United States District Court, S.D. Indiana, New Albany Division
UNITED STATES OF AMERICA ex rel. Jessica Kietzman, Plaintiff,
BETHANY CIRCLE OF KING'S DAUGHTERS OF MADISON, INDIANA, INC. d/b/a KING'S DAUGHTERS' HOSPITAL AND HEALTH SERVICES, Defendant. JESSICA KIETZMAN, Relator.
ORDER ON DEFENDANT'S MOTION TO DISMISS (DKTS. 66,
EVANS BARKER, JUDGE
Jessica Kietzman (“Kietzman”), on behalf of the
United States, brought this qui tam action against
her former employer, The Bethany Circle of King's
Daughters' of Madison, Indiana, Inc. (“Bethany
Circle”), under the False Claims Act (FCA), 31 U.S.C.
§ 3729 et seq., alleging chiefly that Bethany
Circle fraudulently overbilled the United States for certain
medical services. There are also state and federal claims for
wrongful and retaliatory discharge, which Kietzman brought
personally on her own behalf. Now before the Court is Bethany
Circle's motion to dismiss Kietzman's second amended
complaint for failure to state a claim. See Fed. R.
Civ. P. 12(b)(6). For the reasons below, the motion is
granted in part and denied in part. Because the briefs
adequately present the issues for decision, we also summarily
deny Bethany Circle's motion for oral argument on the
motion to dismiss.
and Procedural History
complaint is hardly a model of clarity, but we take its
allegations, so far as their meaning and relevance are
comprehensible without speculation, as true for the purposes
of the instant motion.
Circle operates a hospital (“the Hospital”) in
southern Indiana. The Hospital has a cancer center
(“the Cancer Center”). Kietzman, a registered
nurse, was hired by the Hospital in 1999, and promoted to
director of the Cancer Center in 2007. For at least 2014 and
2015, Kietzman reported to Lisa Morgan
(“Morgan”), the Hospital's vice president for
“Patient Services.” Second Am. Compl. (SAC)
¶ 9. Kietzman was fired from the Hospital in October
2015, despite having consistently received
“exemplary” performance reviews and no employee
discipline. Id. ¶ 8.
proportion of patients of the Hospital and Cancer Center were
beneficiaries of Medicare, a federal program administered by
the Centers for Medicare and Medicaid Services (CMS).
When a Medicare claim is submitted, it processes through a
series of edits [sic] in the Fiscal Intermediary
Standard System [an undefined term] to ensure that the
information provided is complete and correct. If the claim is
deemed incomplete or incorrect, it is sent to a return to
provider (“RTP”) file. In connection with each
claim submitted to Medicare . . . for payment, a provider,
such as [the Hospital], is required to, and does, make
certain certifications, including certifications that the
procedure in question was in compliance with CMS rules,
regulations, and guidelines.
Absent such certifications, the payments are not processed
Id. ¶ 20. The Hospital's billing procedures
relating to CMS are at the heart of Kietzman's case.
The Unnecessary Radiological Scans (SAC ¶¶
January 2010 (not a date relevant per se, but the
earliest date within the FCA's six-year limitations
period), the Cancer Center's independent-contractor
radiologists would perform an “initial diagnostic scan
(‘IDS')” (the nature of the
“scan” is not specified) on new oncology
patients. Id. ¶ 22. Then,
“typically” within two weeks of the initial scan,
the radiologists would perform a “second full
diagnostic [scan] for radiation treatment planning
(‘RadPlanning')[.]” Id. ¶ 23.
The second scan is alleged to be “improper and
unnecessary.” Id. The Hospital's practice
was to bill CMS for both scans, “which was in
contravention of CMS guidelines and regulations[, ]”
id. ¶ 24, but Kietzman does not tell us which
guidelines and regulations were contravened, or in what
respects. Kietzman avers it “[u]pon information and
belief that the Hospital performed approximately one hundred
of these second, unnecessary scans per year, a
“significant percentage” of which was for
Medicare patients. Id.
Combs (“Combs”) served as the Hospital's
director of “Risk Management, Patient Safety[, ] and
Compliance[.]” Id. ¶ 15. She reported to
Carol Dozier (“Dozier”), the Hospital's CEO,
or to the Hospital's CFO. Around the beginning of August
2014, Combs “sent emails out to all the Indiana
hospitals that participated in the same risk retention group
as [the Hospital], inquiring . . . whether they billed CMS
for the second scan.” Id. ¶ 28.
