BARKER v. Columbus Regional Healthcare System, Inc. et al

Filing 39

ORDER denying #25 Motion to Dismiss. Ordered by Judge Clay D. Land on 10/09/2013. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
RICHARD BARKER, on behalf of
the United States of America
and the State of Georgia

*
*

Plaintiff,

*
CASE NO. 4:12-CV-108 (CDL)

vs.

*

COLUMBUS REGIONAL HEALTHCARE
SYSTEM, INC., THE MEDICAL
CENTER, JOHN B. AMOS CANCER
CENTER, REGIONAL ONCOLOGY LLC,
THOMAS J. TIDWELL, and COLUMBUS
RADIATION ONCOLOGY TREATMENT
CENTER,

*

Defendants.

*
*
*
*

O R D E R
Defendant Thomas J. Tidwell (“Tidwell”) filed a motion to
dismiss Plaintiff’s Complaint against him (ECF No. 25).

Tidwell

argues that Plaintiff has not alleged his claims with sufficient
specificity and that the present allegations fail to state a
claim upon which relief may be granted.

At this stage of the

litigation,

Plaintiff’s

the

Court

allegations as true.

must

accept

factual

The Court finds that those allegations are

stated with sufficient particularity to put Tidwell on notice of
the

claims

asserted

against

him.

Moreover,

when

those

allegations are accepted as true, they state a claim for relief

that is plausible on its face.

Accordingly, Tidwell’s motion to

dismiss must be denied.
SUMMARY OF PLAINTIFF’S CLAIMS AGAINST TIDWELL
This qui tam action alleges that Tidwell submitted false
claims

to

the

federal

government

in

violation

Claims Act, 31 U.S.C. §§ 3729-3733.

of

the

False

Specifically, Plaintiff

contends that Tidwell’s sale of his professional association,
Tidwell Cancer Treatment Center (“Tidwell Cancer Center”), to
Columbus

Regional

Healthcare

System

(“Columbus

Regional”)

violated the Anti-Kickback Statute and the Stark Law.

Plaintiff

also asserts that claims subsequently submitted to Medicare and
Medicaid for services provided by Tidwell during the two-year
period that Tidwell continued to practice radiation oncology in
affiliation
certified
Stark

with

Columbus

compliance

Law.

with

Plaintiff

Regional
the

also

were

false

Anti-Kickback

maintains

that

because

Statute
Tidwell

and

they
the

submitted

false claims to Medicare, Medicaid, and other federally funded
health benefits programs for radiation therapy that he did not
perform.

Tidwell contends that Plaintiff has not been specific

enough in his First Amended Complaint and that this lack of
specificity violates Federal Rule of Civil Procedure 9(b), which
requires that claims brought under the False Claims Act must
state
claims.

with

particularity

the

circumstances

supporting

the

Tidwell also maintains that Plaintiff’s claims are not

2

plausible and must be dismissed pursuant to

Federal Rule of

Civil Procedure 12(b)(6) for failure to state a claim upon which
relief may be granted.
To

evaluate

Plaintiff’s
Plaintiff

First
has

circumstances
submitted by

Tidwell’s

motion,

Amended

Complaint

sufficiently
supporting

the

alleged

his

Court

to
with

contention

Tidwell were false.

first

determine

reviews
whether

particularity
that

the

the

claims

The Court then determines

whether those factual allegations, taken as true at this stage
of the proceedings, state a plausible claim under the False
Claims Act.
PLAINTIFF’S FIRST AMENDED COMPLAINT
Plaintiff alleges the following facts in his First Amended
Complaint.

In July, 2010, Columbus Regional, through its wholly

owned subsidiary, Columbus Radiation Oncology Treatment Center,
LLC (“Columbus Radiation”), purchased the Tidwell Cancer Center
for $10.5 million.

1st Am. Compl. ¶¶ 113-14, ECF No. 10.

At

the time of the purchase, Columbus Regional had excess state of
the art radiation therapy capacity and did not need Tidwell’s
facilities or equipment to meet the needs of patients in the
area.
did

Id. ¶ 114.

not

meet

the

According to Plaintiff, Tidwell’s equipment
applicable

standard

of

care

therapy equipment and was essentially worthless.
Over

the

objections

of

its

accountants,

3

for

radiation

Id. ¶ 121.

Columbus

Regional

accounted for $9 million of the purchase price as “good will.”
Id.

¶

115.

