United States District Court, D. North Dakota
United States of America ex rel. Rafik Benaissa, Plaintiff,
Trinity Health, Trinity Hospital, Trinity Kenmare Community Hospital, and Trinity Hospital - St. Joseph's, Defendants,
GRANTING DEFENDANTS' MOTION TO DISMISS
L. Hovland, Chief Judge United States District Court.
the Court is the Defendants Trinity Health, Trinity Hospital,
Trinity-St. Joseph's, and Trinity Kenmare Community
Hospital's "Motion to Dismiss for Failure to State a
Claim" filed on December 21, 2016. See Doc. No.
37. Rafik Benaissa, as relator, filed a response in
opposition to the motion on January 30, 2017. See
Doc. No. 39. The Defendants replied on February 10, 2017.
See Doc. No. 40. For the reasons set forth below,
the Defendants' motion is granted.
Rafik Benaissa filed this qui tarn action against
Trinity Health, Trinity Hospital, Trinity Kenmare Community
Hospital, and Trinity Hospital - St. Joseph's,
John Does 1-100 on November 6, 2015. See Doc. No. 3.
On November 14, 2016, Dr. Benaissa filed an amended
complaint. See Doc. No. 34. In the amended
complaint, Dr. Benaissa alleges Trinity Health violated the
False Claims Act ("FCA") by submitting false and/or
fraudulent claims to the United States. Specifically, Dr.
Benaissa alleges violations of 31 U.S.C. §§
3729(a)(1)(A), 3729(a)(1)(B), 3729(a)(1)(C), and
3729(a)(1)(G) as well as relief from retaliatory actions
pursuant to 31 U.S.C. 3730(h) in eight separate causes of
action. At the heart of Dr. Benaissa's amended complaint
are allegations that Trinity Health violated Stark and
Anti-Kickback statutes when Trinity Health over-compensated
physicians based upon referrals, with physicians referring
patients for and/or conducting unnecessary procedures.
Additionally, the amended complaint alleges Trinity Health
physicians 'upcoded' - a practice in which a
physician bills at a higher than appropriate code level for
patient consultations and receives a greater reimbursement
through Medicare than the physician would have received
billing at a lower code level. Dr. Benaissa also alleges
Trinity Health terminated him in retaliation for challenging
Trinity Health's compensation system.
Benaissa brought this action as a relator, in the name of the
United States. See 31 U.S.C. § 3730(b)(1).
After receipt of a relator's complaint, the United States
may elect to intervene and proceed with the action. 31 U.S.C.
§ 3730(b)(2). The United States declined to intervene in
this action on July 12, 2016. See Doc. No. 15.
Consequently, Dr. Benaissa now has the "right to conduct
the action," subject to the United States reserved right
"to order any deposition transcripts, to intervene in
this action, for good cause, at a later date, and if,
appropriate, to seek the dismissal of the relator's
action . . . ." See Doc. No. 15, p. 2.
amended complaint, Dr. Benaissa alleges Trinity Health
violated the Stark statute and Anti-Kickback statute.
Specifically, Benaissa alleges "Trinity Health has
engaged in a scheme to pay improper compensation to
physicians to induce them illegally to refer patients,
including Medicare, Medicaid, and TriCare patients, to
Trinity Health hospitals and clinics for inpatient,
outpatient, and ancillary services." See Doc.
No. 34, p. 2. Benaissa continues his description of the
scheme that violates Stark and Anti-Kickback statutes:
22. Physicians with whom Trinity Health has entered into
illegal financial relationships refer large volumes of
patients, including Medicare and Medicaid patients to Trinity
hospitals and clinics in violation of federal law. Trinity
has and continues to submit false or fraudulent claims based
on these referrals to the United States to obtain millions of
dollars in Medicare, Medicaid, and TriCare payments that they
were not legally entitled to receive.
23. By way of introduction, the department of surgery and the
related surgical disciplines in most community hospitals are
responsible for substantial annual profit margins generated
by the hospital. That fact is true at Trinity Health.
