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UNITED STATES OF AMERICA, ———=—"

STATE OF CALIFORNIA, STATE OF

COLORADO, STATE OF

CONNECTICUT, STATE OF

DELAWARE, STATE OF FLORIDA, 17-CV-136 (JLS)

STATE OF GEORGIA, STATE OF

ILLINOIS, STATE OF INDIANA,

STATE OF LOUISIANA, STATE OF

MARYLAND, STATE OF

MASSACHUSETTS, STATE OF NEW

HAMPSHIRE, STATE OF NEW

JERSEY, STATE OF NEW YORK,

STATE OF NORTH CAROLINA,

STATE OF OKLAHOMA, STATE OF

RHODE ISLAND, STATE OF

TENNESSEE, STATE OF TEXAS,

STATE OF VIRGINIA, STATE OF

WASHINGTON, AND THE DISTRICT

OF COLUMBIA

ex. rel. MICHAEL PILAT and

PHILIP MANISCALCO,

Plaintiffs,

Vv.

AMEDISYS, INC., and

DOES 1-100,

Defendants.

DECISION AND ORDER

Relators Michael Pilat and Philip Maniscalco filed this suit—on behalf of the

United States of America, twenty-one states, and the District of Columbia—under

the False Claims Act (“FCA”) and the false claims acts of those states against

Amedisys, Inc., and Does 1-100. Dkt. 1; Dkt. 58.

Amedisys moved to dismiss the Third Amended Complaint. Dkt. 61. For the

reasons discussed below, the Court grants this motion and dismisses the Third

Amended Complaint without leave to amend.

PROCEDURAL HISTORY

Relators Pilat and Maniscalco filed the original complaint under seal on

February 25, 2017, and a First Amended Complaint under seal on July 25, 2018.

Dkts. 1, 18. The United States, as well as the named states and the District of

Columbia, informed the Court, on May 19, 2021, that they were declining to

intervene. Dkt. 38. The Court. unsealed the case that same day. Dkt. 39. On

August 9, 2021, the Relators filed a Second Amended Complaint, which Amedisys

moved to dismiss. Dkts. 40, 51. Rather than oppose that motion to dismiss,

Relators filed a Third Amended Complaint (Dkt. 58), which Amedisys moved to

dismiss (Dkt. 61). Relators responded in opposition. Dkt. 65. And Amedisys

replied. Dkt. 66. The Court held oral argument on May 6, 2022. See Dkt. 70.

THIRD AMENDED COMPLAINT!

Relators allege that Amedisys is a home health services company whose

revenues began to suffer after facing allegations of Medicare fraud and entering into

a 2014 settlement agreement with the Department of Health and Human Services.

: This section contains a brief summary of the Third Amended Complaint. Fora

full recitation of the facts alleged in the Third Amended Complaint, see Dkt. 58.

Dkt. 58 9§ 1-7. Relator Pilat began working at Amedisys’s Amherst, New York

home health center as a Clinical Manager Assistant and, in June 2015, Relator

Maniscalco began working there as a physical therapist. Id. 44 8-9.

During their employment, Relators observed and became personally aware of

numerous allegedly fraudulent practices by Amedisys designed to generate or

inflate revenues through Medicare, Medicaid, TRICARE, and other government-

funded healthcare programs. Jd. § 12. Amedisys allegedly sought government

payment for home health services that were not eligible for reambursement because

Amedisys: (1) improperly recruited patients for home health services via

relationships with hospitals and nursing homes, without evaluating eligibility or

need, and without receiving proper approval from the patients’ physicians; (2)

fraudulently billed for improper and/or medically unnecessary treatment, including

patients who were not homebound or no longer required treatment; (8) falsified time

records in order to bill for services not provided or improperly rendered, as well as

unsafe overscheduling of clinicians leading to inadequate patient care; (4) inflated

Medicare and Medicaid reimbursements by “upcoding” patients for a more severe

diagnosis and more intensive level of care than was warranted; and (5) falsified

time entries to report that clinicians spent more time with a patient then they

actually did. See id. |] 66a.-66e.; id. □□ 67-158.

