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Hill v. Board of Regents of University System of Georgia

Court of Appeals of Georgia, Fifth Division

June 28, 2019


          McFADDEN, P. J., MCMILLIAN and GOSS, JJ.

          McMillian, Judge.

         Jennifer Hill filed this qui tam action to recover damages and civil penalties on behalf of the State of Georgia under the Georgia False Medicaid Claims Act, OCGA § 49-4-168, et seq. (the "GFMCA"), and for damages under the GFMCA and the Georgia Whistleblower Act, OCGA § 45-1-4 (the "Whistleblower Act"), for what she claims was retaliation against her. This appeal marks the second appearance of Hill's case before this Court, [1]and she now challenges the trial court's dismissal of the claims alleged in her second amended complaint against the College of Dental Medicine Faculty Practice ("Faculty Practice"), MCG Health System, Inc. ("System"), and MCG Health, Inc. ("MCGHI") (collectively "Defendants"). Although the trial court properly dismissed Hill's claims arising out of allegedly false claims that Defendants submitted to the Georgia Medicaid program, we find that the trial court erred in dismissing her retaliation claims against Faculty Practice.

         In considering a motion to dismiss, courts must accept as true "all well-pled material allegations in the complaint and must resolve any doubts in favor of the plaintiff[.]" (Citation and punctuation omitted.) Republic Title Co., LLC v. Andrews, 347 Ga.App. 463, 464 (819 S.E.2d 889) (2018). Applying these principles, we turn to the complaint in this case, [2] which alleges that in May 2012, Hill accepted the position of Chair of Pediatric Dentistry and the faculty rank of Associate Professor of Pediatric Dentistry offered to her by the acting dean of the College of Dental Medicine (the "CDM"). As part of this position, Hill, along with other qualified faculty members, performed work at the CDM Dental Clinic (the "Clinic"). All faculty members who work at the Clinic are members of Faculty Practice, an unincorporated association. The revenue generated through this clinic was controlled by the Board of Regents of the State of Georgia (the "BOR") but distributed by Faculty Practice, and a portion of the revenue generated by each faculty member became part of his or her compensation pursuant to a revenue distribution plan. Under the terms of her contract, therefore, Hill received payment from both Faculty Practice and the BOR, and she alleges that she was an employee of both entities.[3]

         MCGHI is a non-profit organization formed, in part, for the purpose of leasing and operating Georgia Health Sciences Medical Center clinics and hospitals. Although Faculty Practice is responsible for the billing at the Clinic, MCGHI and System (hereinafter collectively referred to as "MCG") managed and operated the CDM clinical facilities, providing administrative staff and support personnel who prepared the bills and submitted them on behalf of Faculty Practice. Under provider participation agreements with the State of Georgia, Faculty Practice and MCG were required to provide Medicaid Fee-For-Service to recipients and to provide services for children enrolled with the State's PeachCare for Kids Program ("PeachCare") under certain guidelines. MCG billed for these services under its provider number, as well as Faculty Practice's provider number, in accordance with provider agreements each entity signed (collectively, the "Provider Agreement") with the Centers for Medicare and Medicaid Services ("CMS").

         Hill alleges that during the course of her employment, she discovered that Faculty Practice and MCG had violated provisions of the GFMCA by failing to conform to certain regulations regarding plans of care, informed consent, and billing, which in turn violated the Provider Agreement. On or around October 31, 2012, Hill began reporting the violations she observed to the acting dean of the CDM and others. Hill alleges that because of these reports, she was demoted, threatened, harassed, and/or discriminated against as to the terms and conditions of her employment.

