. KROBORTH-LYON, D.P.M.,
WELLNESS SURGICAL ASSOCIATS, P.A., MARKUS GIACOMUZZI, D.P.M.,
ASPEN SURGICAL CENTER, P.A., STEVEN D. THOMPSON, M.D.,
IRISH SURGICAL CENTER, P.A., MICHAEL C. MAIER, M.D.
JMB SURGICAL AFFILIATES, P.A., SJS SURGERY, P.A., EUGENE LOU, M.D.,
LIBERTY FOOT & ANKLE SURGERY CENTER, P.A.,
BRUCE MILLER, M.D., LSO SURGERY CENTER, P.A., KENNETH G. BERLINER, M.D.,
ALEX SURGICAL CENTER, P.A., RICHARD GARZA, M.D.,
GALLERIA SURGICAL ASSOCIATES, P.A., RAFAEL A. LUGO, M.D.,
AMS SURGICAL CENTER, P.A., AHMED KHALIFA, M.D.,
COMPREHENSIVE SURGICARE CENTER, LLC,
RICHARD M. WESTMARK, M.D., CADENZA SPECIALTY CARE, P.A.,
STARBOARD SPECIALTY CARE, LLP, ROBERT A. MOORE, JR., M.D.,
EUSTON ASSOCIATES, PLLC, PAR SURGICAL PLLC,
SCOTT A. COHEN, M.D., Counter-Defendants

CIVIL ACTION NO. 4:11-CV-1355

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

December 8, 2016


OPINION AND ORDER

On April 8, 2011 Plaintiffs

DAC Surgical Partners, P.A.,

Wellness Surgical Associates, P.A.;

Professional Foot and Ankle Surgical Center, P.A.;

SSPA Surgical Center, P.A.;

Lake Breeze Surgical Affiliates, P.A.;

Surgery Pro, P.A.;

Maislos Podiatry, P.A.;

Hopestar Foot & Ankle Surgery Center, P.A.;

Liberty Foot & Ankle Surgery Center, P.A.;

Cadenza Speciality Care, P.A.;

Good Feet Surgery, P.A.;

Premier Surgical Group, P.A.;

FSS-Houston Foot, P.A.;

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Manzano Surgical Affiliates, P.A.;

MMN Enterprise Surgery Center, P.A.;

Sprint Foot & Ankle Surgery Center, P.A.;

Fairway Surgical Center, P.A.;

SJS Surgery, P.A.;

Aspen Surgical Center, P.A. and

Redbird Foot & Ankle Surgery Center, P.A. (referred to collectively herein as "DAC," or "the DACs," or "the DAC plaintiffs")1 filed suit against United Healthcare Services, Inc., and Ingenix, Inc. (hereinafter referred to as "United"). Doc. 1

On September 14, 2011 the DAC plaintiffs filed a First Amended Complaint (Doc. 46) to add plaintiffs

KLA Foot & Ankle Surgical Center, P.A.;

Alex Surgical Center, P.A.;

Elite Surgical Center, P.A.;

Lonestar Surgery Center, P.A.;

Lynn Surgical Affiliates, P.A.;

Kenneth G. Berliner, M.S., P.A., d/b/a/ Lonestar Orthopedics;2

Clear Lake ENT, P.A.;

Ams Surgical Center, P.A.;

Galleria Surgical Associates, P.A.;

CC Houston Surgical Centr, P.A.;

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Ankle and Foot Surg Excel, P.A.;

Starboard Speciality Care, LLP;

JMB Surgical Affiliates, P.A.;

RDJ Surgical Center, P.A.;

Irish Surgical Center, P.A. and

Gator Surgical, P.A. (also referred to collectively herein as "DAC,"or "the DACs," or "the DAC plaintiffs" )

A second amended complaint was also filed September 14, 2011, (Doc 47). A third amended complaint (Doc. 69) was filed February 29, 2012, adding Plaintiff Comprehensive Surgicare Center, L.L.C.

The judge to whom the case was originally assigned, the Honorable Nancy F. Atlas, recused herself on March 27, 2012, and the case was reassigned to the undersigned.

DAC filed a fourth amended complaint (Doc. 140) on July 2, 2012. In this pleading South Side ENT P.A. was substituted in place of Clear Lake ENT. This fourth amended complaint is the "live" pleading in this case.

