United States of America et al v. Asfora et al
Filing
86
MEMORANDUM OPINION AND ORDER denying 73 MOTION to DISMISS for Failure to State a Claim Signed by U.S. District Judge Lawrence L. Piersol on 9/16/2020. (SLT)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
******************************************************************************
*
UNITED STATES OF AMERICA, ex rel. *
CIV 16-4115
C. Dustin Bechtold, M.D. and
*
Bryan Wellman, M.D.,
*
*
Plaintiff/Relators,
*
MEMORANDUM OPINION
vs.
*
AND ORDER
*
WILSON ASFORA, M.D.;
*
MEDICAL DESIGNS, LLC.; and
*
SICAGE, LLC.,
*
*
Defendants.
*
*
******************************************************************************
Pending before the Court is a Motion to Dismiss filed on behalf of Defendants Wilson
Asfora, M.D., Medical Designs, LLC, and Sicage, LLC. For the following reasons, Defendants’
Motion is denied.
I. BACKGROUND
This case is a qui tam action initiated by relators Dr. Carl Bechtold and Dr. Bryan Wellman,
joined by the United States. Dr. Bechtold is an orthopedic surgeon and Dr. Wellman is a
neurosurgeon; both are employed by Sanford Medical Center in Sioux Falls, SD.
Defendant Dr. Wilson Asfora is a neurosurgeon in Sioux Falls, SD, and the owner of
Defendant Medical Designs, LLC (MDLLC) and Defendant Sicage, LLC (Sicage). Dr. Asfora and
his wife established MDLLC, while Dr. Asfora alone established Sicage. Dr. Asfora ordered and
used devices manufactured and sold by MDLLC and Sicage in his surgeries performed at Sanford
Medical Center and related medical facilities in Sioux Falls. As the owner of MDLLC and Sicage,
Dr. Asfora profited from the sales of these devices.
The facts as alleged in Plaintiffs’ Complaint will be deemed true for purposes of this Motion
to Dismiss. United States ex rel Joshi v. St. Luke’s Hospital. Inc., 441 F.3d 552, 555 (8th Cir. 2006).
The several counts against Defendants allege that Defendant Asfora used MDLLC and
Sicage to distribute devices to himself, which he used for his surgeries. It is then claimed Dr. Asfora
profited from the sales in violation of the False Claims Act. The violations are alleged to have arisen
through Dr. Asfora’s presentations for payment of false claims and in the making of false statements
in connection with the payment of those claims. The claims allegedly were false because they were
made in violation of the Anti-Kickback Statute and in connection with surgeries that were medically
unnecessary. Additional counts allege that Dr. Asfora conspired with Defendants MDLLC and
Sicage to violate the False Claims Act, and that this conduct also gives rise to common law claims
of unjust enrichment and payment by mistake. The Defendants have filed a Motion to Dismiss, Doc.
73.
II. MOTION TO DISMISS
Defendants have moved to dismiss all counts under Federal Rules of Civil Procedure
12(b)(6) and 9(b). The standard that a plaintiff must meet to avoid dismissal under Rule 12(b)(6)
is set forth in Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007), and requires that the plaintiff have included in the Complaint “sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Accord, Ashcroft v. Iqbal,
556 U. S. 662, 129 S. Ct. 1937, 173 L. Ed.2d 868 (2009). The Eighth Circuit has added additional
guidance to this standard by directing the District Court to accept as true all allegations of material
fact and construe them in a light most favorable to Plaintiff. Joshi, 441 F.3d at 555.
While
conclusory statements are insufficient, well-pleaded factual allegations should be deemed true and
the District Court should proceed to determine whether plaintiff is entitled to relief. Drobnak v.
Anderson Corp., 561 F.3d 778 (8th Cir. 2008). Accord Ulrich v. Pope Cnty., 715 F.3d 1054, 1058
(8th Cir. 2013) (42 U.S.C. § 1983 suit against police who were given qualified immunity; dismissal
not warranted unless beyond a doubt plaintiff cannot prove the case). See also, Reliance Medical
Systems, LLC v. United States, 2014 WL 576113 (C.D. Cal. 2014) (denying Motion to Dismiss in
case involving spinal implants and alleged scheme to defraud).
Additional requirements apply under Rule 9(b) when a plaintiff alleges fraud. In such a case,
the plaintiff must plead the fraud with particularity, meaning plaintiff must supply sufficient
information about the fraudulent conduct to enable the defendant to “respond specifically and
quickly” to defend against the allegations. United States ex rel Strubbe v. Crawford Cnty. Mem.
