United States District Court, D. Connecticut
UNITED STATES ex rel. PAUL FABULA, and PAUL FABULA, individually, Plaintiff-Relator
v.
AMERICAN MEDICAL RESPONSE, INC., Defendant.
RULING ON MOTION FOR SUMMARY JUDGMENT AND RELATED
MOTIONS
MICHAEL P. SHEA, U.S.D.J.
I.
Introduction
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”). He brings a claim on behalf of the
United States for false claims in violation of §
3729(a)(1)-(2) and a claim on his own behalf for retaliation
in violation of § 3730(h). AMR has filed a motion for
summary judgment on all claims, ECF No. 144, as well as a
motion to exclude the testimony and report of one of
Fabula's experts, ECF No. 143. Fabula has filed a motion
asking the Court to deny or defer ruling on summary judgment
until he has had the opportunity to take more discovery. ECF
No. 157; see Fed. R. Civ. P. 56(d). For the reasons
set forth below, AMR's motion for summary judgment is
GRANTED in part and DENIED in part, Fabula's motion to
deny or defer ruling on summary judgment is DENIED, and
AMR's motion to exclude Fabula's expert is DENIED as
moot.
II.
Procedural History
I
assume familiarity with the allegations in the Fourth Amended
Complaint and the Second Circuit's opinion remanding this
case. United States ex rel. Chorches for Bankr.
Estate of Fabula v. Am. Med. Response, Inc.,
865 F.3d 71 (2d Cir. 2017). I summarize the procedural
history to provide additional context for the discussion that
follows.
Paul
Fabula filed this qui tam action against AMR as a
relator on behalf of the United States on June 22, 2012. ECF
No. 1. The United States gave notice that it declined to
intervene on September 27, 2013. ECF No. 18. Fabula filed a
second amended complaint (“SAC”), bringing a
claim on behalf of the United States for violations of the
FCA, 31 U.S.C. §§ 3729(a)(1) and (a)(2), and a
claim on his own behalf alleging that AMR retaliated against
him for refusing to assist in submitting a false claim, 31
U.S.C. § 3730(h). AMR moved to dismiss, arguing that the
complaint did not state a claim for relief and that Fabula
lacked standing to pursue his claims because he had filed for
bankruptcy and the claims belonged to the bankruptcy estate.
I dismissed Fabula's retaliation claim because I
concluded that he had not alleged facts suggesting that he
engaged in “efforts to stop 1 or more violations”
of the FCA. See 31 U.S.C. § 3730(h). I also
dismissed his FCA claim for lack of standing, but I stayed my
decision to give the trustee of his bankruptcy estate an
opportunity to join the case and pursue the claim. ECF No.
67.
The
trustee of Fabula's bankruptcy estate, Chorches, joined
the case and, on April 24, 2015, filed a Third Amended
Complaint (“TAC”) alleging violations of the FCA.
AMR moved to dismiss the TAC for failure to state a claim,
and I granted the motion on November 6, 2015. ECF No. 82. I
concluded that the complaint did not satisfy the pleading
standard in Fed.R.Civ.P. 9(b) because it did not allege with
specificity that AMR had submitted false claims to the
government for payment.
July
27, 2017, the Second Circuit vacated the dismissal of both
claims, holding that the SAC stated a retaliation claim and
that the TAC stated a claim under the FCA. See
Chorches, 865 F.3d 71. With respect to the FCA claim,
the court held that the TAC satisfied the standard in Rule
9(b) because information about whether individual ambulance
runs were billed to the government was “peculiarly
within the knowledge of AMR, ” id. at 82, and
the TAC had otherwise alleged “facts supporting a
strong inference of fraud, ” id. at 83. With
respect to the retaliation claim, the court held that the TAC
had adequately pled that Fabula engaged in protected activity
by alleging that he refused to falsify a single record that
he believed would later form the basis of a false claim.
