United States of America et al v. ApolloMD, Inc. et al

Filing 85

ORDER granting in part and denying in part 60 Motion to Dismiss for Failure to State a Claim. The Motion to Dismiss is GRANTED as to Counts 3, 4, 6, 7, 8, and 9; but DENIED as to Counts 1, 2 and 5. Relator may seek leave to filed a Second Amended Complaint to re-plead his claims on behalf of the United States under the FCA relating to the five states other than Georgia identified in the Amended Complaint, provided that the motion for leave is filed within 90 days of the date of the commenceme nt of discovery. The Parties are DIRECTED to file a Joint Preliminary Report and Discovery Plan within 15 days of the date of this Order, and discovery shall commence upon the filing of that proposed scheduling order. Signed by Judge Amy Totenberg on 3/31/2021. (hpc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA, ex
:
rel. Chionesu Sonyika, Relator, et al., :
:
Plaintiff,
:
:
v.
:
:
APOLLOMD, INC., et al.,
:
:
:
:
Defendants.
:

CIVIL ACTION NO.
1:20-CV-03213-AT

ORDER
This matter is before the Court on Defendants’ 1 Motion to Dismiss the
Amended False Claims Act Complaint [Doc. 60] brought by Relator, Chionesu
Sonyika (“Relator” or “Sonyika”), on behalf of the United States and six states. 2
Relator filed his initial Complaint on January 3, 2017 in the United States
District Court for the Southern District of Florida. (Doc. 1.) On July 8, 2019, the

Defendants include ApolloMD, Inc., Independent Physicians Resource, Inc., ApolloMD Business
Services, LLC, ApolloMD Holdings, LLC, PaymentsMD, LLC, ApolloMD Group Services, LLC,
Apollo MD Physician Partners, Inc., ApolloMD Physician Services FL, LLC, and Georgia
Emergency Group, LLC. The Court will refer throughout to the collective Defendants as either
“Defendants” or “ApolloMD,” except when speaking about a specific individual Defendant.
Relator describes the Defendants as “a system of affiliated entities” that are collectively “a
privately-held, physician-led national group practice that provides staffing and management
services to hospitals in the United States, specifically in the areas of emergency medicine, hospital
medicine, radiology, and anesthesiology.” (Complaint, ¶ 19.)
2 These states include Florida, Georgia, Indiana, Iowa, Tennessee, and Texas and are referred to
as the "Plaintiff States."
1

United States of America provided notice that it would not intervene in this case.
(Notice, Doc. 24.) The State of Texas similarly declined to intervene on July 16,
2019. (Docs. 27.) On October 27, 2019, Relator filed his First Amended Complaint,
and Defendants moved to dismiss or transfer the case on November 18, 2019.
(Docs. 45, 47.) On August 3, 2020, the District Court for the Southern District of
Florida granted the Defendants’ motion to transfer the case to this Court. (S.D. Fl.
Order, Doc. 56 (also declining to address the merits of Defendants’ motion to
dismiss the case, in light of its decision to transfer it instead).)
Relator alleges in the Amended Complaint that the ApolloMD Defendants,
engaged in a fraudulent scheme through which they would submit claims to the
Centers for Medicare and Medicaid Services ("CMS" for payment for services
allegedly provided by physicians or physicians in conjunction with Physicians
Assistants or Nurse Practitioners (Advanced Professional Practitioners or "APP")
and thereby would use the higher physician billing rates authorized by the
Government under such specific circumstances. Relator alleges that Defendants
routinely submitted false claims because a substantial proportion of billing claims
were, in fact, for services rendered solely by Advanced Professional Providers
("APP", also known as “mid-level providers”) without any physician face-to-face
contact with the patients receiving services through APP staff. Such face-to-face
contact or direct delivery of services by physicians is required for higher billing
for services at physician rates under applicable federal standards. The Amended
2

Complaint asserts claims under the False Claims Act 31 U.S.C. § 3729 et seq. and
applicable state-law equivalents. For the reasons set forth below, the Court
GRANTS Defendants’ Motion to Dismiss as to Count 3, but DENIES the Motion
to Dismiss as to Counts 1 and 2.
I.

STANDARD OF REVIEW
A complaint should be dismissed under Rule 12(b)(6) only where it appears

that the facts alleged fail to state a “plausible” claim for relief. Bell Atlantic v.
Twombly, 550 U.S. 544, 555–56 (2007); Fed. R. Civ. P. 12(b)(6). The plaintiff need
only give the defendant fair notice of the plaintiff’s claim and the grounds upon
which it rests. See Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Bell Atlantic
v. Twombly, 550 U.S. 544, 555 (2007)); Fed. R. Civ. P. 8(a). In ruling on a motion
to dismiss, the court must accept the facts alleged in the complaint as true and
construe them in the light most favorable to the plaintiff. See Hill v. White, 321
F.3d 1334, 1335 (11th Cir. 2003).
A claim is plausible where the plaintiff alleges factual content that “allows
the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plaintiff is
not required to provide “detailed factual allegations” to survive dismissal, but
the “obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550 U.S. at 555. The plausibility standard
requires that a plaintiff allege sufficient facts “to raise a reasonable expectation that
3

discovery will reveal evidence” that supports the plaintiff’s claim. Id. at 556.
Normal standard pleading standards are heightened though for False Claims
Act claim cases because a FCA claim is “a fraud statute for purposes of [Federal
Rule of Civil Procedure] 9(b).” U.S. ex rel. Clausen v. Lab'y Corp. of Am., 290 F.3d
1301, 1310 (11th Cir. 2002) (internal quotation marks omitted). In federal court,
plaintiffs must plead fraud with particularity. See Fed. R. Civ. P. 9(b). When a
Plaintiff states allegations under the False Claims Act, Plaintiff must plead “facts
as to time, place, and substance of the defendant's alleged fraud,” specifically “the
details of the defendants' allegedly fraudulent acts, when they occurred, and who
engaged in them.” U.S. ex rel. Clausen 290 F.3d at 1310–11 (quoting Cooper v.
Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 567–68 (11th Cir. 1994)). As
discussed more fully later in this Order, the pleading requirements under Rule 9(b)
for FCA claims have also been alternatively adapted in some circumstances to allow
claims in certain cases to move forward where the Complaint allegations and
information provide sufficient indicia of reliability regarding the fraud claims
asserted. See, e.g., U.S. ex rel. Walker v. R&F Props. of Lake County, Inc., 433
F.3d 1349, 1359–60 (11th Cir. 2005).
II.