Revenues from perioperative services or ancillary revenues
related to surgical procedures account for a major portion of
annual profits at Trinity Health.
24. Trinity Health has recruited and employed surgeons with a
focus on employing certain surgical specialists who are more
profitable in producing ancillary hospital revenues for
perioperative services. Such specialties include orthopedic
surgery and interventional cardiology.
25. In violation of federal Stark laws, Trinity
Health has induced and financially rewarded certain employed
surgeons based on the volume and value of referrals for
surgical procedures and perioperative services such surgeons
generate for the hospital system. Trinity Health continued
this profiteering scheme even with knowledge that employed
surgeons were ordering unnecessary hospital admissions or
outpatient visits and performing unnecessary surgeries on
patients covered under federal healthcare programs such as
Medicare and TriCare. The scheme at Trinity Health represents
major violations of federal Stark laws and a major
threat to the safety and health of patients.
26. Trinity Health's scheme to over-compensate employed
physicians based on referrals is not limited to surgeons, but
extends to other clinicians with substantial referrals to
Trinity hospitals and clinics. Trinity Health has compensated
their employed physicians at levels to generate massive
losses over the last 6 years. Such losses have been more than
offset by the revenues from referrals by employed physicians
See Doc. No. 34, pp. 6-7.
Dr. Benaissa alleges Trinity's fraudulent scheme rewards
physicians for referrals and results in physicians conducting
unnecessary surgeries. In the amended complaint, Dr. Benaissa
includes allegations specific to five patients. See
Doc. No. 34, pp. 8-11. Dr. Benaissa alleges that in February
of 2012, another orthopedic surgeon, Dr. Ravindra Joshi,
interfered with Dr. Benaissa's treatment of a patient
when Dr. Joshi took the patient back to surgery for
"another irrigation debridement and supposed
'adjustment' of the external fixator."
Id. at 8. According to Dr. Benaissa, "the
surgery was not indicated as the patient had already received
three irrigations and debridements." Id. The
amended complaint also alleges Dr. Joshi and Dr. Benaissa
disagreed about the treatment of an elderly Medicare patient
who had recently undergone cardiac bypass and had a minimally
displaced shoulder fracture. Id. at 10. Dr. Benaissa
alleges he was part of a meeting discussing the death of a
patient who had undergone hip fracture surgery in December
2014. Id. Dr. Benaissa alleges facts specific to a
fourth patient, an elderly Medicare patient with a
non-displaced fracture of the humerus. According to the
amended complaint, Dr. Benaissa recommended conservative
treatment, but Dr. Joshi performed a shoulder surgical
fixation, which failed, and a subsequent shoulder
replacement, that similarly failed. Id. at 11. Last,
Dr. Benaissa describes Dr. Joshi's care of a worker's
compensation patient who suffered a "segmental femur
fracture." Id. Dr. Benaissa alleges these types
of fractures are usually treated with a reamed nail, but Dr.
Joshi did an open reduction, added cables, and performed a
bone graft. Dr. Joshi's treatment increased the chances
of the patient developing complications. Id.
Benaissa's amended complaint includes allegations he
notified Trinity Health executives of his concerns about
unnecessary surgeries and was eventually terminated as a
result. Id. at 7. Dr. Benaissa alleges he discussed
Dr. Joshi's unnecessary surgeries with supervising
physicians on several occasions, only to be rebuffed or
threatened. Id. at 10-13. Dr. Benaissa's amended
complaint also contains allegations that a number of other
individuals communicated to Dr. Benaissa their thoughts that
Dr. Joshi's surgeries were unnecessary, contrary to the
standard of care, disturbing, or concerning. Dr. Benaissa
specifically alleges he received a letter from Dr.
