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United States v. Catholic Health System of Long Island Inc.

United States District Court, E.D. New York

March 31, 2017



          MARGO K. BRODIE United States District Judge.

         On September 5, 2012, Plaintiff-Relator Michael Quartararo brought this qui tam action, under seal, on behalf of the United States of America and the State of New York against Defendants Catholic Health System of Long Island Inc., doing business as Catholic Health Services of Long Island (“CHS”), St. Catherine of Siena Medical Center (the “Medical Center”), St. Catherine of Siena Nursing Home (the “Nursing Home”), Good Samaritan Hospital Medical Center, and Good Samaritan Nursing Home. (Compl., ¶ 1, Docket Entry No. 1.) Relator alleges violations of the False Claims Act, 31 U.S.C. § 3729 et seq. (“FCA”), and the New York State False Claims Act, N.Y. State Fin. Law § 187 et seq. (“NYFCA”), based on the alleged filing of false Medicare and Medicaid reimbursement claims.[1] (Id. ¶¶ 2-10.) While the United States and New York State investigated the allegations to determine whether to intervene, Relator filed an Amended Complaint on September 10, 2012, (Docket Entry No. 3), a Second Amendment Complaint on August 2, 2013, (Docket Entry No. 6), and a Third Amended Complaint (“TAC”) with attachments on February 21, 2015, (Docket Entry Nos. 15, 16). The United States and the State of New York declined to intervene on January 27, 2016, (Docket Entry Nos. 18, 19), and the Court unsealed the TAC the same day. (Order dated Jan. 27, 2016, Docket Entry No. 20.)

         Defendants move to dismiss the action for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure and for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and also move for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Defs. Mot. for Partial Summ. J., Failure to State a Claim, and Lack of Jurisdiction (“Defs. Mot.”), Docket Entry No. 29.) For the reasons discussed below, the Court (1) denies Defendants' motion to dismiss the action for lack of subject matter jurisdiction, (2) grants Defendants' motion to dismiss for failure to state a claim and (3) grants Defendants' motion for summary judgment. The Court grants Relator thirty (30) days to file an amended complaint.

         I. Background

         a. Overview of Medicare and Medicaid reimbursement programs

         Medicare and Medicaid are taxpayer-funded health insurance programs offered to individuals based on age or disability.[2] (TAC ¶¶ 9, 20, 22.) Medicare is provided by the federal government and Medicaid is provided by the federal, state and local governments and operated through the states. (Id.) The United States Department of Health and Human Services, through its Centers for Medicare and Medicaid Services, runs both programs in conjunction with the state agencies that oversee Medicaid. (Id.) Individuals may be covered under Medicare, Medicaid, or both. (Id.) New York State maintains a Medicaid program for its citizens. (Id. ¶ 23.) If health care providers[3] choose to provide state-based Medicaid services, they must enroll with the New York State Department of Health (“DOH”), which requires health care providers to certify that they will comply with DOH rules and regulations.[4] (Id. ¶ 24.) Health care providers that treat patients covered by Medicare or Medicaid may submit claims for reimbursement of the costs expended to treat the covered patients. (Id. ¶¶ 21, 38.) Reimbursement claims are submitted to the DOH on CMS-1450/UB-04 Forms.[5] (Id. ¶ 21.) The reimbursement claim forms contain general compliance certifications specifying that false, misleading, incomplete or inaccurate claims may subject the claimant to civil and criminal penalties. (Id. ¶¶ 21, 24, 25.) The reimbursement claim forms also require a health care provider to include its reimbursement rate. (Id.) In states that provide Medicaid coverage, the reimbursement rate for Medicaid and Medicare claims is calculated and assigned by the state agency that oversees the Medicaid program, (id. at ¶ 26); in New York State, the DOH, (id. ¶ 38).

