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Li v. Swedish American Hospital

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

September 3, 2019

Linda Li, M.D., Plaintiff,
Swedish American Hospital, et al., Defendants.


          Manish S. Shah, United States District Judge.

         Plaintiff Linda Li is a doctor who alleges that someone infiltrated her medical practice's server to alter her insurance information and submit false insurance claims. When she reported this crime, a series of events led to various undeserved sanctions that severely damaged her medical practice and reputation. She brings federal and state-law claims against several defendants, including Rockford police officers, the Illinois Department of Financial and Professional Regulation, the U.S. Department of Health and Human Services' Office of the Inspector General, and others. Most of the defendants move to dismiss the complaint, some have not been properly served, and some have not responded. Li is acting as her own lawyer and has filed many documents-complaints, amended complaints, and hundreds of pages of exhibits. Li's claims are difficult to follow, and she uses legal terms like false claims, equal protection, due process, and defamation, but without a full appreciation of those doctrines and how they might apply to the range of defendants she names and the conduct she complains about. Even when giving her the benefit of liberal construction, she has not alleged a viable federal lawsuit. Defendants' motions are granted, and the case is terminated in its entirety.

         I. Legal Standard

         Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Because Li is pro se, I construe her complaint liberally and hold it to a less stringent standard than a complaint drafted by lawyers. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Nevertheless, to survive a Rule 12(b)(6) motion to dismiss, Li's complaint must contain factual allegations that plausibly suggest a right to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). I assume that the facts alleged in the complaint are true and draw reasonable inferences from those facts in Li's favor, but I am not required to accept as true the complaint's legal conclusions. Id. at 678-79. I am limited to reviewing the complaint, “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1019-20 (7th Cir. 2013) (citation omitted). I may take judicial notice of court filings “when the accuracy of those documents reasonably cannot be questioned.” Parungao v. Cmty. Health Sys., Inc., 858 F.3d 452, 457 (7th Cir. 2017).

         II. Background

         Li is a physician. [7] at 4.[1] She worked at Swedish American Hospital until February 2004, when she started a solo practice in Rockford. [7] at 4. From then until 2007 or 2008, Li performed outpatient work as an independent contractor for the hospital, billing clients for her services while the hospital billed for facility fees and technical fees. [7] at 4. When Li set up her new practice, she submitted Medicare claims under an EIN (Employer Identification Number) associated with “Pain Management and Rehabilitation Center.” [7] at 10. But someone was submitting Medicare claims under “Linda Li” without her authorization, which Li believes means someone altered her profile in the Medicare claims database. [7] at 9-10. As a result, from 2004 to 2006, Medicare and Medicaid were receiving claims from two different identifiers that appeared to be associated with Li but only one of which was Li's actual Id. [7] at 9. Checks were being paid to “Linda Li” but sent to a post office box owned by Swedish American Hospital. [7] at 10. Li never received payments for claims submitted under her old ID, and both Cigna and the Treasury Department paid “Linda Li” but sent the payment to the hospital. [7] at 10-11. Illinois Medicaid owes Li about $90, 000 due to payments diverted to a third-party's account. [7] at 23. Li lost over $28, 000 in Medicare reimbursements because of alleged “overpayment, ” due to the identity thief's claim submissions. [7] at 23. Medicare also owes her over $200, 000 in unpaid claims. [7] at 24.

         In January 2014, Li reported a crime to the Rockford police-someone had stolen her “server CDs” and possibly used them to “set up [a] second server.” [7] at 12. (I understand Li to allege that these stolen server CDs are how the cybercriminal was able to alter her billing identifiers and submit false claims under her name.) Li gave a police officer some documents as evidence, and then put them back in her purse after the police officer made copies. [7] at 12. Then Li went to a dinner with Tim Nycowskiy-her office assistant-and noticed afterwards that her purse had been stolen. [7] at 12. The next day, Li reported her stolen purse to Officer Mace, but the officer never wrote a police report about it. [7] at 13. Nycowskiy soon gave Li her purse back, claiming that he found it on his desk when he got to work. [7] at 13. Li reported this development to Officer Koschak, but the officer recorded the wrong story in her report-Officer Koschak did not mention Nycowskiy and instead wrote that Li found her missing purse on her own desk. [7] at 13. Later, Nycowskiy changed his story to match the false story in Officer Koshak's report, saying that Li found her missing purse on her own desk. [7] at 13. Years later, Li tried to contact Nycowskiy to find out what really happened, and he intentionally avoided her. [7] at 13.