These strategies primarily were employed at the direction and under the

guidance of senior regional personnel and officers from Amedisys’s headquarters.

Id. 417. From at least 2015 onward, these practices resulted in fraudulent billing

practices and thousands of violations of the False Claims Act and of the state false

claims acts. Jd. { 23.

The Third Amended Complaint contains the following counts: (1)

presentation of false claims, in violation of 31 U.S.C. § 8729(a)(1), see id. J 166-68;

(2) making or using a false record or statement to cause a claim to be paid, in

violation of 31 U.S.C. § 8729(a)(2), see id. 9] 169-71; and (8) retaliation, in violation

of 31 U.S.C. § 3730 (h), see id. 9] 172-74.2

LEGAL STANDARDS

I. MOTION TO DISMISS

On a motion pursuant to Fed. R. Civ. P. 12(b)(6), “the court’s task is to assess

the legal feasibility of the complaint.” Lynch v. City of New York, 952 F.3d 67, 75

(2d Cir. 2020). In doing so, the Court “must take the facts alleged in the complaint

as true, drawing all reasonable inferences in [the plaintiffs] favor.” In re NYSE

Specialists Sec. Litig., 503 F.3d 89, 91 (2d Cir. 2007). To survive a Rule 12(b)(6)

motion to dismiss, a complaint must contain sufficient factual matter, accepted as

true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009). Courts “are not bound to accept as true a legal conclusion

couched as a factual allegation,” and “[t]hreadbare recitals of the elements ofa

cause of action, supported by mere conclusory statements, do not suffice.” Jd.

2 The Third Amended Complaint also contains counts under the FCA state

analogues of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hlinois,

Indiana, Louisiana, Maryland, Massachusetts, New Hampshire, New Jersey, New

York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia,

Washington, and the District of Columbia. Id. 4 175-303.

This standard demands “more than a sheer possibility that a defendant has

acted unlawfully.” Jd. Plausibility “depends on a host of considerations: the full

factual picture presented by the complaint, the particular cause of action and its

elements, and the existence of alternative explanations so obvious that they render

plaintiffs inferences unreasonable.” Fink v. Time Warner Cable, 714 F.3d 739, 741

(2d Cir. 2013) (quoting L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 430 (2d

Cir. 2011)).

II. FALSE CLAIMS ACT AND RULE 9(B)

The False Claims Act is an anti-fraud statute “enforced not just through

litigation brought by the Government itself, but also through civil qui tam actions

that are filed by private parties, called relators, ‘in the name of the Government.”

United States ex rel. Chorches for Bankr. Estate of Fabula v. Am. Med. Response,

Inc., 865 F.3d 71, 81 (2d Cir. 2017) (quoting Kellogg Brown & Root Servs., Inc. v.

U.S., ex rel. Carter, 575 U.S. 650, 653 (2015)). In relevant part, the FCA imposes

liability on any person who “knowingly presents, or causes to be presented, a false

or fraudulent claim for payment or approval” by the United States government, 31

U.S.C. § 3729(a)(1)(A), “knowingly makes, uses, or causes to be made or used, a

false record or statement material to [such] a false or fraudulent claim,” id. §

3729(a)(1)(B), or “conspires to commit [either] violation,” id. § 3729(a)(1)(C). The

FCA defines a “claim” as “any request or demand... for money or property” that is

presented, directly or indirectly, to the United States. Chorches, 865 F.3d at 81

(citing 31 U.S.C. § 3729(b)(2)(A)).

