United States District Court, N.D. Illinois, Eastern Division
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,
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
Johnson Coleman United States District Judge
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 
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 . MPI also moves to strike
immaterial, scandalous, and impertinent matter from the
Second Amended Complaint pursuant to Federal Rule of Civil
Procedure 12(f) . For the reasons stated herein the
motions are granted.
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.
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,
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
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.
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.)
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).
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.)
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.
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).
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).
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.