United States District Court, E.D. Kentucky, Central Division, Lexington
UNITED STATES OF AMERICA ex rel. ALISIA ROBINSON-HILL and DAVID A. PRICE, Plaintiffs,
NURSES' REGISTRY AND HOME HEALTH CORP., and ESTATE OF LENNIE G. HOUSE, Defendants.
MEMORANDUM OPINION AND ORDER
KAREN K. CALDWELL, Chief District Judge.
This matter is before the Court on Defendants' joint motion for partial summary judgment. (DE 267). Defendants contend that specific instances of remuneration fall within an exception to the Stark Law, and, therefore, Defendants are entitled to judgment as a matter of law as to those transactions. For the following reasons, Defendants' motion will be denied.
This is a False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733, case that started as a qui tam action filed by Relators, Alisia Robinson-Hill and David Price, against their former employer, defendant Nurses' Registry and Home Health Corporation ("Nurses' Registry"). (DE 1). The United States elected to intervene and filed its Complaint in Intervention in September 2011. (DE 46). In its Complaint in Intervention, the Government adds Lennie House and Vicki House as defendants and alleges extensive Medicare fraud under multiple theories. (DE 46). Relevant to the instant motion, the United States alleges that between March 2006 and August 2010, Defendants violated the FCA by falsely certifying that numerous claims were in compliance with the Stark Law, 42 U.S.C. § 1395nn. Defendants now move for partial summary judgment, contending that certain instances of remuneration fall within the "non-monetary compensation exception" to the Stark Law, and, therefore, cannot form the basis for liability under the FCA. (DE 267).
II. Factual Background
The facts of this action are more fully recounted elsewhere in the record of this case. Only those facts necessary to decide Defendants' present motion are set forth below.
Nurses' Registry is a home health care agency that is headquartered in Lexington, Kentucky. When this action was initiated, Lennie House was the president of Nurses' Registry, and his wife, Vicki House, was the company's secretary. The Houses were co-directors of Nurses' Registry's governing board.
As part of its regular business practice, Nurses' Registry provided items of value to physicians who referred patients to the company. (DE 157-13 V. House Dep. at 78; DE 157-14 Gray Decl. at ¶ 3.) Many of these distributions occurred through Nurses' Registry's marketing department. (DE 157-13 V. House Dep. at 78; DE 157-14 Gray Decl. at ¶ 3.) For example, in or around December 2008, Nurses' Registry sent gift baskets to a number of individuals, including referring physician Dr. Danilo Corales. (DE 157-38). Additionally, many referring physicians-including Drs. Bradford Fine, Stella Staley, and Michelle Welling-were invited to a private event hosted by Defendants at Keeneland race track in October 2009. (DE 157-34; DE 157-35; DE 157-36). Further, in March 2010, Defendants invited referring doctors to "Coach's Night" events, radio shows hosted by the coaches of the University of Kentucky football and basketball teams and sponsored by Nurses' Registry. (DE 157-4 Steketee Dep. at 47-49.) Drs. Ralph Alvarado, Robert Davenport, and Michael Noble were among the referring physicians that attended Coach's Night events at the invitation of Nurses' Registry. (DE 157-30; DE 157-31; DE 157-33).
The United States alleges that, inter alia, these seven instances of remuneration-a gift basket to Dr. Corales; Keeneland event tickets to Drs. Fine, Staley, and Welling; and Coach's Night tickets to Drs. Alvarado, Davenport, and Noble-created "financial relationships" between Nurses' Registry and the referring physicians for purposes of the Stark Law. (DE U.S. Compl. at 43.) Therefore, due to the existence of these "financial relationships, " the Government contends that Nurses' Registry violated the Stark Law when it submitted claims for payment to Medicare for services referred by those doctors. (DE U.S. Compl. at 43.) According to the United States, Defendants then falsely certified compliance with the Stark Law, thereby giving rise to liability under the FCA. (DE U.S. Compl. at 43-44.)
Defendants now move for partial summary judgment, claiming that these seven specific instances of remuneration fall within the "non-monetary compensation" exception to the Stark Law, and, therefore, cannot form the basis for liability under the FCA. (DE 267). Defendants' motion is now ripe for disposition.
III. Standard of Review
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate where the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The main inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-side that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Rule 56(c) mandates summary judgment against a party who fails to establish the existence of an element essential to the party's case and on which that party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
The moving party bears the initial responsibility of "informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrates the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. The movant may meet this burden by demonstrating the lack of evidence supporting one or more essential elements of the non-movant's claim. Id. at 322-25. Once the movant meets this burden, the burden shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250 (internal quotation marks omitted).
In evaluating the evidence, the court draws all reasonable inferences in favor of the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, "the mere existence of a scintilla of evidence in support of the non-moving party's position will not be sufficient; there must be evidence on which the jury could reasonably find ...