RULING ON DEFENDANT YALE-NEW HAVEN HOSPITAL’S MOTION TO DISMISS
Pursuаnt to Rules 9(b), 12(b)(1), 12(b)(6) and 12(h)(3) of the Federal Rules of Civil Procedure, Defendant Yale-New Haven Hospital, Inc. (“YNHH”) moves to dismiss the Second Amended Complaint. 1 For the *63 reasons stated below, Defendant’s Motion [Doc. No. 169] is granted.
1. BACKGROUND 2
This lawsuit arises from Plaintiff-Relator’s (“Relator”) employment with Yale University (“Yale”) and YNHH. Relator alleges that Defendant YNHH violated the federal False Claims Act, 31 U.S.C. § 3729, et seq., as amended (“FCA”), by falsely billing and retaining payments from the Medicare and Medicaid Programs for certain radiological services (Count One). Relator also alleges that YNHH and Yale unlawfully retaliated against Relator in violation of the FCA, 31 U.S.C. § 3730(h) (Count Two) and brings a defamation claim against YNHH and Yale (Count Three).
Relator Robert C. Smith is a medical doctor licensed to practice medicine in Connecticut and New York and is a resident of the State of New York. Relator was employed by Yale beginning in July 1, 1990 until he was allegedly “forced out” on June 30, 1999. He began as an Instructor at the Yale School of Medicine, was promoted to Assistant Professor in July 1991 and became an Associate Professor in July 1996. Moreover, Relator has served as Associate Professor, Department of Diagnostic Imaging; Chief, Section of MRI, Department of Diagnostic Imaging at Yale’s School of Medicine; Director, Magnetic Resonance Imaging Center; and attending staff physician at YNHH. Most recently, Relator served as a Professor of Radiology and Associate Chair of Information Technology and Systems Administration, Department of Radiology, Cornell University Joan and Sanford I. Weill Medical College, New York Presbyterian Hospital from 1999 until the summer of 2003.
Defendant YNHH is reimbursed by Medicare for providing services to eligible patients. According to Relator, YNHH operates a graduate medical education (“GME”) Residency Program paid for, at least in part, by the Medicare Program and under which members of Yale’s School of Medicine faculty and attending physicians at YNHH train Residents and Fellows.
The Department of Health and Human Services, acting pursuant to the Medicare statute, has promulgated regulations governing reimbursement for medical services provided to Medicare beneficiaries, including radiological tests and studies. In order to be reimbursed by Medicare for services provided to its beneficiaries, medical service providers must certify that they have complied with applicable requirements in the regulations. Pertinent to this action, Medicare and Medicaid pay only for services that are reasonable, medically necessary and utilized for diagnostic and therapeutic purposes in connection with health care services provided to Medicare and Medicaid beneficiaries. 42 U.S.C. § 1395y(a)(l). If a radiological test is performed by a Resident or Fellow participating in the GME Residency Program at a Teaching Hospital, Medicare and Medicaid will only pay for the Professional Component of diagnostic Radiology Services interpretations that are performed by, reviewed by or interpreted under the supervision of a Teaching Physician. 42 C.F.R. 415.172. Accordingly, the form that рhysicians must submit to Medicare and Medicaid in order to be entitled to reimbursement includes the following certification: “Signature of Physician or Supplier: I certify that the services shown on *64 this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision.” CMS Form 1500 (the Medicaid certification is identical except that it does not include the word “immediate”).
Relator alleges that during his employment, YNHH and Yale violated the FCA by improperly billing and retaining payments from the Medicare and Medicaid Programs for (1) radiological studies for which the signing radiologist did not review the associated image and/or the preliminary report, including alleged billing for: (a) the “clean up project,” (b) the use of the “Autosign” function on the hospital computer system and (c) the review of reports of neuroradiology fellows; (2) studies by radiologists who were not qualified teaching physicians; and (3) medically unnecessary studies, including alleged billing for old studies and unnecessary panels of studies in the emergency room. In an effort to bill for these radiological studies, Relator alleges that YNHH and Yale knowingly engaged in improper billing schemes by falsifying and altering patient records, submitting bills which they knew were in violation of Medicare and Medicaid billing requirements and falsely certifying that they were in conformity with applicable regulations and minimum standards of patient care.
A. Relator alleges that YNHH and, Yale billed for radiological studies for which the signing radiologist did not review the associated image and/or the preliminary report
Relator alleges that from July 1997 to July 1998, one or more Teaching Physicians finalized Radiology Reports for billing purposes without having ever reviewed the Radiology Study and without having dictated, edited or reviewed the final report. According to Relator’s allegations, the Teaching Physicians’ practice of finalizing the reports in this way “contributed nothing to the diagnosis and/or care of the patient” and therefore “both the Technical Component and the Professional Component were improperly billed to the United States government.” 2d Am. Compl. ¶ 84.
Relator also alleges that a “clean up project,” involving the finalization of reports by Yale faculty members after the films had been reviewed by volunteer faculty members, took place between March and May 1998. Relator alleges that Yale fraudulently billed for the Professional Component for interpretations of old radiological studies that were neither performed under the supervision of the attending physicians nor independently reviewed by the attending physician and which had no therapeutic or diagnostic value at the time they were finalized. Relator’s allegations concerning the clean up project principally involve a complaint by one of his colleagues, Dr. Burrell, alleging that he was coerced to sign off on or finalize reports of Radiology Studies for patients seen two years prior with whom Dr. Burrell had never been involved. Dr. Burrell claims that the cases appeаred on his sign out queue with his name listed as the attending physician of record. After he refused to sign off the reports, his name was removed and Dean Glickman’s, who allegedly promptly signed off on the reports, was substituted. Id. ¶¶ 58-65, 80-82.
Relator alleges that YNHH used the “Autosign” function on the hospital computer system to reflect a fictitious qualified “Responsible Radiologist” of record for the purpose of finalizing radiology reports which were dictated by YNHH’s radiology Residents and Fellows but were never re *65 viewed, approved, edited or certified by the Residents’ or Fellows’ Teaching Physician as required pursuant to the Medicare laws. According to Relator, Autosign was also created for the purpose of finalizing prehminary reports which were dictated by Qualified Radiologists but never reviewed, edited, approved or certified by them prior to finalization. Id. ¶¶ 20, 58-72, 76-78. Relator further alleges that Autosign has additionally been used to move Radiology Studies from “C” status, indicating that a study has never been interpreted, to “F” status, indicating that a study has been interpreted and certified. Id. ¶ 20. Relator alleges that since January 1,1998, at least 1,594 reports of Radiological Studies have been finalized using the Autosign process. Defendant claims that in the email from Felicia Tencza, Yale’s Associate Business manager for the Radiology Department, quoted by Relator in paragraph 58 of the Second Amended Complaint, she made clear that Autosign was created “for the express purpose of flagging preliminary reports for which the slides had been lost before the attending could review them so that Medicare would not be billed.” Mem. Supp. at 3. 3
Relator alleges that a number of faculty members, including himself, repeatedly complained to YNHH Administrators, on both ethical and legal grounds, about the use of Autosign, 2d Am. Compl. ¶ 58-62, and that as a result of his frustration with the University and Hospital’s apathy towards his concerns, he undertook a “comprehensive review” of radiological records dating back to 1998. Upon review, Relator claims that he discovered that “thousands” of reports of Radiology Studies reflecting the initial interpretations of Residents and Fellows had been finalized by Autosign or by physicians who had never reviewed the films and who had not supervised the Resident or Fellow when the Studies were interpreted. Moreover, Relator alleges that “upon information and belief,” the films and/or images associated with the Autosign studies were lost and were never repeated, retrieved or found. Id. ¶ 69.
B. Relator alleges that YNHH and Yale billed for studies by radiologists who ivere not qualified teaching physicians
Relator further claims that since July 22, 1998, outside clinical attending physicians not authorized to bill Medicare as Teaching Physicians finalized reports by Residents and Fellows. Specifically, he names Bruce Simmons, M.D., who allegedly finalized, 34 such reports, and Andy Haims, M.D., who allegedly finalized 1,024 *66 such reports. Id. ¶ 75. Relator claims that “upon information and belief,” Defendant YNHH billed Medicare and Medicaid for the Professional Component of Radiology Studies that were never reviewed by a Qualified Radiologist. Id. ¶ 76.
C. Relator alleges that YNHH and Yale billed for medically unnecеssary studies, including alleged billing for old studies and unnecessary panels of studies in the emergency room
Relator alleges that since 1995, YNHH Radiology Department faculty has interpreted and issued final reports on “old” studies “long after the point in time when they can be considered medically necessary.” Id. ¶ 55. Relator claims that various Department Heads and Managers have “directed and made numerous attempts to intimidate Yale’s Radiology Department faculty members to review and interpret these old Radiology Studies and furnish finalized reports for which Yale could and would bill the Professional Component, even though the delayed interpretations had no therapeutic or diagnostic value ...” Id. ¶ 56.
Relator further alleges that pursuant to “long-standing practice” and as part of departmental policy at YNHH, certain panels of diagnostic tests are routinely ordered, regardless of whether they are medically indicated, prior to patients being examined or evaluated by “appropriate medical providers.” Relator claims that this practice violates Medicare and Medicaid billing requirements. Id. ¶ 89.
After the Original Complaint was filed in this action, Relator deleted the “completed but not read” allegations against YNHH from this action and filed them in a subsequent action, discussed below as “Qui Tam Two.” In the Ruling on Relator’s Motion for Reconsideration in the related action, docket number 03:02cvl205, the allegations against YNHH in that action were dismissed, but the two actions were consolidated and Relator has been granted leave to amend the Second Amended Complaint in this action in order to re-incorporate the particulars of the “completed but not read” allegations. In the interests of efficiency, the related allegations against YNHH will be dealt with in conjunction with the similar issues raised by Cornell and New York Presbyterian Hospital in their Motions to Dismiss filed in Qui Tam Two.
Relator claims to have met with Representatives from the Department of Justice several times in the fall of 1998 and the fall of 1999, at which times he says that he “outlined Defendant’s practices which resulted in the submission of false claims to Medicare.” Opp’n at 6 (citing Smith Aff., Opp’n Exh. A ¶¶ 12, 17, 19, 22). Further, Relator alleges that he and two colleagues, Dr. Rosenfield and Dr. Burrell, met with Richard Levin, the President of Yale University, to discuss what they perceived to be fraudulent activity.2d Am. Compl. ¶ 80. Following that meeting, Relator claims to have discussed the matter again, along with Drs. Rosenfield and Burrell, with Defendant’s General Counsel. Id. ¶ 81.
Relator alleges that after he began investigating and reporting the policies and procedures at issue here, YNHH and Yale, through their officers, agents and employees, harassed and discriminated against him in the terms and conditions of his employment by, inter alia, intimidating him, cutting his salary, stripping him of his administrative positions and titles, forcing him to resign, interfering with his attempts to obtain other employment, forcing him to leave the State of Connecticut and publicly defaming him. Relator alleges that YNHH and Yale similarly retaliated against Dr. Arthur T. Rosenfield and Dr. Morton I. Burrell. Relator asserts *67 that he was discriminated against because of his investigation and reporting of the alleged frauds at issue here, including his reports of the substandard patient care issues, improper billing practices and corporate falsification of documents.2d Am. Compl. ¶¶ 98-103.
