Tucker v. Sebelius, Civil No. 12-5900 (RBK/AMD)

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
PartiesKAREN E. TUCKER, Plaintiff, v. KATHLEEN SEBELIUS, Secretary of Health and Human Services, Defendant.
Docket NumberCivil No. 12-5900 (RBK/AMD)
Decision Date15 November 2013



KUGLER, United States District Judge:

This matter comes before the Court on a motion by Defendant Kathleen Sebelius, Secretary of Health and Human Services ("Defendant"), to dismiss the complaint of Karen E. Tucker ("Plaintiff") for lack of subject matter jurisdiction and for failure to state a claim. The complaint alleges that Defendant failed to process and/or pay thousands of payment requests for services allegedly rendered to Medicare beneficiaries and seeks payment of all claims submitted. Plaintiff also alleges violations of her constitutional rights on the part of Defendant, and asks this Court to vacate a 1998 criminal conviction against her for healthcare fraud. For the reasons expressed below, the Court will grant the motion to dismiss.


Plaintiff, a podiatrist, became one of the subjects of an investigation into potential health care fraud in Texas in 1996. Her practice at the time consisted largely of providing podiatricservices to nursing home patients. Plaintiff received payment for these services by submitting claims to Blue Cross Blue Shield of Texas a/k/a TrailBlazer Health Enterprises, LLC ("TrailBlazer"), a Medicare Part B Carrier.2

Plaintiff was subsequently indicted, charged with multiple counts of health care fraud, and released pending trial. The indictment alleged that Plaintiff repeatedly billed Medicare for expensive procedures that she did not perform, that she billed for services to deceased persons and amputees, and that she exaggerated time spent with patients, billing for more than 24 hours in one day on at least one occasion. See Tucker v. United States, No. 99-cv-2599, 2001 WL 1613796 at *2-4 (N.D. Tex. Dec. 13, 2001). Following her indictment, TrailBlazer informed Plaintiff that her Medicare payments were suspended pursuant to 42 C.F.R. § 405.371 on the basis of reliable information that an overpayment existed and a reasonable suspicion of fraud or misrepresentation. Plaintiff was told, however, that her Medicare claims would continue to be processed during the suspension period, and she would be notified about claim determinations.

Plaintiff continued to pursue outstanding Medicare claims, and in connection with her appeal of unfavorable decisions, Medicare hearing officers requested that she submit certain documentation that she had not included in her initial submissions. In December 1997 and January 1998, Plaintiff received letters from Medicare hearing officers indicating that they had not received the requested documentation, and that as a consequence a number of her appeals of unfavorable payment decisions were being dismissed. However, Plaintiff was informed that she could reopen the appeals if she provided the required documentation within six months. SeeCompl. Ex. 24.

During the period of her release, Plaintiff contacted a number of physicians requesting documentation to substantiate her allegations that these physicians had orally authorized her to perform podiatric care on their patients. Some of these physicians interpreted her request as a request for falsification and promptly informed the prosecutor's office. As a result, the Government issued a superceding indictment accusing Plaintiff of obstruction of justice and moved to revoke her bond under the original indictment.

On March 24, 1998, a hearing was held before Magistrate Judge Jeff Kaplan of the Northern District of Texas with respect to the government's motion to revoke Plaintiff's bond. Over the Government's objection, Magistrate Judge Kaplan released Plaintiff subject to certain conditions including that she "avoid all contact with any persons who may be a witness in this case, including any health care providers, doctors, nursing homes, Medicare personnel, and patients." Compl. Ex. 5, p.32.

This order caused a measure of confusion. While the government originally understood it to prevent Plaintiff from continuing to submit requests for payment from Medicare for services allegedly rendered during the period of alleged Medicare fraud, Plaintiff understood it to mean that she could not personally contact Medicare, but that she could nonetheless attempt to get paid by Medicare for legitimate services rendered in order to pay for her criminal defense. As a consequence, Plaintiff hired a Florida Firm, Cooper Management Group, Inc., to file claims on her behalf.

