Graves vs Plaza Medical Centers, et al.

Filing 884

ORDER denying 707 Motion in Limine. Signed by Magistrate Judge John J. O'Sullivan on 9/25/2017. (mms)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 10-23382-CIV-MORENO/O’SULLIVAN

OLIVIA GRAVES, on behalf of herself
and the UNITED STATES OF AMERICA,
Plaintiff/Relator,
v.
PLAZA MEDICAL CENTERS, CORP.,
HUMANA, INC., and MICHAEL CAVANAUGH,
Defendants.
/
ORDER
THIS MATTER is before the Court on the Defendants Plaza Medical Centers,
Corp. and Dr. Michael Cavanaugh’s Motion in Limine to Limit Evidence of Allegedly
Unsupported Diagnoses and Evidence of Damages to Those Specific Diagnosis/Code
Submissions Identified by Relator in the Body of Her Complaint and Exhibit 29 and
Incorporated Memorandum of Law (DE# 707, 12/28/16), which the undersigned allowed
Defendant Humana, Inc. (DE# 723, 12/28/16) to join. See Order (DE# 848; 7/28/17).
Having reviewed the defendants’ motion, the relator’s response, the defendants’ reply,
as well as the supplemental filings that the Court requested at the August 25, 2017
hearing and the applicable law, it is
ORDERED AND ADJUDGED that the Defendants Plaza Medical Centers, Corp.
and Dr. Michael Cavanaugh’s Motion in Limine to Limit Evidence of Allegedly
Unsupported Diagnoses and Evidence of Damages to Those Specific Diagnosis/Code
Submissions Identified by Relator in the Body of Her Complaint and Exhibit 29 and

