Bernstein v. Silverman

APPEARANCES: OFFICE OF THE UNITED STATES ATTORNEY, SYRACUSE Attorney for Plaintiffs OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL The Capitol Albany, New York 12224 Attorney for Plaintiffs United States of America and the State of New York DARTH M. NEWMAN, LLC Attorney for Plaintiff Relator THOMAS & SOLOMAN, PLLC BARCLAY DAMON, LLP Barclay Damon Tower Attorneys for Defendant Robert Silverman LIPPES MATHIAS, LLP Attorneys for Defendant University OB/GYN Associates, Inc. MCDERMOTT WILL & EMERY Attorney for Defendants Crouse Health Hospital, Inc., and Crouse Health System, Inc. MCDERMOTT WILL & EMERY Attorneys for Defendant Crouse Health Hospital, Inc., and Crouse Health System, Inc. MCDERMOTT WILL & EMERY Attorney for Defendant Crouse Health Hospital, Inc.

OF COUNSEL: CARL G. EURENIUS, AUSA EMILY L. AULETTA, AAG DARTH M. NEWMAN, ESQ. JONATHAN W. FERRIS, ESQ. DAVID G. BURCH, JR., ESQ. KYRA GANSWITH, ESQ. LAURA L. SPRING, ESQ. ALLISON BELLE CHERUNDOLO, ESQ. LAURA MCLANE, ESQ. NATASHA L. DOBROTT, ESQ. MEGAN CORRIGAN, ESQ. STACY A. LUTKUS, ESQ.

MEMORANDUM-DECISION AND ORDER

MAE A. D'AGOSTINO, U.S. DISTRICT JUDGE

I. INTRODUCTION

On May 6, 2020, Plaintiff and Relator Helene Bernstein, M.D., Ph.D., ("Relator") commenced this qui tam action on behalf of the United States of America and the State of New York (collectively "Plaintiffs") asserting that Defendants University OB/GYN Associates ("University OB/GYN"), Crouse Health Hospital and Crouse Health System (together "Crouse") (collectively "Entity Defendants"), and Robert Silverman, M.D. ("Dr. Silverman") (collectively "Defendants") submitted, or caused to be submitted, materially false bills for medical services which were not performed. See Dkt. No. 1. Relator also brought claims on her own behalf asserting that Defendants retaliated against her for reporting, attempting to stop, and refusing to participate in Defendants' dangerous and fraudulent patient care. See id. On July 28, 2023, Defendants filed motions to dismiss. See Dkt. Nos. 58, 59, 60. On December 15, 2023, Relator filed an amended complaint. See Dkt. No. 74.

In her amended complaint, Relator asserts the following ten claims against Defendants: (1) presenting false claims for payment under the False Claims Act (the "FCA"), 31 U.S.C. § 3729(a)(1)(A); (2) making false statements under the FCA, 31 U.S.C. § 3729(a)(1)(B); (3) conspiring to violate the FCA in violation of 31 U.S.C. § 3729(a)(1)(C); (4) presenting false claims for payment under the New York False Claims Act (the "NYFCA"), codified at Finance Law § 189(1)(a); (5) making false statements under the NYFCA, codified at Finance Law § 189(1)(b); (6) conspiring to violate the NYFCA in violation of New York Finance Law § 189(1)(c); (7) retaliation in violation of 31 U.S.C. § 3730(h); (8) retaliation in violation of New York Finance Law § 191; (9) a claim for retaliation in violation of New York Labor Law §§ 740, 741; and (10) filing reverse false claims in violation of 31 U.S.C. § 3729(a)(1)(G). See Dkt. No. 1.

On January 9, 2024, University OB/GYN, Crouse, and Dr. Silverman filed motions to dismiss Relator's claims. See Dkt. Nos. 83, 84, 86. On January 30, 2024, Relator filed a response in opposition. See Dkt. No. 88. On February 6, 2024, Defendants each filed a reply. See Dkt. Nos. 91, 92, 93. Relator filed a sur-reply on February 23, 2024. See Dkt. No. 100. Presently before the Court are Defendants' motions to dismiss.

II. BACKGROUND

A. The Parties

According to the amended complaint, Relator is a M.D., Ph.D. who is dual board certified in Obsterics and Gynecology and Maternal Fetal Medicine. See Dkt. No. 74 at ¶ 13. Relator "joined the Upstate University Medical School faculty in October 2015 as the Division Director of Maternal Fetal Medicine and was an Associate Professor of Obstetrics and Gynecology and an Associate Professor of Microbiology and Immunology." Id. at ¶ 14. Relator had tenure at Upstate University Medical School until May 2021, and held clinical privileges at Upstate University Hospital and Crouse Hospital through fall of 2021. See id. at ¶¶ 15, 16. "[S]he served as a member of the Coding Committee for the Society for [M]aternal-Fetal Medicine from 20192022." Id. at ¶ 22. As a member of the Coding Committee, Relator helped to decide "what is and is not proper coding/billing behavior within her specialty[.]" Id. at ¶ 23. Relator and other Maternal Fetal Medicine ("MFM") doctors "worked at the regional perinatal center housed at Upstate but they were responsible for seeing and treating patients at Upstate and at Crouse Hospital[.]" Id. at ¶ 312. Relator "performed medical services in the name of, on behalf of, and on the premises of each of the Entity Defendants all while and under the supervision and control of Dr. Silverman." Id. at ¶ 331. Relator alleges that each Defendant was an employer of hers, or, alternatively, that she was an agent of each Defendant. See id. at ¶¶ 329-30.