         As health care providers, nursing homes are reimbursed for every day they provide care to a Medicaid or Medicare beneficiary.[6] (Id. ¶ 27 (first citing N.Y. Pub. Health Law § 2808; and then citing 10 N.Y. Comp. Codes R. & Regs. § 86-2 et seq.) (McKinney 2017).) The reimbursement rates are calculated by a complex formula that considers four components related to a nursing home's costs and expenditures: (1) direct costs; (2) indirect costs; (3) non-comparable costs; and (4) capital expenditures. (Id. ¶ 27 (citing 10 N.Y. Comp. Codes R. & Regs. § 86-2.10).) The first three components are known as the “operating portion” of the reimbursement rate. (TAC ¶ 27.) The operating portion is calculated based on a nursing home's costs from a “base year, ” a particular fiscal year selected by the DOH. (Id. ¶ 35.) After the DOH selects a base year, it continues to use that base year to calculate a nursing home's operating costs until it decides to select a new base year. (Id.) The DOH obtains the base-year operating costs through annual cost reports that must be submitted by any nursing home intending to seek Medicaid reimbursement. (Id. ¶¶ 34-35.) From 1983 to 2009, the DOH used a base year of 1983, and cost reports from 1983, to calculate the operating-costs portion of the reimbursement rates. (Id. ¶ 35.) In 2011, the DOH selected a new base year of 2002, which selection applied retroactively to years 2009 to 2011. (Id.) Accordingly, from 2009 to 2011, the DOH used 2002 as the base year and used 2002 cost reports to calculate the operating-costs portion of the reimbursement rates. (Id.) In 2012, the DOH selected a new base year of 2007 and changed its reimbursement rate calculation methodology. (Id.)

         The DOH also has the option to change, or “re-base, ” the base year for a nursing home's reimbursement rate calculation when a nursing home changes ownership. (Id. ¶¶ 36-37.) In order to get an accurate reimbursement rate, the new operator of the nursing home is required to submit a rate appeal and an annual cost report to the DOH once the nursing home has operated at a capacity of ninety-percent or higher for a continuous twelve-month period. (Id. ¶ 37 (citing 10 N.Y. Comp. Codes R. & Regs § 86-2.10(k)).) The annual cost report submitted by the new nursing home operator must be certified by an independent accountant, and the new reimbursement rate applies retroactively and prospectively. (TAC ¶ 37.) Until the DOH calculates and assigns the new reimbursement rate, the new operator must use the reimbursement rate that was assigned to the old operator of the nursing home. (Id. (citing 10 N.Y. Comp. Codes R. & Regs. § 86-2.10(k)(2)(i)).) Once the new operator receives its reimbursement rate, it must pay back any overpayment received while using the old operator's reimbursement rate. See 10 N.Y. Comp. Codes R. & Regs. § 86-2.7.

         b. Factual background

         CHS is a healthcare consortium that operates hospitals and nursing homes. (TAC ¶ 8.) In November of 1999, CHS purchased the Nursing Home and the Medical Center from Episcopal Health Services, who had operated the facilities under the names Bishop Jonathan G. Sherman Episcopal Nursing Home (“Episcopal Nursing Home”) and St. John's Episcopal Hospital. (Id. ¶ 39.) CHS officially assumed ownership and control of Episcopal Nursing Home in early 2000. (Id. ¶ 41.)

         As the new operator, the Nursing Home used the reimbursement rate that the DOH assigned to Episcopal Nursing Home, and was authorized to do so until the Nursing Home maintained ninety-percent capacity over a twelve-month period, at which point the Nursing Home was required to submit its rate appeal and annual cost report to allow the DOH to assign the Nursing Home its own reimbursement rate. (Decl. of David DeCerbo (“DeCerbo Decl.”) ¶¶ 36-37, Docket Entry No. 29-1.)

