United States District Court, E.D. Tennessee, Knoxville
MEMORANDUM AND ORDER
case is before the undersigned pursuant to 28 U.S.C. §
636, the Rules of this Court, and Standing Order 13-02. The
parties appeared for a telephone conference on August 10,
2017, to address several discovery disputes. Attorneys Diana
Cieslak, Amy Kossak, Jeremy Dykes, Robert McConkey, and
Jessica Sievert appeared on behalf of the Government,
attorneys Birt Reynolds and Michael Hamilton appeared on
behalf of Relator Barbara Hinkle, and attorneys Matthew
Curley, Anna Grizzle, and Taylor Chenery appeared on behalf
of Defendants Caris Healthcare, L.P., and Caris Healthcare,
LLC (collectively “the Defendants”).
parties disagree on the appropriate temporal and geographic
scope of discovery. In addition, the Defendants take issue
with the Government's objections to Defendants'
Interrogatory Nos. 1, 2, 3, and 5. The Court will address
each discovery dispute in turn.
Temporal and Geographic Scope of Discovery
Government contends that the relevant time period for
discovery is January 1, 2010 through May 22, 2014. In support
of its position, the Government cites to its Complaint in
which it has alleged that the Defendants submitted false
claims or did not report overpayments or repay Medicare for
amounts billed for ineligible beneficiaries on services
during the period of April 2010 through December 2013. The
Government submits that it is reasonable to include the
months immediately preceding the date in which the Defendants
are alleged to have engaged in the foregoing activity,
thereby arguing that the relevant time period should begin on
January 1, 2010.
Defendants agree with the proposed end date of May 22, 2014,
but argue that the relevant time period for discovery should
begin on January 1, 2013. The Defendants submit that the
Complaint does not include any factual or substantive
allegations that pre-date 2013. Instead, the Defendants
contend that the Complaint alleges certain events occurred in
2013, namely an internal audit, that created a duty for the
Defendants to then review claims for potential over payments
dating back to April 2010. Therefore, the Defendants believe
that the relevant time period for discovery should be from
January 1, 2013 through May 22, 2014.
Government also contends that it is entitled to requested
documents and information concerning Caris office locations
in Tennessee, Virginia, and South Carolina. In this regard,
the Government submits that the allegations in the Complaint
and the manner in which the Defendants organize and manage
their offices, support a finding that the geographic scope of
discovery should include Caris locations in all three states.
Defendants counter that the Complaint does not include any
specific factual allegation related to its offices in South
Carolina or Virginia, and that the Government's theory of
liability only involves patients serviced by offices in
scope of discovery under the Federal Rules of Civil Procedure
is traditionally quite broad.” Lewis v. ACB Bus.
Servs., Inc., 135 F.3d 389, 402 (6th Cir. 1998).
Generally, “any nonprivliedged matter that is relevant
to any party's claim or defense and proportional to the
needs of the case” is discoverable. Fed.R.Civ.P.
26(b)(1). Moreover, information within the scope of discovery
need not be admissible in evidence to be discoverable.
Id. Evidence is relevant when it has “any
tendency to make a fact more or less probable than it would
be without the evidence.” Fed.R.Evid. 401(a).
the temporal scope of discovery, the Court agrees with the
Government and finds that the relevant time period is January
1, 2010 to May 22, 2014. In reaching this conclusion, the
Court observes that the allegations set forth in the
Complaint specifically reference conduct and activity that
began in 2010. For example, in the Government's First
Cause of Action, the Government contends that between June
2013 and December 2013, the Defendants “knowingly
presented or caused to be presented to the United States
false or fraudulent Medicare claims for payment or
approval.” [Doc. 57 at 45]. In its Second Cause of
Action, the Government contends that between April 2010 and
June 2013, “Caris knowingly made or used false records
or statement material to an obligation to pay or transmit
money to the United States, or knowingly concealed, avoided,
or decreased an obligation to pay or transmit money to the
United States.” [Id. at 46]. In support of
both of its claims, the Government sets forth factual
allegations throughout its Complaint that allege the
Defendants (1) made false or fraudulent statements and
records between April 2010 and June 2013, (2) retained
Medicare payments for ineligible patients from April 2010
through June 2013, and (3) submitted false claims for
Medicare payments from June 2013 through December 2013.
[See e.g., id. at 16-22, 27-45]. Because
the alleged acts complained of began in 2010, the Court finds
that extending the scope of discovery to 2010 could
reasonably be expected to cover information that is relevant
to a party's claim.
regard to the geographic scope of discovery, the Court
likewise agrees with the Government and finds that the
Complaint's allegations are not limited to conduct or
practices that only occurred in Tennessee. The Defendants
cite to an internal audit performed in June 2013, which took
place at several Caris Tennessee locations, as evidence that
the substantive allegations in the Compliant are
geographically limited to Tennessee. However, the purpose of
the audit was to provide a “one-month snapshot
review” and evaluation of patients' April 2013
medical records. [Doc. 57 at 16]. Although the Complaint
discusses the audit and six sample patients, the Complaint
does not allege that the false claims acts are limited to
conduct revealed by the audit. Indeed, the Complaint
discusses companywide business practices endorsed by the
Defendants without specific reference to any one of the
geographic locations in which the Defendants operate.
[See e.g., id. 57 at 13-16]. Violations
committed by Caris in meeting the physician certification
requirements, for instance, are alleged to have occurred
“with respect to multiple patients” and are
“not isolated to one facility.” [Id. at
24]. Similarly, the Complaint discusses questionable conduct
and malfeasance committed by the Defendants'
corporate-level and regional managers, as well as concerns
raised by the Chief Medical Officer about ineligible
patients, without reference to a specific geographic
location. [See e.g., Id. at 13-16, 18-19].
Therefore, the Court finds that discovery should not be
limited to Caris offices located in Tennessee, but should
also include its offices in Virginia and South Carolina.
Defendants' Interrogatory Nos. 1, 2, 3, and 5
Defendants request that the Government be ordered to answer
Interrogatory Nos. 1, 2, 3, and 5 which seek identification
of the following: (1) specific false claims at issue for
hospice services provided to ineligible patients; (2) alleged
overpayments improperly retained for such patients; (3)
specific hospice benefit periods during which patients were
ineligible, and (4) any false physician certifications of
eligibility for the hospice benefit for such patients. The
Government has objected to answering these interrogatories
until after it discloses its expert's report and closer
to the conclusion of discovery.
Government argues that answering these interrogatories when
discovery is still in its infancy would effectively require
the Government to disclose its expert's report well in
advance of the deadline set forth in the Scheduling Order for
disclosure of expert witnesses. And because this case is in
the early stages of discovery, the Government argues that it
is still in the process of identifying responsive
information. The Government further submits that it has
already provided information that is responsive to the
interrogatories but objects to providing information beyond
what has already been produced.
Defendants maintain that the Government's refusal to
fully answer the interrogatories prejudices the Defendants in
that they are unable to mount a defense against the
allegations of fraud leveled by the Government. Because the
Government's “discrete list of patients” now
stands at 129, the Defendants contend that thousands of
claims, overpayments, benefit periods, and physician
certifications are at issue. As a result, the Defendants
submit that the Government's refusal ...