         Hill filed her initial qui tam complaint under seal on May 21, 2014, in accordance with OCGA § 49-4-168.2 (c) (2), and after the Georgia Attorney General declined to intervene in the matter, the case was unsealed. See OCGA § 49-4-168.2 (c) (4). Hill's original complaint alleged that the Defendants engaged in five different schemes that resulted in the presentation of false or fraudulent claims for payment to Medicaid and PeachCare in violation of the GFMCA. The Defendants moved to dismiss these claims, and the trial court granted their motions. However, three days before the trial court entered its written dismissal order, Hill filed a second amended complaint (the "Complaint"), in which she reduced the number of schemes to four, [4] asserting that the

Defendants failed to meet the conditions of participation, violated conditions of enrollment as a provider, and violated regulations governing patient records and billing, as required by Defendants' contract with [CMS] and/or the State of Georgia as it incorporates relevant statutory requirements, including:
(a) Failing to obtain the necessary consent from Medicaid/PeachCare beneficiaries before billing for pediatric dental services;
(b) Failing to provide a full and complete treatment plan setting out all expected procedures and other treatments, (Schemes 1 and 2)[;]
(c) Billing, without proper authorization to do so, Medicaid/PeachCare beneficiaries for services that had been disallowed by CMS, (Scheme 3)[; and]
(d) When Defendants were made aware of these various false claims, they did nothing to rectify overpayments and have thus retained overpayments in violation of the Fraud Enforcement Recovery Act of 2009 ("FERA"), 18 USC § 27, (Scheme 5).

         In response, the Defendants renewed their motions to dismiss as to the second amended complaint, and the trial court entered a second order dismissing Hill's claims against the Defendants (the "Dismissal Order") on the ground that she had failed to state any claim for relief under the GFMCA.[5]

         Hill argues on appeal that the trial court erred in (1) making findings of fact instead of searching for issues of fact in deciding the Defendants' motions to dismiss; (2) misconstruing federal law in ruling that she had not pleaded a prima facie case under the GFMCA with regard to Schemes 1 and 2; (3) concluding that balance billing of patients, alleged in Scheme 3, does not violate Medicaid payment regulations; (4) dismissing her "so-called Reverse False Claims" (Scheme 5) under the GFMCA; (5) dismissing her retaliation claims under the GFMCA on the ground that Defendants were not her employer(s); and (6) dismissing her complaint rather than requiring a motion for more definite statement. This Court reviews the trial court's ruling on a motion to dismiss de novo. Andrews, 347 Ga.App. at 464.

         1. Hill's first enumeration of error, asserting that the trial court erred in making findings of fact in the Dismissal Order, essentially argues that the trial court failed to apply the proper standard in considering the motions to dismiss. It is well settled that "[a] trial court may dismiss a complaint under OCGA § 9-11-12 (b) (6) for failure to state a claim where the complaint lacks any legal basis for recovery." (Citation and punctuation omitted.) Villa Sonoma at Perimeter Summit Condo. Assn., Inc. v. Commercial Indus. Bldg. Owners Alliance, Inc., ___ Ga.App. ___, ___ (1) (824 S.E.2d 738) (2019). A complaint lacks any legal basis for recovery where

(1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. If, within the framework of the complaint, evidence may be introduced which will sustain a grant of the relief sought by the claimant, the complaint is sufficient and a motion to dismiss should be denied.

(Citation omitted.) Id. at ___ (1). See also Anderson v. Flake, 267 Ga. 498, 501 (2) (480 S.E.2d 10) (1997). In other words, in reviewing a motion to dismiss, a trial court does not act as a trier of fact, but rather it determines whether a complaint sets up a sufficient framework, upon which facts, if proved, could establish a ground for relief. See Goldston v. Bank of America Corp., 259 Ga.App. 690, 697 (577 S.E.2d 864) (2003). Based on our review of the dismissal order, we find no error in the trial court's enunciation or application of the standard for considering a motion to dismiss.

         2. Count I - False Claims under the GFMCA.

         Turning to the merits of the motion to dismiss, we note at the outset that the Complaint alleges Hill's claims under three separate counts: Count I alleging false claims under the GFMCA in connection with Schemes 1, 2, 3, and 5; Count II alleging retaliation claims under the GFMCA; and Count III, alleging claims under the Whistleblower Act.[6] Hill only appeals the dismissal of her claims against Defendants under Counts I and II of the Complaint, and we address each count in turn.