         In 2001, the Nursing Home submitted its rate appeal and annual cost report to the DOH. (TAC ¶ 43; DeCerbo Decl. ¶¶ 36-38; Nursing Home 2001 Cost Report, annexed to DeCerbo Decl. as Ex. C; Nursing Home Rate Appeal, annexed to DeCerbo Decl. as Ex. D; DOH Acknowledged Rate Appeal, annexed to DeCerbo Decl. as Ex. E.) The DOH, however, never assigned the Nursing Home its own reimbursement rate. (DeCerbo Decl. ¶ 39-40; DOH Record of Open Rate Appeals as of Aug., 2014, annexed to DeCerbo Decl. as Ex. F.) Thus, from 2000 to 2011, the Nursing Home used the reimbursement rate that the DOH had assigned to the prior operator, Episcopal Nursing Home. (TAC ¶ 41.)

         i. New York State investigations into the Nursing Home's Medicare and Medicaid reimbursement claims

         In August of 2005, the New York State Attorney General's Medicaid Fraud Control Unit (the “Fraud Unit”), investigated the Nursing Home's Medicaid reimbursement claims spanning from 2000 to 2004. (Fraud Unit Letter, annexed to DeCerbo Decl. as Ex. Z.) The Fraud Unit requested that the Nursing Home provide any information regarding overpayments and any information about its reserve accounts related to overpayments. (Id.) The Nursing Home responded to the request on October 5, 2005, detailing that it had kept a reserve for overpayments that it believed may be due to the DOH and stating that:

the NYS DOH . . . has not issued [the Nursing Home] rates using the base year cost report submitted for the period of February 29, 2000 through February 28, 2001. Currently and since 2000, [the Nursing Home] is being paid a Medicaid rate issued to Bishop Sherman Nursing Home (the former operator) . . . .

(Nursing Home Letter Replying to Fraud Unit, annexed to DeCerbo Decl. as Ex. AA.) The Nursing Home also stated in the letter that it had submitted a rate appeal that the DOH had yet to resolve. (Id.) The Nursing Home further requested that the DOH decline any requests from the public to release any information provided by the Nursing Home pursuant to New York's Public Officer's Law. (Id.)

         In April of 2007, Relator, who had been working for CHS for about thirty-eight years, was elevated to the position of Licensed Administrator of the Nursing Home. (TAC ¶ 7.) As the Licensed Administrator, Relator was responsible for the general administration of the Nursing Home, which included “managing, supervising, and coordinating” the various departments at the Nursing Home, as well as “maintaining and developing legally compliant operating protocols, developing and managing budgets, developing financial policies[, ] . . . monitoring financial performance . . ., supervising all human resource issues and reporting to the [N]ursing [H]ome's governing body as needed.” (Id.)

         Soon after starting in his new position, Relator discovered that the Nursing Home was using the reimbursement rate assigned to Episcopal Nursing Home. (Id. ¶ 42.) Relator informed several of the executives at the Medical Center that the Nursing Home was not using the correct reimbursement rate and they assured Relator that the DOH had been notified of the issue. (Id. ¶ 43.)

         In May of 2008, Relator met with several CHS executives and restated his concerns regarding the Nursing Home's use of the Episcopal Nursing Home reimbursement rate. (Id. ¶ 47.) During the meeting, the CHS executives told Relator that CHS was aware of the issue and had created a reserve account for the funds that they believed the Nursing Home would owe once the Nursing Home received its reimbursement rate. (Id.) Relator told the executives that the Nursing Home may be eligible for the higher reimbursement rate applicable to hospital-based facilities, given the proximity and interrelatedness of the Nursing Home and the Medical Center. (Id.) The executives told Relator that the DOH likely would not approve a hospital rate for the Nursing Home, but that they may seek to get a hospital rate in the future to set off any overpayments they may have to return to the DOH. (Id.)

         In 2009, the DOH audited the Nursing Home's Medicaid reimbursement rates for the years 2003 to 2007. (Id. ¶ 49.) The audit focused on “a few” claims by the Nursing Home for “capital costs components” that were “inconsistent with governing regulations or unsupported by documentation . . . .” (Id.) The DOH discovered that the Nursing Home had understated the number of reimbursable patient-days in its cost reports. (Id.) As a result, the DOH adjusted the Nursing Home's reimbursement rate “slightly downward” based on the correct number and requested that the Nursing Home return to the DOH $281, 242 in overpayments received as a result of the inflated rate. (Id.)

