U.S. ex rel. Thompson v. Columbia/Hca Healthcare

• Decision Date: 18 August 1998
• Docket Number: Civil Action No. C-95-110.
• Citation: 20 F.Supp.2d 1017
• Parties: UNITED STATES of America ex rel. James M. THOMPSON, Plaintiff, v. COLUMBIA/HCA HEALTHCARE CORPORATION, CHC Holdings, Inc., Columbia Hospital Corporation of Bay Area, Columbia Hospital Corporation of Corpus Christi, Corpus Christi Bay Area Surgery, Ltd., and Columbia Surgicare Specialty Hospital, Defendants.
• Court: U.S. District Court — Southern District of Texas

20 F.Supp.2d 1017

UNITED STATES of America ex rel. James M. THOMPSON, Plaintiff, v. COLUMBIA/HCA HEALTHCARE CORPORATION, CHC Holdings, Inc., Columbia Hospital Corporation of Bay Area, Columbia Hospital Corporation of Corpus Christi, Corpus Christi Bay Area Surgery, Ltd., and Columbia Surgicare Specialty Hospital, Defendants.

Civil Action No. C-95-110.

United States District Court, S.D. Texas, Corpus Christi Division.

August 18, 1998.

John E. O'Neill, Clements, O'Neill, Pierce & Nickens, Houston, TX, David L. Perry, Edwards, Perry & Haas, Corpus Christi, TX, Michael F. Hertz, Depart. of Justice, Civil Div., Washington, DC, for U.S. and James M. Thompson.

Darrell Lee Barger, Barger & Moss, Corpus Christi, TX, Jorge C. Rangel, Law Offies of Jorge Rangel, Corpus Christi, TX, Ernest

E. Figari, Jr., Figari & Davenport, Dallas, TX, for Columbia/HCA Healthcare Corp. of Central Texas, CHC Holdings, Inc., Columbia Hosp. Corp. of Bay Area, Columbia Hosp. Corp. of Corpus Christi and Columbia Surgicare Specialty Hosp.

F. Van Huseman, White, Huseman & Pletcher, Corpus Christi, TX, for Corpus Christi Bay Area Surgery Ltd.

ORDER

HARMON, District Judge.

The above referenced qui tam action alleges that since 1990 Defendants (a health care provider and affiliated entities) submitted false or fraudulent Medicare reimbursement claims in violation of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729¹ et seq. (West 1983 and 1997 Supp.), and violated the Medicare anti-kickback statute, 42 U.S.C. § 1320a-7b(b) (West 1991 & 1997 Supp.),² and two versions of the Medicare self-referral statute (commonly known as the "Stark" laws), 42 U.S.C. § 1395nn (West 1992 and 1997 Supp.).³

As the Court summarized in its recent order, after this Court dismissed all claims under Fed.R.Civ.P. 12(b)(6), the Fifth Circuit affirmed those parts of the Court's decision holding that Thompson's allegations that Defendants submitted claims for medically unnecessary services should be dismissed under Fed.R.Civ.P. 9(b) and that violations of the Medicare anti-kickback statute and the Stark laws, by themselves, do not necessarily give rise to actionable false claims under the FCA. United States ex. rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899 (5th Cir.1997). In response to Relator James M. Thompson's claim that Defendants violated the FCA by falsely certifying that the Medicare services identified in the hospital annual cost reports complied with the laws and regulations dealing with the provision of healthcare services, the appellate court ordered additional factual development in the record from which it could determine whether the government's payments for the services identified in those annual cost reports were conditioned on the truthfulness of such certifications. In Thompson, 125 F.3d at 902, the Fifth Circuit noted that the Ninth Circuit in United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1266 (9th Cir.1996), interpreted the scope of the FCA as the Fifth Circuit does and that it "concluded that false certifications of compliance create liability under the FCA when certification is a prerequisite to obtaining a government benefit." Relator James M. Thompson had alleged that the government conditioned payment on the Defendants' certifications and that Defendants falsely certified compliance. Moreover, the Court of Appeals also vacated that part of the judgment and remanded for further consideration the issues of whether the claims for services rendered in violation of the Stark laws, which expressly prohibit such, constitute false or fraudulent claims under the FCA. Additionally, the Fifth Circuit further pointed out that the FCA imposes liability not only on any person who submits a false or fraudulent claim for payment, but also on a person who knowingly makes a false statement in order to get a false or fraudulent claim paid. 31 U.S.C. § 3729(a)(2). Therefore the appellate court directed this Court, if it concludes that the claims for services rendered in violation of the Stark laws do constitute false or fraudulent claims under the FCA, also to decide whether Thompson has sufficiently alleged that Defendants committed separate and independent violations of the FCA by making false statements to obtain payment of false or fraudulent claims. Finally, the court of appeals left open the issue of claims raised below but not considered in the Court's order of dismissal.⁴

