United States ex rel. Hockaday v. Athens Orthopedic Clinic P.A.
| Decision Date | 19 July 2022 |
| Docket Number | 3:15-CV-122 (CDL) |
| Parties | UNITED STATES OF AMERICA, ex rel. REBECCA HOCKADAY, and STATE OF GEORGIA, ex rel. REBECCA HOCKADAY, Plaintiff-Relator, v. ATHENS ORTHOPEDIC CLINIC, P.A., et al., Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
After prolonged discovery, multiple acrimonious disputes, and the intrusion of Covid-19, this False Claims Act case has finally reached the point where the Court must decide which of Relator's numerous claims shall proceed to trial. Although Relator believes she has voluntarily narrowed her claims, the scattered and often disorganized briefing on the pending summary judgment motions belies any such contention. The Court has attempted to approach the motions methodically and as to the claims that remain for trial, encourages the parties to do the same in their trial preparation lest a jury empaneled to try this case on Halloween, as presently scheduled, may not complete its work by New Year's Day.
The chief protagonist in this drama is Rebecca Hockaday, a disgruntled former employee of the Athens Orthopedic Clinic P.A. (“AOC”). During part of the relevant time frame, she served as AOC's chief operating officer. After her employment was terminated, she found a lawyer who filed this qui tam action pursuant to the False Claims Act (“FCA”). She claims that AOC, several related entities, and individual physicians within the medical practice submitted false claims for reimbursement to the Centers for Medicare and Medicaid Services. She alleges thirty-one categories of FCA violations. She also contends that Defendants retaliated against her for trying to stop FCA violations. Pending before the Court are several summary judgment and related motions filed by Defendants and Relator. For the reasons explained in the remainder of this Order Defendants' summary judgment motion on Relator's Stark Law claims (ECF No. 346) is denied, while Defendants' other summary judgment motions (ECF Nos. 341 342, 343, 345, 347, 348) are granted in part and denied in part. Relator's summary judgment motion on Defendants' advice-of-counsel defense (ECF No. 340) is granted in part and denied in part. Defendants' motion to exclude the testimony of Harold Pellerite (ECF No. 349) is granted to the extent set forth in this Order. Defendants' motion to strike declarations (ECF No. 416) is denied.
Summary judgment may be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In determining whether a genuine dispute of material fact exists to defeat a motion for summary judgment, the evidence is viewed in the light most favorable to the party opposing summary judgment, drawing all justifiable inferences in the opposing party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A fact is material if it is relevant or necessary to the outcome of the suit. Id. at 248. A factual dispute is genuine if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Id.
The FCA imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval,” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” 31 U.S.C. § 3729(a)(1)(A)-(B).[1] The FCA “is designed to protect the Government from fraud by imposing civil liability and penalties upon those who seek federal funds under false pretenses.” Ruckh v. Salus Rehab., LLC, 963 F.3d 1089, 1103 (11th Cir. 2020) (quoting United States ex rel. Lesinski v. S. Fla. Water Mgmt. Dist., 739 F.3d 598, 600 (11th Cir. 2014)). “Liability under the [FCA] arises from the submission of a fraudulent claim to the government, not the disregard of government regulations or failure to maintain proper internal procedures.” Id. (quoting Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1045 (11th Cir. 2015)).
Relator contends that when Defendants submitted claims to Medicare and Medicaid, they falsely certified compliance with certain laws and regulations. To establish an FCA claim under a false certification theory, a relator must prove: “(1) a false statement or fraudulent course of conduct, (2) made with scienter, (3) that was material, causing (4) the government to pay out money or forfeit moneys due.” United States ex rel. Bibby v. Mortg. Invs. Corp., 987 F.3d 1340, 1346 (11th Cir. 2021) (quoting Urquilla-Diaz, 780 F.3d at 1045).