Id. at 96-97
On
appeal, AMR argued that the TAC was “an unjustified
ticket to discovery, ” and that it might face undue
pressure to settle the case to avoid significant litigation
costs. Id. at 87. Responding to these concerns, the
Second Circuit noted that the TAC had included specific
allegations about several ambulance “runs” for
which Fabula was directed to create false records. The court
explained that these allegations were “amenable to a
targeted discovery process that could lead to a swift
resolution of the lawsuit . . . .” Id. The
court elaborated:
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.
If no genuine dispute of material fact is found to exist as
to whether false claims were in fact submitted in that
limited set of cases, the lawsuit would be at or near its
end. See [U.S. ex rel. Grubbs v.
Kanneganti, 565 F.3d 180, 191 (5th Cir. 2009)]
(“discovery can be pointed and efficient, with a
summary judgment following on the heels of the complaint if
billing records discredit the complaint's particularized
allegations.”). If the initial inquiry produces
evidence that seems to bear out the complaint's
assertions, however, the door could be open to broader
discovery without fear of subjecting an innocent defendant to
burdensome and unjustified inquiries. See TAC
¶¶ 110, 114 (stating that false claims not
specifically alleged “can be readily identified by, and
from, the existence of multiple versions of electronic PCRs
for any particular run that has been submitted to Medicare
for payment”).
Chorches, 865 F.3d at 88 n.13.
On
remand, the parties seized on this suggestion. See
ECF No. 99 at 7 (“The parties agree that discovery in
this matter should be bifurcated and phased as endorsed by
the Second Circuit. . . .”). I adopted their request
and bifurcated discovery. ECF No. 102. In Phase I, I ordered
that discovery would be limited to “(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 . . . .” Id. at 1.
I also limited dispositive motions following Phase I to those
three topics. Id.
Fabula
then sought leave to file a Fourth Amended Complaint to (1)
substitute Fabula for Chorches as relator, since Fabula's
bankruptcy proceeding had concluded; (2) join the retaliation
claim, previously set forth in the SAC, with the FCA claim
into a single complaint; and (3) make “some additional,
non-substantive ‘clean-up' changes.” ECF No.
106; ECF No. 113. I granted the motion to amend, ECF No. 115,
and Fabula's Fourth Amended Complaint, ECF No. 105,
became the operative complaint.
III.
Facts Developed in Phase I Discovery
The
following facts are taken primarily from the parties'
Local Rule 56(a) statements and are undisputed unless
otherwise noted.
A.
Patient Care Reports (PCRs) and the MEDS software
Fabula
was employed as an Emergency Medical Technician
(“EMT”) with Defendant AMR, an ambulance service
provider, from 2010 through the end of 2011. Local Rule
56(a)(1) Statement (“56(a)(1) Stmt.”)., ECF No.
151 ¶ 3. Fabula's responsibilities included
transporting patients as a member of an ambulance crew and
documenting those transports by completing Patient Care
Reports (“PCRs”). Id. ¶ 4.
Each
ambulance transport or “run” included a crew of
two EMTs or one paramedic and one EMT. Id. ¶
10. One crew member drove the ambulance, and the other
provided patient care. Id. ¶ 11. The crew
member providing care was responsible for completing a PCR
using AMR's proprietary system called the Multi-EMS Data
System (“MEDS”). Id. ¶¶ 11,
14. Crew members completed PCRs on MEDS by answering a series
of questions on dropdown menus and filling in narratives in
free form text boxes. Id. ¶¶ 13, 15. PCRs
included information such as patient demographics, medical
condition, treatment provided, and the time and location of
the run. Id. ¶¶ 12-13.
One
specific piece of information contained in each PCR was
whether crew members performed an Advanced Life Support
(“ALS”) Assessment and whether they performed
ALS-level services. Id. ¶ 16. Medicare
regulations define an ALS assessment as “an assessment
performed by an ALS crew as part of an emergency response
that was necessary because the patient's reported
condition at the time of dispatch was such that only an ALS
crew was qualified to perform the assessment. An ALS
assessment does not necessarily result in a determination
that the patient requires an ALS level of service.” 42
C.F.R. § 414.605. Fabula alleges that AMR instructed
crew members to enter on the PCR that an ALS Assessment had
been performed any time a paramedic was on the crew. 56(a)(1)
Stmt., ECF No. 151 ¶ 16. AMR disputes this allegation
and contends that the ALS Assessment section was not
automatically populated in PCR reports and that the section
could only be completed by a crew member. Id.
