Druding v. Care Alternatives, Inc.
| Decision Date | 26 September 2018 |
| Docket Number | Civil Action No. 08-2126(JBS/AMD) |
| Citation | 346 F.Supp.3d 669 |
| Parties | Victoria DRUDING, Barbara Bain, Linda Coleman, and Ronni O'Brien, Plaintiff-Relators, v. CARE ALTERNATIVES, INC., Defendant. |
| Court | U.S. District Court — District of New Jersey |
Regina D. Poserina, Esq., Ross Begelman, Esq., Russell D. Paul, Esq., BEGELMAN & ORLOW, P.C., 411 Route 70 East, Suite 245, Cherry Hill, NJ 08034 and Sherrie Savett, Esq. (pro hac vice), BERGER & MONTAGUE, 1622 Locust Street, Philadelphia, PA 19103, Attorneys for Plaintiff-Relators Victoria Druding, Barbara Bain, Linda Coleman, and Ronni O'Brien
Steven L. Penaro, Esq., ALSTON & BIRD LLP, 90 Park Avenue, New York, NY 10016 and William Herman Jordan, Esq. (pro hac vice), Jason Daniel Popp, Esq. (pro hac vice), ALSTON & BIRD LLP, 1201 West Peachtree Street, Suite 4200, Atlanta, GA 30309, Attorneys for Defendant Care Alternatives, Inc.
David Edward Dauenheiner, U.S. ATTORNEY'S OFFICE, DISTRICT OF NEW JERSEY, 970 Broad Street, Newark, NJ 07102 and William Edward Olson, DEPARTMENT OF JUSTICE, CIVIL DIVISION, 175 N. Street, NE, Washington, DC 20004, Attorneys for Interested Party United States of America
Table of Contents
II. FACTUAL AND PROCEDURAL BACKGROUND...672
IV. THE FALSE CLAIMS ACT...682
V. DEFENDANT'S MOTION TO DISMISS...683
VI. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT...684
I. INTRODUCTION
Plaintiff-Relators in this qui tam action are former employees of Defendant Care Alternatives, Inc. ("Care Alternatives" or "Defendant"), a provider of end-of-life hospice care throughout New Jersey. They bring claims on behalf of the United States under the False Claims Act ("FCA"), 31 U.S.C. § 3729 etseq., alleging that Defendant fraudulently billed Medicare and Medicaid by routinely admitting and recertifying inappropriate patients for hospice care. [Docket Item 12.] The United States investigated Plaintiff-Relators' claims for more than seven years, but ultimately declined to intervene in this matter. [Docket Item 15.] The United States, however, remains an "interested party" pursuant to 28 U.S.C. § 517. [Docket Item 153.]
Currently pending before the Court are Defendant's motions to dismiss [Docket Item 126] and for summary judgment. [Docket Item 128.] The central issues in Defendant's motion to dismiss are whether Plaintiff-Relators failed to comply with 31 U.S.C. § 3730(b)(2), which requires that a relator must submit to the Government a "written disclosure of substantially all material evidence and information the person possesses," and, if so, whether dismissal of the Amended Complaint is warranted here. In the alternative, Defendant seeks summary judgment on several independent bases: (1) Plaintiff-Relators' allegations of falsity have insufficient evidentiary support; (2) there is insufficient evidence that Defendants submitted legally false claims; (3) Plaintiff-Relators have not satisfied the FCA element of "materiality;" and (4) Plaintiff-Relators have not adduced any evidence of scienter under the FCA. For the reasons discussed below, the motion to dismiss will be denied, while the motion for summary judgment will be granted.
II. FACTUAL AND PROCEDURAL BACKGROUND1
Plaintiff-Relators bring this qui tam action on behalf of the United States for alleged violations of the FCA in connection with reimbursement claims that Defendant submitted to Medicare and Medicaid between 2006 and October 23, 2007. Plaintiff-Relators generally allege a concerted effort by Defendant to bring in patients to its residential facilities who were not actually eligible for hospice care coverage under Medicare, notwithstanding that each patient was certified as hospice eligible by an independent physician. (See generally Am. Compl.) Specifically, the Amended Complaint identifies 15 patients whose medical records allegedly did not support a finding of terminal prognosis. (Id. at ¶ 25.)
