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United States ex rel Turner v. Michaelis Jackson & Associates

February 13, 2007


The opinion of the court was delivered by: Gilbert, District Judge


This matter is before the Court on defendants' motion to dismiss (Doc. 49), to which relators have responded (Doc. 56) and defendants replied (Doc. 57). For the following reasons, the Court will GRANT IN PART AND DENY IN PART defendants' motion.


On December 12, 2003, Relators Marsha Turner (Turner) and Carolyn Swartos (Swartos) (collectively relators) filed their original complaint (Doc. 1) against Michaelis Jackson & Associates L.L.C. (the Practice) and Michaelis Jackson (Jackson), alleging numerous violations of the False Claims Act (FCA), 31 U.S.C. § 3729, et seq. Relators subsequently filed an amended complaint (Doc. 25) on February 22, 2006, which the Court unsealed, along with the original complaint, on May 15, 2006. Relators' amended complaint is 65 pages long and contains 221 numbered paragraphs.

Jackson is an ophthalmologist and the sole member and manager of the Practice, which does business as Jackson Vision & Laser Centers in Southern Illinois. Turner is a former employee of the Practice who assisted with various administrative duties (including, as will become important, billing) and Swartos is the former proprietor of a medical practice consulting group called Logos Management Group (Logos), which audited the Practice's medical records in July 1999. (Amend. Compl. at. 3). Relators contend defendants violated the FCA by presenting fraudulent claims to Medicare and making false statements to get these claims paid. Specifically, Count I alleges defendants billed for diagnostic exams Jackson did not perform, Count II alleges defendants submitted bills for extended and subsequent ophthalmoscopies that Jackson did not perform, Count III alleges defendants falsified medical records to support medical services Jackson did not provide, Count IV alleges defendants used false records to support cataract surgeries that were not medically necessary, Count V alleges defendants fraudulently manipulated the scheduling of post-surgical follow-up visits so that they could bill Medicare for services that should been covered by previous payments, Count VI alleges Jackson fraudulently induced some of his patients to receive an unwarranted post-cataract-surgery procedure (called a YAG Capsulotomy) and Count VII alleges defendants engaged in "upcoding," meaning, roughly, that they billed Medicare for higher levels of service than actually provided. Defendants move for dismissal of all of these claims pursuant to Federal Rule of Civil Procedure 9(b).


FCA claims must be pleaded in accordance with Rule 9(b). United States ex rel. Garst v. Lockheed-Martin Corp., 328 F.3d 374, 376 (7th Cir. 2003). Under this Rule, "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." As observed in DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990), "[t]his means the who, what, when, where, and how: the first paragraph of any newspaper story." Generally, this means, "facts such as the identity of the person making the misrepresentation, the time, place and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff [must] be alleged in detail." Hefferman v. Bass, 467 F.3d 596, 601 (7th Cir. 2006) (internal quotation marks omitted).

Relators bring their claims pursuant to 31 U.S.C. §§ 3729(a)(1), & (2), which impose liability on any person who "knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval" or any person who "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."

I. Count I

In terms of relators' method of pleading, Count I is representative of Counts II, IV, VI and VII. Factually, it centers on a diagnostic test called a Gonioscopy, which ophthalmologists use to detect glaucoma.*fn1 An ophthalmologist can only perform this test by using a Gonioscopy lens or an instrument called a Zeiss Four Mirror; the test cannot be performed without using one of the two. In his practice, Jackson "routinely" tells his patients he performs a Gonioscopy, but uses neither device. (Amend. Compl. at 8). Instead, he only "look[s] at the patient's eye through a slit lamp for a brief moment." (Id. at 9).

38. [Jackson] caused the records of his Medicare patients to be marked with Gonioscopy results to indicate that a Gonioscopy was performed when no Gonioscopy was performed. For example:

A) On March 23, 2001, Patient 1, a non-glaucoma patient, underwent an examination by [Jackson]. Patient 1's medical record indicates a Gonioscopy was performed; however, no Gonio Lens or Four Mirror was used . . . . [Jackson] dictated [the] results . . . as if he used a Gonio Lens or Four Mirror . . . (Amend. Comp. at 9-10).*fn2 Count I goes on to allege generally that Jackson "would mark the patient's Super Bill, the patient charge sheet, to reflect that a Gonioscopy had been performed," that defendants billed Medicare for Gonioscopies Jackson did not perform, that defendants submitted claims for reimbursement for these procedures to Medicare and that Medicare paid the claims. (Id. at 11, 13). Depending on the year, Jackson submitted from five to forty-seven times as many Gonioscopy claims to Medicare than did similar ophthalmologists in the area.

The crux of defendants' claim is relators' failure to allege "that a bill was submitted to the government for these patients, that the government paid any such bill, and . . . how much the government paid." (Defs.' Mem. Supp. Mot. Dism. at 3).*fn3 They reject the contention that relators can make up for this deficiency by showing Jackson submitted more Goniospopy claims to Medicare than his similarly situated colleagues.

As relators see it, defendants are essentially complaining that they did not plead "the what" of the fraud. They disagree that they must allege specific claim numbers, dates or amounts paid to comply with Rule 9(b) and contend that so long as their allegations put defendants on notice of the nature of their claims they comply with the spirit of the Rule. They assert that the detail with which they describe ...

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