Pending before the Court are the following, interrelated motions:

(1) Defendant Corpus Christi Bay Area Surgery, Ltd.'s ("CBAS'") amended motion to dismiss and, alternatively, motion for summary judgment (# 82);

(2) Defendants Columbia/HCA Healthcare Corporation, CHC Holdings, Inc., Columbia Hospital Corporation of Bay Area, Columbia Hospital Corporation of Corpus Christi, and Columbia Surgicare Specialty Hospital's ("Columbia Defendants'") second amended motion to dismiss or, in the alternative, motion for summary judgment (# 85); and

(3) Plaintiff's motion for leave to amend complaint (# 98).

For the reasons indicated below, the Court agrees with Relator that he has stated claims for three separate violations of the FCA, i.e., the allegedly false certifications of compliance with all applicable Medicare statutes and regulations on which the government conditioned payments, the submission of Medicare claims in violation of the Stark laws' express prohibition, and the submission of claims for services rendered in violation of the Medicare Anti-Fraud and Abuse Act. Furthermore, he has stated a separate and independent claim against Defendants for knowingly making a false statement in order to get false or fraudulent claim paid in violation of 31 U.S.C. § 3729(a)(2). The Court therefore denies the motions to dismiss or for summary judgment and grants Relator's motion for leave to amend.

The Court is aware that Relator has had no opportunity to pursue discovery. The purpose of the requested briefing was for this Court to be able to determine at what is still an early stage of this litigation despite the number of years it has been pending, whether, in light of the facts alleged here, which at this point the Court will assume are true, the second amended complaint (# 29) asserts claims cognizable under the law, in particular the FCA. Nevertheless, because the Court has examined materials beyond the pleadings, in particular an affidavit and declaration, it must review the first two motions under a summary judgment standard, but only to determine whether viable claims have been stated as a matter of law.

The movant seeking a federal summary judgment initially must inform the court of the basis for its motion and point out those portions of the pleadings, depositions, answers to interrogatories, and admissions on file that demonstrate the absence of a genuine issue of material fact and show that it is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant need not negate the opposing party's claims nor produce evidence showing an absence of a genuine factual issue but may rely on the absence of evidence to support essential elements of opposing party's claims. International Assoc. of Machinists & Aerospace Workers, Lodge No. 2504 v. Intercontinental Mfg. Co., 812 F.2d 219, 222 (5th Cir.1987). The burden then shifts to the non-movant to set forth specific facts and competent summary judgment evidence to raise a genuine issue of material fact on each essential element of any claim on which he bears the burden of proof at trial. Fed. R.Civ.P. 56(c). The substantive law governing the suit identifies the essential elements of the claims at issue and therefore indicates which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-moving party may not rest on mere allegations or denials in its pleadings but must produce affirmative evidence and specific facts. Anderson, 477 U.S. at 256-57, 106 S.Ct. 2505. It meets this burden only if it shows that "a reasonable jury could return a verdict for the non-moving party." Id. at 254, 106 S.Ct. 2505. A mere scintilla of evidence will not preclude granting of a motion for summary judgment. Id. at 252, 106 S.Ct. 2505.

All reasonable inferences must be drawn in favor of the non-moving party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), citing United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). Once the burden of proof has shifted to the non-movant, he "must do more that simply show that there is some metaphysical doubt as to the material facts." Id. at 586, 106 S.Ct. 1348. Instead he must produce evidence upon which a jury could reasonably base a verdict in his favor. Anderson, 477 U.S. at 249, 106 S.Ct. 2505. "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id., 477 U.S. at 249-50 106 S.Ct. 2505. Unsubstantiated and subjective beliefs and opinions are not competent summary judgment evidence. Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied, 506 U.S. 825, 113 S.Ct. 82, 121 L.Ed.2d 46 (1992).

Defendant CBAS' separate, amended motion to dismiss or for summary judgment argues that the Fifth Circuit remanded this case for a determination of only two issues, neither of which applies to CBAS, and that therefore CBAS should be dismissed from the case. Specifically, this Court is to decide (1) whether an annual cost report containing a false certification of compliance with Medicare laws is a false claim and (2) whether a claim for...