United States District Court, M.D. Florida, Tampa Division
THE UNITED STATES OF AMERICA, THE STATE OF FLORIDA, ex rel. DELIA BELL, Plaintiffs/Relator,
CROSS GARDEN CARE CENTER, LLC and KARL E. CROSS, Defendants.
D. WHITTEMORE UNITED STATES DISTRICT JUDGE.
THE COURT are motions to dismiss Relator Bell's
Second Amended Complaint from Defendants Cross Garden Care
Center, LLC (Dkt. 91) and Karl Cross (Dkt. 102), and
Bell's responses in opposition (Dkts. 99, 110). Upon
consideration, the motions are GRANTED in
part and DENIED in part. The claims
against Defendant Tabatha Cross have been dismissed (Dkt.
118), and her motion to dismiss is therefore
DENIED as moot. (Dkt. 103).
action alleges violations of the federal False Claims Act
(FCA) and the Florida False Claims Act (FFCA) for claims
relating to medical services and the length of patient stays
submitted by a skilled nursing facility to the Center for
Medicare and Medicaid Services (CMS). The United States and
the State of Florida have elected not to intervene in the
action. (Dkts. 31-32).
the allegations of the Complaint as true, Defendant Karl
Cross is the founder of Cross Senior Care, a chain of skilled
nursing facilities including the Cross Garden Care Center
(CGC) facility. (Dkt. 81 ¶ 18). Relator Bell is a former
administrator of the CGC facility, which was owned by
Defendant Cross Garden Care Center, LLC (Cross Garden).
(Id. ¶¶ 4, 16, 19). She reported directly
to Karl Cross. (Id. ¶ 49).
alleges that Defendants engaged in several practices she
argues constitute violations of the FCA. For example, she
contends that CMS covers the cost of a patient's first
100 days in a skilled nursing facility and, beyond this
period, the patient is required to cover costs. (Id.
¶ 2, 40). She alleges Defendants "required their
medical staff to keep patients on service for 100 days
without regard to patient welfare or medical necessity ... to
maximize reimbursement from Medicare." (Id.
¶ 3). More specifically, she alleges "[a]s she
reviewed . . . utilization reports, she noticed that Karl
Cross and [Cross Garden] kept track of how many days a
resident had remaining under Medicare's 100 day Benefit
Period," that "once a patient reached 100 days,
CGC, at the direction of Karl Cross, immediately discharged
the patient," and that Defendants "refused to
discharge any, or virtually any, Medicare patients before
they reached the end of the 100 day Benefit Period."
(Id. ¶¶ 68-70). Relatedly, she alleges
that Defendants "falsely readmitted patients in order to
reset the 100 day Benefit Period," such as patient W.S.
who was readmitted after three to four day transfers to
Palmetto Psychiatric Unit. (Id. ¶¶ 71-76).
She was aware of the practice because she "personally
observed [W.S.'] treatment." (Id. ¶
79). The Complaint provides the initials of other patients
who allegedly stayed at Cross Garden's facilities for 100
days during multiple benefit periods. (Id. ¶
Bell alleges that, as an administrator, she noticed
"that many of the facility's residents did not
require therapy services and were not eligible for treatment
at the [skilled nursing facility]" but nonetheless
received services. (Id. ¶ 50). The Complaint
mentions a patient, W.S., who suffered schizophrenia and was
able to perform everyday functions without assistance.
(Id. ¶ 51). Defendants allegedly provided
occupational and physical therapy services to him and
submitted claims for reimbursement. (Id. ¶
52-53). Another patient, J.P., could walk without assistance
and refused therapy services. (Id. ¶ 57-58).
Practitioners performed bedside therapy in the form of
"a few minutes of stretching from time to time."
(Id. ¶ 59). Bell personally observed the
treatment of W.S. and J.P. (Id. ¶¶ 55,
also alleges Defendants categorized patients into higher
Resource Utilization Group (RUG) levels to obtain higher
reimbursements. (Id. ¶ 100). Rehab therapy is
classified by different RUG levels, with higher levels
resulting in higher Medicare reimbursement. (Id.
¶¶ 41, 47-48). And patients "with a high level
of independence are not good candidates for rehab
therapy," while patients who are "extremely sick,
unable to participate, and have a poor rehab prognosis are
not good candidates for rehab therapy." (Id.
¶¶ 43-45). She also alleges that Karl Cross
"routinely wrote e-mails to the effect of, 'We need
to get these RUG levels up.'" (Id. ¶
Bell contends that Medicaid patients in Florida receive an
allowance of $105 per month while in a skilled nursing
facility, and that the CGC facility "took money out of
the patients' individual accounts and placed it in a
general facility account." (Id. ¶ 85-87).
