Opinion ID: 2786807
Heading Depth: 2
Heading Rank: 3

Heading: Application to Relators' complaint

Text: In Counts I through IV and VIII through XI,13 Relators allege that four different individuals who treated Yarushka Rivera 13 Counts VIII through XI are the same as Counts I through IV, but they bring claims under the Massachusetts FCA rather than the federal statute. Given the substantive similarity of the [Massachusetts] FCA[] . . . and the federal FCA with respect to the provisions at issue in this litigation, the state statute[] may be construed consistently with the federal act. See New York v. Amgen, Inc., 652 F.3d 103, 109 & n.6 (1st Cir. 2011); Scannell v. Att'y Gen., 70 Mass. App. Ct. 46, 49 n.4 (2007) ([T]he MFCA was modeled on the similarly worded Federal False Claims Act.). -18- (Pereyra, Casado, Fuchu, and Ortiz) did not receive proper supervision, either directly from the clinical director Keohan or from the psychiatrist Gaticales — who, in any event, was not boardcertified. See 130 Mass. Code Regs. §§ 429.423(D), 429.424(A), 429.424(F), 429.438(E). In these counts, Relators have adequately pleaded that Arbour's claims for reimbursement in connection with Yarushka's treatment were false within the meaning of the Act, in that they misrepresented compliance with a condition of payment,
These counts also have properly pleaded that the condition of payment at issue was a material one. The express and absolute language of the regulation in question 'constitute[s] dispositive evidence of materiality.' Hutcheson, 647 F.3d at 394 (quoting SAIC, 626 F.3d at 1269); see 130 Mass. Code Regs. § 429.439 (Services provided by a satellite program are reimbursable only if the program meets the standards described below.) Furthermore, Relators have satisfied the scienter requirement, as they have plausibly pleaded that Arbour knowingly 14 Although the record is silent as to whether Arbour explicitly represented that it was in compliance with conditions of payment when it sought reimbursement from MassHealth, we have not required such express certification in order to state a claim under the FCA. See United States ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 385–86 (1st Cir. 2011) (rejecting labels of express and implied certification). We note, however, that each time it submitted a claim, Arbour implicitly communicated that it had conformed to the relevant program requirements, such that it was entitled to payment. -19- submitted false claims to MassHealth. The complaint quotes a portion of Keohan's interview with the state DPH in which he admitted that, until recently, he was unaware that supervision was required to be provided on a regular and ongoing bases, or that the supervision meetings needed to be documented. These allegations more than suffice to establish that Arbour acted in reckless disregard or deliberate ignorance of the falsity of the information contained in the claims. See 31 U.S.C. § 3729(b)(1)(A); cf. Loughren, 613 F.3d at 313–14. These counts were pleaded with sufficient particularity. In the FCA context, Federal Rule of Civil Procedure 9(b) requires relators to connect allegations of fraud to particular false claims for payment, rather than a fraudulent scheme in the abstract. United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 232 (1st Cir. 2004). While we have declined to set forth a mandatory checklist, we have identified a number of types of information that contribute to the particularity of the allegations, including: the dates of the claims, the content of the forms or bills submitted, their identification numbers, the amount of money charged to the government, the particular goods or services for which the government was billed, the individuals involved in the billing, and the length of time between the alleged fraudulent practices and the submission of claims based on those practices. Id. at 233. -20- Relators' complaint sets forth the core of this material: it alleges twenty-seven separate dates on which claims were submitted in connection with Yarushka's care, each time including the relevant billing codes, amount invoiced, and the name of the Arbour staff member who provided the treatment for which reimbursement was sought. Relators have thus succeeded in linking their allegations of fraud to specific claims for payment. Cf. United States ex rel. Ge v. Takeda Pharm. Co. Ltd., 737 F.3d 116, 124 (1st Cir. 2013) (affirming dismissal of FCA complaint for failure to state fraud with particularity where relator alleged next to no facts in support of the proposition that [pharmaceutical company's] alleged misconduct resulted in the submission of false claims or false statements material to government payment). Finally, we note that while Relators' complaint provides specific information about bills submitted to MassHealth in connection with Yarushka's care only, it also seeks damages for bills submitted for services rendered to all MassHealth recipients by Pereyra, Casado, Fuchu, and Ortiz within a six-year period. Under the circumstances of this case, where Relators have raised a particular and plausible allegation of fraud in connection with the treatment of their daughter, we do not view the absence of more precise details pertaining to the bills for services provided to other MassHealth recipients as an impediment to proceeding. Given that such allegation is not particular to Yarushka's treatment, but -21- rather arises from the clinical director's systematic failure to enforce supervision requirements, it stands to reason that billing for more than one MassHealth recipient has been infected by fraud.
