United States of America et al v. Clarksville Pain Institute et al

Filing 89

MEMORANDUM OPINION OF THE COURT. Signed by District Judge Aleta A. Trauger on 3/6/2025. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(mg) Modified on 3/6/2025 (mg).

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
UNITED STATES OF AMERICA ex rel.
KRISTA NICHOLSON,

)
)
)
Plaintiff,
)
)
v.
)
)
CLARKSVILLE PAIN INSTITUTE, LLC, )
PAIN INSTITUTE OF NASHVILLE, PLC, )
MICHAEL COX, and DEBBIE COX,
)
)
Defendants.
)

Case No. 3:20-cv-00309
Judge Aleta A. Trauger

MEMORANDUM
The United States (the “government”) asserts claims under the False Claims Act (“FCA”)
and federal common law claims for payment by mistake and unjust enrichment against defendants
Clarksville Pain Institute, LLC, Pain Institute of Nashville, PLC, Michael Cox, and Debbie Cox.
Before the court are two Motions to Dismiss the government’s Complaint-in-Intervention
(“Complaint”) (Doc. No. 65): one filed by the Clarksville Pain Institute and the Pain Institute of
Nashville (Doc. No. 75), and the other filed by Michael Cox and Debbie Cox (Doc. No. 79), each
supported by a separate Memorandum of Law (Doc. Nos. 76, 80).1 The government has filed a

1

The court rejects as without merit the government’s assertion that the two sets of
defendants—who happen to be represented by the same counsel—filed separate Rule 12(b)(6)
motions to circumvent the page limitations for dispositive motions set forth in Local Rule
7.01(a)(2). The cases cited by the government are inapposite, and the filing of two separate motions
in this case does not implicate the Local Rule. Even if there were some requirement that all four
defendants join in filing a single motion simply because they are represented by the same attorneys,
given that the Complaint is seventy pages long and comprised of nearly four hundred paragraphs,
the court would readily have granted a motion to exceed the page limitation set forth in the Local
Rule. Moreover, the filing of separate motions in this situation does not create more work for the
court. Raising unjustified arguments does.

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consolidated Response in opposition to both motions. (Doc. No. 81.) The two sets of defendants
filed separate Reply briefs in further support of their motions. (Doc. Nos. 84, 85.)
For the reasons set forth herein, the Cox defendants’ Motion to Dismiss will be granted in
its entirety, and the entity defendants’ motion will be granted in part and denied in part, with the
common law claims permitted to proceed.
I.

LEGAL STANDARDS
A.

False Claims Act

This case involves the defendants’ submission of requests for reimbursement for medical
services from federal health care programs, specifically Medicare and the United States
Department of Veterans Affairs, Veterans Health Agency (“VA”) (collectively with Medicare, the
“Federal Health Benefit Programs” or “FHBP”). Medicare is a federal health insurance program
that provides coverage for individuals based on age, disability, or affliction with endstage renal
disease. (Doc. No. 65 ¶ 33 (citing 42 U.S.C. §§ 426, 426-1.) It is funded by premium payments
from covered individuals and funds appropriated by the government. (Id.) Medicare Part B, which
provides outpatient coverage for, among other things, diagnostic laboratory tests (see 42 C.F.R. §
410.32), only covers medical services that are “reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve the functioning of a malformed body member.” 42
U.S.C. § 1395y(a)(1)(A). Similarly, the VA offers medical benefits to some honorably discharged
veterans and their families through TRICARE or, if they do not qualify for TRICARE, potentially
through the Civilian Health and Medical Program of the VA (“CHAMPVA”). (Doc. No. 65 ¶¶ 67–
68.) Like Medicare, CHAMPVA provides for coverage of allowable medical services and supplies
so long as they are “medically necessary and appropriate for the treatment of a condition and . . .
are not specifically excluded from program coverage.” (Id. ¶ 70 (quoting 38 CFR § 17.272(a)).)

3
The parties’ primary focus is on Medicare claims. To participate in the Medicare program
as a provider, the “provider,” which the Complaint defines as an individual medical practitioner
(Doc. No. 65 ¶ 35 n.2), must submit a Medicare Enrollment Application, Form CMS-855B.
Enrolled providers must complete a new Form CMS-855B to change their enrollment information
or to reactivate or terminate Medicare enrollment. (Id. ¶ 39.) Providers must certify that they will
comply with all Medicare laws, regulations, and program instructions. (Id. ¶ 40 (citing 42 C.F.R.
§ 424.516(a)).) Any services that are not reasonable and necessary for the diagnosis or treatment
of an illness or injury are excluded from coverage, and a provider submitting a claim for payment
to FHBP necessarily certifies that the services were both provided as billed and medically
reasonable and necessary. (Id. ¶¶ 41, 42.)
Medicare also requires that providers include documentation in patients’ medical records
that establish that services provided were reasonable and necessary, and a provider’s claim for a
diagnostic test is not medically reasonable and necessary if there is not sufficient documentation
in the patient’s medical record to establish that the service was reasonable and necessary. (Id. ¶ 43
(citing 42 U.S.C. §§ 1395l(e), 1395u(c)(2)(B)(i); 42 C.F.R. § 410.32(d)(3)).) In addition,
diagnostic testing of a patient must be ordered by the treating provider, and tests that are not
ordered by the treating provider are not reasonable and necessary and are not reimbursable. (Id. ¶
44 (citing 42 C.F.R. § 410.32(a); Medicare Benefit Policy Manual, Ch. 15, § 80.1).)
In addition, although the government elsewhere defines “provider” as an individual
practitioner, it alleges that a provider’s “authorized official” must sign the “Certification
Statement” in Section 15 of Form CMS-855B, which “legally and financially binds [the] supplier
to the laws, regulations and program instructions of the Medicare program.” (Doc. No. 65 ¶ 47.)

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A provider (or entity) seeking reimbursement for services provided to Medicare patients
must submit a CMS Form 1500, or its electronic equivalent, known as the 837P format, to the
appropriate Medicare Administrative Contractor (“MAC”). (Doc. No. 65 ¶¶ 36, 52.)2 To submit
electronic claims via the 837P format, a provider must first complete and submit to CMS an
Electronic Data Interchange Enrollment Form (“EDI”). The EDI may be completed by the provider
or an authorized individual who has the legal authority to commit the provider to abide by the
laws, regulations, and the program instructions of Medicare. On the EDI, the provider agrees in
advance to “submit claims that are accurate, complete, and truthful” and certifies that the use of
the provider’s National Provider Identifier on a claim “constitutes the provider’s legal electronic
signature and an assurance that services were performed as billed.” The provider’s EDI
certification serves as the provider’s signature for every electronic claim submitted by the provider
thereafter. (Doc. No. 65 ¶ 53.)
In addition to Medicare laws and regulations, providers are also subject to Local Coverage
Determinations (“LCDs”) issued by MACs, which identify, for the states within their jurisdiction,
procedures and services that are reasonable and necessary and therefore eligible for payment under
Medicare. (Id. ¶ 38 (citing 42 U.S.C. §§ 1395ff(f)(2), 1395m-1(g)).) When submitting the CMS
1500 to Medicare, providers certify that the claim is truthful, accurate, and complete and complies
with Medicare rules and regulations and applicable LCDs, that the provider is familiar with the
applicable law, and that the services on the claim form were medically necessary. (Id. ¶ 59.)
Generally, after a provider electronically submits the claim to the MAC, the claim is paid directly
to the provider without any review of supporting documents, including medical records. (Id. ¶ 63.)

2

At all times relevant to this Complaint, Palmetto GBA, LLC and its predecessor, Cahaba
Government Benefit Administrators, LLC were the MACs for the services billed to Medicare by
the defendants. (Doc. No. 65 ¶ 37.)

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The FCA imposes civil liability on any person who knowingly submits false claims to the
government. As relevant in this case, 31 U.S.C. § 3729(a)(1)(A) creates liability for “any person
who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for payment or
approval.” To state a “presentment” claim under this provision of the FCA, the government must
sufficiently plead that (1) the defendant presented, or caused to be presented, a claim for payment
or approval; (2) the claim was false or fraudulent; and (3) the defendant’s acts were undertaken
“knowingly,” meaning with actual knowledge of the information, or with deliberate ignorance or
reckless disregard for the truth or falsity of the claim. United States ex rel. Prather v. Brookdale
Senior Living Cmties., Inc., 838 F.3d 750, 761 (6th Cir. 2016); 31 U.S.C. § 3729(b)(1).
Subsection 3729(a)(1)(B) imposes liability on 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). To state a claim under this provision, the plaintiff must sufficiently plead
[1] that the defendant [made] a false statement or create[d] a false record [2] with
actual knowledge, deliberate ignorance, or reckless disregard of the truth or falsity
of the information; [3] that the defendant . . . submitted a claim for payment to the
federal government; . . . and [4] that the false statement or record [was] material to
the Government’s decision to make the payment sought in the defendant's claim.
U.S. ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 408 (6th Cir. 2016) (alterations in
original) (quoting U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 618 F.3d 505, 509 (6th Cir. 2010)).
B.