Finally, Relator alleges that YNHH and Yale publicly defamed him by making statements to third parties which were false, injurious and known to be false at the time they were made and thus were reckless and wanton. Relator claims that these statements caused harm to his reputation and professional image with his colleagues and in the community and caused severe mental and emotional distressed Am. Compl. ¶¶ 104-107.
Relator filed the present qui tam action on or about July 19, 2000. He filed a subsequent qui tam action against Yale, YNHH and other defendants not parties to this action on or about July 12, 2002. For the purposes of this Ruling, the later filed action, 3:02cvl205 (PCD), will be referred to as Qui Tam Two and the present action Qui Tam One. 4 Following the filing of this motion, the parties filed a stipulation dismissing defendant Yale University from both Qui Tam One and Qui Tam Two. On January 7, 2002, more than six months prior to filing either Qui Tam One or Qui Tam Two, Relator brought an action in Connecticut state superior court alleging violations of state law concerning his employment with YNHH and Yale. See Burrell v. Yale Univ., 00-cv-0159421-S (Conn.Super. Waterbury Dist.) (the “State Court Action”). The claims asserted in the State Court Action include claims for retaliation under Section 31-51q of the Connecticut General Statutes,, breach of contract and constructive discharge. The details of these other actions will be discussed further, as necessary, below.
II. DISCUSSION
“The False Claims Act authorizes private citizens to sue on behalf of the United States to recover treble damages from those who knowingly make false claims for money or property upon the Government or who knowingly submit false statements in support of such claims or to avoid the payment of money or property to the Government.”
United States ex rel. Lissack v. Sakura Global Capital Mkts., Inc.,
(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a' false or fraudulent claim allowed or paid;
31 U.S.C. § 3729(a). 5
The Act also contains a “qui tam provision,” which empowers persons—“relators”—to sue false claimants on behalf of the government.
United States ex rel. Drake v. Norden Sys.,
A. False Claims Act: Section 3729 Claims
1. Subject Matter Jurisdiction under 31 U.S.C. § 3730(e)(W
The FCA contains a public disclosure bar that deprives courts of subject matter jurisdiction in cases based on publicly disclosed information unless the person bringing the action is the original source of that information, 31 U.S.C. § 3730(e)(4)(A),, which provides in pertinent part:
No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing ... unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
As is clear from the language of the statute, the satisfaction of section 3730(e)(4)(A) is an issue of subject matter jurisdiction.
United States ex rel. Kreindler & Kreindler v. United Technologies Corp.,
a. Standard of Review
Defendant moves to dismiss Relator’s Second Amended Complaint for lack of subject matter jurisdiction pursuant to Rules 12(b)(1) and 12(h)(3) of the Federal Rules of Civil Procedure.
6
The Relator, as the party asserting subject matter jurisdiction, has the burden of establishing that it exists in this case,
Malik v. Meissner,
When considering a motion to dismiss, however, the court must accept the facts alleged in the complaint as true.
See Jaghory v. New York State Dep’t of Educ.,
As stated previously, Defendant is moving to dismiss Relator’s Second Amended Complaint pursuant to Rules 9(b), 12(b)(1), 12(b)(6) and 12(h)(3) of the Federal Rules of Civil Procedure. When a party moves to dismiss pursuant to Rule 12(b)(1) in addition to other bases, such as Rule 12(b)(6), “the court should consider the Rule (12)(b)(l) challenge first since if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses and objections become moot and do not need to be determined.”
Rhulen Agency, Inc. v. Alabama Ins. Guaranty Ass’n.,
b. Whether Rule 12(b)(1) is the Proper Vehicle for Challenging Subject Matter Jurisdiction under Section 3730(e) (h)
Relator challenges the propriety of considering YNHH’s arguments in a Rule 12(b)(1) motion, arguing that the Second Circuit has never “squarely addressed” whether a 12(b)(1) motion is the appropriate vehicle to challenge subject matter jurisdiction. Opp’n at 8-11. As previously decided in this Court’s Ruling on YNHH’s Motion to Dismiss in Qui Tam Two, subject matter jurisdiction under § '3730(e)(4) may be resolved in a 12(b)(1) motion to dismiss. Therefore, the Court will consider the merits of YNHH’s motion regarding jurisdiction as it did in the prior Ruling.
See United States ex rel. Smith v. Yale-New Haven Hosp. Inc.,
c. Whether there was a Public Disclosure Prior to the Filing of the Original Complaint
The first question in the public disclosure bar analysis is whether there has been a public disclosure. Defendant argues that the public disclosure in this case took place on or about January 7, 2000, the date on which the State Court
*70
Action was filed. Mem. Supp. at 7. Section 3730(e)(4)(A) provides an exclusive list of the situations in which the public disclosure jurisdictional bar applies, such that if the public disclosure does not occur in “a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media,” the qui tam action is not barred.
See Doe,
As the public disclosure jurisdictional bar applies only when a complaint is “based upon” publicly disclosed information, 31 U.S.C. § 3730(e)(4)(A), Defendant also argues that the allegations disclosed in the State Court Action are “substantially similar” to the allegations in the instant action.
8
Id. at 8-9. The Second Circuit,
*71
as well as a majority of other circuits, have held that a qui tam action is “based upon” a public disclosure when the allegations of fraud or the critical elements of the fraudulent transaction are “the same as those that have been publicly disclosed----regardless of where the relator obtained his information.”
Doe,
d. Whether Relator Qualifies as an “Original Source”
As there is no dispute in this case over whether there was a public disclosure of the allegations prior to filing the original complaint, the dispositive question here is whether Relator qualifies as an original source despite the public disclosure.
See
31 U.S.C. § 3730(e)(4)(A);
Koch,
*72 i. Whether Relator has “Direct and Independent” Knowledge
Importantly, the statute requires the relator to have direct
and
independent knowledge. “Independent knowledge” is that which is not dependent on public disclosures.
See Stinson,
“Direct” knowledge is that which is “marked by [the] absence of an intervening agency, instrumentality, or influence: immediate.”
Id.
(quoting Webster’s Third New International Dictionary 640 (1976)). Clearly, “[a] relator has direct knowledge when he sees [the fraud] with his own eyes,” and thus, the “paradigmatic ‘original source’ is a whistleblowing insider.”
United States ex rel. Kinney v. Stoltz,
Relator cites
Quinn,
The lQuinn~\ approach is inconsistent with the plain language of the FCA, which should govern the court’s interpretation. As noted earlier, the statute provides that an original source is someone who has “direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.” 31 U.S.C. § 3730(e)(4)(B). The statute does not provide that all that is necessary is that the relator have “direct and independent knowledge of some of the information on which the allegations are based.” Even with the understanding that “based” should be construed to be “supporting,” there is no indication in the language of the statute that the supporting information need only provide a fraction of the necessary elements of the allegation.
United States ex rel. Hafter v. Spectrum Emergency Care, Inc.,
A. Conduct Allegedly Occurring After Relator Left Yale
Defendant argues that as many of the allegations in the Complaint took place at Yale after June 30, 1999, the date on which Relator left Yale, Relator cannot have “direct and independent knowledge” of any of the post-June 1999 allegations. Mem. Supp. at 12 (citing Compl. ¶¶ 7, 83-91; 2d Am. Compl. ¶¶ 7, 68-76, 79-81). In a similar context,
Stone
held that the defendant’s argument that the relator could not be an “original source” because he no longer worked for the defendant corporation when the allegedly fraudulent activity commenced was “immaterial to the relevant question, which is whether [the relator] had direct and independent knowledge of the information underlying the claim,” which, in that case, was defendant’s awareness that it would be engaging in fraudulent activities.
Stone,
A review of the Second Amended Complaint reveals only a small number of allegations involving conduct taking place after June 30,1999:
68. [Relator Smith’s] review encompassed those reports ... finalized by “Autosign” from the period from Janu *74 ary 1, 1998 to May 2000, and other reports finalized “after-the-fact” which had never been interpreted or finalized
88. Upon information and belief, tens of thousands of additional instances of fraud in the signing of reports has occurred since July 1998 and continues to the present time.
89. It is a long-standing practice ... that certain panels of diagnostic tests, including Radiology Studies, are routinely ordered as a matter of practice ....
2d Am. Compl. ¶¶ 68, 88, 89 (emphasis added). All of these instances of alleged conduct occurring after Relator’s departure involve conduct that began during his employment and continued after his departure. Therefore, as the “information underlying the claim” commenced during Relator’s employment, he is not prevented from establishing “direct and independent knowledge” solely because the conduct continued after his departure.
Defendant also points to Relator’s claim that he “reviewed a serious of radiology reports in the DecRad System [which had been] finalized for the period from January 1, 1998 to May 2000” and to Relator’s following discussion of his investigation. Mem. Supp. at 13 (citing Compl. ¶¶ 83-91; 2d Am. Compl. ¶¶ 68-76). Defendant notes that Relator has not explained how, almost a year after leaving Yale to work at Cornell, he obtained access to YNHH’s computer system in order to conduct his review.
See id.
Although the key question is whether Relator has direct and independent knowledge of the information and not how he obtained it, Defendant does call the credibility of Relator’s assertion into question.
See Stone,
Relator also claims that he possesses firsthand, direct knowledge of ‘Yale’s long standing practice of automatically submitting claims for reimbursement for the Professional Component of all radiology tests and procedures once they are in ‘F’ status in the DecRad system,” Exh. A ¶¶ 9-11, 16, 18, and ‘YNHH’s long standing practice of automatically submitting claims for the Technical Component of radiology tests and procedures once the exam is placed in ‘C’ status in the DecRad system.” Exh. A ¶¶ 7, 12, 21. Defendant maintains that these claims are “simply wrong,” arguing that Relator cannot possess “direct and independent” knowledge sufficient to establish jurisdiction when such knowledge is “demonstrably false.” Def.’s Reply at 7. As the Tenth Circuit Court of Appeals held in Stone, however:
For a relator to be properly qualified as an original source, he must have had direct and independent knowledge of the information on which his claim is based. But whether that claim is ultimately flawed on the merits is an analytically distinct question from the one mandated by the FCA for establishing jurisdiction. It is for the finder of fact to determine *75 whether the plaintiffs theory has merit; to satisfy the direct and independent prong of the original source test, the relator need only show that he possessed direct and independent knowledge of the information upon which his claim is based, not that his claim is factually correct.
