United States ex rel. Walthour v. Middle Ga. Family Rehab LLC

Decision Date20 April 2022
Docket NumberCivil Action 5:18-cv-00378-TES
PartiesUNITED STATES OF AMERICA, ex rel. JOSHUA WALTHOUR, v. MIDDLE GEORGIA FAMILY REHAB, LLC; BRENDA G. HICKS a/k/a BRENDA TAYLOR; and CLARENCE HICKS, Defendants. STATE OF GEORGIA, ex rel. JOSHUA WALTHOUR Plaintiffs,
CourtU.S. District Court — Middle District of Georgia
ORDER

TILMAN E. SELF, III, JUDGE UNITED STATES DISTRICT COURT

On October 10, 2018, Relator Joshua Walthour filed this qui tam action against Defendants Middle Georgia Family Rehab, LLC (MGFR), Brenda G. Hicks, and Clarence Hicks, alleging violations of the False Claims Act, 31 U.S.C. §§ 3729-3733 (the “FCA”), and the Georgia False Medicaid Claims Act, O.C.G.A. §§ 49-4-168, et seq. (the “GFMCA”). See generally [Doc. 3].

Relator Walthour is a Georgia-licensed occupational therapist who worked at MGFR from February 2018 to May 2018, where he performed patient evaluations and provided occupational therapy services to patients. [Id. at ¶ 8]. Relator claims that during his employment, he witnessed Defendants engage in fraudulent business practices against the Medicare, Medicaid, and TRICARE programs. [Id. at ¶¶ 8-13]. Such fraudulent practices include billing for occupational and physical therapy services not rendered, upcoding for services provided, and billing for services provided by unqualified personnel. [Id.].

Two and a half years later, on May 3, 2021, the United States of America and the State of Georgia (collectively, the Government) intervened and filed a Complaint In Intervention (the “Complaint”) [Doc. 31]. In its Complaint, the Government adopts and expounds upon many of Relator's original allegations of fraud. See [Doc. 31]. The Government claims that Defendants received millions of dollars in payments to which they were not entitled as a result of their fraudulent practices. [Id.].

BACKGROUND
A. Procedural History

In October 2018, Relator initiated this action against Defendants following his short-lived, three-month employment at MGFR. See [Doc. 3]. Soon thereafter, the Government spent the next two-and-a-half years investigating Relator's allegations. [Doc. 29]. Based on its findings the Government intervened and filed its Complaint, wherein it alleged that MGFR perpetrated three fraudulent schemes: (1) falsely reporting to government healthcare programs who was rendering services for reimbursement; (2) billing for services rendered by unauthorized providers; and (3) falsely billing for services that reimburse at a higher rate than the services actually performed. [Doc. 31, ¶¶ 77-113; 114-28; 129-42]. The Government claims that Defendants received payments they were not entitled to receive from Medicare, Medicaid, and TRICARE in violation of the FCA and the GFMCA. See generally [id.]. Defendants filed an Answer [Doc. 34] denying any violation of federal or state law on the ground that they did not knowingly submit (or cause to be submitted) false claims for payment to government healthcare programs.

The Court entered a Scheduling and Discovery Order [Doc. 37] that set discovery to expire March 22, 2022. But, because of some scheduling difficulties, the Court allowed the Government to depose six witnesses after the discovery period expired. [Doc. 51]. However, before deposing any of these witnesses, the Government moved for partial summary judgment on 1, 062 specific claims for payment submitted by Defendants to government healthcare programs. See [Doc. 41]. The Government argues that, with respect to these specific claims, Defendants have admitted all of the elements necessary to establish violations of the False Claims Act.” [Id. at p. 1]. Since the Government opted not to conduct any substantive discovery, it is left to rely exclusively on its belief and contention that “MGFR made several significant-and dispositive- admissions[] in its Answer that establish “the elements necessary to conclude as a matter of law that it has violated the FCA and [G]FMCA.” [Id. at pp. 3, 12].

B. Admitted Facts

The facts in this case are largely undisputed. MGFR is a healthcare organization that offers physical therapy, occupational therapy, and speech therapy services to adults and children. [Doc. 47-1, ¶ 1]. It has one location in Byron, Georgia, and a second location in Macon, Georgia. [Id. at ¶ 2]. Brenda Hicks founded MGFR and co-owns the organization with Clarence Hicks. [Id. at ¶¶ 3, 6]. The co-owners maintain different responsibilities when it comes to ensuring the overall operation of the organization. [Id. at ¶¶ 4-6]. Brenda Hicks oversees daily operations, which includes scheduling therapy services and billing for government healthcare programs. [Id. at ¶ 4]. Her responsibilities include submitting claims to the Medicare, Medicaid, and TRICARE programs. [Id. at ¶ 5]. Clarence Hicks assists with daily operations, including enrolling MGFR in government healthcare programs. [Id. at ¶ 7]. But, he has no involvement, including any supervisory role, in submitting claims to the aforementioned programs. [Doc. 47-3, ¶ 13].