Standard of Review

Two standards of review govern the consideration of a motion to dismiss claims under the
FCA. First, under Rule 12(b)(6), the court must accept as true all well pleaded material allegations
of the pleadings, and those allegations must “be sufficient to give notice to the defendant as to
what claims are alleged, and . . . plead ‘sufficient factual matter’ to render the legal claim plausible,
i.e., more than merely possible.” Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir.
2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009)). That is, under the general pleading

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standards of Rule 8, the factual allegations in the complaint need not be detailed, although “a
plaintiff’s 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.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
As with any motion under Rule 12(b)(6), if “matters outside the pleadings are presented to
and not excluded by the court, the motion must be treated as one for summary judgment under
Rule 56.” Fed. R. Civ. P. 12(d). At the same time, it has long been the rule that a court may consider
not only the complaint and exhibits attached to it, but also exhibits attached to a defendant’s motion
to dismiss, “so long as they are referred to in the Complaint and are central to the claims contained
therein.” Brent v. Wayne Cty. Dep’t of Hum. Servs., 901 F.3d 656, 694 (6th Cir. 2018) (citation
omitted). A court may also consider public records without converting a Rule 12(b)(6) motion into
a Rule 56 motion, but it cannot take judicial notice of the facts set forth in a public record unless
they “are not subject to reasonable dispute.” Jones v. City of Cincinnati, 521 F.3d 555, 562 (6th
Cir. 2008) (citation omitted); see also Bailey v. City of Ann Arbor, 860 F.3d 382, 386 (6th Cir.
2017) (“[A] court ruling on a motion to dismiss ‘may consider materials in addition to the
complaint if such materials are public records or are otherwise appropriate for the taking of judicial
notice.’” (emphasis in original) (quoting New Eng. Health Care Emps. Pension Fund v. Ernst &
Young, LLP, 336 F.3d 495, 501 (6th Cir. 2003))). In this case, the defendants refer to documents
outside the pleadings that are neither referred to in the Complaint nor central to its claims. To the
extent they are public documents, the facts therein are clearly subject to dispute. The court has not

7
considered these documents in addressing the Motions to Dismiss.3
In addition to Rule 12, complaints alleging FCA violations must comply with Federal Rule
of Civil Procedure 9(b), “because defendants accused of defrauding the federal government have
the same protections as defendants sued for fraud in other contexts.” Prather, 838 F.3d at 760
(quoting Chesbrough v. VPA, P.C., 655 F.3d 461, 466 (6th Cir. 2011)) (internal quotation marks
omitted). Under that rule, “[i]n alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a
person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). To satisfy Rule 9(b)’s particularity
requirement, “a plaintiff, at a minimum, must ‘allege the time, place, and content of the alleged
misrepresentation on which he or she relied; the fraudulent scheme; the fraudulent intent of the
defendants; and the injury resulting from the fraud.’” United States ex rel. Bledsoe v. Cmty. Health
Sys., Inc. (“Bledsoe II”), 501 F.3d 493, 504 (6th Cir. 2007) (quoting Coffey v. Foamex L.P., 2 F.3d
157, 161–62 (6th Cir. 1993)). In the Sixth Circuit, the complaint must identify specific false claims;
it is not sufficient to simply allege a false scheme with particularity. Id.4
Because this case involves multiple defendants, it implicates another aspect of Rule 9(b).
That is, the particularity requirement prohibits plaintiffs from relying on “group pleading.” See

3

These documents include, for example, the Tennessee Department of Health’s Chronic
Pain Guidelines (see Doc. No. 76 at 8 & n.2), the CDC Guideline for Prescribing Opioids for
Chronic Pain (id. at 9 & n.5), and internet articles on allergy testing and chronic pain (id. at 12 &
n.10).
4

There is a circuit split on this issue, with the Fourth, Sixth, Eighth, and Eleventh Circuits
applying the stricter rule, while the Second, Third, Fifth, Seventh, Ninth, Tenth, and D.C. Circuits
“have overtly adopted a more lenient pleading standard,” allowing a “complaint that does not
allege the details of an actually submitted false claim to pass Rule 9(b) muster by alleging
particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong
inference that claims were actually submitted.” United States ex rel. Chorches for Bankr. Est. of
Fabula v. Am. Med. Response, Inc., 865 F.3d 71, 89 (2d Cir. 2017) (internal quotation marks and
citations omitted).

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Sugarlips Bakery, LLC v. A&G Franchising, LLC, No. 3:20-cv-00830, 2022 WL 210135, at *10
(M.D. Tenn. Jan. 24, 2022) (“Mere ‘group pleading’ . . . fails to meet . . . [Rule] 9(b)’s specificity
requirements . . . . ” (citation omitted)). More specifically, the Sixth Circuit has explained that “[a]
complaint may not rely upon blanket references to acts or omissions by all of the defendants.”
United States ex rel. Bledsoe v. Cmty. Health Sys., Inc. (“Bledsoe I”), 342 F.3d 634, 643 (6th Cir.
2003). Rather, under Rule 9(b), “each defendant named in the complaint is entitled to be apprised
of the circumstances surrounding the fraudulent conduct with which he individually stands
charged.” Id. (citation omitted); see also Bledsoe II, 501 F.3d at 510 (“[I]mproperly pled
allegations of fraud do not become adequate merely by placing them in the same complaint with
allegations that are sufficient . . . . Allowing such a complaint to go forward in toto would not
provide defendants with the protections that Rule 9(b) was intended to afford them . . . .”). Thus,
under Rule 9(b), a plaintiff cannot “simply lump[] multiple defendants together without explaining
each defendant’s culpable role.” Sugarlips Bakery, 2022 WL 210135, at *10.
The “knowingly” element of FCA claims is not subject to the particularity requirement and
may instead, be alleged “generally,” subject only to Rule 8. To determine whether a plaintiff’s
factual allegations give rise to an inference of fraudulent intent, “the court must conduct an inquiry
of the competing plausible inferences and must find scienter has been sufficiently pled as long as
a reasonable person would deem the inference of scienter cogent and at least as compelling as any
opposing inference one could draw from the facts alleged.” United States v. Quicken Loans Inc.,
239 F. Supp. 3d 1014, 1024–25 (E.D. Mich. 2017) (quoting Chamberlain v. Reddy Ice Holdings,
Inc., 757 F. Supp. 2d 683, 701 (E.D. Mich. 2010)).

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II.

FACTS AND PROCEDURAL HISTORY
A.

Background

Relator Krista Nicholson filed a qui tam complaint under seal on April 10, 2020. (Doc. No.
1.) The relator’s qui tam complaint alleged numerous fraud schemes and FCA violations, including
the submission of false claims for various categories of medically unnecessary services, as well as
violations of the Anti-Kickback Statute and the Stark law.
In July 2024, after numerous extensions of the deadline, the government elected to
intervene in part, with respect to the relator’s claims under 31 U.S.C. § 3729(a)(1)(A) and (B)
concerning the medical necessity of Urine Drug Testing (“UDT”), allergy testing, and
psychological testing. (See Doc. No. 60.) It declined to intervene with respect to the other claims
in the qui tam complaint. (Doc. No. 61.) The government filed its intervenor Complaint on
September 11, 2024 (Doc. No. 65), and the court subsequently dismissed the relator’s nonintervened qui tam claims. (Doc. No. 71.)
Defendant Clarksville Pain Institute, LLC (“CPI”) was a single-member limited liability
company formed in 2012 with its principal place of business in Clarksville, Tennessee. CPI’s
registered agent was Michael Cox. Debbie Cox was its sole member. (Id. ¶ 17.)
Pain Institute of Nashville, PLC (“PIN”) is a professional limited liability company formed
in 2017 with its principal place of business in Clarksville, Tennessee, at the same address as that
previously used by CPI. PIN’s registered agent and secretary is Michael Cox. When PIN was
formed on February 15, 2017, Debbie Cox held a 99% membership interest, and non-party John
Stanton held a 1% membership interest. Stanton withdrew his membership interest on February
15, 2022. (Id. ¶ 18.) Another individual was a member of PIN until August 7, 2023, when she
transferred her membership interest to a professional limited liability company of which Debbie
Cox is the sole member. (Id. ¶ 20.)

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CPI and PIN—to which the government refers collectively as the “Pain Institute”—are
separate entities, but they operated a single business, a medical clinic (“the clinic”) at 1849
Madison Street in Clarksville, Tennessee during the relevant time, overlapping for at least some
period after PIN was formed in 2017 until CPI and PIN merged on November 1, 2018, with PIN
as the surviving entity.5 (Id. ¶ 19.) Practitioners at the clinic provide pain management treatment
that often involves prescribing opiates to chronic pain patients. (Id. ¶ 29.)
Michael Cox and Debbie Cox are married and reside in Franklin, Tennessee. Michael Cox
was formerly a sales representative in the healthcare industry. Debbie Cox is a licensed nurse
anesthetist. (Id. ¶¶ 23–25.) The Coxes directed and controlled the clinic’s daily operations,
including the operation of an in-house UDT laboratory and the submission of claims for payment
to FHBP. (Id. ¶ 30.) According to the government, the Coxes “implemented their fraudulent
schemes on FHBP” through their operation of the clinic. (Id. ¶ 29.)
The government alleges generally that CPI and PIN, entities “owned or managed” by
Michael Cox and Debbie Cox, billed FHBP for false and/or fraudulent claims for three kinds of
medical testing administered to FHBP beneficiaries: UDT, allergy tests, and psychological tests.
(Id. ¶¶ 1–2.) According to the government, the defendants billed FHBP for tests that
were not rendered, not medically necessary, not used in the treatment of FHBP
beneficiaries, billed pursuant to impermissible blanket orders, and/or not ordered
by the treating practitioner. These services did not comply with material
requirements of FHBP laws, regulations, and program instructions, and as the Pain
Institute and the Coxes knew, were not reimbursable.
(Id. ¶ 3.) The government alleges that the defendants “knew, acted in deliberate ignorance, or acted
in reckless disregard of FHBP requirements” and “submitted claims to FHBP for payment anyway

5

The court refers to them as separate entities, to the extent the allegations in the Complaint
make that possible.

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thereby presenting false claims and making materially false express and implied certifications to
get such claims paid.” (Id. ¶ 4.) These practices allegedly continued from “at least April 2014
through May 2024,” during which period the defendants “knowingly submitted and caused to be
submitted millions of dollars in false claims to FHBP for services that were not reasonable and
necessary for treatment of their patients,” thus causing the government to incur millions of dollars
in damages when FHBP paid the false or fraudulent claims. (Id. ¶ 9.)
Debbie Cox, through CPI, opened the clinic in February 2012, and Michael Cox eventually
quit his medical sales job to work as an employee of the clinic on the “business side.” (Doc. No.
65 ¶¶ 150–42.) The Coxes ran a second location in Whitehouse, Tennessee, which eventually
moved to Springfield, Tennessee. They also started the Cox Family Pharmacy, which operated
from the same suite as the in-house UDT lab in the same suite of offices at 1849 Madison Street,
in Clarksville, Tennessee. (Id. ¶¶ 148–51.) After Tennessee passed a law in 2017, prohibiting pain
clinics from owning a pharmacy within 1,000 feet of a pain clinic, the Coxes sold the Cox Family
Pharmacy to an entity owned by an employee of the pharmacy and an employee of the Coxes’ inhouse UDT lab. (Id. ¶¶ 152–54.)
Michael Cox ran the “business side” of the clinic, including finances, payroll, and ordering
supplies. (Id. ¶ 156.) Debbie Cox performed procedures as a nurse anesthetist at the clinic until
November 2016. (Id. ¶ 157.)
Michael Cox signed the Certification Statement in Section 15 of Form CMS-855B on
behalf of CPI in 2014, in his capacity as both the “delegated official” and “office manager.” Debbie
Cox, as CPI’s “authorized official,” signed the “Certification Statement” in Section 15 of Form
CMS-855B on behalf of CPI in 2014, 2015, 2016, and 2018. She signed the “Certification
Statement” in Section 15 of Form CMS-855B on behalf of PIN in 2017, 2021, and 2022. She

