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United States ex rel. Taylor v. Boyko

United States District Court, S.D. West Virginia, Charleston Division

June 7, 2019

UNITED STATES OF AMERICA, ex rel. CORTNEY TAYLOR, Plaintiff,
v.
MICHAEL J. BOYKO, M.D., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER, UNITED STATES DISTRICT JUDGE

         The Court has reviewed Defendant Martin Gottlieb & Associates, LLC's Motion to Dismiss (Document 53), Defendant Martin Gottlieb & Associates, LLC's Memorandum in Support of Its Motion to Dismiss (Document 54), the Relator's Memorandum in Opposition to Defendant, Martin Gottlieb & Associates, LLC's Motion to Dismiss (Document 73), and Defendant Martin Gottlieb & Associates' Response to Plaintiff's Memorandum in Opposition to Defendant, Martin Gottlieb & Associates, LLC's Motion to Dismiss (Document 77).

         In addition, the Court has reviewed Defendants Michael J. Boyko, M.D.; Mark Perni, D.O.; BestPractices of West Virginia, Inc.; BestPractices, Inc.; Holiday Acquisition Company, Inc.; EmCare, Inc.; and Envision Healthcare Corporation's Motion to Dismiss (Document 56), Defendants Michael J. Boyko, M.D.; Mark Perni, D.O.; BestPractices of West Virginia, Inc.; BestPractices, Inc.; Holiday Acquisition Company, Inc.; EmCare, Inc.; and Envision Healthcare Corporation's Memorandum in Support of Their Motion to Dismiss (Document 57), the Plaintiff's Memorandum in Opposition to Defendants Boyko, Perni, BestPractices of West Virginia, BestPractices Inc., Holiday Acquisitions Company, Inc., EmCare, Inc. and Envision Healthcare Corporation's Motion to Dismiss (Document 74), and Defendants Michael J. Boyko, M.D.; Mark Perni, D.O.; BestPractices of West Virginia, Inc.; BestPractices, Inc.; Holiday Acquisition Company, Inc.; EmCare, Inc.; and Envision Healthcare Corporation's Reply Memorandum in Support of Their Motion to Dismiss (Document 78). For the reasons stated herein, the Court finds that Defendant Gottlieb's motion should be granted, and that the remaining Defendant's motion should be granted in part and denied in part.

         FACTUAL ALLEGATIONS

         The Relator, Cortney Taylor, initiated this action pursuant to the False Claims Act (FCA) on behalf of herself and the United States with a Complaint for Violations of the False Claims Act, 31 U.S.C. § 3729, et seq. (Document 1) filed on October 25, 2017. The complaint remained sealed until September 6, 2018. Ms. Taylor named the following Defendants: Michael J. Boyko, M.D., Mark Perni, D.O., BestPractices of West Virginia, Inc. (BPWV), Martin Gottlieb & Associates LLC (Gottlieb), BestPractices, Inc. (BP), Holiday Acquisition Company, Inc., EmCare, Inc., and Envision Healthcare Corporation. She seeks to recover damages and penalties on behalf of the United States arising from alleged false claims made by the Defendants.

         BPWV contracted to manage the Camden-Clark Medical Center (CCMC) emergency department. Dr. Boyko was employed by BPWV and served as a physician at CCMC. Dr. Perni was a locum tenens physician who was providing medical services at CCMC on August 2, 2012, although he had not signed the contract governing BPWV's relationship with CCMC. Because Dr. Boyko was not scheduled to work on August 2-3, 2012, the Relator alleges that it was not permissible for Dr. Perni to take his place for billing purposes. Jennifer Angelilli was a nurse practitioner employed by BPWV and working at CCMC. She also had not signed the contract. Her credentials to practice as a nurse practitioner required that she be supervised by a physician. She did not have a supervising physician at CCMC.

         BPWV's state corporate license to conduct business and medical license were revoked on November 1, 2011, due to failure to file an annual report and filing fee. BPWV continued to operate the emergency department of Camden-Clark Medical Center following the license revocations until March 2013, including submitting claims for reimbursement to Medicare for at least 25, 000 patients. Neither BPWV nor Dr. Boyko notified CMS (Centers for Medicare & Medicaid Services) of the license revocations.

