Opinion
Civil Action No. 01-508
November 4, 2003
MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION
I. RECOMMENDATION
For the reasons stated below, it is respectfully recommended that the District Court: grant in part and deny in part the Defendant's Motion for Summary Judgment (Doc. 43); and grant the Plaintiff's Motion for Summary Judgment (Doc. 45) regarding the Defendant's Counterclaim.
II. REPORT
GENERAL BACKGROUND
The Plaintiff Mark L. Cooper ("Mr. Cooper" or "the Plaintiff") brings this action against his former employer, Gentiva Health Services, Inc. ("Gentiva" or "the Defendant"). See generally Am. Compl. (Doc. 8). Mr. Cooper brings qui tam claims against the Defendant for alleged violations of the False Claims Act ("the FCA" or "the Act"), 31 U.S.C. § 3729, et seq., and the United States has declined to intervene. The Plaintiff also alleges retaliatory discharge under 31 U.S.C. § 3730(h), as well as violation of the Pennsylvania Whistleblower Law, 43 P.S. § 1421, et seq. See generally Am. Compl. at Counts II-III.
Gentiva previously was known as "Olsten Health Services," "Olsten Corporation" or "Olsten." See generally, e.g., Def.'s Statement of Material Facts (Doc. 41) at 10 n. 6 (after Plaintiff was hired by Olsten, said company "split off its home health services business" and named it Gentiva); see also Cooper Dep. Tr. (attached under Ex. C to Doc. 42) at 159-60 (discussing Plaintiff's employment "with Olsten, then Gentiva"). Following counsels' lead, the court hereinafter will refer to the Defendant simply as "Gentiva."
Gentiva has stated a Counterclaim against the Plaintiff, seeking attorney's fees and expenses under 31 U.S.C. § 3730(d)(4). Tracking the language of this provision, the Defendant alleges that Mr. Cooper's claims are "[clearly] frivolous, vexatious, [and/]or brought primarily for purposes of harassment." See Def.'s Countercl. (Doc. 11) at ¶ 2.
Gentiva now moves for summary judgment, asserting multiple arguments in connection with each of the Plaintiff's claims. See generally Def.'s Br. in Supp. of Mot. for Summ. J. (Doc. 44, hereinafter cited as "Def.'s Br."). Mr. Cooper has filed a cross-motion, seeking summary judgment on the Defendant's Counterclaim. See Doc. 45.
The briefing on the aforementioned Motions has come to a close, and they are now ripe for adjudication. ANALYSIS A. The Defendant Is Entitled to Summary Judgment on the Plaintiff's Qui Tam Claims. 1. Factual Allegations and Legal Standards
Mr. Cooper's qui tam claims address Gentiva's provision of the prescription drug Flolan, and infusion pumps used for delivering the same, to Medicare and Medicaid patients suffering from pulmonary hypertension. See generally Am. Compl. at ¶¶ 4-6. Although the Plaintiff's allegations are numerous and varied, his overarching themes are that Gentiva provided inaccurate and improperly maintained infusion pumps, thereby causing a "wast[e of] valuable medication," the "supply of unnecessary quantities of medication," and the "billing [of] the United States . . . for services not rendered or [rendered] below accepted medical treatment standards." See generally, e.g., Am. Compl. at ¶¶ 12-13, 15-16, 26.
The Plaintiff's qui tam claims primarily are asserted under 31 U.S.C. § 3729(a)(1) and 3729(a)(2). See generally Pl.'s Br. in Opp'n to Def.'s Mot. for Summ. J. (Doc. 53, hereinafter cited as "Pl.'s Opp'n Br.") at 4. Under Sections 3729(a)(1) and (a)(2), an entity may be liable if it:
Mr. Cooper's qui tam claims are to be distinguished from his claims of retaliatory discharge, which will be addressed in a separate section, infra. Likewise, the court will reserve for separate discussion the Plaintiff's seemingly less-central claims under 31 U.S.C. § 3729(a)(4). See generally discussion infra.
(1) knowingly presents, or causes to be presented, to an officer or employee of the [U.S.] Government . . . a false or fraudulent claim for payment or approval; [or]
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.See id.
The Plaintiff, like many before him, relies on the "certification theory" in attempting to meet the aforementioned standards. See generally, e.g., Pl.'s Opp'n Br. at 5-11 (referencing same and arguing Gentiva certified to Government it would meet certain regulatory and other standards). In Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001), the Court of Appeals for the Second Circuit aptly summarized the certification theory and the parameters governing the same:
[T]he [`legally false'] certification theory of liability . . . is predicated upon a false representation of compliance with a federal statute or regulation or a prescribed contractual term. . . . It differs from [the] `factually false' certification [theory], which involves an incorrect description of goods or services provided or a request for reimbursement for goods or services never provided . . . .
[A] claim for reimbursement made to the government is not legally false simply because the particular service furnished failed to comply with the mandates of a statute, regulation or contractual term that is only tangential to the service for which reimbursement is sought. Since the Act is . . . aimed at retrieving ill-begotten funds, it would be anomalous to find liability when the alleged noncompliance would not have influenced the government's decision to pay. Accordingly,. . . the Act . . . does not encompass those instances of regulatory noncompliance that are irrelevant to the government's disbursement decisions.
[For the above reasons, w]e join [numerous other] . . . Circuits in ruling that a claim under the Act is legally false only where a party certifies compliance with a statute or regulation as a condition to governmental payment.
[T]he legally false certification theory further may be divided into the categories of [e]xpress [f]alse [c]ertification [and implied false certification] . . .
An expressly false claim is, as the term suggests, a claim that falsely certifies compliance with a particular statute, regulation or contractual term, where compliance is a prerequisite to payment.
. . . .
An implied false certification claim is based on the notion that the act of submitting a claim for reimbursement itself implies compliance with governing federal rules that are a precondition to payment . . . .
But caution should be exercised not to read [the implied certification] theory expansively and out of context. The . . . rationale [underlying the theory], for example, does not fit comfortably into the health care context because the False Claims Act was not designed for use as a blunt instrument to enforce compliance with all medical regulations — but rather only those regulations that are a precondition to payment — and to construe the impliedly false certification theory in an expansive fashion would improperly broaden the Act's reach. Moreover, a limited application of implied certification in the health care field reconciles, on the one hand, the need to enforce the Medicare statute with, on the other hand, the active role [entities] outside the federal government play in assuring that appropriate standards of medical care are met. Interests of federalism counsel that the regulation of health and safety matters is primarily, and historically, a matter of local concern.
Moreover, permitting qui tam plaintiffs to assert that defendants' quality of care failed to meet medical standards would promote federalization of medical malpractice, as the federal government or the qui tam relator would replace the aggrieved patient as plaintiff. . . . Beyond that, we observe that the courts are not the best forum to resolve medical issues concerning levels of care. State, local or private medical agencies, boards and societies are better suited to monitor [such] issues. . . .
For these reasons, we think a medical provider should be found to have implicitly certified compliance with a particular rule as a condition of reimbursement in limited circumstances. Specifically, implied false certification is appropriately applied only when the underlying statute or regulation upon which the plaintiff relies expressly states the provider must comply in order to be paid. . . .See id., 274 F.3d at 696-700 (numerous citations and internal quotations omitted).
As best as the undersigned can tell, the Third Circuit Court has not weighed in on the various certification theories addressed above. Having carefully reviewed the relevant precedent, however, the undersigned finds Mikes to be a well-reasoned and accurate statement of the law. Other district courts within this Circuit are in agreement, having expressly adopted the Second Circuit Court's reasoning. See, e.g., U.S. ex rel. Watson v. Connecticut Gen'l Life Ins. Co., 2003 WL 303142, *10 (E.D. Pa. Feb. 11, 2003) (relying on Mikes to conclude that, "whether the certification was express or implied, [liability] exist[ed] only if certification of . . . compliance influenced the government's payment decision"); In re Genesis Health Ventures, Inc., 272 B.R. 558, 569-70 (Bankr. D. Del. 2002) (citing Mikes and holding essentially same). Plaintiff's counsel, moreover, takes no issue with the standards annunciated in Mikes, arguing instead that the case is distinguishable on its facts. See generally, e.g., Pl.'s Opp'n Br. at 11, 14-16 (citing freely to Mikes and purporting to distinguish same).
Based on the foregoing, and in the absence of any meaningful objection by the Plaintiff, the District Court should apply the theoretical framework and analyses annunciated in Mikes.
2. Sources of Alleged Certification
To properly analyze Mr. Cooper's claims, the court first must identify the regulatory, statutory, and/or contractual standards to which the Defendant allegedly certified. Plaintiff's counsel identifies five.