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signed a Certification Statement on a Form CMS-855B in her personal capacity as a practitioner
in 2017. (Doc. No. 65 ¶¶ 48–51.) CPI submitted one of its EDI certifications, signed by Debbie
Cox, to the MAC in April 2013. PIN submitted one of its EDI certifications, signed by Debbie
Cox, to the MAC in January 2021. (Id. ¶¶ 54–55.)
The government asserts that the medical clinic’s “business model” relied on “extracting
revenue from its patients” based on a “‘tests-for-pills’ quid pro quo,” pursuant to which patients
underwent excessive and unnecessary testing and other services to get their prescribed pain
medications. (Id. ¶¶ 159, 161–62.) Although not involved with the medical side of the clinic’s
practice, Michael Cox allegedly “would often try to manipulate processes and influence/intimidate
providers into treating patients in more profitable ways.” (Id. ¶ 163.)
Debbie Cox, in solicitating a physician to join the clinic as a provider, described the clinic’s
patient population as “mainly Medicare and [T]ricare patients” who were “very compliant.” (Id. ¶
164.)
As an example of its assertion that the Coxes made patient-care decisions based on profit,
the government quotes a text exchange between Michael Cox and John Pritchard, then an
employee of the Cox Family Pharmacy, which the Coxes still owned at that time. Pritchard sent
Michael Cox a text stating that the profit for Movantik, a laxative often prescribed with opioids,
was “between $7 and $11” per prescription, to which Cox responded, “Let’s buy just kidding.”
(Id. ¶¶ 165–66.)
The government maintains that the Coxes’ alleged greed played out through their operation
of four distinct “schemes” as identified by the government, two of which concern UDT: the
Standing/Blanket Orders Scheme and the Reflex Testing Scheme. The third was the Allergy
Testing Scheme, and the fourth was the Psychological Testing Scheme.

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B.

The UDT Schemes

The government acknowledges that UDT is often used in the management of chronic pain
patients taking prescribed opioids for long periods of time. UDT is “used both to confirm that
patients are taking, rather than diverting, the drugs that are prescribed to them, and that they are
not taking other drugs not prescribed by the treating physician.” (Doc. No. 65 ¶ 91.) When used
correctly, UDT can be reasonable and medically necessary. (Id. ¶ 92.)
To be a “covered service” and eligible for payment by Medicare, UDT claims must comply
with the MAC’s Local Coverage Determination L35724, Controlled Substance Monitoring and
Drugs of Abuse Testing (“LCD”), which covers services performed on or after October 1, 2015.
(Doc. No. 65 ¶ 108.) The LCD defines the term “standing order” as a “[t]est request for a specific
patient representing repetitive testing to monitor a condition or disease for a limited number of
sequential visits.” (Doc. No. 65 ¶ 110 (quoting LCD L35724 at 4).) By definition, “[r]outine
standing orders for all patients in a physician’s practice are not reasonable and necessary.” (Id.
(quoting LCD L35724 at 13).)
The LCD defines “blanket order” as a “[t]est request that is not for a specific patient” but
is instead “an identical order for all patients in a clinicians’ practice without individualized
decision making at every visit.” (Id. ¶ 111 (quoting LCD L35724 at 5).) The LCD states that any
UDT performed pursuant to a blanket order is not reasonable and necessary and therefore not
eligible for reimbursement. (Id.)
Reflex testing is “[l]aboratory testing that is performed ‘reflexively’ after initial test results
to identify further diagnostic information essential to patient care,” meaning that it is “not
necessarily based on a specific physician’s order.” (Id. ¶ 112 (quoting LCD L35724 at 5).) “Reflex
definitive UDT” is deemed not reasonable and necessary when “presumptive testing is performed
at point of care because the clinician may have sufficient information to manage the patient.” (Id.

14
¶ 113 (quoting LCD L35724 at 13).) In sum, the LCD requires that all UDT orders be
“individualized based on clinical history and risk assessment, and must be documented in the
medical record.” (Id. ¶ 115 (quoting LCD L35724 at 8).)
The government alleges that, “[t]hrough standing and blanket orders, the Coxes pressured
providers to order more UDT with higher rates of reimbursement.” (Id. ¶ 169.) The defendants
also allegedly profited from reflex testing by requiring “mandatory patient re-visits every 28 days
and consistently conducting presumptive and definitive UDT simultaneously.” (Id.)
The clinic has always had an on-site lab for testing UDT samples, located in the same
building as the clinic but in a different suite. (Id. ¶¶ 173, 175.) The clinic performs UDTs at its onsite lab using a complex machine that conducts High Performance Liquid Chromatography
coupled with Mass Spectrometry (“LCMS machine”), which the clinic has owned since 2014. (Id.
¶¶ 102, 177–78.) Unlike point of care (“POC”) tests, LCMS test results are often not available for
several days after the test is performed. (Id. ¶ 104.) The government also explains that,
[w]hen a definitive test is performed on an LC-MS device, there is no medical
purpose or reason for the LC-MS simultaneously to report “presumptive results”
because definitive results contain the same information that a presumptive test
provides, and more.
(Id. ¶ 105.) In addition, even if the LCMS machine runs “the same set of tests on all samples”
simply for convenience and cost-effectiveness, irrespective of medical necessity, the lab may only
bill FHBP “for those tests that are medically reasonable and necessary to treat the beneficiary.”
(Id. ¶¶ 106–07.)
Debbie Cox told a physician whom she was soliciting to join the practice that the LCMS
machine was “a game changer and will pay for itself within a few months. There is special chart

15
verbiage and [CPT] codes6 not to over or under bill or be put on CMS’ radar.” (Id. ¶ 179.)
Michael Cox tracked the clinic’s UDT on a weekly basis, using an Excel spreadsheet
demonstrating how many tests per month were conducted and how those tests broke down by
payor. (Id. ¶¶ 180–81.)
According to the government, the “defendants” collectively “articulated a policy of blanket
and standing orders” for UDT at the medical clinic. (Id. ¶ 182.) The Coxes allegedly disseminated
the blanket and standing orders over the years through text messages, office policies, email, and
verbal in-person communications. (Id. ¶ 183.) The “defendants” have also implemented a policy
of reflex testing since 2014, pursuant to which patients “would be tested for presumptive and
definitive UDT on the same date of service every 28 days.” (Id. ¶ 184.) These “schemes,” rather
than individualized patient care, allegedly drove providers’ testing decisions. (Id. ¶ 185.) The
“schemes” are manifested by “medical records that are often incomplete or lack documentation of
test results, provider orders, and patient discussions.” (Id. ¶ 186.) Providers at the clinic
purportedly “knew the drill and followed the Coxes’ instructions to bill UDT in accordance with
these two schemes.” (Id. ¶ 188.) The government also asserts that the schemes “taint all of the Pain
Institute’s claims for UDT since 2014.” (Id. ¶ 189.)
The government alleges that, irrespective of whatever written policies and treatment
guidelines providers possessed, “the real policy was articulated by the Coxes: testing was
mandatory every 28 days.” (Id. ¶ 194.) As a result, providers’ UDT orders were not based on
specific patient needs and individualized decision making at each patient visit. (Id. ¶ 197.)

6

Current Procedural Terminology Codes (“CPT codes”) precisely identify the services
rendered, and providing accurate CPT codes in claims is material to, and a condition of, payment
for FHBP. (Doc. No. 65 ¶¶ 56, 57.)

16
The medical director for CPI from 2014 through 2016 signed an undated “Urine Drug
Screen Policy” for patients on opioid therapy that directed providers to designate patients as high,
medium, or low risk, based on factors identified in the policy. (Id. ¶¶ 282, 285.) High-risk patients
were to undergo UDT on every visit; medium-risk patients would receive UDT eight times a year;
and low-risk patients would receive UDT four times a year. (Id. ¶ 285.) Patients could be
designated as high risk for many reasons, including being on a certain amount of opioids or being
prescribed benzodiazepines, but providers were to “classify a high risk patient using their level of
experience and comfort level while dealing with a patient on opioid therapy.” (Id.) According to
the government, this policy is inconsistent with the applicable LCDs and meets the definition of
both a blanket order and a standing order for UDT. (Id. ¶ 286.)
PIN’s 2018 written policies and procedures specifically state that “Urine drug screens are
mandatory at the Institute.” (Id. ¶ 199.) Each new patient had to sign a form acknowledging that
urine drug screens were mandatory. (Id. ¶ 200.)
On September 1, 2015, a CPI employee emailed Michael Cox. The email’s subject heading
was “medical necessity for UDT’s for chronic pain patients,” and the body of the email stated:
HI Michael [sic], See below. Kerri.
This patient is a chronic pain patient that is using opiates/opioids and or on other
schedule 2 and 3 medications. Because of the risk of abuse with other prescribed
medications of the same nature not prescribed by this clinic and illicit drugs of
abuse, I am ordering this drug test out of medical necessity for this patients safety
and efficacy and to prevent to the best of my ability this patient to abuse any
prescribed or illicit/illegal drugs.
(Id. ¶¶ 201–02 (“[sic]” in original).) Michael Cox replied, “Thanks!” (Id. ¶ 203.)
No additional information about this exchange exists, but the government infers from it
that the employee was drafting for Michael Cox’s review “language for standing orders in a
patient’s medical record so that UDT could be billed with more frequency.” (Id. ¶ 204.)

17
Michael Cox tracked the profitability of UDT closely, and the Coxes knew that “more
testing meant more money.” (Id. ¶ 209; see id. ¶¶ 205–08, 210–13.)
In February 2016, Michael Cox exchanged emails with CPI’s third party medical billers,
Ron Wood and Michelle Sandlin of Medical Data Services, regarding CIGNA’s new UDT policy,
the maximum number of dates and units for which CIGNA would reimburse UDT, the CPT codes
that CIGNA had declared not medically necessary, and strategies for maximizing reimbursement
for UDT. (Id. ¶¶ 214–20.)
In June 2017, Sandlin notified Michael Cox that Medicare was “conducting a widespread
review” of a specific UDT CPT code, G0483, for medical necessity. (Id. ¶¶ 222–23.)
In November 2017, Sandlin notified Michael Cox of the Medicare LCD applicable to the
same CPT code (G0483); she sent Cox a marked-up copy of the LCD, noting which issues did or
did not apply to the medical clinic. (Id. ¶¶ 224–25.) She pointed out: “Blanket Orders . . . this is
the actual office policy to test each patient across the board. This is NOT [sic] medically necessary
per Medicare Guidelines.” (Id. ¶ 226 (“[sic]” in original).) Sandlin also noted that routine standing
orders were not “necessary” and that “Confirmation UDS is NOT [sic] medical necessary
UNLESS [sic] the POC/Analyzer is negative when it should be positive.” (Id. ¶¶ 226–27 (“[sic]”
in original); see also id. ¶ 228.) Among other things, Sandlin emphasized that “[d]ocumentation is
key to all of this . . . . The providers need to make sure to get specific about the wording of WHY
the UDS is needed.” (Id. ¶ 228.)
Despite Michael Cox’s thus being notified about what would and would not be considered
medically necessary, the clinic’s providers allegedly “continued billing in accordance with the
Standing/Blanket Orders and Reflex Testing Schemes.” (Id. ¶ 229.)