Defendant Care Alternatives provided hospice care to patients throughout New Jersey. (Veltri Dep. [Docket Item 128-6] at 25:1-4, 76:4-78:1; see also Spoltore Dep. [Docket Item 128-4] at 21-1-26:25, 46:12-47-8.) To that end, Defendant employed a variety of clinicians, including registered nurses, chaplains, social workers, home health aides, and therapists, and worked with independent physicians who served as hospice medical directors.2 (Spoltore Dep. at 75:1-8; see also Care Alternative's Polices regarding Hospice Services [Docket Item 128-5] at 7, 10-17, 26-29, 38-39.) Together, these clinicians formed so-called "interdisciplinary teams" (hereinafter, "IDTs"), which met twice a month to review patient care plans, identify any particular patient needs, and discuss patients who were up for re-certification. (Spoltore Dep. at 149:25-150:15.) The IDTs also provided integrated care and services pursuant to individualized patient plans of care. (Id. at 21:15-26:26; see also Policies at 1.) The medical directors who were part of Defendant's Southwest Region IDT during the relevant period were Dr. Wadawa, Dr. Uwewemi, and Dr. Dignam. (Druding Dep. [Docket Item 144-3] at 23:13-25:1.)
According to Care Alternatives Hospice Administrator Loretta Spoltore ("Spoltore"),3 Care Alternatives had well-established compliance, quality assurance, training, and auditing programs that were designed to ensure "continuous improvement" and "strove to make sure that what [the company was doing] was at or above national standards." (Spoltore Dep. at 94:16-24; see also Veltri Dep. [Docket Item 128-7] at 45:13-46:1.) Spoltore also testified that Care Alternatives devoted significant resources to ensuring that clinicians created thorough patient medical records. (Spoltore Dep. at 114:21-117:12.)
Care Alternatives' Susan Coppola ("Coppola")4 led quarterly medical record audits to ensure that they were complete and contained documentation required by company policy. (Coppola Dep. [Docket Item 128-8] at 17:13-18:11, 56:19-58:4.) Nurses, full-time auditors, and regional managers assisted with these auditing efforts and, if deficiencies were identified, it was generally the regional manager's responsibility to develop and implement corrective action plans. (Id. at 78:13-80:12; Spoltore Dep. at 74:8-75:12, 114:21-117:12.)
It was Care Alternatives' practice to provide education to staff members of "every policy and procedure, every audit form, every paper" in use by Care Alternatives. (Coppola Dep. at 96:21-97:3.) Care Alternatives employees generally received compliance training on an annual basis. (Spoltore Dep. at 95:25-96:14.) Moreover, newly-hired nurses were provided compliance orientation and then educated by their individual teams, other nurses, social workers, and chaplains so that they understood the standards of care and practice for Care Alternatives. (Id. at 34:13-35:22; see also Coppola Dep. at 97:4-97:19.) Care Alternatives' compliance training was "an ongoing educational process." (Coleman Dep. [Docket Item 130-2] at 30:17-31:2.)
In addition to its internal compliance efforts, Care Alternatives was audited by (and conferred accreditation by) Community Health Accreditation Partner ("CHAP") a non-profit, third-party accreditation agency that conducted on-site surveys of Care Alternatives. (Coppola Dep. at 14:1-7.) To that end, Care Alternatives required that all patient medical records be timely delivered and stored in its headquarter offices in Cranford, New Jersey in the event CHAP visited for an on-site review of Care Alternatives' program on short notice. [Docket Item 144-5 at 2.] Care Alternatives hired a consultant, Toni Swick, to review the medical preparation of any possible State audit or CHAP review. (Veltri Dep. at 145:1-146:6.)
Plaintiff-Relators Victoria Druding, Linda Coleman, Barbara Bain, and Ronni O'Brien are former Care Alternatives employees. (Am. Compl at ¶ 1.)
Victoria Druding ("Druding") was employed by Care Alternatives as a Regional Manager of the Southwest Region for almost six months, from April 17, 2007 through September 6, 2007, when she quit without giving notice. (Druding HR File [Docket Item 128-11] at 1-2; Druding Dep. at 23:1-23:18.) As Regional Director, Druding was responsible for management of the clinical team, which included nurses, social workers, chaplains, and directors. (Id. at 23:13-25:1.) She was also responsible for ensuring that IDT meetings were scheduled and held in a timely manner. (Id. )
Linda Coleman ("Coleman") was employed by Care Alternatives as a Registered Nurse ("RN") Case Manager in the Southwest Region of New Jersey from April 2004 to September 2007. (Coleman Dep. at 9:18-10:1, 12:20-14-8.) As RN Case Manager, Coleman's duties were to (Id. at 8:15-21.) According to Coleman, her job (Id. at 14:18-15:6.)
Barbara Bain ("Bain") was employed by Care Alternatives as a...
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