On May 13, 1998, after additional hearings before Judge Kaplan had taken place, Chief District Judge Jerry Buchmeyer held a hearing on an unrelated matter. At the hearing, ChiefJudge Buchmeyer asked Plaintiff's counsel and the Assistant United States Attorney what Judge Kaplan did with respect to Plaintiff's ability to bill Medicare and thereby earn money to pay for her defense. Plaintiff's counsel, F. Lee Bailey responded: "He lifted any restrictions against her practicing medicine. . . . And he lifted any restrictions against her putting in claims." Compl., Ex. 22, p.4-5. Mr. Bailey was concerned that this was a meaningless remedy because Medicare would not pay any claims submitted by Plaintiff until after the resolution of the criminal prosecution. The Assistant United States Attorney agreed that Magistrate Judge Kaplan had lifted the restriction on Plaintiff filing claims with Medicare. Id. at Ex. 22, p.7-8.

On December 18, 1998, Plaintiff pleaded guilty to one violation of heath care fraud. Specifically, she pleaded guilty to providing podiatric services to Zala Farley without obtaining a specific recommendation and approval for the services from the attending physician. On March 5, 1999, Plaintiff was sentenced to six months of home confinement, three years of probation, and was required to pay $26,402 in restitution to the United States.

Following her sentencing, Plaintiff began the process of attempting to get paid the amounts she believed she was owed by Medicare, but was precluded from recovering during the pendency of her criminal prosecution. On July 29, 1999, Plaintiff contacted Medicare requesting information as to how to appeal claims previously denied at the fair hearing and administrative law judge levels. In a letter dated September 13, 1999, James Alexander, M.D., the Texas Medicare Director, stated that he had asked William Young of Benefits Integrity to give him information regarding the status of the federal litigation issues in Plaintiff's case, and that Mr. Young had stated that she was "allowed to appeal [her] claims at the appropriate level." Compl. Ex. 19.

On September 13, 1999, Debra Brigham, a Medicare Provider Education Specialist at Trailblazer, communicated with Plaintiff several times. In a letter dated November 2, 1999, Ms. Brigham stated that Medicare claims could only be accepted for the last quarter of 1997 and all of 1998 and 1999. Apparently, this statement was made pursuant to 42 C.F.R. § 424.44, which requires that claims be submitted within a certain period of time after services are rendered. Ms. Brigham also noted that several of Plaintiff's fair hearing requests had been dismissed, and that the time limit had expired for re-opening the hearing requests; thus, TrailBlazer was unable to forward these claims to an administrative law judge.

In a fax to Dr. Alexander dated December 13, 1999, Plaintiff stated that Carol Alkek, Manager of the Fair Hearings Department, had called and stated that she had no intention of reviewing the approximately 7000 claims filed for a fair hearing because she could not find the data on the computer system and the matter was untimely. In a letter to Debra Brigham on the same day, Plaintiff requested that her approximately 1500 outstanding claims subsequent to May 1996 be allowed to be submitted, because her files had been seized in May 1996 and returned in August 1999. Plaintiff also requested the opportunity to resubmit claims that had been submitted in 1994 and 1995. See Compl. Ex. 11.

In April 2003, an attorney for Plaintiff sent two letters to Center for Medicare & Medicaid Services ("CMS"), Region VI, requesting that CMS assist her in securing payment for outstanding claims from TrailBlazer. On May 12, 2003, Stephanie Gammon, Manager of the Program Integrity Branch in CMS, Region VI, requested that Plaintiff provide information on the outstanding claims in dispute, after which CMS would ask the Medicare carrier to research the claims and provide the final status of the claims.

By letter dated March 29, 2004, which was sent to Plaintiff's attorney, Ms. Gammon noted that in January 2004, CMS had received three computer disks with claims information. Ms. Gammon stated that, considering the large number of claims involved, CMS had asked TrailBlazer to randomly select a claim for review from each of the eighteen facilities listed in the submitted information. The review indicated that several of the claims had been disallowed for lack of medical necessity, with first level appeals affirming the denials, and that the other claims were disallowed for reasons including lack of medical necessity, invalid procedure code, and invalid date of service listed. Ms. Gammon noted that the findings indicated that TrailBlazer processed and adjudicated the claims according to Medicare rules and regulations, that Plaintiff was provided with appeal rights, and that since the claims were processed for payment in 1996 through 1998, the timeliness for appealing the initial claim payment determination had expired. In addition, Ms. Gammon stated that TrailBlazer records indicate that all cases submitted for appeals by Plaintiff have been adjudicated and closed accordingly through the Fair Hearing Department.

By letter dated June 2, 2006, Susan McLaughlin, Acting Branch Manager of the Program Integrity Branch, CMS Region...

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