Hosp., 915 F.3d 1158, 1163 (8th Cir. 2019). Plaintiff is not required, however, to describe all
actions, dates, participants and other details of the alleged fraud at the pleading stage. United States
ex rel Benaissa v. Trinity Health, 963 F.3d 733, 739 (8th Cir. 2020) (citing Joshi, 441 F.3d at 557).
The Benaissa court expressed the view that, “This particularity requirement demands a higher
2
degree of notice than that required for other claims,” and “is intended to enable the defendant to
respond specifically and quickly to the potentially damaging allegations.” Id. (quoting United States
ex rel Costner v. URS Consultants, Inc., 317 F.3d 883, 888 (8th Cir. 2003)). The court continued,
“To satisfy Rule 9(b)’s particularity requirement, ‘the complaint must plead such facts as the time,
place, and content of the defendant’s false representations, as well as the details of the defendant’s
fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as
a result,’” Benaissa, 963 F.3d at 739 (quoting Joshi, 441 F.3d at 556). As the court in Joshi noted,
“Put another way, the complaint must identify the ‘who, what, where, when, and how’ of the alleged
fraud.” 441 F.3d at 556.
The Eighth Circuit has provided specific guidance for pleading violations of the False Claims
Act. In United States ex rel Thayer v. Planned Parenthood of the Heartland, 765 F.3d 914, 918 (8th
Cir. 2014), the court clarified that where the question is whether the defendant has submitted false
claims for payment, the plaintiff may plead representative examples of the false claims. In the
alternative, the plaintiff may allege details of the scheme to submit false claims “paired with reliable
indicia that lead to a strong inference that claims actually were submitted.” Id. (citing United States
ex rel Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir. 2009)). The court reiterated this standard
in Benaissa, 963 F.3d at 739 (quoting Strubbe, 915 F.3d at 1163).
Other Courts of Appeal also have provided helpful direction in cases alleging False Claims
Act violations based on the Anti-Kickback Statute. For example, the Court of Appeals for the First
Circuit recently instructed as follows: “To be clear, the plaintiff in such a case need not prove at the
pleading stage that what he complained to his employer about was an actual AKS violation. But,
the plaintiff must sufficiently allege that ‘his reports concerned FCA-violating activity such as the
submission of false claims’ resulting from conduct that could constitute a violation of the AKS.”
United States ex rel Booker v. Pfizer, 847 F.3d 52, 60 (1st Cir. 2017). Further, as the court explained
in United States ex rel Groat v. Boston Heart Diagnostics Corp., 255 F.Supp.3d 13, 20 (D. D.C.
2017)(citing Twombly, 550 U.S. at 556), “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” The court determined the Plaintiff had sufficiently pleaded that Boston
Heart had “submitted false claims to Medicare Advantage Plans and Medicaid Plans, which are
funded by Medicare and Medicaid dollars” by showing the submission of the claims to the
Government; alleging the tests at issue were “worthless” for certain patients and therefore “known
3
to be medically unnecessary”; creating an evidence issue over medical necessity, which should not
be resolved at the Motion to Dismiss stage but deferred until the Summary Judgment stage; and
supplying sufficient evidence of defendant’s knowledge based on notice to the CEO and a Vice
President through attendance at a meeting with Plaintiff. 255 F.Supp.3d at 22.
III. FALSE CLAIMS ACT
A. Legal Standard
1. False Claims Act Allegations
Plaintiffs allege that Defendants violated the False Claims Act (FCA), 31 U.S.C.
§ 3729(a)(1), which establishes civil penalties for, in pertinent part, any person who:
(A) knowingly presents or causes to be presented, a false or fraudulent claim for payment
or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or statement
material to a false or fraudulent claim;
(C) conspires to commit a violation of subparagraph (A), (B)….
As the Supreme Court commented in In Universal Health Services, Inc. v. United States ex
rel Escobar, 579 U.S.___, 136 S. Ct. 1989, 1996, 195 L.Ed.2d 348 (2016), the False Claims Act was
enacted after the Civil War to address the “massive frauds perpetrated by large contractors during
the Civil War.” Despite its having been amended numerous times since then, the focus of the
statute, according to the Court, “remains on those who present or directly induce the submission of
false or fraudulent claims.” Id. A claim is a request for payment or reimbursement, 31 U.S.C.