Although

Tidwell

never

became

an

employee

of

Columbus Regional, he was supposed to continue to administer the
affairs of the Tidwell Cancer Center on a day-to-day basis and
practice radiation oncology there until his retirement two years
later in December 2012.
and

non-physician

Id. ¶ 116.

staff

of

All other administrative

Tidwell

Cancer

employees of Columbus Regional in 2010.
was

recruited

to

Notwithstanding

take

the

over

condition

Center

Id.

Tidwell’s

of

the

did

become

No new physician
practice.

equipment,

Id.

the

Tidwell

Cancer Center and Columbus Regional agreed that Tidwell Cancer
Center

would

federally

submit

funded

professional

claims

health

component

technical component.

to

benefits

of

Id.

Medicare,

Medicaid

programs

radiation

and

for

treatments

other

both

and

the

for

the

Some of the patients who were treated

under this arrangement are listed in the Complaint, along with
the dates of service and the codes.

Id. ¶¶ 116, 123.

When

payments for these claims were received, they were deposited
into the Tidwell Cancer Center bank account and then transferred
to Columbus Regional’s bank account.
Cancer

Center

December 2012.
Plaintiff
Tidwell

Cancer

disbanded

upon

the

Id. ¶ 116.
retirement

of

The Tidwell
Tidwell

in

purchase

of

Id.
alleges

that

Center

was

Columbus
not

4

a

Regional’s
good

faith

commercially

reasonable
Plaintiff

transaction
asserts

for

that

fair

Columbus

market

value.

Regional

paid

Instead,

Tidwell

$10.5

million to obtain referrals from him during the two-year period
following the purchase until his retirement and to prevent any
referrals

by

him

to

Plaintiff

maintains

any

competitors

that

this

of

Columbus

conclusion

is

Regional.

supported

by

admissions from agents of Columbus Regional, the manner in which
the

transaction

was

accounted

for

on

Columbus

Regional’s

financial records, the lack of value for any tangible assets of
Tidwell Cancer Center, the amount of the purchase price, and the
conduct of Tidwell and Columbus Regional during the two years
following

the

purchase.

Plaintiff

contends

that

these

allegations establish a violation of the federal Anti-Kickback
Statute and the Stark Law.
when

Tidwell

submitted

Moreover, Plaintiff alleges that

bills

to

Medicare

and

Medicaid,

he

falsely certified that those bills were not related to services
that were provided in violation of either of those statutes when
in

fact

those

services

were

tainted

by

such

violations.

Plaintiff also contends that radiation therapy treatments during
the two-year period following the purchase could not have been
done within the standard of care given the condition of the
equipment at the Tidwell Cancer Center, and therefore, billings
for those treatments violated the False Claims Act.

5

DISCUSSION
To evaluate Tidwell’s motion to dismiss, the Court first
looks

at

the

statutory

law

on

which

Plaintiff’s

claims

are

based—the False Claims Act, the Anti-Kickback Statute and the
Stark

Law.

alleged

The

with

Court

then

particularity

examines

the

whether

circumstances

Plaintiff
giving

rise

has
to

these claims as required by Federal Rule of Civil Procedure
9(b).

The

Court

concludes

by

deciding

whether

the

facts

alleged, if true, sufficiently state a claim upon which relief
can be granted under Federal Rule of Civil Procedure 12(b)(6).
I.

The False Claims Act, The Anti-Kickback Statute, and the
Stark Law
Plaintiff’s claims are brought pursuant to the False Claims

Act, 31 U.S.C. §§ 3729-33.
private

citizens

to

bring

The False Claims Act
actions

on

behalf

of

authorizes

the

federal

government to recover amounts that were paid by the government
for false claims that were submitted with knowledge that the
claims were false.

31 U.S.C. §§ 3729(a), 3730(b).

False claims

may include claims that sought payment for services that were
not

rendered

or

that

were

not

medically

necessary.

United

States v. R&F Props. of Lake Cnty., Inc., 433 F.3d 1349, 1356
(11th Cir. 2005).

False claims may also include claims that

certify compliance with laws and regulations concerning proper
practices

for

medical

providers,

6

such

as

the

Anti-Kickback

Statute and the Stark Law, when in fact those claims are for
services that were provided in violation of those rules.

42

U.S.C. § 1320a-7b(g); McNutt ex rel. United States v. Haleyville
Medical Supplies, Inc., 423 F.3d 1256, 1259-60 (11th Cir. 2005).
The

federal

kickbacks

or

Anti-Kickback

other

payments

Statute
to

induce

or

prohibits
reward

the

referral or generation of federal health care business.

