United States v. Ellis

UNITED STATES OF AMERICA, Plaintiff, v. MARK A. ELLIS, M.D.; PATSY ALLEN;MARK A. ELLIS, M.D. d/b/a ELLIS PAIN CENTER;and ELLIS PRACTICE MANAGEMENT, LLC; Defendants.

CIVIL ACTION No. 3:19-CV-107 (CAR)

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA ATHENS DIVISION

August 11, 2020

ORDER ON DEFENDANTS' MOTION TO DISMISS

The United States of America filed this action asserting Defendants Mark A. Ellis, M.D. ("Ellis"); Patsy Allen ("Allen"); Mark A. Ellis, M.D. d/b/a Ellis Pain Center ("EPC"); and Ellis Practice Management, LLC ("EPM") violated the False Claims Act ("FCA"), 31 U.S.C. § 3729 et al., for alleged presenting false claims to the Medicare program. The United States also asserts claims for unjust enrichment and payment by mistake. Currently before the Court is Defendants' Motion to Dismiss the Complaint for failure to state a claim upon which relief may be granted. Having considered the Motion, pleadings, and applicable law, the Court DENIES Defendants' Motion [Doc. 6].

BACKGROUND

For purposes of this Motion, the Court accepts all factual allegations in the Complaint as true and construes them in the light most favorable to the United States.

On November 27, 2019, the United States brought this qui tam action against Defendants Ellis, Allen, EPC, and EPM, alleging violations under the FCA for presenting false claims to Medicare and under common law for unjust enrichment and payment by mistake. The Government alleges that Defendants submitted thousands of false claims to Medicare for services that were never rendered or not medically reasonable or necessary, and such actions unjustly enriched their bank accounts at the expense of the United States and the public.¹

At all times relevant to the Complaint, Defendant Ellis was a licensed physician engaged in the practice of pain management, the sole owner of Ellis Pain Center ("EPC"), and one of the owners of Defendant EPM.² Defendant Allen was the Practice Administrator of EPC and has no medical training or certifications.³ Defendant EPM operated EPC.⁴ Approximately 50% of the patients seen at EPC are Medicare beneficiaries.⁵ Ellis and Allen directed employees of EPC to conduct tests on Medicare beneficiaries and to submit claims to Medicare.⁶

A. Legal and Regulatory Framework

The FCA provides for the award of treble damages and civil penalties for knowingly presenting or causing to be presented false or fraudulent claims for payment to the United States, for knowingly making or using, or causing to be made or used, false records or statements material to false or fraudulent claims paid by the United States and for knowingly and improperly avoiding an obligation.⁷

In 1965, Congress enacted the Health Insurance for the Aged and Disabled Act, 42 U.S.C. § 1395 et seq., known as the Medicare Program, as part of Title XVIII of the Social Security Act, to provide health insurance coverage for people age 65 or older and for people with certain disabilities or afflictions.⁸ The Medicare Program is administered by the United States Department of Health and Human Services, through the Center for Medicare and Medicaid Services ("CMS"). The Medicare Program consists of four parts.⁹ Medicare Part B is a federally subsidized, voluntary health insurance program that pays a portion of the costs of certain health services, including the costs of clinic visits to healthcare providers, physicians' services, services and supplies incident to physicians' services, and diagnostic tests.¹⁰

Health care providers that wish to submit claims for Medicare reimbursement must enroll in the Medicare Program.¹¹ Once the provider is enrolled or credentialed, the provider may submit claims to Medicare for services rendered to the patients. To obtain reimbursement from Medicare for certain outpatient items or services, providers and suppliers submit a claim form known as the CMS-1500 form ("CMS-1500") or submit claims electronically using the 837P format ("837P").¹²

Reimbursement for Medicare Part B claims is made through CMS, which contracts with Medicare Administrative Contractors ("MACs") (previously private insurance carriers) to administer and pay Part B claims submitted by health care providers from the Medicare Trust Fund.¹³ At all times relevant to this Complaint, Cahaba Government Benefit Administrators, LLC ("Cahaba") was the MAC that administered Medicare Part B claims submitted by Defendants.¹⁴

B. Factual Allegations

Defendants Ellis and EPC were enrolled as suppliers of healthcare services to Medicare beneficiaries.¹⁵ The Complaint alleges that although Ellis and EPC "knew, recklessly disregarded or were deliberately ignorant of the conditions for reimbursement of medical under the Medicare Program," they nonetheless "implement[ed] a scheme by which they submitted claims to Medicare for urine drug testing and ancillary testing that was never rendered and/or was medically unnecessary."¹⁶ The 67-page Complaint divides the alleged false claims into two broad sections—urine drug testing and ancillary testing—with each section containing detailed allegations, including specific patient encounters, that highlight the alleged fraudulent practices.