§ 3729(b)(2)(A). The statute includes a requirement of “knowledge” meaning “actual knowledge
of the information,” or acting in “deliberate ignorance of the truth or falsity of the information,” or
“in reckless disregard of the truth or falsity of the information.” § 3729 (b)(1)(A).
The gist of Plaintiffs’ first claim under the False Claims Act is that Defendants submitted
or caused the submission of false or fraudulent claims for reimbursement under Medicare, Medicaid,
and Tricare to Sanford Medical Center, which in turn submitted them for payment. The claims were
false or fraudulent, according to Plaintiffs, because they allegedly arose from the remuneration
Defendant Asfora improperly received in connection with his use of devices obtained through
Defendants MDLLC and Sicage, in violation of the Anti-Kickback Statute, and because the
payments Defendant Asfora received from use of the devices arose from medically unnecessary
surgeries. Furthermore, according to Plaintiffs, the Defendants violated the False Claims Act in a
4
second way by submitting false statements to obtain reimbursement, in that Defendants falsely
claimed to be in compliance with the Anti-Kickback Statute and other applicable statutes.
a. The Anti-Kickback Statute
(1) General
The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b prohibits “knowingly and willfully
solicit[ing] or receiv[ing] any remuneration (including any kickback, bribe, or rebate) directly or
indirectly,… in cash or in kind,” in exchange for referring or inducing another to refer, an individual
to particular goods or services ”for which payment may be made in whole or in part under a Federal
Health Care program.” The purpose of the statute as articulated by the Department of Health and
Human Services is to protect patients by preventing health care professionals from profiting from
sales of devices where they have an incentive to employ them in surgery merely to satisfy a profit
motive or where surgeries are medically unnecessary. 78 Fed. Reg. 19,271 (March 29, 2013), 2013
WL 1248464.
The statute focuses on remuneration, and “any” remuneration in violation of the statute is
covered. United States v. Shoemaker, 746 F.3d 614, 630 n.22 (5th Cir. 2014). The statute applies to
“any person” and covers both givers and receivers of the remuneration. Id. at 619, 631.
To fit the elements of the statute, Plaintiff must establish more than mere encouragement
of Defendant to refer business, Hanlester Network v. Shalala, 51 F.3d 1390, 1398 (9th Cir. 1995).
Rather, there must be inducement under the statute, meaning “an intent to exercise influence over
the reason or judgment of another in an effort to cause the referral of program-related business.”
Id. This definition was provided by the Secretary of Health and Human Services and the Hanlester
court “agree[d] with this interpretation.” Id.
Further, the Defendant’s conduct must be knowing and willful, meaning that Defendant
knows the conduct is wrongful, even if the Defendant is unaware of the particular statute violated.
Hanlester, 51 F.3d 1390, 1400. As one District Court noted, willfulness ordinarily is proved by
circumstantial evidence and generally involves ”proof that a defendant took several actions
inconsistent with a good-faith belief that his conduct was legal.” Klaczak v. Consolidated Medical
Transport, 458 F. Supp.2d 622, 676 (N.D. Ill. 2006).
(2) Physician Owned Distributorships
An area of particular concern to Congress in addressing possible fraudulent conduct in
connection with the delivery of health care services is the Physician Owned Distributorship (POD).
5
The Department of Health and Human Services describes this type of entity as follows: “’POD’ is
any physician-owned entity that derives revenue from selling, or arranging for the sale of,
implantable medical devices and includes physician-owned entities that purport to design or
manufacture, typically under contractual arrangements, their own medical devices or
instrumentation.” Special Fraud Alert: Physician-Owned Entities (March 26, 2013), 78 Fed. Reg.
19, 271, FN 1 (March 29, 2013), 2013 WL 1248464. Congress has not prohibited all PODs, but
recognizing the possibility of financial incentives, has described conduct in the Anti-Kickback
Statute which is implicated by PODs. The rationale was expressed by the Department in the
following language:
PODs that exhibit any of these or other questionable features potentially raise four
major concerns typically associated with kickbacks—corruption of medical
judgment, overutilization, increased costs to the Federal health care programs and
beneficiaries, and unfair competition. This is because the financial incentives PODs
offer to their physician-owners may induce the physicians both to perform more
procedures (or more extensive procedures) than are medically necessary and to use
the devices the PODs sell in lieu of other, potentially more clinically appropriate,
devices. We are particularly concerned about the presence of such financial
incentives in the implantable medical device context because such devices typically
are “physician preference items,” meaning that both the choice of brand and the type
of device may be made or strongly influenced by the physician, rather than being
controlled by the hospital or ASC where the procedure is performed. Id.