When a
crew member completed a PCR, he or she submitted it
electronically to AMR's MEDS server. Id.
¶¶ 19-20. AMR asserts that PCRs that were submitted
could no longer be altered in any way, including by the crew
members who submitted them. Id. (citing MEDS 2
Manual, ECF No. 146-48 at 5). Crew members could provide
additional or corrected information only by completing an
addendum, a separate document that was electronically
attached to the original PCR. 56(a)(1) Stmt., ECF No. 151
¶¶ 22, 30.
Fabula
contends that the MEDS system changed while he was employed
by AMR. Fabula Decl., ECF No. 153 ¶ 15.[1] The “MEDS
2” system was in place when he joined the company and
for the “bulk of [his] time at AMR.” Id.
Using the MEDS 2 system, Fabula states that crew members
could supplement or correct PCRs and resubmit them after the
initial submission. Id. He asserts that AMR
subsequently transitioned to “MEDS 3, ” and,
under the new system, PCRs were locked to editing after they
were submitted. Id. Fabula also states that crew
members could “park” PCRs and edit them later
before submitting them to the MEDS server. Id.
¶ 8. AMR disputes Fabula's recollection. It cites
portions of the MEDS 2 manual indicating that PCRs cannot be
altered once they are finalized. MEDS 2 Manual, ECF No.
146-48 at 5 (“Once the PCR is locked, you can only
preview or transmit the PCR. If additional information needs
to be added to the PCR, an Addendum must be
completed.”).
B.
Physician Certification Statements (PCSs)
AMR
documents state that a Physician Certification Statement
(“PCS”) “is required when we transport a
Medicare patient in a non-emergency situation where the
patient is under the direct care of a physician.” ECF
No. 152-9 at 17. The documents also state that the PCS
“supports the medical reason why an ambulance was the
correct level of transportation” and was
“reasonable and necessary.” Id. at 16.
Information on the PCS regarding a patient's medical
condition “must be completed by the physician or
authorized clinician, ” which includes registered
nurses and nurse practitioners. Id. at 26-28. For
the transport of “repetitive patients”- patients
requiring “three or more ambulance transports during a
10-day period OR one transport per week for a minimum of
three weeks for treatment of the same
condition”-Medicare requires a PCS signed by a
physician (not another authorized clinician) and obtained
before the ambulance transport is provided.
Id. at 23-24. “Once signed, however, a
repetitive patient PCS can be used for 60 days when the
patient is transported for the same condition.”
Id.; see also 42 C.F.R. §
410.40(d)(2).
C.
AMR's Billing Procedures
After a
crew member completed and submitted a PCR, MEDS automatically
forwarded it to the Transportation Authorization Department
(“TAD”). 56(a)(1) Stmt., ECF No. 151 ¶ 26.
TAD reviewed each PCR, and if it identified any issues, sent
notes with clarifying questions or requests for addenda to
the crew member who completed it. Id. ¶ 27.
Fabula contends that another department, Patient Business
Services (“PBS”), also regularly reviewed PCRs
and provided comments and questions for TAD to pass on to
crew members. 56(a)(2) Stmt., ECF No. 151 ¶ 2. When a
crew member received a question or comment from TAD or PBS,
he or she could create an addendum to provide additional or
corrected information. 56(a)(1) Stmt., ECF No. 151 ¶ 29.
AMR asserts that crew members who received a request for
clarification or additional information but who could not
recall the underlying run were permitted to complete an
addendum stating that “no further medical
necessity” or “no further information”
could be provided. Id. Fabula testified that his
supervisors told him he could not indicate he did not
remember the patient, and that he “need[ed] to put
something in there.” Fabula Dep., ECF No.152-1 at 46.
