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Stop Illinois Health Care Fruad, LLC v. Sayeed

United States District Court, N.D. Illinois, Eastern Division

August 25, 2016

STOP ILLINOIS HEALTH CARE FRUAD, LLC, a Delaware Limited Liability Company, individually and on behalf of and in the name of the United States of America and the State of Illinois, Plaintiffs,
v.
ASIF SAYEED, an Illinois Resident, HEALTHCARE CONSORTIUM OF ILLINOIS, an Illinois Corporation, MANAGEMENT PRINCIPLES, INC., an Illinois Corporation, VITAL HOME & HEALTHCARE, INC., an Illinois Corporation, PHYSICIAN CARE SERVICES, S.C., an Illinois Corporation, a/d/a Home Physician Care Services, Defendants.

          MEMORANDUM OPINION AND ORDER

          Sharon Johnson Coleman United States District Judge

         In this qui tam action, relator Stop Illinois Health Care Fraud, LLC, (“Relator”) alleges that defendants, Asif Sayeed, Healthcare Consortium of Illinois, Management Principles, Inc., Vital Home and Healthcare, Inc., and Physician Care Services, S.C., engaged in a fraudulent scheme in violation of the False Claims Act, 31 U.S.C. § 3729(a)(1), the Anti-Kickback Statute, 42 U.S.C. § 1320(a)-7b(b), and the Illinois False Claims Act, 740 ILCS 175/1 et seq.. Defendant Healthcare Consortium of Illinois (“HCI”) filed a motion to dismiss [56] for failure to state a claim. Defendants Asif Sayeed, Management Principles, Inc., Vital Home & Healthcare, Inc., and Physician Care Services, S.C, (collectively “MPI”) also move to dismiss the complaint for failure to state a claim [61]. MPI also moves to strike immaterial, scandalous, and impertinent matter from the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(f) [59]. For the reasons stated herein the motions are granted.

         Background

         The following facts are derived from the Second Amended Complaint for purposes of the motions now before the Court. Relator Stop Illinois Health Care Fraud, LLC, alleges that Asif Sayeed engaged in a fraudulent scheme through the defendant entities: Healthcare Consortium (“HCI”), a provider of case management services through the Illinois Community Care program; Management Principles, Inc. (“MPI”), a marketer of services for the other defendant entities; Vital Home and Healthcare, Inc. (“Vital”), a home health agency licensed by the State of Illinois to provide Medicare reimbursable home health services such as skilled nursing, occupational and physical therapy, social workers, and speech therapy; and Physician Care Services, SC (“PCS”), a provider of in-home physician services.

         Relator alleges that HCI gathers information by performing wellness and safety assessments for Illinois residents who may be in need of medical and social services. (Dkt. 52 at ¶ 13). Relator alleges that HCI provides this information to MPI, Vital, and PCS, who then directly contact the patients, purporting to represent the Department of Aging and soliciting Medicare-eligible services to these patients. (Id.) The Complaint identifies three employees of HCI as involved in the conduct: Candace Brooks, Rosetta, [1] and Malika Mohammed. (Id. at ¶ 14). These individuals allegedly provide patient lists that from HCI to MPI, which then uses that information to solicit home health services. (Id.)

         MPI, Vital, and PCS share a single business address, 8051186th Street, Tinley Park, Illinois, which is owned by Sayeed, MPI's president. (Id. at ¶ 16). The Complaint alleges that the three entities operate as a single enterprise with personnel sharing office space at the Tinley Park location. Upon information and belief, MPI's only activity is to engage in cold calling and/or marketing of Medicare eligible patients for health services on behalf of Vital and PCS. Sayeed is also Vital's President. (Id. at ¶ 18, 20). Both MPI and PCS share the same registered agent, Asim Farooqi.[2]

         Relator alleges “on information and belief” that the defendant entities are conspiring to defraud both Medicare and the State of Illinois' Medicaid program by paying an Illinois Department of Aging Community Care Program Care Coordination Unit (“CCU”) employee for a list of CCU participants, including the confidential information that the participants have provided to the CCU intake person. The Complaint identifies a woman named Rosetta as the HCI employee contact between the defendant entities. (Id. at ¶ 37). Relator reached Rosetta by calling MPI. Allegedly, Rosetta informed the Relator that MPI works with both HCI and the Department of Aging to find physicians and nurses for patients. (Id. at ¶ 38). When asked about the services offered, Rosetta purportedly explained that MPI would arrange patient services provided by Vital and PCS, and that all services would be paid for by Medicare. (Id.)