Concerned with this possibility of fraud, Congress did not prohibit all physician-owned
distributorships, but also declined to provide a “safe harbor” for them across the board. In
implementing the statute, the Department of Health and Human Services also declined to enact a
blanket prohibition of PODs, and also recognized some “safe harbors” for situations where
physicians use devices that are distributed by PODs in which they have an interest. For example,
a “safe harbor” protection from liability applies if the doctor-owner of the POD has a limited
ownership interest and recoups a minority of any revenue generated. 42 C.F.R. 1001.952(a)(2).
Lacking “safe harbor” protection exposes the physician who owns the POD to scrutiny as possibly
engaging in fraudulent conduct. It is important to keep in mind, however, the caution expressed by
the court in Klaczak, which emphasized, “The various Medicare ‘safe harbors’ define a subset of
clearly legal conduct, but that does not mean that anything outside of the ‘safe harbors’ violates the
AKS,” 458 F.Supp.2d at 686 (citing United States v. Shaw, 106 F.Supp.2d 103, 115 (D. Mass.
2000), which cites 64 FR 63518-01 (November 19, 1999)).
6
(3) Medically Unnecessary Surgeries
In developing the provisions of the False Claims Act, Congress was guided by the
recognition that financial incentives can corrupt the judgment of health care providers, and that
physicians may engage in medically unnecessary surgeries that are financially rewarding.
Submitting a bill for payment for such a surgery violates the False Claims Act, Reliance, 2014 WL
5761113, at *2 and *5. The violation might exist alone or operate in tandem with other conduct
which may, in turn, violate the Anti-Kickback Statute. Groat, 255 F.3d at 31.
The question of medical necessity implicates fraudulent conduct by the physician, and not
simply medical malpractice. The Court of Appeals for the Third Circuit recently noted that a
difference of medical opinion is enough “to create a triable dispute of fact regarding FCA falsity.”
United States ex rel Druding v. Care Alts., 952 F.3d 89, 100 (3d Cir. 2020)(disagreeing with United
States v. AseraCare, Inc., 938 F.3d 1278, 1297 (11th Cir. 2019)(AseraCare III)). A separate
analysis of falsity and scienter will be made at the summary judgment stage, but here we are
concerned with adequacy of pleading. Although in a different context, the court in Groat adopted
an approach consistent with this reasoning, determining that any dispute about medical necessity
should not be resolved through a Motion to Dismiss. Groat, 255 F.Supp.3d at 28.
Furthermore, it is relevant to proving the knowledge element under the False Claims Act that
a physician, as a professional, would understand that a bill would be submitted for payment in
connection with the surgery and that if the surgery were medically unnecessary, the claim for
payment would be false. Druding, 952 F.3d at 97-98; Reliance, 2014 WL 5761113, *5.
b. Express and Implied False Certification
Under various provisions of the Medicare, Medicaid and Tricare programs, health care
providers are required to certify compliance with the requirements of those programs. Form CMS1500 is designed to implement the certification process and requires the provider to expressly certify
that the medical care at issue was not administered in violation of the Anti-Kickback Statute and was
medically necessary. It is also conceivable that a provider would also submit documentation that
does not specifically denote which conditions for payment by the federal government apply, but
would assert compliance with them. This is the theory of implied certification.
In Escobar, the Supreme Court held that an individual who submits a claim for payment by
the federal government impliedly certifies compliance with all conditions of payment, and if that
certification is untrue, the “implied false certification” theory can support a claim under the False
7
Claims Act. 136 S. Ct. at 1995. The Court added that the defendant can be liable for violating the
Act’s requirements even if compliance with them was not explicitly stated as a condition of
payment. Id. The Court cautioned, however, that not every violation of the certification requirement
gives rise to liability for the defendant. The Court included a proviso that the defendant must have
knowingly violated a requirement that defendant is aware is material to the Government’s payment
decision. Id. Under the False Claims Act, 31 U.S.C. § 3727(b)(4), “material” is defined as “having
a natural tendency to influence, or be capable of influencing, the payment or receipt of money or
property.” The Escobar Court instructed to “look to the effect on the likely or actual behavior of
the recipient of the alleged misrepresentation.” Id. at 2002 (quoting 26 R. Lord, Williston on
Contracts § 69:12, p. 549 (4th ed. 2003)). A statement is not material if it is minor or insubstantial,
or simply because it would give the Government the option not to pay; it is a demanding standard.
