United States v. Consultants in Gastroenterology, P.A.
| Decision Date | 30 March 2021 |
| Docket Number | Civil Action No.: 3:19-cv-03403-JMC |
| Parties | United States of America, Plaintiff, Ex rel. Jeffrey Harbit and Alan Inglett, Plaintiffs-Relators, v. Consultants in Gastroenterology, P.A., South Carolina Endoscopy Center, LLC, South Carolina Endoscopy Center Northeast, LLC, S. Gabe Saleeby, M.D., March E. Seabrook, M.D., John W. Schaberg, M.D., Eugene W. Stuart, M.D., Rajeev Vasudeva, M.D., James A. Richter, M.D., Matthew N. Thomas, M.D., and Erick Singh, M.D., Defendants. |
| Court | U.S. District Court — District of South Carolina |
Plaintiff-Relators Jeffrey Harbit and Alan Inglett (together "Plaintiff-Relators"), on behalf of Plaintiff United States of America (the "United States" or the "Government"), bring this action against Defendants Consultants in Gastroenterology, P.A. ("CIGPA"); South Carolina Endoscopy Center, LLC ("SCECL"); South Carolina Endoscopy Center Northeast, LLC ("SCECNL"); S. Gabe Saleeby, M.D.; March E. Seabrook, M.D.; John W. Schaberg, M.D.; Eugene W. Stuart, M.D.; Rajeev Vasudeva, M.D.; James A. Richter, M.D.; Matthew N. Thomas, M.D.; and Erick Singh, M.D. (collectively "Defendants") alleging that their actions violated the False Claims Act of 1986 ("FCA"), 31 U.S.C. §§ 3729-33.1 (See ECF No. 16.) Specifically, Plaintiff-Relatorsallege four (4) separate causes of action for: (1) violation of 31 U.S.C. § 3729(a)(1)(A) and (B) (the "FCA claims"); (2) violation of 31 U.S.C. § 3729(a)(1)(C) (the "FCA conspiracy claim"); (3) violation of 31 U.S.C. § 3729(a)(1)(D) (the "FCA conversion claim"); and (4) violation of 31 U.S.C. § 3729(a)(1)(G) (the "reverse FCA claim"). (ECF No. 16 at 16 ¶ 70-19 ¶ 91.)
This matter is before the court on Defendants' Motion to Dismiss pursuant to Rules 8(a), 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 21.) Plaintiff-Relators oppose the Motion in its entirety. (See ECF No. 25.) For the reasons set forth below, the court GRANTS in part and DENIES in part Defendants' Motion to Dismiss. Specifically, the court dismisses Plaintiff-Relators' FCA conspiracy claim and reverse FCA claim. (ECF No. 16 at 17 ¶ 79-18 ¶¶ 81, 87-19 ¶ 91.) The court, however, denies Defendants' Motion to Dismiss Plaintiff-Relators' FCA claims and FCA conversion claim. (Id. at 16 ¶ 70-17 ¶ 78, 18 ¶¶ 82-86.)
Plaintiff-Relators allege that they are both Certified Registered Nurse Anesthetists. (Id. at 3 ¶¶ 7, 8.) Harbit further alleges that he was an employee of CIGPA from 2012 to 2018 and Inglett alleges he was employed from 2017 to 2019 by CIGPA, SCECL, and SCECNL. (Id.) Both Plaintiff-Relators allege they were responsible for reviewing patient records for the purpose of complying with regulations of the Centers for Medicare & Medicaid Services. (Id.)
Defendants CIGPA, SCECL, and SCECNL are alleged to be South Carolina corporations in Richland and Lexington counties, employing the other named Defendants. (Id. at 3 ¶ 9-4 ¶ 11.) Defendants Saleeby, Seabrook, Schaberg, Stuart, Vasudeva, Richter, Thoma, and Singh are all allegedly physicians and board-certified gastroenterologists licensed to practice medicine in the state of South Carolina. (Id. at 4 ¶ 12-6 ¶ 19.) Plaintiff-Relators allege that Defendants own oroperate colonoscopy clinics/endoscopy centers that billed Medicare for approximately 5,500 procedures per year, totaling to approximately $5.3 million dollars in reimbursements for such procedures. (Id. at 2 ¶¶ 2, 5; 8 ¶ 28.)
As to the particulars supporting their claims, Plaintiff-Relators assert that in order to obtain reimbursement through said federal programs, the physician performing such procedures has to comply with 42 C.F.R. § 416.42(a), indicating the physician must evaluate a patient for fitness to undergo anesthesia before the procedure and complete a comprehensive history and physical assessment of the patient thirty (30) days prior to the procedure. (ECF No. 16 at 8 ¶¶ 30-32.) Additionally, 42 C.F.R. § 416.42 requires that a physician must perform a "time out" prior to performing an endoscopic procedure "to confirm that the correct patient, site and procedure have been identified, and that all required documents and equipment are available and ready for use." (ECF No. 16 at 11 ¶¶ 51, 52.)
Throughout their time employed by Defendants, Plaintiff-Relators allege to have witnessed Defendants participating in several acts to bypass such requirements. First, Plaintiff-Relators allege that Defendants falsified patient records to show that Defendants performed the required pre-anesthesia/pre-procedure requirement. (Id. at 2 ¶ 3.) Specifically, Plaintiff-Relators allege that they witnessed Defendants schedule procedures in such a manner to prevent the pre-procedure requirements from being conducted by a physician, having other staff members perform the pre-procedure requirements (except when being investigated by the Government), and falsifying records in such a way to indicate these pre-procedure requirements were performed by a physician. (Id. ¶ 4, at 9 ¶ 37-11 ¶ 42.)
Next, Plaintiff-Relators allege that they themselves, along with other non-physician staff members performed the "time out" requirements after the procedure was completed by a physician.(Id. at 11 ¶ 52.) Plaintiff-Relators further indicate that, like the pre-procedure requirements, the only time the "time out" was performed by a physician, as required by 42 C.F.R. § 416.42(a), was when Defendants were under investigation by the Government. (ECF No. 16 at 11 ¶ 53.)
Plaintiff-Relators allege that, in falsifying patient records, Defendants wanted to maximize the number of patients receiving endoscopy procedures per unit of time in order to receive higher profits than they would with compliance. (Id. at 12 ¶¶ 54, 56.) Additionally, Plaintiff-Relators allege that Defendants' actions placed patients in Defendants' care at risk. (Id. ¶ 55.)
Based on the foregoing, Plaintiff-Relators filed a Complaint under seal against Defendants pursuant to the FCA on December 6, 2019. (ECF No. 1.) After investigating the allegations as contemplated by 31 U.S.C. § 3730(b), the United States filed a Notice of Election to Decline Intervention (ECF No. 13) under 31 U.S.C. § 3730(b)(4)(B) on April 24, 2020, to inform the court of its decision to not intervene in this action. Immediately thereafter, the court unsealed the Complaint and other previously filed documents. (ECF No. 14.)
On June 30, 2020, Plaintiff-Relators filed an Amended Complaint. (ECF No. 16.) On August 17, 2020, Defendants filed the instant Motion to Dismiss Plaintiff-Relators' Amended Complaint. (ECF No. 21.) On September 29, 2020, Plaintiff-Relators filed a Response in Opposition to Defendants' Motion to Dismiss contending that the court should deny the Motion in all respects. (ECF No. 25.) Defendants then filed a Reply to Plaintiff-Relators' Response in Opposition to Defendants' Motion to Dismiss Plaintiff-Relators' Amended Complaint (ECF No. 26) on October 6, 2020, to which Plaintiff-Relators, after receiving leave from the court (see ECF No. 29), filed a Surreply in Opposition to Defendants' Motion to Dismiss on October 28, 2020. (ECF No. 30.)
The court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, as the claims arise under the laws of the United States, specifically 31 U.S.C. §§ 3732(a) and 3730(b), which empower district courts to hear claims arising under the FCA, and also via 28 U.S.C. § 1345 because the United States is a plaintiff.
A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted "challenges the legal sufficiency of a complaint." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (). A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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." Id.
Substantive FCA claims must satisfy both Rule 8(a)'s plausibility requirement and Rule 9(b)'s particularity standard to survive a motion to dismiss. Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989, 2004 n.6 (2016). More specifically, "[i]n considering a 12(b)(6) challenge to the sufficiency of a complaint, this Rule must be applied in conjunction with the liberal pleading standard set forth in Federal Rule of Civil Procedure 8(a)." Jenkins v. Fed. Bureau of Prisons, C/A No. 3:10-1968-CMC-JRM, 2011 WL 4482074, at *2 (D.S.C. Sept. 26, 2011). Rule 8(a) provides that to be legally sufficient, a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).
Rule 9(b) imposes a heightened pleading standard on...
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