Patel v. Va. Premier Health Plan

1

LEKEI PATEL, Relator/Plaintiff, v. VIRGINIA PREMIER HEALTH PLAN, INC., Defendant.

No. 7:19-cv-516

United States District Court, W.D. Virginia, Roanoke Division

July 5, 2022

MEMORANDUM OPINION

MICHAEL F. URBANSKI, CHIEF UNITED STATES DISTRICT JUDGE

This matter comes before the court on Defendant Virginia Premier Health Plan, Inc.'s (“Va. Premier's”) motion to dismiss Plaintiff Lekei M. Patel's Second Amended Complaint (“SAC”), ECF No. 52, for failure to state a claim upon which relief can be granted. ECF No. 56. The parties have requested that the court rule on the pleadings. For the reasons explained herein, the court DENIES the motion to dismiss.

I.

On July 23, 2019, Patel filed her original complaint against Va Premier. See ECF No. 1. Va. Premier filed a motion to dismiss for failure to state a claim. ECF No. 33. In response, Patel moved to voluntarily dismiss Counts I through VIII of the First Amended Complaint (“FAC”), ECF No. 36, and opposed the motion to dismiss Count IX. See ECF No. 45. The court granted Patel's motion to voluntarily dismiss Counts I through VIII with prejudice as to Patel, but without prejudice as to the United States and the Commonwealth of Virginia. See ECF No. 51. The court also dismissed Patel's False Claims Act (FCA) retaliation claim (Count IX), but granted her leave to amend her complaint as to that claim. See id. After Patel filed her SAC, Va. Premier again moved to dismiss the FCA retaliation claim for failure to state a claim under Fed.R.Civ.P. 12(b)(6). See ECF No. 56.

II.

Under Rule 12(b)(6), a party may move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). At this stage, the court must accept as true all well-pleaded allegations and draw all reasonable factual inferences in the plaintiff s favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007). “While 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) (internal citation and quotation marks omitted). To survive dismissal, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

III.

Patel alleges the following facts in support of her FCA retaliation claim. The Virginia Department of Medical Assistance Services (“DMAS”) implemented a program called Commonwealth Coordinated Care Plus (“CCC Plus”) on August 1, 2017, as part of a state plan for medical assistance services. SAC, ECF No. 52, at 2. DMAS contracted with six Managed Care Organizations (“MCOs”), including Va. Premier, to provide CCC Plus services. Id. at 3. Va. Premier then began to provide “Medicaid managed long term services and supports” to members of CCC Plus. Id. DMAS pays a capitation payment to Va. Premier monthly as payment for services provided and administrative costs. Id. The capitation rate is based on data provided by MCOs and DMAS and includes factors such as eligibility group, locality, and level of care. Id. The total monthly payment from DMAS to Va. Premier is based on the number of members Va. Premier served and the capitation rate associated with those members. Id. at 4.

On January 1, 2018, DMAS started to withhold 1% of all payments made through its CCC Plus Program, which was a “quality withhold tied to sufficient reporting of core quality measures[.]” Id. From July 1, 2018 to December 31, 2018, it was tied to reporting of CCC Plus members. Id. at 4-5. If MCOs reported sufficient data, they were entitled to earn back the 1% quality withhold, but if they did not, they forfeited the quality withhold for 2018. Id. at 5. DMAS required the Medicaid contractors participating in CCC Plus to have “care coordination staffing ratios that ensure compliance with all required care coordination activities required under th[eir] contract” with DMAS. Id. From August 1, 2017 to December 31, 2018, the maximum ratio for care coordinators of CCC Plus Waiver participants (Level 3s) was 1:70, and on January 1, 2019, it increased to 1:75. Id. For care coordinators of Emerging High-Risk members (Level 2s), the ratio from August 1, 2017 to 2019 was 1:400. Id. at 6. DMAS required the MCOs to provide reports each month demonstrating their compliance with these ratios. Id.

Va. Premier was also required to provide benefits to CCC Plus HCBS Waiver members including Personal Emergency Response Systems (“PERS”), Assistive Technology (“AT”), and Environmental Modifications (“EMs”). Id. Va. Premier was supposed to assist members in accessing these services. Id.