B. Facts Obtained via Discovery in State Court Action
Defendant argues that the jurisdictional bar applies because a large part of the newly pled allegations in the Second Amended Complaint come from information disclosed during the discovery process in the State Court Action. Mem. Supp. at 15-16 (citing 2d Am. Comp. ¶ 85, which states that “[a] review of Defendants’ records provided thus far has revealed ...” and ¶ 88, which cites a “recent admission of Dr. Gordon Sze”). Although disclosure by itself is not sufficient to defeat jurisdiction if the relator is the source of the information disclosed, Defendant correctly asserts that if Relator had obtained information regarding post-June 1999 transactions through discovery in the State Court Action, he would not, as a matter of law, have “independent” knowledge of that information.
See Kreindler,
Defendant argues that certain allegations in the Second Amended Complaint— specifically, those in paragraphs 85 and 88 — were obtained by way of discovery in the State Court Action and should be dismissed. Mem. Supp. at 15-16. As the Section containing these allegations appears in the Second Amended Complaint but not in the Original Complaint, which was filed six months earlier, Defendant’s argument appears to carry sоme weight. The statement that “[a] review of the Defendants’ records provided thus far has revealed evidence of the alleged Neuroradiology Fellow and Resident Billing fraud,” appears to indicate that the records were produced and the relevant evidence gathered during discovery. 2d Am. Compl. ¶ 85. Thus, as to the evidence mentioned in paragraph 85, it appears that YNHH and/or Yale — and not Relator— were the “original sources.”
See Kreindler,
It seems, with regard to Relator’s allegation that Residents and Neuroradiology Fellows were used to facilitate fraudulent billing practices in paragraphs 83-88 of the Second Amended Complaint, that Relator does not have direct knowledge of the information forming the “core” of the allegation. Although it is not clear from the face of the Complaint, Relator appears to not have direct knowledge of the allegation in paragraph 84, which says that “the essence of the claim” was “first raised by Resident Physicians.” 2d Am. Compl. ¶ 84. Moreover, the evidence that Relator provides appears to have been obtained through discovery in the State Court Action. For example, Relator says that certain evidence was revealed by “[a] review of Defendants’ records provided thus far,” and discusses information “contained in a Hogan & Hartson investigative report.” Id. ¶ 85. Similarly, Relator discusses other knowledge apparently “based on the handwritten notes taken by President Levin.” Relator does not explicitly state where he obtained the information, but the statements in the complaint and the fact that the allegations were not present in the Original Complaint lead to the conclusion that these facts were discovered after the filing of the Original Complaint, most likely by virtue of discovery in the State Court Action. 11 Based on his review of the aforementioned documents, Relator makes his own “unavoidable inferences” and conclusions, but the basis of these allegations comes from information provided by other sources. As a matter of law, Relator cannot claim to be the original source of information disclosed during discovery in the State Court Action. Accordingly, the Court finds that it does not have subject matter jurisdiction over the allegations found in paragraphs 83-88 of the Second Amended Complaint.
C. Information Obtained from Third Parties
With respeсt to Relator’s claims regarding the “clean up project,” Defendant argues that “it is clear from the face of the Complaint that the allegations are based on secondhand information from Dr. Burrell.” Mem. Supp. at 15 (citing Compl. ¶¶ 77-80; 2d Am. Compl. ¶¶ 62-65). As Defendant alleges, Relator’s allegations in paragraphs 62-65 of the Second Amended Complaint are clearly based on information provided to him by Dr. Burrell, however, that fact will not defeat jurisdiction if, as discussed earlier, the information forming the basis of the complaint is within Relator’s “direct and independent” knowledge.
See Stone,
Defendant cites further examples of Relator conceding that he does not have “direct or independent” knowledge of various allegations, including Relator’s testimony in the State Court Action that he has “no idea” and is “not claiming one way or the other” whether YNHH was billing for Autosign. Doyle Deck Exh. J at 521:4-13;
see also
Compl. ¶¶ 20, 72-76, 81-89, 91-93; 2d Am. Compl. ¶¶20, 57-61, 66-74, 76-78 (“Autosign” claims). Defendant also points to Relator’s admission with respect to his claims that YNHH billed for medically unnecessary panels of tests, Compl. ¶¶ 96-99; 2d Am. Compl. ¶¶ 89-92, that he has “no way of knowing” whether the memo in question either ordered fraudulent billing or was even put into effect. Doyle Deck Exh. K at 604:5-11, 607:10-14. Relator’s admissions that he does not know whether fraudulent billing occurred are troublesome. It is clear that Relator must establish “direct and independent” knowledge of an actual FCA violation— which includes the actual submission of false claims.
See United States ex rel. Karvelas v. Melrose-Wakefield Hosp.,
Relator, however, maintains that he does have direct and independent knowledge of the information underlying the allegations of fraud, having obtained such information firsthand during his tenure as a Teaching Physician in Defendant’s employ. Opp’n at 13 (citing Exh. A ¶¶ 13-22). Specifically, Relator argues that he possesses firsthand, direct knowledge “of Yale’s long standing practice of automatically submitting claims for reimbursement for the Professional Component of all radiology tests and procedures once they are in “F” status in the DecRad system,” Exh. A ¶¶ 9-11, 16, 18, “of YNHH’s long standing practice of automatically submitting claims for the Technical Component of radiology tests and procedures once the exam is placed in “C” status in the DecRad system,” Exh. A ¶¶ 7, 12, 21, as to how Autosign was going *78 to be used, Exh. C, “of the fraudulent finalization of preliminary reports written by Residents and Fellows ... because he discussed with actual Residents the fact that the respective faculty members were routinely signing off on the reports without reviewing the associated images or the reports,” Exh. A ¶ 15, and “of the Clean up project because he discussed with actual faculty who were coerced into participating in the fraud and because Plaintiff independently investigated and reviewed the computer records of specific cases that were part of the fraud,” Exh. A ¶¶ 18-19. Relator argues that this direct knowledge is “clearly evident” in the independent review he performed of fraudulently finalized reports, his complaints to Felicia Tencza, and his meetings with Yale President Levin and Yale’s General Counsel on the matter. Opp’n at 14 (citing 2d Am. Compl. ¶¶ 58-61, 66-76, 80-82, 84, 89, 90, 98, 101; Exh. A ¶¶ 13-22).
Although Relator’s investigation/review could lead to information which he would have direct and independent knowledge of, if his admissions are to the contrary, then they would control over the allegations in his complaint. As discussed above, Defendant cited several examples of Relator conceding that he does not have knowledge of the information forming the basis of the complaint, that is, that fraudulent billing occurred. Since Relator presents no evidence that he had direct and independent knowledge of fraudulent billing and since his admissions suggest none, there is insufficient evidence for this Court to find that Relator is an original source as to the allegations in paragraphs 20, 57-61, 66-74, 76-78 and 89-92 of the Second Amended Complaint.
Similarly, Defendant argues that Relator has demonstrated that his claim about billing for reports prepared by Neuroradiology Fellows in paragraphs 83-88 of the Second Amended Complaint is based on information obtained from third parties and therefore is “derivative of the information of others” and not “independent.” Def.’s Reply at 9; see also Mem. Supp. at 13-15. Defendant alleges that Relator has admitted to not having direct and independent knowledge of these alleged fraudulent activities, citing a filing in the State Court action in which Relator conceded, along with the other plaintiffs in that action, thаt he “did not directly observe or participate” in those activities. Doyle Decl. Exh. G at 2. In that filing, the State Court plaintiffs stated that “the source of these allegations [of alleged fraudulent activities relating to the overreading of the neuroradiology fellows] are numerous current and former radiology residents who directly and reluctantly participated in these activities.” Id. Similarly, in information produced during discovery in the State Court Action, Relator concedes that the plaintiffs in that action “did not claim that Yale had billed for these studies; it was enough of a violation of law and medical ethics for a physician to place his name on a report certifying he had reviewed the film when he had not.” Id. Exh. I at 5. For purposes of this action, however, the question of whether these practices violated law and medical ethics is irrelevant — it is false or fraudulent billing which is the sine qua non of an FCA violation. Since there is no violation without false or fraudulent billing, Relator’s statement casts considerable doubt on the viability of these claims. His silence on the subject suggests that he possessed no knowledge of any fraudulent billing, for if he did, presumably, he would have made that fact clear. Therefore, the evidence on the record at this point suggests that all that Relator was told and all that he knew was that the reports were signed.
In the Reply, Defendant also claims that Relator admits in this action that he obtained the information secondhand, citing *79 Relator’s argument that he “has direct knowledge of the fraud[ ] ... because he discussed [it] with actual Residents.” Def.’s Reply at 8 (citing Opp’n at '14). Moreover, Defendant points to Relator’s statement that he has “direct knowledge of the Clean up project because he discussed with actual faculty who were coerced into participating in the fraud and because Plaintiff independently investigated and reviewed the computer records specific cases that were part of the fraud,” Exh. A ¶¶ 18-19, and argues that these statements “turn the meaning of ‘direct’ on its head,” as Relator “concedes that his information ... was obtained secondhand rather than by personal observation.” Relator, on the other hand, claims that he followed the information up with his own independent investigation. Opp’n at 14.
Numerous courts have held that knowledge that is “unmediated by anything by [relator’s] own labor” or derived from information obtained firsthand through relator’s own labor is “direct.”
See, e.g., Wang,
D. Information and Belief Allegations
Defendant argues that the allegations pled “on information and belief’— specifically, those found in paragraphs 20, 69, 72, 77-78, 82-83 and 87-88 of the Second Amended Complaint — should be dismissed. Defendant claims that as to those allegations, Relator “has no basis to claim original source status.” Def.’s Reply at 10. Even if allegations are filed “on information and belief,” however, a relator can qualify as an original source if he or she had independent, firsthand knowledge of fraudulent conduct before the allegations of fraud were publicly disclosed.
See United States ex rel. DeCarlo v. Kiewit/AFC Enters.,
In his Affidavit, Relator outlines the “core” information he observed during his tenure at YNHH. Opp’n, Exh. A ¶¶ 13-22. Relator alleges to have direct knowledge of, inter alia, the resident schedules, the procedures for reviewing interpretations and associated images and finalizing reports, the alleged practice of some of the Emergency Department (“ED”) faculty members of not reviewing the images or the interpretations of the ED radiology tests, the alleged discovery that many of these reports were signed in large batches in a very short period of time while films were still in the library, the fact that this was contrary to long-standing policies in the ED, Yale’s “long standing practice” of automatically submitting claims for reimbursement for the Professional Component of all radiology tests and procedures that have been signed by faculty and placed in “F” status in the DecRad system (indicating that they had been finalized even though Relator alleges that many were never properly reviewed and corrected), the fact that Dr. Glickman’s name was used to finalize reports that allegedly had never been reviewed or edited, the Auto-sign fraud and YNNH’s “long standing practice” of automatically submitting claims for the Technical Component of radiology tests and procedures once the exam is placed in “C” status in the DecRad system even if such tests and procedures were only finalized by Autosign. Id. Some of Relator’s concerns regarding the рractice of signing radiology reports on patient studies for which the films have been lost are indicated in a May 4,1998 memo Relator sent to Dr. Bruce McClennan, which Relator attaches as evidence of his direct knowledge of the fraud. See Opp’n Exh. B. As a recipient of the Tencza memo explaining Autosign, Relator clearly had direct knowledge of how Autosign was going to be used, see Opp’n Exh. C, but did not necessarily have direct knowledge that fraud was actually committed. Moreover, some of Relator’s knowledge — regarding, for example, the fraudulent finalization of preliminary reports written by Residents and Fellows and the Clean up project— stems from discussions with Residents and faculty members and his own independent investigations, which, as stated earlier, renders the information “indirect.” The knowledge at issue was not “unmediated by anything but [Relator’s] own labor” and was not derived from information obtained firsthand through relator’s own labor, rather, much of it was obtained secondhand, through reports from Residents, other faculty members and possibly, information produced during discovery in the State Court Action.
