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United States ex rel. Fabula v. American Medical Response, Inc.

United States District Court, D. Connecticut

September 12, 2018

United States ex rel. PAUL FABULA, and PAUL FABULA, Individually Plaintiff-Relator
v.
AMERICAN MEDICAL RESPONSE, INC., Defendant.

          MEMORANDUM AND ORDER

          MICHAEL P. SHEA, U.S.D.J.

         Plaintiff-Relator Paul Fabula, brings this action under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., against Defendant American Medical Response, Inc. (“AMR”). Pending before the Court is Plaintiff-Relator's motion for extension of the deadlines set out in the Second Amended Scheduling Order (ECF No. 131) and a discovery dispute between the parties. I attach to this ruling the correspondence and discovery requests received from the parties regarding their dispute. On September 5, 2018 I held a telephonic oral argument concerning the dispute. This ruling resolves the issues raised in the parties' correspondence and those raised in the telephonic oral argument.

         I. BACKGROUND

         A. Procedural History

         On June 22, 2012, Fabula filed this qui tam action as a relator on behalf of the United States. (ECF No. 1.) The United States declined to intervene in 2013. (ECF No. 18.) Fabula filed his second amended complaint (“SAC”), bringing a claim on behalf of the United States under the False Claims Act, 31 U.S.C. §§ 3729(a)(1) and (a)(2) (“FCA”), and a claim on his own behalf for retaliation in violation of 31 U.S.C. § 3730(h). The Court dismissed the FCA claim and the retaliation claim, but stayed its decision to give Chorches, the trustee of Fabula's bankruptcy estate, a chance to pursue the claims. (ECF No. 67.) Chorches pursued the FCA claim by timely filing the Third Amended Complaint (“TAC”), which the Court later dismissed as well. (ECF No. 82.) In July 2017, the Second Circuit reversed the dismissal of the claims, holding that the SAC stated a retaliation claim and that the TAC stated a claim under the FCA. See United States ex rel. Chorches v. Am. Med. Response, Inc., 865 F.3d 71 (2d Cir. 2017). Fabula subsequently moved to file a Fourth Amended Complaint (FAC), combining the retaliation claim from the SAC with the FCA claim from the TAC and substituting Fabula for Chorches given that his bankruptcy proceeding had concluded. (ECF No. 105.). The Court granted the motion on January 3, 2018. (ECF No. 115.)

         B. Fabula's Claims

         Fabula claims that the Defendant violated the FCA by seeking reimbursement from Medicare and Medicaid for ambulance transports that it certified were medically necessary despite knowledge that they were not. (ECF No. 105 ¶ 14.)[1] Fabula alleges that, as an employee of AMR, he was forced to modify Patient Care Reports (“PCRs”) based on handwritten notes given to him and his co-workers by supervisors. (Id. at ¶ 24.) He claims that the changes were required in order to fraudulently convert non-reimbursable trips into reimbursable trips under Medicare and Medicaid. (Id. ¶ 32.) The FAC lists several specific ambulance runs for which Fabula was instructed to revise his PCRs in order to obtain payment from Medicare or Medicaid. (ECF No. 105 ¶¶ 88-94, 97, 99, 100.) The FAC additionally alleges broader schemes aimed at increasing reimbursements from Medicare and Medicaid. For example, Fabula claims that an electronic filing system required “that the box for ‘paramedic assessment' had to be checked for every run, and that no PCR could go through the system and be processed without checking Advanced Life Support . . . assessment.” (Id. at ¶ 133.). These designations would trigger reimbursement for an additional $1, 200 to $1, 500 from Medicare or Medicaid per ambulance run. (Id. ¶¶ 134-136.) Similarly, Fabula alleges that the computerized forms would automatically insert “Yes” in the field asking whether patients were “bed confined” regardless of whether that designation was accurate (Id. ¶ 139.) This made it more likely that the ambulance trip would be reimbursable. (Id. ¶ 65.)