         In March of 2011, Relator attended a meeting between CHS executives and representatives from Horan Martello and Marrone, a health care accounting firm. (Id. ¶ 50.) Representatives from the accounting firm discussed the overpayments the Nursing Home had been receiving due to the continuing application of Episcopal Nursing Home's reimbursement rate. (Id.) The attendees discussed a chart, which illustrated that, as of 2011, the Nursing Home may have owed the DOH $13 million in Medicaid overpayments. (Id.) The accounting representatives told the CHS executives that it may be best not to follow up with the DOH regarding the overpayments because the statute of limitations on repayment may soon expire, and the individuals at the DOH who were responsible for the Nursing Home's rate appeal likely had retired and forgotten to inform someone else to complete the rate appeal. (Id.)

         ii. The DOH retroactively re-bases the reimbursement rates in 2011 and the Nursing Home receives a mitigation payment as a result

         In June of 2011, the DOH retroactively changed the base year used to calculate Medicaid reimbursement rates for health care providers from 1983 to 2002 for the reimbursement period covering 2009 through 2011. (Id. ¶¶ 35, 51.) The re-basing caused the Nursing Home's reimbursement rate to drop from “approximately $270 per Medicaid patient day to . . . $250 per Medicaid [patient] day.” (Id. ¶ 51.) The DOH sought to minimize the impact of the re-basing by providing one-time mitigation payments to affected health care providers that could be used to off-set any potential losses caused by the retroactive application of the lower reimbursement rates. (Id. ¶ 59.) Under this program, the Nursing Home received a $4.5 million mitigation payment.[7] (Id.) CHS accepted the mitigation payment and subsequently “misappropriated” approximately $1.7 million of the mitigation payment by charging the Nursing Home for “workers['] compensation” and “excess Medicaid costs.” (Id. ¶ 61.)

         In June of 2012, Relator again discussed his concerns regarding the Nursing Home's reimbursement rate with John Haight, a CHS executive. (Id. ¶ 54.) Relator told Haight that he believed that the Nursing Home should apply for a hospital-based rate to off-set any losses incurred as a result of the 2011 re-basing. (Id.) Haight told Relator that CHS did not want to draw the DOH's attention to its reimbursement rates because the DOH may realize that the Nursing Home owes at least $13 million in overpayments as a result of using the Episcopal Nursing Home reimbursement rate for such a long period of time. (Id.) Relator told Haight that returning the overpayments was not an issue since the Nursing Home had placed the funds in a reserve account. (Id.) Haight told Relator that the Medical Center had borrowed all of the reserve account funds and that the reserve account was empty. (Id.) Haight also told Relator that CHS believed that it would not be responsible for the overpayments due to the statute of limitations and a lack of continuity in the DOH office, but that CHS kept the reserve account on the books in the event that DOH disregarded the statute of limitations and sought repayment. (Id.) When Relator expressed that he was uncomfortable with the Nursing Home's decision not to return the overpayments, Haight told him “not to get his panties all twisted.” (Id.) Relator made one final attempt to follow up on the issue later that month, but to no avail. (Id. ¶ 55.)

         iii. CHS's alleged use of the Nursing Home's Medicaid and Medicare funds for non-Medicaid and non-Medicare purposes

         During the course of Relator's employment as the Nursing Home's Licensed Administrator, Relator also discovered that CHS had been improperly diverting the Nursing Home's Medicaid funds. (Id. ¶ 65.) Starting in 2007, CHS and the Medical Center began charging the Nursing Home for “medical, administrative, utility and other costs” that the Nursing Home had not incurred or which costs were overinflated. (Id. ¶ 66.) The false payments were taken from the Nursing Home's Medicaid and Medicare funds for the Nursing Home's patients. (Id. ¶¶ 67, 75-77.)