Many of the claims pled on information and belief make up the substance of Relator’s FCA claim. See, e.g., 2d Am. Compl. ¶¶ 77 (“On information and belief, Defendants Yale and YNHH billed Medicare and Medicaid for the Professional Component of these Radiological Studies never reviewed by a Qualified Radiologist.”); 78 (“Upon information and belief, Defendants utilized the ‘Autosign’ process and the other afore-described non-Qualified Radiologist Radiology Study report finalization methods to avoid and conceal the obligation of said Defendants to repay the United States monies paid to Yale and YNHH for both the Professional and Technical Components of these Radiological Services.”); 83 (“Upon information and belief, over a one-year period, from on or about July 1997 to July 1998, several thousands of Radiology Reports read by Residents and first year Neuroradiology Fellows were fraudulently finalized by Yale Faculty who never reviewed the images.”); *81 87 (“Upon information and belief, several thousands of such instances of fraud were perpetrated from July 1997 to July 1998.”). These allegations cannot survive without proof that Relator has direct, independent, firsthand knowledge of the information that does form the basis of the complaint and certainly cannot support an FCA claim. To be an original source, Relator must have direct and independent knowledge of facts, not mere suspicions of illegal conduct. Relator has not demonstrated that any of the alleged failures — i.e., the non-review by a qualified radiologist, billing for non-reviewed studies, finalization of reports of residents and/or fellows by faculty who did not review the images — were performed or done as to constitute fraud in his presence or observations. Therefore, this Court finds that it does not have jurisdiction over those allegations pled on information and belief.
E. Second Circuit Precedent
The Second Circuit, setting a high bar, has repeatedly found that qui tam plaintiffs did not qualify as original sources. For example, in
Kreindler,
the qui tam plaintiff was an attorney who had obtained knowlеdge of the underlying fraud during his representation of a widow in a previous wrongful death action against defendant.
More recently — and more similarly — the qui tam plaintiffs in
New York Medical College
(“NYMC”) were found to not be original sources because the principal source of their knowledge of the fraud was an audit initiated by New York City Health and Hospital Corporation (“HHC”) that found that NYMC had overcharged HHC.
In this case, like in
New York Medical College,
Relator’s information came from other sources — e.g., information from Residents and from Dr. Burrell, discovery in the State Court Action and the Hogan & Hartson report — and not from personal observation at the time or by after-the-fact investigation which discovered documents such as records reflecting actual wrongdoing. As discussed herein, the evidence on the record does not establish that Relator’s knowledge was direct and indepen
*82
dent rather than being based on information discovered in the State Court Action or from the Hogan & Hartson investigative report. In a situation like the one at hand, it is virtually impossible for a qui tam plaintiff to directly observe all aspects of the fraudulent conduct with his own eyes. The decisive element, however, is the fact that Relator has simply failed to show that he would have had knowledge of the fraud without the information obtained from other sources.
See New York Med. Coll.,
ii. Whether Relator Voluntarily Provided the Information to the Government Prior to Filing Suit
As this Court has already found that Relator does not qualify as an original source based on his lack of direct and independent knowledge, it is not necessary to reach the second prong of the original source analysis, i.e., whether Relator voluntarily provided the information to the government prior to filing suit.
iii. Whether Relator was Directly or Indirectly a Source to the Entity that Publicly Disclosed the Allegations on Which the Suit is Based
Similarly, since this Court has already found that Relator does not qualify as an original source based on his lack of direct and independent knowledge, we also need not reach the third prong of the analysis, i.e., whether Relator was directly or indirectly a source to the entity that publicly disclosed the allegations on which the suit is based.
2. Whether the FCA Claims Should be Dismissed for Failure to Meet Rule 9(b)’s Heightened Pleading Standards
a. Principles Governing the Pleading Requirements of Rule 9(b)
Defendant also moves to dismiss Relator’s FCA claims pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. Although this Court already found that Relator’s FCA cause of action should be dismissed for lack of subject matter jurisdiction, we also hold, in the alternative, that the FCA claims fail to satisfy Rule 9(b).
Notwithstanding the liberal standards applicable to a motion to dismiss, it is well-established that suits under the FCA are subject to the heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure, which requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.”
See Gold,
Scienter may be pled generally under both the FCA and Rule 9(b).
See Gold,
The general rule is that Rule 9(b) pleadings cannot be based on “information and belief.”
Segal v. Gordon,
Courts have also relaxed Rule 9(b)’s pleading requirements in cases involving particularly complex or extensive fraudulent schemes.
In re Cardiac Devices Qui Tam Litig.,
b. Discussion
The alleged fraud is extremely complex, involves thousands of instances, occurred over an extended period and involves information “peculiarly within the adverse parties’ knowledge” or within Defendant’s capacity to identify from the facts alleged. Thus the Rule 9(b) particularity requirements should be relaxed.
See In re Cardiac Devices,
The Second Amended Complaint adequately provides Defendant with notice as to the claims asserted against it, thus serving the underlying purpose of Rule 9(b) and satisfying “the ‘who, what, where, when, and why’ requirements of the Second Circuit case law.”
In re Cardiac Devices,
The “what” is the submission of claims for payment to the Medicare and Medicaid Programs based on: (1) reads of “old” studies performed long after the point in time when they can be considered medically necessary, with no therapeutic or diagnostic value and would not constitute “physician services,”
id.
¶¶ 55-56; (2) issuing reports of Radiology Studies based solely upon interpretations made by Residents and Neuroradiology Fellows not properly supervised by a Qualified Radiologist,
id.
¶¶ 57-78; (3) fraudulently finalizing Radiology Reports which were read by Residents and first-year Neuroradiology Fellows but never reviewed or edited by Yale Faculty,
id.
¶¶ 83-88; and (4) ordering certain panels of diagnostic tests without regard to whether the tests are medically indicated and prior to patients being examined or evaluated,
id.
¶¶ 89-92. Moreover, Relator claims that these allegedly fraudulent practices resulted in the “knowing overstatement” of YNHH’s costs as reported in its annual Medicare Cost Reports filed with the federal government.
Id.
at ¶ 93. Importantly, however, although Relator alleges generally that false or fraudulent bills were submitted (on “information and belief’), Relator fails to identify a single false or fraudulent bill submitted to the federal government.
See Luce v. Edelstein,
*85 The “where” is both YNNH, the place where the fraudulent activity took place, and the Medicare and Medicaid offices, the places the claims and reports were filed, facts that should be within the knowledge of Defendant. The “when” is the time when these claims were filed — according to the complaint, the fraudulent activity took place between 1995 and 2000, with some allegedly continuing to the present day. The “how” is detailed extensively in the portions of the complaint describing Defendant’s alleged wrongdoing, in which Relator alleges that Defendant employed a full-time staff person to find lost studies, id. ¶ 55, used Autosign to finalize Radiology Reports never reviewed by a Qualified Radiologist, id. ¶¶ 58-78, used Residents and Neuroradiology Fellows to facilitate billing fraud, id. ¶¶ 83-88, and issued memoranda dictating departmental policies that furthered fraudulent practices, id. ¶¶ 58, 90. Relator also describes the Medicare Regulations in detail in an effort to explain why the alleged conduct constituted fraud against the government. See id. ¶¶ 21 — 40.
The Second Amended Complaint identifies the hospital and University involved, some of the doctors involved and the specific regulations allegedly violated. This information gives Defendant notice of the specific activities constituting the allegations of fraud, thereby providing Defendant with arguably enough information to file an effective responsive pleading.
Defendant alleges, however, that Relator’s Second Amended Complaint “remains devoid of the particulars required under Rule 9(b),” arguing that more details regarding the submission of actual false or fraudulent claims are required. Mem. Supp. at 20;
see Karvelas,
Relator contends that the rigid pleading standards should be relaxed in this case for facts which are in the exclusive control and possession of Defendant. Defendant asserts that the information at issue is not within its exclusive control, arguing that the government possesses all claims submitted by Defendant and such information can be obtained through sources such as the Freedom of Information Act. Mem. Supp. at 25, n. 12. The Court in Karvelas, however, has already rejected this argument, explaining that:
[EJvery FCA qui tarn action involves allegations of false or fraudulent claims submitted to the government. In many of these cases, the information needed to fill the gaps of an inadequately pleaded complaint will be in the government’s hands. In addition, if the relator seeks to obtain the requisite information from the government, for example by submitting a request under the Freedom of Information Act (FOIA), he or she may encounter Section 3730(e)(4) of the FCA, which prohibits qui tam actions based upon publicly disclosed allegations unless the relator is an “original source” of that information.
Although the pleading standards are relaxed, the Second Circuit has imposed a requirement that pleadings based on information and belief must be accompanied by “a statement of facts upon which the belief is based.”
DiVittorio v. Equidyne Extractive Indus., Inc.,
In this case Relator has alleged a complex, specific scheme of fraud giving rise to an inference that fraudulent billing may have occurred. The Second Amended Complaint alleges that fraudulent claims were submitted, but fails to set forth evidence of specific billing records for actual claims submitted to the government.
See
2d Am. Compl. ¶¶ 56, 77, 78, 87, 89, 92, 93, 94. Numerous courts have held that both corporate insiders and outsiders must offer more than conclusory statements that false claims were submitted to the government; they must support such allegations with the specificity required by Rule 9(b). Here, Relator has alleged that false claims were submitted, but has not identified a specific amount of charges that were submitted, provided the dates that false claims were submitted or provided a copy of a single bill or payment. His allegations of fraudulent billing are primarily conclusory summations and assumptions or allegations based solely on “information and belief.”
12
If Relator is unable to identify a
*87
single false claim arising from the alleged scheme of fraud or at least set forth an adequate basis on which his belief is based, he cannot meet even a “bare-bones Rule 9(b) test.”
Walsh,
Relator does provide
some
factual basis for his claim — namely, that “Yale has a long-standing practice of billing the Professional Component of Radiology Services for all reports that are signed (and thereby ‘finalized’) by Yale faculty and submitting claims under the name of the faculty member that signs the report” and that “there is no question that if Plaintiffs allegations are accepted as true, Yale University must have submitted claims for reimbursement from the Medicare program (under the name of the faculty signing each report) for all such signed reports for Medicare patients,” Opp’n at 34 (citing Smith Aff., Exh. A ¶¶ 9-11, 16, 18) These statements, however, are merely conclusory allegations lacking factual substantiation. The policy of not subjecting a defendant to the time and expense of defending an “improvident” clаim requires evidence of some, although not each and every, instance of actual billing to sufficiently allege that fraud occurred.