Substantive FCA allegations are subject to the heightened pleading

requirements of Fed. R. Civ. P. 9(b). Id. (first citing U.S. ex rel. Ladas vu. Exelis,

Inc., 824 F.3d 16, 26 (2d Cir. 2016); and then citing Gold v. Morrison-Knudsen Co.,

68 F.3d 1475, 1476-77 (2d Cir. 1995)). When allegations involve fraud, Rule 9(b)

requires that a party “state with particularity the circumstances constituting

fraud.” Fed. R. Civ. P. 9(b). A complaint alleging fraud must ordinarily “(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.” Chorches, 865 F.3d at 81 (quoting Ladas, 824 F.3d at

25). “[C]ourts have characterized this pleading standard as the ‘who, what, when,

where, and how’ of the alleged fraud.” United States ex rel. Monda vu. Sikorsky

Aircraft Corp., No. 3:99CV1026 (JBA), 2005 WL 1925903, at *2 (D. Conn. Aug. 11,

2005), aff'd, 207 F. App’x 28 (2d Cir. 2006) (citations omitted).

The adequacy of particularized allegations under Rule 9(b) is “case-and

context-specific.” Chorches, 865, F.3d at 81 (quoting Espinoza ex. rel. JPMorgan

Chase & Co. v. Dimon, 797 F.3d 229, 236 (2d Cir. 2015)). Courts have described the

“threefold” purpose of Rule 9(b) as follows: “it is designed to provide a defendant

with fair notice of a plaintiffs claim, to safeguard a defendant’s reputation from

improvident charges of wrongdoing, and to protect a defendant against the

institution of a strike suit.” Ladas, 824 F.3d at 25-26 (quoting O’Brien v. Nat?

Property Analysts Partners, 936 F.2d 674, 676 (2d Cir. 1991)). Dismissal for failure

to satisfy Rule 9(b)’s particularity standard is required where FCA claims under

Sections 3729(a)(1)(A) and (B) rest on “speculation and conclusory allegations.”

United States ex rel. Duhaine v. Apple Health Care Inc., No. 3:19-CV-00963 (KAD),

2022 WL 3226631, at *5 (D. Conn. Aug. 10, 2022) (quoting United States ex rel.

Gelbman v. City of New York, 790 F. App’x 244, 249 (2d Cir. 2019)).

Despite the rigid Rule 9(b) pleading requirements, allegations may be based

on “information and belief when facts are peculiarly within the opposing party’s

knowledge.” Chorches, 865 F.3d at 81-82 (citation omitted). Where pleading is

permitted on information and belief, the complaint must “adduce specific facts

supporting a strong inference of fraud.” Id. at 82.

DISCUSSION

Amedisys argues that Relators do not plausibly allege the submission of a

false claim, particularly, that they have not alleged false claims or fraudulent

conduct with the specificity required by Rule 9(b); that Relators do not adequately

allege a false records claim or a retaliation claim; and that the state law claims

should be dismissed alongside the analogous deficient FCA allegations. As

discussed below, Amedisys is correct.

I. THE THIRD AMENDED COMPLAINT FAILS TO ALLEGE FRAUD

WITH SUFFICIENT PARTICULARITY

To state a claim under Sections 3729(a)(1)(A) and (B), a plaintiff must allege

allege that “(1) defendant submitted a claim for payment to the [G]overnment, (2)

8 Amedisys also preues that Relators fail to allege a valid theory of falsity. Because

the Court agrees with Amedisys that the substantive FCA claims fail under Rule

9(b), the Court need not decide that issue.

the claim for payment was false or misleading, (3) defendant acted knowingly in

making that false or misleading claim for payment, and (4) the false or misleading

statement was material to the [G]overnment’s decision to pay.” United States ex

rel. Bonzant v. United Techs. Corp., No. 3:16-CV-1730 (JCH), 2019 WL 5394577, at

*2. (D. Conn. Oct. 22, 2019) (citing Chorches, 865 F.3d at 81).

The primary component of an FCA violation is that the defendant submits or

causes the submission of a claim for payment to the Government—that is, that

“false records were actually presented to the [G]overnment for reimbursement.”

