Court Opinion

ID: 3183316
Source: CourtListenerOpinion
Date Created: 2016-03-08 01:04:47.833913+00
Date Added: 2024-06-11T14:35:48.002016
License: Public Domain

Case: 15-10192      Document: 00513409349         Page: 1    Date Filed: 03/07/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                            United States Court of Appeals
                                                                                     Fifth Circuit

                                      No. 15-10192                                 FILED
                                                                               March 7, 2016
                                                                              Lyle W. Cayce
UNITED STATES OF AMERICA, ex rel. DARILYN JOHNSON,                                 Clerk

              Plaintiff–Appellant,

v.

KANER MEDICAL GROUP, P.A.; DAVID KANER,

              Defendants–Appellees.

                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 4:12-CV-757

Before PRADO, SOUTHWICK, and GRAVES, Circuit Judges.
PER CURIAM:*
       Darilyn Johnson, a former employee of Defendants–Appellees Kaner
Medical Group, P.A., and its owner David Kaner (collectively, “KMG”), filed
this qui tam action under the False Claims Act (“FCA”), alleging that KMG
presented fraudulent claims for reimbursement to the Government and that
KMG improperly terminated her in retaliation for investigating the company’s
alleged FCA violations. The district court sua sponte granted summary
judgment in favor of KMG. We affirm.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 15-10192     Document: 00513409349       Page: 2    Date Filed: 03/07/2016

                                    No. 15-10192
            I. FACTUAL AND PROCEDURAL BACKGROUND
      Kaner Medical Group, P.A., provides health care services to patients out
of its two locations in Bedford and Euless, Texas. KMG is under the sole
ownership of David Kaner. Relator Darilyn Johnson began working in the
billing department of KMG in April 2012 and was primarily responsible for
collecting outstanding patient accounts.
A.    KMG’s Allergy Clinic and Billing Practices
      This suit arises out of services performed at KMG’s allergy clinic for
patients enrolled in Medicare and TRICARE. 1 Patients are referred to the
allergy clinic by either a physician, a physician’s assistant, or a nurse
practitioner employed by KMG. Three medical assistants, none of whom are
licensed medical providers in the State of Texas, administer allergy testing and
allergen immunotherapy services at the clinic.
      In order to be reimbursed, the Centers for Medicare and Medicaid
Services (“CMS”) require health care providers to submit a claim form with
detailed information about the patient, provider, and the services performed.
To submit a claim, the health care provider uses his or her National Provider
Identifier (“NPI”), which is a unique ten-digit number. Only licensed health
care providers have an NPI. Reimbursable services may be delegated to an
unlicensed medical assistant so long as the assistant is directly supervised by
a provider with a valid NPI. Providers can then bill for these delegated services
under their own NPI.

      1   TRICARE is the health care provider for the U.S. military. About Us, TRICARE,
http://tricare.mil/About.aspx?utm_source=footer&utm_medium=organic&utm_campaign=a
bout-us (last updated Sept. 30, 2015).
                                          2
     Case: 15-10192      Document: 00513409349         Page: 3    Date Filed: 03/07/2016

                                      No. 15-10192
       At the time Johnson was employed, KMG used a specific form to submit
claims for reimbursement—Form 1500. 2 This form includes a box for the
referring provider’s NPI and a separate box for the rendering provider’s NPI.
Instructions provided by CMS confirm that in KMG’s case, the referring
provider would be the physician, physician’s assistant, or nurse practitioner
that referred the patient to the allergy clinic, and the rendering provider would
be the physician, physician’s assistant, or nurse practitioner supervising the
allergy clinic on the day the patient received the service. At the time of this
suit, KMG’s practice was to place the referring provider’s NPI and electronic
signature in both the rendering and referring provider boxes, regardless of who
was actually on site at the allergy clinic to supervise the day the services were
performed.
B.     Johnson’s Termination
       On June 18, 2012, Johnson sent an e-mail to two of her supervisors
expressing concerns about KMG’s billing and collection practices. In her e-
mail, Johnson claimed that KMG had improperly billed Medicare–Medicaid
patients directly, which she alleged was “against the law.” On June 26, 2012,
Johnson sent a second e-mail to one of her supervisors about a refund she
believed was due to a specific Medicaid patient that had been directly billed.
That same day she was asked into her supervisor’s office and shown several
“employee counseling notices” that summarized patient complaints about her
job performance. Johnson was then dismissed from KMG.
C.     The FCA Suit
       Johnson filed a qui tam suit under the FCA against KMG and Kaner on
October 25, 2012. The Government chose not to intervene in Johnson’s suit.