First, counsel makes reference to Gentiva's "Medicare/ Federal Health Care Provider/Supplier Enrollment Application." See Pl.'s Statement of Material Facts (Doc. 54) at ¶ 3; see also Gentiva Docs. at Bates Nos. 3166-3184. This form constituted Gentiva's "application for enrollment" as a Medicare "supplier of durable medical equipment, prosthetics, orthodontics, and supplies (DMEPOS)" and, "[u]pon [its] completion and approval . . ., the applicant . . . [would] be issued a DMEPOS supplier billing number." See Gentiva Docs. at Bates No. 3166; see also "Application Instructions" to same. The Application contained specified "[c]ertification [s]tatement[s]," which "include[d] the minimum standards to which the applicant must adhere to be enrolled in the Medicare program as a DMEPOS supplier." See Supplier Enrollment Application, Bates Nos. 3183-84, at ¶¶ 21-22; see also Instructions at ¶¶ 21-22. Among other things, the Enrollment Application required Gentiva to certify that: it "read, underst[ood], me[t], and [would] continue to meet all supplier standards as outlined in 42 C.F.R. § 424.57"; it was "familiar with and agree[d] to abide by the Medicare or other federal health care program laws, regulations and program instructions"; and if it "bec[ame] aware that any information in [the A]pplication [wa]s not true, correct, or complete," Gentiva "agree[d] to notify . . . Medicare . . . of this fact immediately." See Pl.'s Statement of Material Facts at ¶ 3; see also Gentiva's Enrollment Application at ¶¶ 21, 22.
Although they have not been made part of the record, the Application Instructions can be found at the website, "http://richiebrace.com/documents/ DMERCapplication.pdf." The District Court may take judicial notice of the Instructions. Compare Gentiva's Supplier Enrollment Application with contents of website cited supra (containing blank application identical to Gentiva's, including same "OMB Approval [Number]" and "HCFA" form number, along with instructions to same); cf. also generally Fed.R.Evid. 201(b)(2) (court may take judicial notice of fact(s) "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned"); Recklitis v. C.I.R., 91 T.C. 874, 911 (U.S. Tax Ct. 1988) (taking judicial notice of federal tax forms "and related instructions").
The second source of alleged certification derives from the provisions in 42 C.F.R. § 424.57. See generally Pl.'s Statement of Material Facts at ¶ 4. These regulations identify "[s]pecial payment rules for items furnished by DMEPOS suppliers" like Gentiva, as well as the "issuance of DMEPOS supplier billing privileges." See 42 C.F.R. § 424.57.
Section 424.57(b) identifies the conditions "[a] DMEPOS supplier must meet . . . in order to be eligible to receive payment for a Medicare-covered item." See id. In relevant part, this Section requires that: (1) the supplier has "submitted a completed application to CMS to furnish Medicare-covered items including [the] required enrollment forms"; (2) the billed item "was furnished on or after the date CMS issued to the supplier a DMEPOS supplier number conveying billing privileges"; and (3) the CMS "has not revoked or excluded the DMEPOS supplier's privileges during the period [in] which the item was furnished." See §§ 424.57(b)(1)-(3).
The Centers for Medicare and Medicaid Services, or "CMS," is "a subunit of the Department of Health and Human Services" charged with administering the Medicare program. See generally U.S. v. Baxter Int'l, Inc.,___ F.3d ___, 2003 WL 22120071 at n. 2 (11th Cir. Sept. 15, 2003). Until recently, the CMS was known as the Health Care Financing Administration, or the "HCFA." See id. Hereinafter, "HCFA" and "CMS" will be used interchangeably to refer to the governmental unit responsible for administering the Medicare program.
Although there are two other requirements under subsection (b), see §§ 424.57(b)(4)-(5), they are not implicated through the analyses below.
Section 424.57(c) addresses the "[a]pplication certification standards" for DMEPOS suppliers. See id. These provisions set forth the standards a supplier "must meet and . . . certify [to] in its application for billing privileges." See id. Although many requirements are listed, Plaintiff's counsel focuses on the subsections directing the supplier to: "maintain and replace at no charge or repair . . . Medicare-covered items it has rented to beneficiaries," see § 424.57(c)(14); and to "[f]ill orders, fabricate, or fit items from its own inventory or by contract with other companies." See § 424.57(c)(4).
While the Plaintiff does not reference § 424.57(c)(19), said provision also is relevant to the court's analyses below. See generally discussion infra. Subsection (c)(19) provides that the supplier "[m]ust have a complaint resolution protocol to address beneficiary complaints that relate to supplier standards in [this] paragraph (c) . . . and keep written complaints, related correspondence and any notes of actions taken in response to written and oral complaints." See id.
Finally, Section 424.57(d) describes the sanction imposed for a DMEPOS supplier's failure to comply: "CMS will revoke a supplier's billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section." See id.
The undersigned's independent research has revealed that Section 424.57 was revised effective October 11, 2000. Opposing counsel have failed to address this issue, let alone urge for the application of one version over the other. In light of this omission, and for the sake of simplicity, the court will analyze the more recent version of the regulations. See generally discussion in text, supra (citing and quoting post-revision regulations). Importantly, though, the provisions discussed in this Report appear in both the pre- and post-revision regulations, and any difference in terms is insubstantial for the purposes of the court's analyses. Compare, e.g., 42 C.F.R. § 424.57(b)(2) (effective Oct. 11, 2000) (billed item must be furnished "on or after the date CMS issued . . . a DMEPOS supplier number conveying billing privileges") with 42 C.F.R. § 424.57(b) (effective Dec. 11, 1995) ("Medicare pays for items furnished by a supplier with a billing number") (emphasis added in both); compare 42 C.F.R. § 424.57(c)(4), (14) (Oct. 11, 2000) with 42 C.F.R. § 424.57(c)(1), (5) (Dec. 11, 1995) (each addressing suppliers' certifications regarding equipment maintenance and filling of its own orders); compare 42 C.F.R. § 424.57(c)(19) (Oct. 11, 2000) with 42 C.F.R. § 424.57(f) (Dec. 11, 1995) (contemplating substantially similar "complaint resolution protocols"); and compare 42 C.F.R. § 424.57(d) (Oct. 11, 2000) with 42 C.F.R. § 424.57(d) (Dec. 11, 1995) (both addressing revocation of billing privileges for failure to comply with regulations).
The third source of purported certification is what Plaintiff's counsel characterizes as "[t]he Program Instructions given to" Gentiva as "a supplier of Flolan." See Pl.'s Statement of Material Facts at ¶ 5. The document cited by counsel appears to identify and explain several "HCPCS Codes" established by TriCenturion, LLC ("TriCenturion"), the "Program Safeguard Contractor" for Gentiva's DMERC Region. See Cooper Docs. at Bates Nos. 0147-0150 (attached under Ex. 8 to Doc. 56). Although the Plaintiff does a woefully inadequate job of explaining how the purported "Program Instructions" constitute a source of certification, the court will join Defense counsel in assuming arguendo that the cited documentation required Gentiva to provide "injection epoprostenol," ( i.e., Flolan) and "an infusion pump . . . for the administration of" the same. Compare Pl.'s Statement of Material Facts at ¶ 5 with Def.'s Reply Br. (Doc. 59) at 3 (Gentiva was to provide Flolan and "an infusion pump").
"In 1993, the HCFA, in an effort to promote greater uniformity and consistency in [durable medical equipment] reimbursement, consolidated the responsibilities for . . . reimbursement into four regional [insurance] carriers, called the [d]urable [m]edical [e]quipment [r]egional [c]arriers (`the DMERCs')." See generally U.S. v. Medica-Rents Co. Ltd.,___ F. Supp.2d ___;, 2003 WL 22282910, *2 (N.D. Tex. Sept. 23, 2003). In the website relied upon by Plaintiff's counsel, TriCenturion identifies itself as a company with which the CMS has contracted "to perform selected Medicare program integrity tasks" for the relevant DMERC. See generally website at http://www.tricenturion.com/.
The fourth source of alleged certification comes from the "Physicians Desk Reference" and the pump manufacturer's "Operator's Manual," both of which indicated that the pumps' "[d]elivery [a]ccuracy" should be plus or minus 6% "of the programmed rate." See Pl.'s Statement of Material Facts at ¶ 6; see also Cooper Docs. at Bates No. 0001 (excerpt of Physicians Desk Reference); Gentiva Docs. at Bates No. 0391 (pump "Operator's Manual").
