United States v. Adams

371 F.Supp.3d 1195

UNITED STATES of America, Plaintiff,

v.Charles C. ADAMS, MD, and Charles C. Adams, MD, PC, d/b/a Personal Integrative Medicine PLLC, Defendants.

CIVIL ACTION FILE NO. 4:18-CV-0191-HLM

United States District Court, N.D. Georgia, Rome Division.

Signed March 8, 2019

Paris A. Wynn, Office of the United States Attorney-ATL600 Northern District of Georgia, Atlanta, GA, for Plaintiff.

Lauren Ann Warner, Scott Robert Grubman, Chilivis, Cochran, Larkins & Bever, LLP, Atlanta, GA, for Defendants.

ORDER

Harold L. Murphy, UNITED STATES DISTRICT JUDGE

This is an action filed under the False Claims Act (the "FCA"), 31 U.S.C. §§ 3729, et seq. The case is before the Court on Defendants' Motion to Dismiss [14].

I. Standard Governing a Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) allows the Court to dismiss a complaint, or portions of a complaint, for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When reviewing a motion to dismiss, the Court must take the allegations of the complaint as true and must construe those allegations in the light most favorable to the plaintiff. Alvarez v. Att'y Gen. for Fla., 679 F.3d 1257, 1261 (11th Cir. 2012).

Although a court is required to accept well-pleaded facts as true when evaluating a motion to dismiss, it is not required to accept the plaintiff's legal conclusions. Chandler v. Sec'y of Fla. Dep't of Transp., 695 F.3d 1194, 1199 (11th Cir. 2012) (per curiam) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). The Court also does not accept as true "unwarranted deductions of fact[ ] or legal conclusions masquerading as facts." Snow v. DirecTV. Inc., 450 F.3d 1314, 1320 (11th Cir. 2006) (internal quotation marks and citation omitted).

Finally, the Court may dismiss a complaint if it does not plead "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Simpson v. Sanderson Farms, Inc., 744 F.3d 702, 708 (11th Cir. 2014) (internal quotation marks omitted) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court observed that a complaint "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. at 555, 127 S.Ct. 1955. Although factual allegations in a complaint need not be detailed, those 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. Moreover, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The mere possibility that the defendant might have acted unlawfully is not sufficient to allow a claim to survive a motion to dismiss. Id. Instead, the well-pleaded allegations of the complaint must move the claim "across the line from conceivable to plausible." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

II. Plaintiff's Allegations

A. The Parties

Plaintiff is the United States, and it brings this action on behalf of the United States Department of Health and Human Services ("HHS") and the Centers for Medicare and Medicaid Services ("CMS"), which administer the Medicare program. (Compl. (Docket Entry No. 1) ¶ 21.) Defendant Personal Integrative Medicine, PLLC ("PIM") is a Tennessee corporation with its principal place of business in Ringgold, Georgia. (Id. ¶ 22.) Defendant Charles C. Adams, M.D. ("Dr. Adams") owns and operates PIM. (Id. ) During the time period relevant to this action, Dr. Adams was a licensed physician in Georgia and did business in Ringgold. (Id. ¶ 23.) Defendant Charles C. Adams. M.D., P.C., d/b/a Full Circle Medical Center ("FCMC") was a Tennessee corporation with its principal place of business in Ringgold, and Dr. Adams operated it. (Id. ¶ 24.) Plaintiff alleges that Defendants "perpetuated a scheme between November 2008 and September 2015 involving the knowing submission of false claims for medically unnecessary and ‘alternative’ chelation therapy that Dr. Adams administered using the drug calcium disodium versentate, or edetatecalcium disodium (EDTA), which the [Food and Drug Administration ("FDA") ] only approved for indications of lead poisoning and lead encephalopathy." (Id. ¶ 1.) According to Plaintiff, "Defendants received approximately $ 1.5 million in Medicare reimbursements" from this scheme. (Id. )

B. The FCA

The FCA imposes civil penalties on a person who "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval," or who "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim." (Compl. ¶ 33.) Public Law 111-21, the Fraud Enforcement and Recovery Act of 2009 ("FERA"), which was enacted on May 20, 2009, amended the FCA. (Id. ¶ 34.) According to Plaintiff, § 3729(a)(1) of the prior statute applies to conduct that occurred before FERA's enactment, while § 3729(a)(1)(A) of the revised statute applies to conduct that occurred after FERA's enactment. (Id. ) Plaintiff alleges that § 3729(a)(1)(B) applies to all claims in this case. (Id. )