"Karl Cross then used the money from this general
account to purchase furniture for the [skilled nursing
facility]." (Id. ¶ 88). The Complaint
includes as an example Karl Cross removing $400 from
W.S.' account to purchase a $90 television. (Id.
¶ 89-90). And "nurses complained to Bell that they
were prevented from providing therapy services to Medicaid
patients because Medicaid reimbursed at a lower level than
Medicare for such services." (Id. ¶ 93).
brings three claims against Defendants. Count I alleges a
violation of the FCA, 31 U.S.C. § 3729(a)(1)(A), for
knowingly presenting a false claim for payment in the form of
billing unnecessary therapy services, falsely inflating RUG
levels, unnecessarily retaining patients for 100 days, and
improperly resetting the 100-day benefit period for
readmitted patients. (Id. ¶¶ 99-100).
Count II alleges a violation of § 3729(a)(1)(B) for
making a false record or statement to a false claim when
Defendants "created false narratives in patient notes to
justify their decision to provide services in excess of what
is medically necessary." (Id. ¶¶
104-05). Bell brings Count III under the FFCA, Fla. Stat.
§ 68.082(2)(a), alleging Defendants "appropriate[d]
patient allowances and us[ed] those funds to purchase
furniture and equipment for their facilities."
(Id. ¶¶ 109-10).
raise four arguments for dismissal. First, they argue the
Complaint does not allege fraud with particularity to satisfy
Rule 9(b) of the Federal Rules of Civil Procedure. Second,
they contend that Bell invoked an incorrect basis for the
Court's supplemental jurisdiction over the FFCA claim and
that the conduct giving rise to the FFCA claim is not part of
the same transaction or occurrence as the FCA claim. Third,
they contend the Middle District of Florida is an improper
venue. Finally, they argue the Second Amended Complaint is an
impermissible shotgun pleading. (Dkts. 92, 102).
complaint must contain a "short and plain statement of
the claim showing that the pleader, is entitled to
relief." Fed.R.Civ.P. 8(a)(2). The complaint must
"plead all facts establishing an entitlement to relief
with more than 'labels and conclusions' or a
'formulaic recitation of the elements of a cause of
action.'" Resnick v. AvMed, Inc., 693 F.3d
1317, 1324 (11th Cir. 2012) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 554, 555 (2007)). "[O]nly a
complaint that states a plausible claim for relief survives a
motion to dismiss." Ashcroft v. Iqbal, 556 U.S.
662, 679 (2008) (citation omitted). "A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged."
Id. at 678 (citation omitted). "Determining
whether a complaint states a plausible claim for relief
will... be a context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense." Id. at 679 (citation omitted).
motions are due to be granted in part and denied in part. The
allegations in Count I satisfy Rules 8(a) and 9(b) of the
Federal Rules of Civil Procedure, but the allegations
supporting Count II do not. Second, the FFCA claim in Count
III is due to be dismissed because the factual allegations
giving rise to the FFCA claim are not part of the same
transaction or occurrence as the FCA claim. Third, the Middle
District of Florida is a proper venue for this action.
Finally, Defendants' contention that the Complaint is a
shotgun pleading is not a basis to dismiss the action.
Specificity of the Allegations Stating an FCA Claim
imposes liability on any person who knowingly presents or
causes to be presented a false or fraudulent claim for
payment or approval, 31 U.S.C. § 3729(a)(1)(A), or
knowingly makes, uses, or causes to be made or used a false
record or statement material to a false or fraudulent claim,
§ 3729(a)(1)(B). "To prevail on an FCA claim, the
plaintiff must prove that the defendant (1) made a false
statement, (2) with scienter, (3) that was material, (4)
causing the Government to make a payment." United
States v. AseraCare, Inc., 938 F.3d 1278, 1284 (11th
Cir. 2019) (citation omitted); see also United States ex
rel. Sharpe v. Americare Ambulance, No.
8:13-cv-1171-T-33AEP, 2017 WL 2840574, at *4 (M.D. Fla. July
3, 2017); Baklid-Kunz v. Halifax Hosp. Med. Or., No.
6:09-CV-1002-ORL-31, 2014 WL 2968251, at *3 (M.D. Fla. July
an FCA complaint must "state with particularity the
circumstances constituting fraud." Fed.R.Civ.P. 9(b);
see United States ex rel. Clausen v. Lab. Corp. of
Am.,290 F.3d 1301, 1310 (11th Cir. 2002). This is
satisfied if the complaint alleges "facts as to time,
place, and substance of the defendant's alleged fraud,
specifically the details of the defendants' allegedly
fraudulent acts, when they occurred, and who engaged in
them." Hopper v. ...