         (a) Schemes 1 and 2: Implied False Certification Claims.

         Hill first asserts that the trial court misconstrued applicable federal law in concluding that she failed to state a claim for relief under the GFMCA with regard to Schemes 1 and 2.

         The GFMCA, enacted in 2007, imposes civil liability for Medicaid fraud. OCGA § 49-4-168.1. As pertinent to Schemes 1 and 2, a person violates that act when he or she "[k]nowingly presents or causes to be presented to the Georgia Medicaid program a false or fraudulent claim for payment or approval[.]" OCGA § 49-4-168.1 (a) (1). Additionally, the GFMCA is violated when a person "[k]nowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim[.]" OCGA § 49-4-168.1 (a) (2). For purposes of the act, a "claim" is defined to include "any request or demand, whether under a contract or otherwise, for money or property . . . made to the Georgia Medicaid program[.]" OCGA § 49-4-168 (1).

         Although Georgia courts have had very little occasion to address the provisions of the GFMCA, this Court has noted that "[t]he statutory language in the GFMCA . . . mirrors the language in the federal False Claims Act, 31 USC § 3730 (h) [the "Federal Act"], and courts generally look to federal case law to decide issues under the GFMCA." (Citation omitted.) Murray v. Commmunity Health Systems Professional Corp., 345 Ga.App. 279, 283 (1) (811 S.E.2d 531) (2018). See also Reddick v. Jones, 2015 U.S. Dist. LEXIS 40877 at *16 (III) (A) (3) (NDGa. 2015) (applying Federal Act case law to GFMCA claims). Relying on the applicable federal authority, we now turn to the allegations of the Complaint regarding Schemes 1 and 2.

         The Complaint alleges that the Defendants functioned "as providers or as the agents of providers of pediatric dental services to Medicaid and/or PeachCare beneficiaries," and in that capacity, they operated under "the rules mandating provider compliance under Title XIX of the Medicaid Act."[7] The Complaint further alleges that the Medicaid Act requires the State of Georgia to implement an Early and Periodic Screening, Diagnosis, and Treatment ("EPSDT") program, which includes regular dental services and which "cannot function without viable and correctly recorded plans of care for plan beneficiaries - allowing for continuity of care[, without which], the EPSDT program cannot achieve its stated purposes." The Complaint also alleges that 42 CFR § 482.24 (c) (4) (v) requires that Defendants maintain certain documentation for Medicaid patients including informed consent and other records showing the medical treatment provided. The Defendants billed and received compensation from Medicaid and PeachCare for dental services provided to their beneficiaries, and the Complaint alleges that by billing for such services, Defendants certified to Medicaid and PeachCare that the dental care had been rendered in compliance with the regulatory requirements of those programs, when in fact they had failed to meet the requirements for maintaining evidence of proper informed consent and plans of care.

         These allegations set forth claims under the theory of "implied false certification," and according to that theory,

when a defendant submits a claim, it impliedly certifies compliance with all conditions of payment. But if that claim fails to disclose the defendant's violation of a material statutory, regulatory, or contractual requirement, so the theory goes, the defendant has made a misrepresentation that renders the claim "false or fraudulent" under [the Federal Act].

Universal Health Servs., Inc. v. United States ex rel. Escobar, ___ U.S. ___ (136 S.Ct. 1989, 195 L.Ed.2d 348) (2016) ("Escobar"). The United States Supreme Court has recognized the potential viability of such claims, holding that

the implied certification theory can be a basis for liability, at least where two conditions are satisfied: first, the claim does not merely request payment, but also makes specific representations about the goods or services provided; and second, the defendant's failure to disclose noncompliance with material statutory, regulatory, ...

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