18
In October 2018, Ron Wood sent Michael Cox the LCD on UDT again, again outlining the
“Medical Necessity Guidance” for UDT. (Id. ¶¶ 230–31.)
Later the same month, Debbie Cox sent a text message to several individuals (whose roles
at the clinic are not identified), notifying them that she and Michael Cox, after talking with CPI
providers, had decided to require all patients receiving an opioid prescription be furnished with
Narcan7 and that is “mandatory just like a drug screen.” (Id. ¶ 236.) Patients refusing to comply
by their third visit would be discharged. (Id.) She noted, “This way if there is ever an OD we are
covered and they are taught what to do to prevent a death.” (Id.)
In August 2019, Humana Military sent PIN an “education letter” regarding its UDT
program, specifically noting that it had found that the clinic “bill[ed] an excessive volume of the
highest level of definitive drug testing” and requiring all future definitive drug test claims to be
submitted with “the corresponding medical records and physician orders.” (Id. ¶ 237–38.)
In March 2022, Michael Cox, Debbie Cox, and another third-party biller, Megan Rabbitt,
exchanged text messages about the fact that TRICARE was “pulling charges on every patient” but
was still denying UDT claims as medically unnecessary. (Id. ¶¶ 243–44; see id. ¶ 248.) Debbie
Cox asked Rabbitt if she was “respond[ing] that the patient is high risk for overdosing or that
they’re on a benzo antidepressant or sleep aid” that “put[] them at high risk for overdosing.” (Id.
¶ 245.) Rabbitt told her that it was because they were using “too high of a code for what is done”
and that they had changed the code and were “hoping this will take down the denials.” (Id. ¶ 246;
see also id. ¶ 248.)

7

Narcan, the brand name for the medication naloxone, is an opioid antagonist that “rapidly
reverses an opioid overdose.” See https://nida.nih.gov/publications/drugfacts/naloxone.

19
In June 2022, an integrity contractor for CMS sent PIN a notice of overpayment in the
amount of $16,708.38, pertaining to claims that had been denied for lack of documentation. (Id.
¶¶ 249–50.) The letter also notified the clinic that
interviewed Medicare beneficiaries “stated that you set his/her appointment
schedule every 28 days, which provides for 13 office visits per year instead of 12
. . . you conducts [sic] the highest level of urine drug tests at every visits and do not
explain the medical necessity for the [t]ests nor do you alter the beneficiary’s
medications or plan of care based upon the results of the extensive drug testing.
(Id. ¶ 252 (alterations in original).) Despite this notice, the clinic continued to bill UDT in the same
manner that it had been doing. (Id. ¶ 253.)
Bill Heckle, a consultant for the UDT lab, sent invoices to Michael Cox for his services for
May, June, July, and August 2022, reflecting that the number of presumptive and confirmatory
tests conducted those months were almost identical (960 and 942 for each in May; 1,112 and 1,114
in June; 841 and 880 in July; and 880 and 879 in August). (Id. ¶¶ 254–55, 257–60.) According to
the government, these numbers were so close each month “because the Pain Institute’s practice
was to bill both presumptive and definitive/confirmatory UDT on the same day.” (Id. ¶¶ 256.)
In October 2022, Heckle emailed Michael Cox to tell him:
Regarding reflexing, it looks like reflex testing for your practice lab is not going to
work out. CMS has determined that reflex testing is “not Reasonable” other than at
reference labs. You can still use the guidelines for reflex testing which should
satisfy the medical necessity (for example to verify presumptive Positives UTD).
You can’t just automate it without a provider order.
(Id. ¶ 262.) According to the government, this is the defendants’ “Reflex Testing Scheme in action.”
(Id. ¶ 263.)
In August 2023, another consultant engaged by the medical clinic notified Michael Cox
that CMS had implemented a policy change effective July 1, 2023, pursuant to which claims for
definitive drug testing would automatically be denied “when billed on the same claim with
presumptive tests.” (Id. ¶ 266.) The consultant also provided advice on how to “bypass this edit.”

20
(Id.) At some point, audits conducted by private insurers Blue Cross and United Healthcare
“reflected overpayments and denied claims for UDT.” (Id. ¶ 267.)
Nonetheless, the government claims, Michael Cox “intimidate[d] providers into ordering
more UDT,” telling them things like, “it’s your license” and “it’s on you if you don’t order a drug
screen.” (Id. ¶ 268.)
The government asserts that all of these communications reflect the Coxes’ understanding
of Medicare billing and coding for UDT, that “blanket and standing orders existed at the [medical
clinic] since at least 2014,” and that the clinic “engaged in reflex testing whenever it could.” (Id.
¶¶ 269–71.)
For example, between January 2, 2014 and October 31, 2023, approximately 67% of all
visits to the medical clinic by Medicare patients included a presumptive and definitive UDT on
the same day. (Id. ¶ 274.) It is “improbable” that all of these patients required presumptive and
definitive UDT on the same day. In addition, a large number of the clinic’s patients had return
visits every 28 days. The clinic’s practice model was “to test patients every 28 days regardless of
medical need, with both presumptive and definitive UDT on the same day at almost every visit.”
(Id. ¶¶ 277–80.)
Based on all of these allegations, the government asserts that the defendants “recklessly
disregarded, or were deliberately ignorant of the requirements for billing UDT to FHBP” and
nonetheless “submitted claims to FHBP for UDT services that they knew were not rendered, not
medically necessary, not used in the treatment of FHBP beneficiaries, billed pursuant to
impermissible blanket orders, and/or not ordered by the treating practitioner.” (Id. ¶¶ 290–91.)
C.

The Allergy Testing Scheme

The medical clinic began its allergy testing program in September 2016 and continued
through July 2019. (Id. ¶¶ 296, 301.) The government alleges that the allergy testing program

21
“served no pain management objective.” (Id. ¶¶ 297.) Neither patients nor providers understood
why the clinic offered allergy testing. (Id. ¶ 300.) The government avers that “[a]llergy testing has
nothing to do with pain management.” (Id. ¶ 304.)
Many patient medical records include “handwritten blank sheets” with the heading
“Alternative Pain Management.” (Id. ¶ 302.) The form includes a list of treatment modalities,
apparently as possible alternatives to opioid pain medications, in one column and “dates” in a
second column. (Id. ¶ 303.) The alternative modalities listed include pain cream, DME brace,
allergy test, physical therapy, chiropractic, weight loss, TPI and facet injections, and radiology.
(Id.) The government alleges that the only reason allergy testing shows up on this list of alternative
modalities was because the clinic’s “practice was to get as many patients to do the allergy testing
as possible for money.” (Id. ¶ 305.)
In November 2017, Michael Cox exchanged emails with Kathy Hartman, National Director
of Allergy Programs at Medela Remedium Solutions (“MRS”), regarding reducing the costs of
MRS Allergy Kits if the clinic bought the “entire MRS program” in bulk for its three locations.
(Id. ¶¶ 306–08.) The Complaint references a series of emails a clinic employee sent herself in
April, May, and July 2018 showing lists of allergy test recipients. The government concludes that
these emails establish that the clinic was “tracking how many patients it could convince to do
allergy tests.” (Id. ¶¶ 309–14.)
The government interprets training documents created by the same employee in early 2019
as showing that the clinic was “training employees to push and perform allergy tests on everyone
with insurance regardless of medical need.” (Id. ¶ 322.) One document contained bullet points
stating that allergy intake should be “included with new patient paperwork”; “Allergy tests and
adjunct therapies to be pushed (new patient visit, write on pain level to be transferred to their next

22
office visit ‘fill out AT ppwk.’ . . . The MA’s will ask patient if they would like to have the test
conducted (push this, tell them it counts as an adjunct therapy and it will not be an additional cost
to them.)” (Id. ¶ 316.)
A second training document reflected the following:

(Id. ¶ 321.) Notably, among the criteria listed is the requirement that the patient “have allergy
symptoms.” (Id.) The same document includes “Make sure allergy tests are being conducted”
under “Manager Duties.” (Id. ¶¶ 323–24.)
On March 26, 2019, a clinic employee sent a text message to co-workers Debbie Cox,
Melissa Moore, relator Krista Nicholson, and Macy Hargis, congratulating them on the “allergy
test today” and noting that, “[o]nce we have all of our established patients taken care of we will
only have to do them on our newer patients!” (Id. ¶¶ 325–26.) Debbie Cox responded, “I know 4
of them . . . impressive!!!” (Id. ¶ 327; see also id. ¶ 328.) According to the plaintiff, these
documents confirm that the clinic was “conducting allergy tests on everyone” and that the “Coxes’

23
goal was to test everyone,” irrespective of individual patients’ medical need and not based on
individualized decision-making. (Id. ¶¶ 329–32.)
Based on these allegations, the government avers that the defendants knowingly submitted
claims to FHBP for allergy testing services that they knew or should have known were not
medically necessary, were not used to treat FHBP beneficiaries, and/or were billed “pursuant to
impermissible blanket orders.” (Id. ¶ 334.)
D.