Fifth, and finally, Plaintiff's counsel identifies "Health Insurance Claim Form RRB-1500," also known as form "HCFA-1500." See Pl.'s Statement of Material Facts at ¶ 7; see also Ex. H1 to Doc. 42 (copy of HCFA-1500 form). Plaintiff's counsel acknowledges that a DMEPOS supplier, like Gentiva, "is paid when it submits" the HCFA-1500 form. See Pl.'s Statement of Material Facts at ¶ 7. In submitting the form, the Defendant "certif[ied] that the services [identified]. . . were medically indicated and necessary for the health of the patient and were personally furnished by [it] or . . . incident to [its] professional service." See id. 3. The Plaintiff's Certification Theories, the Alleged Sources of Obligation Underlying Them, and the Reasons Why They Fail
Mr. Cooper's overarching theories of liability are relatively clear, and they will be described below. How Plaintiff's counsel purports to satisfy the legal standards applicable under the certification theory, however, is far less so. Counsel's briefing is limited to the identification of the alleged certifications referenced above, followed by a jumble of cryptic, and often unsupported, legal conclusions that fail to meaningfully address the standards annunciated in Mikes or any other court decision. See generally Pl.'s Opp'n Br. at 5-10 (stating "there is evidence that Gentiva submitted a false [or] fraudulent claim," reciting various alleged certifications identified above, but taking no account of sources of obligation or whether they properly may support an FCA claim); compare also generally, e.g., id. at 11-12 ("suggest[ing]" that distinction between legally and factually false certifications is "without significance" because Defendant "factually certifie[d] compliance with federal statutes and regulations" when it sought DMEPOS billing privileges) with Mikes, 274 F.3d at 697 ("factually false certification . . . involves an incorrect description of goods or services provided or a request for reimbursement for goods. . . never provided") (emphasis added).
As a result, the court largely is left to conduct its analyses in a vacuum, and the undersigned has done so below. It is respectfully submitted, however, that the District Court owes no duty to sort through counsel's cryptic assertions and legal conclusions and explain why each fails under the law.
The Plaintiff's first theory of liability relates to the Defendant's alleged certification(s) regarding the accuracy of its infusion pumps. See generally Pl.'s Opp'n Br. at 1-2. Specifically, counsel maintains that "federal standards" required the pumps to have a Flolan delivery accuracy of plus or minus 6%. See generally Pl.'s Opp'n Br. at 1-2.
As seen above, the 6% accuracy standard derives not from a statutory, regulatory, or contractual provision, but from the Physician's Desk Reference and the pump manufacturer's "Operator's Manual." See generally discussion supra. These facts plainly preclude reliance on the "express certification" theory, as Gentiva's reimbursement claims in no way certified compliance with the 6% accuracy standard under "a particular statute, regulation or contractual term." See Mikes, 274 F.3d at 698.
As to any claim of implied certification, Mr. Cooper's argument is weaker than an analogous one rejected in Mikes. In that case, the defendants allegedly submitted false or fraudulent claims for spirometry tests performed on Medicare patients. See generally id. The plaintiff argued that the defendants implicitly certified their compliance with guidelines established by the American Thoracic Society ("ATS"), which "set out the generally accepted [medical] standards for spirometry." See id. at 694. Recognizing that the ATS guidelines were not expressly stated in any statute or regulation, the plaintiff sought to import the guidelines through general provisions of the Medicare statute requiring providers to assure their services are "of a quality which meets professionally recognized standards of health care." See generally id. at 701 (citing and quoting Medicare statute, 42 U.S.C. § 1320c-5(a)). The plaintiff maintained that the defendants, through their submission of HCFA-1500 forms (the same as referenced above in this case), impliedly certified compliance with the Medicare provision regarding "professionally recognized standards of health care." See id.
The Second Circuit Court rejected this argument as unsupported by the implied certification theory. Having previously recognized that implied certification may arise "only when the underlying statute or regulation . . . expressly states the provider must comply in order to be paid," the court found:
[T]he Medicare statute does not explicitly condition payment upon compliance with [the section referencing professionally recognized standards of health care]. Instead, [that section] simply states . . .`[i]t shall be the obligation' of a practitioner who provides a medical service `for which payment may be made . . . to assure' compliance with the section. Hence, it may be seen that [the `professionally recognized standards' provision] acts prospectively, setting forth obligations for a provider to be eligible to participate in the Medicare program. . . .
Since [the relevant Medicare provision] does not expressly condition payment on compliance with its terms,. . . [the] defendants did not submit impliedly false claims by requesting reimbursement for spirometry tests . . . allegedly . . . not performed according to the recognized standards of health care.See Mikes, 274 F.3d at 701-702 (numerous citations omitted, emphasis added).
The Plaintiff here, having failed to identify any statutory, regulatory, or contractual provision adopting the 6% accuracy standard, presents an argument akin to the "below professionally recognized standards" theory presented in Mikes. Mr. Cooper's argument is even weaker, however, as his counsel has failed to identify any statute or regulation through which the 6% accuracy standard may even be inferred or imputed. See generally Pl.'s Opp'n Br. Thus, the Plaintiff's arguments regarding said standard are completely without merit and should be rejected.
Assuming Mr. Cooper relies on the Medicare statute's reference to "professionally recognized standards of health care," Mikes makes clear why such an approach fails. See generally discussion in text supra.
The Plaintiff's second theory relates to Gentiva's alleged failure to perform timely and proper maintenance on the infusion pumps provided to its customers. See generally Pl.'s Opp'n Br. at 2, 9-10. This time, counsel is able to identify a regulatory provision touching on the subject: the requirement in 42 C.F.R. § 424.57(c)(14) that a DMEPOS supplier "must certify in its application for billing privileges that it meets and will continue to meet [certain] standards," including the "maint[enance] . . . or repair" of "Medicare-covered items it has rented to beneficiaries." See id. (emphasis added).
Again, Mr. Cooper has failed to make a case for express certification. As his counsel plainly admits, Gentiva "is paid when it submits" the HCFA-1500 form. See Pl.'s Statement of Material Facts at ¶ 7. And though the claim form contains a certification that the "services [identified] . . . were medically indicated and necessary for the health of the patient," no reference to C.F.R. § 424.57 generally, or to equipment maintenance more specifically, can be found. See Ex. H1 to Doc. 42. Thus, the Plaintiff's maintenance-related claims are properly analyzed under the implied certification theory. See generally Mikes, 274 F.3d at 698 (recognizing, under materially similar circumstances, that plaintiff's only colorable claim of express certification flowed from "medical necessity" statement in HCFA-1500 form); see also generally discussion infra (addressing Plaintiff's arguments regarding medical necessity).
In reaching this conclusion, the court rejects the Plaintiff's presumed, but not meaningfully articulated, argument that an express certification was made through Gentiva's "Supplier Enrollment Application." As noted above, the Defendant's Application did certify that Gentiva "read, underst[ood], me[t], and [would] continue to meet all supplier standards as outlined in 42 C.F.R. § 424.57." See generally discussion supra; see also generally id. (certifying that Defendant was "familiar with and agree[d] to abide by the Medicare or other federal health care program laws, regulations and program instructions"). These certifications, however, were made as conditions of enrollment, not in connection with Gentiva's request(s) for payment after its Application had been "approv[ed]" and the company had been "issued a DMEPOS supplier billing number." See discussion supra; see also id. (Application's certification statements addressed "the minimum standards to which the applicant must adhere to be enrolled in the Medicare program as a DMEPOS supplier") (emphasis added). Stated somewhat differently, the Enrollment Application is not "a claim" for payment; it is, as its title indicates, an application for enrollment as a DMEPOS supplier. See id.; cf. also generally Mikes, 274 F.3d at 698 (express false certification involves "a claim that falsely certifies compliance with a particular statute, regulation or contractual term, where compliance is a prerequisite to payment") (emphasis added).
The fact that the Defendant's Enrollment Application was not a claim for payment would seem an obvious one. It is further bolstered by opposing counsels' agreement the HCFA-1500 form was that which triggered the government's payment of Gentiva's claims. See Def.'s Br. at 4 ("[t]o bill Medicare for . . . pumps and Flolan . . ., Gentiva submitted a[n] HCFA[-]1500 form"); Pl.'s Statement of Material Facts at ¶ 7 ("[a] DMEPOS supplier is paid when it submits a[n HCFA-1500] form"). Plaintiff's counsel nevertheless appears to insist that Gentiva's enrollment and re-enrollment forms somehow are relevant to the certification analysis. See, e.g., Pl.'s Opp'n Br. at 5 (citing Gentiva's Enrollment Application and re-enrollment obligations as evidence of false or fraudulent claims). The court sees no reason to indulge in such distorted reasoning, as the merits of the Plaintiff's arguments under C.F.R. § 424.57 are, in any event, reached under the implied certification theory. See discussion immediately infra.