He acknowledged that he was told by field training officers
that he could write “no further medical
necessity” if he did not recall additional information
about a patient. Fabula Dep., ECF No. 145-1 at 32.
Once
the internal review of a PCR was complete, PBS determined if
the run was billable and to whom. 56(a)(1) Stmt., ECF No. 151
¶ 45. If it determined a run was billable, PBS submitted
a claim for reimbursement. Id. PBS prepared bills
for Medicare and Medicaid, as well as private payors and
direct bills to patients. Id. ¶ 47. In some
instances, AMR billed Medicare even though it knew the claim
would be denied so that it could seek payment from a
secondary payor such as the patient's private insurance.
Id. ¶¶ 49-50. In these cases, it sometimes
used “denial modifiers.” Id.
¶¶ 49, 51. “The GY denial modifier notified
CMS that the run was not medically necessary based on the
documentation.” Id. ¶ 51. “The GZ
modifier notified CMS that AMR was unsure whether the runs
were medically necessary and left the ultimate assessment up
to CMS.” Id. Fabula states that AMR could and
did appeal the denial of claims that were submitted using GY
and GZ modifiers. 56(a)(2) Stmt., ECF No. 151 ¶ 31;
Adams Expert Report, ECF No. 145-13 at 15. Fabula also
asserts that, on at least one occasion, Medicare paid a claim
that AMR submitted with a GZ modifier without the need to
appeal. 56(a)(2) Stmt., ECF No. 151 ¶ 33; Adams Expert
Report, ECF No. 145-13 at 15.
D.
Ambulance Runs Identified in the Complaint
The
Fourth Amended Complaint identifies several specific
ambulance runs or sets of runs that Fabula contends were
falsified at AMR's direction or otherwise improperly
billed to Medicare. Fourth Am. Compl. (FAC), ECF No. 105
¶¶ 88-94, 99, 100. Phase I discovery with respect
to Fabula's FCA claims was limited to these specific
runs. See Discovery Ruling, ECF No. 138 (discussing
the scope of Phase I discovery as limited to the
“specific claims and ambulance runs identified in the
operative Complaint”).[2] I summarize the allegations in
the complaint and the evidence developed with respect to each
of these runs (the “Complaint Ambulance Runs”)
below, organized according to the paragraph in the Fourth
Amended Complaint that addressed them.[3]
1.
Paragraph 88: December 16, 2011 Run
a)
Allegations in the Fourth Amended Complaint
Fabula
alleged that, on December 16, 2011, AMR dispatcher Paul
Zadrozny contacted him to ask whether he wanted to work on a
long-distance patient transfer from New Haven, CT, to
Guilford, CT. FAC, ECF No. 105 ¶ 88. Zadrozny told
Fabula that he would be required to complete paperwork to
ensure that Medicare would reimburse AMR for the transfer.
Id. AMR allegedly “wanted” Fabula to
write that the patient could not sit at ¶ 90-degree
angle due to a hip fracture, even though “the patient
had already fully recovered.” Id.
b)
Facts Developed in Phase I Discovery
AMR
asserts that it was unable to identify any records matching
this description. Supplemental Responses to Relator's
First Set of Interrogatories (“Supplemental
Responses”), ECF No. 145-10 at 3-4. Nor was it able to
find potentially relevant records using expanded search
criteria. Id.
2.
Paragraphs 89 and 90: December 14, 2011 Runs
a)
Allegations in the Fourth Amended Complaint
Fabula
alleged that he was partnered with paramedic Amy Baitch for
two runs on December 14, 2011. Fourth Amended Complaint, ECF
No. 105 ¶ 89. Both runs were routine scheduled patient
transports, and neither patient required an ambulance.
Id. ¶¶ 89-90. AMR falsely dispatched the
ambulance as a “911” call so that it could bill
Medicare for the transports. Id.
b)
Facts Developed in Phase I Discovery
AMR
represents that it was unable to identify any PCRs matching
these calls. Supplemental Responses, ECF No. 145-10 at 4. It
reports that it identified only one date in 2011 (August 11,
2011) on which Fabula was partnered with Amy Baitch, and the
pair submitted only one PCR designated as a 911 call, which
involved a patient who had been in a car accident.