Also on July 2, 2012, defendants United Healthcare Services, Inc., and Ingenix, Inc. filed a counterclaim against each of the named DAC plaintiffs and the medical doctors United alleged to be the "owners" of the DAC plaintiffs:

DAC Surgical Partner, P.A. and Cong Thu Nguyen, M.D.;

Fairway Surgical Center, P.A., and Kevin R. Smith, M.D.;

Lake Breeze Surgical Affiliates, P.A., and Roy S. Lewis, M.D.;

Lonestar Surgical Center, P.A. and Becky McGraw-Wall, M.D.;

Lynn Surgical Affiliates, P.A. and Larry P. Conrad, M.D.;

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Manzano Surgical Affiliates, P.A. and Mark A. Nichols, M.D.;

South Side Ent, P.A. and Alfredo Jimenez, M.D.;

Surgery Pro, P.A. and James H. Liu, M.D.;

Ankle and Foot Surg Excel, P.A. and Jerry Miles, D.P.M.;

CC Houston Surgical Center, P.A. and Chad C. Clause, D.P.M.;

Elite Surgical Center, P.A. and Chad C. Clause, D.P.M.;

Elite Surgical Center, P.A. and Bryan Yueh Lee, D.P.M.;

FSS-Houston Foot, P.A. and Sherman Nagler, D.P.M.;

Gator Surgical, P.A. and Marco Vargas, D.P.M.;

Good Feet Surgery, P.A. and Robert J. Moore, III, D.P.M.;

Hopestar Foot & Ankle Surgery Center, P.A. and Gregory L. Mangum, D.P.M.;

KLA Foot & Ankle Surgical Center, P.A. and Stephen G. Eichelsdorfer, D.P.M.;

Maislos Podiatry, P.A. and Gabriel Maislos, D.P.M.;

MMN Enterprise Surgery Center, P.A., Meynard M. Nussbaum, D.P.M.;

Premier Surgical Group, P.A., and Mark H. Moss, D.P.M.;

Professional Foot & Ankle Surgical Center, P.A. and David S. Jenson, D.P.M.'

RDJ Surgical Center P.A. and D. Sean Sweeney, D.P.M.;

Redbird Foot & Ankle Surgery Center, P.A. and Brian W. Zale, D.P.M.;

Sprint Foot & Ankle Surgery Center, P.A., and Jeffrey J. Penso, D.P.M.;

SSPA Surgical Center, P.A. and Elizabeth A. Kroborth-Lyon, D.P.M.;

Wellness Surgical Associates, P.A. and Markus Giacomuzzi, D.P.M.;

Aspen Surgical Center, P.A. and Steven D. Thompson, M.D.;

Irish Surgical Center, P.A. and Michael C. Maier, M.D.;

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JMB Surgical Affiliates, P.A., SJS Surgery, P.A. and Eugene Lou, M.D.;

Liberty Foot & Ankle Surgery Center, P.A. and Bruce Miller, M.D.;

LSO Surgery Center, P.A. and Kenneth G. Berliner, M.D.;

Alex Surgical Center, P.A. and Richard Garza, M.D.;

Galleria Surgical Associates, P.A. and Rafael A. Lugo, M.D.;

AMS Surgical Center, P.A. andAhmed Khalifa, M.D.;

Comprehensive Surgicare Center, LLC and Richard M. Westmark, M.D.;

Cadenza Specialty Care, P.A., Starboard Specialty Car, LLP and Robert A. Moore, Jr., M.D. Doc. 141. The doctor counter-defendants are hereinafter collectively referred to as the "Doctors."

DAC's fourth amended complaint, contains the same 37 plaintiff companies as United's counter-defendant companies.

On January 25, 2013 United removed a case filed on December 17, 2012 in the 113th Judicial District Court of Harris County Texas, styled Par Surgical, PLLC and Euston Associates, PLLC v. United Healthcare Services, Inc. and Ingenix, Inc., Civil Action No. 2012-73871. The removed case, 4:13-cv-00197, was assigned to the Honorable Ewing Werlein. On April 8, 2013 United filed an opposed motion to consolidate the Par/Euston case with the instant case; the motion to consolidate was granted June 24, 2013.

Thereafter, on July 5, 2013, United filed a first amended counterclaim (Doc. 316), which added Euston Associates, PLLC, Par Surgical PLLC, and Scott A. Cohen, M.D. as counter defendants (hereinafter sometimes referred to collectively as "Par").

Pending before the Court are:

1. United's Consolidated Motion for Summary Judgment as to All of Plaintiffs' Causes of

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Action (Doc. 485);

2. Par's, Euston's, and Dr. Cohen's Motion for Summary Judgment on United's Counterclaims (Doc. 491);

3. The Doctors' Motion to Dismiss and Motion for Summary Judgment Dismissing United's Counterclaims and Plaintiffs' Motion for Summary Judgment Dismissing Defendants' Affirmative Defenses (Doc. 500);

4. Dr. Cohen's, Par's and Euston's Motion for Reconsideration of Motion to Dismiss (Doc. 505);

5. United's Rule 72(a) Objections to Magistrate Judge Stacy's Order Denying United's Motion to Strike Declarations and Advantix Records Attached to Plaintiffs' Response to United's MSJ, in Violation of Court Order (Doc. 532)3

I. Background

This mare's nest of a case involves two competing claims involving facility fee payments from United Healthcare Services, Inc. to the plaintiff DACs and their doctor owners. The DAC plaintiffs assert in their Fourth Amended Complaint that United represented in the...

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