United States District Court, E.D. Virginia, Richmond Division
JAMES R. SPENCER, Senior District Judge.
THIS MATTER is before the Court on Defendants' Motion to Dismiss ("Motion") (ECF No. 16), filed on October 3, 2014. Relator filed a response in opposition on October 15, 2014 ("Opp'n Mem.") (ECF No. 18), and Defendants subsequently filed a reply on October 21, 2014 ("Reply Mem.") (ECF No. 19). The parties have not requested a hearing on this matter, and the Court finds that oral argument is unnecessary. See E.D. Va. Loc. Civ. R. 7(J). For the reasons set forth below, the Motion is GRANTED.
a. Factual Background
This is an action to recover damages and civil penalties on behalf of the United States and the Commonwealth of Virginia arising from alleged false and/or fraudulent records, statements and claims made, used, or presented and caused to be made, used or presented by Defendants, Agape Counseling and Therapeutic Services, Inc. ("Agape"), Sherie Mawusi ("Mawusi"), and Lena Baker-Scott ("Baker-Scott") (collectively, the "Defendants"), to Medicaid and other state and federal programs in violation of the Federal Civil False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., and the Virginia Fraud Against Taxpayers Act ("VFATA"), Va. Code § 8.01-216.1 et seq. Relator, Lisa Phipps ("Phipps" or "Relator"), brings these claims on behalf of the United States and the Commonwealth of Virginia pursuant to the qui tarn provisions of the FCA and the VFATA. The specific allegations as detailed in the Complaint are as follows.
Phipps started working at Agape in May 2006 and was a Director of Community Mental Health Services. Agape offers mental health programs to the community, including outpatient psychotherapy, substance abuse counseling, therapeutic day treatments, mental health support services for children and adults, and intensive in-home services. Mawusi is a licensed clinical social worker ("LCSW") and owner of Agape. Baker-Scott is also an owner of Agape. She is a Qualified Mental Health Professional ("QMHP"), but not a Licensed Mental Health Professional ("LMHP").
The procedure that was employed at Agape prior to September 2010 was as follows: an initial "assessment" is completed face-to-face by a LMHP or a QMHP after which an Individualized Service Plan ("ISP") is drawn up by the LMHP or QMHP. Agape bills Medicaid $91.00 for an intake assessment. However, only direct face-to-face contacts and services by the LMHP or QMHP to individuals are reimbursable by Medicaid. Therefore, if an Agape staff person, other than an LMHP or a QMHP, actually completed the assessment, an LMHP or a QMHP could not simply "sign off' on the assessment in order to qualify for Medicaid reimbursement. Next, after an intake assessment is completed, and once the actual ISP is developed, a Qualified Paraprofessional in Mental Health ("Qualified Paraprofessional") may provide counseling services under the supervision of a QMHP. The Complaint alleges that "Agape allowed unqualified employees to complete face-to-face assessments and reassessments, and nevertheless submitted these intakes to Medicaid for payment." (Compl. ¶ 32.)
Further, on July 23, 2010, the Department of Medical Assistance Services ("DMAS") announced changes to Community Mental Health Rehabilitative Sendees, specifically Adult Oriented Services, to be implemented on September 1, 2010. These changes required the initial assessment and six month reauthorization to be done "face-to-face by the LMHP or a license-eligible mental health professional" ("LMHP-E") and no longer could be conducted by a QMHP. Under these new regulations, Agape only had four employees company-wide who could now perform the face-to-face intakes: Mawusi; Tiffany Dobbins ("Dobbins"), Coordinator for Mental Health Support; LaDonna Stone ("Stone"), Coordinator for Intensive In-Home Services; and Marie Payne-Clore ("Payne-Clore"), Director of Agape's Culpeper location. Because of the small number of eligible employees, Agape "stretch[ed] the category way beyond its legitimate definition, " (Compl. ¶ 40), by claiming that "being license eligible meant you were working on it, '" ( id. at ¶ 41).
The alleged wrongdoing in this case began when defendants billed government health programs for services that were not eligible for payment because the services were not provided by the appropriate qualified mental health professional. Defendants forged documents and falsified records in order to avoid having to repay money to government health programs.
Specifically, in February 2012, Mawusi and Baker-Scott began to request certain files from Jennifer Jenkins ("Jenkins"), Director of Quality Assurance. David Wilson ("Wilson"), Mawusi's personal assistant, created a "File Check-Out Log" for both Mawusi and Baker-Scott. In August 2012, Phipps began to suspect something was wrong with Agape's business practices. She noticed the File Check-Out Log and the fact that the clients' files on this list were those for whom assessments had been performed by employees on her team who were "working on it" and who had not received a letter of approval from the Virginia Board of Counseling.
Additionally, she noticed that Payne-Clore's signature was on one of the assessments. Phipps knew that because Payne-Clore was the Director of Agape's Culpeper location, Payne-Clore would never have completed an assessment for a client assigned to Phipps' team or caseload. Upon further examination, Phipps found more files containing assessments signed by individuals other than the persons she knew had completed them. Phipps proceeded to make a list of such cases in order to protect herself since as the Director she was responsible for her files.
In early June 2012, Wilson began to present files to Phipps as well as other directors at Mawusi's directive, with sticky notes attached and instructions to "fix" this, "add" that or "change" something else. Specifically Phipps was requested to remove the "ACTS Staff Completing Assessment" on Agape's Adult Intake Assessment form and delete the name of the person who actually completed the assessment. These changes were requested for employees who had completed assessments after the regulations were changed in 2010, and who were no longer qualified to perform the assessments. Phipps was then directed to print the altered assessment with a blank signature page so that a different person, including Mawusi and Baker-Scott, could sign it. These altered documents would then be placed in the clients' files. These requests for changes were most prevalent before a DMAS or Medicaid audit. Phipps refused to make the proposed changes, and instead gave the files back unaltered.
b. Procedural Background
Phipps filed her four-count Complaint in this Court on March 15, 2013 (ECF No. 1), in which she alleges: (1) violations of the False Claims Act (count one); (2) concealing obligation to pay money to the Government (commonly referred to as a "reverse false claim"), in violation of 31 U.S.C. § 3729(a)(1)(G) (count two); (3) conspiracy to submit false claims, in violation of 31 U.S.C. § 3729(a)(1)(C) (count three); and (4) violations of the Virginia Fraud Against Taxpayers Act (count four). In her prayer for relief, Phipps requests the Court to enter judgment against Defendants in an amount equal to three times the amount of damages the United States as well as the Commonwealth of Virginia have sustained because of Defendants' actions, plus a civil penalty of $11, 000 for each violation of the FCA as well as the VFATA; the maximum award permitted under § 3730(d) of the FCA; as well as all costs of this action, including attorneys' fees. The Complaint was initially filed under seal to allow the United States and the Commonwealth to investigate the claims and determine whether to intervene, 31 U.S.C. § 3730(b); Va. Code § 8.01-216.5(B). On May 20, 2014, the United States and the Commonwealth noticed their intent not to intervene and the case was subsequently unsealed.
Defendants then filed the present Motion, requesting the Court to dismiss Relator's entire Complaint. The ...