The Psychological Testing Scheme

The government alleges that the defendants had a scheme to “bill reflexively” for as much
psychological testing as possible, irrespective of individual patients’ medical needs. (Id. ¶ 338.)
“Patients would be tested when they came to the Institute on an iPad, and the results of those
screenings were often never discussed with the patient.” (Id. ¶ 339.) Michael Cox purportedly
“pressure[d] providers to order psychological tests,” telling them “there was a state law requiring
them to order testing,” even though he himself was not a medical practitioner. (Id. ¶ 340.) As a
result, providers ordered testing, but their orders “were not specific to the medical needs of patients
and were not based on individualized decision-making at each patient’s visit.” (Id. ¶ 342.)
Humana Military notified the medical clinic in August 2019 that it would require medical
records to substantiate any future claims billed for substance abuse assessments or psychological
testing. (Id. ¶¶ 343–44.) In January 2022, Blue Cross Blue Shield of Tennessee denied payment
for 124 claims under CPT code 96136 (for psychological or neuropsychological test
administration) because the providers were not qualified to administer and interpret the test results
for this type of test. (Id. ¶¶ 345–46.)
In January 2022, a clinic medical provider texted a clinic employee a photo of a document
titled, “CPI Tablet Schedule 2022,” which showed for each month of the year the specific
psychological tests CPI would be “running that month,” along with the statement: “So the months

24
96138 [CPT code] is written in the box is the months we’re doing that specific test.” (Id. ¶¶ 347–
49; see id. ¶ 343.)
In February 2022 and August 2023, Blue Cross denied payment for claims for which the
providers had “improperly billed for psychological testing performed by nurse practitioners.” (Id.
¶¶ 354, 355.) Other audits by Blue Cross and United Health similarly denied claims for
psychological testing performed at the clinic. (Id. ¶ 356.)
Based on these allegations, the government avers that the defendants submitted claims to
FHBP for psychological testing services that they knew were not medically necessary, were not
used in the treatment of FHBP beneficiaries, and/or were billed pursuant to impermissible blanket
orders. (Id. ¶ 358.)
From April 2010 through May 9, 2024, FHBP compensated the pain clinics nearly $15
million for UDT, allergy testing, and psychological testing. On May 13, 2024, CMS suspended all
Medicare payments to the clinic. (Id. ¶¶ 360, 362.)
E.

Examples of False Claims

The government provides examples of what it characterizes as “illustrative samples of the
types of false claims” the defendants submitted to FHBP between February 2015 and June 2021.
(Id. ¶ 364.)
The Complaint states that Patient A, a Medicare beneficiary, became a CPI patient in
September 2015. This patient’s progress note for October 21, 2015 states: “POC [point of care]
WNL [within normal limits] for meds prescribed,” but despite the initial test results’ being within
normal limits, “definitive lab was ordered today for quantitative results that are necessary for
proper treatment.” (Id. ¶ 365(A)(i)–(ii).)
Billing records for November 18, 2015 show that Patient A received a preliminary screen
followed by a confirmatory test for fourteen drug classes ordered on the same day, less than a

25
month after the presumptive and definitive testing ordered on October 21, 2015. (Id. ¶¶
365(A)(vi)–(vii).) The progress note for November 18, 2015 again notes: “WNL [within normal
limits] for meds prescribed, but definitive lab was ordered today for quantitative results that are
necessary for proper treatment.” (Id. ¶ 365(A)(vii).)
The medical clinic billed Medicare $167 for the preliminary screen and $512 for the
confirmatory testing and was reimbursed by Medicare in the amount of $679 on or about
November 25, 2015. (Id. ¶¶ 365(A)(vii), (xii).) The defendants allegedly knew that this amount
was not properly reimbursable, because the testing “was not medically necessary, [was] not used
in the treatment of [Patient A], or [was] billed pursuant to impermissible blanket/reflex/standing
orders.” (Id. ¶ 365(A)(xii).)
Patient A’s progress note for March 10, 2016 states:
This patient is a chronic pain patient that is using opiates/opioids and or on other
schedule 2 and 3 medications. Because of the risk of abuse with other prescribed
medications of the same nature not prescribed by this clinic and illicit drugs of
abuse I am ordering this drug test out of medical necessity for this patient’s safety
and efficacy and to prevent to the best of my ability this patient to abuse any
prescribed or illicit / illegal drugs.
(Id. ¶ 365(iii).) The government points out that this language essentially mirrors the language in
an email to Michael Cox on September 1, 2015, which suggests that the “defendants” were cutting
and pasting patient notes in Patient A’s records. (Id. ¶ 365(iv)–(v).)
The government alleges that Patient B became a patient at PIN in September 2019. Billing
data reflects that PIN billed Medicare under CPT codes 80307 and G0483 for UDT on the same
dates of service for Patient B on September 11, 2019, September 25, 2019, October 23, 2019,
November 20, 2019, January 20, 2020, March 16, 2020, April 13, 2020, and May 11, 2020. (Id.
¶ 365(B)(i)–(ii).) Medicare paid PIN approximately $2,439 for this series of claims, which the
defendants allegedly knew was not reimbursable because the UDT services “were not medically

26
necessary, not used in the treatment of the beneficiary, or billed pursuant to impermissible blanket
orders.” (Id. ¶ 365(B)(ii).)
Patient B’s record also contains a progress note for February 17, 2020 showing that, on
that day, the patient “answered various questions for a psychological test called COMM for
aberrant behavior.” (Id. ¶ 365(B)(iv).) The progress note, signed by provider Meghan Anderson,
includes the following statement:
Per the Tennessee State Requirements and Tracy Alcott, General Sessions
Attorney, we will perform psychological testing at every visit for a patient on
benzodiazepine therapy and every other visit for all other patients to screen for risk
of depression and misuse of opioid therapy.
(Id.) The note also states: “Risk Assessment: High risk – behavioral – for potential medication
misuse or abuse due COMM score of 11 on 2/17/2020, we will continue with definitive UDS at
least six time per year[.]” (Id.) However, Patient B’s psychological test results for April and May
2020 showed lower risk, but the provider did not scale back the frequency of psychological testing.
(Id. ¶ 365(B)(v)–(vi).) CMS was billed and reimbursed the clinic in the amount of $29.77 for
psychological testing that the defendants knew was not medically necessary, not used in the
treatment of Patient B, or was billed pursuant to a blanket order. (Id. ¶ 365(B)(vii).)
Patient D was another PIN patient who received UDT presumptive and definitive testing.
According to the treatment records, he regularly received presumptive testing and occasionally
also received definitive testing. However, when the patient’s presumptive test was positive for
benzodiazepines in September 2019, his progress note for that day states, “Urine drug screen
completed today; POC,” and “Benzo Use: none,” and, although the patient had in fact tested
positive for benzodiazepines, no definitive test was ordered. (Id. ¶ 365(D)(i)–(viii).) His treatment
notes for October 2019 similarly states, “Benzo Use: None,” but that his POC UDT in September
had been positive for “Opi.” (Id. ¶ 365(C)(ix).) In other words, the government says, the medical

27
clinic was “billing for UDT and not even looking at the results to inform decisions on how much
UDT to order and when.” (Id. ¶ 365(D)(xi).) Medicare reimbursed the medical clinic more than
$1,000 on this series of claims for services that, according to the government, the defendants knew
or should have known were not medically necessary, were not used in the treatment of the
beneficiary, or were billed pursuant to impermissible blanket orders. (Id. ¶ 365(D)(xii).)
Likewise, Patient E, also a Medicare beneficiary, received presumptive and definitive
UDT, billed under CPT codes 80307 and G0483, on the same day at roughly monthly visits from
July 2019 through June 2021. (Id. ¶ 365(E)(i)–(iii).) Upon beginning treatment in July 2019, the
patient signed a document titled “Three Strike Policy,” which notified the patient that the
“practice” had a policy pursuant to which a patient could be discharged for misuse of narcotics
medication. (Id. ¶ 365(E)(iv).) In September 2020, the patient signed another document agreeing
not to use illegal drugs while on prescriptions from PIN. (Id. ¶ 365(E)(v).) The patient
subsequently received UDT test results that were inconsistent with prescribed medications in
March 2020 for which no written warning was issued. The patient received written warnings about
noncompliance after visits in May 2020, June 2020, and February 2021, but he was not discharged.
He received a verbal warning in June 2021. According to the government, Medicare reimbursed
PIN more than $6,700 for UDT for this patient which the defendants knew “was not reimbursable
because the billed services were not medically necessary, not used in the treatment of the
beneficiary, or billed pursuant to impermissible blanket orders.” (Id. ¶ 365(E)(xiii).)
Only one of the examples cited by the government involved a patient who received allergy
testing. Patient C, a patient at the medical clinic beginning in May 2016, underwent allergy testing
(CPT code 95004) on October 30, 2017, purportedly based on a diagnosis of allergic rhinitis. (Id.
¶ 365(C)(i)–(ii).) The “Chief Complaint” on that date was recorded as “Med 13(Y)–ONLY

28
ALLERGY TEST PERFORMED THIS DOS [date of service].” (Id. ¶ 365(C)(iii).) According to
the government, no justification for the test is found in the record, no follow-up was noted, no test
result or interpretation is in the record, and the treatment note does not reflect the finding of any
symptoms consistent with allergy. (Id. ¶ 365(C)(iv).) Medicare reimbursed the medical clinic in
the amount of $290 for medically unnecessary and otherwise non-reimbursable allergy testing. (Id.
¶ 365(C)(v).)
Patient F, a clinic patient in 2018 and 2019, received UDT and psychological testing on a
monthly basis, despite being designated as “low risk” for both substance abuse and psychological
issues. (Id. ¶ 365(F)(i)–(xvi).) Patient G was a clinic patient from February–June 2015. The patient
underwent both presumptive and definitive UDT on three dates in February 2015 despite a clear
lack of need, and the patient’s progress notes do not reflect an individualized assessment of the
necessity for the UDT. (Id. ¶ 365(G)(i)–(vii).). These services resulted in the billing of Medicare
or the VA for unnecessary services that were reimbursed by the government. (See also Summary
of Claims, Doc. No. 65-1.)
F.

The Government’s Claims

The government’s First Claim for Relief asserts that the defendants collectively violated
31 U.S.C. § 3729(a)(1)(A) by knowingly, as that term is defined by the statute, presenting or
causing to be presented materially false and fraudulent claims for payment or approval to the
United States, specifically claims for reimbursement for UDT, psychological tests, and allergy
tests performed on FHBP beneficiaries, when the claims were not payable either because the
services were not rendered,8 the services were not medically necessary (including because they

8

The government provides no examples, and no allegations, of claims relating to tests or
other services that were not actually performed.

29
were being billed pursuant to impermissible blanket orders and not being ordered by the treating
provider), “and/or” the tests were not being used in the treatment of the FHBP beneficiaries. (Doc.
No. 65 ¶ 367.)
Its Second Claim for Relief asserts that the defendants violated § 3729(a)(1)(B) by
knowingly submitting the false statements, certifications and representations on claim forms, the
EDI, and multiple CMS-855b forms to obtain approval for, and payment by, the United States on
the false or fraudulent claims that also violated § 3729(a)(1)(A). (Doc. No. 65 ¶ 370.)
The factual allegations supporting the federal common law claims for payment by mistake
and unjust enrichment are essentially the same as those supporting the FCA claims, but payment
by mistake and unjust enrichment do not require fraud on the part of the defendants. (Id. ¶¶ 373–
74, 376–77.)
III.

