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United States ex rel. Branscome v. Blue Ridge Home Health Services, Inc.

United States District Court, W.D. Virginia, Roanoke Division

March 13, 2018



          Elizabeth K. Dillon, United States District Judge

         Plaintiff Kimberly Branscome, a physical therapy assistant, brings this action against her former employer, Blue Ridge Home Health Services (BRHH); a BRHH physical therapist, Jeffery Owens (Owens); and BRHH president and owner, Dustin Snow (Snow). Branscome alleges that defendants submitted false Medicare claims, used false records material to false Medicare claims, used false records to avoid their obligation to repay the government, and retaliated against her by terminating her employment, all in violation of the False Claims Act, 31 U.S.C. § 3729 et seq.

         Before the court are two motions: (1) defendants' motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), and (2) defendants' motion to strike the complaint in its entirety for Branscome's serving an un-redacted copy on Snow in violation of the court's order. (Dkt. No. 19.) The matter has been fully briefed, and the court heard oral argument on August 25, 2017. For the reasons set forth below, the court will grant defendants' motion to dismiss and deny defendants' motion to strike.

         I. BACKGROUND

         Medicare provides home health services through a prospective payment system (PPS). (Compl. ¶ 16.) Under the PPS, Medicare pays home health agencies (HHA) a predetermined base payment, which may be adjusted. (Id.) Home health agencies use the electronic Outcome and Assessment Information Set (OASIS) to assess a patient's condition. (Id. ¶ 18.) The information in OASIS is used to determine a “case-mix adjustment” to the standard base payment. (Id.) This “case-mix” is organized into three dimensions and is intended to capture clinical severity factors, functional severity factors, and service utilization factors. (Id.) The results of OASIS are then combined with other information, and the HHA uses PC Pricer software to calculate the proper claim for each individual. (Id. ¶ 19.) Finally, the HHA makes a certified claim for payment using either an electronic 8371 form or a paper claim form; the claim incorporates data from OASIS and PC Pricer. (Id. ¶ 21.)

         In March 2013, Branscome began working at BRHH as a physical therapy assistant. Owens joined as a part-time physical therapist in late 2014. Branscome learned of ten problematic visits made by Owens to patients from October 2014 through April 2015. From speaking with her patients and with her coworkers, Branscome discovered that Owens was making shorter visits and guiding patients through fewer or different exercises than he recorded in his notes. One patient informed Branscome that she had asked Owens if he was committing “Medicare fraud.” (Compl. ¶ 36). Another told Branscome's coworkers, who then told Branscome, that Owens had committed “Medicare fraud.” (Compl. ¶ 45.)

         Branscome met with Snow twice to discuss these issues. During the first visit, sometime in late 2014, Branscome brought another employee along and told Snow how Owens “was not giving [patients] the physical therapy they needed and recording treatment that was not being performed.” (Compl. ¶ 48.) Snow responded that he would address the problem. During the second visit, in March 2015, Branscome showed Snow the inappropriate way Owens had pulled a patient up, and “also informed him that Owens had once again not stayed the required amount of time.” (Compl. ¶ 62.) Snow responded that he did not think Branscome should be going behind Owens' back. Shortly after this meeting, Owens called Branscome and told her that “if it goes to court, you won't be involved.” (Compl. ¶ 65.)

         During the tenth visit, which took place on April 21, 2015, Branscome told the patient that Branscome was going to report Owens for not performing the requisite physical therapy, and Branscome asked the patient if she would be willing to repeat her statements about Owens. “Shortly thereafter, ” Branscome was called into the BRHH office and terminated. (Compl. ¶ 83.) Snow told Branscome that this patient had complained to her nurse that Branscome had asked her to sign a document saying “she would come to court to testify against Owens for his fraudulent billing practices and false documentation.” (Compl. ¶ 85.) Branscome denies ever asking the patient to sign such a document. She alleges that Snow and BRHH terminated her “because of her persistent questions about Owens' billing practices and her statement that she was going to do something about it.” (Compl. ¶ 88.)

         When Branscome later filed for unemployment, BRHH denied her claim because she was “terminated for misconduct.” (Compl. ¶ 92.) The Virginia Employment Commission also denied her application for unemployment benefits. (Compl. ¶ 91.) Branscome later learned that Snow and BRHH reported her to the Virginia Physical Therapy Board (VPTB) in May 2015 “for speaking with patients about Owens' fraudulent billing.” (Compl. ¶ 92.) Branscome “rebutted these charges.” (Id.)

         Branscome filed suit in March 2016, alleging in part that defendants submitted false claims for payment to the United States Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS). The United States has declined to intervene in this case. (Dkt. No. 9.)


         A. Standard of Review

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff's allegations must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This standard “requires the plaintiff to articulate facts, when accepted as true, that ‘show' that the plaintiff has stated a claim entitling him to relief, i.e., the ‘plausibility of entitlement to relief.'” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). The plausibility standard requires more than “a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678.

         In determining whether the plaintiff has met this plausibility standard, the court must accept as true all well-pleaded facts in the complaint and in any documents incorporated into or attached to the complaint. Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). Further, it must “draw[] all reasonable factual inferences from those facts in the plaintiff's favor, ” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999), but it need not “accept legal conclusions couched as facts or ‘unwarranted inferences, unreasonable conclusions, or arguments, '” Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012) (quoting Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008)).

         B. Branscome Fails to State a Claim under the ...

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