United States District Court, W.D. Kentucky, Paducah Division
MEMORANDUM OPINION AND ORDER
THOMAS B. RUSSELL, District Judge.
This matter is before the Court on several motions. Defendant Mercy Health Partners - Lourdes, Inc. has filed a Motion to Dismiss Amended Complaint. (Docket No. 23). Plaintiff Cindy Flick filed a Motion to Amend/Correct Amended Complaint, (Docket No. 24), which the Court interprets both as her reply to Defendant's Motion to Dismiss and as a Motion to Amend. Finally, Defendant filed a Motion to Strike. (Docket No. 6). These matters are now ripe for adjudication. For the following reasons, the Court will GRANT Plaintiff's Motion to Amend, GRANT IN PART and DENY IN PART Defendant's Motion to Dismiss, and GRANT IN PART and DENY IN PART Defendant's Motion to Strike.
Plaintiff Cindy Flick ("Flick"), proceeding pro se, brought this litigation against her previous employer, Mercy Health Partners - Lourdes, Inc. ("Lourdes"). (Docket No. 19). Flick was hired in January of 2011 as a Laboratory Section Supervisor. Her duties included "oversight of a wide variety of administrative, fiscal and technical activities and ensuring the efficient operation and regulatory compliance of the clinical laboratory...." (Docket No. 15-2). Flick alleges that in March of 2013, she became aware that Lourdes was "purposely holding breast tissue biopsy specimens for 14 days after patient discharge before sending them to Agendia (an outside reference lab)." Id. Agendia performs genetic testing which identifies the type of cancer present in the tissue. Flick alleges that the 14 day hold on breast tissue was done in order to "circumvent the Medicare Date of Service ("DOS") rule which specifies that any laboratory services performed within 14 days of an inpatient admission would be lumped into the predetermined DRG payment.... Anything after 14 days post discharge is treated as a separate encounter and can be billed separately." Id. Flick alleges that this meant that Agendia could bill Medicare, and not Lourdes, for the $9, 325 cost of the testing, leaving Lourdes with the full reimbursement payment. She alleges that this procedure violated the Medicare Claims Processing Manual and could adversely impact the health and welfare of breast cancer patients.
Flick became aware of this activity in March of 2013 and informed her direct supervisor Mohammad Khan, the Laboratory Director. Flick alleges that Khan denied knowledge of arrangement and made no effort to change it. In April of 2013, Flick reported the activity to Elizabeth Snodgrass, the Corporate Compliance Officer. Flick alleges that Snodgrass said she would investigate it, and shortly afterwards the practice was discontinued.
Further, Flick alleges that Khan attempted to obtain discounted pricing from Agendia by adding a clause to a proposed contract that required the lab to waive the charges if testing was ordered on inpatient or same day surgery. Flick alleges that Agendia sales representative Renis Baker met with Flick and said he was having trouble with Khan. Flick alleges that Baker indicated that Lourdes had unpaid bills, and Baker also sent Flick a copy of the proposed contract via e-mail. Flick met with Khan around July 30, 2013 and told him that she believed the stipulation regarding free services was a potential violation of Anti-Kickback regulations. Flick alleges that Khan responded that it was not her business. Additionally, Flick discovered that Agendia had written off approximately $14, 000 worth of services on two patients, one of whom Lourdes had already billed Medicare for.
In August of 2013, Flick met with Jeff Jones, Vice President of Operations; Flick reported that Khan had solicited and accepted free services and supplied Jones with documentation. Flick alleges that she heard back from Jones via e-mail on September 6, 2013, and that Jones said he did not have time to deal with these issues and that Jones supported Khan's decisions.
On October 3, 2013, Flick was suspended pending termination. The reason given for her termination was insubordination. Prior to her termination, Flick's four previous evaluations from Khan ranked her as an "above average" employee. Flick alleges that she was discharged in retaliation for reporting the activities described above.
In her first amended complaint, Flick alleges that the defendant violated KRS 216B.165 for unlawfully terminating her, KRS 205.8461 for soliciting kickbacks, 205.8463, 205.8465, and 18 USC 1031. In her second amended complaint, Flick voluntarily dismissed her claims under 31 USC 3729-3733 and 42 USC 1320(a)-7(b)(b). (Docket No. 24-1). Thus, Defendant's Motion to Dismiss is GRANTED as to those two claims.
The Federal Rules of Civil Procedure require that pleadings, including complaints, contain a "short plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a claim or case because the complaint fails to "state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b). When considering a Rule 12(b)(6) motion to dismiss, the court must presume all of the factual allegations in the complaint are true and draw all reasonable inferences in favor of the nonmoving party. Total Benefits Planning Agency, Inc., 552 F.3d 430, 434 (6th Cir. 2008) (citing Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir. 1983)). "The court need not, however, accept unwarranted factual inferences." Id. (citing Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)).
Even though a "complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). Instead, the plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. (citations omitted). A complaint should contain enough facts "to state a claim to relief that is plausible on its face." Id. at 570. A claim becomes plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). If, from the well-pleaded facts, the court cannot "infer more than the mere possibility of misconduct, the complaint has alleged-but has not show[n]'-that the pleader is entitled to relief.'" Id. at 1950 (citing Fed.R.Civ.P. 8(a)(2)). "Only a complaint that states a plausible claim for relief survives a motion to dismiss." Id.
In addition, federal courts hold pro se pleadings to a less stringent standard than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir. 1991). However, "[o]ur duty to be less stringent' with pro se complaints does not require us to conjure up unpled allegations." McDonald v. Hall, 610 F.2d 16, 19 (1st Cir. 1979) (citation omitted). Accordingly, this Court is not required "to explore exhaustively all potential claims of a pro se plaintiff, " as this would "transform the district court from its legitimate advisory role to the improper role of an advocate seeking out the strongest arguments and most successful strategies for a party." Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985). Only well-pled factual allegations contained in the complaint and amended complaint are considered on motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). See Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997).
1. Claims under KRS 205.8461 and KRS 205.8463
Flick argues that Lourdes violated both KRS 205.8461 and KRS 205.8463. KRS 205.8461 states that:
...[N]o provider shall knowingly solicit, receive, or offer any remuneration (including any kickback, bribe, or rebate) for furnishing medical assistance benefits or in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any goods, facility, service, or item ...