         Ms. Taylor received treatment for post-caesarean section abdominal pain at the CCMC emergency department on August 2-3, 2012. She is a Medicare beneficiary, and claims for her care were submitted to Medicare for payment. Her medical records list Dr. Perni as her attending physician and Ms. Angelilli as providing additional care. Ms. Angelilli diagnosed Ms. Taylor with cellulitis, then documented that her condition had improved and that she was stable prior to discharging her with a prescription for antibiotics around 4:00 a.m., on August 3, 2012. Dr. Perni did not make entries on the medical record until approximately two hours after Ms. Taylor had been discharged. He did not provide her with medical care but signed her record for billing purposes, completing an “Attending Note” box to “[permit] a provider to bill at a higher level of care because a physician was involved.” (Compl. at ¶ 143.) Ms. Taylor sought additional treatment on August 3, 2012. She was diagnosed with necrotizing fasciitis, a potentially fatal condition, and transferred to West Virginia University for surgical intervention and treatment on August 4, 2012.[1] Gottlieb, which provided billing services for the other corporate defendants, prepared an invoice for Ms. Taylor, billing $668 with a code applicable to severe, life threatening, presenting problems. The invoice included a code modifier to reflect the provision of services by a locum tenens physician in place of the regular physician, since Dr. Perni was replacing Dr. Boyko during Ms. Taylor's visit. However, Dr. Boyko had never been scheduled to work on that date. Gottlieb submitted the invoice for payment, but “made no references to services being provided only by Ms. Angelilli in its preparation and submission of billing documents to Medicare or Medicaid.” (Id. at ¶ 110). Medicare reimbursed BPWV at the full physician rate.

         In the complaint, the Relator alleges that each Defendant is liable for FCA violations. She alleges two types of false claims: submission of claims despite the revocation of BPWV's business and medical licenses, and upcoding to improperly bill at a physician rate when no physician provided patient care. She alleges that each Defendant presented, or caused to be presented, false claims for payments, and that each Defendant knew, was deliberately ignorant of, or recklessly disregarded the facts demonstrating the impropriety of the claims. In short, the Relator alleges that BPWV, BP, and Gottlieb were involved in creating the reimbursement claims forms presented to Medicare, while Envision, EmCare, and Holiday caused Gottlieb to submit the false claims “through their ownership structure and control of BP, and BP's direct or indirect contractual arrangements with Camden-Clark, BPWV, and Gottlieb.” (Id. at ¶ 124.) Dr. Boyko and Dr. Perni are alleged to be responsible because of their roles in creating the medical records underlying the billing claims. The Relator seeks judgment in the amount of three times the amount of damages, civil penalties, payment to the Relator of thirty percent of the proceeds, expenses, and attorneys' fees and costs.

         STANDARD OF REVIEW

         A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a complaint or pleading. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Additionally, allegations “must be simple, concise, and direct.” Fed.R.Civ.P. 8(d)(1). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a complaint must contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Moreover, “a complaint [will not] suffice if it tenders naked assertions devoid of further factual enhancements.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557) (internal quotation marks omitted).

         Rule 9(b) of the Federal Rules of Civil Procedure requires that a party alleging fraud or mistake “must state with particularity the circumstances constituting fraud or mistake, ” although allegations related to state of mind “may be alleged generally.” “To satisfy Rule 9(b), a plaintiff asserting a claim under the [False Claims] Act ‘must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'” U.S. ex rel. Nathan v. Takeda Pharm. N. Am., Inc., 707 F.3d 451, 455-56 (4th Cir. 2013) (quoting United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir.2008)). The Fourth Circuit cautions courts to “adhere[] firmly to the strictures of Rule 9(b) in applying its terms to cases brought under the Act, ” explaining that “[t]he multiple purposes of Rule 9(b), namely, of providing notice to a defendant of its alleged misconduct, of preventing frivolous suits, of eliminating fraud actions in which all of the facts are learned after discovery, and of protecting defendants from harm to their goodwill and reputation are as applicable in cases brought under the Act as they are in other fraud cases.” Id. at 456 (internal quotation marks and citations omitted).

         When reviewing a motion to dismiss, the Court must “accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 93 (2007). The Court must also “draw[ ] all reasonable factual inferences from those facts in the plaintiff's favor.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). However, statements of bare legal conclusions “are not entitled to the assumption of truth” and are insufficient to state a claim. Iqbal, 556 U.S. at 679. Furthermore, the court need not “accept as true unwarranted inferences, unreasonable conclusions, or arguments.” E. Shore Mkts., v. J.D. Assocs. Ltd. P'ship,213 F.3d 175, 180 (4th Cir. 2000). “Threadbare recitals of the elements of a cause of action, supported by mere ...


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