Having rejected the notion that Gentiva expressly certified its compliance with C.F.R. § 424.57, the court must consider whether an implied certification claim is viable. The plain language of the regulations reveals it is not.
As noted above, the implied certification theory applies "only when the underlying . . . regulation . . . expressly states [that] the provider must comply in order to be paid." See generally Mikes, 274 F.3d at 700 (emphasis added). The "maintenance" provision of C.F.R. § 424.57, found at subsection (c)(14), is one of the "standards" a DMEPOS supplier "certif[ies to] in its application for billing privileges." See §§ 424.57(c), (c)(14) (emphasis added). The reference to the supplier's "application for billing privileges," rather than to the payment of any given claim, reveals that these provisions "act prospectively, setting forth [the] obligations for a provider to be eligible to participate in the Medicare program." See Mikes, 274 F.3d at 701 (citations omitted, emphasis added).
The remainder of Section 424.57 confirms that the regulations "establish conditions of participation, rather than prerequisites to receiving reimbursement." See Mikes, 274 F.3d at 701-702 (holding same in connection with analogous statutory provision). As its title indicates, Section 424.57 addresses two distinct issues: "[s]pecial payment rules for items furnished by DMEPOS suppliers"; and the "issuance of DMEPOS supplier billing privileges." See § 424.57. The provisions relied upon by the Plaintiff fall within subsection (c), which specifically addresses "[a]pplication certification standards" and annunciates the things that must be certified "in [the] application for billing privileges." See § 424.57(c).
If any provisions may be stretched to address matters of payment, it would be those found under subsection (b). See § 424.57(b) ("[a] DMEPOS supplier must meet the following conditions in order to be eligible to receive payment for a Medicare-covered item"). Those provisions lend no support to the Plaintiff's position, however, as they require only the submission of a completed supplier application, the existence of billing privileges when the charged item was furnished, and the CMS's having not revoked or excluded the supplier's billing privileges during that time. See § 424.57(b)(1)-(3).
The notion that a supplier may have its billing privileges revoked is recurrent, and it rings the death knell to the Plaintiff's arguments under Section 424.57. As referenced above, subsection (d) specifically addresses the potential intended consequences of "[f]ailing to meet [the] standards . . . under paragraphs (b) and (c)": "[the] CMS will revoke a supplier's billing privileges." See § 424.57(d) (emphasis added).
As was true in Mikes, "[t]he fact that [the regulations] permit[the] sanction" of terminating supplier eligibility "makes it evident that the section is directed at the provider's continued eligibility in the Medicare program, rather than any individual incident of noncompliance." See id., 274 F.3d at 702 (emphasis added). This conclusion is further bolstered by the provisions in Section 424.57(c)(19), which contemplate "a complaint resolution protocol to address beneficiary complaints that relate to supplier standards in paragraph (c)." See id.
The Plaintiff fails to allege Gentiva was in violation of "the conditions . . . of [payment] eligib[ility]" stated in § 424.57(b). See generally Pl.'s Opp'n Br. Even if he had, subsection (d) plainly indicates that the remedy for such violations would be the revocation of billing privileges, not the refusal to pay on a given claim. See § 424.57(d) (identifying revocation of billing privileges as sanction for supplier's "[f]ailure to meet [the] standards . . . under paragraphs (b) and (c)") (emphasis added).
In sum, Section 424.57 makes abundantly clear that the proper redress for violations of the standards established therein is not the denial of payment, but the revocation of the supplier's billing privileges, with or without the assistance of beneficiary complaint procedures. See generally discussion supra. Thus, the Plaintiff may not properly proceed under the implied certification theory for alleged violations of Section 424.57.
The Plaintiff's next theory of liability addresses the Defendant's having supplied pumps it did not own or contract for. See generally, e.g., Pl.'s Opp'n Br. at 10. As the Defendant admits, during a period of "low inventory" in 1999, Gentiva provided to Medicare patients pumps held within its possession "as part of a Glaxo Wellcome drug study, but which Gentiva did not own" ("the Glaxo pumps"). See generally, e.g., Def.'s Statement of Material Facts at ¶¶ 72-73, 75. Defense counsel maintains that this conduct fails to support an FCA claim because it did not "result in financial loss to the government." See generally Def.'s Br. at 9; see also generally Hutchins v. Wilentz, Goldman Spitzer, 253 F.3d 176, 184 (3d Cir. 2001) (unless allegedly false or fraudulent claim "would result in economic loss to the United States government, liability under the False Claims Act does not attach") (citations omitted), cert. denied, 536 U.S. 906 (2002).
The District Court need not reach the economic loss inquiry, however, as the Plaintiff in the first instance has failed to show that a false certification was made. Regarding equipment ownership, the only certification identified by Plaintiff's counsel is found in C.F.R. § 424.57(c)(4). See generally Pl.'s Opp'n Br. at 6, 10; see also § 424.57(c)(4) (supplier "must certify in its application for billing privileges" that it "[f]ills orders . . . from its own inventory or by contract with other companies"). As explained above, the Defendant's compliance with the "own inventory" standard, along with the others in subsection (c), has nothing to do with the payment of claims. See generally discussion supra. Rather, the certification is made in connection with the "application for billing privileges," and compliance is a "condition of participation, rather than [a] prerequisite to . . . reimbursement." See id.; see also § 424.57(d) (sanction for non-compliance with subsection (c) is revocation of billing privileges). Thus, the Plaintiff's argument regarding Gentiva's use of Glaxo pumps fails under the false certification theory.
The Plaintiff does not argue the Defendant's use of Glaxo pumps violated the HCFA-1500 certification that the equipment was "personally furnished by [Gentiva] or [was] furnished incident to [its] professional service." Cf. generally HCFA-1500 form. Even if he did, such an argument would fail. It remains beyond dispute that Gentiva provided the pumps in question to Medicare patients, and the term "furnished" neither states nor implies a condition of ownership. See generally Webster's New World Dictionary (3d College ed. 1988) (furnish means "to supply, provide, or equip with whatever is necessary or useful").
As referenced above, the Plaintiff's inability to prove false or fraudulent claims renders moot Defense counsel's arguments regarding the "economic loss" standard. See discussion supra in text. The same holds true for counsel's arguments under the "original source doctrine" and whether Gentiva "knowingly" presented a false or fraudulent claim. Cf. generally Def.'s Br. at 8-13.
Next, interspersed throughout the Plaintiff's opposition papers are references to the "medical necessity" certification found in Gentiva's HCFA-1500 forms. See generally, e.g., Pl.'s Opp'n Br. at 2 ("Gentiva knowingly caused billing for more Flolan . . . than was medically necessary"); id. at 9 ("[d]elivery of pumps that are not maintained is not medically necessary[, nor is] the rental of pumps that supply less than all of the required medicine"). These arguments fail for the same reasons they did in Mikes:
[While the court] agree[s] that [the] defendants certified they would comply with the terms on the [HCFA-1500] form and that such compliance was a precondition of governmental payment . . . [, the] plaintiff's objections to [the] defendants' spirometry tests do not implicate the standard set out in the HCFA-1500 form that the procedure was dictated by `medical necessity.'
The term `medical necessity' does not impart a qualitative element mandating a particular standard of medical care, and [the plaintiff] does not point to any legal authority requiring us to read such a mandate into the form. Medical necessity ordinarily indicates the level — not the quality — of the service. For example, the . . . medical necessity [standard] may [be implicated] where a party contends that a particular procedure was deleterious[,] . . . performed solely for profit[,] . . . or where a party seeks reimbursement for a procedure that is not traditionally covered. . . .
[As seen in these examples, t]he phrase `medically necessary' . . . appl[ies] to ex ante coverage decisions but not ex post critiques of how providers executed a procedure. . . .
In as much as [the plaintiff] challenges only the quality of [the] defendants' spirometry tests and not the decisions to order this procedure for patients, she fails to support her contention that the tests were not medically necessary.See Mikes, 274 F.3d at 698-99 (numerous citations and some internal quotations omitted, emphasis added).
Here, the Plaintiff's complaints regarding the maintenance and accuracy of Gentiva's pumps clearly and obviously go to the quality of its services, not whether the patients' receipt of the treatment was medically justified. As in Mikes, Mr. Cooper's arguments constitute " ex post critiques of how [the] provider executed a procedure," and they do not reflect the " ex ante coverage decisions" contemplated under the medical necessity inquiry. See id. at 698. The Plaintiff's arguments fail, and this court is "not obligate[d] . . . to step outside [its] primary area of competence [to] apply a qualitative standard measuring the efficacy of [Gentiva's] procedures." See id. at 702.