Joshi's full-time nurse that stated:
"His unnecessary surgeries really concerned me as I
finally brought it up to him." "He would see a
patient and an assessment and MRI would be done, and they
would simply tell us nurses he does not see anything wrong
with this patient, however he told us that he wanted to
schedule surgery as soon as possible on them because they are
in pain." "As I confronted him he did not respond
and I believe that he thought I knew too much information,
and wanted to get rid of me." "Recently he has done
a couple of 'unnecessary' surgeries and the patients
have died." "The work environment became very
hostile as I would get pulled behind closed doors and
reprimanded for not meeting his quota for the day with
patients or having enough surgeries scheduled during the
week." "Trinity and the DON [Department of Nursing]
simply covered up all his mistakes and let them go."
See Doc. No. 34, p. 15. According to the amended
complaint, Dr. Joshi's nurse was fired when she raised
her concerns regarding Dr. Joshi's surgeries to Trinity
Health's administration. Id. at 16.
second issue, Dr. Benaissa alleges Trinity Health physicians
engaged in "upcoding" by billing at a level five
for patient consults, when billing at a lower level would
have been more appropriate, causing Trinity Health to receive
a greater reimbursement through Medicare compared to the
reimbursement Trinity Health would have received had Dr.
Joshi billed at a lower level. Id. at 17.
Trinity's Chief of Surgery, Dr. Kindy, monitored the
codes/levels at which physicians sought reimbursement through
Medicare. Dr. Benaissa alleges that Dr. Kindy pressured Dr.
Benaissa to up-code his consultations from a level two to at
least a level three to receive greater reimbursement through
Medicare. Id. Dr. Benaissa alleges Trinity Health
terminated him as a result of his actions challenging the
compensation scheme, namely questioning Dr. Joshi's
unnecessary surgeries. Id. 20-21.
Health filed this motion to dismiss pursuant to Rules 8(a),
9(b), and 12(b)(6) on December 21, 2016. See Doc.
No. 37. Trinity Health asserts Dr. Benaissa's amended
complaint fails to plead specific, particularized facts in
accordance with Rule 8 and 9(b) of the Federal Rules of Civil
Procedure to support the allegation Trinity Health violated
the FCA by submitting false and/or fraudulent claims to the
United States. Dr. Benaissa disagrees and contends the
amended complaint outlines details of Trinity Health's
fraud, identifying unlawful payments, the parties who
received them, and the time periods of the unlawful payments
sufficiently to satisfy the contours of Rules 8 and 9(b).
STANDARD OF REVIEW
Health moves to dismiss the amended complaint pursuant to
Rules 12(b)(6), 9(b), and 8(a) of the Federal Rules of Civil
Procedure. To survive a motion to dismiss, a pleading must
provide "a short and plain statement of the claim that
the pleader is entitled to relief." Fed.R.Civ.P.
8(a)(2). The purpose of this requirement is to "give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests." Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). When ruling
on motions under either Rule 12(b)(6) or Rule 9(b), the Court
accepts the factual allegations in the complaint as true,
drawing all reasonable inferences in favor of Dr. Benaissa,
as the non-moving party. Drobnak v. Anderson Corp.,
561 F.3d 778, 781 (8th Cir. 2008).
12(b)(6) of the Federal Rules of Civil Procedure mandates the
dismissal of a claim if there has been a failure to state a
claim upon which relief can be granted. To survive a motion
to dismiss under Rule 12(b)(6), "a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
plaintiff must show that success on the merits is more than a
"sheer possibility." Id. A complaint is
sufficient if its "factual content . . . allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Id. The
court need not accept legal conclusions or "formulaic
recitation of the elements of a cause of action" in the
complaint as true. Id. at 681. A complaint does not
"suffice if it tenders a naked assertion devoid of
further factual enhancement." Ashcroft, 556
U.S. at 678 (2009). The determination of whether a complaint
states a claim upon which relief can be granted is "a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
Id. at 679. Dismissal will not be granted unless it
appears beyond doubt the plaintiff can prove no set of facts
entitling the plaintiff to relief. Ulrich v. Pope
Cnty, 715 F.3d 1054, 1058 (8th Cir. 2013).
