United States ex rel. Anderson v. Curo Health Servs. Holdings
| Decision Date | 21 March 2022 |
| Docket Number | 3:20-cv-00168 (Member),3:13-cv-00672 (Lead) |
| Court | U.S. District Court — Middle District of Tennessee |
| Parties | UNITED STATES OF AMERICA ex rel. RACHEL CAROL ANDERSON and STEVEN TROY MATHIS, v. CURO HEALTH SERVICES HOLDINGS, INC., CURO HEALTH SERVICES LLC f/k/a CURO HEALTH SERVICES, INC., TNMO HEALTHCARE, LLC d/b/a AVALON HOSPICE, and REGENCY HEALTH CARE GROUP LLC, Defendants. STATE OF TENNESSEE ex rel. RACHEL CAROL ANDERSON and STEVEN TROY MATHIS, Plaintiffs, |
UNITED STATES OF AMERICA ex rel. RACHEL CAROL ANDERSON and STEVEN TROY MATHIS,
STATE OF TENNESSEE ex rel. RACHEL CAROL ANDERSON and STEVEN TROY MATHIS, Plaintiffs,
v.
CURO HEALTH SERVICES HOLDINGS, INC., CURO HEALTH SERVICES LLC f/k/a CURO HEALTH SERVICES, INC., TNMO HEALTHCARE, LLC d/b/a AVALON HOSPICE, and REGENCY HEALTH CARE GROUP LLC, Defendants.
Nos. 3:13-cv-00672 (Lead), 3:20-cv-00168 (Member)
United States District Court, M.D. Tennessee, Nashville Division
March 21, 2022
MEMORANDUM
ALETA A. TRAUGER, UNITED STATES DISTRICT JUDGE
Three motions to dismiss are pending in this case. First, the defendants have filed a Renewed Motion to Dismiss the Consolidated Complaint in Intervention of the United States and Tennessee (Doc. No. 147), to which the United States and Tennessee have filed a Response (Doc. No. 153), and the defendants have filed a Reply (Doc. No. 163). Second, the defendants have filed a Renewed Motion to Dismiss the First Amended Complaint of Plaintiff-Relators [Robin Dillon] Teague, [Lisa] Pence, [Lisa] Adkins, and [Amy] Carnell (Doc. No. 148), to which those relator-plaintiffs have filed a Response (Doc. No. 154), and the defendants have filed a Reply (Doc. No. 164). Finally, the defendants have filed a Motion to Dismiss the Third Amended Complaint of Plaintiff-Relators Rachel Carol Anderson and Steven Troy Mathis (Doc. No. 165), to which those relator-plaintiffs have filed a Response (Doc. No. 168), and the defendants have filed a Reply (Doc. No. 170).
For the reasons set out herein, the motion directed at the governments' claims will be denied, the motion directed at the claims of Teague et al. will be denied partially on the merits and partially as moot, and the motion regarding the claims of Anderson and Mathis will be granted in part and denied in part.
I. BACKGROUND[1]
In order to address the unique difficulties facing patients with terminal illnesses and their loved ones, the medical profession has developed a model of care known as hospice, which is designed, not to cure or even halt the patient's disease, but to use medical technologies and methods, as well as other supports, to ease the patient's final days, months, or, in some cases, years of life. See 42 C.F.R. § 418.3. But hospice is expensive, and many dying people cannot afford it on their own. For certain qualifying patients, the costs of hospice are shouldered, at least in part, by government healthcare programs such as Medicare and Medicaid.
This case is about a group of Tennessee hospice providers that, the plaintiffs allege, helped themselves to a portion of the money available from those programs for hospice care by falsely certifying that patients' illnesses had reached a terminal stage, when, in fact, they had not. The defendants do not argue-at least at this point-that the fraud claims against them should be dismissed in their entirety. Rather, they ask the court to "narrow" the case in a number of ways, based on the law governing how such causes of action should be pleaded. The defendants also ask the court to dismiss a handful of additional claims, brought by former employees who helped bring this situation to light, alleging retaliatory discharge.
A. Structure of Hospice Benefits Under Medicare and Medicaid
"To be eligible for hospice care under Medicare or Medicaid, a patient must be certified by a physician as 'terminally ill'-meaning that the patient's prognosis 'is for a life expectancy of 6 months or less if the terminal illness runs its normal course.'" U.S. ex rel. Holloway v. Heartland Hospice, Inc., 960 F.3d 836, 842 (6th Cir. 2020) (quoting 42 C.F.R. §§ 418.20(b), 418.22(b)(1)). The decision to admit a Medicare or Medicaid patient into hospice must be made on the recommendation of the hospice provider's "medical director in consultation with, or with input from, the patient's attending physician (if any)." 42 C.F.R. § 418.25(a). In making that decision, the medical director must consider "(1) [diagnosis of the terminal condition of the patient[;] (2) [o]ther health conditions, whether related or unrelated to the terminal condition[; and] (3) [c]urrent clinically relevant information supporting all diagnoses." 42 C.F.R. § 418.25(b). The determination that an individual is hospice-eligible is documented and memorialized in a document known as a "certification of terminal illness," or "COTI," which must initially be signed by the patient's "attending physician, if the individual has an attending physician," as well as either the medical director or a physician member of the hospice's "interdisciplinary group," or "IDG." 42 C.F.R. § 418.22(c)(1). The IDG is a group of various types of professionals-including at least one social worker and at least one pastor or counselor-"who work together to meet the physical, medical, psychosocial, emotional, and spiritual needs of the hospice patients and families facing terminal illness and bereavement." 42 C.F.R. § 418.56(a)(1).