         In 2008, Relator realized that the Medical Center had overcharged the Nursing Home for laboratory costs and brought it to Haight's attention. (Id.) Haight informed Relator that the Medical Center charged the Nursing Home a fixed-yearly rate, regardless of the actual laboratory charges incurred. (Id.) Relator also discovered that the Medical Center's laboratory rates for the Nursing Home's residents was much greater than the laboratory rates charged for the residents in CHS other nursing homes and much greater than then-current market rate for such services. (Id.)

         In late 2009 and late 2011, CHS had taken $2 million and $1.1 million, respectively, from the Nursing Home's budget to cover “purported workers['] compensation costs, ” but Relator alleges that the workers' compensation cases originating from the Nursing Home failed to support such large deductions. (Id. ¶ 68.) When Relator questioned the deductions, he was told that they were not only for the workers' compensation costs incurred in those years, but also to cover workers' compensation costs incurred by the Nursing Home in 2005. (Id.) In two subsequent emails he received, Relator learned that the Nursing Home's workers' compensation costs were disproportionately higher than those of CHS other nursing homes. (Id. ¶¶ 68-70.) When Relator raised the issue of the Nursing Home's workers' compensation costs with officials of CHS and the Medical Center, he was ignored. (Id. ¶ 68.)

         In March of 2012, Relator attended a meeting with other CHS executives and officials, where he raised his concerns regarding the inflated laboratory costs the Medical Center had charged and was continuing to charge the Nursing Home. (Id. ¶ 71.) In response, one executive laughed and told Relator that the Medical Center was “ripping [the Nursing Home] off.” (Id.) At a follow-up meeting with Haight and other CHS executives, Relator reasserted his concerns pertaining to the Medical Center's rates for the Nursing Home's residents, and was told that the rates would remain the same for the current fiscal year but “could be addressed in next year's budget.” (Id. ¶ 72.) Relator subsequently received an email confirming CHS position. (Id.) Because Haight and other CHS executives refused to address the rate and charging issues, Relator took his concerns to a CHS compliance officer. (Id. ¶ 73.) Although the compliance officer said that she would address Relator's concerns, no action was ever taken. (Id.)

         Shortly thereafter, Relator discovered that the Nursing Home was paying a portion of the salary for various staff members at the Medical Center and other CHS nursing homes who spent little to no time at the Nursing Home and had little to no involvement in the Nursing Home's operations. (Id. ¶ 74.) Relator presented the issue to Haight and other CHS executives. (Id.) Haight and the others acknowledged that the salary charges were improper, but did not take any corrective action. (Id.) When Relator raised the issue a second time, Haight responded that he was free to charge the Nursing Home for the salaries of any CHS staff regardless of how much of their work pertained to the Nursing Home. (Id. ¶ 75.)

         Based on Relator's knowledge of the foregoing activities, he commenced the instant action. (Id. at 2.)

         II. Discussion

         a. Standards of review

         i. Motion to dismiss for lack of jurisdiction

         A district court may dismiss an action for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) when the court “lacks the statutory or constitutional power to adjudicate it.” Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.À.R.L., 790 F.3d 411, 416-17 (2d Cir. 2015) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)); Shabaj v. Holder, 718 F.3d 48, 50 (2d Cir. 2013) (quoting Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005)); see also Chau v. S.E.C., __F. App'x__, 2016 WL 7036830, at *1-2 (2d Cir. Dec. 2, 2016). The plaintiff has the burden to prove that subject matter jurisdiction exists, and in evaluating whether the plaintiff has met that burden, “‘[t]he court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, ' but ‘jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.'” Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (citations omitted), aff'd, 561 U.S. 247 (2010). A court may consider matters outside of the pleadings when determining whether subject matter jurisdiction exists. M.E.S., Inc. v. Snell, 712 F.3d 666, 671 (2d Cir. 2013); Romano v. Kazacos, 609 F.3d 512, 520 (2d Cir. 2010).

         ii. Motion to dismiss for failure to state a claim upon which relief may be granted

         In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must construe the complaint liberally, “accepting all factual allegations in the complaint as true and drawing all reasonable inferences in the plaintiff's favor.” Concord Assocs., L.P. v. Entm't Prop. Trust, 817 F.3d 46, 52 (2d Cir. 2016) (quoting Chambers v. Time Warner Inc., 282 F.3d 147, 152 (2d Cir. 2002)); see also Tsirelman v. Daines, 794 F.3d 310, 313 (2d Cir. 2015) (quoting Jaghory v. N.Y. State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997)). A complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 717-18 (2d Cir. 2013). Although all allegations contained in the complaint are assumed true, this principle is “inapplicable to legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678.