BACKGROUND
Relator, Chionesu Kwesi Sonyika, M.D. (“Relator” or “Sonyika”) is a medical

doctor who worked from 2010 to 2018 for ApolloMD as an “independent
contractor physician” in the emergency departments at the Atlanta Medical
Center-South in Atlanta, Georgia, and the Spalding Regional Medical Center in
4

Griffin, Georgia. (Complaint, ¶ 18.) According to the Amended Complaint, Sonyika
is certified by the American Board of Emergency Medicine (ABEM) and specifically
residency-trained in emergency medicine. Relator alleges that ApolloMD uses a
fraudulent scheme whereby it “systematically submit[s] false claims to the Centers
for Medicare and Medicaid Services (“CMS”) and Plaintiff State[s’] Medicaid
programs for reimbursement for services performed by ‘mid-level’ healthcare
providers (e.g., physician assistants and nurse practitioners) at Apollo emergency
rooms.” (Complaint, ¶ 1.) Relator alleges that he has “personal knowledge of and
non-public information” about this alleged scheme. (Complaint, ¶ 18.)
According to the Amended Complaint, "Apollo is among the nation’s most
profitable physician practice management companies (“PPMs”), which provide
management and human-resources services to hospitals and, in particular, to
emergency departments." (Amended Compl., ¶ 44.) Citing Apollo's own website
description of its business, 3 the Amended Complaint states that,
Apollo’s revenue-based business model is built on three
primary goals: (1) treat and bill more patients by
increasing “patient throughput and allowing for volume
growth”; implement standard coding and billing
procedures to capture as much revenue as possible from
CMS and private payers; and (3) align physicians’
incentives with hospitals’ incentives by compensating
physicians based on the number of “patients they treat
and the procedures they perform.”
(Amended Compl., ¶ 44.)

See Amended Compl., ¶ 44, n. 16, 17 (citing http://apollomd.com/home/multispecialtysolutions/emergency-medicine/ (and noting “last visited Dec. 10, 2016”).
3

5

Relator alleges that ApolloMD submits claims for reimbursement that
reflect that a patient was seen by both a mid-level provider (i.e., Nurse
Practitioners or Physician Assistants) and a physician, even though most patients
only ever saw a mid-level provider. (Complaint, ¶ 3.) Relator alleges that each care
provider, whether mid-level or physician, has a National Provider Identification
number (“NPI”) that affects the rates of reimbursement for care from any given
provider. (Id.) Relator alleges that because claims submitted under mid-level
providers’ NPIs are reimbursed at only about 85% of the rate of a physician’s NPI,
ApolloMD directs its physicians to sign charts even for patients they did not see
and treat, so that ApolloMD can submit for the 100% reimbursement rate available
for physicians. (Id. at ¶¶ 3–4.)

As discussed later, Relator also alleges that

Defendants used false representations and records for the purpose of getting false
claims paid or approved by the Government.
According to the Complaint, ApolloMD's top national executives emailed all
ApolloMD emergency department physicians, “explicitly stating that, for Medicare
patients, all mid-level charts are ‘billed under the physician NPI number’—i.e.
regardless of whether the physicians actually saw the patient.” (Amended Compl.,
¶ 5 and Ex. 1.) Relator alleges that, “[b]ecause the NPI number is what
automatically triggers the reimbursement rate, this fact, which Apollo itself has
confirmed, is an admission of fraud and establishes the existence and the national
breadth of Apollo’s unlawful Scheme.” (Id.) Relator further alleges that ApolloMD
attempts to “cover up” this scheme by “manipulating charts to falsely reflect what
6

is referred to in the Medicaid regulations as a ‘split/shared visit[,]’ … [which is]
when a mid-level and a supervising physician both treat the same patient, meaning
that both the physician and the mid-level actually provide face-to-face services to
the patient.” (Complaint, ¶ 6.) Relator alleges that when a claim is submitted as a
split/shared visit, “CMS reimburses for the mid-level services at the same rate as
the physician’s services, as if the mid-level were an extension of the physician[,]”
and that in the emergency department, “a properly documented split/shared visit
is the only circumstance under which mid-level services may be reimbursed at the
full physician rate.” (Id. (emphasis in original).)
Relator alleges that in emergency rooms, actual split/shared visits are
“exceedingly rare” and that physicians and mid-levels “rarely, if ever, see patients
together.” (Complaint, ¶ 7.) This is because "to maximize efficiency and avoid
overlap under Apollo’s business model, mid-levels independently treat loweracuity patients and physicians independently treat higher-acuity patients." 4 Id.,
Relator claims in the Complaint that he “personally performed true split/shared
visits in less than 1% of the emergency patients he treated at Apollo[,]” and that
this was “customary for all physicians Relator worked with.” (Id.)
Relator

alleges

that

despite

this

standard

bifurcation

of

work

responsibilities, ApolloMD “requires physicians and mid-levels to indicate in every

Similarly, Relator alleges that the standard emergency room floor model used by Apollo
partitions physicians and midlevel professionals in different areas of the emergency department
to enable the company to maximize revenue and focus Physician Assistants and Nurse
Practitioners on separately treating more patients. See Amended Compl., ¶ 45.

4

7

mid-level medical chart that the physician provided the services to the patient by
demanding that physicians sign every mid-level chart and indicate that the
physician also treated the patient seen by the mid-level professional so that Apollo
can bill for the mid-level professional's services under the physician’s NPI at the
full physician rate.” (Complaint, ¶ 8.) Relator alleges that “every emergency
physician is required to sign and approve every mid-level chart sent to him or her
at the end of each shift. A typical ‘attestation’ will say something like, ‘I have
consulted with Physician Assistant Smith and concur with the treatment she
provided.’” (Id. at ¶ 66.) According to Relator, seeking reimbursement under the
physician’s NPI in such a scenario is a stark violation of the requirements for claims
submission to CMS. (Id. at ¶ 59 (citing CMS, Medicare Claims Processing Manual,
pub 100-04, Ch. 12, § 30.6.1(B) (“[I]f there was no face-to-face encounter between
the patient and the physician (e.g., even if the physician participated in the service
by only reviewing the patient’s medical record) then the service may only be billed
under the [mid-level’s NPI]”)).) 5
Relator alleges also that ApolloMD paid illegal kickbacks to physicians that
were directly tied to the physicians’ required participation in the scheme. Relator
claims in the Amended Complaint that ApolloMD “credits and pays physicians for

See also, Amended Complaint Ex. 4, Doc. 45-4 at at pp. 5–6, ¶ I.D. memo to ApolloMD
management representatives from Heidi Young, CPC, Director of International Coding Pettigrew
Medical Business, which provided contractual advisory services to ApolloMD in regard to CMC
billing and coding requirements. The memo makes clear that shared services of a physician and
mid-level professionals cannot be billed at the physician's rate unless there is documented
physician face-to-face time with the patient that exceeds a mere greeting or introduction and that
such time must meet other substantive service delivery requirements as well.
5

8

each patient they actually see and for each mid-level chart they sign, which
substantially increases the physicians’ compensation.” (Complaint, ¶ 11.) Relator
points to his own payment history as alleged proof of the “fraudulent billing and
the kickbacks that Apollo paid him under the Scheme.” (Id. at ¶ 12.) Relator
embeds within his Amended Complaint a chart that he claims shows at the
Spalding Regional Medical Center “the total number of patients that Relator
supposedly treated with a mid-level in a given pay period” and also “the total
compensation Relator received in a given pay period for supposedly treating
patients with a mid-level[.]” (Id.) According to the Amended Complaint, this chart
is a screenshot produced directly from ApolloMD’s online portal for employee
payment information. (Amended Compl., ¶ 12.) Relator alleges that a column in
the chart labeled “$ Generated MLP 6 Patients” reflects “illegal kickbacks that
Apollo paid Relator under the Scheme—an amount totaling $97,378 in this
instance—in just six months.” (Id.) This column is next to another column labeled
“$ Generated Dr Only Pts” that Relator alleges shows the amount of money he was
paid for patients who saw Relator – a physician – only, and not also a mid-level
provider. (Id. at ¶ 13.) Relator claims that the chart further shows that it would be
impossible for physicians to actually treat patients in concert with mid-levels at the
frequency that ApolloMD allegedly submitted claims for such co-treatment. (Id.)
Relator alleges that the chart shows that he received credit for treating “as many

MLP is an acronym for mid-level professional. The Court understands the Amended Complaint
to allege that “$ generated MLP Patients” as used here refers to the amount of money generated
by Relator’s attestation on charts for patients seen by a mid-level professional.

6

9

as 811 patients in the month of January 2016.” (Id.) However, “[a]s Relator worked
approximately 15 days per month at Apollo, that would mean Relator would have
to physically treat more than 54 patients each and every shift during that month to
reach 811 patients[,]” and that this “is not physically possible.” (Id.; see also, data
chart embedded at ¶14 (identifying breakout of patients at Atlanta Medical Center
purportedly seen by both a mid-level and physician in connection with Relator’s
treatment records for 2010–12 at the emergency room at that hospital).)
Relator further alleges that ApolloMD has to submit information to a
database maintained by CMS called the Physician Quality Reporting System
(“PQRS”). (Amended Compl., ¶¶ 51–53.) According to the allegations in the
Amended Complaint, ApolloMD had to submit “Medicare beneficiary data and
charts” to the PQRS or it “would receive a penalty reduction in reimbursement.”
(Id. at ¶ 52.) Relator alleges that the data submitted by ApolloMD to the PQRS “was
based on actual claims submitted by Apollo to CMS for services Apollo
provided to Medicare beneficiaries under the fee-for-service schedule.” (Id. at ¶ 53
(emphasis in original).) Relator alleges, with documentary back-up, that after
ApolloMD began participating in the PQRS system, it also sent out reports to its
physicians showing the result of the quality measures reflected therein. (Id.)
Relator claims that after review of the reports, some of ApolloMD’s physicians
“questioned why certain services had been attributed to them when they did not
actually perform the services[,]” and that ApolloMD’s Chief Operations Officer and
Chief Quality Officer answered some of the questions in an email sent on December
10

2, 2016. (Id.) Relator reproduced a portion of the December 2, 2016 email which
appears as follows:

(Doc. 45 at 27.) 7 As stated in the email, the charts reflect claims that had actually
been billed, and that had been billed using the physician’s NPI number even for
claims that should have – according to the Amended Complaint – been billed solely
under the mid-level practitioner’s NPI, with that practitioner's 85% rate.
Relator points as well to communications from ApolloMD to its network of
employees, highlighting several emails that requested physicians sign charts,
allegedly in furtherance of the scheme. (See Amended Compl. at 6 (Mar. 14, 2013
email from Credentialing Specialist noting, “Physicians please make sure you go
through the midlevel charts and attest with your signature that you reviewed the
charting etc.”); 7 (Dec. 4, 2012 email from Group Coordinator asking recipients to
“[p]lease remember to SIGN (or for the midlevels, assign) all of your charts. … I
know the new system makes this difficult, but this is a significant delay in coding
“APC” as used in this chart refers to “advanced practice clinicians,” which is another term for a
mid-level practitioner. (Amended Compl., Doc. 45 at ¶ 53.)

7

11

that very negatively affects reimbursement and in turn, our paychecks.”); 8 (Dec.
5, 2012 email from Group Coordinator saying, “[p]lease also remember to SIGN
every chart on which you document. To be safe, physicians can ‘verify’ the midlevels’ charts, but still sign them as well. … For the mid-levels, please remember to
assign each chart to a doctor.”); 12 (Sept. 25, 2014 email from Group Coordinator
stating, “[r]emember physicians, your unsigned charts DIRECTLY affect your
paycheck!”); 13 (Sept. 26, 2013 email from Group Coordinator explaining, “[y]our
paychecks as well as everyone else’s in the company directly relate to how much
money is brought in, which is directly tied to charting.”).) Relator alleges that these
emails corroborate his allegations that ApolloMD incentivized its physicians to
falsely attest to having seen patients in concert with mid-level practitioners when
in reality those patients only ever saw a mid-level practitioner. Relator alleges that
these emails show that ApolloMD aligned the physicians’ financial incentives with
their participation in the scheme. (Amended Compl., ¶ 47.)
On the basis of these allegations, the Amended Complaint sets forth three
claims for relief under the FCA: (1) a so-called “presentment claim” under 31 U.S.C.
§ 3729(a)(1)(A) (Count One, Doc. 45 at 41); (2) a so-called “use claim” under 31
U.S.C. § 3729(a)(1)(B) (Count Two, Doc. 45 at 41–42); and (3) an anti-kickback
claim under 42 U.S.C. § 1320a-7b(g) (Count Three, Doc. 45 at 42–44). Counts four
through nine are made under the related acts for fraud under state law for the
states of Florida, Georgia, Indiana, Iowa, Tennessee, and Texas, respectively. (Doc.
45 at 44–49.)
12

III.

DISCUSSION
The FCA states:
Any person who ... knowingly presents, or causes to be
presented, to an officer or employee of the United States
Government ... a false or fraudulent claim for payment or
approval ... is liable to the United States Government for
a civil penalty of not less than $5,000 and not more than
$10,000, plus 3 times the amount of damages which the
Government sustains because of the act of that person ....

31 U.S.C. § 3729(a). The FCA authorizes private citizens (known in this context as
qui tam relators) to bring actions on behalf of the United States. 31 U.S.C. §
3730(b). “Recovery under the False Claims Act is not measured by the amount of
any actual damage a relator might have sustained personally as a result of a
defendant's false claim.” United States v. R&F Properties of Lake Cnty., Inc., 433
F.3d 1349, 1355 (11th Cir. 2005). Instead, the relator stands “in the shoes of the
United States government,” and so can prosecute the lawsuit on the United States'
behalf, and recover, for the United States, “the losses attributable to any fraudulent
claim and the civil penalty authorized by the statute.” Id. (citing 31 U.S.C. § 3730).
Relator brings an FCA “presentment claim” under 31 U.S.C. § 3729(a)(1)(A)
in Count One, and an FCA “use claim” under 31 U.S.C. § 3729(a)(1)(B) in Count
Two. The Court notes here that Defendants appear to be focused solely on whether
Relator has sufficiently alleged a presentment claim in Count One, although they
move to dismiss both Counts using their arguments relating to the presentment
claim. Defendants have not separately addressed the elements of Relator’s use
claim in Count Two. Instead, Defendants in effect generically argue that the use
13

claim simply fails for the same reasons they have argued that the presentment
claim fails. While the elements of a presentment claim and a use claim are similar,
they are still not identical. To establish a presentment claim under 31 U.S.C. §
3729(a)(1)(A), “a relator must prove three elements: (1) a false or fraudulent claim,
(2) which was presented, or caused to be presented, for payment or approval, (3)
with the knowledge that the claim was false.” United States ex rel. Phalp v. Lincare
Holdings, Inc., 857 F.3d 1148, 1154 (11th Cir. 2017). But to establish a use claim
under 31 U.S.C. § 3729(a)(1)(B), “a relator must show that: (1) the defendant made
(or caused to be made) a false statement, (2) the defendant knew it to be false, and
(3) the statement was material to a false claim.” Id. In other words, a use claim
does not require the Relator to allege that the Defendant ever submitted any claim
for payment to the government. See Hopper v. Solvay Pharms., Inc., 588 F.3d
1318, 1327 (11th Cir. 2009) ("We agree that 31 U.S.C. § 3729(a)(2) does not demand
proof that the defendant presented or caused to be presented a false claim to the
government or that the defendant's false record or statement itself was ever
submitted to the government. We conclude, however, that a plaintiff must show
that (1) the defendant made a false record or statement for the purpose of getting
a false claim paid or approved by the government; and (2) the defendant's false
record or statement caused the government to actually pay a false claim, either to
the defendant itself, or to a third party."); see also Allison Engine Co. v. United
States ex rel. Sanders, 553 U.S. 662, 671 (2008) (holding that the differential
verbiage of § 3729(a)(1)(A) and (a)(1)(B) suggests that Congress "did not intend to
14

include a presentment requirement" in an (a)(1)(B) use claim, and that subsection
(1)(B) "is an attempt provision, imposing liability for statements made with the
intent to defraud the government, whether or not the government actually pays a
false claim."). However, Defendants’ argument in the Motion to Dismiss, including
as to Count 2, boils down to arguments that Relator has failed to show through
particularized evidence that ApolloMD ever presented a false or fraudulent claim
to Medicare or Medicaid. 8
As discussed supra, FCA claims are reviewed under Rule 9(b). To meet this
Rule’s requirements, a relator must therefore “state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “The
particularity rule serves an important purpose in fraud actions by alerting
defendants to the precise misconduct with which they are charged and protecting
defendants against spurious charges of immoral and fraudulent behavior.” U.S. ex
rel. Mastej v. Health Mgmt. Assocs., Inc., 591 F. App'x 693, 703 (11th Cir. 2014)
(quoting United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1359 (11th Cir.
2006)). To that end, a complaint under the FCA “satisfies Rule 9(b) if it sets forth
facts as to time, place, and substance of the defendant's alleged fraud, specifically
the details of the defendants' allegedly fraudulent acts, when they occurred, and
In their Reply, Defendants contend that a physician’s attestation on a chart did not itself certify
that provision of services. (Reply, Doc. 80 at 13–14.) But this is a factual dispute, as the attestation
records as described may indeed have verified the physician's role in service or alternatively have
been submitted along with other coding and billing documentation to support ApolloMD’s alleged
scheme to gain reimbursement at the full physician rate instead of the discounted mid-level rate.
Relator's specific evidence relating to ApolloMD’s focus on obtaining physicians' attestation
signatures in connection with chart review in order to boost the company's financial recoupment
lends credence to the Amended Complaint's assertion.
8

15

who engaged in them.” Mastej, 591 F. App'x at 703 (quoting Hopper v. Solvay
Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009)). The Eleventh Circuit
summarized in Mastej the varied ways in which this standard may be met in an
FCA presentment claim pursuant to 31 U.S.C. § 3729(a)(1)(A), and its discussion
is also relevant to a use claim under § 3729(a)(1)(B),
This Court evaluates “whether the allegations of a
complaint contain sufficient indicia of reliability to
satisfy Rule 9(b) on a case-by-case basis.” Atkins, 470
F.3d at 1358. Providing exact billing data—name, date,
amount, and services rendered-or attaching a
representative sample claim is one way a complaint can
establish the necessary indicia of reliability that a false
claim was actually submitted. See, e.g., Hopper, 588 F.3d
at 1326; Atkins, 470 F.3d at 1358. However, there is no
per se rule that an FCA complaint must provide exact
billing data or attach a representative sample claim. See
Clausen, 290 F.3d at 1312 & n. 21 (listing some of the
types of information that might help a plaintiff plead the
submission of a claim with particularity but cautioning
that Rule 9(b) “does not mandate all of this information
for any of the alleged claims”); see also Durham v. Bus.
Mgmt. Assocs., 847 F.2d 1505, 1512 (11th Cir.1988)
(“Allegations of date, time or place satisfy the Rule 9(b)
requirement that the circumstances of the alleged fraud
must be pleaded with particularity, but alternative means
are also available to satisfy the rule.”).
Under this Court's nuanced, case-by-case
approach, other means are available to present the
required indicia of reliability that a false claim was
actually submitted. Although there are no bright-line
rules, our case law has indicated that a relator with direct,
first-hand knowledge of the defendants' submission of
false claims gained through her employment with the
defendants may have a sufficient basis for asserting that
the defendants actually submitted false claims. See U.S.
ex rel. Walker v. R & F Properties of Lake County, Inc.,
433 F.3d 1349, 1360 (11th Cir.2005) (holding that Rule
9(b) was satisfied where the relator was a nurse
16

practitioner in the defendant's employ whose
conversations about the defendant's billing practices
with the defendant's office manager formed the basis for
the relator's belief that claims were actually submitted to
the government) . . . .
At a minimum, a plaintiff-relator must explain the
basis for her assertion that fraudulent claims were
actually submitted. See Corsello v. Lincare, Inc., 428
F.3d 1008, 1013–14 (11th Cir.2005) (finding insufficient
indicia of reliability after noting that the relator “did not
explain why he believes fraudulent claims were
ultimately submitted”).
Mastej, at 591 F. App’x. at 704; see also U.S. ex rel. Matheny, 671 F.3d 1217, 1230
(11th Cir. 2012) (“As Defendants recognize, we are more tolerant toward
complaints that leave out some particularities of the submissions of a false claim if
the complaint also alleges personal knowledge or participation in the fraudulent
conduct.”).
A.

Counts 1 & 2 – 31 U.S.C. § 3729(a)(1)(A) & (B)

In Count 1 in the Amended Complaint, Relator alleges that Defendants
violated 31 U.S.C. § 3729(a)(1)(A) of the False Claims Act. (Count One, Doc. 45, ¶¶
80–85.) This section of the False Claims Act creates liability for any person who
“knowingly presents, or causes to be presented, a false or fraudulent claim for
payment or approval[.]” 31 U.S.C. § 3729(a)(1)(A). The Amended Complaint
alleges that ApolloMD violated this section because they “have submitted false
claims for reimbursement for evaluation and management services performed
solely by mid-level practitioners in Apollo emergency departments as if they were
performed by or in conjunction with a physician.” (Complaint, ¶ 83.)

17

In Count 2 in the Amended Complaint, Relator alleges that Defendants
violated 31 U.S.C. § 3729(a)(1)(B) of the False Claims Act. (Count Two, Doc. 45, ¶¶
86–89.) This section of the False Claims Act creates liability for any person who
“knowingly makes, uses, or causes to be made or used, a false record or statement
material to a false or fraudulent claim[.]” 31 U.S.C. § 3729(a)(1)(B). The Amended
Complaint alleges that ApolloMD violated this section because they,
have made, used, or caused to be made or used false
records or statements on medical charts and records
regarding the provider of medical services by requiring
physicians to sign and attest to mid-level charts for which
physicians provided no face-to-face medical treatment
and using the falsified charts and records to support
claims to CMS for reimbursement at the full physician
rate, as if a physician – rather than a mid-level
professional – provided the services. As such, through
their conduct, Defendants have made, used, or caused to
be made or used, false records or statements material to
false or fraudulent claims, as set forth above, in violation
of 31 U.S.C. § 3729(a)(1)(B).
(Complaint, Doc. 45, ¶ 88.)
The Defendants seeks to dismiss these two counts, arguing that the
Amended Complaint does not meet the pleading requirements of Rule 9(b)
because it “fails to plead with particularity that any false claims were actually
presented to or paid for by the government.” (Motion to Dismiss, Doc. 60-1 at 9–
10.) Defendants contend that Relator “fails to identify a single claim presented to
the government[,]” and that he “admits that he has no examples of actual fraud[.]”
(Id. at 11.) Defendants further argue that the Amended Complaint also lacks
“indicia of reliability” because Relator does not have “first-hand knowledge of the
18

defendants’ billing practices” and so he lacks “a sufficient basis for such an
allegation.” (Id. at 13. (quoting U.S. ex rel Mastej v. Health Mgmt. Assoc., Inc., 591
F. App’x 693, 704 (11th Cir. 2014)).)
Defendants are correct that Relator does not identify any single claim that
was presented for reimbursement. But Relator is not relying solely on allegations
as to his beliefs about the “underlying improper practices alone” to make out his
FCA claim. See Corsello v. Lincare, Inc., 428 F.3d 1008, 1014 (11th Cir.2005), reh'g
& reh'g en banc denied, 167 F. App'x 170 (2006), cert. denied, 549 U.S. 810, 127 S.
Ct. 42, 166 L. Ed. 2d 18). 9 In addition to his first-hand knowledge of the alleged
scheme on the practice-side of the equation – that is, Relator has personal
knowledge of how the physicians were expected to notate their charts in
furtherance of the scheme – Relator also supplies allegations that reflect that
claims had indeed been filed pursuant to the scheme. For example, Relator points
first to a chart showing his personal reimbursement for care he purportedly
provided at ApolloMD’s Spalding Regional Medical Center from January 1, 2016
to July 1, 2016. (Doc. 45 at 10.) Relator alleges that the chart shows reimbursement
that he received based at least in part on how many charts he fraudulently signed
as having seen a patient in concert with a mid-level professional even though he
had not actually done so. (Id. at ¶¶ 12–13.) Relator alleges that the amounts in the
column of the chart titled “$ Generated MLP Patients” reflect money actually paid

"Although Corsello worked in sales, his allegations, often based “on information and belief,”
lacked the “indicia of reliability” required by Clausen because they failed to provide an underlying
basis for Corsello's assertions." Corsello v. Lincare, Inc., 428 F.3d at 1013–14.
9

19

to him – as opposed to money that he could stand to earn – on the basis of such
fraudulent claims. (Id.) According to the allegations in the Complaint, these
payments were a direct flowthrough from the reimbursements actually received by
ApolloMD from Medicare and Medicaid for the fraudulently coded claims. (Doc.
45 at ¶¶ 6–8 (discussing emails that allegedly show that physician enhanced
reimbursements are based directly on participation in the scheme, and that the
claims would be submitted to Medicare or Medicaid).)
As noted above, Relator also alleges that ApolloMD submitted information
to the PQRS based on actual claims that had been submitted to CMS for payment.
(Complaint, ¶¶ 51–53.) According to the Amended Complaint, the PQRS reports
raised questions among ApolloMD physicians as to why some services appeared to
have been attributed to them through their NPI’s, even though they did not actually
perform those services. (Amended Compl., ¶ 53.) Again, as noted above, Relator
claims that the email sent out by ApolloMD executives in response to these
concerns only confirmed that charts which showed co-treatment by a mid-level
and a physician. However, as physicians were required to sign off on a large volume
of mid-level professionals' service charts, regardless of whether they had actually
conducted face-to-face treatment of the patients according to the Relator, the midlevel professionals' service/billing charts should have been billed under the midlevel’s NPI for lower reimbursement. But instead, they were actually billed under
the physicians’ NPIs for full reimbursement. (Id. at ¶¶ 52–54.)

20

As discussed earlier, a relator can also provide the required indicia of
reliability for purposes of satisfying Rule 9(b) “by showing that he personally was
in a position to know that actual false claims were submitted to the government
and had a factual basis for his alleged personal knowledge.” U.S. ex rel. Mastej v.
Health Mgmt. Assocs., Inc., 591 F. App'x 693, 707 (11th Cir. 2014) (quoting
Walker, 433 F.3d at 1360; and Hopper, 588 F.3d at 1326 (indicating that a relator
may satisfy Rule 9(b) by alleging “personal knowledge of the defendants' billing
practices that g[i]ve[s] rise to a well-founded belief that the defendant submitted
actual false or fraudulent claims”); see also Hill v. Morehouse Med. Assocs., Inc.,
2003 WL 22019936 at *3 (11th Cir. Aug. 15, 2003) (observing that “Rule 9(b)’s
heightened pleading standard may be applied less stringently . . . when specific
‘factual information [about the fraud] is peculiarly within the defendant's
knowledge or control’” and where plaintiff pled sufficient facts as an employee
based on her firsthand witnessing of the fraudulent conduct to provide “the indicia
of reliability that is necessary in a complaint alleging a fraudulent billing scheme”);
U.S. ex rel. King v. DSE, Inc., No. 8:08-CV-2416-T-23EAJ, 2011 WL 1884012, at
*1–3 (M.D. Fla. May 17, 2011) (finding that where relator’s knowledge of the falsity
of the defendant’s certification that defendant’s manufactured items complied with
contract specifications was based upon his own knowledge and involvement in the
manufacturing process, complaint allegations were deemed to afford the requisite
reliability to support the relator’s False Claims Act claims).

21

The Eleventh Circuit applies a “nuanced, case-by-case approach” to
consideration of whether the required indicia of reliability necessary for stating
firsthand knowledge of a scheme are present. Mastej, 591 F. App'x at 704. A relator
with direct, first-hand knowledge of the defendants' submission of false claims
gained through her employment with the defendants may have a sufficient basis
for asserting that the defendants actually submitted false claims. Id. (citing U.S. ex
rel. Walker v. R & F Properties of Lake County, Inc., 433 F.3d 1349, 1360 (11th Cir.
2005) (discussed later infra).
In Clausen, the Eleventh Circuit lists “some of the types of information that
might have helped [Relator] state an essential element of his claim with
particularity,” as including amounts of charges, actual dates of claim submissions,
policies about billing “or even second-hand information about billing practices[,]”
or copies of a bill or payment provided. U.S. ex rel. Clausen v. Lab'y Corp. of Am.,
290 F.3d 1301, 1312 & n. 21 (11th Cir. 2002).
In United States ex rel. Walker, the Eleventh Circuit considered a scheme
very similar to the one in the instant case. 433 F.3d 1349, 1360 (11th Cir.2005),
reh'g & reh'g en banc denied, 179 F. App'x 687 (2006), cert. denied, 549 U.S. 1027,
127 S. Ct. 554, 166 L.Ed.2d 423. In Walker, the scheme involved billing services
provided by nurse practitioners as “incident to the service of a physician” even
though the services were provided without any physician involvement and should
therefore have been reimbursed at a lower rate. Id. The relator in that matter
pleaded that she “believed [the defendant] submitted false or fraudulent claims for
22

services,” but did not plead with particularity that the defendant had submitted
any actual claim. Id. The Court of Appeals held that the complaint satisfied Rule
9(b), and contrasted another case where the plaintiff failed to “explain why he
believed fraudulent claims were ultimately submitted.” Id. (quoting Corsello, 428
F.3d at 1014 ). The Court found that the relator’s allegations in Walker were
“sufficient to explain why [she] believed” the claims had been submitted to
Medicare. Relator there did not have a Medicare identification number and based
on a particular conversation with the office manager, learned that the medical
practice never billed separately for nurse practitioner services delivered
independently but instead billed these services solely at the higher rate for services
"incident to the service of a physician". Id.
Walker reaches a different conclusion than some other Eleventh Circuit
cases which were deemed to lack sufficient evidentiary indicia of reliability, such
as Corsello, or Mitchell v. Beverly Enterprises, Inc., 248 F. App'x 73 (11th Cir.
2007) (unpublished), reh'g & reh'g en banc denied, 255 F. App'x 504. In Corsello,
the court held that the relator’s position as a sales associate did not provide
adequate indicia of reliability that he had firsthand knowledge of the actual
submission of false claims. 428 F.3d at 1013. The court held that,
Although Corsello worked in sales, his allegations, often
based “on information and belief,” lacked the “indicia of
reliability” required by Clausen because they failed to
provide an underlying basis for Corsello's assertions.
Corsello did not explain why he believes fraudulent
claims were ultimately submitted. Corsello's contention
that he was “aware” of billing practices was neither
23

particular to any specific fraudulent claim against the
government nor factually supported because Corsello
conceded that he “did not have access to company files
outside his own offices.” Underlying improper practices
alone are insufficient to state a claim under the False
Claims Act absent allegations that a specific fraudulent
claim was in fact submitted to the government.
Id. at 1013–14. Similarly, in Mitchell v. Beverly Enterprises, Inc., the court found
that although the Complaint included “specific allegations of the defendant’s
policies” it also contained only conclusory allegations that the policies had
“resulted in false charges being submitted to Medicare.” 48 F. App'x 73, 75. The
result was the same in U.S. ex rel. Atkins v. McInteer, where the Eleventh Circuit
found that a psychiatrist whose only knowledge of the billing and claims
submission process was “rumors from staff and … records of what he believed to
be the shoddy medical and business practices of two psychiatrists” did not suffice
to allege firsthand knowledge of the submission of false claims. 470 F.3d 1350,
1358–59 (11th Cir. 2006).
This case is distinguishable from other cases that found a lack of a reliable
indicia of reliability. Here, when taking all of the allegations in the Amended
Complaint in the light most favorable to Relator, Relator has alleged an adequate
factual basis for personal knowledge of the scheme including that claims during
the relevant time period had actually been submitted to CMS for reimbursement
although they included false or fraudulent coding and sought reimbursements in
excess of what was allowed by CMS rules. (See Amended Compl., ¶ 8 (citing CMS,
MEDICARE CLAIMS PROCESSING MANUAL, pub 100-04, Ch. 12, § 30.6.1(B) (“[I]f there
24

was no face-to-face encounter between the patient and the physician (e.g., even if
the physician participated in the service by only reviewing the patient’s medical
record) then the service may only be billed under the [mid-level’s NPI]”).) Relator,
through his personal participation in the alleged scheme as an emergency care
physician at two different Apollo sites over an eight year period and the
documentary evidence embedded within his Amended Complaint, has presented
sufficient indicia of reliability to show that he has a factual basis upon which he
alleges knowledge that actual false claims were submitted to the government
during the relevant period and that ApolloMD had a policy through which
physicians were directed to falsely attest to or verify having seen patients that they
did not in fact treat. The combination of factors alleged in the Amended Complaint,
but particularly his experience and understanding of the service delivery and
charting systems used in the ApolloMD emergency model and his close review of
reporting of his own billing and payment data provide Relator's complaint with
sufficient indicia of reliability for purposes of Rule 9(b) for both the presentment
and use claims. Additionally compelling are the examples provided by Relator that
show the compensation he allegedly received as a direct throughput from
participation in the scheme – examples that Relator allege necessarily required
first the payment by Medicare or Medicaid of a falsely submitted claim.
Furthermore, the Amended Complaint includes enough details regarding which
ApolloMD executives were involved in the alleged scheme, during what specific

25

period of time, and on a national basis to put the Defendants on notice of the
particular allegations against them.
More broadly, Relator has provided sufficient indicia of reliability for
proceeding as to ApolloMD’s alleged scheme based in part on his personal
experience working at emergency rooms in the Georgia ApolloMD facilities and
actively participating in the charting and alleged billing "scheme" allegedly
maintained by Defendants and observing the company's responses to related
concerns raised by physicians.
The Amended Complaint does not, however, present sufficient indicia of
reliability at this juncture for Relator’s knowledge of ApolloMD’s practices in states
other than Georgia. Relator points to some emails that went out to ApolloMD
physicians and employees in various states, but this alone is not enough to allege
that ApolloMD in fact had identical charting and claim submission practices or
guidelines in each state or as actually implemented, though that certainly is
possible given the national model used by ApolloMD. As each state here has its
own department for Medicaid claims processing, it is conceivable that ApolloMD
follows modified guidelines in each state – and Relator has not adequately pleaded
to the contrary. As the Court discusses further infra, Relator has not laid down an
adequate factual basis through the allegations in the Amended Complaint to
sustain his State law claims in states other than Georgia at this time.
For the foregoing reasons, the Motion to Dismiss to DENIED as to Counts
1 and 2.
26

B.

Count 3 – 42 U.S.C. § 1320a-7b(g)

In Count 3 of the Amended Complaint, Relator alleges that Defendants
violated 42 U.S.C. §§ 1320a-7b, the “Anti-Kickback Statute.” (Count Two, Doc. 45,
¶¶ 86–89.) This portion of the statute creates criminal liability for any person who
“knowingly and willfully makes or causes to be made any false statement or
representation of a material fact in any application for any benefit or payment
under a Federal health care program,” among other similar acts. (Count Three,
Doc. 45 at 42–44). Relator claims in the Amended Complaint that “[b]ecause this
violation of the Anti-Kickback Statute involves a claim for reimbursement to a
federal health care program, and that violation is material to the government’s
reimbursement

decision,

Defendants’

have

submitted

false

claims

for

reimbursement that include items or services resulting from a violation of the AKS,
which constitute false claims under the FCA. (Complaint, ¶ 96 (citing 42 U.S.C. §
1320a-7b(g)).) The subsection cited by Relator specifies that,
In addition to the penalties provided for in this section or
section 1320a-7a of this title, a claim that includes items
or services resulting from a violation of this section
constitutes a false or fraudulent claim for purposes of
subchapter III of chapter 37 of title 31.
42 U.S.C. § 1320a-7b(g).
In the Motion to Dismiss, Defendants state simply that this “is a criminal
statute,” for which there is no private right of action, and ‘neither the structure of
[the Anti-Kickback Statute] nor its legislative history suggests that Congress
intended to provide a private remedy.’” (Motion to Dismiss, Doc. 60-1 at 17 (citing
27

U.S. ex rel. Barrett v. Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28, 37
(D.D.C. 2003)).) It is true that "neither Stark nor AKS provide private rights of
action." Ameritox, Ltd. v. Millennium Laboratories, Inc., 803 F.3d 518, 522 (11th
Cir. 2015). However, the Anti-Kickback Statute itself says that a violation of that
statute “constitutes a false or fraudulent claim for purposes of subchapter III of
chapter 37 of title 31[,]” which is the False Claims Act. 42 U.S.C. § 1320a-7b(g).
See Mastej, 591 F. App’x at 698. But Relator fails to state his claim here for a
different reason.
Relator does not allege that the violations of the Anti-Kickback Statute
themselves formed the basis of liability under the FCA. That is, Relator is not
alleging that ApolloMD submitted claims for reimbursement that resulted from a
violation of the Anti-Kickback Statute – i.e. their payment claims were not
associated with providing kickbacks to obtain additional client referrals. That is
the common scenario when a kickback is paid as an inducement to refer a patient
to a particular clinic, for example. Relator instead appears to allege what is called
a reverse false claim. This type of claim alleges that “defendants owed an obligation
to pay money to the United States at the time of the allegedly false statements.”
U.S. ex rel. Matheny v. Medco Health Sols., Inc., 671 F.3d 1217, 1222 (11th Cir.
2012) (citing United States v. Pemco Aeroplex, Inc., 195 F.3d 1234, 1235–36 (11th
Cir.1999). To plead a reverse false claim, “relators must show that the defendants
owed an obligation to pay money to the United States at the time of the allegedly
false statements.” Id.; see also United States ex rel. Heller v. Guardian Pharmacy,
28

LLC, No. 1:18-CV-03728-SDG, 2021 WL 488305, at *5 (N.D. Ga. Feb. 10, 2021) (a
claim arises if a defendant “certif[ies] compliance with laws and regulations
concerning proper practices for medical providers ... when in fact those claims are
for services that were provided in violation of those rules.”) (quoting Barker ex rel.
United States v. Columbus Reg'l Healthcare Sys., Inc., 977 F. Supp. 2d 1341, 1344
(M.D. Ga. 2013)). The False Claims Act defines “obligation” as “an established
duty, whether or not fixed, arising from an express or implied contractual, grantorgrantee, or licensor-licensee relationship, from a fee-based or similar relationship,
from statute or regulation, or from the retention of any overpayment[.]” 42 U.S.C.
§ 3729 (b)(3). In the context of this case, Relator alleges that the physicians knew
that their compensation would increase in direct proportion to how many charts
they signed attesting to having seen patients that they did not actually see, or who
received treatment which should have been billed under the mid-level
practitioner’s NPI instead. This seems in the end just a variation of Relator’s
allegations in Counts 1 and II and not an actual "kickback" paid to a third party to
obtain referrals or an actual reverse kickback, as it is usually known.
What Relator has pleaded in the Amended Complaint, merely alleges
broadly that the Defendants violated the Anti-Kickback Statute, but does not
otherwise plead the required elements for a reverse false claim. The Court will not
infer from the Complaint that Relator has adequately pleaded the elements of a
reverse false claim relating to alleged kickbacks. In other words, Relator has failed
to plead adequately to meet the requirements of Rule 8 or Rule 9 as they pertain
29

to Count 3, because the Amended Complaint fails to plead with particularity the
elements of this claim. The Motion to Dismiss is GRANTED as to Count 3.
C.

Counts 4, 6, 7, 8, 9 – claims under the laws of other states

As the Court noted above in its discussion of Counts 1 and 2, this Order finds
only that Relator has adequately pleaded his personal knowledge of the scheme as
it relates to ApolloMD’s practices in Georgia, where the Relator worked. The
Defendants moved generally to dismiss all of the state law claims, apparently
incorporating their arguments relating to the purported insufficiency of Counts 1
and 2, but not actually addressing any of the state law claims directly. Regardless,
because Relator has not shown an adequate foundation for knowledge of
ApolloMD’s billing and claims process in states other than Georgia, Counts 4, 6, 7,
8, and 9 10 all must be dismissed.
Count 5 alleges violations of the Georgia State False Medicaid Claims Act
(O.C.G.A. § 49-4-168), and is not dismissed for the same reasoning elucidated
supra in the discussion relating to Counts 1 and 2.
The Motion to Dismiss is GRANTED as to Counts 4, 6, 7, 8, and 9.
IV.

CONCLUSION
For the reasons expressed in this Order, the Motion to Dismiss is

GRANTED as to Counts 3, 4, 6, 7, 8, and 9; but DENIED as to Counts 1, 2 and

Count 4 (Florida False Claims Act, FL. STAT. § 68.081 et seq.); Count 6 (Indiana Medicaid False
Claims and Whistleblower Protection Act, INC. CODE § 5-11-5.7-1, et seq.); Count 7 (Iowa False
Claims Act, IOWA CODE §§ 685.1, et seq.); Count 8 (Tennessee Medicaid False Claims Act, TENN.
CODE ANN. § 71-5-181, et seq.); Count 9 (Texas Medicaid Fraud Prevention Act, TEX. HUM. RES.
CODE § 36.002, et seq.). See Amended Compl., Doc. 45 at 45, 46–49.

10

30

5. [Doc. 60.]
In the event that additional evidence is produced within the first 75 days of
discovery that Relator believes will warrant the Court’s expansion of the scope of
this case to emergency room practices and procedures in the five states other than
Georgia identified in the Amended Complaint, Relator may seek leave to filed a
Second Amended Complaint to re-plead his claims on behalf of the United States
under the FCA relating to those states, provided that the motion for leave is filed
within 90 days of the date of the commencement of discovery. 11
The Parties are DIRECTED to file a Joint Preliminary Report and
Discovery Plan within 15 days of the date of this Order, and discovery shall
commence upon the filing of that proposed scheduling order.

IT IS SO ORDERED this 31st day of March, 2021.
_____________________________
Amy Totenberg
United States District Judge

The Court advises Relator, though, to be cautious in proceeding to seek to expand this suit and
to avoid biting off more than the Relator and his counsel can chew. This would only waste all
parties' and the Court's time and resources.

11

31