       2TRICARE also uses Form 1500. Johnson does not point to any TRICARE regulations,
guidelines, or instructions that prohibit KMG’s practice of placing the referring provider’s
NPI in the rendering provider box.
                                             3
    Case: 15-10192    Document: 00513409349     Page: 4    Date Filed: 03/07/2016

                                 No. 15-10192
After several years of discovery, the district court sua sponte granted summary
judgment in favor of KMG on all three counts alleged in Johnson’s Second
Amended Complaint and dismissed the suit. This appeal involves two of those
claims.
      First, Johnson alleges that KMG violated 31 U.S.C. § 3729(a)(1)(A),
arguing that it submitted false claims for reimbursement to Medicare and
TRICARE. To support this argument, Johnson contends that KMG’s practice
of using the referring provider’s NPI number regardless of which provider
actually supervised the services is a false claim for payment submitted to the
Government. Second, she alleges that she was terminated in retaliation for
raising   concerns   about   KMG’s   billing   practices   in   violation   of   31
U.S.C. § 3730(h) because she began asking questions and voicing concerns
about KMG’s billing practices related to its Medicare–Medicaid patients.
           II. JURISDICTION AND STANDARD OF REVIEW
      The district court had jurisdiction over this suit under 28 U.S.C. § 1331.
This Court has jurisdiction pursuant to 28 U.S.C. § 1291.
      Summary judgment may be granted by a district court sua sponte if
proper notice is given and the parties are afforded a reasonable time to
respond. Fed. R. Civ. P. 56(f). This Court reviews a district court’s grant of
summary judgment de novo, viewing “all facts and evidence in the light most
favorable to the non-moving party.” Amerisure Mut. Ins. Co. v. Arch Specialty
Ins. Co., 784 F.3d 270, 273 (5th Cir. 2015). Summary judgment is appropriate
“if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). A genuine dispute of material fact exists when “the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Savant v.
APM Terminals, 776 F.3d 285, 288 (5th Cir. 2014) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)).
                                          4
     Case: 15-10192   Document: 00513409349     Page: 5   Date Filed: 03/07/2016

                                 No. 15-10192
                              III. DISCUSSION
      Under the FCA, private parties can bring suit against any person that
has submitted false claims for payment to the U.S. Government and are
entitled to collect a portion of the civil penalty and damages recovered. 31
U.S.C. §§ 3729(a), 3730(b)(1), (d). The suit is brought in the Government’s
name, and the Government has the exclusive opportunity to intervene. Id.
§ 3730(b)(1), (4)–(5). But, if the Government does not intervene, the qui tam
provision of the statute allows the private party to prosecute the suit on the
Government’s behalf. Id. § 3730(c)(3). “The FCA is not a general ‘enforcement
device’ for federal statutes, regulations, and contracts.” United States ex rel.
Steury v. Cardinal Health, Inc., 625 F.3d 262, 268 (5th Cir. 2010) (quoting
United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d
899, 902 (5th Cir. 1997)). Instead, the statute serves as “the Government’s
‘primary litigation tool’ for recovering losses resulting from fraud.” Id. at 267
(quoting United States ex rel. Marcy v. Rowan Cos., 520 F.3d 384, 388 (5th Cir.
2008)).
A.    Submission of False Claims under 31 U.S.C. § 3729(a)(1)(A)
      Any person that “knowingly presents, or causes to be presented, a false
or fraudulent claim for payment or approval” to the Government is liable under
the FCA. 31 U.S.C. § 3729(a)(1)(A). Generally, there are four elements that
must be met to succeed in a qui tam action under § 3729(a)(1)(A): “(1) a false
statement or fraudulent course of conduct; (2) that was made or carried out
with the requisite scienter; (3) that was material; and (4) that caused the
government to pay out money.” United States ex rel. Spicer v. Westbrook, 751
F.3d 354, 365 (5th Cir. 2014). The district court granted summary judgment in
favor of KMG on Johnson’s § 3729(a)(1)(A) claim reasoning that Johnson failed
to meet elements two and three of this test.