See Rombach,
Another FCA case,
United States ex rel. Pogue v. Diabetes Treatment Ctrs. of America, Inc.,
involved allegations of illegal kickbacks to physicians in return for patient referrals to diabetes treatment centers in hospitals across the country.
' Although the complaint may provide Defendant with adequate notice of the claims against it, Rule 9(b) has other purposes that must also be considered. In addition to providing notice that enables defendants •to prepare meaningful defenses to charges of fraud, the particularity requirement of Rule 9(b) serves the purposes of,
inter alia,
preventing conclusory allegations of fraud from serving as a basis for strike suits and fishing expeditions, and protecting defendants from groundless charges that may damage their reputations.
See Rombach,
c. Leave to Amend
Failure to satisfy Rule 9(b) generally results in dismissal of the complaint without prejudice.
In re Time Warner Inc. Sec. Litig.,
3. Whether the FCA Claims Should be Dismissed for Failure to State a Claim Pursuant to Rule 12(b)(6)
Although Relator’s claims were already dismissed for lack of subject matter jurisdiction and for failure to meet the Rule 9(b) particularity requirements, in the alternative, certain claims should also be dismissed pursuant to Rule 12(b)(6) for failure to state a claim.
a. Standard of Review of a Motion to Dismiss Under Rule 12(b)(6)-
Defendant also moves to dismiss Relator’s Second Amended Complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The function of a motion to dismiss for failure to state a claim is “merely to assess the legal feasibility of a complaint, not to assay the weight of evidence which might be offered in support thereof.”
Ryder Energy Distribution Corp. v. Mertill Lynch Commodities, Inc.,
When ruling on a motion to dismiss, a district court should decide the motion on the complaint alone, excluding additional evidence, affidavits, exhibits and factual allegations contained in legal briefs or memoranda.
Friedl v. City of New York,
b. “Knowing Assistance ” Standard
It is important to distinguish between billing for the Professional Component and the Technical Component of radiological studies. Defendant asserts that “YNHH has no responsibility for, nor does it bill for, the Professional Component of Radiological Services.” YNHH’s Reply in Supp. Mot. Dismiss, 3:02cvl205 (PCD) [Doc. No. 75], at 4. The Supreme Court has said, however, that the provisions of the FCA, read together, “indicate a purpose to reach any person who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government.”
United States ex rel. Marcus v. Hess,
c. The False Claims Act
As stated previously, “[t]he False Claims Act authorizes private citizens to sue on behalf of the United States to recover treble damages from those who knowingly make false claims for money or property upon the Government or who knowingly submit false statements in support of such claims or to avoid the payment of money or property to the Government.”
Lissack,
There are multiple theories of liability under the FCA, two of which are referred to as “legally false” and “factually false” certification. “Legally false” certification applies when a defendant has “false[ly] or fraudulent[ly] certifi[ed] that they are in compliance with the applicable federal statute or regulation.”
Mikes v. Straus,
It is clear that “a claim under the [FCA] is legally false only when a party certifies compliance with a statute or regulation as a condition to governmental payment.” Id. The Medicare Regulations and the CMS (formerly HCFA)-1500 and HCFA1450 forms expressly provide that certification is a precondition to governmental reimbursement. In order to obtain reimbursement and as a condition to governmental payment, providers must certify that they are in compliance with the terms on the form. Form CMS-1500, which is required for Medicare Part B benefits to be paid, requires physicians to “certify that the services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision.” Similarly, hospitals must submit the Form HCFA-1450 (UB-92) in order to obtain reimbursement for items and services provided to a patient. In submitting the Form HCFA-1450, hospitals are required to certify — but only if seeking CHAMPUS reimbursement — that “the information submitted as part of this claim is true, accurate and complete, and, the services shown on this form were medically indicated and necessary for the health of the patient.” In addition to this form, Medicare providers are required to annually submit a Hospital Cost Report, *92 Form HCFA-2552, which summarizes the amount of interim payments received and the amount to which the hospital claims entitlement from Medicare. This Cost Report contains a mandatory certification that the report “is a true, correct and complete statement prepared from the books and records of the provider in accordance with applicable instructions.”
d. Discussion
As Relator notes, former defendant Yale would use the CMS-1500 form for submission of claims for the Professional Component of radiology services whereas Defendant YNHH uses the HCFA-1450 form for the submission of claims for the Technical Component of such services. The HCFA-1450 form does not contain the same express certification as does the CMS-1500 form. The HCFA-1450 form does not contain the certification that the services in question “were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision,” only requiring providers to certify that the services “were medically indicated and necessary” in the event that the hospital is seeking CHAMPUS reimbursement.
See
Form HCFA-1450;
Riley,
Relator alleges that Defendant submitted false or fraudulent bills to Medicare and Medicaid but does not mention CHAMPUS. This fact alone does not exonerate YNHH — as discussed above, the FCA applies to anyone “who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government.”
United States ex rel. Marcus v. Hess,
i. Allegations that Defendants Billed for Studies by Radiologists Who Were Not Qualified Teaching Physicians
Defendant argues that Relator’s allegation that “reports by residents and fellows were finalized by ... outside clinical attending physicians [i.e., Drs. Simmons and Haims] who are not authorized to bill Medicare as Teaching Physicians” fails to state a claim under the FCA. Mem. Supp. at 32 (quoting 2d Am. Compl. ¶ 75). Under the applicable Medicare regulations, a teaching physician is defined as “a physician (other than another resident) who involves residents in the care of his or her patients.” 42 C.F.R. § 415.152. This broad definition of teaching physician seems to include, and thus permit billing *93 by, outside clinical attending physicians. Due to this inclusive definition, Relator’s allegation in paragraph 75 of the Second Amended Complaint fails to state a claim.
Moreover, Relator does not provide support for or explain his claim that Medicare would not provide reimbursement for services performed by “non-qualified” physicians. 2d. Am. Compl. ¶ 78. As the Régulations provide no basis for distinguishing between “qualified” and “non-qualified” physicians, a claim that one or more are unqualified does not give rise to a viable cause of action. Relator does not respond to Defendant’s arguments that this claim should be dismissed and the Court can find no reason to uphold the claim. Therefore, the claims in paragraph 75 and the portion of paragraph 78 relating to “the other afore-described non-Qualified Radiologist Radiology Study report finalization methods” should also be dismissed, in addition to the afore-mentioned grounds, for failure to state a claim.
ii. Allegations that Defendants Billed for Studies fоr Which the Signing Radiologist did not Revietv the As sociated Image and/or the Preliminary Report
In a situation similar to the one at hand,
Mikes
held that an allegation that signing, certifying physicians did not “personally furnish” the associated services as required by the CMS-1500 form is a permissible cause of action.
A. Allegations Regarding the Neuroradiology Fellows
Defendant argues that Relator’s allegations regarding the neuroradiology fellows’ and residents’ review of reports are based on the “false assumption” that Yale and YNHH cannot properly bill Medicare and Medicaid for services rendered by fellows and residents without review by a supervising physician. Defendant is responding to Relator’s contention that “[i]n the event that a Radiology Study is interpreted and/or dictated by a Resident, Fellow or anyone other than a Qualified Radiologist, a Qualified Radiologist must review and sign the Study in accordance with the applicable rules and regulations governing physicians at Teaching Hospitals. Otherwise that study may not be billed.” 2d Am. Compl. ¶ 14. Relator argues that if an interpretation is prepared by a Resident or Fellow, a Teaching Physician must indicate that he or she has personally reviewed the image and the interpretation and either agrees with or edits the findings. 2d. Am. Compl. ¶ 31; Opp’n at 36 (citing 42 C.F.R. §§ 172, 16 180). Relator claims that “Medicare does not pay for the interpretation if the documentation shows simply a countersignature of the Resident’s interpretation by the Teaching Physician.” 2d Am. Compl. ¶ 31 (citing 42 C.F.R. § 415.172; 60 Fed.Reg. 63124). Relator further alleges that “over a one-year period ... several thousands of Radiology Reports read by Residents and first year Neuroradiology Fellows were fraudulently finalized by Yale Faculty who never reviewed the images.” Id. ¶ 83. Relator alleges that the reports were fraudulently finalized “for *94 billing purposes,” id. ¶84, in violation of the Medicare/Medicaid certification which requires signing providers to certify that “the services ... were medically indicated and necessary for the health of the patient and were personally furnished by me or were incident to my professional service by my employee under my immediate personal supervision.” See CMS Form 1500. These claims involve the Form CMS-1500, which is submitted by physicians as a condition of reimbursement for the Professional Component of medical services. As a technical matter, YNHH is not required to and does not submit the Form CMS-1500 as a condition of reimbursement.
Defendant asserts that Medicare carriers “must pay for the [Professional Component] of radiology services furnished by a physician to an individual patient in all settings under the fee schedule for physician services regardless of the specialty of the physician who performs the service.” Mem. Supp. at 33 (quoting Medicare Claims Processing Manual, Ch. 13, § 20.1). As residents and fellows are “licensed physicians,” Defendant argues, Medicare is required to pay for services rendered by them under this provision. Moreover, Defendant contends that the services of “moonlighting” residents and fellows may properly be billed to Medicare even without the supervision or presence of teaching physicians. Id. (citing 42 C.F.R. § 415.208 17 ). Defendant is correct in part — the services of “moonlighting” residents and fellows may be billed as physician services if certain criteria are met. 42 C.F.R. § 415.208(b)(2). 18 The regulation also provides, however, that the services of residents who are not “moonlighting” are not payable as physician services. 42 C.F.R. § 415.208(b)(1). 19 Since the questions of whether the residents and fellows qualify as “moonlighting” residents and whether the specified criteria are met require factual evidence outside of the amended complaint, they are not properly determined on a motion to dismiss. 20
The allegations in paragraphs 83-88 of the Second Amended Complaint, however, deal with the Professional Component of Radiology Services, for which YNHH is not technically responsible and does not bill directly. Relator does not specifically allege, with respect to these claims, that YNHH knowingly participated in these practices or knowingly cooperated with Yale.
See Riley,
B. Allegations Regarding the “Clean Up Project”
Relator alleges that Defendant improperly engaged in a “clean up project,” pursuant to which attending faculty radiologists were asked to sign off on or finalize reports with which they had not been involved and which had not previously been interpreted or finalized for use in connection with patients’ diagnosis and treatment.2d Am. Compl. ¶¶ 58-65, 80-82. Defendant argues that these allegations are insufficient because Relator “does not claim that the voluntary faculty members failed to interpret the report and associated images contemporaneously with providing care for the patient.” Mem. Supp. at 35. Relator does allege, however, that physicians were being “coerced” to sign off on reports on patients with whom they had never been involved or had any association and to finalize reports of Radiology Studies that were a couple of years old and that the physicians had never been involved with.2d Am. Compl. ¶¶ 62-63, 65, 80-81.
