United States ex rel. White v. Gentiva Health Servs., Inc.
| Decision Date | 25 June 2014 |
| Docket Number | No.: 3:10-CV-394-PLR-CCS,: 3:10-CV-394-PLR-CCS |
| Parties | United States of America, ex rel. Vicky White, Plaintiff-Relator, v. Gentiva Health Services, Inc. Defendant. |
| Court | U.S. District Court — Eastern District of Tennessee |
On September 8, 2010, Vicky White filed this qui tam action under the federal False Claims Act, 31 U.S.C. §§ 3729, et seq. After the United States declined to intervene, Ms. White served Gentiva with a summons. Presently before the Court is Gentiva's motion to dismiss for failure to state a claim. For the reasons that follow, Gentiva's motion is granted in part and denied in part.
The False Claims Act imposes civil liability for knowingly presenting or causing to be presented false or fraudulent claims to the United States Government for payment or approval. 31 U.S.C. § 3729(a)(1)(A). It also imposes liability for knowingly employing a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government—what is known as a "reverse" false claim. 31 U.S.C. § 3729(a)(1)(G). See, e.g., United States ex rel. Winkler v. BAE Sys., Inc., 957 F.Supp.2d 856, 876 (E.D. Mich. 2013).Those who violate the False Claims Act are liable for civil penalties up to $10,000 and treble damages. Id. To promote enforcement of the False Claims Act, private individuals (called "relators") can bring qui tam1 actions on behalf of the United States. 31 U.S.C. § 3730(b)(2). After the relator files its complaint, the United States has the option of intervening and conducting the litigation itself. 31 U.S.C. § 3730(b)(4)(B). If the government opts not to intervene, the relator may proceed individually. 31 U.S.C. § 3730(c)(3). Successful relators are awarded a portion of the winnings ranging from 10 to 30 percent depending on the relator's role in the case and whether or not the government chose to intervene. 31 U.S.C. § 3730(d). This award encourages "whistleblowers to act as private attorneys-general in bringing suits for the common good." United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 507 (6th Cir. 2009) (quotations omitted).
The False Claims Act's award to the relator has the side effect of encouraging opportunistic plaintiffs to bring parasitic lawsuits in the hopes of profiting from public information. To encourage private citizens to expose fraud while discouraging opportunistic plaintiffs, the False Claims Act bars certain qui tam actions, including qui tam actions based on allegations that are already the subject of a civil suit to which the government is a party, or qui tam actions based on a fraud that has already been publicly disclosed. 31 U.S.C § 3730(e)(4). See also Poteet, 552 F.3d at 507.
The False Claims Act applies to claims submitted by healthcare providers to Medicare and Medicaid, "indeed, one of its primary uses has been to combat fraud in the healthcare field." United States ex rel. Osheroff v. HealthSpring, Inc., 938 F.Supp.2d 724, 732 (M.D. Tenn. 2013) (quoting Chesbrough v. VPA P.C., 655 F.3d 461, 466 (6th Cir. 2011)).
Medicare beneficiaries who are homebound can receive certain medically necessary services at home. See 42 U.S.C. §§ 1395f(a)(2)(C), 1395n(a)(2)(A). These services generally include skilled nursing, physical therapy, speech-pathology therapy, and occupational therapy.
Home-health agency's patients are referred for home-health services by their physicians who are required to certify that the patient is under their care, that the physician has established and will periodically review a 60-day plan of care, that the patient is homebound, and that the patient requires one of the types of home-health services that qualifies for Medicare. After receiving a patient referral, a home-health agency is required to provide its own patient-specific, comprehensive assessment, called an Outcome and Assessment Information Set ("OASIS"). 42 C.F.R. § 484.55. During this initial assessment, the home-health agency must determine the immediate care and support needs of the patient, and, for Medicare patients, determine eligibility for the Medicare home health benefit, including homebound status. Id.
A 60-day plan of care is called an "episode." After each episode, a patient must be recertified to receive funds from Medicare. To be recertified, the patient's physician must review and sign the patient's plan of care, making any necessary changes, and the home-health agency must complete a new assessment, and determine that the patient is still eligible to receive Medicare-funded home-health services.