         Moreover, as discussed in greater detail below, “[i]t is self-evident that the FCA is an anti-fraud statute, ” and therefore “claims brought under the FCA fall within the express scope of Rule 9(b) [of the Federal Rules of Civil Procedure].” Wood ex rel. U.S. v. Applied Research Assocs., Inc., 328 F. App'x 744, 747 (2d Cir. 2009) (quoting Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. 1995)); see Bishop v. Wells Fargo & Co., 823 F.3d 35, 43 (2d Cir. 2016) abrogated on other grounds by Bishop v. Wells Fargo & Co., 580 U.S. __, __, 2017 WL 670171, at *1 (Feb. 21, 2017) (quoting same). Pleadings subject to Rule 9(b) must “(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 25-26 (2d Cir. 2016) (quoting Shields v. Citytrust Bank Corp., Inc., 25 F.3d 1124, 1128 (2d Cir. 1994)); Wood, 328 F. App'x at 747 (quoting same). “Ultimately, whether a complaint satisfies Rule 9(b) depends upon the nature of the case, the complexity or simplicity of the transaction or occurrence, the relationship of the parties and the determination of how much circumstantial detail is necessary to give notice to the adverse party and enable him to prepare a responsive pleading.” United States v. Wells Fargo Bank, N.A., 972 F.Supp.2d 593, 616 (S.D.N.Y. 2013); see Kane ex rel. U.S. v. Healthfirst, Inc., 120 F.Supp.3d 370, 383 (S.D.N.Y. 2015) (quoting same); U.S. ex rel. Bilotta v. Novartis Pharm. Corp., 50 F.Supp.3d 497, 508 (S.D.N.Y. 2014) (quoting same); U.S. ex rel. Kester v. Novartis Pharma. Corp. (“Novartis I”), 23 F.Supp.3d 242, 258 (S.D.N.Y. 2014) (quoting same); see also Rombach v. Chang, 355 F.3d 164, 171 (2d Cir. 2004) (discussing the purpose of the particularity requirement and emphasizing fair notice to the defendant).

         “In determining the adequacy of a claim under Rule 12(b)(6), consideration is limited to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.” Wilson v. Kellogg Co., 628 F. App'x 59, 60 (2d Cir. 2016) (quoting Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991)). In addition, courts may consider “documents that, although not incorporated by reference, are integral to the complaint.” L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011) (internal quotation marks omitted) (quoting Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004)).

         iii. Motion for summary judgment

         Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Davis v. Shah, 821 F.3d 231, 243 (2d Cir. 2016); see also Cortes v. MTA NYC Transit, 802 F.3d 226, 230 (2d Cir. 2015); Tolbert v. Smith, 790 F.3d 427, 434 (2d Cir. 2015); Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 843 (2d Cir. 2013). The role of the court “is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists.” Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (first quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010); and then citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A genuine issue of fact exists when there is sufficient “evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. The “mere existence of a scintilla of evidence” is not sufficient to defeat summary judgment. Id. The court's function is to decide “whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, a rational juror could find in favor of that party.” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000).