Defendant also argues that Relator fails to allege (1) “that Medicare was asked to pay twice for the same service;” and (2) “that Medicare was asked to pay a cent more than if the voluntary faculty members had themselves finalized the reports.”
Id.
(citing 2d Am. Compl. ¶¶ 58-65, 80-82); Reply at 20-21. This Court has already established that the FCA does not require a showing that the United States have suffered damages as a result or fraudulent claim.
See Rex Trailer,
CMS Form 1500 includes an express certification that the physician’s services were “medically indicated and necessary for the health of the patient and were personally furnished by [the signing physician] or wеre furnished incident to [the signing physician’s] professional service by [his or her] employee under [his or her] immediate personal supervision.” Defendant then tries to go on to argue, however, that “[a]s long as the provider does not bill twice for the same service, Medicare does not question whether the subsequent review and finalization by another physician was medically necessary.” Id. at 21. This statement is not completely accurate, as Medicare may not question whether a service was timely provided in such a case, but all services provided and billed for still must be medically necessary. Relator’s allegation goes beyond a claim that services were not timely provided to a claim that the signing physician did not actually provide the services and/or that the services were not medically necessary. The Regulations set the requisite standard for Teaching Physician involvement. See 42 C.F.R. §§ 415.170 (providing that the services must be “personally furnished by a physician who is not a resident” or “furnished by a resident in the presence of a teaching physician”); 415.172 (“If a resident participates in a service furnished in a teaching setting, physician fee schedule payment is made only if a teaching physician is present during the key portion of any service or procedure for which payment is sought.”); 415.180 (“Physician fee schedule payment is made for the interpretation of diagnostic radiology and other *96 diagnostic tests if the interpretation is performed or reviewed by a physician other than a resident.”). If Relator’s allegations are true and Defendant billed for studies with which the signing physician was not involved (and therefore, for which the signing physician could not assess medical necessity), this would state a claim under the FCA and thus, these allegations should not be dismissed on that basis.
C. Allegations Regarding the Use of ‘Autosign”
Defendant also argues that Relator’s claims regarding the use of the “Autosign” function fail to state a claim. Mem. Supp. at 35 (citing 2d Am. Compl. ¶¶ 20, 57-61, 66-74, 76-78). Defendant asserts that Relator has “selectively omitted” certain quotes from the Tencza emails which tend to undermine his claims. 21 Id. For example, Defendant cites Ms. Tencza’s explicit statement that “[i]t is VERY important that we do not bill for the study.” See id.; see also Opp’n Exh. C. Similarly, Defendant quotes Ms. Tencza’s statements in a subsequent email — -also quoted by Relator — in which she reiterates that “no bill will go out for ‘Auto Sign.’ That is the purpose of creating Autosign.” See Mem. Supp. at 35; see also Opp’n Exh. C. Based on these conflicting statements, Defendant asserts that Relator cannot state a claim based on the use of Autosign. 22 Mem. Supp. at 36. There is some evidence, however, suggesting that Defendant may have billed for studies finalized by Autosign, including Relator’s allegation that Auto-sign was used to move studies from “C” status, indicating that they have not been interpreted, to “F” status, indicating that they have been interpreted and finalized, 2d Am. Compl. ¶20, the fact that Yale automatically submits claims for reimbursement for radiology tests and procedures once they are in “F” status, Opp’n Exh. A ¶¶ 11, and Ms. Tencza’s admission that “[t]his procedure cannot prevent an attending from finalizing a report without viewing the images” and thus, the “procedure cannot correct an issue [the] billing [department] is now aware of.” Tencza email, Opp’n Exh. C.
Relator’s substantiation for these claims is based entirely on a series of inferences — i.e., evidence of certain studies’ movement from C to F status, automatic billing for studies in F status and the fact that Tencza’s procedure cannot prevent fraudulent billing — and should be regarded as extremely subject to question. The Tencza memos and statements cited by Defendant raise an inference to the contrary, i.e., that no fraudulent billing occurred, and thus the present record leaves Relator’s justification for the claim extremely in doubt. Viewing the facts in the light most favorable to Relator, it is questionable whether a reasonable jury could legitimately find that Defendant violated the FCA. The matter need not be decided *97 at this time, however, in view of the otherwise dispositive resolution of the matter.
iii. Allegations that Defendants Billed for Medically Unnecessary Studies
Relator claims that Defendants, either by performing reads of “old” studies or by routinely ordering panels of tests without regard to medical necessity, improperly billed Medicare for the Professional Component of radiology studies that were not medically necessary. 2d Am. Compl. ¶¶ 55-56, 89-92. It is important to note that term “medically necessary,” as used on the CMS-1500 form, refers to the level rather than the quality of the services provided.
See Mikes,
Although claims for medically unnecessary treatment are actionable under the FCA, Relator’s allegations regarding “old” studies (¶¶ 55-56) only allege improper billing of the Professional Component and therefore do not directly implicate YNHH. See 2d Am. Compl. ¶ 56 (“Yale could and would bill for the Professional Component”) (emphasis added). Relator does, however, allege that ‘YNHH has employed a full-time staff person to find lost Radiology Studies” in order to bill for “old” studies and that “[i]t is a long-standing practice in the YNHH Emergency Department that certain panels of diagnostic tests, including Radiology Studies, are routinely ordered as a matter of practice, regardless of whether the tests are medically indicated, and prior to patients being examined or evaluated by appropriate medical providers.” Id. ¶¶ 55, 89. Moreover, Relator alleges that both Defendants “knowingly submitted claims for payment from the Medicare and Medicaid Programs for both the Technical and Professional Components of those Services.” Id. ¶ 92. These statements, in conjunction with the earlier descriptions of Yale and YNHH’s closely interconnected relationship, sufficiently allege cooperation and “knowing assistance” so аs to implicate YNHH.
The allegations in paragraphs 89-92 of the Second Amended Complaint assert that Defendants improperly billed for both the Technical and Professional Components of radiology services. Defendant asserts that the allegations are “so vague and conclusory that Defendants cannot respond,” arguing that they should be dismissed pursuant to Rule 9(b) as well as Rule 12(b)(6). Mem. Supp. at 36. Defendant also argues that Relator “cannot use the implied false certification theory to second guess medical judgment.” Reply at 21-22 (citing
Mikes,
Although Relator fails to respond to Defendant’s assertions on this issue, the Medicare regulations and statutes clearly require physicians to certify that the services they perform are reasonable and medically necessary for diagnosis or treat
*98
ment.
See
42 U.S.C. § 1395y(a)(l)(A) (excluding from coverage items and services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member”); 42 C.F.R. § 411.15(k);
see also Mikes,
B. False Claims Act: Section 8780(h) Retaliation Claims
Relator alleges that “[bjecause of his investigation and reporting of the frauds alleged [in the Second Amended Complaint], [he] was harassed and was discriminated against in the terms and conditions of his employment, by and through the acts of the Defendants’ officers, agents, and employees, including Dean [David] Kessler[, M.D.,] Bruce McClennan, M.D., James Brink, M.D., [and] Howard For-man, M.D.” 2d Am. Compl. ¶ 99. His retaliation claim includes allegations of harassment, threats and intimidation, salary cuts, decreased responsibility, lost administrative positions and titles, forced resignation from Yale and YNHH and being forced to leave the state of Connecticut. Id. The FCA prohibits employers from retaliating against relators, providing that:
Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.
31 U.S.C. § 3730(h). This provision was enacted in an effort to protect employees who assist in the discovery and prosecution of fraud and to encourage persons with knowledge of such fraud to come forward, because “few individuals will expose fraud if they fear their disclosures will lead to harassment, demotion, loss of employment or other form of retaliation.” S. REP. NO. 345, 99th Cong., 2d Sess. 35 (1986), as reprinted in 1986 U.S.C.C.A.N. 5266, 5300.
Defendant contends that Relator’s Section 3730(h) claim for retaliation should be dismissed as untimely, arguing that the claim is governed by the 90-day limitations period of Connecticut’s whistle-blower statute and thus is time-barred. Mem. Supp. at 36-40. Defendant also argues that the retaliation claim should be dis *99 missed pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Id. at 41-45.
1. Whether Relator’s Retaliation Claim is Time-Barred,
To determine the appropriate statute of limitations for a cause of action created by a statute, courts first ask whether a limitations period is expressly supplied by the statute. If one is not supplied, then the most closely analogous state limitations period governs.
See North Star Steel Co. v. Thomas,
In making this determination, we must ask (1) which state law cause of action is most closely analogous to Section 3730(h) and (2) whether the limitations period applicable to that cause of action comports with the policies underlying the federal law.
See North Star Steel,
Defendant argues that the “most closely analogous” stаte statute is Section 31-51m of the Connecticut General Statutes, which provides:
No employer shall discharge, discipline or otherwise penalize any employee because the employee ... reports ... a violation or a suspected violation of any state or federal law or regulation ... to a public body .... No municipal employer shall discharge, discipline or otherwise penalize any employee because the employee ... reports ... to a public body concerning the unethical practices, mismanagement or abuse of authority by such employer. The provisions of this subsection shall not be applicable when the employee knows that such report is false.
Conn. GemStat. § 31-51m(b). This statute, also known as Connecticut’s “whistle-blower” statute, provides for a ninety-day limitations period:
Any employee who is discharged, disciplined or otherwise penalized by his employer in violation of the provisions of subsection (b) may, after exhausting all available administrative remedies, bring a civil action, ... within ninety days of such violation ....
Conn. GemStat. § 31-51m(c) (emphasis added). Since Smith resigned from Yale on June 30, 1999 and his Original Complaint in this action was not filed until July 19, 2000, it is clear that he failed to assert his claim for some, if not all, of the allegedly retaliatory acts within the ninety-day period.
*100 Relator concedes that Section 31 — 51(b) provides for a cause of action similar to the retaliation claim under the FCA, however, Relator argues that it is not the “most closely analogous” cause of action available under Connecticut law. Opp’n at 48. Relator contends that Section 31-51m and Section 3730(h) are distinguishable, in that the scope of protected conduct for which Section 31-51m provides protection is much narrower, thus protecting employees from “far fewer activities” than does Section 3730(h). Opp’n at 48^49. Specifically, Relator points to language in Section 31-51m which only protects employees who report violations or suspected violations of law, whereas Section 3730(h) protects all employees who engage in lawful acts “in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action .... ” See Conn. Gen.Stat. § 31-51m; 31 U.S.C. § 3730(h). While the conduct protected under Section 31~51m would be protected under Section 3730(h), a great deal of conduct protected under Section 3730(h) does not fall under the limited protection of Section 31-51m. In this case, for example, Relator claims not only that Defendant retaliated on the basis of his reporting of alleged violations of the FCA but also for his investigation of Defendant’s allegedly fraudulent conduct. See 2d Am. Compl. ¶ 99. Although Defendant claims that “[t]he analogy between § 3730(h) and § 31-51m could not be more straightforward,” Reply at 22, this Court does not find it to be the most closely analogous state cause of action.