In the urine drug testing section, the Government details EPC's urine drug testing equipment, EPC's use of billing "shortcuts" into its billing software that it submitted to Medicare, and EPC's billings for urine tests on patients that it never conducted. Specifically, the Government alleges that Ellis and Allen directed its third-party billing company to create a series of "shortcuts" in the billing software that it used to submit EPC's claims to Medicare.¹⁷ Ellis and Allen would tell its billing company which drug tests it wanted to include in the shortcut, the company would create the shortcut, and when an EPC employee entered the name of the shortcut into the billing software, the software automatically populated the claim form with codes for the pre-determined tests selected by Ellis and Allen, even though there was no indication on the bill that the tests had been conducted.¹⁸ EPC would use the shortcut to automatically add additional tests it never conducted to the claim that it submitted to Medicare; Medicare reimbursed EPC for all of those tests, but had it known such tests were never conducted, it would not have reimbursed EPC.¹⁹ The shortcuts did not vary by patient or reflect the individual patients' respective needs.²⁰

Although Ellis and Allen knew that Medicare required drug screening tests to be conducted separately from the drug confirmation test, they nonetheless directed that the shortcut "USDM" automatically bill Medicare for both a drug screening test and a confirmation test, even though EPC only ran a single test on the patient's urine specimen; thus, Allen and Ellis directed EPC to use the UDSM shortcut to bill Medicare for confirmation tests that it never conducted.²¹ Moreover, the testing equipment EPC used did not have the capability to run a confirmation test.²² Likewise, the Government alleges that Ellis and Allen directed EPC to use the UDSM shortcut to bill Medicare for quantitative urine drug tests that it neither had the equipment to perform nor actually conducted.²³

The Complaint details examples of seven specific patients encounters where Allen and/or Ellis directed an EPC employee to enter the UDSM shortcut into the billing software to automatically populate the Medicare claim form with confirmation or quantitative tests that were never conducted on each patient; EPC submitted those claim forms for each patient, and Medicare reimbursed EPC.²⁴ The Complaint states the date of each patient's visit, the test on the patient's superbill that was actually conducted, the procedure codes and descriptions of the additional tests that were billed to Medicare but not actually conducted, the date the claim forms were submitted to Medicare, and the amount Medicare reimbursed EPC.²⁵

The Complaint also details urine drug tests that Allen and Ellis directed EPC to bill, and Medicare subsequently paid, that the beneficiary's treating physician never ordered;²⁶ specific patient encounters in which Allen and Ellis directed EPC employees to use the UDSM shortcut to automatically bill Medicare for urine drug tests that had no clinical utility and were medically unnecessary, which Medicare paid;²⁷ and specific patient encounters where Ellis and Allen directed EPC employees to use the LCMSM shortcut to automatically bill Medicare for quantitative tests that were not medically necessary, which Medicare reimbursed.²⁸ Finally, the Complaint details specific ancillary tests performed on patients that Allen and Ellis instructed EPC's clinical providers to conduct on a pre-set schedule regardless of the patient's individual signs, symptoms, complaints, or medical history, which EPC billed to Medicare and Medicare reimbursed knowing such tests were not reimbursable, including Arterial Brachial Index tests, ANSAR tests, EKG tests, Sudoscan tests, Pharyngometer tests, Vestibular Autorotation tests, and bone density tests.²⁹

LEGAL STANDARD

On a motion to dismiss, the Court must accept as true all well-pleaded facts in a plaintiff's complaint.³⁰ To avoid dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'"³¹ A claim is plausible where the plaintiff alleges factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."³² The plausibility standard requires that a plaintiff allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence" that supports a plaintiff's claims.³³

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain "a short and plain statement of the claim showing that the pleading is entitled to relief."³⁴ The purpose of this requirement is to "gi...