THE COXES’ MOTION TO DISMISS FCA CLAIMS
A.

Allegations Supporting FCA Claims

The individual defendants argue that the Complaint fails to allege particularized facts as to
each of them establishing that they caused any providers to submit false claims and instead “relies
on the broadest possible allegations of ownership and alleged responsibility for practices,
procedures and financial performance untethered from any specific false claim or false
statements.” (Doc. No. 80 at 12.)
In response, the government points to the following as “just examples” of the particular
facts establishing the Coxes’ individual liability:
30. At all times relevant to this Complaint, Michael and Debbie Cox
directed and controlled the Pain Institute’s daily operations, including the operation
of an in- house UDT laboratory and the submission of claims for payment to FHBP.
163. Despite having no medical training, Michael Cox would often try to
manipulate processes and influence/intimidate providers into treating patients in
more profitable ways.

30
179. In a text message soliciting a physician to join the Pain Institute,
Debbie Cox stated regarding the LCMS machine, “That machine is a game changer
and will pay for itself within a few months. There is special chart verbiage and cpt
codes not to over or under bill or be put on CMS’ radar.”
183. These blanket and standing orders were disseminated by various ways
by Debbie and Michael Cox over the years, sometimes in text messages, sometimes
expressed in office policies, sometimes in person, and sometimes in emails.
232. On October 25, 2018, Debbie Cox sent a text message to John Stanton,
John Prichard, Stacie Broadbent Wyatt, and six other individuals. In that message,
she communicated a new policy requiring all patients to have Narcan, regardless of
medical need.
233. The text message stated that Narcan “is mandatory just like a drug
screen.”
234. In other words, urine drug screens were mandatory for everyone at
each office visit.
235. As stated in the text message, Michael and Debbie Cox were making
decisions about the clinic’s practices together, and then communicating those
decisions to staff.
245. Debbie Cox responded, “Do you respond that the patient is high risk
for overdosing or that they’re on a benzo antidepressant or sleep aid.? [sic] Which
puts them at high risk for overdosing?”
246. Rabbitt stated: “It was because we were using the code G0483. They
state it is too high of a code for what is done. We have changed the code to G0482
and I am hoping this will take down the denials.”
247. Debbie Cox’s answer about a suggested response ignores the medical
needs of any specific patient – it wholesale classifies people as high risk based on
factors that may or may not be specific to any one patient.
268. Michael Cox would intimidate providers into ordering more UDT,
telling providers things like “it’s your license” and “it’s on you if you don’t order a
drug screen.”
325. On March 26, 2019, Stacie Broadbent Wyatt sent a text message to her
co-workers Debbie Cox, Melissa Moore, Krista Nicholson, and Macy Hargis.
326. In that text message, Ms. Wyatt stated: “Great job on the allergy test
today, girls! I will continue to put notes in. Once we have all of our established
patients taken care of we will only have to do them on our newer patients!”

31
327. Debbie Cox responded, “I know 4 of them . . . impressive!!!” followed
by the emoji inspired by Edward Munch’s noted painting, The Scream.
340. Michael Cox would pressure providers to order psychological tests,
telling providers that there was a state law requiring them to order testing, though
he himself was not a medical clinician.
(Doc. No. 81 at 17 –19 (quoting Doc. No. 65).)9
The government maintains that these allegations are sufficient to establish the Coxes’
individual liability, that the cases on which the Coxes rely are distinguishable, and that other cases
decided within the Sixth Circuit have repeatedly held that similarly pleaded complaints alleged
sufficient facts to establish clinic owners’ and managers’ liability.
B.

Discussion

The FCA applies to individual defendants who “cause” submission of false claims, even if
they were not personally involved in submitting the claims at issue. United States ex rel. Kramer
v. Doyle, No. 1:18-CV-373, 2022 WL 1186182, at *12 (S.D. Ohio Apr. 21, 2022). However, the
FCA is generally understood to require “some action by the defendant whereby the claim is
presented or caused to be presented.” Id. (quoting United States v. Murphy, 937 F.2d 1032, 1039
(6th Cir. 1991)).
In Kramer, the government brought claims against the owner of several dental practices
based on a theory that he had caused the submission of false claims for reimbursement by

9

The only additional substantive allegation involving Debbie Cox that the court has located
in the Complaint is this:
164. In a text message soliciting a physician to join the Pain Institute, Debbie Cox
stated, “Our patients are very compliant[,]” and explained that the practice’s referrals were
“mainly Medicare and [T]ricare patients.”
(Doc. No. 65 ¶ 164.) The Complaint also contains a few additional allegations about Michael Cox,
including that he appeared to approve standardized language for “standing orders” for UDT in a
September email exchange with a clinic employee and that he closely tracked how much money
the clinic made on UDT and on the different types of tests. (Id. ¶¶ 201–13.)

32
Medicare. In support of the claims against the owner, the operative complaint alleged that he set
financial goals for the practices and pursued them by making telephone calls to employees who
did not meet them. It did not, however, allege that any employee who “treated one of the example
patients ever received a phone call . . . about revenue, nor. . . provide even approximate timing,
content, or participants in any specific phone call.” Id. at *13. The complaint did not allege
specifics about how the owner personally set or communicated revenue targets; nor did it allege
that he instructed employees to provide unnecessary services or created incentives related to the
provision of specific services. Id. Under these circumstances, the court found the allegations in the
complaint “too general and conclusory to state with particularity that [the defendant owner]
proximately caused the submission of any of the identified false claims” submitted by the dental
practices he owned, as the complaint failed to “identify the ‘who, what, when, where, and how’ of
[the owner’s] role in the submission of any identified false claim.” Id. (quoting Sanderson v. HCAThe Healthcare Co., 447 F.3d 873, 877 (6th Cir. 2006)).
Conversely, in United States ex rel. Norris v. Anderson, 271 F. Supp. 3d 950, 955 (M.D.
Tenn. 2017), Judge Crenshaw of this court rejected arguments advanced by an individual and his
management company “that they simply managed” the pain clinics that they controlled and that
they could not be liable for any allegedly wrongful “upcoding” in claims submitted by the clinics
to Medicare. There, the complaint alleged, among other things, that defendant Anderson personally
instructed billing employees at the clinics to bill using a specific CPT code, instead of a lower code
that would have provided less in reimbursement, for all established patient office visits, despite
actual knowledge that clinics had not provided the patients with services that were reimbursable
under that CPT code. Id. When questioned by employees, the individual defendant reiterated that
employees were to “upcode.” Id. The government also alleged that the defendants oversaw all

33
billing at the four clinics, caused the submission of false claims for reimbursement, and did so
improperly, insofar as they knew that the upcoding caused the submission of claims for services
that were not provided.
Likewise, in United States ex rel. Odom v. SouthEast Eye Specialists, PLLC, 570 F. Supp.
3d 561, 583 (M.D. Tenn. 2021) (Crenshaw, C.J.), the court recognized that a defendant may be
liable under the FCA if it pursues a scheme that ultimately results in the submission of a false
claim, even if the defendant does not participate in the actual submission of the claim. Under such
a theory, “a complaint is adequate where it alleges that the defendants set company policy and
implemented the ‘financial incentives designed to induce the submission of false claims.’” Id.
(quoting United States ex rel. Alt v. Anesthesia Servs. Assocs., PLLC, No. 3:16-cv-0549, 2019 WL
7372510, at *18 (M.D. Tenn. Dec. 31, 2019)). In Odom, the government expressly alleged that the
individual defendants were not only the co-founders, part owners, and officers of the corporate
defendant, they were “directly and personally involved” in implementing the “co-management
model”—which is described at length—knowing that this model violated the Anti-Kickback
statute, knowingly caused the submission of false claims in violation of the Anti-Kickback statute,
personally marketed the illegal co-management scheme at seminars designed to induce others to
engage in the scheme, personally delivered kick-back payments to “high referring optometrists,”
and so forth. Id. at 580.
1.

Debbie Cox’s Individual Liability

The allegations regarding Debbie Cox’s involvement in the alleged schemes are sparse.
The government alleges that she was the sole member of CPI, held a 99% ownership interest in
PIN, “controlled” both entities, and “directed and controlled” their daily operations and the
submission of claims for payment to FHBP. (Doc. No. 65 ¶¶ 17, 18, 21, 30.) She signed EDIs and
Certification Forms on the CMS-855B forms. (Id. ¶¶ 48, 50, 54, 55.) Otherwise, the government

34
alleges that “defendants” collectively articulated a policy of blanket and standing orders and that
Debbie (and Michael) “disseminated” these orders in “various ways . . . over the years, sometimes
in text messages, sometimes expressed in office policies, sometimes in person, and sometimes in
emails.” (Id. ¶¶ 182–83.)
These communications are not described, however. One text message identified as
evidence of such policies is the one in which Debbie Cox disseminated a new policy requiring all
patients to be furnished with Narcan and informed clinic employees that Narcan would be
“mandatory just like a drug screen.” (Id. ¶¶ 232–33, 236.) While the court must, at this juncture,
draw all reasonable inferences in favor of the government, as the plaintiff, this text message cannot
plausibly be construed as confirming, as the government claims, that providers were required to
order “urine drug screens . . . for everyone at each office visit.” (Id. ¶ 233.) At most, this text can
plausibly be construed to mean that patients receiving long-term opioid treatment must undergo
drug screens in certain situations, but the frequency and scope of such screens is not specified.10
In short, the text message does not confirm or even imply the existence of the UDT schemes
alleged in this lawsuit.
Next, the government points to an exchange of emails between Debbie Cox and PIN’s
medical biller at that time, in which Cox asked questions about why TRICARE was denying UDT
claims as medically unnecessary. She asked the biller, Megan Rabbitt, if Rabbitt was explaining
that the patients were at high risk for overdosing, and Rabbitt explained that TRICARE had told
her that they were using the wrong code for what was done. (Id. ¶¶ 243–46.) The government
draws the conclusion from Debbie Cox’s question that Cox was “ignor[ing] the medical needs of

10

Accord, e.g., Tenn. Code Ann. § 53-11-308(g) (“Any prescribers of opioids . . . to
patients who are in chronic, long-term drug therapy for ninety (90) days or longer shall consider
mandatory urine drug testing.” (emphasis added)).