“Every hospital” contacted responded that it did
not, and several responded that such billing “was
illegal, improper, and against CMS rules and
regulations.” Id. Combs's e-mails and the
hospitals' responses was the first Kietzman heard of the
Hospital's practice of billing for the second scans.
“Upon information and belief, ” Kietzman alleges
that Combs was directed to send the e-mails by Dozier and
Morgan, knowing that billing CMS for the second scans was
illegal and “desiring to provide
‘cover'” for the Hospital. Id.
¶ 29. On January 29, 2015, Dozier informed Cancer Center
staff, including Kietzman, that the Hospital would continue
to bill for the second scans.
February 2015, trainers from Siemens USA, from whom the
Hospital had purchased scanning equipment, were at the
Hospital to train Hospital staff on the use of the new
equipment. The trainers “questioned” the
Hospital's practice of performing the second scans.
Id. ¶ 36. Present at the time was Elizabeth
Meyer (“Meyer”), an independent-contractor
physicist at the Cancer Center who reported to Kietzman, who
threatened to “turn [the Hospital] into the United
States Government, for fraudulent billing, if this practice
did not immediately stop.” Id. Kietzman was
informed of this exchange by a later e-mail from another
Hospital staffer, which characterized Meyer's comments as
“inappropriate.” Id. ¶ 38.
was also informed that Dozier intended to terminate
Meyer's employment based on her comments. Kietzman
thought such action would be ill advised, resulting in a
February 15, 2015, meeting with Meyer, Morgan, and Dozier,
during which Dozier told Meyer “that her comments were
inappropriate, and that [Dozier] would not tolerate anyone
who threatened to report any of [the Hospital's]
practices to the federal government, nor would she permit
anyone who did so to remain employed” at the Hospital.
Id. ¶ 41. Meyer then apologized, and Dozier
explained that the Hospital's second-scan practice
“was for ‘best patient care'” and that
the Hospital “did not bill” for the second scans.
Id. ¶ 42. Kietzman alleges that Dozier was
lying when she made this statement, but that Kietzman was
unaware that it was a lie at the time-despite Kietzman's
allegation that, two weeks earlier, Dozier had informed
Cancer Center staff that the Hospital would continue
to bill for the second scans. Perhaps Kietzman meant to
allege that, at the February 15, 2015, meeting, Dozier
represented that the Hospital would cease billing
for the second scans. These averments are unclear.
February 18, 2015, Kietzman was informed by a radiation
therapist who reported to her that “additional charges
should not be entered according to the code book[, ] . . . a
reference manual . . . outlin[ing] when charges [to CMS] are,
and are not, appropriate.” Id. ¶ 43. This
statement “was intended to alert [Kietzman] to the fact
that the directive from [Dozier] was illegal.”
Id. Kietzman does not explain what Dozier's
“directive” was, what “additional
charges” were being discussed, and why their not being
entered “according to the code book” was intended
to “alert” Kietzman to the
“illegality” of Dozier's
The Fiducial-Marker Kickbacks (SAC ¶¶
the middle of April 2015, Kietzman approached Combs and
another Hospital manager about the Hospital's billing for
“fiducial markers, ” that is, “interstitial
devices for radiation therapy, ” implanted by
independent-contractor urologists at the Hospital.
Id. ¶ 47. The urologists “desired”
that the Hospital “begin” purchasing fiducial
markers for their use, presumably rather than require the
urologists to purchase the markers for themselves.
Id. As (again presumably) some proportion of the
purchased fiducial markers would be implanted in Medicare
beneficiaries, Kietzman appears to have believed that the
Hospital's purchasing the markers and billing Medicaid
for them, when they should have been paid for by the
urologists themselves, constituted a kickback and an
“illegal entic[ement to] the urologists to send
patients to [the Hospital] . . . .” Id. But
Combs told Kietzman that, because “the urology
department [was] receiving credit for the billing for the
fiducial markers, there were no compliance concerns.”
The Meaningful-Use Violations (SAC ¶¶ 50,
to CMS, ” entering a radiology order into “the
electronic medical system” must be done “by a
licensed healthcare professional or a credentialed medical
assistant.” Id. ¶ 50. “This
requirement falls under the ‘meaningful use'
mandate set by CMS.” Id. Between June and
August 2015, Kietzman informed Morgan that nonqualified
Hospital personnel were entering orders into the system.