                                       5
    Case: 15-10192    Document: 00513409349      Page: 6    Date Filed: 03/07/2016

                                  No. 15-10192
      Under the FCA, “a lie is actionable but not an error.” United States ex
rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004).
Therefore, liability does not attach unless “the [defendant] knowingly asks the
Government to pay amounts it does not owe.” United States ex rel. Willard v.
Humana Health Plan of Tex. Inc., 336 F.3d 375, 381 (5th Cir. 2003). The False
Claims Act defines “knowing” and “knowingly” as follows:
      (1) the terms “knowing” and “knowingly”–
             (A) mean that a person, with respect to information–
                   (i) has actual knowledge of the information;
                   (ii) acts in deliberate ignorance of the truth or falsity of the
                   information; or
                   (iii) acts in reckless disregard of the truth or falsity of the
                   information; and
             (B) require no proof of specific intent to defraud
31 U.S.C. § 3729(b)(1)(A)–(B). This is an elevated standard, as a finding of
negligence or gross negligence is not sufficient to satisfy the scienter
requirement. United States ex rel. Farmer v. City of Hous., 523 F.3d 333, 338
(5th Cir. 2008). “Given this definition of ‘knowingly,’ courts have found that
the mismanagement—alone—of programs that receive federal dollars is not
enough to create FCA liability.” Id. at 339; see also Willard, 336 F.3d at 381
(explaining that liability attaches to a false claim for payment not “a health
care provider’s disregard of Government regulations or improper internal
policies”). As a result, to survive summary judgment, Johnson must raise a
genuine dispute of material fact that KMG acted with either 1) actual
knowledge, 2) deliberate ignorance, or 3) reckless disregard.
      Assuming, as the district court did, that KMG actually submitted false
claims for payment to the Government by incorrectly filling out Form 1500,
none of Johnson’s arguments raise a genuine dispute of material fact that KMG
acted with the requisite mental state required under the statute. She has
presented no summary judgment evidence on which a reasonable jury could

                                        6
     Case: 15-10192    Document: 00513409349     Page: 7   Date Filed: 03/07/2016

                                  No. 15-10192
find that KMG acted with actual knowledge, deliberate ignorance, or reckless
disregard. Rather, the record indicates that, at most, KMG’s misunderstanding
of CMS’s requirements was negligent, which is not sufficient to attach liability
under the FCA. See Farmer, 523 F.3d at 338.
      Because Johnson has failed to raise a genuine dispute of material fact
that KMG had the requisite scienter—actual knowledge, deliberate ignorance,
or reckless disregard—in submitting reimbursement claims to Medicare and
TRICARE, we affirm the district court’s grant of summary judgment on
Johnson’s § 3729(a)(1)(A) claim. As such, we need not address Johnson’s
arguments related to the issue of materiality.
B.    Retaliation Under 31 U.S.C. § 3730(h)(1)
      The False Claims Act provides a cause of action for employees that
experience adverse employment actions in response to their activities “in
furtherance of an [FCA] action” or their “efforts to stop 1 or more violations” of
the FCA. 31 U.S.C. § 3730(h)(1). “The ‘whistleblower’ provision of the False
Claims Act prevents the harassment, retaliation, or threatening of employees
who assist in or bring qui tam actions” and “is intended to encourage[s] those
with knowledge of fraud to come forward.” Robertson v. Bell Helicopter Textron,
Inc., 32 F.3d 948, 951 (5th Cir. 1994). To survive summary judgment on this
claim, Johnson must raise a genuine dispute of material fact that 1) she
engaged in protected activity, 2) KMG knew she engaged in that activity, and
3) she was terminated as a result of her engagement in that activity. See 31
U.S.C. § 3730(h).
      To qualify as protected activity under the whistleblower provision, the
activity must be “in furtherance of” uncovering fraud or potential fraud against
the Government. 31 U.S.C. § 3730(h)(1); see also Robertson, 32 F.3d at 951.
Johnson argues that the two e-mails she sent to her supervisors raising
concerns about KMG’s billing practices in June 2012 qualify as protected
                                        7
    Case: 15-10192    Document: 00513409349     Page: 8   Date Filed: 03/07/2016

                                 No. 15-10192
activity under the whistleblower provision. But, the concerns Johnson raised
to her supervisors involved the direct billing of Medicare–Medicaid patients.
While both of those programs are Government run, Johnson has failed to
demonstrate how her actions investigating this practice were in furtherance of
uncovering or preventing fraud against the Government. At oral argument,
Johnson argued that her activity was protected under the FCA because the
Government has an interest in the proper billing of their Medicare–Medicaid
patients. But, in directly billing Medicare–Medicaid patients, KMG was not
presenting any false claim for payment to the Government. Instead, it was
seeking payment from the patients themselves. Because Johnson has failed to
adequately show how directly billing Medicare–Medicaid patients relates to
the presentation of false claims for payment to the Government, she has failed
to raise a genuine dispute of material fact that she engaged in protected
activity under the FCA.
      Therefore, we affirm the district court’s grant of summary judgment on
her retaliation claim. As a result, we decline to reach Johnson’s arguments
related to the second and third elements of this claim.
                             IV. CONCLUSION
      For the foregoing reasons, we AFFIRM the district court’s grant of
summary judgment.

                                       8