the FCA is an anti-fraud statute, complaints alleging
violations of the FCA must comply with Rule 9(b)"
United States ex rel. Joshi v. St. Luke's Hospital
Inc., 441 F.3d. 552, 556 (8th Cir. 2006). "Rule
9(b)'s 'particularity requirement demands a higher
degree of notice than that required for other claims,'
and 'is intended to enable the defendant to respond
specifically and quickly to the potentially damaging
allegations.'" Id. (quoting United
States ex rel. Costner v. URS Consultants. Inc., 317
F.3d 883, 888 (8th Cir. 2003)). When determining whether a
complaint complies with Rule 9(b), the Court must consider
whether the complaint states "with particularity the
circumstances constituting fraud or mistake."
Fed.R.Civ.P. 9(b). A plaintiff must plead such matters as the
time, place and contents of the allegedly false
representations, as well as the identity of the person making
the representations and what was obtained or given up.
Schaller Tel. Co. v. Golden Sky Systems. Inc., 298
F.3d 736, 746 (8th Cir. 2002). "Conclusory allegations
that a defendant's conduct was fraudulent and deceptive
are not sufficient" to satisfy Rule 9(b). Id.
(quoting Commercial Prop, v. Quality Inns, 61 F.3d
639, 644 (8th Cir. 1995)).
motion to dismiss, Trinity Health contends Dr. Benaissa's
amended complaint should be dismissed because he has failed
to plead specific, particularized facts to support the
allegations Trinity Health defrauded federal healthcare
programs in violation of the FCA. In response to the motion,
Dr. Benaissa contends the amended complaint sufficiently
states a claim upon which relief can be granted and satisfies
Rule 9(b) by stating with particularity the circumstances
constituting Trinity Health's violations of the FCA. The
Court begins its analysis of whether the amended complaint
satisfies Rules 8 and 9(b) by looking to to the False Claims
Act and Anti-Kickback and Stark statutes.
Anti-Kickback and Stark Statutes and the False Claims
Benaissa alleges Trinity Health violated the Anti-Kickback
and Stark statutes by excessively compensating physicians in
exchange for referrals for surgical procedures and engaging
in upcoding. The Anti-Kickback statute ("AKS")
imposes criminal liability on a defendant who "knowingly
or willfully solicits or receives any remuneration"
(such as a kickback, bribe, or rebate) directly or
indirectly, overtly or covertly, in cash or in kind, "in
return for referring an individual to a person for the
furnishing of any item or service for which payment may be
made in whole or in part under a Federal health care
program." 42 U.S.C. § 1320a-7b(b)(1). In addition,
AKS imposes criminal liability on a defendant who
"knowingly and willfully offers or pays any remuneration
directly or indirectly, overtly or covertly, in cash or in
kind" for a referral. 42 U.S.C. § 1320a-7b(b)(2).
In 2010, Congress amended the AKS to explicitly state that
"a claim that includes items or services resulting from
a violation of this section constitutes a false or fraudulent
claim" under the False Claims Act. 42 U.S.C. §
the Stark statute, 42 U.S.C. § l395nn(a), generally
prevents a physician who has a financial relationship with an
entity from making a referral to that entity for the
"furnishing of designated health services for which
payment otherwise may be made" and such entity may not
present or cause to be presented a claim of payment for
designated health services pursuant to a prohibited referral.
42 U.S.C. § l395nn(a). However, there are numerous
exceptions to the application of this general rule.
See 42 U.S.C. § l395nn(b)-(e).
Benaissa alleges Trinity Health's violations of the
Anti-Kickback and Stark statutes caused Trinity Health to
submit false certifications to the government for Medicare,
Medicaid, and Tricare reimbursement in violation of the False
Claims Act. The False Claims Act imposes liability on any
(A) knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a
false record or statement material to a false ...