Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 1 of 26 PageID 2164

UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
UNITED STATES OF AMERICA and
STATE OF FLORIDA, ex rel. NANCY CHASE,

v.

Plaintiffs,

Civil Action No.

8:10-cv-01061-JSM-TGW

CHAPTERS HEALTH SYSTEM, INC., et al,

Dispositive Motion

Defendants.
/
HOSPICE DEFENDANTS DISPOSITIVE MOTION TO DISMISS AND MOTION
TO STRIKE RELATORS FOURTH AMENDED COMPLAINT AND
INCORPORATED MEMORANDUM OF LAW
Defendants, Chapters Health System, Inc., Chapters Health, Inc. (Chapters),
LifePath Hospice, Inc. (LifePath), and Good Shepherd Hospice, Inc. (Good Shepherd)
(collectively, the Hospice Defendants), pursuant to Fed. R. Civ. P. 12(b)(6), 12(f), 9(b),
and 8(a) move the Court to dismiss and/or strike the Fourth Amended Complaint
(Complaint) of Relator, Nancy Chase (Relator), with prejudice. Having attempted five
times over six years to state a False Claims Act case, Relator fails in this fifth attempt to state
a cause of action.1 In sum, the Relator:
1. fails to allege that the Hospice Defendants submitted a single false claim to Medicare
or Medicaid;
2. fails to allege specific allegations of purported fraud against the Hospice Defendants
under the False Claims Act, 31 U.S.C. 3729 et seq. (FCA), the analogous Florida
False Claims Act, Fla. Stat. 688.083 et seq. (FFCA), under the Anti-Kickback
Statute, 42 U.S.C. 1320a-7b et seq. (AKS), or under the Stark Act, 42 U.S.C.

The United States has not intervened at this time. (Doc. 56). The State of Florida elected to decline
intervention. (Doc. 74). The case was unsealed by the Clerk on May 12, 2016. (Doc. 93).

1
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 2 of 26 PageID 2165

l395nn(a) (I)(A) (Stark Act), with sufficient particularity in accordance with Fed.
R. Civ. P. 9(b) and controlling case law;
3. fails to allege personal, direct knowledge of the allegations made by Relator;
4. fails to allege any allegations supporting a claim for conspiracy;
5. fails to allege discrimination and retaliation claims that are not time-barred or
otherwise fails to state a claim; and
6. indiscriminately pleads her allegations and claims against all of the 12 Defendants in
violation of Fed. R. Civ. P. 8(a) and 10(b) in a shotgun style.
I.
A.

INTRODUCTION

Relators Complaint Distorts The Hospice Defendants Activities.

Relators Complaint is a lengthy diatribe of unrelated, inconsistent, or incomplete

facts (most of which Relator reports second or third hand) that fails to allege a violation of
the FCA. Without distinguishing between Defendants and treating the Defendants as though
they were one Defendant, Relator accuses the Hospice Defendants of all manner of
wrongdoing over a span of sixteen years including (1) admitting ineligible patients to hospice
care, (2) deceiving patients into electing hospice without informed consent, (3) falsifying
Medicare/Medicaid election documents and medical records, (4) providing patients higher
levels of hospice care then medically necessary, (5) changing patients plans of care to
conserve costs, and (6) requesting payment for services not provided or provided for hospice
ineligible patients. (Doc. 79, 2, 40). Relator alleges the Hospice Defendants perpetuated
an extensive kickback scheme whereby management encouraged employees to meet quotas
for referrals and provide unspecified kickbacks to outside healthcare entities for referrals.
(Id. at 3). Upon closer examination of the unrelated, inconsistent, or incomplete facts,
however, the Complaint is devoid of the factual allegations necessary to state a claim under

2
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 3 of 26 PageID 2166

the FCA, FFCA, AKS or Stark Act. Instead, the Complaint reveals a disgruntled former
employees distortion of clinical patient care decisions or other permitted practices, of which
she, as a non-medical professional, was not involved and is not qualified to discuss. The
purported facts in the Complaint are incomplete descriptions of overheard conversations,
rumors, or Relators account of one-off statements. (See id. at 52, 60, 64, 66, 70, 79, 82,
92, 98, 99, 108, 110, 111, 123). For example, Relators claim that ineligible patients were
admitted and recertified for hospice care appears to stem from a Medicare audit eight years
ago of which Relator was not even tangentially involved where the Hospice Defendants
worked with their Medicare fiscal intermediary to review charts and make suggested
adjustments. (Id. at 45).
Relators allegations reflect that she does not understand and was not directly
involved in the clinical decisions about which she complains, including the medical
admissions, certifications, recertifications, or referrals.

As a Social Services Specialist,

Patient/Family Counselor and/or Psychosocial Consultant, Relator had no responsibility for

the clinical/medical certification or level of care/plan of care decisions made by admissions
nurses and medical doctors, nor can she allege she did. As a result, Relators allegations,
with no supporting documentation, are fundamentally incomplete and defective because they
are founded on unsubstantiated opinion and inference.
Moreover, a review of the Complaints allegations through the lens of Fed. R. Civ. P.
9(b)s particularized pleading requirements shows that after five attempts over six years
Relator does not know the who, what, where, when, and how of the purportedly fraudulent
practices. Indeed, Relator has so distorted her memory of the Hospice Defendants that

3
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 4 of 26 PageID 2167

innocent practices or her recollection of one-off statements are now characterized as illegal in
an apparent attempt to concoct false claims violations through extenuated inference that these
practices collectively were part of a larger, systemic and nefarious scheme to defraud
Medicare and Medicaid. But on an even more basic level, Relator still cannot allege the
essential element of a false claims action that a false claim was actually submitted to
Medicare or Medicaid. Nor can this Relator, with no personal, direct knowledge of or access
to billing information for the Hospice Defendants, ever make such an allegation. This is
precisely the type of hollow, conclusory and speculative pleading Rule 9(b) is intended to
prevent.
Additionally, Relators wholesale incorporation of the general allegations into all
counts makes it impossible for the Hospice Defendants to decipher which allegations are
specifically directed to which counts and which allegations pertain to which Defendant.
Such an impermissible shotgun pleading, for a fifth time, should be dismissed with prejudice.
II.

THE COURT SHOULD DISMISS THE FOURTH AMENDED COMPLAINT

WITH PREJUDICE.
A.

Relator Purports To Bring Claims Based On Fraud.

The Complaint asserts the following three counts against all 12 Defendants: Count I,
alleging the submission or causing the submission of false claims under the FCA and FFCA;
Count II, alleging false statements or records that caused payments of false or fraudulent
claims under the FCA and FFCA; and Count III, alleging a conspiracy to commit violations
under the FCA and FFCA. (Doc. 79, 173183). Relator apparently bases Counts I and II
on purported violations of the AKS or Stark Act. (Id. at 3, 133, 175). The Complaint also

4
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 5 of 26 PageID 2168

asserts Counts IV and V against only LifePath, alleging retaliation and discrimination against
Relator in violation of the FCA and FFCA. (Id. at 184193).
To state a claim under the FCA or FFCA Relator must show that the Hospice
Defendants each: (1) knowingly presented or caused to be presented to an agent of the
United States a claim for payment; (2) that the claim was false or fraudulent; and (3) that
each of the Hospice Defendants knew it was false or fraudulent. See U.S. ex rel. Kunz v.
Halifax Hosp. Med. Ctr., No. 6:09-cv-1002-Orl-31DAB, 2011 WL 2269968, at *3 (M.D. Fla.
June 6, 2011); U.S. ex rel. Westfall v. Axiom Worldwide, Inc., No. 8:06-cv-571-T-33TBM,
2009 WL 1424213, at *4 (M.D. Fla. May 20, 2009). Knowingly means when there is (1)
actual knowledge of the fraud; (2) deliberate ignorance of the truth; or (3) reckless disregard
of the truth or falsity of the information. 31 U.S.C. 3729(b).
A violation of the AKS occurs when the defendant (1) knowingly and willfully, (2)
pays money, directly or indirectly, to doctors, (3) to induce the doctors to refer individuals to
the defendants for the furnishing of medical services, (4) paid for by Medicare. United
States ex rel. Mastej v. Health Mgmt. Assocs., Inc., 591 F. Appx. 693, 698 (11th Cir. 2014)
(emphasis added) (citing U.S. v. Vernon, 723 F.3d 1234, 1252 (11th Cir. 2013).
The Stark Act bars entities from submitting claims to federal health care programs if
the services forming the basis of the claims were furnished pursuant to referrals from
physicians with whom the entities had a financial relationship. See 42 U.S.C. 1395nn(a)(l).
B.

Relator Fails to Plead Her Fraud Claims With Particularity.

Counts I, II, and III are subject to the heightened pleading requirements of Fed. R.
Civ. P. 9(b), which requires that [i]n alleging fraud or mistake, a party must state with

5
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 6 of 26 PageID 2169

particularity the circumstances constituting fraud or mistake. As a fraud statute, Rule 9(b)
requires stating FCA claims with particularity. See Kunz, 2011 WL 2269968 at *7 (citing
U.S. ex rel. Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301, 130911 (11th Cir. 2002));
see also U.S. ex rel. Nunnally v. W. Calcasieu Cameron Hosp., 519 F. Appx. 890, 894 (5th
Cir. 2013) (an AKS violation must also be pleaded with particularity in an FCA action
premised on an unlawful kickback).2 Rule 9(b) also applies to Relators conspiracy claim,
which is predicated on fraud. See Allyn v. Western United Life Assur. Co., 347 F. Supp. 2d
1246, 1249 n.5 (M.D. Fla. 2004) (dismissing counts premised on fraud that failed to comply
with Rule 9(b)). To meet the requisite particularity under Rule 9(b), Relator must set forth in
her counts, (1) the precise statements made or omitted in what documents or oral
representations; (2) the time and place of such statements and the individual making or
omitting them; (3) the statements content and manner in which they misled the relator; and
(4) what defendants gained as a consequence of such fraud. See Clausen, 290 F.3d at 1310.
In other words, a fraud complaint must specifically allege the who, what, when, where and
how of the fraud. Garfield v. NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006).
Relators FCA counts must allege facts as to time, place, and substance of the
defendants alleged fraud, [and] the details of the defendants allegedly fraudulent acts,
when they occurred, and who engaged in them. Corsello v. Lincare, Inc., 428 F.3d 1008,
100812 (11th Cir. 2005). Liability under the False Claims Act arises from the submission
of a fraudulent claim to the government, not the disregard of government regulations. Id. at
2

Courts have analyzed claims under the FCA and FFCA similarly using the Rule 9(b) standard. See
U.S. v. Aggarwal, No. 6:03-cv-117-Orl-31KRS, 2004 WL 5509107, at *4 n.6 (M.D. Fla. Nov. 8,
2004) (citing U.S. ex. rel. Carroll v. JFK Med. Ctr., No. 01-8155-CIV, 2002 WL 31941007 (S.D. Fla.
Nov. 15, 2002) (making no distinction between FCA and FFCA under Rule 9(b)).

6
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 7 of 26 PageID 2170

1012. After five amended complaints over the course of six years, Relators Complaint still
fails to meet these standards.
C.

Relator Fails To Plead Her FCA Claims with Particularity.

i.

The Complaint does not identify a single false claim actually

submitted to Medicare/Medicaid.

Counts I and II of the Complaint have a fatal flaw: Relator has failed to sufficiently
allege the sine qua non of a false claims action that a false claim was submitted to the
government by the Hospice Defendants. Kunz, 2011 WL 2269968, at *7. Relators failure to
allege the actual submission of a specific false claim by any of the defendants is fatal to her
claim. Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1326 (11th Circuit 2009). Further,
Rule 9(b) requires some indicia of reliability in the complaint to support allegations of an
actual false claim for payment being made to the Government. Mitchell v. Beverly Enters.,
Inc., 248 F. Appx. 73, 7475 (11th Cir. 2007) (internal quotations omitted) (citing Clausen,
290 F.3d at 1311). Nothing in Relators complaint provides any indicia of reliability.
a.

Submission of a false claim may not be inferred.

In Hopper, the Eleventh Circuit affirmed the lower courts rejection of relators
argument that allegations from which the court could infer that a false claim was submitted to
the government was sufficient.

The court noted that in order to satisfy Rule 9(b)s

particularity requirement, [plaintiff must] allege a false claim that was actually submitted to
the government. 588 F.3d at 1359 (emphasis added); see also Clausen, 290 F.3d at 1313,
n.23 (the court cannot presume billing policies or assume claims were actually billed to the
government). Indeed, the FCA does not allow a relator to detail a purported scheme, but then
to allege simply and without any stated reason for his belief that claims requesting illegal

7
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 8 of 26 PageID 2171

payment must have been submitted, were likely submitted or should have been submitted to
the Government. Clausen, 290 F.3d at 1311.
b.

Relator fails to identify a false claim that was submitted.

In the instant case, Relator does not identify a single false claim or plead any details
of any objectively false claims knowingly submitted to the government by the Hospice
Defendants. Instead, Relator cursorily references that the Hospice Defendants were billing
Medicare and Medicaid for the past sixteen years. (Doc. 79, 42, 59, 66, 74, 107, 114).
Relator further makes only conclusory, generalized allegations that the Hospice Defendants
likely submitted at least $20 million in claims to the government each year and that all of
the claims submitted back to 2004 (a twelve-year timeframe) were false or fraudulent
because of purported kickback violations. (Id. at 164-165).
Relator does not plead the basis for any false claims, which of the Hospice
Defendants submitted any false claims, on what dates in particular any false claims were
submitted, that the claims were knowingly submitted, or for what patients false claims were
submitted.

Instead, Relator asks the Court to infer the submission of a false claim to

Medicare/Medicaid

from

the

general

fact

that

the

Hospice

Defendants

serve

Medicare/Medicaid patients and bill for them. Such open-ended and vague inferences of
generalized billing will not satisfy Rule 9(b). See Corsello, 428 F.3d at 1013; Hopper, 588
F.3d at 132627.
After a fifth attempt, Relator cannot point to anything in the Complaint to overcome
the fact that [she] did not see any fraudulent bills prepared or presented to the Government
for payment. United States v. Healogics, Inc., No. 6:14-CV-283ORL31KRS, 2016 WL

8
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 9 of 26 PageID 2172

2744949, at *7 (M.D. Fla. May 11, 2016). Because Relator does not, and cannot, plead
details of false claims submitted to the government by the Hospice Defendants, the
Complaint must be dismissed with prejudice.
ii.

Relator fails to allege particularized facts to support her claims.

Relator accuses the Hospice Defendants management personnel of improperly

instructing employees regarding patient admissions and recertifications, patient record
keeping, and billing practices. (Doc. 79, 46123). The Complaint generally alleges that
management encouraged admissions staff to admit referrals as a matter of course without
verifying eligibility and documentation, and that a hospice physician directed staff on what to
include in a patients record. (Id. at 49, 64). Relator fails to plead, however, whether staff
in fact followed those instructions and to connect any instructions to specific false claims.
The implementation and execution of the practices or policies, if it occurred, would be the
actual fraudulent practice, not the mere existence of the supposed practices or
communication of the supposed instructions. See Healogics, 2016 WL 2744949, at *5
(relators identified numerous instances where employees encouraged medical professionals
to perform improper or unnecessary services but did not identify a single instance where a
physician actually did so).

The mere existence of improper policies, instructions, or

disregard of government regulations does not constitute a FCA violation. See Urquilla-Diaz
v. Kaplan Univ., 780 F.3d 1039, 105152 (11th Cir. 2015) (quoting Clausen, 290 F.3d at
1311) (mere disregard of federal regulations or improper internal practices does not create
liability unless, as a result the [defendant] knowingly ask[s] the Government to pay
[such amounts]).

9
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 10 of 26 PageID 2173

a.

Relator does not provide allegations on what occurred,

when these actions occurred, or who was involved.

What actually occurred and whether it occurred at all and who was involved
are not mentioned. The Complaint alleges that management instructed staff members to
fraudulently admit patients, (id. at 4666), deceive and mislead patients (id. at 6773),
up-code to inflate reimbursement (id. at 7490), falsify documents and records (id. at
91103), and falsify billing or alter patient care plans (id. at 104123). However, Relator
does not provide any particulars or other specifics of (1) ineligible patients who were in fact
wrongly admitted to or remained in hospice care; (2) deceived or misled patients; (3) actual
instances of up-coding; (4) false documents and records; (5) false bills; or (6) altered patient
care plans. Relator merely provides this Court with her own legal conclusion that fraudulent
activity occurred.
Relator points to the alleged fact that following a 2008 audit, the Hospice Defendants
patient total dropped by approximately one-third, as patients were allegedly removed from
hospice care. (Id. at 45). Relator surmises that when the number of patients served rose
after 2008 that these patients must have been inappropriate for hospice or procured through
illegal referrals. (Id. at 161-164). Such vague inferences are not sufficient under Rule
9(b).

See Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)

(inappropriate to include legal conclusions masquerading as facts in claim).

When the allegedly fraudulent acts happened is similarly left unclear. According to
Relator, the fraudulent acts could have occurred at any point since at least 2000.3 (Doc. 79,
40, 42, 174, 179). Relator provides a single example of specific dates affiliated with an
3

There is a six year limitations period when the government has not intervened. 31 U.S.C. 3731(b).

10
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 11 of 26 PageID 2174

unidentified patient who was allegedly admitted on November 14, 2007 and discharged and
readmitted multiple times within a five year span. (Id. at 65). However, these allegations
describe events that are not wrongful. The length of time the unidentified patient spent in
hospice care, and that the patient was discharged and readmitted, does not establish these
were inappropriate or fraudulent revocations and re-admittances. This is precisely the type of
fraud by inference that was rejected by the court in Barys ex rel. U.S. v. Vitas Healthcare
Corp., No. 04-21431-CIV-JORDAN/, 2007 WL 2310862, at *5 (S.D. Fla. July 25, 2007),
aff'd, 298 F. Appx. 893 (11th Cir. 2008).
Relator alleges that a LifePath physician purportedly said in hindsight that the patient
should not have been admitted to hospice and was not eligible for continuous care, but the
Complaint fails to plead who allegedly overheard this supposed comment, what the supposed
lack of eligibility was, how this patient was allegedly fraudulently readmitted, and that the
Hospice Defendants knew the patient was being fraudulently decertified and readmitted and
knew the care was subsequently being billed to Medicare. See Garfield, 466 F.3d at 1262
(complaint should state the who, what, when, where and how of the fraud). Evidence of a
long stay in the hospice program is not sufficient to state a claim for fraud. See Barys, 2007
WL 2310862, at *5. Indeed, the determination of a terminal illness and six month or less life
expectancy is based on medical judgment. (See Doc. 79, 3235). Reasonable physicians
could genuinely differ on such a determination with neither being objectively incorrect.
See U.S. v. AseraCare Inc., No. 2:12-CV-245-KOB, 2015 WL 8486874, at *9 (N.D. Ala.
Nov. 3, 2015) (physicians differences of opinion regarding whether hospice services were
properly billed to the Government, without more, cannot show falsity under the FCA). Even

11
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 12 of 26 PageID 2175

if true, this hindsight statement is nothing more than a gratuitous comment concerning a
single patient, which is hardly the rampant fraud Relator apparently perceives.4
iii.

Relator fails to sufficiently allege a false record or statement

material to the Governments payment of false claims.

Relator also asserts in conclusory fashion in Count II that the Defendants made a false
record or statement material to the Governments payment of false claims. (Doc. 79, 179).
Such a claim, however, requires a knowing and specific false record or statement material to
a false claim that caused the government to actually pay a false claim, either to the
defendant itself, or to a third party. Hopper, 588 F.3d at 1327. The Complaint fails to
sufficiently identify any falsified documentation, material to payment by Medicaid and
Medicare, that caused such payments. See U.S. v. Space Coast Med. Assocs., LLP, 94 F.
Supp. 3d 1250, 1257 (M.D. Fla. 2015).
Instead, Relator generally alleges that the Defendants falsified and fraudulently
procured documents and patient records. (Doc. 79, 91, 9397, 100). However, even if
true, the allegations lack particularity how the supposed fraudulent forms are procured from
patients, who created these forms, what patients were involved, when these forms were
procured, if Relator herself procured such forms through fraud, and a resulting claim.
iv.

Relators allegations fail to support an AKS violation.

The Complaint attempts to allege AKS and Stark Act violations, in order to state a
claim under the FCA and FFCA, by describing various schemes by the Hospice Defendants
to provide allegedly unlawful employee referral incentives, (id. at 135141), and
4

This allegation illustrates the overarching problem with Relators Complaint by revealing how her
distorted and incomplete perception of a statement or activity, especially as a non-medical person, led
her to believe that wrongful conduct existed where none did.

12
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 13 of 26 PageID 2176

kickbacks. (Id. at 142160). However, the allegations of the Complaint even if true
fall well short of stating a violation of the AKS or Stark Act.
First, Relator must identify an actual claim submitted for payment to or actually paid
by the government related to services rendered to an unlawfully referred patient to plead an
AKS or Stark Act claim. Mastej, 591 F. Appx. 693, 70607 (Through four versions of the
complaint, Mastej never pleaded any details as to the referred patients, or any specifics as to
any interim claim submissions or payments for the referred patients). Here, in addition to
lacking detail, Relator has not identified a single false claim submitted to Medicare/Medicaid
in any of the purported schemes.
Additionally, Relator must allege with particularity a connection between
remuneration and referrals in an AKS or Stark claim. Nunnally, 519 F. Appx. at 894 (AKS
violation must be pled with particularity, including that the amount of the remuneration is
real rather than hypothetical, how it constituted an illegal kickback, and that the
kickback was provided in turn for the referral of patients). Details that may provide the
requisite specifics include:

(1) the dates or frequency [of referrals]; (2) the dates or

frequency with which the Defendants treated such referred patients;[] (3) the dates,
frequency, or amounts of any actual interim claims for such referred patients submitted by
the Defendants and paid by Medicare; (4) the number of referred patients (whether per
week, per month, or per year); [(5)] the number or amounts of claims for referred patients; or
[(6)] the amount of payments received for referred patients. Mastej, 591 F. Appx. 693,
70607. Here, Relator fails to make any connection between remuneration and referrals, and
only references rumors and speculation not actual facts.

13
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 14 of 26 PageID 2177

Relator asserts that the Hospice Defendants maintained quotas for referrals and paid
kickbacks and incentives to employees who generated the most referrals. (Doc. 79, 56,
135). Again, Relator wants this court to infer that tracking or having a budget relating to
patients in hospice care somehow implies that illegal, improper and false referrals are being
requested or made. Nevertheless, even assuming that having a quota is per se illegal under
the FCA, FFCA, AKS, or Stark Act, Relator does not allege any particulars of who made the
referrals, who was referred, what allegedly fraudulent bills were actually submitted to the
government, when the allegedly fraudulent bills were submitted, and when and how any
physicians received remuneration for such referrals.

See Corsello, 428 F.3d at 1012

(complaint must allege the details of the defendants allegedly fraudulent acts, when they
occurred, and who engaged in them.). Nor, does Relator allege the who, what, when, where
and/or how of the purported bonuses, prizes, and better performance evaluation allegedly
provided to staff. (Doc. 79, 135141).
Not surprisingly, Relators allegations concerning kickbacks between the Hospice
Defendants and other Defendant entities similarly fail to allege the requite specificity.
Relator fails to allege any actionable kickback to Sunrise Senior Living Services. The
Complaint concludes that Brighton Gardens of Tampa, a facility operated by Sunrise,
referred all of its dying patients to the Hospice Defendants and expected the Hospice
Defendants to enroll and certify all such referred patients for continuous care service,
regardless of patient eligibility. (Id. at 142144). However, Relator provides no details
about what Brighton Gardens received from the Hospice Defendants for making such
referrals, or who was engaged in such assurances and referrals. Relator makes no allegation

14
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 15 of 26 PageID 2178

that the supposed assurances were followed, or that demonstrate that the dying patients
supposedly referred were in fact ineligible for hospice or continuous care.
The Complaint further alleges that Superior Residences was a large referral source
for the Hospice Defendants and that they provided the facility with supplies for the entire
facility, not just hospice patients. (Id. at 148). Relator concludes that the supplies were
provided in exchange for referrals of patients. (Id.) However, Relator fails to provide any
factual allegations to demonstrate that this conclusory statement is plausibly accurate such as
the who, what, where, when and why of these purported referrals.
Relator alleges that Hospice Defendants kept JSA Medical Group patients enrolled in
hospice regardless of eligibility, allowing the Hospice Defendants to reduce JSA Medical
Groups patient care costs in exchange for referrals from the Group. (Id. at 157160).
Relator alleges no particulars of who engaged in the referrals, what patients were referred,
what allegedly fraudulent bills were actually submitted to the government, when the
allegedly fraudulent bills were submitted, and when these actions purportedly occurred. See
Corsello, 428 F.3d at 1012 (complaint must allege the details of the defendants allegedly
fraudulent acts, when they occurred, and who engaged in them.).
Similarly, Relator alleges no details, beyond conclusory statements, indicating that
Dr. Wacksman, or Mobile Physician Services, received remuneration in exchange for
referrals, or any factual allegations describing with particularity the purported fraud.
Significantly, the Complaint also lacks any specific allegations connecting such
alleged kickbacks by and between these Defendants to claims submitted for payment to or
paid by Medicare or Medicaid. By failing to demonstrate (1) the payment of any unlawful

15
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 16 of 26 PageID 2179

kickback or referral with particularity and (2) that any Defendant submitted a false claim as a
result of the unlawful kickback, the Complaint fails to satisfy Rule 9(b) and should be
dismissed. See U.S. ex rel. Keeler v. Eisai, Inc., 568 F. Appx. 783, 799 (11th Cir. 2014).
v.

The Complaint does not contain the requisite detail to avoid

dismissal.

Even in cases where relators plead a far higher level of reliability and particularity,
the Eleventh Circuit dismissed relators FCA and FFCA claims. See, e.g., Keeler, 568 F.
Appx. at 783 (affirming dismissal for lack of particularity even where complaint recited
numerous facts personally learned as a drug salesman, including providers names and the
quantity of drugs those providers purchased); U.S. ex rel. Atkins v. McInteer, 470 F.3d 1350
(11th Cir. 2006) (affirming dismissal for lack of particularity even where relator alleged an
elaborate scheme accompanied by citations to patients, dates and medical records);
Clausen, 290 F.3d at 130305 (affirming dismissal of the relators second amended
complaint even though relator specifically identified the patients involved, described the
tests, and the dates on which the tests were performed).
Here, Relator fails to detail the who, what, where, when, or how of the alleged
fraudulent claims and kickbacks necessary to maintain a claim under the FCA, FFCA, AKS
or Stark Act. Failure to plead the details of any alleged fraud circumvents the purpose of
Rule 9(b) and allows relators to try to extract the required but absent details through
subsequent invasive discovery or force a nuisance settlement. See Clausen, 290 F.3d at
1310, 1313 n.24 (When a plaintiff does not specifically plead the minimum elements of
their allegation, it enables them to learn the complaints bare essentials through discovery. . .
may needlessly harm[s] a defendants goodwill and reputation and, at worst, are baseless

16
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 17 of 26 PageID 2180

allegations used to extract settlements.); Keeler, 568 F. Appx. at 803 (recognizing that to
use documents obtained in discovery to overcome pleading hurdles would circumvent the
purpose of Rule 9(b)).
D.

Relators FCA And FFCA Claims Must Be Dismissed For Failure To

Plead Personal, Direct Knowledge.
i.

Relator lacks personal knowledge of the Hospice Defendants

billing practices.

Relators must have first-hand knowledge to support their allegations in a qui tam
Complaint. See Axiom, 2009 WL 1424213 at *5 (dismissing FCA claims where relators
concluded, without specifically alleging, that defendants submitted false claims to the
Government, and relators did not have first-hand knowledge because they neither worked in
the defendant-physicians offices or witnessed the physicians submitting false claims).
On the face of the Complaint, Relator alleges she was a social worker and counselor
at LifePath. (Doc. 79, 11). As discussed above, Relator makes only conclusory statements
that claims were submitted (id. at 163164), but provides no facts or allegations upon
which this Court could conclude that an actual false claim was in fact submitted to Medicare
or Medicaid. Relators mere assertion of direct and independent knowledge does not
provide her conclusory allegations with the indicia of reliability that is necessary, because
no underlying basis for her assertions exists to create any indicia of reliability. See Barys,
2007 WL 2310862, at *4; compare with Hill v. Morehouse Med. Associates, Inc., No. 0214429, 2003 WL 22019936, at *4 (11th Cir. Aug. 15, 2003) (where plaintiff alleged she
personally observed billers and coders inappropriately change codes and submit claims and
she worked in the billing department); All Childrens Health Sys., Inc., 2013 WL 1651811, at

17
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 18 of 26 PageID 2181

*2 (establishing reliability where a relator worked in the very department where [the]
alleged fraudulent billing scheme occurred); Space Coast, 94 F. Supp. 3d at 1257
(describing methods to provide an indicia of reliability, such as including specific billing data
amounts, dates, or services rendered or copies of specific bills). Relator does not include
allegations that she personally observed inappropriate codes submitted to Medicare or
Medicaid or worked in the billing department. (Doc. 79). It is not enough for the plaintiffrelator to state baldly that he was aware of the defendants billing practices, to base his
knowledge on rumors, or to offer only conjecture about the source of his knowledge.
Healogics, Inc., 2016 WL 2744949, at *5.
ii.

Relator lacks direct knowledge of hospice medical practices.

The Court could not conclude from Relators allegations, even if true, that she is
qualified to opine on patients eligibility for hospice care. Relators personal knowledge
stems from her non-clinical, distorted perception and conjecture of what is or is not an illness
that should qualify a patient for hospice, what is or is not a nonrecertifiable patient, and what
verbiage should or should not be used in medical records. Relator fails to plead any
experience, knowledge, or fact, beyond mere speculation, regarding patient eligibility for
hospice. As such, Relator fails to meet the direct knowledge requirement under the FCA.
Moreover, Relator also has no direct knowledge of the activities she purports to
attribute to Chapters or Good Shepherd by purportedly talking with other employees. (Doc.
79, 12). As such, she cannot state a qui tam Complaint against these entities.5 See United
States ex rel. Schumann v. Astrazeneca Pharms. L.P., 769 F.3d 837, 848 (3d Cir. 2014)

There are no allegations of wrongdoing where Chapters or Good Shepherd is specifically mentioned.

18
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 19 of 26 PageID 2182

(relators knowledge is not direct because it came from reviewing documents and discussing
them with colleagues who participated in the underlying events) (internal citation omitted).
E.

Count III Fails To Sufficiently Allege The Elements Of A Conspiracy

Cause Of Action Under The FCA And FFCA.

Count III for conspiracy should similarly be dismissed. To establish liability for
conspiracy under the FCA, Relator must establish: (1) that the defendant conspired with
others to get a false claim allowed or paid, (2) that the conspirators performed any act to get a
false or fraudulent claim paid, (3) a meeting of the minds, between the alleged conspirators
to achieve the unlawful purpose and (4) that the conspirators intended to defraud the
Government. U.S. ex rel. Bane v. Breathe Easy Pulmonary Services, Inc., 597 F. Supp. 2d
1280, 1289 (M.D. Fla. 2009).
Relator fails to allege the required elements of a conspiracy. (Doc. 79, 182). The
Complaint contains no actual facts of any agreement to conspire under the FCA or FFCA.
There are no allegations of communications between the alleged co-conspirators that
demonstrate an agreement to defraud the government. Axiom, 2009 WL 1424213 at *6.
Further, no allegations exist of where or when an agreement was reached. Id. [A]llegations
concerning a conspiracy (lacking specific allegations regarding the entry of an agreement or
overt acts) are merely legal conclusions masquerading as factual allegations, which do not
survive the motion to dismiss. Id. (citing Corsello, 428 F.3d at 1014).
Finally, as shown above, there is no actionable FCA or FFCA claim sufficiently
alleged in the Complaint. Without an underlying FCA or FFCA claim, the conspiracy claim
must be dismissed as well. See supra II.AD; Rebman v. Follett Higher Educ. Group, Inc.,
575 F. Supp. 2d 1272, 1280 (M.D. Fla. 2008) (conspiracy requires an underlying tort).

19
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 20 of 26 PageID 2183

F.

Relators Retaliation and Discrimination Claims must be dismissed.

i.

The statute of limitations time-bars Relators claims related to her

termination.

Relators retaliation/discrimination claim based on her termination in 2012 is barred

because it was not raised within the statute of limitations for bringing such a claim.
Relator must bring any retaliation claims within three years of its occurrence. 31
U.S.C. 3730(h)(3). Relator alleges that she was terminated in 2012. (Doc. 79, 171).
Even if Relator was terminated on the last day of 2012,6 her Fourth Amended Complaint was
not filed until March 24, 2016, more than three years from the day she was terminated.
Relator had not previously raised an issue of retaliation based on her termination and such
claims will not now relate back to the original filing.7 Indeed, in the Third Amended
Complaint, filed on August 7, 2012, Relator alleges that she was still employed at the time of
the filing. (Doc. 26). Since, the Fourth Amended Complaint was filed beyond the statute of
limitations period, her claims of retaliation based on her termination are barred.
ii.

Relators FFCA claims fail to include conditions precedent.

Her claims under Fla. Stat. 68.08 suffer from additional infirmities. Relator can
only bring a claim under that provision through Fla. Stat. 112.3187 et seq. the Whistleblowers Act applicable to public sector employees or contractors thereto. McShea v. School
Bd. of Collier Cnty., 58 F. Supp. 3d 1325, 1345 (M.D. Fla. 2014). As a result, Relator must
meet all the stringent conditions precedent to suit under Section 112.3187(6) (describing
administrative prerequisites). Merely reporting alleged wrongdoing to an employees
6

Relator was actually terminated on December 11, 2012.

An amendment newly introducing a retaliation claim does not relate back to an original complaint.
See Hayes v. Dep't of Educ. of City of New York, 20 F. Supp. 3d 438, 451 (S.D.N.Y. 2014).
7

20
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 21 of 26 PageID 2184

supervisor is not sufficient. Kelder v. ACT Corp., 650 So. 2d 647, 648-649 (Fla. 5th DCA
1995) (plaintiffs complaints were only made internally which was fatal to her state
whistleblower claim). The Complaint is conspicuously silent on her satisfaction of the
administrative prerequisites mandated by Section 112.3187(6), therefore independently
barring her Section 68.08 claims. Fairbanks v. City of Bradenton Beach, 733 F. Supp. 1447,
1449 (M.D. Fla. 1989).8
iii.

Relator fails to state a retaliation or discrimination claim.

Additionally, Relators retaliation and discrimination claims in Counts IV and V

suffer from the same shot gun and conclusory allegation infirmities as the rest of her
Complaint. To state a claim for retaliation Relator must show that (1) she was engaged in
conduct protected under the FCA and FFCA; and (2) her employer retaliated against her
because of that conduct. See Mack v. Augusta-Richmond County, Ga., 148 F. Appx. 894,
896897 (11th Cir. 2005). Relator must also establish that the decision-makers were aware
of the Relators protected activity when making the employment decision at issue. Id. at
897; see also Nelson v. Dept of Labor and Employment Security, 1993 WL 13699912 at *14
(PERC Nov. 16, 2013) (requiring knowledge by decision makers of protected activity).
Here, Relator fails to allege a sufficient FCA retaliation claim under both pre-2009
and post-2009 FCA amendment law. Relator also fails to allege decision-maker knowledge
or that her termination was because of FCA and FFCA prohibited conduct. Instead,
Relator summarily alleges that she was demoted by LifePath in 2009 for raising

Relators Section 68.08 claims may also be untimely, as they were required to be brought within 180
days of the administrative exhaustion. See 112.3187(8)(c). Allocco v. City of Coral Gables, 221 F.
Supp. 2d 1317, 1366 (S.D. Fla. 2002).

21
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 22 of 26 PageID 2185

unspecified ethical issues. (Doc. 79, 169). Additionally, Relator claims that she was
removed from a committee in 2010 and ultimately discharged by LifePath in 2012 for
complaining about failing to follow patient advance directives. (Id. 170, 171).
Relator states in conclusory fashion that she reported violations of the FCA and
FFCA. (Id. 184, 185, 189, 190). Relators purports to have, on an unspecified date,
complained about inadequate staffing issues. (Id. at 109). She next alleges that in 2009 she
objected to purported double billing practices by the Hospice Defendants (id. 115, 117,
123), and that [b]eginning prior to 2009, a facility reportedly received kickbacks for
referring patients for improper services to which she objected. (Id. 144, 146).
The timing of her purported internal complaints is important because the FCA
retaliation provision was amended in 2009, with the amendment affecting conduct that
occurred on or after May 20, 2009. See Westlund v. LabCorp of America Holdings, No.
8:10-cv-2882-T-23TGW, 2012 WL 1416417, at *1 (M.D. Fla. Apr. 24, 2012). For acts prior
to May 20, 2009, (Doc. 79, 123, 14446, 169), Relator must show that her employer knew
that a qui tam action might arise from an employees acts. Id. at *1. In other words, Relator
must allege that she notified her employer that she was investigating potential fraud under the
FCA or that she told her employer that their actions may be subject to a qui tam action, not
simply raise a concern. Id. at *2 (dismissing qui tam retaliation complaint where plaintiff
alleged that she questioned and raised concerns to her employer).

Here, Relators

allegations are merely expressions of concern rejected by the Westlund court as sufficient to
sustain a FCA claim.

22
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 23 of 26 PageID 2186

Nor, however, does Relator state a claim under the post-amendment FCA retaliation
provision either to the extent any of her unspecified internal complaints occurred after May
20, 2009. Section 3730(h) requires an employee to act in furtherance of an action under the
FCA. Id. at *3 (citing Graham Cnty. Soil & Water Conserv. District v. United States ex rel.
Wilson, 545 U.S. 409, 416, n. 1 (2005)). Relators Complaint fails to specify that she made
complaints that the practices were prohibited by the FCA or FFCA. She merely alleges that
she objected to practices of the Hospice Defendants, not even LifePath specifically.
Moreover, Relator does not tie her purported internal complaints to her alleged
demotion in 2009. (Doc. 79, 169). She does not identify who she complained to about a
failure to honor an advance directive in February 2010 or who made the decision to remove
Relator from the Ethics Committee. (Id. at 170). As such, Relator fails to plead the
requisite decision-maker knowledge of her alleged complaints to state a retaliation claim.
Mack, 148 F. Appx. at 897.9 Likewise, fatal to Relators claims, is the absence of any
allegation that failing to follow patient advance directives violates the FCA or FFCA in the
first place.

Therefore, her claim that her termination in 2012 resulting from advance

directive complaints is not alleged to be because of a FCA or FFCA violation.

For all of the forgoing reasons, Counts IV and V should be dismissed with prejudice.

Nor do these bare allegations constitute sufficient retaliatory adverse action to constitute
actionable retaliation in any event where Relator has not alleged any loss of pay or benefits as a result
of her alleged demotion or removal from a committee. See, e.g. Gray v. City of Jacksonville, Fla.,
492 F. Appx. 1 (11th Cir. 2012), cert. denied 134 S.Ct. 84 (2013) (removal of additional duties not
adverse action); Reeves v. DSI Security Services, Inc., 395 F. Appx. 544 (11th Cir. 2010) (failure to
given non-guaranteed overtime, ignoring phone calls and comments were not retaliation).

23
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 24 of 26 PageID 2187

III.

THE COMPLAINT SHOULD BE STRICKEN UNDER FED. R. CIV. P. 12(f)

A.

The Amended Complaint Is An Impermissible Shotgun Complaint.

The Complaint, for the fifth time, impermissibly incorporates all allegations of
purported fact and law into all counts against all 12 Defendants and should be dismissed.
An impermissible shotgun complaint contains several counts, each one incorporating
by reference the allegations of its predecessors, leading to a situation where most of the
counts contain irrelevant factual allegations and legal conclusions. Strategic Income
Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295 (11th Cir. 2002). The
Eleventh Circuit described shotgun pleadings as altogether unacceptable and suggested that
courts strike them. Cramer v. State of Fla., 117 F.3d 1258, 1263 (11th Cir. 1997). Shotgun
pleadings violate the short and plain pleading requirement of Rule 8 and also violate Rule
10(b), which prohibits the incorporation of all factual allegations of prior counts into each
subsequent count. See, e.g., Pelletier v. Zweifel, 921 F.2d 1465, 1518 (11th Cir. 1991). Such
shotgun pleadings make it virtually impossible to know which allegations of fact are
intended to support which claim(s) for relief. Stephens v. Dye, No. 8:12-CV-00302-EAK,
2012 WL 5520740, at *2 (M.D. Fla. Nov. 14, 2012) (internal citations omitted).
The Complaint asserts three counts against all 12 Defendants under the FCA and
FFCA, (Doc. 79, 173183), and two counts against LifePath only. (Id. at 184193). A
classic shotgun pleading, the Complaint first lists general allegations, which are then
wholesale incorporated into each count, regardless of relevance. (Id. at 173, 178, 181,
184, 189). None of the first three counts specifically identifies the Defendant to whom it is
directed. Instead, each of the three counts against the 12 Defendants recites that by means

24
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 25 of 26 PageID 2188

of the acts described above Defendants violated the various statutes and then, each of the
five counts is incorporated together. (Id. at 179, 181-182, 184-185, 189-190).
The impermissible shotgun pleading in the Complaint requires the Hospice
Defendants and this Court to sift through the reincorporated allegations in an attempt to
determine which allegations actually relate to which count and which Defendant.

See

Strategic Income, 305 F.3d at 1295. It is impossible for the Hospice Defendants to decipher
which allegations are specifically directed to which counts and pertain to which Defendant.
This faulty pleading is Relators fifth bite at the apple. Another attempt at pleading
will only result in another impermissible complaint, which will waste valuable court
resources.

Watson v. HSBC Card Servs., Inc., No. 3:10-CV-985-J-34JBT, 2010 WL

4337911, at *1 (M.D. Fla. Oct. 27, 2010) (shotgun pleadings impede the courts ability to
administer justice, waste judicial resources, and should be stricken). As such, the Complaint
should be finally dismissed as to the Hospice Defendants with prejudice.
IV.

CONCLUSION

For these reasons, the Hospice Defendants request that the Court dismiss Relators
Fourth Amended Complaint with prejudice and award such further relief as appropriate.
Respectfully submitted:
/s/ Adam P. Schwartz
Adam P. Schwartz, FBN: 83178
Cathleen Bell Bremmer, FBN: 813028
Blaise N. Gamba, FBN: 27942
Erin J. Hoyle, FBN: 117762
CARLTON FIELDS JORDEN BURT, PA
P.O. Box 3239
Tampa, FL 33601-3239
Telephone: 813.223.7000
Facsimile: 813.229.4133

25
107849193.8

Case 8:10-cv-01061-JSM-TGW Document 145 Filed 07/06/16 Page 26 of 26 PageID 2189

E-mail: aschwartz@carltonfields.com
cbremmer@carltonfields.com
bgamba@carltonfields.com
ehoyle@carltonfields.com
and
Gabriel Imperato, FBN: 623652
Broad and Cassel
100 S.E. 3rd Avenue
Suite 2700
Fort Lauderdale, FL 33394
Telephone: 954.764.7060
Facsimile: 954.761.8135
E-Mail: gimperato@broadandcassel.com
Counsel for Chapters Health System,
Inc., Chapters Health, Inc., LifePath Hospice,
Inc., Good Shepherd Hospice, Inc.,
CERTIFICATE OF SERVICE
I hereby certify that on July 6, 2016, I electronically filed the foregoing with the
Clerk of Court by using the Courts CM/ECF system thereby serving all registered users in
this case including:
Tillman Finley (pro hac vice)
Daniel Marino (pro hac vice)
Elyse MacNamara (FBN: 107191)
MARINO FINLEY PLLC
1100 New York Avenue, NW Suite 700W
Washington, DC 20005
and
Natalie Khawam, FBN: 0027997
WHISTLEBLOWER LAW FIRM, P.A.
400 N. Tampa Street, Suite 950
Tampa, FL 33602-4700
(813) 944-7853 Office
(813) 434-2173 Facsimile
Counsel for Relator
/s/ Adam P. Schwartz
Adam P. Schwartz, FBN: 83178

26
107849193.8