         b. Federal and New York False Claims Acts

         The FCA imposes liability for, among other things, “knowingly” presenting or causing to be presented, a false or fraudulent claim “for payment or approval.” 31 U.S.C. § 3729(a). Although Congress has repeatedly amended the FCA, “its focus remains on those who present or directly induce the submission of false or fraudulent claims.” Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 579 U.S.__, __, 136 S.Ct. 1989, 1996 (2016). A “claim” includes direct requests to the government for payment as well as claims for reimbursement under federal benefits programs. Id. The NYFCA “is closely modeled on the federal FCA, ” Bilotta, 50 F.Supp.3d at 509 (citation and internal quotation marks omitted), and it imposes liability for “knowingly mak[ing] a false statement or knowingly fil[ing] a false record, ” People ex rel. Schneiderman v. Sprint Nextel Corp., 26 N.Y.3d 98, 112 (2015). Because the NYFCA mirrors the FCA in many respects, “it is appropriate to look toward federal law when interpreting the New York act.” State ex rel. Seiden v. Utica First Ins. Co., 943 N.Y.S.2d 36, 39 (App. Div. 2012) (citing State of N.Y. ex rel. Jamaica Hosp. Med. Ctr., Inc. v. UnitedHealth Grp., Inc., 922 N.Y.S.2d 342, 443 (App. Div. 2011)); see Kane ex rel. U.S. v. Healthfirst, Inc., 120 F.Supp.3d 370, 381 (S.D.N.Y. 2015) (“When interpreting the NYFCA, New York courts rely on federal FCA precedent.”); Bilotta, 50 F.Supp.3d at 509 (“New York courts rely on federal FCA precedents when interpreting the NYFCA.” (citation omitted)). Pursuant to the private, or qui tam, provisions of the FCA and NYFCA, a private person may bring a civil action on behalf of the government, as a “relator, ” for violations of each act. 31 U.S.C. § 3730(b); N.Y. State Fin. Law § 190(2). If a relator brings such an action under either the FCA or the NYFCA, the government may elect, within a set period of time, to intervene in the action. 31 U.S.C. § 3730(b)-(c); N.Y. State Fin. Law § 190(2)(b).

         Here, Relator invokes provisions of the FCA that subject to civil liability any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” to the United States government, 31 U.S.C § 3729(a)(1)(A); “knowingly makes, uses, or causes to be used, a false record or statement material to [such] a false or fraudulent claim, ” id. § 3729(a)(1)(B); “conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G), ” id. § 3729(a)(1)(C); or “knowingly makes . . . a false record or statement material to an obligation to pay” the government or “conceals or . . . avoids or decreases an obligation to pay” the government, id. § 3729(a)(1)(G). (TAC ¶¶ 89, 94, 99, 105.) Relator brings substantially the same claims pursuant to the NYFCA. (TAC ¶¶ 115, 121, 127, 133 (citing N.Y. State Fin. Law §§ 189(1)(a), (b), (c), (g)).)

         To prove a false claim under FCA sections 3729(a)(1)(A) and 3729(a)(1)(B) or NYFCA sections 189(1)(a) and 189(1)(b), a relator must show that the defendant “(1) made a claim, (2) to the [] government, (3) that is false or fraudulent, (4) knowing of its falsity, and (5) seeking payment from the federal treasury.” Bishop, 823 F.3d at 43 (quoting Mikes v. Straus, 274 F.3d 687, 695 (2d Cir. 2001)), abrogated on other grounds by Universal Health Servs., Inc., 579 U.S. at__, 136 S.Ct. at 2001); U.S. ex rel. Qazi v. Bushwick United Hous. Dev. Fund Corp., 977 F.Supp.2d 235, 239 (E.D.N.Y. 2013) (quoting same). However, neither the FCA nor the NYFCA defines a “false” claim. See Mikes, 274 F.3d at 696; U.S. ex rel. Kester v. Novartis Pharm. Corp. (“Novartis V”), 43 F.Supp.3d 332, 367-68 (S.D.N.Y. 2014).

         Similarly, to prove a “reverse false claim” under FCA section 3729(a)(1)(G) or NYFCA section 189(a)(g), which involves money owed to the government rather than money paid by the government, a relator must show: “(1) proof that the defendant made a false record or statement (2) at a time that the defendant had a presently-existing obligation to the government - a duty to pay money or property.” Novartis V, 43 F.Supp.3d at 367-68 (quoting Chesbrough v. VPA, P.C., 655 F.3d 461, 473 (6th Cir. 2011) (internal quotation marks omitted)); see also Wood, 328 F. App'x at 748.