         Fabula's retaliation claim focuses on a specific PCR. He alleges that he was ordered to make changes to a PCR for an ambulance run in early December 2011 (id. ¶ 50), but that he refused, (Id. ¶ 59, 70). AMR allegedly responded by threatening him with termination (id. ¶ 72), and later suspended him and refused to allow him to return to work, (Id. ¶ 73). Fabula alleges that this indefinite suspension amounted to a de facto termination of his employment. (Id. at ¶ 74.)

         II. DISCOVERY DISPUTE

         Following remand from the Second Circuit, the Court ordered the parties to file a revised report under Local Rule 26(f). (ECF No. 96.) In their report, the parties jointly requested phased discovery as the Second Circuit had suggested in its opinion in this case. (ECF No. 99 at 7) (citing Am. Med. Response, Inc., 865 F.3d at 88 n.13 (“Where a qui tam relator identifies representative examples of false claims or, as here, makes allegations leading to a strong inference that specific false claims were submitted, defendants could initially be required to provide discovery only with respect to the cases identified in the complaint.”)). The Court adopted the parties' request in its scheduling order. (ECF No. 120.) As a result, the Court ordered that discovery would take place in two phases, with Phase I including only “(1) the specific claims and ambulance runs identified in the operative Complaint; (2) Fabula's retaliation claim; and (3) whether Mr. Fabula is judicially estopped from recovering on the False Claims Act claims against Defendant.” (Id.)

         Fabula takes issue with AMR's responses to 10 discovery requests based on AMR's understanding of the scope of Phase I.[2] Fabula also argues that AMR improperly limited its production and responses to requests related to the retaliation claim to a narrow set of ambulance runs, contrary to the Court's order.[3]

         A. Scope of Phase I Discovery

         The parties dispute the scope of the phrase “specific claims and ambulance runs” in the scheduling order. (ECF No. 120.) AMR argues that the Phase I discovery is limited to the individual instances in which Fabula was ordered to falsify a PCR in connection with an ambulance run described in the complaint (the “Subject Transports”). Fabula contends that the phrase “specific claims and ambulance runs” also encompasses the broader schemes intended to increase the proportion of Medicare-reimbursable ambulance runs or the amount of reimbursement for each run. (E.g., ECF No. 105 ¶ 134-136; 139.) I adopt AMR's view. The footnote in the Second Circuit's opinion on which this discovery plan was based suggested limiting discovery to specific “cases, ” a term the court used to refer to particular ambulance runs and the requests for payment associated with those runs. See Am. Med. Response, Inc., 865 F.3d at 87 (“While invoice No. and the dates of their submission would undoubtedly have put AMR on notice of specific claims allegedly submitted to the government, so do details provided in the TAC (such as dates of runs, patient names, actual reasons for the transport, and the information entered into PCRs) with respect to specific runs for which false claims were submitted . . . . [B]y alleging with particularity AMR's scheme to falsify PCRs in order to qualify runs as medically necessary, and identifying particular cases in which that scheme was carried out, Fabula [has satisfied Rule 9(b)]”). Although language in the parties' conference report used the word “claims” instead of “cases, ” I find that the most reasonable reading of that term in this context is the meaning ascribed by the FCA. See 31 U.S.C. ¶ 3729(b)(2) (defining “claims” in the FCA as a “request or demand . . . for money or property”).

         The parties also dispute the scope of discovery in Phase I for Fabula's retaliation claims. Fabula suggests that he was terminated because he opposed AMR's broad scheme to defraud Medicaid and Medicare. He thus contends that he should be allowed discovery on the entire scheme. As alleged in the complaint, though, his retaliation claim is relatively narrow: he claims that he was terminated because he refused to falsify a specific PCR from December 2011. (ECF No. 105 ¶¶ 50-75.) Indeed, the Second Circuit held that Fabula successfully pled a claim for retaliation by alleging that he was terminated for “refusing to falsify a single PCR.” Am. Med. Response, Inc., 865 F.3d at 96. In Phase I, ...


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