Plaintiff's counsel introduces another wrinkle, arguing that the under-delivery of medicine caused by the inaccuracy of Gentiva's pumps caused the billing of more Flolan than was medically necessary. See generally discussion supra. While Plaintiff's counsel certainly cannot be faulted for lacking creativity, his argument meets the same fate as those that preceded it.
Gentiva has shown that the amount of Flolan supplied to any given patient was dictated by the dosage prescribed by his or her physician. See generally Def.'s Statement of Material Facts at ¶ 43. The Plaintiff fails to refute this fact, asserting instead that physicians "over[-]prescribe[d]" Flolan to account for the Gentiva pumps' under-delivery of medicine. See Pl.'s Opp'n at 11. Accordingly, counsel's theory goes, "[t]he Flolan prescribed was clearly more than [the amount] medically necessary." See id.
Counsel's legal maneuvering aside, Mr. Cooper still has failed to implicate the "medical necessity" standard. As seen in Mikes, said inquiry goes to whether the medical treatment in question is, in the first instance, justified by the patients' medical condition. See generally discussion supra. Here, there exists no basis for questioning whether the Gentiva patients who received Flolan were proper candidates for the medicine. There is no evidence, for example, that Flolan treatment "was deleterious," "performed solely for profit," or "not traditionally covered" under Medicare. See generally Mikes, 274 F.3d at 698 (citing same as instances where "medical necessity" standard properly may be implicated). To the contrary, the record confirms that Flolan therapy is a necessary treatment for the "life-threatening, non-curable heart condition" of pulmonary hypertension. See generally, e.g., Def.'s Statement of Material Facts at ¶ 1.
In the end, the Plaintiff's argument regarding the amount of Flolan prescribed is little more than a thinly-veiled attack on the quality of the services provided by Gentiva. Counsel identifies no legal authority supporting his implicit shift from questioning whether Flolan treatment was "medically necessary" to whether the amount prescribed by the patients' physicians was justified. To make such a shift, the court would be required to address the quality of the Defendant's services, an inquiry falling squarely outside its "primary area of competence." See Mikes, 275 F.3d at 702; see also id. ("quality of care standard[s]" are "best enforced by those professionals most versed in the nuances of providing adequate health care"). Thus, the Plaintiff's argument that the inaccuracy of Gentiva's pumps rendered them "medically [un]necessary" is without merit.
This conclusion is further bolstered by the Defendant's uncontested evidence that the Flolan treatment methodology requires a residual volume of the medicine to go unused. See generally Def.'s Statement of Material Facts at ¶¶ 24-25 ("Because Flolan must be continuously administered and because air must never be pumped into a patient's heart, [the] Flolan cassette [feeding the pump] never will be completely empty or `run dry'[;] . . . a minimum five percent residual volume of Flolan always must remain in [the] cassette") (citations to evidence omitted). In light of this fact, the Plaintiff's complaint regarding the precise quantity of Flolan remaining in Gentiva's pumps necessarily goes to the quality of the Defendant's services, not whether the treatment was medically justified by the patients' illness.
The Plaintiff's related arguments regarding pump efficacy, both presumed and articulated, likewise fail. The presumed argument is that the pumps' inaccuracy resulted in a "factually false certification" regarding the amount of Flolan "delivered" by Gentiva. See discussion supra (addressing factually false certification); see also Pl.'s Opp'n Br. at 28-29. Counsel's articulated argument is that "the medication left over in [Gentiva's] pumps . . . was government property not delivered." See id. at 28 (citing 31 U.S.C. § 3729(a)(4)).
Both of these arguments hinge upon Plaintiff counsel's mis-characterization of the term "delivery." Counsel has not, and apparently cannot, dispute that Gentiva shipped to its patients the amount of Flolan prescribed by their physicians. See generally discussion supra. Regardless of how much Flolan was "delivered" through Gentiva's pumps, Mr. Cooper has failed to demonstrate that the Defendant gave "an incorrect description of goods or services provided or a request for reimbursement for goods or services never provided." See id. (identifying same as bases for "factually false" certification claim).
Similarly without merit is the Plaintiff's reliance on Section 3729(a)(4), which states:
[Liability attaches if an entity] has possession, custody, or control of property . . . to be used . . . by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the [entity] receives a certificate or receipt.See id. (emphasis added).
Even assuming counsel has made a case for applying Section 3729(a)(4), a proposition the District Court should expressly decline to endorse, he has failed to establish that less Flolan was "delivered" than the amount for which Gentiva was paid. The Plaintiff has not shown the Defendant shipped to its patients less medication than their physicians specified. There again exists no legal authority supporting counsel's implicit shift in inquiry from the amount of Flolan provided to the amount "delivered" through Gentiva's allegedly inaccurate pumps.
Although the undersigned has explained why the Plaintiff's Section 3729(a)(4) claim fails under the theoretical constructs presented, the case law reveals the Section to be wholly inapplicable. See generally, e.g., U.S. ex rel. Aakhus v. Dyncorp, Inc., 136 F.3d 676, 681 (10th Cir. 1998) ("the certificate or receipts . . . must be created by the government," and "[t]he plain language of (a)(4) makes clear the certificate or receipt . . . must have some connection or relationship tothe defendant's return of [government] property") (emphasis added). Either way, the Plaintiff's arguments are without merit.
The last discernable argument raised by Plaintiff's counsel relates to the "worthless services" doctrine. Counsel asserts that "there is a point at which bad performance [equates to] non-performance," and the quality of Gentiva's services crossed this line. See generally Pl.'s Opp'n Br. at 16.
As recognized in Mikes,
An allegation that [the] defendants violated the Act by submitting claims for worthless services is not predicated upon the false certification theory. Instead, a worthless services claim asserts that the knowing request of federal reimbursement for a procedure with no medical value violates the Act irrespective of any certification. . . . In a worthless services claim, the performance of the service is so deficient that for all practical purposes it is the equivalent of no performance at all.See id., 274 F.3d at 702-703 (emphasis added).
Mr. Cooper's evidence fails to support a reasonable inference that Gentiva's services had "no medical value." Cf. generally ACT, Inc. v. Sylvan Learning Sys., Inc., 296 F.3d 657, 666 (8th Cir. 2002) (on summary judgment, non-moving party is not entitled "to the benefit of unreasonable inferences [or] those that amount to nothing more than mere conjecture"). To the contrary, the Defendant's equipment and medicine was used to treat a life-threatening, non-curable heart condition. See generally discussion supra. If Gentiva's services were indeed totally worthless, the evidence would establish that its patients essentially went untreated, thereby presumably causing serious deterioration of their condition or death. No such evidence has been brought forward, and the court otherwise has no reasonable basis for concluding Gentiva's services were completely worthless. See generally Mikes, 274 F.3d at 702-703; see also, e.g., U.S. ex rel. Swan v. Covenant Care, Inc., ___ F. Supp.2d ___, 2003 WL 22037752, *6 (E.D. Cal. Aug. 5, 2002) (rejecting worthless services claim against nursing home because plaintiff did "not allege that [the defendant] failed to provide any services to its patients" as result of alleged under-staffing; "she only challenge[d] the level of care and the amount of services" received) (emphasis added).
Having addressed the Plaintiff's most substantial arguments, all that remain are the "loose ends" raised in his pleadings and legal briefing. Such matters are quickly disposed of.
First is Mr. Cooper's reference to "regulations relating to pump tracking, defect reporting, maintenance of records and customer service." See generally Am. Compl. at ¶ 29(E). Other than the regulations addressed above, Plaintiff's counsel has failed to identify any statutory, regulatory or contractual source of obligation. See generally Pl.'s Opp'n Br. The Plaintiff's allegations of additional certification find no support in the record.
Second are the Plaintiff's references to the "Program Instructions." See generally discussion supra. As seen above, the documentation cited by counsel does little more than describe the "HCPCS Codes" presumably applicable to Gentiva's services. See id. Even assuming the document obligated the Defendant to supply Flolan and "an infusion pump," moreover, there is no meaningful dispute that Gentiva did just the same. See id. The purported "Program Instructions" are a red herring, and they find no proper place in the court's analyses.