Defendant Dr. Silverman "is the former Division Director of Maternal Fetal Medicine at Upstate University Hospital and a board certified Maternal Fetal Medicine physician" who was acting as a representative and agent of University OB/GYN, Upstate Medical University ("Upstate"), and Crouse. Id. at ¶¶ 24, 25. Dr. Silverman was promoted to Chair of Obstetrics and Gynecology at Upstate before Relator was hired. See id. at ¶ 26. Dr. Silverman was in charge of patient safety and medical quality for Obstetrics and Gynecology at Crouse Hospital and Upstate. See id. at ¶ 29. He also held the positions "Professor, Chairman, and Director of the Division of Maternal-Fetal Medicine and the Department of Obstetrics and Gynecology at Upstate; and Chairman of the Department of Obstetrics and Gynecology and Director of the Regional Perinatal Program a joint program existing at Upstate Medical University and Crouse Hospital." Id. at ¶ 28. Dr. Silverman was the "longtime president of [University] OB/GYN [], the physician services entity, known as medical services group ('MSG'), that bills for provider services performed by Upstate Medical University affiliated Obstetrics and Gynecologic providers (including Upstate and Crouse) and then compensates physicians with the majority of their salary." Id. at ¶ 30. Dr. Silverman was the president of University OB/GYN until May 31, 2020. See id. at ¶ 37. Relator alleges that Dr. Silverman was her employer, had the "power to hire and fire" her, "personally signed the offer letter which effectuated" hiring her, and "personally supervised her, controlled her titles, working conditions including hours and schedules, and compensation." Id. at ¶ 319.

Relator's claims are based on her allegations that Dr. Silverman has been falsely attesting to reading, interpreting, and evaluating the results of ultrasound and fetal nonstress tests ("NSTs") ordered for patients and billing for them. See Dkt. No. 74 at ¶¶ 31, 32. Failing to read the results while nevertheless billing for them "expos[es] women and fetuses to the unnecessary risk of a gap in their medical care." Id. at ¶ 191. Relator also alleges that Dr. Silverman has "used his

leadership positions" to retaliate against people who raised concerns that he was engaging in fraudulent and dangerous practices. Id. at ¶ 34.

Defendant University OB/GYN is a not-for-profit corporation incorporated in the State of New York with a principal place of business in Syracuse, New York. See id. at ¶ 35. University OB/GYN "is a physician services entity which bills and collects revenue for physician services performed by Upstate Medical University affiliated Obstetric and Gynecologic providers including at Upstate and Crouse Hospitals." Id. at ¶ 36. University OB/GYN "submits or causes to be submitted" bills on behalf of Dr. Silverman for study reading, evaluation, and management services. Id. at ¶ 39. Relator alleges that some of these bills are materially false because Dr. Silverman never performed the services. See id. Relator also alleges that University OB/GYN retaliated against her by "restricting and withholding her compensation." Id. at ¶ 40.

Relator was a member of University OB/GYN during her employment at Upstate and Crouse Hospital, as required by the Upstate bylaws. Id. at ¶ 38. University OB/GYN was one of Relator's employers, maintained employment records on her, and controlled the majority of her compensation. See id. at ¶¶ 322-23. Relator was required to be employed by, and associated with, University OB/GYN in order to perform services at Upstate and Crouse Hospital. See id. at ¶ 324.

Upstate, Crouse, and University OB/GYN jointly control the regional perinatal program. See id. at ¶ 313. All non-physician staff at the regional perinatal center are employed by Upstate and Upstate subsequently charges University OB/GYN for the use of its staff and physical resources. See id. at ¶ 314. Upstate's Governing Board provides governance and oversight over clinical medicine and the various Medical Services Groups, including University OB/GYN. See id. at ¶ 315. Money collected at University OB/GYN is distributed to Upstate and Crouse and

Crouse contributes to the salaries of University OB/GYN physicians pursuant to contractual agreements with University OB/GYN. See id. at ¶¶ 316-17.

Defendants Crouse Health Hospital and Crouse Health System are both not-for-profit corporations incorporated in the State of New York with a principal place of business in Syracuse, New York. See id. at ¶¶ 41, 45. Crouse Health Hospital and Crouse Health Systems own or control Crouse Hospital and are "ultimately responsible for submitting, or causing to be submitted, the bills...