United States ex rel. Rockey v. Ear Institute of Chicago, LLC
92 F. Supp. 3d 804
N.D. Ill.2015Background
- Rockey filed a qui tam action under the FCA against Ear Institute Defendants and Trellis alleging Medicare fraud and retaliation for exposing it; U.S. declined to intervene and the complaint was unsealed, followed by amended and second amended complaints.
- The alleged scheme involved billing Medicare using a physician’s NPI in place of audiologists’ NPIs, despite audiologists often not enrolled or authorized to bill under physician NPIs.
- Medicare rules required physician supervision for some services and allowed diagnostic audiology by audiologists only with a physician order; the Ear Institute allegedly submitted claims with misidentified Rendering Providers.
- Rockey reported improper billing in October 2010; Ear Institute Defendants acknowledged impropriety but instructed her to continue similar submissions; a November 2010 letter from a treating physician to Medicare acknowledged the misbilling issue.
- Rockey was terminated in November 2010, and the suit was filed in October 2011; the operative allegations include NPI claims, physician order claims, therapeutic claims, conspiracy, retaliation, and state-law retaliation.
- The court addressed amendments to the FCA in 2009–2010, applying the pre- and post-amendment provisions to conduct occurring at different times, and analyzed pleading standards under Rule 8 and Rule 9(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public disclosure bar on NPI claims | Rockey argues no jurisdictional bar; original source exception saves claims. | Ear Institute Defendants contend Wiet’s letter publicly disclosed the allegations and transactions. | Public disclosure bar bars NPI claims; dismissible as to NPI counts. |
| Knowledge, falsity, and materiality pleading for NPI claims | Rockey alleges Ear Institute knew of the NPI violation and acted knowingly. | Defendants argue lack of plausible knowledge; many allegations are conclusory and time-barred. | NPI claims fail for insufficient knowledge, falsity, and materiality pleadings. |
| Viability of physician order and therapeutic claims against Ear Institute and Trellis | Claims show services were billed without physician orders and included therapeutic services. | Claims lack specific invoices but may rely on described forms; Trellis as agent may be limited. | Physician order and therapeutic claims survive as to Ear Institute Defendants; Trellis dismissed for lack of tying allegations. |
| Reverse false claims and scope of liability | Wiet’s letter could be a false statement material to an overpayment. | NPI claims lack overpayments; contemporaneity varies by provision; some claims not actionable. | Reverse false claims liability dismissed for NPI claims; survives to physician order/therapeutic claims against Ear Institute Defendants. |
| Conspiracy and retaliation claims viability | Conspiracy exists where two or more persons agree to defraud; retaliation protected by FCA § 3730(h). | Conspiracy requires an actual FCA violation by at least one co-conspirator; retaliation requires protected activity. | Conspiracy survives only for physician order/therapeutic claims against Ear Institute Defendants; retaliation claim survives; other conspiracy/retaliation aspects dismissed or limited. |
Key Cases Cited
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (2010) (public disclosure bar discussed in FCA context)
- Rockwell Int'l Corp. v. United States, 549 U.S. 457 (2007) (public disclosure bar is jurisdictional in older framework)
- Glaser v. Wound Care Consultants, Inc., 570 F.3d 907 (7th Cir. 2009) (public disclosure implications in Seventh Circuit FCA cases)
- Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994) (test for whether allegations publicly disclosed could alert authorities)
- Absher v. Momence Meadows Nursing Ctr., Inc., 764 F.3d 699 (7th Cir. 2014) (cites Springfield Terminal Terminal standard on public disclosure)
- Grenadyor v. Ukrainian Village Pharmacy, Inc., 772 F.3d 1102 (7th Cir. 2014) (materiality and public disclosure considerations in FCA context)
- Conner v. Salina Regional Health Ctr., Inc., 543 F.3d 1211 (10th Cir. 2008) (certification liability analysis in FCA context)
- Rogan v. General Dynamics, 517 F.3d 449 (7th Cir. 2011) (materiality standard for FCA claims)
- Yannacopoulos v. General Dynamics, 652 F.3d 818 (7th Cir. 2011) (definition of materiality under FCA)
- Brandon v. Anesthesia & Pain Management Assocs., Ltd., 277 F.3d 936 (7th Cir. 2002) (retaliation/whistleblowing protections in FCA context)
- Halasa v. ITT Educational Services, Inc., 690 F.3d 844 (7th Cir. 2012) (interpretation of FCA retaliation protections)