Last is Plaintiff counsel's attempt to distinguish Mikes. Counsel posits that, "[i]n the present case, [unlike Mikes,] the accuracy of the pumps [was] a specific defined term of the agreement, as was pump maintenance . . . and delivery from stock." See Pl.'s Opp'n Br. at 15-16. As seen above, none of these assertions are borne out by the record. To the contrary, Mikes overwhelmingly supports the rejection of the Plaintiff's claims at every turn. Counsel cannot distinguish Mikes, and the analyses reflected therein defeat Mr. Cooper's qui tam claims.
In conclusion, the Plaintiff's allegations address a very serious matter, namely the quality of medical care provided to dangerously ill patients. See generally discussion supra. No matter how tempted the court may be to "step outside [its] primary area of competence and apply a qualitative standard measuring the efficacy of [medical] procedures," such inclinations must be tempered by its obligation to follow the law. As the Mikes Court aptly observed, "[i]nterests of federalism counsel that the regulation of health and safety matters is primarily, and historically, a matter of local concern." See discussion supra. Allowing Mr. Cooper to proceed under the theories presented, moreover, would be to "promote [the] federalization of medical malpractice, [with] the federal government or the qui tam relator . . . replac[ing] the aggrieved patient as plaintiff." See id.
At least under the circumstances presented here, the court must agree that other public or private entities "are better suited to monitor quality of [medical] care issues." See Mikes, 274 F.3d at 700. Indeed, the record reveals that more appropriate forms of redress both existed and were utilized by Gentiva's patients. See generally, e.g., Def.'s Br. at 11 and Pl.'s Statement of Material Facts at ¶ 40 (both noting that residual volume issue was discussed on various internet websites and electronic bulletin boards related to pulmonary hypertension); Def.'s Statement of Material Facts at ¶ 102 and n. 8 (addressing one patient's complaint to Federal Drug Administration, and said administrative body's subsequent investigation of same); see also generally, e.g., 42 C.F.R. § 424.57(c)(19) (requiring supplier to establish "a complaint resolution protocol to address beneficiary complaints that relate to supplier standards, " and contemplating potential revocation of billing privileges in response thereto).
The Plaintiff's qui tam claims fail under the law, and the Defendant is entitled to summary judgment in this regard. B. The Defendant Has Failed to Show Its Entitlement to Summary Judgment on the Plaintiff's Retaliatory Discharge Claim. 1. Scope of Retaliatory Discharge Claim and Evidence A Supporting Same
Mr. Cooper's allegations of retaliatory discharge stem from his having contacted Gentiva's corporate compliance hotline regarding its use of Glaxo pumps. See Pl.'s Opp'n Br. at 29-32. The facts and allegations giving rise to his claim are as follows.
The Plaintiff also claims to have engaged in protected conduct when, "on his own initiative, [he] directed [those under his supervision to] run tests on [the Defendant's] pumps to measure" their level of inaccuracy. See generally Am. Compl. at ¶¶ 34(E), (F). Defense counsel's summary judgment papers level detailed attacks on this theory, and the Plaintiff has failed to meaningfully respond. Compare Def.'s Br. at 16-19 (arguing that Plaintiff's investigation into pump inaccuracy was not "protected conduct," Gentiva did not terminate him "because of" such conduct, and Defendant's decision maker had no knowledge of Plaintiff's investigation) with Pl.'s Opp'n Br. at 29-32 and n. 10 (focusing exclusively on Glaxo pumps issue, save single conclusory sentence in footnote regarding investigation of pump inaccuracy). The Plaintiff has not met his burden on summary judgment regarding the pump inaccuracy investigation. See generally Ridgewood Bd. of Educ. v. N.E. ex rel. M.E., 172 F.3d 238, 252 (3d Cir. 1999) ("[o]nce the moving party points to evidence demonstrating no issue of material fact exists, the non-moving party has the duty to set forth specific facts showing [otherwise]") (citations omitted, emphasis added). Thus, the court's analyses will be restricted to Mr. Cooper's report regarding the Glaxo pumps.
The Plaintiff acted as warehouse manager for Gentiva's facility in Warrendale, Pennsylvania. See generally Def.'s Statement of Material Facts at ¶¶ 61-62. In that capacity, he managed the day-to-day operations of Gentiva's Flolan services and oversaw "the program through which [the Defendant] tracked, maintained, and distributed" its pumps. See generally id. at ¶¶ 63-64.
Mr. Cooper has testified that in late 1999, and due to an inventory shortage, Jay Watson ("Mr. Watson") instructed him to send Glaxo pumps to Gentiva patients. See generally Cooper Dep. Tr. at 80. Mr. Watson, who the Plaintiff identifies as general manager of the Warrendale facility and his direct supervisor, allegedly gave this instruction to Mr. Cooper's assistant, Tim Grzelka ("Mr. Grzelka"). See generally id.
Mr. Cooper had some trepidation regarding Mr. Watson's instruction, based on alleged discussions he had with Frank Geiger ("Mr. Geiger"), Gentiva's senior vice president of materials, and others:
Q. Did [someone] tell you that the Glaxo pumps should not be sent to a patient . . . whose services were being covered by a government payer?
A. Yes, we discussed that. . . .
Q. When did you discuss [it]?
A. In the weeks prior to [Mr. Watson] telling us to [send out Glaxo pumps].
Q. What were those discussions?
A. We can't send out the pumps that we do not own.
. . . .
Q. Who told you that?
A. I believe it was [Mr.] Watson, and [Mr. Geiger] was involved in the conversation.
. . . .
[Mr. Geiger later] was saying that we shouldn't have sent the pumps out regardless, that it would somehow be fraud. [Mr. Watson] agree[d], but it was done,. . .[t]hey [already] were sent out.
Q. What kind of fraud was Mr. Geiger talking about?
A. I believe Medicare fraud.
See Cooper Dep. Tr. at 81-83.
After the Glaxo pumps had been sent, the Plaintiff's assistant Mr. Grzelka approached him regarding the same:
Q. Did Mr. Grzelka express any concern to you about sending the Glaxo pumps out?
A. . . . . After . . . [they] were [sent] out, . . . we made a call to the corporate compliance hotline.
Q. Did Mr. Grzelka approach you[,]. . . express his concern and tell you he was going to report this to the . . . hotline?
A. Yes, we had a conversation about doing that. . . . [Mr. Grzelka] came up to me[,] we spoke about it[, a]nd we both made the call to the hotline.
Q. Did you tell Mr. Grzelka you wanted to participate in the call?
A. Absolutely.
. . . .
Q. What was your conversation with [the hotline representative]?
A. [With t]he first woman that we spoke [to], . . . [we addressed] our concern for Medicare fraud when the Glaxo pumps were sent out. We were very concerned about trouble.See id. at 86-88.
The Plaintiff's testimony is corroborated by Gentiva's "Corporate Compliance Intake Form" dated December 28, 1999. See Gentiva Docs. at Bates No. 0086. Said form confirms Mr. Grzelka and the Plaintiff called on that date, with the "Nature of [the] Call" being "Fraudulent billing." See id. The "[d]etails" section described the conversation as follows:
Tim [Grzelka] and Mark [Cooper] called to notify us of some issues in the Warrendale office pertaining to lack of pumps and fraudulent billing. . . . When the branch ran out of pumps they were told by [Mr.] Watson to use the Glaxo pumps, which are . . . study . . . equipment . . . not owned by [Gentiva]. . . . However, [Gentiva] is billing for the use of these pumps. . . . Investigation is in progress.See id.
Mr. Cooper has testified that, after the hotline call was placed, Mr. Watson approached him and stated that "he was pretty upset about [it]." See Cooper Dep. Tr. at 92. According to the Plaintiff, Mr. Watson would not let "the subject . . . drop," bringing it up "[b]etween five and ten [times]" thereafter. See id. at 94. Then, Mr. Watson allegedly told the Plaintiff to "take actions against [Mr. Grzelka]" for having called the hotline. See generally id. at 93-94. Mr. Cooper did so, see id. at 97, and in response Mr. Grzelka made another call to the hotline on March 9, 2000. The intake form memorializing the second communication indicated that the "Nature of [the] Call" was "[a]lleged retaliation for reporting issue to Corporate Compliance." See Gentiva Docs. at Bates No. 0088. The summary section of the form stated:
Tim Grzelka and Mark Cooper [called] Corp[orate] Compliance on December 27[, 1999]. [Mr. Grzelka] was recently told by [Mr. Cooper] that he [was] told by Jay Watson . . . to give him a written warning for causing alarm by reporting the issue regarding the [Glaxo] pumps. . . . Investigation is in progress.See id.