Incorporated Memorandum of Law (DE# 707, 12/28/16), which was adopted by
Defendant Humana, Inc., is DENIED.
In their motion, the defendants seek to exclude any evidence of patients,
diagnoses or codes other than those specifically identified by diagnosis/code and date
by Relator in her Third Amended Complaint and Exhibit 29. (DE# 707, 12/28/16)
The defendants argue that allowing the relator to introduce evidence at trial of 8,000+
additional claims regarding the 1,200+ particular patient/diagnosis code submissions
identified and specifically challenged by date in the relator’s Third Amended Complaint
and Exhibit 29 thereto is prejudicial and impossible. See Defendants Plaza Medical
Centers Corp.’s and Dr. Michael Cavanaugh’s Supplemental Memorandum in Support
of Defendants’ Motion in Limine to Limit Evidence of Allegedly Unsupported Diagnoses
and Evidence of Damages to Those Specific Diagnosis/Code Submissions Identified by
Relator in the Body of Her Complaint and Exhibit 29 [D.E. 707] at 6 (DE# 879, 9/6/17).
The defendants contend that “[i]t would take two years more for Defendants to be able
to prepare to defend against 8000+ additional claims and they could only start the
process after Relator provides opinions as to [the] basis for a falsity claim for the
additional diagnoses/code submissions she intends to challenge.” Id.
Additionally, the defendants argue that the relator’s request to introduce
evidence of challenged diagnoses other than those specifically identified by patient,
diagnoses, code and date of submission in her Third Amended Complaint and Exhibit
29 is contrary to relevant law and violates the Court’s rulings and orders in this case.
The undersigned disagrees. In the Third Amended Complaint, which is the operative
complaint, the relator stated, “discovery has yielded the disclosure of over 600
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Medicare Part C patient files ... Relator identified hundreds of additional patients with
diagnoses not supported by the medical records. These patients and unsupported
diagnoses are identified in the appendix attached hereto and incorporated as Exhibit
29.” Third Amended Complaint at ¶42 (DE# 277, 9/22/15). The Third Amended
Complaint alleges that “... Medicare would have started to pay the higher capitation
amounts after the diagnoses were first made ... and they would continue until those
diagnoses are removed. All of the claims submitted to [the Centers for Medicare and
Medicaid Services] after that date were thus fraudulent.” Id. at 39(b). The relator
alleged increased risk adjustment factors of various patients over the course of several
years stemming from the initial fraudulent diagnoses. See, id. at ¶¶46-75.
During the August 25, 2017 hearing, the parties argued about the distinction
between diagnoses and diagnosis codes. The relator contends that her expert, Dr.
Weine, testified regarding false diagnoses and that Dr. Weine’s initial expert report and
supplemental expert report “makes [sic] it apparent that that first date of service is the
date of [sic] the diagnosis was first made incorrectly and all subsequent ones are
incorrect, except for those few patients. Those exceptions that are noted within [Dr.
Weine’s] report.” (Sealed)(DE# 873-1 at 134, 9/1/17).
Additionally, in the Order on Defendant Humana, Inc.’s Motion for Discovery
Hearing to Compel Relator to Answer Interrogatories No. 62 and No. 63 (DE# 620,
10/25/16), the undersigned ruled that
Plaintiff is deemed to have answered Interrogatory No. 62 as follows:
Every False Clinical Diagnosis, and corresponding Patient and first Date
of Service for which the diagnosis was unsupported, that Plaintiff has
identified for Humana Medicare Advantage Plan Patients are listed in the
HUM-GRA-EX-0000063 spreadsheet (a compilation prepared by Humana
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of every alleged unsupported diagnoses listed in the Expert Report of
Gary R. Weine, M.D., F.A.C.P. dated August 22, 2016), and in the PLAWEINE-00001 spreadsheet (alleged unsupported diagnoses listed in the
Supplement Expert Report of Gary R. Weine, M.D. F.A.C.P., dated
September 26, 2016). Plaintiff has not identified any other False Clinical
Diagnosis responsive to Interrogatory No. 62 apart from the False Clinical
Diagnosis listed by Patient, Diagnosis Code and Date of Service in the
above-referenced spreadsheets.
Order (DE# 620, 10/25/16). In her initial opposition (DE# 754, 1/11/17), the relator
conceded that relator “has no issue with limiting evidence at trial to the specific
diagnoses and diagnosis codes identified by patient beginning on the date of service
listed in the initial and supplemental expert reports of Dr. Weine, in keeping with the
[C]ourt’s order at D.E. 620.” Opposition at 2 (DE# 754, 1/11/17). The relator explained
that “[t]he 1,229 risk-adjusting diagnoses referred [to in] the Plaza Defendants motion
do not equate to only 1,229 risk adjusting diagnosis code submissions.” Id. The
undersigned agrees. The relator further explained that
the Plaza Defendants assigned diagnoses (e.g. COPD) to their patients in
the patients’ progress note and then submitted corresponding diagnosis
codes (e.g. ICD-9 code 496 for COPD) to Humana for patient encounters
on multiple dates of service and in some cases, over multiple years. For
this simple reason, the number of false diagnosis code submissions for
which Relator will put on evidence at trial is greater than the number of
false diagnoses. “Each diagnosis may be coded multiple times and must
be submitted at least annually to affect capitation amounts ... Relator has
challenged over 9,200 risk-adjusting diagnosis codes of an actual 74,619
risk-adjusting codes Plaza submitted to Humana during 2006-2011
timeframe.”
Id. (quoting excerpt from the relator’s opposition to the Plaza defendants’ motions for
summary judgment) (DE# 646 n.4)(emphasis in original)). In her Supplemental Briefing
on Defendants Plaza Medical Centers, Corp.’s and Dr. Michael Cavanaugh’s Motion to
Limit Evidence, the relator stated that “trial in this case will focus on a discrete universe
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of 360 patients diagnosed with 1,229 conditions they did not have.” (DE# 878, 9/6/17).
The undersigned finds that the relator’s disclosure of 360 patients with 1,229 conditions
identified as unsupported as of the date indicated in the Third Amended Complaint as
well as the spreadsheet identified in Dr. Weine’s supplemental expert report that was
referenced and incorporated in the relator’s answers to Humana, Inc.’s Interrogatories
Nos. 62 and 63, provided adequate notice to the defendants that the false diagnoses
continued for each patient beyond the initial date of diagnosis. See Order at 4 n.1 (DE#
276, 9/22/17). In granting leave to file the Third Amended Complaint, the undersigned
explained that “[t]he amended spreadsheet includes the patient name and the
unsupported diagnoses as well as the date each was originally diagnosed and the
Bates stamp page number where the document can be found. The amended
spreadsheet contains 1,226 unsupported diagnoses identified in 361 patients.” Id.
(Emphasis added); see Amended Spreadsheet (DE# 268, Ex. 1; 9/4/2015). The relator
maintains and the undersigned agrees that the relator informed the defendants of the
scope of the false claims at issue in this case since August 2015. The defendants’
argument that some of the identified patients may have subsequently developed the
initial unsupported condition due to a general deterioration of health as a patient ages
does not negate the relator’s allegation that the diagnoses were unsupported initially
and subsequently for a period of time. The undersigned finds that the defendants may
dispute the relator’s claim of falsity and/or prove that any of the diagnoses at issue
became accurate at any point throughout the relevant period.
The defendants argue that the relator failed to sufficiently allege the extra 8,000+
claims and wholly failed to produce any evidence of falsity in her sworn testimony and
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her expert’s sworn report and cannot present these diagnosis/code submissions at trial
due to discovery violations and the complete absence of evidence of falsity. The
defendants argue further that “‘[t]rial by surprise is no longer part of our jurisprudence.’”
(DE# 879, 9/6/17) (quoting Benedetti v. Soo Line RR Co., 2004 WL 2222281 (N.D. Ill.
2004) (quoting Salgado by Salgado v. General Motors Corp., 150 F.3d 735, 742 n.6 (7th
Cir. 1998)). The defendants’ reliance on Benedetti and Salgado is misplaced as both
cases address the district court’s proper exclusion of expert reports due to discovery
violations. Additionally, neither case is binding on this Court. The undersigned finds
that the relator satisfied the pleading requirements of Rule 9(b) of the Federal Rules of
Civil Procedure and the defendants were on notice of the universe of claims at issue for
more than two years.
Accordingly, the Defendants Plaza Medical Centers, Corp. and Dr. Michael
Cavanaugh’s Motion in Limine to Limit Evidence of Allegedly Unsupported Diagnoses
and Evidence of Damages to Those Specific Diagnosis/Code Submissions Identified by
Relator in the Body of Her Complaint and Exhibit 29 and Incorporated Memorandum of
Law (DE# 707, 12/28/16), which was adopted by Defendant Humana, Inc., is DENIED.
DONE AND ORDERED in Chambers at Miami, Florida this 25th day of
September, 2017.

JOHN J. O’SULLIVAN
UNITED STATES MAGISTRATE JUDGE
Copies to:
United States District Court Judge Moreno
All counsel of record

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