Morgan responded “that they needed to help the
physicians ‘get where they needed to be.'”
Id. Kietzman told Morgan “that it would be
inappropriate and illegal to do so.” Id.
The Supervising-Provider Violations (SAC ¶¶
summer of 2015, Kietzman was told by Morgan and Dozier to
“find a physician within [the Hospital] to be the
‘supervising provider' for medical oncology, if a
medical oncologist was absent, pursuant to CMS
regulations.” Id. ¶ 51. Obligingly,
Kietzman “arranged for a surgeon to obtain certain
training and education on oncology issues sufficient to meet
CMS guidelines for a supervising provider.”
Id. She then took a two-week medical leave.
absence, Morgan and Dozier “knowingly and illegally
assigned physicians who did not meet ‘supervising
provider' criteria to perform those roles. Specifically,
the physicians in question did not have privileges to order
the procedures in question.” Id. ¶ 52.
When Kietzman returned from leave, she “raised serious
concerns” about this matter with Dozier and Morgan.
The Direct-Supervision Violations (SAC ¶ 56)
to CMS, radiation therapy requires direct supervision. Direct
supervision requires a physician to provide supervision by
being immediately available and interruptible to provide
assistance and direction throughout the performance of the
procedure.” Id. ¶ 56. On September 9,
2015, Kietzman informed Morgan that, because Cancer Center
physicians were requesting too many days off, they were
unable to directly supervise all Cancer Center radiation
therapy. Morgan responded “that they would ‘have
to make it work, ' because a physician was unable to come
The Full Ultrasounds (SAC ¶¶ 73-76)
is informed and believes that, since 2010, the Hospital has
“invoiced CMS and the United States for full
radiological reads, ” while performing only
“limited or follow up ultrasounds that should have been
billed and reimbursed under different [billing] codes.”
Id. ¶ 73. This issue was raised at “one .
. . meeting” by “one of the . . .
physicians” “[a]t some time between 2007 and
2009[.]” Id. ¶ 15.
Retaliation (SAC ¶¶ 58, 60-64, 67-72)
September 15, 2015, a Cancer Center staffer sent an e-mail to
Cancer Center employees, including Kietzman, inquiring about
the Hospital's billing practices with respect to
radiological scans. Kietzman responded to the e-mail
“stating that it was her impression that the
radiologists were reading treatment planning CT scans, but
not charging for them.” Id. ¶ 58. Dozier,
an addressee of the original e-mail, replied to Kietzman,
“Why would you copy all these people on this question?
This is unprofessional.” Id. Less than two
hours later, Dozier sent a second e-mail to Kietzman,
apologizing for the tone of her first e-mail and asserting
that “the radiologists are very sensitive on this and
when we mention charging, they get defensive.”
next day, September 16, 2015, Morgan asked to meet with
Kietzman to discuss the previous day's e-mail exchange
with Dozier, and that meeting occurred the following day,
September 17, 2015. It was Morgan's opinion that Kietzman
“should have been at [Dozier's] door first thing
[the day before] apologizing for her actions.”
Id. ¶ 61. Kietzman responded that she had
simply stated Hospital policy as she understood it. Morgan
nevertheless thought Kietzman had been
“disrespectful” and “needed to make the
situation ‘right'” with Dozier. Id.
Kietzman still did not understand what she had done to give
offense and “stated that she found it
interesting” that Dozier had subsequently apologized
for her first e-mail. Id. Kietzman noted that
“people sometimes get emotional for feelings of guilt,
implying that [Dozier] felt guilty for these practices, and
that [Kietzman] was considering reporting the matter to the
federal government. [Morgan] responded, ‘Choose your
words very carefully.'” Id.
the same day, September 17, 2015, Dozier met with Kietzman
and Morgan. Dozier again apologized for the tone of her first
e-mail on September 15, 2017, and asked Kietzman “to
clarify any questions she may have before she sends out
emails.” Id. ¶ 63. As she had with
Morgan, Kietzman expressed confusion over what her misstep
had been and “noted that if the billing [for the second
radiological scans] were occurring, she would need to report
it to the federal government.” Id. Dozier
repeated that “it is ‘touchy with the
radiologists when you talk about money.'”
Id. Dozier “stated that it seemed that her and
[Kietzman] were always on a ...