Patel was hired by Va. Premier on or about January 17, 2018 as a Level 3 Long Term Service and Support Specialist serving CCC Plus Waiver Populations in the Roanoke, VA location. Id. at 7. “A Level 3 assists high-risk Medicaid recipients and their family members to resolve issues related to the members' care.” Id. Each Level 3 has a caseload of members that they are expected to assist, and when Patel was interviewed, her supervisor told her that her caseload would consist of about 70 members. Id. Patel alleges that her first caseload actually consisted of about 170 members. Id. Only four of the 19 Level 3s in the Roanoke office had caseloads below the DMAS limit of 70. Id. at 8. Several Level 3s had caseloads exceeding 100 members, and three or four Level 2 care coordinators had caseloads exceeding 400. Id. Starting in June 2018, Patel repeatedly complained to her supervisors and human resource officers about how the company was defrauding the United States and Virginia by assigning her and other care coordinators caseloads that exceeded the ratios permitted by DMAS. Id. Specifically, on or about June 14, 2018, Patel complained to Va. Premier's Senior Human Resources Generalist Brittany S. Wooden about the “excessive and unlawful care coordination staffing ratios.” Id. at 9. She repeated these complaints to Wooden on July 31, 2018. Id.

Patel also complained about Va. Premier's refusal to process AT and EMs applications for its members even though it was required to “assist its CCC Plus Members in accessing [these] services.” Id. at 10 (citing Exhibit 3, at 342). Va. Premier did not instruct its care coordinators on how to apply for these funds on behalf of their members. Id. In a training session on July 18, 2018, Patel asked Va. Premier's Director of Health Services MLTSS, Andrea Brodman, how to apply for EMs on behalf of a member, but Brodman told her not to “promote” this program because not providing it helps Va. Premier save money. Id. at 10- 11. Patel replied that the money was there for members and her member needed it to make her house safer to continue to live in. Id. at 11. Yet, none of the supervisors at the training told the care coordinators how to apply. Id. Patel alleges that over the course of the following six months, she repeatedly alerted Va. Premier of its obligations to provide its members with access to EM and AT services and informed Va. Premier that not doing so was a material breach of its legal obligations. Id.

Va. Premier terminated Patel's employment on January 31, 2019, alleging that she submitted a fraudulent document to DMAS-a Member Note (Exhibit 30, “the Note”) that she submitted after assessing an autistic member. Id. Patel had begun the assessment in November 2018, but worked on it again on January 2, 2019, and completed it on January 3, 2019. Id. On the November date and on January 2, 2019, she interacted with the member, but on January 3, 2019, she did not. Id. at 12. This Note described the member and included present tense observations, which Patel's supervisor, Nora Bell, misinterpreted to imply that Patel had observed the member on January 3, the same day she submitted the Note, thus leading Bell to conclude that the Note was fraudulent. Id.

Patel asserts that this claim of fraud was pretextual because she did not purport to have made any of the observations on the same day she submitted the Note. Id. To further support the claim that the purported reason for firing her was pretextual, Patel details actual and intentional fraud that was allegedly committed by Bell while employed by Va. Premier. See Id. Patel alleges that fraudulent practices were common among Va. Premier's management. See id. at 13.

DMAS required Va. Premier to submit monthly reports indicating its level of compliance with the 1:70 and 1:400 maximum care coordination ratios, and Va. Premier demonstrated awareness that it was bound by these ratios. Id. Patel inferred that Va. Premier had “intentionally and fraudulently reported staffing ratios for Level 3s that were at or below the 70:1 maximum” even when they were higher, and thus had “corruptly and falsely certified to DMAS that it was in compliance with the CCC Plus ratio requirements every week after February 7, 2018.” Id. at 13-14. “Va. Premier also reported compliance with the Emerging High Risk coordinator [Level 2] ratio on all but two dates between August 7, 2017, and November 23, 2018.” Id. at 14. On these two dates, Va. Premier reported a ratio of 352:1, but Patel observed that all the Level 2 coordinators had caseloads above 400. Id.

Patel alleges that Va. Premier knew that failure to comply with DMAS requirements “would result in the denial of payment of claims, suspension of Defendant's operations termination of the CCC Plus Contract or disqualifying as a[n] MCO.” Id. (citing Exhibit 3). Patel alleges that she believed that Va. Premier...