The Plaintiff claims that, on or around the time these events transpired, he began to "develop the perception" that he had become a "marked man in the corporation." See Cooper Dep. Tr. at 98. For example Bob Nixon ("Mr. Nixon"), the president of the Plaintiff's division, allegedly told Mr. Cooper he was the root of a lack of employee "synerg[y]" at the Warrendale facility. See id. at 99-101. The Plaintiff also allegedly "was starting to be left off emails, [excluded from] meetings," et cetera. See id. at 102.
Thereafter, in August 2000, Mr. Watson allegedly told the Plaintiff he should begin looking for another job. See Pl.'s Statement of Material Facts at ¶ 72. Mr. Watson purportedly repeated this statement on September 27, 1999, and just seven days later Chris Anderson ("Mr. Anderson") authored an email regarding the Plaintiff's termination. See Gentiva Docs. at Bates No. 0096. Mr. Anderson acted as "Vice President, Audit Services and Quality Assurance, and Chief Compliance Officer" of Gentiva. See Anderson Decl. (attached as Ex. L to Doc. 42) at ¶ 4. He also was the management-level employee to whom Mr. Cooper's hotline complaint was referred. See generally Cooper Dep. Tr. at 87-88. In his October 4, 2000 email, Mr. Anderson stated that, "when Bob Nixon and I were in Warrendale a couple of months ago, he and I agreed [Mr. Cooper] would be terminated for his retaliation against another employee[, i.e., Mr. Grzelka]." Gentiva Docs. at Bates No. 0096.
Just two days later, on October 6, 2000, Gentiva's human resources department transmitted to the Plaintiff a letter of termination. See Gentiva Docs. at Bates No. 0166-0168.
As to the substance of Mr. Cooper's complaint regarding the Glaxo pumps, the record confirms that an investigation was undertaken. Within an unspecified time frame after Mr. Cooper's call to the hotline, Mr. Anderson called upon the assistance of Mr. Nixon to investigate the matter. See generally Anderson Dep. Tr. (attached as Ex. K to Doc. 42) at 47-48, 51. When the investigation revealed (again within an unspecified time frame) that Glaxo pumps indeed had been provided to Medicare patients, Gentiva purchased the pumps and "reimbursed Medicare for the [previous] payments . . . it received for the[ir] rental." See Def.'s Br. at 10; see also Def.'s Statement of Material Facts at ¶¶ 82, 84.
2. Legal Standards and Analysis
The Third Circuit Court in Hutchins described as follows the legal standards governing Mr. Cooper's retaliation claim:
A plaintiff asserting a [retaliation claim under the FCA] must show (1) he engaged in `protected conduct,'. . . and (2) that he was discriminated against because of his protected conduct. . . . In proving that he was discriminated against `because of' conduct in furtherance of a False Claims Act suit, a plaintiff must show that (1) his employer had knowledge he was engaged in protected conduct; and (2) that his employer's retaliation was motivated, at least in part, by the employee's engaging in protected conduct. . . . At that point, the burden shifts to the employer to prove the employee would have been terminated even if he had not engaged in the protected conduct.See id., 253 F.3d at 186 (citations and some internal quotations omitted).
At the onset, it is important to note that Mr. Cooper's inability to bring viable qui tam claims is not relevant to the retaliation inquiry. As the Hutchins Court explained, the retaliation provisions "do not require the plaintiff to have developed a winning qui tam action"; they "only require that the plaintiff engage in acts [made] in furtherance of an [FCA] action." See id. at 187 (citations, internal quotations, and some alterations omitted). Thus, the Defendant's entitlement to summary judgment on the Plaintiff's qui tam claims has no bearing on the retaliation analyses.
In its moving papers, Gentiva challenges the Plaintiff on his initial burdens, namely whether Mr. Cooper engaged in "protected activity" and whether he was discriminated against "because of" such activity. See generally Def.'s Br. at 16-20. As to the "protected conduct" inquiry, the Third Circuit Court has observed:
Under the appropriate set of facts, [protected] activit[y] can include internal reporting and investigation of an employer's false or fraudulent claims. . . . [It] would [not] . . . be in the interest of law-abiding employers for the [False Claims Act] to force employees to report their concerns outside the corporation in order to gain whistleblower protection. Such a requirement would bypass internal controls and hotlines, damage corporate efforts at self-policing, and make it difficult for corporations and boards of directors to discover and correct on their own false claims made by rogue employees or managers. . . .
Mere dissatisfaction with one's treatment on the job is not, of course, enough. Nor is an employee's investigation of nothing more than his employer's non-compliance with federal or state regulations.See Hutchins, 253 F.3d at 187 (citations and internal quotations omitted, alterations in original, emphasis added).
As to whether the employer discriminated against the employee "because of" protected activity:
[T]he kind of knowledge the [employer] must have mirrors the kind of activity in which the [employee] must be engaged. What [the employer] must know is that [the employee] is engaged in protected activity . . . — that is, in activity that reasonably could lead to a False Claims Act case.See id. at 188 (citations and internal quotations omitted, alterations in original).
These general propositions aside, the Hutchins Court recognized that the aforementioned determinations require "intensely factual" inquiries. See id. at 187, 189, 191. Accordingly, the court surveyed the various legal decisions preceding it and identified the considerations taken into account. See id. at 189 (proclaiming to do same). Among other things, these considerations include:
• whether the plaintiff's complaints led to internal or external investigation(s);
• whether the plaintiff used the words, "illegal," "unlawful," " qui tam, " "fraud" or "fraudulent" in characterizing his concerns regarding the charges;
• whether the plaintiff's "regular job duties" involved "investigating and reporting fraud" or, similarly, whether the plaintiff uncovered the alleged fraud through his performance of specifically "assigned task[s]"; and
• whether the plaintiff can rebut evidence that his supervisors had no knowledge of the protected activity.See Hutchins, 253 F.3d at 189-92 (numerous citations omitted).
Taking the aforementioned considerations into account, the Plaintiff has met his burdens regarding protected activity and the Defendant's knowledge of the same.
As seen above, Mr. Cooper has testified that he called the corporate compliance hotline to report "Medicare fraud." See discussion supra (quoting Plaintiff's testimony that "[we addressed] our concern for Medicare fraud"). Gentiva's own records confirm this fact, as its Corporate Compliance Intake Form noted Mr. Cooper's report of "fraudulent billing." See Gentiva Docs. at Bates No. 0086. Under Hutchins, this evidence weighs in favor of finding protected activity. See, e.g., id. at 192-93 (plaintiff's "characterizing the employer's conduct as illegal or fraudulent" informs employer "that litigation is a reasonable possibility").
Next, the Plaintiff's hotline call led not only Gentiva's conducting an internal investigation, but to its reimbursement of Medicare payments accepted in connection with the Glaxo pumps. See discussion supra;Hutchins, 253 F.3d at 189 (protected activity found where reports "through corporate channels . . . le[d] . . . to investigations" that confirmed plaintiff's allegations of fraud). Notably, moreover, Gentiva's investigation was conducted by Messrs. Anderson and Nixon, the very same management-level employees who decided to terminate the Plaintiff "for his retaliation against" Mr. Grzelka based on the hotline call (ironically, the same call in which the Plaintiff participated). These facts bolster the conclusion that Gentiva had knowledge, both literally and within the applicable legal standards, of Mr. Cooper's protected activity.
In addition, the record does not support Defense counsel's contention that the Plaintiff acted within his "regular course of duties" in reporting Medicare fraud through the corporate hotline. See Def.'s Br. at 17. The evidence refutes any notion that Mr. Cooper was responsible for Medicare billing or that his regular job duties included "investigating and reporting fraud." See discussion supra; see also Cooper Dep. Tr. at 84-85 (Plaintiff was not responsible for billing); Def.'s Statement of Material facts at ¶¶ 62-66, 68-69 (summarizing Plaintiff's job responsibilities, and making no reference to billing matters or investigation of fraud).
Finally, this is not a case where the Plaintiff has done "nothing to rebut his [employer's evidence] regarding [its] lack of knowledge that he was" engaged in conduct "outside the scope of his job responsibilities." See Hutchins, 253 F.3d at 192 (citation and internal quotations omitted). To the contrary, the record contains clear evidence that employees involved in the adverse employment decision participated directly in the investigation of improper billing. See discussion supra.
In sum, the Plaintiff has met his burdens regarding protected activity and the Defendant's knowledge of the same.
The Defendant next argues that Mr. Cooper has failed to show Gentiva's retaliation was "motivated" by his protected conduct and that he would have been terminated irrespective of the same. See Def.'s Br. at 19-21. In these regards, the Plaintiff has identified material issues of fact.
