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United States ex rel. Kietzman v. Bethany Circle of King's Daughters of Madison, Indiana, Inc.

United States District Court, S.D. Indiana, New Albany Division

March 30, 2018

UNITED STATES OF AMERICA ex rel. Jessica Kietzman, Plaintiff,
v.
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, 68)

          SARAH EVANS BARKER, JUDGE

         Relator 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.

         Facts and Procedural History

         The 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.

         Bethany 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.

         Some 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 and made.

Id. ¶ 20. The Hospital's billing procedures relating to CMS are at the heart of Kietzman's case.

         I. The Unnecessary Radiological Scans (SAC ¶¶ 22-43)

         Since 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.

         Margie 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.

         In 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.

         Kietzman 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.

         On 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 “directive.”

         II. The Fiducial-Marker Kickbacks (SAC ¶¶ 47-49)

         Around 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.” Id.

         III. The Meaningful-Use Violations (SAC ¶¶ 50, 53)

         “According 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.

         IV. The Supervising-Provider Violations (SAC ¶¶ 51-52)

         In the 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.

         In her 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. Id.

         V. The Direct-Supervision Violations (SAC ¶ 56)

         “According 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 in.” Id.

         VI. The Full Ultrasounds (SAC ¶¶ 73-76)

         Kietzman 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.

         VII. Retaliation (SAC ¶¶ 58, 60-64, 67-72)

         On 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.” Id.

         The 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.

         Later 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 ‚Äústated that it seemed that her and [Kietzman] were always on a ...


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