United States ex rel. Myers v. America's Disabled Homebound, Inc.

• Decision Date: 22 March 2018
• Docket Number: No. 14 C 8525,14 C 8525
• Parties: UNITED STATES OF AMERICA ex rel. DONNA MYERS, AND DONNA MYERS, individually, Plaintiff, v. AMERICA'S DISABLED HOMEBOUND, INC.; BENCHMARK HEALTH CORP.; ROBERT M. KAPLAN; RICHARD ANSFIELD; SCOTT SCHNEIDER, Defendants.
• Court: U.S. District Court — Northern District of Illinois

UNITED STATES OF AMERICA ex rel. DONNA MYERS,AND DONNA MYERS, individually, Plaintiff, v. AMERICA'S DISABLED HOMEBOUND, INC.; BENCHMARK HEALTH CORP.;ROBERT M. KAPLAN; RICHARD ANSFIELD; SCOTT SCHNEIDER, Defendants.

No. 14 C 8525

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

March 22, 2018

Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER

Donna Myers worked as a nurse for America's Disabled Homebound, Inc. ("ADH"), which is a home physician service. She alleges that ADH; its president, Richard Ansfield; its chief operating officer, Scott Schneider; its employee Dr. Robert Kaplan; and Benchmark Health Corp., another home physician service of which Ansfield is the president, falsely certified that certain patients were homebound in order to receive reimbursement from Medicare for their services in violation of the False Claims Act ("FCA"). She also alleges that Defendants violated the FCA by requiring her to use Medicare billing codes for patient visits of a greater duration than she actually provided. In addition to her FCA claims, Myers alleges that she was fired in violation of the Illinois Whistleblower Act when she refused to follow Defendants' instructions for visiting patients and recording the treatment services she provided because she believed those instructions violated federal regulations. Defendants have moved to dismiss Myers's claims for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 38; R. 41; R. 44; R. 49. For the following reasons, those motions are denied in part and granted in part.

Legal Standard

A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). "'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.

Additionally, it is well established that the FCA "is an anti-fraud statute and claims under it are subject to the heightened pleading requirements of Rule 9(b)." Thulin v. Shopko Stores Operating Co., LLC, 771 F.3d 994, 998 (7th Cir. 2014). Rule 9(b) requires a plaintiff to "state with particularity the circumstances constituting fraud or mistake." "The reference to 'circumstances' in the rule requires the plaintiff to state the identity of the person who made the misrepresentation, the time, place and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff [.]" United States v. Sanford-Brown, Ltd., 788 F.3d 696, 705 (7th Cir. 2015); see also United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 853 (7th Cir. 2009) ("particularity . . . means the who, what, when, where, and how"). Nevertheless, courts should not "take an overly rigid view of the formulation," and the "requisite information . . . may vary on the facts of a given case." Pirelli v. Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 442 (7th Cir. 2011). Thus, although plaintiffs "'are not absolutely required to plead the specific date, place, or time of the fraudulent acts,'" they "still must 'use some alternative means of injecting precision and some measure of substantiation into their allegations of fraud.'" Id. (quoting 2 James Wm. Moore, MOORE'S FEDERAL PRACTICE § 9.03[1] [b], at 9-18 (3d ed. 2010)). Rule 9(b) requires a "plaintiff to do more than the usual investigation before filing [a] complaint. Greater precomplaint investigation is warranted in fraud cases because public charges of fraud can do great harm to the reputation of a business firm orother enterprise (or individual)." Ackerman v. Nw. Mut. Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999) (citations omitted).

Background

The relevant Medicare regulations provide the following:

For a patient to be eligible to receive home health services under Part A and Part B, the law requires that a physician certify in all cases that the patient is confined to his/her home. For purposes of the statute, an individual shall be considered "confined to the home" (homebound) if the following two criteria are met:

1. Criterion One:

The patient must either:

- Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place or residence

OR

- Have a condition such that leaving his or her home is medically contraindicated.

If the patient meets one of the criterion one conditions, then the patient must ALSO meet two additional requirements defined in criterion two below.

2. Criterion Two:

- There must exist a normal inability to leave home;

AND

- Leaving home must require considerable and taxing effort.

* * * *

If the patient does in fact leave the home, the patient may nevertheless be considered homebound if the absences from the home are infrequent or for periods of relatively short duration, or are attributable to the need to receive health care treatment.

* * * *

Any absence of an individual from the home attributable to the need to receive health care treatment, including regular absences for the purpose of participating in therapeutic, psychosocial, or medical treatment in an adult day-care program that is licensed or certified by a state, or accredited to furnish adult day-care services in a state, shall not disqualify an individual from being considered to be confined to his home. Any other absence of an individual from the home shall not so disqualify an individual if the absence is of an infrequent or of relatively short duration. For purposes of the preceding sentence, any absence for the purpose of attending a religious service shall be deemed to be an absence of infrequent or short duration.

* * * *

However, occasional absences from the home for nonmedical purposes, e.g., an occasional trip to the barber, a walk around the block or a drive, attendance at a family reunion, funeral, graduation, or other infrequent or unique event would not necessitate a finding that the patient is not homebound if the absences are undertaken on an infrequent basis or are of relatively short duration and do not indicate that the patient has the capacity to obtain the health care provided outside rather than in the home.

* * * *

The aged person who does not often travel from home because of feebleness and insecurity brought on by advanced age would not be considered confined to the home for purposes of receiving home health services unless they meet one of the above conditions.

See Medicare Benefit Policy Manual, Chapter 7 - Home Health Services, Part 30.1.1 - Patient Confined to the Home, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c07.pdf (last visited Mar. 22, 2018).

Myers alleges that Defendants sought reimbursement for services provided to "homebound" patients, even though those patients were not in fact homebound. Myers alleges that she has personal knowledge of these patients' conditions and knows that they were not homebound when Defendants sought Medicare reimbursement on that basis. For five of the patients (identified by a number beginning with "DM"), Myers makes the following specific allegations about their conditions in an effort to show that they were not homebound:

DM20A suffers from Multiple sclerosis, and uses a cane but is not homebound and goes to the health club at least once a week.

DM21A is an usher at his church and drives a friend's children to school.

DM35 was seen by Relator on March 24, 2014. When Relator arrived for her home health visit with DM35, DM35 was not home. When DM35 arrived home, DM35 had walked several blocks with two turkeys on his/her walker.

DM14 is not homebound and goes to a clinic on a bus for all of his/her medical needs.

DM17 is not homebound, drives to work, the grocery store, and church.

R. 13 ¶¶ 48-49, 52, 54-55. Myers also alleges that Defendants sought Medicare reimbursement for seven additional patients who she alleges were not homebound. She does not make detailed allegations about their conditions, but merely alleges that they are "not homebound." Id. ¶¶ 57-67.

Analysis

Liability under the FCA can be predicated on a number of acts, including as relevant to Myers's claims: "knowingly present[ing], or caus[ing] to be presented, afalse or fraudulent claim for payment or approval," 31 U.S.C. § 3729(a)(1)(A) (Count I); "knowingly mak[ing], us[ing], or caus[ing] to be made or used, a false record or statement material to a false or fraudulent claim," § 3729(a)(1)(B) (Count II); or "knowingly mak[ing], us[ing], or caus[ing] to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceal[ing] or knowingly and improperly avoid[ing] or decreas[ing...