United States ex rel. Enloe v. Heritage Operations Grp., LLC

622 F.Supp.3d 679

UNITED STATES of America and the State of Illinois,ex rel. Samuel Enloe, et al., Plaintiffs, v. HERITAGE OPERATIONS GROUP, LLC, et al., Defendants.

Case No. 20-cv-1169

United States District Court, N.D. Illinois, Eastern Division

Signed August 18, 2022

Terrence Buehler, The Law Office of Terrence Buehler, Chicago, IL, for Plaintiff United States of America.

Jeffrey Jay Levine, Chicago, IL, Peter S. Lubin, Patrick Doyle Austermuehle, Lubin Austermuehle, P.C., Oakbrook Terrace, IL, for Plaintiff A. Samuel Enloe.

Moses Suarez, SmithAmundsen LLC, Chicago, IL, Matthew Gerard Brothers, Smith Amundsen LLC, Chicago, IL, Suzannah Wilson Overholt, Pro Hac Vice, SmithAmundsen LLC, Indianapolis, IN, for Defendants.

MEMORANDUM OPINION AND ORDER

Steven C. Seeger, United States District Judge

Samuel Enloe brought this qui tam case about providing medication to residents of nursing homes without a valid prescription. Defendant Heritage Operations Group operates dozens of long-term care facilities in Illinois, and it gets its prescription medication from Defendant Green Tree Pharmacy. Enloe alleges that nurses at Heritage dispense pain medication to residents in the middle of the night without following the regulatory requirements of the Controlled Substances Act.

Enloe, as a relator, brought this case on behalf of the United States and the State of Illinois. He claims that Heritage and Green Tree violated the False Claims Act by dispensing medication to residents without a valid prescription, and then requesting and receiving payment from the government. Defendants, in turn, moved to dismiss.

For the reasons stated below, the motion to dismiss is granted.

Background

At the motion to dismiss stage, the Court must accept as true the well-pleaded allegations of the complaint. See Lett v. City of Chicago, 946 F.3d 398, 399 (7th Cir. 2020). The Court "offer[s] no opinion on the ultimate merits because further development of the record may cast the facts in a light different from the complaint." Savory v. Cannon, 947 F.3d 409, 412 (7th Cir. 2020).

Plaintiff Samuel Enloe spent over 20 years working for Omnicare, Inc., a CVS-affiliated pharmacy company that serves nursing home residents. See Am. Cplt., at ¶ 8 (Dckt. No. 10-1). Enloe is currently the owner and operator of Critical Care Pharmacy, a pharmacy that focuses on the needs of long-term care residents. Id.

Defendant Heritage Operations Group operates around 60 long-term care facilities (i.e., nursing homes) in Illinois, catering to elderly and infirm individuals. Id. at ¶¶ 10-11. Defendant Green Tree Pharmacy is an Illinois-based pharmacy, with multiple locations throughout the state. Id. at ¶ 13.

Defendants have a close corporate relationship. The same family owns both companies, and Green Tree operates as Heritage's exclusive pharmacy. Id. at ¶¶ 15-16. So Green Tree provides prescription-drug services to Heritage's long-term care facilities. And, in return, Heritage relies on Green Tree for all of its pharmaceutical needs.

In general, a pharmacy must receive a written prescription from a physician before dispensing a Schedule II controlled substance (e.g., opioids) to a patient. Id. at ¶ 26. In emergencies, a doctor can call in a prescription to a pharmacist, and a pharmacist can dispense a controlled substance to a nurse, so that a resident can receive it right away. But there are a number of requirements. Id. at ¶¶ 26-27. For example, a doctor must present a written, signed prescription to support the emergency Schedule II verbal order within seven days. Id. at ¶ 27.

Operating a facility for the elderly and infirm comes with unique challenges. Facilities must provide residents with much-needed pain medication on short notice. Id. at ¶ 23. Sometimes they need medication in the middle of the night. Id. And sometimes they need Schedule II controlled substances. Id.

That need can create complications for care facilities, because doctors and pharmacists play a role in the distribution of medication. Physicians write the prescriptions, and pharmacists fill them. That process poses extra challenges after hours.

So, to meet the needs of the residents, care facilities have different ways to get access to pain medication at all hours. The key point is that each approach involves both doctors and pharmacists.

Some facilities keep on-site emergency kits with medication. Id. at ¶ 24. The kits contain commonly dispensed controlled substances, and they are considered an extension of the pharmacy. Id. They are kept locked and secured. Id. A nurse can obtain Schedule II controlled substances (including opioids) from emergency kits after the delivery of a written prescription to a pharmacy, or after a pharmacist has received a verbal emergency prescription from a doctor. Id.