42

U.S.C. § 1320a-7b(b)(2)(A).

made

generally

Claims submitted that include items

or services resulting from kickback violations may be deemed
“false” under the False Claims Act.

42 U.S.C. §1320a-7b(g).

The Anti-Kickback Statute does include statutory and regulatory
“safe

harbors.”

harbor

permits

physicians

and

For

example,

compensation
hospitals

if

the

“personal

agreements
(1)

a

services”

between

written

safe

non-employee

agreement

exists

between the parties that is signed by the physician and the
hospital; (2) the term of the agreement is at least one year;
(3) the agreement covers all of the services to be provided by
the

physician

specificity;

and
(4)

sets
the

forth

aggregate

the

physician’s

compensation

duties
paid

to

with
the

consultant physician over the term of the agreement is set in
advance, is consistent with fair market value in an arms-length
transaction, and is not determined by the volume or value of any
referrals or business otherwise generated between the physician
and the hospital.

42 C.F.R. §1001.952(d).

7

The Anti-Kickback

Statute safe harbors also address space and equipment rental.
To obtain the benefit of this safe harbor, the parties must (1)
enter into a written lease, (2) that has a term of at least one
year, and (3) sets a fair market value payment for the space or
equipment that is set in advance and is not determined by the
value of referrals.

Specifically, for leases of office space,

the

rented

aggregate

necessary

to

space

accomplish

purposes of the rental.

cannot

the

exceed

commercially

what

is

reasonably

reasonable

business

Id. §1001.952(b)(5).

The Stark Law generally prohibits physicians from referring
Medicare patients for certain designated services to an entity
with

which

the

physician

U.S.C. § 1395nn(a)(1)(A).
such

referrals

from

has

a

financial

relationship.

42

It also prohibits an entity receiving
claim

for

designated services provided as a result of that referral.

Id.

§ 1395nn(a)(1)(B).

presenting

to

Medicare

any

A physician may not present or cause to be

presented a claim for a designated service that the physician
knows or should know is for an item or service that is not
payable under the statute.

Id. § 1395nn(g)(3).

The Stark Law

also has safe harbors or exceptions for arrangements that do not
violate the statute if all of the conditions are met.
§ 1395nn(3).

Id.

These exceptions are similar to the safe harbors

under The Anti-Kickback Statute.

8

II.

Federal Rule of Civil Procedure 9(b)
Federal Rule of Civil Procedure 9(b) requires that a party

asserting

a

claim

under

the

False

Claims

Act

state

with

particularity the circumstances constituting the basis for the
“false claim.”

United States ex rel. Clausen v. Lab. Corp. of

Am., Inc., 290 F.3d 1301, 1308-09 (11th Cir. 2002).
finds that Plaintiff has done so here.

The Court

He has specifically

alleged the parties (the “who”), the transaction (the “what”),
the date (the “when”) and the location (the “where”) of the
conduct

that

Statute

and

he
the

contends
Stark

violates

the

Law.

federal

Plaintiff

Anti-Kickback

further

alleged

specifically why none of the safe harbors or exceptions to those
statutory
Tidwell
services

prohibitions

knowingly
covered

violations of

applies.

submitted
by

billings

those

federal law

And

Plaintiff
that

billings

alleged

certified

were

not

that

that

the

tainted

by

when in fact they allegedly were.

Plaintiff also provided specific examples of such billings, with
patient names, dates of service, and types of service.

While

Plaintiff may not have alleged every tainted bill, he clearly
alleges

that

this

conduct

occurred

over

the

two-year

period

following Columbus Regional’s purchase of Tidwell Cancer Center
and prior to Tidwell’s retirement.

Furthermore, for the two-

year period after the sale of Tidwell Cancer Center, Plaintiff
alleges that the radiation therapy equipment was so substandard

9

that no radiation therapy could have been provided by Tidwell
within

the

applicable

standard

of

care.

Consequently,

any

billings during that time for such radiation therapy were either
for services that were not provided or for services that were
not

medically

necessary.

Tidwell

may

quarrel

with

the

truthfulness of these allegations, but this is not the stage
where Plaintiff must come forward with proof.
come.

That time will

This case is not analogous to those cases in which the

plaintiff

simply

submitted.

alleges

generally

that

false

claims

were

Without the benefit of discovery, it is difficult to

imagine how Plaintiff here could have been any more specific in
his allegations.