Since MGFR first opened its doors, it has routinely submitted claims to the Medicare, Medicaid, and TRICARE programs. [Doc. 47-1, ¶ 8]. MGFR agreed that it would only submit claims that were accurate, complete, and truthful. [Id. at ¶ 9]. Through this agreement, MGFR certified that the information provided on each claim was accurate, complete, and truthful. [Id. at ¶ 10]. MGFR knew it was prohibited from misrepresenting the identity of the provider who rendered the services underlying a specific claim. [Id. at ¶ 11]. In fact, the healthcare organization knew that providing accurate information on a claim was a condition of payment. [Id. at ¶ 12]. And, it knew that accurately representing the identity of the rendering provider was material to the Government's reimbursement decisions. [Id. at ¶ 13].

Brenda Hicks and Clarence Hicks deny knowingly submitting (or causing to be submitted) claims for payment to these programs that contained false information in violation of federal and state laws. [Doc. 34, ¶ 4]; see generally [Doc. 47]. Since 2013, Brenda Hicks has called the Medicare and TRICARE helplines to receive instructions on how to submit claims for reimbursement. [Doc. 47-3, ¶ 2]. Brenda Hicks avers that Medicare and TRICARE representatives told her that she could bill for services rendered by physical therapy assistants and occupational therapy assistants if these assistants were supervised by a licensed physical therapist or occupational therapist. [Id. at ¶¶ 3, 5-9]. In these discussions, Brenda Hicks claims that representatives advised her that the occupational therapist or physical therapist make onsite supervisory visits every 30 days-the therapists were not required to be onsite when assistants rendered the services. [Id.]. Brenda Hicks understood Medicaid to follow the same standards, and therefore, relied on this information when submitting MGFR's claims for reimbursement to Medicare, Medicaid, and TRICARE. [Id. at ¶ 4].

Moreover, a newly hired speech pathologist confirmed that supervisors need only be onsite once a month to legally and properly bill for an assistant's services. [Id. at ¶¶ 10-11]. When MGFR hired Shakemia Johnson as a speech language pathologist in March 2015, she advised MGFR that her assistant could work and bill under her name for services that the assistant rendered. [Id.]. Shakemia confirmed that she did not need to directly supervise her assistant when the assistant rendered billable services. [Id.]. Brenda Hicks avers that Shakemia's statements matched the information that she gleaned from her conversations with government representatives, and she believed the information to be accurate. [Id. at ¶ 11].

The Government's pending Motion takes issue with allegedly false claims submitted by MGFR for services rendered by three therapists-Gamal Elawad, Maren Johnson, and Cassandra Frazier. See generally [Doc. 41]. MGFR hired Gamal Elawad as a licensed physical therapist, and he worked for the healthcare organization for several years, including 2016 and 2018. [Doc. 47-1, ¶ 20]. Relevant to this action is the fact that Elawad spent time in jail on the following dates: January 7-23, 2016; August 30-September 6, 2018; October 31-November 2, 2018; and November 29-December 6, 2018. [Doc. 47-1, ¶¶ 21-22]. MGFR submitted 59 claims[1] for reimbursement to government healthcare programs that listed Elawad as the rendering provider of services on dates when he was incarcerated. [Id. at ¶¶ 23, 26]; see generally [Doc. 41-5]; [Doc. 41-7].

Obviously, since Elawad was in jail, he could not provide services on those dates; so, other MGFR employees did. [Doc. 47-1, ¶ 24]. However, MGFR's misrepresentations of Elawad as the rendering provider were material to the government healthcare programs' reimbursement decisions. [Id. at ¶ 25].

MGFR hired Cassandra Frazier as a licensed speech language pathologist, and she worked for the healthcare organization for several years, including 2015. [Id. at ¶ 27]. She resigned on November 10, 2015. [Id. at ¶ 30]. During Frazier's employment, she traveled outside the state of Georgia on the following dates: May 11-15, 2015; May 31-June 5, 2015; and October 12, 2015. [Id. at ¶ 28]. MGFR submitted claims for reimbursement to government healthcare programs that listed Frazier as the rendering provider for services on dates when she wasn't in Georgia. [Id. at ¶ 29]. Again, it is obvious that Frazier did not provide any services on those dates; so, other MGFR employees did. [Id. at ¶ 32]. Frazier resigned from MGFR on November 10, 2015. [Id. at ¶ 30]. But, even after this date, MGFR continued to submit claims listing her as the rendering provider. [Id. at ¶ 31]. MGFR submitted 1 claim to Medicare, 11 claims to Medicaid, and 29...

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