Some facilities also keep medication on-site in machines called an Automated Dispensing System. Id. at ¶ 25. The machines store a variety of prescription medications, including controlled substances. After a doctor issues a prescription, the pharmacy authorizes the release of the medication from the machines by entering a code. Id. Nurses at the facility then enter another code, which releases the medicine from the machines. It sounds like a vending machine, of sorts, for controlled substances and other drugs.

Another option is to employ an on-site pharmacist 24 hours a day, 7 days a week. If a pharmacist is always on call, a pharmacist can dispense prescription medication whenever a resident needs it. Id. at ¶ 28.

According to the complaint, Defendants "simply ignore all of these rules and safeguards for handling and dispensing narcotic drugs." Id. When a patient needs medicine in the middle of the night, "no pharmacist is available for the practitioner to call, as all of Green Tree's pharmacists went home hours ago." Id. at ¶ 31. Heritage and Green Tree do not have round-the-clock pharmacists on site for cost reasons. Id. at ¶ 28. Pharmacists cost $65 to $75 per hour, so it is expensive to have pharmacists available all day, every day. Id.

The lack of pharmacists puts the nurses in a bad position. "The nurse has a patient in pain and no pharmacist is available for the practitioner to call, as all of Green Tree's pharmacists went home hours ago. With no pharmacists available, the nurse can either take the prescription directly or wait until normal business hours - a poor set of choices when one is dealing with someone in serious pain in the middle of the night." Id. at ¶ 31.

According to the complaint, Heritage provides drugs to residents at night by obtaining emergency prescriptions. But Heritage skips a step by cutting out the pharmacist. The nurse obtains the prescription directly from the doctor, and then obtains the medication from an unlocked cabinet. Id. at ¶¶ 31-32. The nurse then dispenses the medication to the resident before reaching out to the pharmacy after the fact.

"When a Heritage resident needs pain medication in the middle of the night, the on-duty nurse calls a practitioner for an emergency prescription who then authorizes the nurse to go to the unlocked, unsecured and unlimited supply of narcotics and take what he or she needs to address the patient's needs." Id. at ¶ 29.

Then, on "information and belief," the nurse contacts the pharmacy the following day. Id. at ¶ 30. The nurse obtains an "invalid prescription" to cover the drugs that were administered the night before "without a legal prescription." Id.

The late-night requests for pain medication typically involve Schedule II narcotics. Id. at ¶ 32. But pharmacists can dispense a Schedule II drug only in two limited circumstances: (1) a physician provides the pharmacist with a written and signed prescription for the specific drug; or (2) in an emergency, the physician orally authorizes the pharmacist to dispense the drug, and submits a follow-up written prescription within seven days. Id. at ¶¶ 22-27, 33; see also 21 C.F.R. § 1306.11(a), (d).

According to the complaint, the nurses at Heritage dispense Schedule II controlled substances without obtaining valid prescriptions, "relying on an oral prescription that is not approved by a pharmacist." See Am. Cplt., at ¶ 36 (Dckt. No. 10-1). The complaint alleges, on information and belief, that Heritage receives about 50 late-night requests for pain medication every week. Id. at ¶ 14.

Enloe basically alleges that Defendants are distributing drugs without valid prescriptions in violation of the Controlled Substances Act. Id. at ¶¶ 32, 43; see also 21 U.S.C. § 801 et seq. Defendants "allow[ ] nurses to have illegal access to controlled substances for Heritage residents when a resident's need for pain medication comes up after hours, that is, when there is no pharmacy for a practitioner to call in order to legally get the pain medication prescribed and dispensed." See Am. Cplt., at ¶ 32 (Dckt. No. 10-1).

As Enloe sees it, Defendants are violating the False Claims Act by violating the Controlled Substances Act. "Green Tree and Heritage are violating the [C]ontrolled [S]ubstance [A]ct . . . . Therefore, Green Tree violates the False Claims Act by billing Medicare Part D and other various government funded programs for invalid prescriptions." Id.

According to the complaint, Defendants "billed the United States government and the State of Illinois for those medications based solely on physician's orders which did not comply with the requirements of 21 C.F.R. § 1306.05(a) and without obtaining a valid prescription." Id. at ¶ 43. Enloe also alleges that he "has lost business" to Heritage because his company incurs the "extraordinary expenses" of complying with the Controlled Substances Act. Id. at ¶ 37.

Enloe filed a complaint as a relator for the United States and the State of Illinois. The complaint alleges one claim under the False Claims Act and the Illinois False Claims Act. Id. at ¶¶ 39-43. The United State declined to intervene. See Notice of Election to Decline Intervention (Dckt. No. 16...