Relator initially asserted claims based on fifty-four categories of alleged FCA violations, plus an FCA retaliation claim. After Defendants filed their summary judgment motions on all the claims, Relator moved to dismiss her claims based on twenty-three categories of FCA violations, and the Court dismissed those claims. Order Dismissing Claims, ECF No. 380.[2]The dismissal of those claims did not completely moot any of the summary judgment motions, and the Court addresses the remaining claims below. But before focusing on the specific claims, the Court finds it helpful to address three preliminary matters that affect some or all of Defendants' pending motions.
In most of their summary judgment motions, Defendants argue that Relator cannot identify a claim that was submitted to a Government healthcare program and thus cannot establish an FCA claim. Federal Rule of Civil Procedure 56 permits a movant who does not have a trial burden of production to assert, without citing the record, that the nonmoving party “cannot produce admissible evidence to support” a material fact. Fed.R.Civ.P. 56(c)(1)(B); accord Fed.R.Civ.P. 56 advisory committee's note to 2010 amend. ( ).
Relator responds to most of Defendants' arguments on this issue by pointing to unauthenticated charts without any explanation from a witness about who created the charts, where the data came from, or what the charts mean. Relator argues that these charts establish that the relevant claims were submitted to the Government for payment and were paid. At trial, these unauthenticated charts standing alone will likely be insufficient to support this contention by Relator. But at this stage of the proceedings, it does not appear that Defendants maintain that the claims information cannot be presented in an admissible form. Although Relator has not explained how she plans to reduce the exhibits to admissible form at trial, the Court finds it hard to believe that competent lawyers will be unable to do so given that there is no serious dispute that AOC treated Medicare and Medicaid patients and billed government healthcare programs for its services. For summary judgment purposes, the Court declines to issue a blanket ruling that Relator has failed to present evidence that Defendants submitted claims to the Government for services rendered to their patients who were covered by Medicare and/or Medicaid.
Defendants contend that Relator cannot establish the scienter element of some of her claims because Defendants relied on the advice of counsel in deciding how to proceed with the relevant transactions. Under the FCA, reckless disregard “is the lowest scienter threshold.” Yates v. Pinellas Hematology & Oncology, P.A., 21 F.4th 1288, 1303 (11th Cir. 2021). There is no dispute that a participant in the Medicare and Medicaid programs has “a duty to familiarize itself with the legal requirements for cost reimbursement.” Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 64 (1984). Congress added the reckless disregard rule “to capture ‘the ostrich type situation where an individual has buried his head in the sand and failed to make simple inquiries which would alert him that false claims are being submitted.'” Yates, 21 F.4th at 1303 (quoting Urquilla-Diaz, 780 F.3d at 1058).
A “person acts with reckless disregard-and thus ‘knowingly'-under the FCA when he ‘knows or has reason to know of facts that would lead a reasonable person to realize that harm [like a false claim] is the likely result of the relevant act.'” Id. (quoting Urquilla-Diaz, 780 F.3d at 1058). Good faith reliance on counsel's advice, though, can negate the mens rea element. United States v. Vernon, 723 F.3d 1234, 1269 (11th Cir. 2013) (alteration in original) (quoting United States v. Petrie, 302 F.3d 1280, 1287 n.6 (11th Cir. 2002)). The elements of this defense are: “(1) [the defendant] fully disclosed to his attorney all material facts that are relevant to the advice for which he consulted the attorney; and (2) thereafter, he relied in good faith on the advice given by his attorney.” Id. (alteration in original) (quoting United States v. Hill, 643 F.3d 807, 851 (11th Cir. 2011)).
Relator argues that Defendants should not be permitted to assert the advice-of-counsel defense. Relator emphasizes that the Eleventh Circuit refers to the advice-of-counsel defense as an “affirmative defense” in several contexts including the context of a health fraud criminal case. See Vernon, 723 F.3d at 1269 (). The Court understands that Defendants did not formally raise the advice-of-counsel defense until May of ...
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