Some patients go into hospice with only a very short amount of time left. Other patients, however, face a more uncertain calendar. Medicare and Medicaid measure the duration of hospice placements in terms of "election periods," so-called because they represent periods in which the patient has elected to forego curative treatment in favor of palliative care. The initial election
period is 90 days; the second election period is another 90 days; and, after that, a qualifying patient may remain in government-supported hospice for "[a]n unlimited number of subsequent 60-day periods," as long as his condition remains terminal, as defined by the relevant statutes and regulations. 42 C.F.R. § 418.21. A fresh COTI must be completed at the beginning of each election period, 42 C.F.R. § 418.22(a)(1), but, after the first COTI, only one physician's signature is required on each subsequent COTI, see 42 C.F.R. § 418.22(c)(2).
Although these policies originated in the Medicare program, Tennessee's Medicaid program, known as "TennCare," follows them as well. See Tenn. Comp. Rules & Regs. 1200-13-13-.04(1)(b)(l 1) (adopting "Medicare Hospice requirements"). (See also Doc. No. 100 ¶ 63 (citing TennCare Policy Manual, Policy No. BEN 07-001 (Rev. 7)).) Under TennCare, however, hospice eligibility has an additional level of significance in terms of a patient's covered services, because a valid COTI qualifies an eligible patient for residential nursing facility care, without that patient's having to go through TennCare's ordinary Pre-Admission Screening and Resident Review process. See Tenn. Comp. R. & Regs. 1200-13-01-. 10(2)(c)(7), (i), (3); Tenn. Comp. R. & Regs. 1200-13-01.-23(2)(d)(3).
If a patient's illness progresses as originally expected-that is, if the patient dies before the end of the six months concluding at the end of the second election period-then the patient's COTI can be based on a review of the patient's health information, without an additional face-to-face assessment. However, unless there is a public health emergency, "a hospice physician or hospice nurse practitioner must have a face-to-face encounter with each hospice patient whose total stay across all hospices is anticipated to reach the 3rd benefit period." 42 C.F.R. § 418.22(a)(4)(i). These face-to-face evaluations, which are performed for the purpose of allowing the practitioner to "gather clinical findings to determine continued eligibility for hospice care," must occur "no
more than 30 calendar days prior to .. . the 3rd benefit period recertification" and must be repeated for "every benefit period recertification thereafter." Id.
A COTI must meet the following requirements in order for Medicare or Medicaid to pay for the patient's hospice care:
(1) The certification must specify that the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course.
(2) Clinical information and other documentation that support the medical prognosis must accompany the certification. . . .
(3) The physician must include a brief narrative explanation of the clinical findings that support[] a life expectancy of 6 months or less as part of the certification and recertification forms, or as an addendum to the certification and recertification forms. . . .
(4) The physician or nurse practitioner who performs the face-to-face encounter with the patient [if required] must attest in writing that he or she had a face-to-face encounter with the patient, including the date of that visit. The attestation of the nurse practitioner or a non-certifying hospice physician shall state that the clinical findings of that visit were provided to the certifying physician for use in determining continued eligibility for hospice care.
(5) All certifications and recertifications must be signed and dated by the physician(s), and must include the benefit period dates to which the certification or recertification applies.
42 C.F.R. § 418.22(b); see also 42 U.S.C. § 1395f(a)(7). Pursuant to those requirements, the COTI must not only contain certain information and be prepared in a certain way, see 42 C.F.R. § 418.22(b)(1), (3)-(5), but it must also be retained in a certain way-specifically, by inclusion in the hospice agency's own medical record for that patient, see 42 C.F.R. § 418.22(b)(2). Those medical records, in turn, must themselves be "legible, clear, complete, and appropriately authenticated," or else the hospice can be found to be out of compliance with Medicare requirements. 42 C.F.R. § 418.104. The effect of those requirements is that, if a hospice agency is complying with Medicare and Medicaid rules, then either the agency or an authorized third party-
such as an auditor or investigator-should be able to refer to the record of each Medicare or Medicaid patient in the agency's care at any time and know immediately (1) the full and precise basis of that patient's...
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