136 S. Ct. at 2002. The Court also explained that if the Government has paid claims despite its
knowledge that certain requirements were violated and has signaled no change in position, that is
strong evidence that the statements were not material. Id.
B. ANALYSIS
1. Presentation of False Claims for payment—
False Claims Act 31 U.S.C. § 3729(a)(1)(A)
In Count I, Plaintiffs allege that Defendant Asfora “knowingly submitted” and “caused
Sanford Medical Center to submit” claims in violation of the False Claims Act to Medicare and
related federal entities for payment, in that he solicited remuneration to induce him to order the
purchase of products from Defendant MDLLC in violation of the Anti-kickback Statute. Doc. 58
¶ 316. Likewise, Plaintiffs allege Defendant MDLLC violated the same provisions by offering and
paying remuneration to Dr. Asfora to induce him to order its products. Id. ¶ 317. In Count II,
Plaintiffs allege that Defendant Asfora engaged in the identical conduct with Defendant Sicage, id.
¶¶ 321, 323, and that Defendant Sicage engaged in the identical conduct with Defendant Asfora, id.
¶¶ 322, 323.
Plaintiffs describe in detail the alleged scheme engaged in by Defendants Asfora, MDLLC
and Sicage, id. ¶¶ 141, 154, over a lengthy period of time which enabled Dr. Asfora to reap
substantial profits from his use of devices supplied by MDLLC and Sicage. Id. ¶¶ 123, 142.
Plaintiffs allege that this conduct was knowing, based on his receipt of fraud alerts from HHS, id.
¶¶94-103; his involvement in other investigations, ¶¶ 135-41; warnings, ¶¶ 158-60, 241-44; reviews,
8
¶¶ 261-90; and his admission, ¶ 232. Plaintiffs further allege that at least some of these claims were
submitted for payment by Medicare, Medicaid or Tricare. Id. ¶ 289. Plaintiffs have sufficiently
pleaded the allegations.
Count I also alleges that Defendant Asfora knowingly submitted and caused Sanford Medical
Center to submit, and that Defendant MDLLC knowingly caused Asfora and Sanford Medical
Center to submit, false claims to Medicare and other federal entities for payment knowing the claims
were false because they sought compensation for certain surgeries that were medically unnecessary,
id. ¶¶ 282, 287-90, or were more extensive than necessary. Id. ¶ 318. Count II alleges the same
conduct against Defendant Asfora and Defendant Sicage. Id. ¶ 323.
Plaintiffs’ allegations that certain surgeries were medically unnecessary surgeries or more
extensive than necessary are sufficiently pleaded. Id. ¶¶ 282-90. Plaintiffs’ allegations that the
conduct was knowing and that claims were submitted to the pertinent federal entities for payment
also meet the standard. Id. ¶¶ 216-17. Plaintiffs have sufficiently pleaded the alleged violations
of the False Claims Act, 31 U.S.C. § 3729 (a)(1)(A).
2. False Certification of Claims for Payment—31 U.S.C. § 3729(a)(1)(B)
Plaintiffs allege in Count III that Defendants Asfora and MDLLC made false statements,
including false certifications, on provider enrollment forms and claim forms that they were in
compliance with the Anti-Kickback Statute and that the surgeries from which the claims arose were
medically necessary. The allegations appear throughout the Complaint, but in particular in the
sections listed herein. Doc. 58 ¶¶ 31, 37-38, 103. Plaintiffs allege the false statements were made
knowingly. Id. ¶¶ 290-95; 309-14. Plaintiffs allege the same conduct in Count IV against Defendant
Asfora and Defendant Sicage. Id. ¶¶ 58, 296, 306-08. Plaintiffs allege these certifications caused
the submission of false claims for payment by Sanford Medical Center. Id. ¶¶ 27, 32. Given the
manner in which the claims are paid by the federal government, the documentation allegedly must
be accurate and the information submitted is material to payment. Id. ¶¶ 50-56. Plaintiffs have
sufficiently pleaded the allegations against Defendants.
IV. CONSPIRACY CLAIMS
In Counts V and VI, Plaintiffs have alleged conspiracy to violate the False Claims Act by
Defendants Asfora and MDLLC, and by Defendants Asfora and Sicage, respectively. To establish
their claims, Plaintiffs will have to prove that Defendants entered into an agreement to violate the
Act, and committed an overt act in furtherance. 18 U.S.C. § 371.