35
any specific patient” and “wholesale classif[ying] people as high risk based on factors that may or
may not be specific to any one patient.” (Id. ¶ 247.) Again, this inference is not plausible, since
Cox was not actually providing treatment or classifying any patient and was, instead, simply asking
questions.
Additionally, Debbie Cox made comments to encourage new practitioners to join the
practice, touting the benefits of the LCMS machine and describing the clinic’s patients as generally
“compliant.” (Doc. No. 65 ¶¶ 169, 174.) These comments are not evidence of the alleged schemes.
Finally, Debbie Cox was on a text thread about the clinic’s efforts to offer allergy testing to clinic
patients, and she was enthusiastic about the four allergy tests that had been performed that day.
Cox is not alleged to have actually presented false claims as the provider of services, and
the court understands the allegations against her to be based on her having caused the presentment
of false claims. Aside from alleging broad oversight and control of the entity defendants, however,
the Complaint contains no specific allegations about how Debbie Cox caused the presentment of
any false claims. As in Kramer, the mere fact that she owned the entities is not sufficient. There is
no evidence that she treated any of the specific patients for whom false claims were presented, that
she submitted those claims, that she played any role in the submission of the claims, or that she
even knew about them. See Kramer, 2022 WL 1186182, at *12. While the FCA applies to
individuals who “cause” the submission of false claims, even if they are not personally involved
in submitting them, the FCA “still requires ‘some action by the defendant whereby the claim is
presented or caused to be presented.’” Id. (quoting Murphy, 937 F.2d at 1039). The government’s
claims against Debbie Cox are entirely conclusory, with no particular fact establishing her
involvement in any of the alleged schemes or in pressuring any of the individual providers at either
CPI or PIN to submit false claims. In short, the Complaint does not identify the “who, what, when,

36
where, and how” of Debbie Cox’s role in the submission of any identified false claim. Accord id.
at *13; see also Sanderson, 447 F.3d at 877.
The government does not adequately respond to the Motion to Dismiss filed on behalf of
Debbie Cox and makes only a half-hearted effort to justify the claims. The allegations against her
do not satisfy Rule 9(b) and are subject to dismissal on that basis. The court does not reach the
question of Debbie Cox’s knowledge of the submission of false claims.
2.

Michael Cox’s Individual Liability

The claims against Michael Cox fare little better, as the allegations involving him are no
less vague and conclusory. He is alleged to have “pressured” providers by telling them things like
“it’s your license,” and “it’s on you if you don’t order a drug screen.” (Doc. No. 65 ¶ 268.) Aside
from the fact that these statements are not alleged with the requisite particularity under Rule 9(b),
they are also inescapably true: providers have responsibility for ordering medically necessary
testing, and their failure to do so that results in certain outcomes could jeopardize their licensure.
Michael Cox is also alleged to have falsely told providers that state law required psychological
testing. This statement, too, is not alleged with the requisite particularity under Rule 9(b): there is
no indication as to why it was false, when the statement was made, in what context, or to whom
he made that statement.
The fact that a September 1, 2015 email from a clinic employee to Michael Cox containing
language regarding the medical necessity of UDT, which Cox appeared to approve, is identical to
language found in a patient file dated March 10, 2016 is potentially suspicious. (See id. ¶¶ 202–
03, 365(A)(iii).) However, to conclude from that single email that Michael Cox personally devised
a scheme to bill medically unnecessary services, communicated that scheme to providers, and
incentivized them to follow it requires many inferential leaps and does not satisfy Rule 9(b)’s
particularized pleading requirement.

37
Michael Cox is alleged to have closely tracked the financial performance of the clinic and
the amount of money the clinic received for each test performed, and the Complaint alleges very
generally that he set company policy. But merely tracking financial performance is not sufficient
to give rise to an inference that he caused the submission of false claims. Notably, like the
defendant in Kramer, Michael Cox is not alleged to have set or communicated revenue targets for
providers, to have instructed providers to provide unnecessary services, or to have created any
incentives related to the provision of specific services. Kramer, 2022 WL 1186182, at *13. Unlike
in Odom, the Complaint here contains no express allegations that Michael Cox “implemented . . .
financial incentives designed to induce the submission of false claims.” Odom, 570 F. Supp. 3d at
583 (citation and internal quotation marks omitted). And, unlike the defendant in Norris, Michael
Cox is not alleged to have specifically instructed providers to upcode. Norris, 271 F. Supp. 3d at
955. The allegations of the supposed “pressure” applied by Michael Cox is nothing like those
found sufficient to establish a causal connection to the submission of false claims in United States
ex rel. Hayward v. SavaSeniorCare, LLC, No. 3:11-00821, 2016 WL 5395949 (M.D. Tenn. Sept.
27, 2016), where employees were “systematically” pressured to meet predetermined billing
“goals” “through various devices, including action plans, performance evaluations, calls and visits
to facilities, threats of repercussions or termination for poor performers, and bonuses for those that
did well.”
As with Debbie Cox, the conclusory allegations fail to identify the “who, what, when,
where, and how” of Michael Cox’s causal role in the submission of any identified false claim and,
therefore, fail to state a claim against him under the FCA.
IV.

THE ENTITY DEFENDANTS’ MOTIONS TO DISMISS FCA CLAIMS
While the Complaint contains few facts concerning the operational structure of the pain

clinic operated by CPI and PIN, it clearly alleges that Debbie Cox and Michael Cox controlled the

38
business operations of the clinic. If the Complaint had alleged facts sufficient to establish the
individual defendants’ liability under the FCA, it would necessarily have also alleged facts
sufficient to state FCA claims against the entity defendants, based simply on the allegations that
the Coxes acted on behalf of the entities as well as on their own behalf.
Having concluded, however, that the Complaint fails to state colorable claims against the
individuals for violations of the FCA, the question remains whether it plausibly alleges FCA
violations against the entities based on other allegations in the Complaint, including those
concerning the specific examples of allegedly false claims. The court finds that it does not. Every
other opinion to which either party has directed the court’s attention (and those the court has
located through its own research) that have permitted similar FCA claims to survive a motion to
dismiss have involved allegations of specific facts indicating the existence of actual schemes to
defraud and the knowing involvement of individuals acting on behalf of the entities in directing
employees of the entity to submit false or fraudulent claims. Such detailed allegations are sorely
lacking in this case. The government instead relies on conclusory assertions and seeks to have the
court draw inferences from vague and ambiguous communications the context for which is not
explained. The court finds, in short, that the Complaint sketches a broad theory of fraudulent
schemes but fails to plead particularized details of those schemes as required by Rule 9(b), fails to
plead facts sufficient to show that any tests ordered by CPI’s or PIN’s providers (none of whom
are identified) were medically unnecessary, and fails to allege facts showing that CPI or PIN acted
with the requisite knowledge of the submission of any allegedly false claims, as discussed in
greater detail hereafter.

39
A.

The UDT Schemes

Regarding the blanket/standing order scheme specifically, as the defendants point out:
The Complaint identifies no actual standing or blanket order in any patient’s
medical record; it alleges no document containing a policy for standing or blanket
orders; it points to no emails, text messages, or other communications directing
CPI’s and PIN’s providers to use standing or blanket orders; it cites no instance
where Debbie Cox, Michael Cox, or any other individual instructed a provider to
order a UDT or CPI’s and PIN’s third-party biller to submit a UDT claim; it does
not contend that providers were rewarded or disciplined based on their UDT
ordering patterns; and it mentions not a single instance where any provider believed
they were ordering a medically unnecessary UDT. In the absence of the foregoing,
the Complaint invites the Court to infer a fraud scheme in lieu of pleading the
requisite detailed facts.
(Doc. No. 76 at 16.) This summation fairly identifies the problems in the Complaint.
Instead of details, the Complaint contains conclusory, essentially tautological assertions
that CPI and PIN billed FHBP for UDT that was not medically necessary or used in the treatment
of patients and was “billed pursuant to impermissible blanket orders and/or not ordered by the
treating practitioner.” (Doc. No. 65 ¶ 3.) It alleges a quid pro quo scheme, pursuant to which
patients were required to undergo unnecessary testing in exchange for receiving their opiate
prescriptions (id. ¶ 162), but the Complaint does not provide actual examples of any such quid pro
quo interaction; it asserts that providers “knew the drill” (id. ¶ 188)—i.e., knew that they were
required to order unnecessary testing—but it does not contain any allegations by any actual
providers that they were pressured or instructed to conduct, or bill for, unnecessary UDT. It broadly
alleges the existence of blanket and standing orders but does not show the existence of any such
order in any patient’s record and provides no specifics about such orders, such as who articulated
them, to whom, what they stated exactly, when the orders were issued, or how they were
implemented.
The Complaint alleges that the entities tracked business metrics and accuses Debbie and
Michael Cox of being driven by greed and profit (see, e.g., id. ¶¶ 159, 168, 180–81, 192, 205–13,

40
269), but keeping track of profits and even being driven to profit are not illegal and do not equate
to evidence of a scheme to defraud.
The Complaint alleges instances in which CPI or PIN sought or received advice from
outside consultants and billing companies for assistance with billing and compliance. The
government asks the court to infer from these communications the existence of the alleged
schemes. While such inferences would arguably be permissible if the government only needed to
satisfy Rule 8, the attenuated inferences the government asks the court to draw here do not satisfy
Rule 9(b)’s particularity requirement. Likewise, the government’s reliance on one CMS contractor
audit and several audits by private insurance companies that identified overpayments is misplaced,
particularly given that none of these audits is alleged to have found improper billing based on
standing orders or blanket orders.
Finally, the statistics on which the government relies, standing alone and even in
conjunction with the other allegations in the Complaint, are not sufficient to support the fraud
allegations. These statistics certainly give rise to a reasonable inference of an unnecessarily high
level of UDT, but a mere “improbability” that all of the testing for which CPI and PIN billed was
medically necessary again does not satisfy the government’s obligation to plead with particularity
the facts showing that the defendants devised and implemented a fraudulent scheme. Accord, e.g.,
U.S. ex rel. Integra Med Analytics, L.L.C. v. Baylor Scott & White Health, 816 F. App’x 892, 89798 (5th Cir. 2020) (noting that statistical data may be used to satisfy Rule 9(b) “when paired with
particular details”); U.S. ex rel. Winnon v. Lozano, No. CV 17-2433 (RJL), 2023 WL 6065162, at
*6 (D.D.C. Sept. 18, 2023) (finding that the relator’s “reliance on the comparison of statistical
averages . . . , without also pleading ‘particular details of a scheme to submit false claims,’ does

41
not meet the particularity requirements of Rule 9(b)” (quoting U.S. ex rel. Heath v. AT & T, Inc.,
791 F.3d 112, 126 (D.C. Cir. 2015))).
Regarding the reflex testing scheme, the government alleges that, “between January 2,
2014, and October 31, 2023, approximately 67% of all visits to the Pain Institute for Medicare
beneficiaries included a presumptive and a definitive UDT on the same day” and that, “[b]etween
January 2, 2014, and October 31, 2023, out of all Medicare beneficiary visits for UDT to the Pain
Institute, approximately 80% were for presumptive and definitive UDT; approximately 14% were
for definitive only, and approximately 5% were presumptive only.” (Doc. No. 65 ¶¶ 274, 276.) As
the government also alleges, “[i] is improbable that 67% of visits to the Pain Institute for Medicare
beneficiaries required presumptive and definitive UDT on the same day.” (Id. ¶ 275.)
The court accepts that this sheer volume of UDT, particularly the fact that such testing
usually included presumptive and definitive testing on the same day, gives rise to a reasonable
inference that not all such testing was medically necessary or reasonable. The problem, again, is
that the Complaint does not pair these statistics with any details about the existence of a scheme
requiring reflexive testing, showing that reflex testing was actually occurring—that is, that the
definitive testing was being performed and billed without an order from the provider—or the
implementation of such a scheme by CPI or PIN.
The government points to billing invoices submitted by Bill Heckle at PL Consultants to
PIN that show a similar number of presumptive and quantitative testing each month for a period
of four months in 2022 and an email from Heckle to Michael Cox stating, “it looks like reflex
testing for your practice lab is not going to work out. CMS has determined that reflex testing is
‘not Reasonable’ other than at reference labs. You can still use the guidelines for reflex testing
which should satisfy the medical necessity (for example to verify presumptive Positives UTD).