A Medicare beneficiary is homebound if, due to underlying illness or injury, the beneficiary has conditions that restrict the ability to leave the home. Medicare Benefit Policy Manual, ch. 7, § 30.1.1. Homebound status does not require a beneficiary to be bedridden; instead a beneficiary is considered homebound if leaving their residence requires considerable or taxing effort. Id.
Home-health agencies are not paid per service rendered. Instead, Medicare pays themunder a prospective payment system that provides a predetermined amount for the entire 60-day episode. See 42 U.S.C. § 1395fff(a); 42 C.F.R. § 484.205(a). Adjustments are made to a standard national episode rate to account for the type of care the patient requires as well as the geographic location. See 42 U.S.C. §§ 1395fff(b)(4)(B), 1395fff(b)(4)(C). These adjustments are made based on the OASIS forms, which are submitted to the government through a Medicare administrative contractor or fiscal intermediary for payment.
Certain additional adjustments are made to the reimbursement rate, including a "Low Utilization Payment Adjustment" and a "Therapy Threshold." The reimbursement rate is subject to a Low Utilization Payment Adjustment when the home-health agency visits the patient four or fewer times during a 60-day episode. In such a situation, Medicare will calculate its payment using a per-visit amount. A Therapy Threshold is just the opposite of a Low Utilization Payment Adjustment. When a home-health agency reaches a certain number of visits during a given 60-day episode—the Therapy Threshold—Medicare will increase the reimbursement paid on the patient's behalf.
Medicare conditions payment on the physician's certification that the beneficiary is homebound and in need of skilled services. 42 C.F.R. § 409.41(b). Medicare also conditions payment on the beneficiary actually being homebound and actually needing skilled services. 42 C.F.R. § 409.41(c) (). Additionally, Congress has statutorily prohibited the payment of any Medicare claim for services that are not medically reasonable and necessary. 42 U.S.C. § 1395y(a)(1)(A) ().
Gentiva Health Services is a home-health agency that provides home-health services to more than 350,000 patients nationwide. In 2009, Gentiva received approximately 80 percent of its home-health revenues from Medicare and Medicaid. The relator, Vicky White, is a registered nurse who has worked in the healthcare industry for her entire professional career (beginning in 1976). In late 2008, Ms. White accepted a job-offer from Gentiva to work as a Director of Clinical Operations and Services. She reported to Brian Bacon, a Branch Director who headed Gentiva's McMinnville and Tullahoma, Tennessee offices. Mr. Bacon reported to Deana Murphy, the Area Vice President.
Though she was hired to work in Gentiva's McMinnville office, Ms. White spent her first six weeks at Gentiva in their Tullahoma facility so she could receive software training. Afterwards, she returned to Tullahoma from time to time to help the Tullahoma office audit patient files by reviewing OASIS and other documents created by nurses and therapists. In late 2009, Ms. White began reviewing and "locking" OASIS documents for the McMinnville office so the government could access those records in connection with the reimbursement process.
One of Ms. White's responsibilities as the Director of Clinical Operations and Services in the McMinnville office was to review patient records to ensure they were complete and the patients qualified for home healthcare. Ms. White found that many of the psychiatric patients' charts indicated the patients were stable—either because the patient was not experiencing symptoms or because the symptoms were minimal and not disrupting the patient's life. Because these patients were stable, they were not eligible for home-health services. Despite this, Gentiva continued to recertify these ineligible patients time and time again.
The psychiatric nurses were required to share their reports with Bridget Freeze, the Manager of Clinical Practice in the McMinnville office, who would review and certify them. Ms. White observed that Freeze was certifying and recertifying patients for home-health services without reviewing the psychiatric patients' charts. Ms. White approached Ms. Freeze about this observation. Ms. Freeze explained that Jo Ellen Young and Jimmie Webb, both nurses in the McMinnville office, had worked together to establish and grow the psychiatric-patient program in the McMinnville office, and that Ms. Freeze did not feel comfortable complaining to Webb about the psychiatric patients' charts.
So Ms. White spoke with Webb herself. She explained that many patients had been recertified six or more times despite charts indicating the patient was stable. Webb told Ms. White Gentiva had, on several occasions, audited these records and not uncovered any issues. He said, "if...
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