The Court finds that Plaintiff has complied

with Federal Rule of Civil Procedure 9(b).
III. Federal Rule of Civil Procedure 12(b)(6)
Tidwell

seeks

to

dismiss

Rule 12(b)(6) as implausible.

Plaintiff’s

claims

pursuant

to

The thrust of his argument is not

that if Plaintiff proves everything he alleges, he still cannot
prevail

under

incredulous
allegations.
another

the

that

applicable
anyone

Tidwell’s

example

of

what

law.

could
Motion

Tidwell

possibly
to

Twombly

believe

Dismiss
and

simply

(ECF

Iqbal

finds

it

Plaintiff’s
No.

have

25)

is

wrought—a

compulsion to file a motion to dismiss in every case.

The

Supreme Court’s statement in Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007), which was reaffirmed in Ashcroft v. Iqbal, 556

10

U.S. 662 (2009), did not seem startling:
dismiss,

a

complaint

must

contain

to survive a motion to

sufficient

factual

matter,

accepted as true, to “state a claim to relief that is plausible
on its face.”
at 678.
include

Twombly, 550 U.S. at 570; accord Iqbal, 556 U.S.

The additional explanation that the complaint must
sufficient

factual

allegations

“to

raise

a

right

to

relief above the speculative level,” Twombly, 550 U.S. at 555,
likewise did not suggest that the Supreme Court intended to
rewrite

Rule

12(b)(6)

or

abandon

notice

pleading;

and

the

Court’s observation that “a formulaic recitation of the elements
of a cause of action” does not suffice, id., did not seem to
foreshadow a sea-change in the legal standard governing motions
to dismiss.

But many lawyers (and judges) have interpreted the

Supreme Court’s decisions in Twombly and Iqbal as ushering in a
new era for motions practice in federal court.
Since Twombly was decided, many lawyers have felt compelled
to file a motion to dismiss in nearly every case, hoping to
convince the Court that it now has the authority to divine what
the

plaintiff

may

plausibly

be

able

to

prove

rather

than

accepting at the motion to dismiss stage that the plaintiff will
be able to prove his allegations.
close

resemblance

to

summary

These motions, which bear a

judgment

motions,

view

every

factual allegation as a mere legal conclusion and disparagingly
label all attempts to set out the elements of a cause of action

11

as “bare recitals.”

They almost always, either expressly or,

more often, implicitly, attempt to burden the plaintiff with
establishing a reasonable likelihood of success on the merits
under the guise of the “plausibly stating a claim” requirement.
While

these

cautious

lawyers,

who

have

been

encouraged

by

Twombly and Iqbal, have parsed the Twombly decision to extract
every helpful syllable, they often ignore a less well known (or
at least less frequently cited) admonition from Twombly: “[O]f
course, a well-pleaded complaint may proceed even if it strikes
a savvy judge that actual proof of those facts is improbable,
and that a recovery is very remote and unlikely.”

Twombly, 550

U.S. at 556 (internal quotation marks omitted).

Finding the

Twombly/Iqbal urge irresistible, many lawyers fail to appreciate
the distinction between determining whether a claim for relief
is “plausibly stated,” the inquiry required by Twombly/Iqbal,
and divining whether actual proof of that claim is “improbable,”
a feat impossible for a mere mortal, even a federal judge.
This Court obviously understands that not all motions to
dismiss suffer from this Twombly/Iqbal compulsion, but many do,
and the present one certainly does.

12

Accordingly, it is denied.

CONCLUSION
For the reasons stated in this Order, Defendant Tidwell’s
Motion to Dismiss (ECF No. 25) is denied.1
add,

however,

that

its

ruling

today

The Court hastens to

does

not

suggest

that

Plaintiff’s allegations are true or even that Plaintiff will
ultimately be able to prove them.

The law requires the Court at

this stage to accept those factual allegations as true.

Having

done so for the moment, the Court has found that a plausible
claim has been stated under the law.

Plaintiff will have the

burden of producing evidence to support these allegations, and
Tidwell

will

have

an

opportunity

to

contest

that

evidence.

Today’s Order simply allows the parties to proceed to the next
step with neither a final validation nor repudiation of the
claims by the Court.

IT IS SO ORDERED, this 9th day of October, 2013.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

1

Although this Order focuses specifically on Plaintiff’s federal
claims, the Court, based upon the same rationale expressed herein,
also denies Tidwell’s motion to dismiss Plaintiff’s state law claims
to the extent those claims apply to Tidwell.

13