According to Plaintiff, for violations that occurred before May 20, 2009, the FCA provided that a person would be liable to the United States "for each instance in which the person ‘knowingly presents, or causes to be presented, to an officer or employee of the United States government ... [a] false or fraudulent claim for payment or approval.’ " (Compl. ¶ 35 (quoting 31 U.S.C. § 3729(a)(1) (1986).) "As amended in 2009, the [FCA] extends liability, both before and after its amendments, to any person who ‘knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.’ " (Id. ¶ 35 (quoting 31 U.S.C. § 3729(a)(1)(B) (2009).) As defined in the FCA, "knowing" and "knowingly" "mean that a person, with respect to information: (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information." (Id. ¶ 37.) According to Plaintiff, the FCA "provides that no proof of specific intent to defraud is required." (Id. )

C. Medicare and Claims Submission Overview

Congress enacted the Health Insurance for the Aged and Disabled Act, known as the Medicare Program, in 1965 to pay for the costs of certain health care services. (Compl. ¶ 38.) Entitlement to Medicare depends on age, disability, or affliction with end-stage renal disease. (Id. ) HHS administers Medicare, and it delegated responsibility for administering Medicare to CMS. (Id. ) Medicare has several parts, and this action concerns claims submitted under Medicare Part B, Supplementary Medical Insurance for the Aged and Disabled, which applies to "those drugs that are provided incident to a physician's service and cannot usually be self-administered." (Id. ¶ 40.)

CMS initially contracted with carriers, typically private insurance companies, to process and pay Part B claims. (Compl. ¶ 41.) Beginning in November 2006, Medicare Administrative Contractors ("MACs") began to replace carriers and fiscal intermediaries. (Id. ¶ 42.) MACs act on CMS's behalf to process and pay Part B claims, and they perform administrative functions on a regional level. (Id. ¶ 43.) Between 2009 and 2015, Cahaba Government Benefit Administrators, LLC ("Cahaba") was the Part B MAC for the region that included Georgia. (Id. ¶ 43.)

Independent clinical laboratories, group practices, and individual providers must submit CMS Form 8551, a Medicare Enrollment Application to participate in Medicare as new enrollees. (Compl. ¶ 44.) Those entities also must complete that form to change information or to reactivate, revalidate, or terminate Medicare enrollment. (Id. ) By signing CSM Form 8551, signatories certify that: (1) they "agree to abide by the Medicare laws, regulations, and program instructions" that apply to them or to their organizations; (2) they "understand that payment of a claim by Medicare is conditioned upon the claim and the underlying transaction complying with such laws, regulations, and program instructions ... and on the supplier's compliance with all applicable conditions of participating in Medicare"; (3) they "will not knowingly present or cause to be presented a false or fraudulent claim for payment by Medicare"; and (4) they "will not submit claims with deliberate ignorance or reckless disregard of truth or falsity." (Id. ¶ 45.) "[A]n authorized official must sign the ‘Certification Section’ in Section 15 of Form CMS-8551, which legally and financially binds the signer to all of the laws, regulations, and program instructions of the Medicare program." (Id. ¶ 46.) Dr. Adams signed the certification statement on Section 15 of Form CMS-8551 on November 10, 2016. (Id. ¶ 47.)

Medicare providers submit reimbursement claims for services provided on a CMS 1500 form (the "CMS 1500") or its electronic equivalent, the 837P Form. (Compl. ¶ 48.) Providers or suppliers include certain five digit codes, Current Procedural Terminology Codes ("CPT Codes") or Healthcare Common Procedure Coding System Level II Codes ("HCPSC Codes") (collectively, the "Procedure Codes") on CMS 1500 or 837P Forms to indicate to CMS the services rendered for which the providers or suppliers seek reimbursement. (Id. ) Providers also must include a diagnosis code with each claim to Medicare, which describes the diagnosis or medical condition associated with the claim. (Id. ¶ 49.)

During the time period relevant to this action, Medicare providers were required to use the diagnostic codes set forth in the International Classification of Diseases,...