United States District Court, E.D. Kentucky, Central Division, Frankfort
MEMORANDUM OPINION AND ORDER
GREGORY F. VAN TATENHOVE, District Judge.
This matter is before the Court upon the Joint Motion to Dismiss [R. 4] filed by Defendants Dr. Philip Robinson and Associates in Eye Care ("AEC"), and the Motion to Dismiss filed by Defendant AEC [R. 6] on the same day. For the reasons set forth herein, both motions are DENIED.
The relevant facts and legal standards are the same for both motions. The United States has brought an action against both Dr. Philip Robinson, an optometrist, and against his employer, Associates in Eye Care, P.S.C. ("AEC"), under the False Claims Act, 31 U.S.C. §§ 3729-33 ("FCA"), and under common law theories of payment by mistake and unjust enrichment. [R. 1, ¶¶ 1-2.] The Complaint alleges that Dr. Robinson provided routine eye examinations to nursing home residents that were unnecessary, and that on certain days he claimed to examine such a high number of patients that either he could not possibly have provided such services under the circumstances, and/or such services were so cursory that they were worthless. [R. 1, ¶¶ 2-3; R. 10 at 1.] The Complaint also alleges that AEC, who employed Dr. Robinson, sought and received all reimbursement from Medicare and Medicaid for the services at issue between January 1, 2007 and January 31, 2012. [R. 1, ¶2; R. 10 at 1; R. 11 at 2.] According to the Complaint, Dr. Robinson owned 8%-10% of AEC's stock, and Dr. Robinson assigned his right to bill Medicare and Medicaid for his services to AEC, who submitted all of Dr. Robinson's claims and then shared the reimbursement money with him. [R. 1, ¶¶ 2, 23.] During the time period in question, the United States claims Dr. Robinson "was an extreme outlier in his utilization" of certain billing codes, allegedly submitting more claims to Medicare for certain types of eye exams during certain time periods than any other optometrist in Kentucky, and in the country. [R. 1, ¶ 36.]
In particular, the Complaint alleges that the frequency with which Dr. Robinson began to see many of his nursing home patients, beginning in 2007, was "unreasonable and unnecessary" given their conditions. [R. 1, ¶ 3.] The Complaint further alleges that there were at least 271 days during the relevant time period in which Dr. Robinson claims to have seen fifty (50) or more nursing home residents, which means that he could not have spent more than a few minutes at most with each one, and/or which establishes that the billing codes he used did not accurately reflect the services provided. [R. 10 at 1-2; R. 11 at 2-3.] According to the United States, on eleven of those days in question, Dr. Robinson claimed to have treated over 100 patients in an eight-hour day, while using billing codes that described examinations that typically take at least fifteen minutes to perform. [R. 1, ¶¶ 3, 31-36.]
In their Joint Motion to Dismiss, Dr. Robinson and AEC contend that the United States has not pled facts with sufficient particularity to satisfy the requirements of Federal Rules of Civil Procedure 12(b)(6) or 9(b). [R. 4-1 at 3, 5, 8.] Defendants argue that the government's allegations are not specific enough to provide proper notice, that the claims are based on speculation and devoid of factual support, and that the so-called representative examples of fraudulent claims detailed in the Complaint are not truly representative of the whole and therefore are insufficient for purposes of a FCA claim. [R. 4-1 at 1-16.] Additionally, Defendants contend that the Complaint fails to plead sufficient facts to establish the requisite intent element of the claim. [ Id. at 16-21.] Finally, Defendants argue that the United States' claims of unjust enrichment and mistake should also be dismissed pursuant to the same particularity standard of Rule 9(b). [ Id. at 21-23.]
In AEC's Motion to Dismiss, AEC separately argues that at least the claims against AEC should be dismissed because they lack sufficient detail concerning AEC's role in allegedly fraudulent activities, particularly because the Complaint fails to allege how AEC could have known there was anything wrong with Dr. Robinson's claims. [R. 6-1 at 1-5.] AEC also contends that it should not be held accountable under the FCA for Dr. Robinson's behavior. [ Id. ]
Under the False Claims Act ("FCA"), any person or entity "who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval, " or who "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim" is liable to the United States government for a specified civil penalty, plus two or three times the amount of damages which that person's fraudulent acts caused the government to sustain. 31 U.S.C. § 3729(a)(1)(A)-(B). For purposes of the FCA, the term "knowingly" means that the person or entity "has actual knowledge of the information, " or acts "in deliberate ignorance" or "in reckless disregard of the truth or falsity of the information." 31 U.S.C. § 3729(b)(1). To act "knowingly" requires "no proof of specific intent to defraud." 31 U.S.C. § 3729(b)(1)(B).
Accordingly, the Sixth Circuit, as well as other Circuits, have commonly held that the requisite elements of a FCA claim are as follows: "(1) a person presents, or causes to be presented, a claim for payment or approval; (2) the claim is false or fraudulent; and (3) the person's acts are undertaken knowingly, ' i.e., with actual knowledge of the information, or with deliberate ignorance or reckless disregard for the truth or falsity of the claim." United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 503 (6th Cir. 2007); see also United States v. Villaspring Health Care Center, Inc., 2011 WL 6337455, at *1 (E.D. Ky. Dec. 19, 2011) (quoting Bledsoe, 501 F.3d at 503).
In a motion to dismiss pursuant to Federal Rule 12(b)(6), "[t]he defendant has the burden of showing that the plaintiff has failed to state a claim for relief." DirecTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir. 1991)). When reviewing a Rule 12(b)(6) motion, the Court "construe[s] the complaint in the light most favorable to the plaintiff, accept[s] its allegations as true, and draw[s] all inferences in favor of the plaintiff." Id. (citation omitted). Such a motion should not be granted, however, "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Ricco v. Potter, 377 F.3d 599, 602 (6th Cir. 2004)). The Court, however, "need not accept as true legal conclusions or unwarranted factual inferences." Id. (quoting Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. 2000)). Moreover, the facts that are pled must rise to the level of plausibility, not just possibility - a complaint containing "facts that are merely consistent with a defendant's liability... stops short of the line between possibility and plausibility." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell ...