UNITED STATES OF AMERICA et al v. UPMC et al

Filing 109

ORDER. Defendants' Motion to Dismiss (Doc. 99 ) is GRANTED, and this action is DISMISSED WITH PREJUDICE. Signed by Judge Cathy Bissoon on 3/27/18. (dcd)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA,
ex rel., J. WILLIAM BOOKWALTER,
III, et al.,
Plaintiffs,
v.
UPMC, et al.,
Defendants.

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Civil Action No. 12-145
Judge Cathy Bissoon

ORDER
Defendants’ Motion to Dismiss (Doc. 99)1 will be granted. In support of this ruling,
the Court incorporates by reference its analyses in the Order dated June 21, 2017 (Doc. 95),
as well as the analyses in Defendants’ current Motion-papers (Docs. 100 & 108).
In the June 21st Order, the Court expressed “strong doubts” regarding Plaintiffs’ ability to
overcome-by-amendment the numerous pleading deficiencies identified therein. See Doc. 95
at 2. Defense counsel is correct that Plaintiffs did not comply with the Court’s instructions
regarding amendment, see Doc. 100 at 1; but, in fairness, it now seems clear that they were
directed to do that which could not be done. Indeed, had Plaintiffs’ request to amend not been so

At the onset, the Court dispenses with the notion that Defendants should be faulted, or owe an
apology, for not adhering to the undersigned’s “meet and confer” requirement as-relates to
motions under Rule 12(b)(6). See generally Practices & Procedures (http://www.pawd.uscourts.
gov/sites/pawd/files/JudgeBissoon-Chamber-Rules-Revised-20170214.pdf) at § II.A
(requiring parties, in advance of motions-practice, to discuss whether pleading defects may be
cured by amendment). The requirement does not “fit” the current procedural posture (i.e.,
Plaintiffs being afforded one last chance to amend their pleadings, following the Court’s grant of
a prior Motion to Dismiss based on detailed legal analyses; after which it was almost a foregone
conclusion that Defendants again would test the legal-sufficiency of the amended claims).
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vociferously stated, the Court might well have thought to allow, in the alternative, a second path:
that Plaintiffs be permitted to stand on their pleadings and immediately proceed to appellate
review. See generally S.B. v. KinderCare Learning Ctrs., 815 F.3d 150, 152 n.1 (3d Cir. 2016)
(contemplating same).
In the end, the outcome remains unchanged. Plaintiffs by-now have abandoned all of
their claims save those under the Stark Law. Defendants have made compelling arguments that
Plaintiffs’ current allegations do not plausibly identify a Stark-implicating compensation
agreement, see Doc. 100 at 7-9, and the Court adopts their arguments and conclusions.
Even were the Court to assume the contrary, Plaintiffs’ underlying premise – that targetedphysicians conducted medically unnecessary, or unnecessarily complex, procedures – persists.
See, e.g., 2d Am. Compl. (Doc. 98) at ¶¶ 67, 82, 188-212. Plaintiffs’ newly-amended pleadings
offer no greater specificity, and they still fail to sufficiently allege “particular details of a scheme
to submit false claims[,] paired with reliable indicia . . . lead[ing] to a strong inference” that false
claims actually were submitted. See Doc. 95 at 3 (citing and quoting binding Third Circuit
authority).
In the face of this seemingly inevitable conclusion, Plaintiffs attempt to side-step it by
suggesting that the wRVU-based compensation system, either generally or as applied by
Defendants, constituted a per se violation of the Stark Law. The Court joins Defendants in
rejecting this contention. There is no support for it, in the law or otherwise, and were such
allegations enough, one can only imagine the proliferation of qui-tam lawsuits that would result.
See Doc. 108 at 2-3 & n.2.2

Tellingly, the case decisions cited by Plaintiffs’ counsel are facially distinguishable. See, e.g.,
Doc. 103 at 16 (citing cases in which healthcare systems allegedly offered salaries or bonuses
well in excess of fair-market-value, essentially taking a loss on those specific services in
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Perhaps the clearest “shorthand” explanation for why Plaintiffs’ claims remain deficient
is one emphasized in the Court’s prior Order: Plaintiffs have not, and cannot, distinguish the
presumably-lawful compensation/referral arrangements between the Relator-physician(s)
and Defendant(s), and those of the purportedly malfeasant physicians. The only plausible
distinction is Plaintiffs’ contention – whether by express averment or through unspoken
implication – that certain “bad actors” performed unnecessary or unnecessarily-complex medical
procedures and the Relator(s) did not.3
For all of the reasons above, including those incorporated by reference herein and in the
June 21st Order, Defendants’ Motion to Dismiss (Doc. 99) is GRANTED, and this action is
DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.

March 27, 2018

s\Cathy Bissoon
Cathy Bissoon
United States District Judge

cc (via ECF email notification):
All Counsel of Record

exchange for windfalls resulting from increased referrals and “downstream income”).
Defendants’ wRVU-based compensation model is, on its face, productivity-related; and the
“special sauce” needed to make Plaintiffs’ claims plausible – sufficiently-specific allegations
regarding a lack of medical necessity – remains conspicuously absent.
In contravention of the Court’s June 21st Order, a swath of the Second Amended Complaint
brazenly reasserts the same allegations regarding lack-of-medical-necessity. See Doc. 98
at ¶¶ 188-212 (subsection titled, “[Physicians p]erforming more complex procedures than
necessary [to] artificially inflate wRVUs”). Other instances have been omitted. See Doc. 100-1
(redlined-comparison of First and Second Amended Complaints, supplied by Defendants’
counsel). The Court’s June 21st Order is the law of the case, and Plaintiffs cannot evade it
merely by extracting some or all references to “medical necessity.”
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