Id.
3.
Paragraph 91: December 7, 2011 Run
a)
Allegations in the Fourth Amended Complaint
Fabula
alleged that he was suspended for one day on December 7,
2011, for failing to complete three “parked” PCRs
for ambulance runs in May. FAC, ECF No. 105 ¶ 91. AMR
allegedly provided him with information to include in the
forms and would not allow him to return from suspension
unless he completed them. Id.
b)
Facts Developed in Phase I Discovery
AMR
asserts that it does not have record of any
“parked” PCRs from the relevant days. AMR
produced an “Employee Suspension Notice” dated
December 3, 2011 notifying Fabula that he would be suspended
for one day on Monday, December 5, 2011 for “parked PCR
issues” in violation of AMR's standard operating
procedures. ECF No. 146-44. The notice indicates the
“Infraction Date” was November 30, 2011, and
states that Fabula had received warnings on May 22, 2011 and
October 5, 2011. Id.
4.
Paragraphs 92 and 99: Patient JC Runs
[[4]]
a)
Allegations in the Fourth Amended Complaint
Fabula
alleged that he was involved in several runs for patient JC,
a “grossly overweight man” with diabetes. FAC,
ECF No. 105 ¶¶ 92, 99. JC allegedly called 911 for
an ambulance six dozen times in 2011. Id. ¶ 99.
AMR directed Fabula to “change and falsely certify the
electronic entry of” PCRs indicating that “[JC]
had difficulty remaining in an upright position in order to
qualify [JC]'s runs in the ambulance for
Medicare/Medicaid reimbursement.” Id. The
Fourth Amended Complaint describes a specific ambulance run
for JC on December 4, 2011. Id. ¶ 92. That day,
Fabula was allegedly partnered with EMT Douglass Gladstone.
Id. Gladstone and Fabula assisted in transporting JC
to a hospital. The patient had no medical need to go to the
hospital, “he simply wanted to go there.”
Id. AMR directed Fabula to list JC's prior
surgeries to justify the transport even though the patient
was “able to walk himself to the stretcher[] and climb
on unassisted.” Id.
b)
Facts Developed in Phase I Discovery
AMR
produced 71 PCRs for patient JC from 2011.[5] Of those, six
included addenda. See ECF Nos. 146-11 through
146-16. Fabula authored two of the 71 PCRs that AMR produced.
Fabula Decl., ECF No. 153 ¶ 51. He was not a crew member
on any of the calls with addenda. See ECF Nos.
146-11 through 146-16. He asserts, however, that AMR has
failed to produce all of the relevant records for JC. Fabula
Decl., ECF No. 153 ¶¶ 50-53. AMR's submissions
suggest that it transported patient JC on 133 occasions in
2011. See Billing Summary, ECF No. 146-21 at 2, 5,
8, 11 (billing summary spreadsheet listing 133 separate
transport dates for JC; see also Adams Expert
Report, ECF No. 145-13 at 17 n. 9 (“It is also worth
noting that AMR transported Patient JC 133 times in
2011.”). The summary sheet shows that 71 of the 133
total transports were submitted for reimbursement to
Medicare, Medicaid, or both. Billing Summary, ECF No. 146-21
at 3, 6, 9, 12 (columns H and I listing the payor to whom
each claim was submitted).
Fabula
asserts that AMR improperly billed Medicare for 23 of
JC's transports. See Berry Expert Report, ECF
No. 154 at 8-9 (explaining that 25 runs for JC were
improperly billed); ECF No. 150 at 21 n.15 (noting that
Fabula's expert later agreed that two of those runs were
properly billed). He cites the report of Peter Berry, whom he
has disclosed as a billing expert. Mr. Berry explains that he
determined that AMR billed for Advanced Life Support
(“ALS”) services when runs were initiated by 911
calls. Berry Expert Report, ECF No. 154 at 9. The PCRs for
JC's runs do not include documentation of an ALS
assessment or intervention, and Mr. Berry asserts that the
fact that the runs were initiated by 911 calls does not, on
its own, support billing at the ALS level. Id.