Relator maintains that the three-year statute of limitations provided for under Connecticut General Statutes Section 31-51q or under the common law wrongful discharge claim is the most closely analogous limitations period under state law. Opp’n at 50-52. Connecticut General Statutes Section 31-51q protects employees who exercise “rights guaranteed by the first amendment to the United States Constitution or section 3, 4, or 14 of article first of the Constitution of the State.” Conn. Gen.Stat. § 31-51q. Section 31-51q is concerned with broadly protecting constitutional rights, whereas Section 3730(h) is concerned with protecting employees who,
inter alia,
report and investigate fraudulent activities. S. REP. NO. 99-345, at 34 (1986),
as reprinted in
1986 U.S.C.C.A.N. 5266, 5299. The speech protected under Section 31-51q need only be on a matter of “public concern;” there is no requirement that it be connected to an investigation of an employer’s allegedly illegal activities.
See Cotto v. United Techs. Corp.,
Several of the courts to consider the issue have held that the state law cause of action most closely analogous to that provided for under Section 3730(h) was the state’s common law tort claim for wrongful discharge.
See, e.g., United States ex rel. Lujan v. Hughes Aircraft Co.,
Connecticut also recognizes a common law tort claim for wrongful discharge “where the discharge contravenes a clear mandate of public policy.”
See Sheets v. Teddy’s Frosted Foods, Inc.,
Turning to the second question in the analysis, the Court finds Connecticut’s three-year limitations period to be consistent with Section 3730(h) and the general policies underlying it.
See Ackley,
The legislative history of Section 3730(h) establishes a two-fold policy: (1) protecting whistle-blowers against discrimination by their employers and (2) promoting anti-fraud enforcement efforts. Nothing in the legislative history suggests that Congress intended these claims to proceed on an especially fast track, which it might have easily indicated in the statute had it cared to. Other federal legislation, protective of personal rights but nonspecific as to the limitations period and embracing various state laws, such as the Civil Rights Act of 1871, as amended, 42 U.S.C. § 1983, contemplate actions being brought with various state limitations periods up to three years. When shorter periods have been intended, Congress has not hesitated to say so. Nor is the balance that three years strikes between the time for an employee to present a claim and the right of an employer to be free from stale claims in any way inappropriate. The search for truth if the three-year period is acknowledged will not “be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise.”
Id,. Similarly, this Court finds that application of Connecticut’s three-year limitations period to Relator’s Section 3730(h) claims is in harmony with the federal statute and the pоlicies underlying it.
Relator alleges that he was retaliated against for investigating and reporting the alleged fraudulent activities to Yale University and Hospital Administrators during 1998 and 1999, until he was forced to resign from Yale. Opp’n at 51; 2d Am. Compl. ¶¶ 4, 7, 99. Relator filed his Original Complaint in-this action on July 19, 2000 and thus all of the alleged retaliatory acts fall well within the three-year statute of limitations period. Accordingly, Relator’s Section 3730(h) retaliation claims are not barred by the applicable statute of limitations.
2. Whether the Retaliation Claims Should be Dismissed for Failure to State a Claim Pursuant to Rule 12(b)(6)
In order to state a claim for retaliation under Section 3730(h) of the FCA, a relator must show that (1) the employee engaged in conduct protected under the FCA; (2) the employer knew that the employee was engaged in such conduct; and (3) the employer discharged, discriminated against or otherwise retaliated against the employee because of the protected conduct.
Karvelas,
a. Whether Relator Engaged in Protected Conduct
To satisfy the first prong in the analysis, Relator must demonstrate that he engaged in activity protected by the FCA. 31 U.S.C. § 3730(h). He need not actually have filed a FCA lawsuit or have developed a winning claim to receive Section 3730(h)’s protection, but need only have engaged in conduct “in furtherance of’ a FCA action.
Karvelas,
Courts have held that an investigation into fraudulent billing practices constitutes protected conduct under Section 3730(h).
See Yesudian,
67. Relator Smith reported and complained about the deficiencies in patient care, improper billing, falsification of records and deficiencies in the GME Residency Program to Defendants’ representatives ... along with numerous other representatives of Yale and *104 YNHH ... and the Defendants failed to take any corrective action in response to those reports and complaints.
68. Concerned about what he perceived to be substandard care which was harming patients and putting patients at risk, the illegal alteration of patient records, misrepresentation of information on patient reports, and fraudulent billing practices, Relator Smith reviewed a series of radiology reports in the DecRad system. The review encompassed those reports which Dr. Burrell had complained about to Dr. Forman and Dr. McClennan, those reports finalized by “Autosign” for the period from January 1, 1998 to May 2000, and other reports finalized “after-the-fact” which had never been interpreted or finalized for use in connection with the patient’s diagnosis and treatment.
73. Relator Smith’s investigation has revealed that at least 81 patient radiological reports initially interpreted by Residents and Fellows have been altered to reflect the names of Qualified Radiologists as the Responsible Radiologists even though those so named never supervised the Residents and Fellows when the preliminary interpretations were performed and they never reviewed or interpreted the Radiology Studies prior to finalizing the reports.
77.On information and belief, Defendants Yale and YNHH billed Medicare and Medicaid for the Professional Component of these Radiological Studies never reviewed by a Qualified Radiologist, in violation of 31 U.S.C. § 3729(a)(l-2).
78. Upon information and belief, Defendants utilized the “Autosign” process and the other afore-described non-Qualified Radiologist Radiology Study report finalization methods to avoid and conceal the obligations of said Defendants to repay the United States monies paid to Yale and YNHH for both the Professional and Technical Components of these Radiological Services, in violation of 31 U.S.C. § 3729(a)(7) and 18 U.S.C. § 1001.
79. On July 15, 1999, Dr. Rosenfield met with President Levin, to discuss in detail the Medicare fraud committed by Dr. McClennan and colleagues ....
80. On July 15, 1999, Dr. Burrell met with President Levin on the issues raised in Dr. Burrell’s letter dated July 3,1999 (as referenced above) e.g.: ... d. Extensive issues related to fraud ...
81. On July 21, 1999, Drs. Burrell, Rosenfield, and [Relator] Smith met with Yale’s General Counsel, Dorothy Robinson, Esq. in her office: ... e. Dr. Burrell informed General Counsel Robinson of at least five serious improprieties regarding inappropriate signing of reports ....
Although these allegations are much too vague to meet Rule 9(b) pleading standards, Relator does properly allege that he was investigating and reporting defendant’s alleged fraudulent billing practices rather than just its noncompliance with federal and state regulations. 23 As Relator properly alleges that his investigations and reports concerned activities that allegedly involved fraud on the government, he satisfies the first prong of the Section 3730(h) inquiry.
*105 b. Whether Defendant Knew that Relator teas Engaged in Protected Conduct
To satisfy the second element of a FCA retaliation claim, Relator must show that “the employer had knowledge the employee engaged in protected activity.”
Karvelas,
Since a plaintiff is not required to “know” that his or her investigation may lead to a FCA action, similarly, there can be and is no requirement that the defendant know that the employee has filed or is contemplating such an action.
Yesudian,
Internal reporting has been held to constitute protected activity, but if an employee wants to impute knоwledge to the employer for purposes of the second prong of the analysis, he must specifically tell the employer that he is concerned about possible fraud.
Yesudian,
The
Robertson
plaintiff had an additional weakness as well — since the plaintiffs job in that case involved substantiating charges and because he never characterized his concerns as involving investigations into potentially fraudulent activity, his employer had no way of knowing that his concerns were any different than those typically raised as part of his job.
Here, Relator suffers from neither of the above weaknesses. Relator properly alleges that he reported allegations of Medicare fraud and the submission of false claims to the government to Hospital and University Administrators.
See
2d Am. Compl. ¶¶ 79-81. Although the pleadings are vague, they do state that Drs. Rosenfield, Burrell and Relator reported “Medicare frauds committed by Dr. McClennan and colleagues,”
id.
¶ 79, “[e]xtensive issues related to fraud,”
id.
¶ 80, and informed Yale’s General Counsel that certain doctors “are committing fraud according to Medicare regulations.”
25
Id.
¶ 81. These pleadings, although vague, are sufficient for a “reasonable jury to conclude that defendant ] had reason to believe that [relator] was investigating their alleged fraudulent billing practices in contemplation of a possible qui tarn action.”
See Mikes,
c. Whether Defendant Retaliated Because of the Protected Conduct
In order to state a claim for retaliation, Relator must also allege that he was retaliated against because of his protected conduct.
Karvelas,
Relator alleges that “[b]ecause of his investigation and reporting of the frauds alleged herein, Relator Smith was harassed and was discriminated against in the terms and conditions of his employment, by and through the acts of the Defendant’s officers, agents, and employees, including Dean Kessler, Bruce McClennan, M.D., James Brink, M.D., Howard For-man, M.D.2d Am. Compl. ¶ 99. Relator then lists the specific ways in which he alleges Defendant retaliated against him, including allegations that “he was repeatedly harassed, threatened and subject to intimidation by Bruce McClennan, M.D. and others;” “his salary was cut;” “he was stripped of administrative positions and titles ...“he was forced to resign from Yale and YNHH;” “he was interfered with in his attempts to obtain employment elsewhere;” and “he was forced to leave the state of Connecticut which had been his home for 19 years.” Id.
Relator’s conclusory allegations fail to state a claim for retaliation. “Nowhere in his complaint does [Relator] allege a factual predicate concrete enough to support his conclusory statement that he was retaliated against because of conduct protected under the FCA.”
26
Karvelas,
3. ■ Whether the Retaliation Claims on behalf of Nom-Parties Burrell and Rosenfield should be Dismissed
Defendant argues that Relator’s Section 3730(h) claims on behalf of Drs. Rosenfield and Burrell should be dismissed for lack of standing. Mem. Supp. at 44 (citing 2d Am. Compl. ¶¶ 100, 101). Defendant maintains that plaintiffs bringing retaliation claims “may not seek redress for the alleged injury of other persons.” Id. at 44-45. Section 3730(h) provides, in relevant part:
Any employee who is discharged, demotеd, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in *108 furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole.
31 U.S.C. § 3730(h). The language of the statute indicates that it is only the employee retaliated against who may seek relief for any harm suffered. The statute does not appear to contemplate employees bringing Section 3730(h) suits on behalf of other employees. In order to bring a suit, “the irreducible constitutional minimum of standing” requires a plaintiff to have suffered a “particularized” injury; that is, one that “affeet[s] the plaintiff in a personal and individual way.”
Lujan v. Defenders of Wildlife,
C. Defamation Claim
Defendant argues that Relator’s defamation claim should be dismissed pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Mem. Supp. at 45. In order to establish a claim for defamation under Connecticut law, a plaintiff must prove that: “(1) the defendant published a defamatory statement; (2) the defamatory statement identified the plaintiff to a third person; (3) the defamatory statement was published to a third person; and (4) the plaintiffs reputation suffered injury as a result of the statement.”