         Relator also contacted Rosetta by calling the PCS office. (Id. at ¶ 39). During the call, Rosetta explained that she works for MPI, PCS, and HCI. (Id.) While working at HCI she obtains information for potential referrals of patients. (Id.) Relator was also able to contact Rosetta by calling the telephone number for Vital. (Id. at ¶ 40).

         Relator alleges that once the patient information is obtained, MPI calls the patients directly to solicit for additional medical services. During the calls, the MPI marketer relates that the callers are from the Department of Aging or that the caller received a referral from the Department of Aging, and then they convince the patient they are eligible for home health services paid for by Medicare. (Id. at ¶ 41). MPI then offers to send a physician to the patient's home to perform an assessment for services. (Id. at ¶ 42). If the patient accepts, MPI transfers the call to the PCS to schedule the visit. (Id.) The in-home physician assessment “nearly always” finds that the patient is qualified for home health services. (Id.) If the patient has a primary care physician, MPI will contact that physician stating that they have a referral from the Department of Aging for the patient to receive home health services and will have the physician return an authorization for the services. (Id. at ¶ 44-45.) Internal documentation from MPI and HCI allegedly show that it is an explicit written procedure for these entities to state that they have received a referral from the Department of Aging when no such process of referral exists. (Id.)

         Jim Szymanski was hired by Sayeed as the Director of Marketing for Vital where he worked for a few months in 2009 or 2010. (Id. at ¶ 46). While employed at Vital, Szymanski learned that Vital was routinely given access to the confidential patient files from HCI in order to select potential home health patients with the most profit potential from Medicare reimbursements. (Id.) Vital made payments in the form of gift cards and meals to HCI's case manager in exchange for access to the confidential files. (Id.) Specifically, Alice Piwowarski, would go to HCI on a weekly basis with gift cards Sayeed gave her to exchange for information. (Id.) The gift cards were often from Target for amounts ranging from $50 to $250. (Id.) Piwowarski has identified Ella Gray and Joe English as two supervisors at HCI, and Denise Thomas as the former Marketing Director of PCS, that were aware of the exchange of confidential patient files for gift cards.

         The Complaint sets forth one specific example of the alleged scheme in practice. On April 19, 2011, HCI received a referral from the Department of Aging for Mikeolene Williams, a Medicare beneficiary. Akira Syndor, an HCI Care Coordinator, performed an assessment of Williams on May 2, 2011. (Id. at ¶ 49). MPI received his information from HCI on May 5, 2011. (Id. at ¶ 50). On that same date, a marketer form MPI contacted Williams and discovered he had home care from an organization called Help at Home five days a week. (Id. at ¶ 51). MPI informed Williams that he was eligible for a home visit from a physician. (Id.) A doctor from PCS went to Williams' home to perform an assessment on May 9, 2011. (Id. at ¶ 52). Based on the assessment, the PCS physician authorized home health services from Vital. (Id.) Vital began providing services to Williams on May 17, 2011. (Id. at ¶ 53).

         The Complaint alleges “on information and belief” that around May 5, 2011, an MPI employee, believed to be Alice Piwowarski delivered gift cards from Sayeed to HCI personnel with the knowledge of HCI supervisors Ella Gray and Joe English in exchange for protected health information of individuals who had been screened by HCI, including Williams. (Id. at ¶ 56).

         The Second Amended Complaint contains three Counts. Count I, as to all defendants for violations of the False Claims Act, 31 U.S.C. § 3729(a)(1), for submitting, or causing to be submitted, reimbursement claims for Medicare funds which it knew to be false. (Id. at ¶ 70-71). Count II, as to all defendants for violations of the False Claims Act through the prohibition on kickbacks, 42 U.S.C. § 1320A-7B(b)(2), in connection with referrals of patients for home health services. (Id. at ¶ 77). Count III, as to all defendants alleges violations of the Illinois False Claims Act, 740 ILCS 175/3, for submitting or causing to be submitted claims for reimbursement to Medicare. (Id. at ¶ 84). Defendants move to dismiss all counts.

         Legal ...


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