Fabula asserts that AMR trained crew members to indicate that
an ALS assessment was conducted any time a paramedic was on
the run, even if the paramedic did not actually complete an
assessment. Fabula Decl., ECF No. 153 ¶¶ 42-44. He
also asserts that MEDS 2 required crew members to report that
an ALS assessment had been performed any time a paramedic was
on the run regardless of whether the assessment was actually
performed. Id. (“[F]or a certain period of
time beginning with the roll-out of the new documentation
protocol, the PCR software was set up such that you could not
move past the dispatch section without having checked yes
[indicating an ALS assessment was performed] if a paramedic
was on the run.”). AMR's billing expert agrees that
“10 transports for Patient JC met medical necessity for
ambulance transport but do not appear to meet the standard
for ALS billing, although BLS billing would have been
appropriate.” Adams Expert Report, ECF No. 145-13 at
21.
5.
Paragraph 93: October 17, 2011 Run
a)
Allegations in the Fourth Amended Complaint
Fabula
alleged that he transported a patient from a nursing home to
a health center on October 17, 2011. FAC, ECF No. 105 ¶
93. The transport was cancelled en route to the health center
because the crew was informed that the patient did not have
an appointment that day. Id. The patient never left
the ambulance. Id. AMR nevertheless directed Fabula
to complete two PCRs as if the crew had transported the
patient to and from the appointment. Id.
Fabula's supervisor also directed him to have the nurse
at the nursing home “sign twice, ” thereby
“trick[ing her] into signing as though she was
receiving the patient at the health center.”
Id.
b)
Facts Developed in Phase I Discovery
AMR
identified two PCRs that matched the description in the
Fourth Amended Complaint. The first PCR indicates the crew
arrived at the patient's side at 8:53 AM on October 17,
departed for the health center at 9:22 AM, and arrived there
at 9:52 AM. ECF No. 146-3 at 2. The “Narrative”
section states
pt transferred from [redacted] to [redacted] for a ct scan.
pt needs ambulance due to severe bed sore on buttocks and
need for o2 for copd. Pt had no complaints during transport
and vitals remained within normal limits. upon arrival to
facility for pts ct scan this facility stated they have no
record of this pt having an appointment today, and they
cannot take this pt at this time. The facility from which the
patient is from booked the ambulance for this transport but
did not make the appointment for the ct scan. The pt never
left the ambulance and did not make contact with the ct scan
facility. Pt was transported back to the original facility
where pt care was transferred over to staff.
Id. at 3. The “Facility Signature”
section includes a signature from “melissa, ” as
the “Receiving Facility Representative.”
Id. at 6. The name and location of the facility are
redacted. Id.
The
second PCR indicates the crew was at the patient's side
at 9:53 AM, they departed for the nursing home at 9:52 AM,
and arrived at 10:46 AM. ECF No. 146-4 at 2. The
“Narrative” section states:
pt transferred to [redacted] from [redacted]. Pt needs
ambulance due to severe bed sore on buttocks and need for o2
for copd. Pt had no complaints during transport and vitals
remained within normal limits. Pt was transported back to
original facility where pt care was transferred over to
staff.
Id. The “Facility Signature” section
includes a signature from “melissa” as the
“Receiving Facility Representative, ” and the
name and location of the facility are again redacted.
Id. at 6.
AMR
submitted bills to Medicaid for both October 17, 2011
ambulance runs, and both bills were paid. See AMR
Payment Records, ECF No. 152-7 at 64-65 (AMR records showing
Medicaid payment of $218.82 for each run).[6] Fabula contends
that these bills were fraudulent because AMR should have
billed Medicaid for only one run. 56(a)(2) Stmt., ECF No. 151
¶¶ 12- 14.) AMR contends that it was appropriate to
submit two bills under Medicaid billing rules. See
Reply Br., ECF No. 165 at 8.
6.
Paragraph 94: ...