Defense counsel treats the "motivation" and "terminated either way" inquiries essentially the same way, arguing in both instances that Mr. Cooper's inadequate job performance resulted in his termination. See generally Def.'s Br. at 19-21. The undersigned agrees with Defense counsel's implicit recognition that, at least within the context of this case, the two inquiries appear to be the "flip side" of one another, i.e., either Mr. Cooper's termination was "motivated" by his protected conduct, or he would have been terminated regardless of the protected conduct. And though subtle distinctions may be drawn between the two standards, the undersigned questions whether such distinctions could, as a practical matter, be recognized and applied in any FCA retaliation case. In the end, though, the District Court need not address these issues, as the Defendant's evidence and arguments under the two standards are materially similar.
Defense counsel cites the testimony of numerous management-level employees at Gentiva regarding the Plaintiff's allegedly inadequate job performance. See generally Def.'s Br. at 20. Gentiva appears to blame all of its problems in Warrendale, both in connection with Flolan services and otherwise, on Mr. Cooper. See, e.g., id. (alleging Plaintiff failed to properly track, retrieve, and manage Flolan equipment and inventory, he failed to properly manage personnel, and failed to maintain professional relationships with other employees). Based on these alleged deficiencies, Jim Glynn ("Mr. Glynn"), the Vide President of Operations for the Plaintiff's division, "decided to terminate [the] Plaintiff's employment." See id.
The Plaintiff has introduced evidence, however, that calls these explanations into serious question. As seen above, just two days before Mr. Cooper received his letter of termination, Mr. Anderson authored an email stating he and Mr. Nixon had agreed "a couple of months" previously that the Plaintiff "would be terminated for his retaliation against" Mr. Grzelka. See discussion supra. This evidence comes from Gentiva's own files, and it is in plain contradiction to (a) Gentiva's proffered reason for termination ( i.e., inadequate performance), and (b) the claim that Mr. Glynn made the termination decision. See generally discussion supra.
The Defendant's claims of poor job performance also are undermined by Mr. Cooper's largely favorable performance evaluation, which preceded the termination decision by less than three months. See Gentiva Docs. at Bates Nos. 0231-0233 (Mr. Watson's Jul. 12, 2000 evaluation of Plaintiff, indicating that of nine performance categories, Mr. Cooper was "Effective/On Target" in six, "Above Expectations" in two, and "[Needed] Improvement" in one).
Mr. Anderson's email is even more damaging given the referenced decision makers' knowledge of and involvement in the hotline complaint made by Mr. Cooper. As referenced above, Mr. Anderson was the management-level employee who followed up on the complaint. Both Mr. Anderson and Mr. Nixon, moreover, were involved in the resulting investigation, which ultimately led to the reimbursement of Medicare payments.
Reading the evidence in a light most favorable to the Plaintiff, moreover, it is entirely reasonable to infer that Mr. Cooper's direct supervisor Mr. Watson, who allegedly was aware of the Plaintiff's call to the hotline and was quite upset regarding the same, was involved in or influenced Gentiva's decision to terminate Mr. Cooper. Likewise, the evidence regarding Mr. Watson's having instructed the Plaintiff to retaliate against Mr. Grzelka further calls into question Gentiva's true motivation(s) in terminating Mr. Cooper's employment.
The circumstances leading up to the Plaintiff's termination, as well as the seemingly gross inconsistencies in the Defendant's proffered explanations regarding the same, preclude the entry of summary judgment. This case reeks of disputed material fact, and Gentiva's Motion for Summary Judgment as to retaliation should be denied.
C The Defendant Has Failed to Show Its Entitlement to Summary Judgment on the Plaintiff's Claim Under the Pennsylvania Whistleblower Law.
To sustain a claim under the Pennsylvania Whistleblower Law ("the PWL"), the Plaintiff "must establish he was retaliated against . . . because he made a good faith report . . . to [his] employer or appropriate authority" of an instance of "wrongdoing" or "waste." See generally Miles v. City of Phila., 2001 WL 34076644, *12 (E.D. Pa. Apr. 10, 2001) (citation and internal quotations omitted).
As seen below, the Plaintiff survives the Defendant's summary judgment request based on his allegations of "wrongdoing." Mr. Cooper's claims of "waste," on the other hand, fail for the same reasons identified in the court's FCA analyses. Cf. generally discussion supra (explaining why Plaintiff's allegations regarding residual volume of Flolan failed to support qui tam or retaliation claims under FCA).
Defense counsel has neither urged nor shown that Mr. Cooper's hotline call fails to qualify as a "report" of "wrongdoing." See generally Def.'s Br. at 22-25. The PWL's definition of "wrongdoing" includes "violation[s] . . . of . . . Federal or State statute or regulation" that are "not of a merely technical or minimal nature." See Pa. Cons. Stat. 43 P.S. § 1422 (emphasis added). Gentiva has not shown itself to have been in compliance with the "own inventory" provisions in 42 C.F.R. § 424.57(c)(4), discussed supra, nor has it shown why the presumed violations were "of a merely technical or minimal nature."
To be sure, Mr. Cooper's pleadings regarding the PWL do not make express reference to his hotline report. See generally Am. Compl. at Count III. Such allegations do appear in the Plaintiff's FCA retaliation Count, however, and the court agrees with Defense counsel that they reasonably may be read to support the PWL claim. Cf. generally Def.'s Br. at 22 ("[a]rguably, the only report of . . . wrongdoing . . . to Gentiva" was Plaintiff's hotline call).
Defense counsel instead attacks the Plaintiff's claim under the "good faith" standard. See Def.'s Br. at 23. The PWL requires a report of wrongdoing to be "made without malice or consideration of personal benefit," and "the person making the report [must] have reasonable cause to believe [it] is true." See 43 P.S. § 1422.
Based on the same facts and allegations supporting the Plaintiff's retaliatory discharge claim under the FCA, a jury reasonably may conclude that the PWL's "good faith" standards have been met. See generally, e.g., discussion supra (summarizing Plaintiff's testimony that he reported fraud because he was "very concerned about trouble"). The Defendant's assertions to the contrary notwithstanding, the evidence clearly does not lend to a resolution of this matter on summary judgment.
Finally, Defense counsel asserts that Mr. Cooper has failed to show "a [causal] connection between the report of wrongdoing and the alleged retaliatory acts." See Def.'s Br. at 24 (citing O'Rourke v. Commonwealth, 778 A.2d 1194, 1200 (Pa. 2001)). Again, disputed issues of material facts preclude the entry of summary judgment in this regard. See generally discussion supra (noting, among other things, Gentiva decision makers' participation in investigation leading to Medicare reimbursement).
The Defendant has failed to show its entitlement to summary judgment on the Plaintiff's PWL claim. D. The Plaintiff Is Entitled to Summary Judgment on the Defendant's Counterclaim for Attorney's Fees and Expenses.
The Defendant's Counterclaim is brought under FCA Section § 3730(d)(4). See generally discussion supra. Even assuming Gentiva properly may bring a counterclaim under this Section, it has failed as a matter of law to show that Mr. Cooper's action is "clearly frivolous, . . . vexatious, or [has been] brought primarily for purposes of harassment." See 31 U.S.C. § 3730(d)(4).
As seen above, Mr. Cooper's retaliation claim under the FCA easily survives scrutiny at the summary judgment stage. It is respectfully submitted, moreover, that the Plaintiff's evidence presents one of the stronger retaliation claims to have come before the undersigned in recent memory. And while the Plaintiff's qui tam claims ultimately fail under the law, the length and breadth of the court's analyses above hardly are indicative of a claim fairly characterized as "clearly frivolous" or "vexatious." Nor does there exist any basis for concluding that Mr. Cooper has brought his claims "primarily for purposes of harassment."
For all of these reasons, the District Court should grant the Plaintiff's Motion for Summary Judgment on the Defendant's Counterclaim. Cf. generally, e.g., Medina v. Ramsey Steel Co., Inc., 238 F.3d 674, 686 (5th Cir. 2001) (affirming district court's denial of attorney's fees and costs; "[h]aving found at least some of [the plaintiff's] claims . . . sufficient to survive summary judgment, it cannot be said that his claims were frivolous or that he litigated in bad faith").
CONCLUSION
As consistent with the analyses above, the Defendant's Motion for Summary Judgment (Doc. 43) should be granted in part and denied in part, and the Plaintiff's Motion for Summary Judgment (Doc. 45) regarding the Defendant's Counterclaim should be granted.
In accordance with the Magistrates Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.1.4(B) of the Local Rules for Magistrates, objections to this report and recommendation are due by November 20, 2003. Responses to objections are due by December 1, 2003.