         At around the same time Li reported the theft to the Rockford police, Laura Forester, a medical prosecutor for the Illinois Department of Financial and Professional Regulation, got a phone call from Officer Hughes, who said that Li's crime reports were not supported by evidence. [7] at 14. Based on that call, Forester petitioned for Li to undergo a forensic psychiatric evaluation. [7] at 14. She did this without telling Li about Officer Hughes's allegation, investigating it, or providing evidence that it was true. [7] at 14-15. Forester also ignored reports from doctors saying that Li was fit to practice. [7] at 15.

         In March 2014, Ashral Helmy conducted the psychiatric evaluation. [7] at 16. He falsely diagnosed Li with “delusional disorder.” [7] at 16. In doing so, Helmy did not ask Li to bring evidence of her claims of identify theft and cybercrime, he did not view her evidence and lied under oath when he said he did, and he did not verify Li's criminal allegations with her family and colleagues. [7] at 16. The next month, Li's Illinois and California medical licenses were suspended. [7] at 17. Vladimir Lozovskiy, another IDFPR medical prosecutor, ignored Li's evidence when defending the IDFPR's decision to suspend her medical license. [7] at 18-19.

         The suspension of Li's medical licenses triggered a chain reaction. In May 2014, the Illinois Office of the Inspector General (through its counsel, Martin Feldman) issued a Medicaid sanction based on the IDFPR's finding that Li was mentally impaired. [7] at 17. In October 2015, the federal Office of the Inspector General (through Bernice Smith) revoked Li's Medicare billing privileges. [7] at 20. And in August or October 2018, the Office of Personnel Management debarred her (though the letter, written by David Cope, was dated October 2015). [7] at 8, 21. None of these entities did their own investigation to see whether the IDFPR's claims were supported by fact, nor did they give Li an opportunity to show that her criminal allegations were true, not delusional. [7] at 17-22.

         On March 15, 2016, Li filed a complaint in the Circuit Court of Cook County against Helmy and two Northwestern entities. [50-2] at 1.[2] She brought claims of professional negligence, psychiatric abuse based on the equal protection act, fraud and misrepresentation, and libel and slander against Helmy, which the state court dismissed with prejudice in February 2017. [50-7]. The dismissal was based on several grounds that largely amounted to an adjudication on the merits, including that Helmy's statements were entitled to absolute privilege, Helmy did not have a physician-patient relationship with Li, and the other claims were not cognizable under Illinois law. [50-7].

         On March 31, 2017, Li filed a complaint in this court against the IDFPR, Lozovskiy, Forester, the City of Rockford, Hughes, Helmy, and multiple Northwestern entities, alleging theories of constitutional violations under 42 U.S.C. § 1983 and intentional infliction of emotional distress. Amended Complaint, Li v. Hughes, et al., No. 17 CV 2498 (N.D. Ill. Apr. 21, 2017), ECF No. 7. I dismissed the complaint in its entirety, mostly with prejudice. Li v. Illinois Dep't of Fin. & Prof'l Regulation, No. 17 CV 2498, 2018 WL 1453551, at *7 (N.D. Ill. Mar. 23, 2018). I held that claims against the IDFPR defendants were barred by the Eleventh Amendment, claims against Rockford and Hughes were time-barred, claims against Helmy and Northwestern Memorial Hospital were barred by res judicata, and claim preclusion barred claims against the Northwestern University defendants. Id. at *3-7.

         Li filed this case on December 18, 2018. [1]. The case was first assigned to the Chief Judge under this court's procedures for False Claims Act cases brought under 31 U.S.C. § 3729, et seq. The case was reassigned to another judge because review of the complaint showed that Li did not file the suit on behalf of the United States. [12]. The case was then reassigned to me because it was a refiling of the case I previously dismissed. [18].

         III. ...

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