For similar reasons, Counts VII and XIV of Relators' complaint also survive a motion to dismiss. The substance of those counts is that Arbour violated both the federal and Massachusetts FCA by fraudulently misrepresenting its compliance with regulations requiring mental-health clinics to employ at least one boardcertified psychiatrist at all times.15 See 130 Mass. Code Regs. 15 At different points in their complaint, Relators identify both MassHealth and Department of Public Health (DPH) regulations as the source of this staffing requirement. There is at least some ambiguity as to whether the MassHealth regulation in question, 130 Mass. Code Regs. § 429.422, independently requires each satellite clinic to employ its own psychiatrist. Section 429.422 provides that mental health centers must employ at least one psychiatrist. A mental health center is defined as an entity that delivers a comprehensive group of diagnostic and psychotherapeutic treatment services to mentally or emotionally disturbed persons and their families by an interdisciplinary team under the medical direction of a psychiatrist. 130 Mass. Code Regs. § 429.402. This definition appears to refer to an entity comprising both the parent center and the satellite locations. See 130 Mass. Code Regs. § 429.402 (defining parent center as the central location of the mental health center . . . .; defining autonomous satellite program and dependent satellite program as a mental health center program . . . .) (emphases added). On this reading of the definition of mental health center, a satellite that does not employ a psychiatrist is not out of compliance with the staffing regulation so long as the parent has a psychiatrist on staff. But the DPH regulations suggest something else. 105 Mass. Code Regs. § 140.530 provides that every clinic providing mental health services must employ a board-certified psychiatrist, or one who is eligible for board certification. A satellite clinic must meet [this requirement] independently of its parent clinic. 105 Mass. Code Regs. § 140.330. According to the DPH report attached -22- § 429.422(A); 105 Mass. Code Regs. § 140.530(C)(1)(a). Since the clinical director is explicitly responsible for hiring adequate psychiatric staff, see 130 Mass. Code Regs. § 429.423(B)(2)(e), and claims are reimbursable only if the clinical director fulfills the assigned duties, see id. § 429.439(C), Arbour's failure to maintain a properly licensed psychiatrist on staff constituted noncompliance with a material condition of payment. Such noncompliance was at least deliberately ignorant, in light of Relators' allegation that they were able to determine that Gaticales was not board-certified in psychiatry simply by checking a state licensing database. Thus, these counts, too, were improperly dismissed.16 to Relators' complaint, which details the results of the agency's investigation of the satellite clinic where Yarushka Rivera received treatment, that clinic was not in compliance with the staffing requirements of 105 Mass. Code Regs. § 140.530. We defer to the agency's determination that such regulation applies to the Arbour satellite clinic at issue here. See City of Pittsfield, Mass. v. U.S. Envt'l Prot. Agency, 614 F.3d 7, 10-11 (1st Cir. 2010) (giving controlling weight to agency's interpretation [of its own regulation] unless it is plainly erroneous or inconsistent with the regulation) (internal quotation marks omitted); Friends & Fishers of Edgartown Great Pond, Inc. v. Dep't of Envt'l Prot., 446 Mass. 830, 838 (2006) (deferring to agency's interpretation of its own regulations). 16 These counts also allege that Arbour violated core staffing requirements by failing to have at least one licensed psychologist on staff. However, the regulations do not mandate that a psychologist be on staff at all times; instead, clinics are required to employ at least two people from various disciplines, one of which is psychology. 130 Mass. Code Regs. § 429.422(A); 105 Mass. Code Regs. § 140.530(C)(2)(b). Although Fuchu held herself out as a licensed psychologist when she in fact was not, the complaint does not allege whether Arbour retained any other properly licensed psychologists, or staff in other approved disciplines. Thus, the portions of Counts VII -23-
We are left with Counts V, VI, XII, and XIII, which allege that Arbour engaged in fraudulent billing in connection with other unlicensed and unsupervised clinical staff and nurse practitioners. Relators allege that the specific identit[ies] of these staff members are currently unknown to [them] but [are] well known to Arbour. We have previously upheld the dismissal of claims under the FCA for failure to plead fraud with particularity where, among other things, the individuals involved with allegedly improper billing were not identified. See, e.g., Karvelas, 360 F.3d at 233. Here, however, while the staff members in question have not been identified by name in the individual counts, the factual background of the complaint sets forth a non-exhaustive list of twenty-two Arbour employees who have obtained a National Provider Identification number despite not being licensed as social workers or mental-health counselors by the Commonwealth of Massachusetts. Moreover, the DPH report attached to the complaint verifies that twenty-three Arbour therapists were not licensed for independent practice and also . . . were not licensed in their discipline, and had received no documented supervision prior to January 2012. These concrete allegations, corroborated by a state agency's and XIV that allege that Arbour committed fraud by failing to have at least one licensed psychologist on staff does not state a plausible claim for relief. -24- independent report and Keohan's own admission that the clinic suffered from a fundamental lack of oversight, confirm that the basic goals of Federal Rule of Civil Procedure 9(b) have been met — to provide a defendant with fair notice of a plaintiff's claim, to safeguard a wrongdoing, and to protect a defendant against the institution of a strike suit. Suna v. Bailey Corp., 107 F.3d 64, 68 (1st Cir. 1997) (internal quotation marks omitted); cf. Ge, 737 F.3d at 123 (observing that particularity requirement of Rule 9(b) is designed to ward off parasitic relators who bring FCA damages claims based on information within the public domain or that the relator did not otherwise discover (internal quotation marks omitted)). Under the circumstances, then, these counts of Relators' complaint also state claims under the FCA.