9
As previously noted, Plaintiffs have alleged that Defendant Asfora as an individual conspired
with MDLLC, id. ¶¶ 336-38 (owned by Defendant Asfora and his wife) and with Sicage, id. ¶¶ 34143 (owned by Defendant Asfora alone). The question arises whether there is sufficient separation
between Defendant and his distributorships that a conspiracy count will lie. In Cedrick Kushner
Promotions, Ltd. v. King, 533 U. S. 158, 121 S. Ct. 2087, 195 L. Ed.2d 348 (2001), a case brought
under the RICO statute, 18 U.S.C. § 1961, et al, the Court accepted the argument that dismissal of
a conspiracy charge was improper where the claim was against Defendant individually and against
the Defendant as a solely-owned corporation. 533 U. S. at 162. The Court reasoned that
Defendant’s adoption of the corporate form transformed the entity and it was no longer simply an
individual person. Id. The Court explained, “The corporate owner/employee, a natural person, is
distinct from the corporation itself, a legally different entity with different rights and responsibilities
due to its different legal status. And we can find nothing in the statute that requires more
‘separateness’ than that”. Id.
That rationale was adopted in United States ex rel Millin v. Krause, 2018 WL 1885672 (D.
S.D. 2018), a case involving farm subsidies which arose under the False Claims Act, where the court
held the intracorporate conspiracy doctrine does not apply in the context of the Act. Recognizing
that the question remains unsettled, id. at 12, the court determined the doctrine does not bar a
conspiracy claim against a corporation and its employee for violation of the False Claims Act. The
Millin court adopted a second rationale as well, noting that because the conduct at issue would
violate both the criminal conspiracy statute, 18 U.S.C. § 371, and the civil liability sections of the
False Claims Act, the intracorporate conspiracy doctrine would not preclude a conspiracy charge
(citing United States ex rel Harris v. Lockheed Martin Corp., 905 F.Supp.2d 1343 (N.D. Ga. 2012)).
The Defendants’ Motion to Dismiss Counts V and VI centers on both the lack of an
underlying offense which constitutes a violation of the False Claims Act, Doc. 74, p. 31, and failure
to establish separate parties involved in the conspiracy. Plaintiffs have alleged sufficient facts on
both issues, see Sec. III. A.1., above, and Doc. 58, ¶¶ 15-17. The Defendants’ Motion is denied.
V. COMMON LAW CLAIMS
The standard for the common law claims brought by Plaintiffs was articulated in United
States ex rel Roberts v. Aging Care Home Health, Inc., 474 F. Supp. 2d 810 (W.D. La. 2007), where
the court set forth the elements for a claim of unjust enrichment. In such a case, the Plaintiff would
have to show: 1- it had a reasonable expectation of payment; 2-Defendant should reasonably have
10
expected to pay; or 3-society’s reasonable expectations of person and property would be defeated
by non-payment. 474 F.Supp.2d at 820. For payment by mistake, the Plaintiff must show the
Medicare program “made… payments under an erroneous belief which was material to the decision
to pay.” Id. at 819.
Plaintiffs have brought claims for unjust enrichment and payment by mistake which the
Defendant claims are duplicative of the statutory claims. Under Pa. Nat’l Mut. Cas. Ins. Co. v. Pine
Bluff, 354 F.3d 945, 951 (8th Cir. 2004), it is permissible to pursue consistent remedies as long as
Plaintiffs are awarded only one. Plaintiffs have pleaded sufficient facts on these claims as
alternatives to the False Claims Act claims above, and the Motion to Dismiss these counts is denied.
VI. CONCLUSION
Plaintiffs have pleaded with sufficient particularity that Defendants submitted false claims
for payment under Medicare, Medicaid or Tricare. The alleged false claims are based on Defendant
Asfora’s use of devices from Defendant MDLLC and Defendant Sicage in violation of the AntiKickback Statute as well as his performance of medically unnecessary surgeries. Plaintiffs have
provided sufficient examples of allegedly medically unnecessary surgeries performed by Dr. Asfora,
and an alleged scheme to obtain improper reimbursement from Medicare, Medicaid and Tricare.
Plaintiffs have alleged scienter sufficiently based on defendant’s alleged deception, the warnings
of illegality, and the prior qui tam action. Therefore, Defendants’ Motion to Dismiss is denied.
IT IS ORDERED that Defendants’ Motion to Dismiss (Doc. 73) is denied.
Dated this 16th day of September, 2020.
BY THE COURT:
______________________________
Lawrence L. Piersol
United States District Judge
ATTEST:
MATTHEW W. THELEN, CLERK
_____________________________
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?