42
You can’t just automate it without a provider order.” (Doc. No. 65 ¶ 262.) The government states,
“This is the Reflex Testing Scheme in action.” (Id. ¶ 263.) But again, the details of this scheme are
not particularized. The Complaint does not contain detailed allegations showing that the
presumptive and definitive testing was for the same patients or even on the same day, that the tests
were performed without a provider’s order, or that any of them was medically unnecessary. The
government, instead, asks the court to draw these conclusions, and it considers Heckle’s email to
be a smoking gun. But it is not. The government provides no context for the email. For instance,
is Heckle responding to a question about whether reflex testing going forward would be
permissible? Or is he telling Cox that he can no longer perform reflex testing without a provider’s
order? Did his invoices change substantially after that email? Absent some detail putting this email
in context, it cannot be deemed to allege with particularity a scheme to engage in reflex testing.
B.

Allergy Testing Scheme

The government alleges that the “allergy testing program” began in 2016, when PIN was
not yet in existence. It asserts in a conclusory fashion that allergy testing “has nothing to do with
pain management.” (Doc. No. 65 ¶¶ 296, 304.) In 2017, CPI was offered a reduced price from a
particular company if it made a bulk purchase of allergy test kits to use at all three of its locations.
(Id. ¶¶ 306–08.) The Complaint does not allege whether CPI actually accepted the offer. These
allegations do not establish that CPI engaged in a scheme involving allergy testing.
As regards PIN, the Complaint alleges that a clinic employee named Stacie Broadbent
Wyatt sent herself emails showing how many patients had undergone allergy testing between July
31, 2017 and April 6, 2018 and between May 25, 2018 and July 27, 2018. (Id. ¶¶ 309–14.) In
February 2019, she sent herself what appeared to be training notes for new employees regarding
allergy tests as “adjunct therapy” for “insurance patients only,” one of the criteria for which was
that the patient had to “have allergy symptoms.” (Id. ¶ 321.) These allegations do not establish

43
with particularity the existence of a fraudulent scheme to push and bill for medically unnecessary
allergy testing. The text message exchange among Wyatt and other clinic employees, including
Debbie Cox, congratulating them on getting allergy tests done, strongly suggests that clinic
employees were being encouraged to offer allergy testing to patients with allergy symptoms, but,
again, nothing in the exchange suggests a scheme to perform and bill for medically unnecessary
allergy testing. The allegations that follow from these facts, including that “Providers’ orders for
allergy testing were not specific to the medical needs of patients and were not based on
individualized decision-making at each patient’s visit” are wholly conclusory and not supported
with reference to actual facts and patient records.
C.

Psychological Testing

The Complaint’s allegations regarding the psychological testing scheme are even more
vague and conclusory than those concerning the other types of testing schemes. There are no
allegations concerning CPI or psychological testing that occurred before CPI’s merger with PIN,
aside from the single statement that “Defendants” began performing psychological assessments in
2014. (Doc. No. 65 ¶ 336.) The alleged scheme was to “bill reflexively for as much testing as
possible.” (Id. ¶ 338; see id. ¶ 341.)
The Complaint contains no allegations showing the existence of such an express policy. It
alleges that Michael Cox put “pressure” on providers to perform psychological testing, but the
alleged pressure (telling providers that psychological tests were required under state law, even
though he was not a provider) is not alleged with any particularity, as discussed above. Nor does
this statement appear to be the type of “pressure” that would incentivize reasonable—and
reasonably professional—medical providers to perform tests that they did not believe were
medically necessary. Certainly there are no allegations of financial pressure to increase billing or
adverse consequences for providers who did not meet financial targets. Compare, e.g., United

44
States v. Life Care Ctrs. of Am., Inc., No. 1:08-CV-251, 2014 WL 11429265, at *9 (E.D. Tenn.
Mar. 26, 2014) (finding Rule 9(b) satisfied and denying motion to dismiss FCA claims, where the
complaint contained “many allegations regarding [the corporate] Defendant’s actions to influence
and direct its therapists, including setting corporate targets at the Ultra High RUG [Resource
Utilization Group] level, pushing for increased Medicare revenue, setting minimum therapy levels,
measuring an employee’s performance on his ability to bill at an Ultra High RUG level, and
rewarding employees who billed at higher RUG levels” and further alleged “that these actions,
directing and pressuring therapists to bill at higher RUG levels, resulted in Life Care submitting
Medicare billings which were knowingly false”).
The government alleges that Humana required medical records to support claims for
psychological testing and that Blue Cross Blue Shield auditors denied claims on the basis that
providers were not qualified to administer or interpret psychological tests. The auditors are not
alleged to have found that the testing was medically unnecessary, however, and these allegations
do not establish the existence of a scheme to administer medically unnecessary tests to Medicare
patients.
The Complaint alleges a text message exchange between a provider and an unidentified
clinic employee in January 2022, discussing a posted monthly schedule as to which psychological
tests to run. (Id. ¶¶ 347–53.) The Complaint, however, makes no real attempt to explain or
contextualize the exchange or the calendar and does not even go so far as to allege that
psychological tests were performed according to the schedule, that the provider believed such tests
to be medically unnecessary and conducted them anyway, or that any tests were medically
unnecessary.

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D.

Summation—FCA Claims

The allegations in the Complaint in this case allege the existence of fraudulent billing
schemes in only the most general terms. These allegations might, at least arguably, be sufficient
to allow the FCA claims to proceed if they were governed solely by Rule 8 and the Twombly /
Iqbal pleading standard. Under Rule 9(b), however, the Complaint simply does not allege with
sufficient particularity the who, what, when, where or how of the alleged schemes, nor does it
allege any causal connection between the adoption and implementation of these schemes by the
entity defendants and the submission of false claims by the individual providers. The court finds
that the Complaint fails to state a colorable FCA claim under 31 U.S.C. § 3729(a)(1)(A), for
causing false claims to be presented.
Specifically regarding the claim under § 3729(a)(1)(B), which gives rise to liability for
“knowingly mak[ing], us[ing], or caus[ing] to be made or used, a false record or statement material
to a false or fraudulent claim,” the government does not expressly explain its theory of recovery.
The Complaint alleges that the claims at issue in this case were submitted by “various mid-levels
and other physicians as the rendering provider,” but with CPI or PIN as the “billing provider.” It
therefore appears that the subsection (B) claims are premised upon CPI’s and PIN’s having
submitted EDIs in which they agreed to submit “accurate, complete, and truthful” claims. (See
Doc. No. 65 ¶¶ 53, 370.) The Complaint does not allege, however, that CPI’s and PIN’s prior
submission of EDIs was material to the government’s payment of claims later submitted by
individual providers with the entity as the “billing provider.”
Regardless, the Complaint also does not allege a basis for the entities’ knowledge of the
purported falsity of individual providers’ submissions of claims to Medicare for reimbursement,
simply by virtue of the claims’ having been submitted through the entities as the billing provider.
The tests at issue were ordered by CPI’s and PIN’s licensed nurse practitioners and physicians.

46
(Doc. No. 65 ¶ 61.) To the extent the government seeks to establish the entities’ knowledge through
communications in which Debbie Cox and Michael Cox were involved, as discussed above, none
of those communications is sufficient to establish that the individual defendants caused the
submission of false statements.
As for the examples of false claims provided in the Complaint, even if the court accepts
that the claims set forth therein were for services that were not, in fact, medically necessary, the
FCA “does not penalize all factually inaccurate statements, but only those statements made with
knowledge of their falsity.” Houston, 2011 WL 4899983, at *4 (quoting United States ex rel.
Yannacopoulos v. Gen. Dynamics, 652 F.3d 818, 832 (7th Cir. 2011)). Without allegations
establishing the existence of a fraudulent scheme, the identification of incorrect claims, standing
alone, is not sufficient to give rise to FCA liability.
The Complaint fails to state FCA claims against CPI or PIN with the requisite particularity
under Rule 9(b), as a result of which those claims are subject to dismissal under Rule 12(b)(6).
V.

THE COMMON LAW CLAIMS
Both sets of defendants also seek dismissal of the federal common law claims of payment

by mistake and unjust enrichment on the basis that they are “premised upon the same set of facts
as the FCA” and thus “subject to the same heightened pleading standard.” (See Doc. No. 76 at 25;
Doc. No. 80 at 24.) They also assert that the government “does not otherwise separately allege any
well-pleaded common law claims against either Defendant.” (Doc. No. 76 at 25; Doc. No. 80 at
24.) The government responds only “[p]leading in the alternative is not strange or unusual” and
that the “Defendants’ arguments on these theories are barely developed, and there is no real dispute
that those claims would rise and fall with the sufficiency of the Complaint on the FCA theories.”
(Doc. No. 81 at 24.)

47
Given this concession and the court’s conclusion that the FCA claims are subject to
dismissal, it follows, as the government effectively concedes, that the common law claims are also
subject to dismissal.
VI.

CONCLUSION
For the reasons set forth herein, both Motions to Dismiss (Doc. Nos. 75, 79) will be granted,

and the government’s Complaint-in-Intervention (Doc. No. 65) will be dismissed. An appropriate
Order is filed herewith.

ALETA A. TRAUGER
United States District Judge