         Finally, to prove a false claim under FCA section 3729(a)(1)(C) or NYFCA section 189(1)(c), a relator must show that the defendant agreed with another to commit a violation of FCA sections (a)(1)(A), (B) or (G) or NYFCA sections 189(1)(a), (b) or (g), and committed an overt act in furtherance of the violation. U.S. ex rel. Scharff v. Camelot Counseling, No. 12-CV-3791, 2016 WL 5416494, at *9 (S.D.N.Y. Sept. 28, 2016); Novartis V, 43 F.Supp.3d at 360.

         c. The Court has subject matter jurisdiction over this action

         Defendants argue that, based on the version of the FCA that was in effect at the time of the challenged conduct, the Court lacks jurisdiction over Relator's FCA claims because the relevant information underlying the claims was publicly disclosed prior to Relator initiating this action, when the Fraud Unit investigated the Nursing Home's Medicaid and Medicare reimbursement practices in 2005. (Defs. Mem. of Law in Supp. of Defs. Mot. (“Defs. Mem.”) 16-19, Docket Entry No. 29-9.) Relator argues in response that the Court must apply the version of the FCA statutes in effect at the time he filed this action. (Pl. Opp'n to Defs. Mot. (“Pl. Opp'n”) 3-8, Docket Entry No. 32.) Relator also argues that CHS never publicly disclosed the essential facts underlying the allegedly fraudulent conduct, and any information CHS provided to the Fraud Unit was not publicly disclosed and therefore does not meet the standard for public disclosure. (Id. at 8-15.) The Court addresses the arguments below.

         i. Applicable version of the FCA

         The parties dispute which version of the FCA applies to this action for the purpose of determining whether the public disclosure bar is applicable.[8] (Defs. Mem 16-20; Pl. Opp'n 2-4; Defs. Reply in Further Supp. of Defs. Mot. (“Defs. Reply”) 6, Docket Entry No. 36.) Plaintiff argues that the 2010 version of the FCA applies because it “applies to all cases filed” after its March 2010 enactment. (Pl. Opp'n 2.) Defendants argue that the 2006 version of the FCA applies because the alleged conduct occurred between February of 2000, and March of 2009 prior to the FCA amendments. (Defs. Reply 6.)

         1. The 2006 and 2010 versions of the FCA

         In May of 2009, Congress amended the FCA, which it had last amended in 1994. See 31 U.S.C. § 3729. The sections and subsections of the FCA were renumbered, as relevant here, from sections 3729(a)(1), (a)(2), (a)(3) and (a)(7), to (a)(1)(A), (a)(1)(B), (a)(1)(C) and (a)(1)(G), respectively. Compare Id. § 3729 (1994) with § 3729 (2009). Although the wording of the sections changed slightly, there was no substantive difference between the 1994 version and the 2009 version of the statute for these sections. See Bishop, 823 F.3d at 43 n.1 (“Congress amended the FCA in 2009, but the changes to the statute do not materially alter our analysis . . . .”).

         In July of 2010, for the first time since 2006, Congress amended the FCA's statutory provisions governing the courts' jurisdiction over section 3729 claims brought by relators pursuant to 31 U.S.C. § 3730. As relevant here, Congress amended “the public disclosure bar” found at section 3730(e)(4)(A), a provision that governs a relator's ability to pursue an FCA claim where the relevant information underlying the claim was publicly disseminated or publicly available before the relator filed an FCA action. The 2006 version of the public disclosure bar read:

(4)(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.

31 U.S.C § 3730(e)(4)(A) (2006). The 2010 version of the public disclosure bar reads:

(4)(A) The court shall dismiss an action or claim under this section, unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed--
(i) in a Federal criminal, civil, or administrative hearing in which the Government or ...

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