United States ex rel. McIver v. ACT for Health, Inc.

Decision Date06 January 2021
Docket NumberCivil Action No 18-cv-00792-RBJ
PartiesUNITED STATES OF AMERICA, ex rel. KATHRYN MCIVER et al, Plaintiffs, v. ACT FOR HEALTH, INC, d/b/a Professional Case Management and KEVIN VOLLMER, Defendants.
CourtUnited States District Courts. 10th Circuit. United States District Court of Colorado

ex rel. KATHRYN MCIVER et al, Plaintiffs,
d/b/a Professional Case Management and
KEVIN VOLLMER, Defendants.

Civil Action No 18-cv-00792-RBJ


January 6, 2021

Judge R. Brooke Jackson


Defendants move to dismiss and for judgment on the pleadings. For the reasons set forth herein, the motion is denied.


ACT for Health, Inc., doing business as Professional Case Management ("PCM"), is a Colorado-based company that provides home health care services for current and former Energy Department employees who are eligible for benefits under the Energy Employees Occupational Illness Compensation Program Act ("EEOICPA"), 42 U.S.C. § 7384.1 Kevin Vollmer is the sole owner of PCM. The beneficiaries of the services are workers who have become ill due to exposure to radiation and other harmful substances while on the job, such as at federal weapons sites. The services are provided by registered nurses, licensed practical nurses, and various other

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categories of medical and non-medical aids and assistants. PCM bills the United States for the services it provides.

Plaintiffs Kathryn McIver and Cassandra Ohnstad filed this lawsuit against PCM on April 4, 2018 under the qui tam provisions of the False Claim Act. At that time Ms. McIver was PCM's Senior Director of Clinical Operations, but she no longer works for PCM. Ms. Ohnstad formerly was PCM's Vice President of Human Services. The case remained largely dormant while the United States considered whether to intervene. It declined to do so on September 18, 2019. ECF No. 18.

Although it is a federal program, several of the states in which PCM operates require that providers of home health care services (and professionals who physically provide the services such as nurses) must be licensed. The EEOICPA and regulations thereunder require that providers comply with the state requirements. However, the date when this was first required is disputed, and that is a central issue in this case. PCM contends that this was first required on April 9, 2019, the effective date of a regulation adopted on February 8, 2019 that expressly requires compliance with state requirements, 20 C.F.R. 30.400(c), and that it has complied with this regulation. Plaintiffs claim that the regulation only clarified the requirement that providers comply with both federal and state licensure requirements which had existed since 2006, and that PCM had knowingly and intentionally violated the requirement for many years.

Second Amended Complaint

In their Second Amended Complaint, which is the operative complaint in this case, plaintiffs cite OWCP's Notice of Proposed Rulemaking which started the process that resulted in the regulation that became effective on April 9, 2019. The Notice stated, "[T]he Department proposes to add new language in this paragraph to explain the current qualifications that must be met before hospitals and providers of medical services or supplies may furnish appropriate

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services, drugs, supplies and appliances to covered employees." ECF No. 33 at ¶43 (quoting 80 Fed. Reg. 72296, 72299 (Nov. 18, 2015)).

As evidence of PCM's knowledge of the necessity that it comply with state licensure requirements before April 9, 2019, plaintiffs point to a lawsuit filed by PCM in Kentucky, ACT for Health v. United Energy Workers Healthcare Corp., No. 5:15-cv-195 (D. Ken.). See ECF No. 33 at ¶¶103-08. In that case, filed August 21, 2015, PCM contended that a competitor engaged in unfair competition by, among other things, operating in violation of Kentucky's laws and regulations regarding the licensure of health care service providers.2

Plaintiffs also point to another lawsuit pending in this district, ACT for Health v. United States Department of Labor, No. 19-cv-00827-DDD, in which PCM challenges the process that resulted in the April 9, 2019 rule. ECF No. 33 at ¶46. In a motion to dismiss that case, which has been briefed but not yet decided, the defendants note that when the final rule was published, "OWCP explained that 'this rule is largely an update to the existing regulations to reflect the program's current processes, and incorporates the policy and procedural changes that have been implemented since the existing regulations were issued in 2006, rather than imposing any new regulatory burdens.'" ECF No 46 in No. 19-cv-00827-DDD at 3 (quoting 84 Fed. Reg. 3026 (Feb. 8, 2019)). The government's motion to dismiss in that case also cites PCM's position in its Kentucky case. Id. at 14, n.2.

Plaintiffs allege that PCM has concealed its failure to comply with state licensure requirements by using provider identifications from three states in which PCM is actually licensed (Colorado, Tennessee, and New Mexico) when it bills for services rendered in other states. ECF No. 33 at ¶¶112-15. As an example of what they claim was fraudulent conduct,

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plaintiffs allege that PCM operated in Texas without a license for five years, avoiding Texas's oversight and licensing fees and even altering patient and employee records to create the appearance that services were begun after PCM applied for a provisional license in 2016. Id. at ¶¶116-43. Plaintiffs allege that similarly practices took...

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