Iosa v. Gentiva Health Services, Inc.,
Relator argues that he properly pled each of the above elements. Specifically, Relator alleges that:
105. Various Yale and [YNHH] representatives made false and injurious statements to third parties, including but not limited to employees, agents, and/or representatives of Cornell University Medical College, New York Presbyterian Hospital, Northwestern University and Boston University, as well as colleagues and staff at Yale and YNHH.
106. The statements made about Relator Smith were reckless and wanton in that they were false and known to be false at the time they were made by Yale and YNHH’s representatives.
107. The falsity of the allegations caused Relator Smith to suffer harm to his reputation and professional image with his professional colleagues and in the community, as well as severe mental and emotional distress.
2d Am. Compl. ¶¶ 105-07. Under Rule 8(e)(1), the standards for pleadings are liberal. Fed.R.Civ.P. 8(e)(1). The complaint need only “afford defendant sufficient notice of the communications complained of to enable him to defend himself.”
Kelly v. Schmidberger,
Relator’s vague allegations do not sufficiently plead any defamatory statements. He need not list the alleged defamatory statements verbatim, but Relator must at least plead the content of the alleged communications, when they were made, the context in which they were made, or by and to whom they were made, which he fails to do. Because of the vague and conclusory nature of Relator’s defamation allegations, Defendant is unable to assert an informed defense.
27
See Kelly,
III. CONCLUSION
For the reasons stated above, Defendant’s motion to dismiss [Doc. No. 169] is granted. Specifically, this Court finds that Relator’s FCA claims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction, and in the alternative, for failure to meet the particularity requirements of Fed.R.Civ.P. 9(b). This Court also holds that the claims outlined in paragraphs 75, 78, 14, 31, 83 and 84 of the Second Amended Complaint and Relator’s retaliation and defamation claims should be dismissed, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim. Moreover, the Court finds that the retaliation claim asserted by Relator on behalf of non-parties Burrell and Rosenfield should be dismissed for lack of standing.
SO ORDERED.
Notes
. Although the Motion to Dismiss was originally filed by Yale University and YNHH, Yale University was subsequently dismissed from the lawsuit, thus mooting the motion as to it. Therefore, only the claims against YNHH will be dealt with in this Ruling. Yale University will be discussed, as necessary, to explain the pending allegations and the background of the case.
. Unless otherwise noted, the account that follows is taken from Relator’s Second Amended Complaint.
. In the Second Amended Complaint, Relator quotes the Tencza email as stating that the Autosign process would be "rarely used and then only in the most extenuating circumstances." Although the sentence quoted by Defendant is not included in the portions of the email exchange attached to Relator's Opposition as Exhibit C, there are several other statements included that help to put the email in context. Specifically, in the April 27, 1998 email, Ms. Tenczaa wrote that “[i]t is VERY important that we do not bill for the study.” She also admits that Autosign creates a "sticky problem,” stating that physicians "must involve [the] billing [department] in order to avoid improper billing and its negafive consequences.” Moreover, in the April 30, 1998 email, Ms. Tencza concedes that she "would not know if the hospital charged” for the study. She also states again that "[i]t is anticipated that this will be a little used procedure.” She makes clear that "no bill will go out for ‘Auto Sign’ ” as "[t]hat is the purpose of creating 'Auto Sign,’ ” but says that this method of finalizing reports "cannot prevent an attending [physician] from finalizing a report without reviewing the images. Therefore, this procedure cannot correct an issue [the] billing [department] is not aware of. Viewing the images is the resрonsibility of the attending [physician].” Opp’n, Exh. C.
. Pursuant to this Court's Ruling on Relator's Motion for Reconsideration in Qui Tam Two, the two actions have recently been consolidated for efficiency purposes.
. The history of the FCA and the 1986 amendment have been outlined in detail by numerous courts and thus it is unnecessary to do so again here.
See, e.g., United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prud. Ins. Co.,
. “The distinction between a Rule 12(h)(3) motion and a Rule 12(b)(1) motion is simply that the former may be asserted at any time and need not be responsive to any pleading of the other party. For purposes of this case, the motions are analytically identical because the only consideration is whether subject matter jurisdiction arises.”
Berkshire Fashions, Inc. v. M.V. Hakusan II,
. Although the Second Circuit adopted the
Stinson
approach in
Kreindler,
the circuits are split on how to treat discovery disclosed during litigation. Both the D.C. Circuit and the Seventh Circuit disagreed with the
Stinson
approach, holding that "discovery material which has not been filed with the court and is only theoretically available upon the public's request” is not "publicly disclosed” within the meaning of Section 3730(e)(4)(A).
United States ex rel. Springfield Terminal Ry. Co. v. Quinn,
. Defendant argues that in making the determination as to whether the two complaints are substantially similar, the Court should consider only the allegations in the initial complaint, asserting that "[wjhere, as here, the relator has amended the complaint, the Court looks to the initial complaint in determining subject matter jurisdiction.” Mem. Supp. at 9 n. 5. Defendant cites no direct support for this proposition in this Circuit and the Court is aware of none.
United States ex rel. Kinney v. Stoltz,
. The Ninth Circuit has also adopted the third requirement that the qui tam plaintiff must
*72
"have had a hand in the public disclosure of allegations that are part of one's suit.”
Wang,
. Aside from the paragraphs cited by Defendant (83-88), there are no "core, substantive” additions to Relator's allegations in the Second Amended Complaint that were not in the Original Complaint — in fact, aside from the paragraphs noted, the allegations in the two complaints are virtually identical. Both complaints were, however, framed after the State Court Action was filed.
. Relator does not specify the source of the information and does not dispute Defendant’s contention that the information was obtained by way of discovery in the State Court Action. Thus, the Court sees no reason to speculate to the contrary.
. For example, in paragraph 56 of the Second Amended Complaint, Relator ends the description of the fraudulent scheme with the conclusory summation that the Chair and Vice-Chairs at YNHH “made numerous attempts to intimidate Yale's Radiology Department faculty members to review and interpret these old Radiology Studies and furnish finalized reports for which Yale could and would bill the Professional Component ...” 2d Am. Compl. ¶ 56 (emphasis added). Relator offers similarly conclusory assumptions at other points in the complaint, including the allegation that "[bjilling for panel studies not medi *87 cally indicated violates Medicare and Medicaid billing requirements and also subject [sic] patients to needless, potential [sic] harmful radiation.” Id. ¶ 89. Moreover, for other fraudulent activities, Relator alleges fraudulent billing based only on information and belief. See, e.g., id. ¶ 77 {"On information and belief Defendants Yale and YNHH billed Medicare and Medicaid for the Professional Component of these Radiology Studies never reviewed by a Qualified Radiologist, in violation of 31 U.S.C. § 3729(a)(l-2).”) (emphasis added); id. ¶ 78 {"Upon information and belief, Defendants utilized the 'Autosign' process and the other afore-described non-Qualified Radiologist Radiology Study report finalization methods to avoid and conceal the obligations of said Defendants to repay the United States monies paid to Yale and YNHH for both the Professional and Teсhnical Components of these Radiology Services, in violation of 31 U.S.C. § 3729(a)(7) and 18 U.S.C. § 1001.”) (emphasis added).
. The court noted and relied in part on the fact that the relator had adequately alleged “the crucial element of a False Claims Act action” — “that false claims were submitted” to the federal government — in denying defen
*88
dants’ motion to dismiss.
Pogue,
. The Second Circuit has declined to explicitly decide whether the FCA contains a mate.riality requirement.
See Mikes v. Straus,
. Although the courts generally require that the false statement or claim at issue be material, they have generally rejected the additional requirement that the United States have suffered damages as a result of the false or fraudulent claim. See, e.g.,
Rex Trailer Co. v. United States,
. 42 C.F.R. § 415.172 reads: “If a resident participates in a service furnished in a teaching setting, physician fee schedule payment is made only if a teaching physician is present during the key portion of any service or procedure for which payment is sought.”
. The regulation defines "services of moonlighting residents” as "services that licensed residents perform that are outside the scope of an approved GME program.” 42 C.F.R. § 415.208(a).
. The regulation provides that services performed by "moonlighting” residents that "are performed in an outpatient department or emergency department of a hospital in which they have their training program are covered as physician services and payable under the physician fee schedule if all of the following criteria are met: (i) The services are identifiable physician services and meet the conditions for payment of physician services to beneficiaries in providers in § 415.102(a). (ii) The resident is fully licensed to practice medicine, osteopathy, dentistry, or podiatry by the State in which the services are performed. (iii) The services performed can be separately identified from those services that are required as part of the approved GME program.”
. The regulation provides, in pertinent part, that "[t]he services of residents to inpatients of hospitals in which the residents have their approved GME program are not covered as physician services and are payable under §§ 413.75 through 413.83 regarding direct GME payments.”
. Outside evidence, such as Defendant's assertion that Smith previously admitted under oath that he "do[es] not claim that Yale billed for these studies,” is not properly considered on a motion to dismiss.
See
Reply at 9;
Friedl,
. Normally, outside evidence cannot be considered on a motion to dismiss.
Friedl,
. In its Reply, Defendant also uses Relator's "prior judicial admission that he personally has no idea whether Yale submitted claims for such reports” to argue that the claims relating to Autosign should be dismissed. As outside evidence should not be considered on a motion to dismiss, however, this argument will not be considered at this stage.
Friedl,
. As courts are required to make all reasonable inferences in favor of the plaintiff on a Rule 12(b)(6) motion to dismiss, we assume that Relator’s references to investigation and reporting of “fraud” is referring to defendant’s allegedly fraudulent billing practices and not just to potential violations of federal and state laws.
See Karvelas,
. At least one court within this Circuit has held, however, that a plaintiff must inform the employer that he or she believes that the suspected fraudulent activities are in violation of United States law. United States ex rel. Vallejo v. Investronica, Inc., 2 F.Supp.2d 330, 339 (W.D.N.Y.1998) (finding that the plaintiff had not stated a claim for retaliation, in part, because he did “not allege that he told the defendants that he was going to report such impropriety to officials of the Government or that he was contemplating his own qui tam action”). At some point such a requirement may be proper, but an FCA action would not necessarily be the intent of belief of Relator at the inception of his or her investigation or in its early stages.
. Although Relator's allegations primarily concern information given to Yale’s administrators, some of Defendant YNHH's administrators are named as well. The court will assume, for purposes of the Rule 12(b)(6) motion to dismiss, that because of the close working relationship between the two and the fact that many of the persons named held positions and worked with both entities, YNHH was informed of Relator’s reports and concerns.
. Because Relator resigned and was not terminated by Defendant, this Court need not engage in the burden-shifting analysis employed by other courts.
See, e.g., Mikes,
. For example, Defendant argues that because of the lack of specificity in Relator's allegations, they are unable to assert a viable statute of limitations defense. Mem. Supp. at 47.