Chorches, 865 F.3d at 88-84; see also U.S. ex rel. Clausen v. Lab’y Corp. of Am., 290

F.3d 1301, 1811 (11th Cir. 2002) (“The submission of a false claim is... the sine

qua non of a [FCA] violation”); United States v. Wal-Mart Stores E., LP, 858 F.

App’x 876, 878 (6th Cir. 2021) (“A critical component of an FCA complaint is the

allegation that a claim for payment was presented to a government entity.”). Rule

9(b)’s heightened standard does “not permit a [FCA relator] merely to describe a

private scheme in detail but then to allege simply and without any stated reason for

[his or her] belief that claims requesting illegal payments must have been

submitted, were likely submitted[,] or should have been submitted to the

Government.” Clausen, 290 F.3d at 1311.

While there is no “mandatory checklist” of specific information that must be

included, a plaintiff who provides “zero details identifying particular false claims

and instead concludes fraudulent bills must have been submitted... [a]t best...

alleges a course of conduct or scheme which he assumes culminated with the

submission of claims.” Ameti ex rel. United States v. Sikorsky Aircraft Corp., No.

3:14-CV-1223 (VLB), 2017 WL 26386037, at *6 (D. Conn. June 19, 2017); see also

U.S. ex rel. Chapman v. Off. of Child. & Fam. Servs. of State of New York, No. 1:04-

CV-1505, 2010 WL 610730, at *4 (N.D.N.Y. Feb. 16, 2010) (dismissing an amended

complaint for failure to meet the particularity requirement of Rule 9b) where the

plaintiff “lays out what he contends is an elaborate scheme, but then summarily

concludes that the defendants submitted false claims to the government for

reimbursement.”), affd sub nom. Chapman uv. Off. of Child. & Fam. Servs. of the

State of New York, 423 F. App’x 104 (2d Cir. 2011).

While “[u]nderlying schemes and other wrongful activities that result in the

submission of fraudulent claims are included in the ‘circumstances constituting

fraud or mistake’ that must be pled with particularity pursuant to Rule 9(b),”

pleadings “invariably are inadequate unless they are linked to allegations, stated

with particularity, of the actual false claims submitted to the government that

constitute the essential element of an FCA qui tam action.” U.S. ex rel. Mooney v.

Americare, Inc., No. 06-CV-1806 FB VVP, 2018 WL 1346022, at *8 d&.D.N.Y. Apr. 3,

2018) (quoting United States ex rel. Karvelas v. Melrose-Wakefteld Hospital, 360

F.3d 220, 232-33 (1st Cir. 2004)); see also Ladas, 824 F.3d at 26-28 (affirming

dismissal of a relator’s complaint for failing to plead with the particularity required

under Rule 9(b) because the complaint did not show any submitted claim was false

or that the devices delivered to the Government failed to comply with contractual

specification requirements).

Courts in the Second Circuit regularly dismiss complaints for this

“fundamental deficiency,” as one court described the Rule 9(b) specificity

requirement. See United States ex rel. Duhaine v. Apple Health Care Inc., No. 3:19-

CV-00963 (KAD), 2022 WL 3226631, at *6 (D. Conn. Aug. 10, 2022). Duhaine

involved allegations of a “decade-long fraudulent scheme to prescribe medically

unnecessary therapies to vulnerable patients for the purpose of maximizing

Medicare billing and reimbursements.” Id. The complaint lacked information

regarding the specific claims for Medicare reimbursement—such as the date of any

such claim, the content of the forms or bills submitted, identification numbers, the

amount billed to the Government, the particular services for which the Government

was billed, the patients or individuals involved in the billing, or the length of time

between the alleged non-reimbursable treatment of Medicare patients and the

submission for their care. Jd. The district court determined that the complaint was

deficient because “[t]his information, or at least some of it, is critical to stating a

FCA violation with the requisite particularity under Rule 9(b).” Id.

As the Second Circuit recognized in Chorches, in some cases a plaintiff may

satisfy the more rigid pleading requirements of Rule 9(b) by pleading on

information and belief—that is, by asserting specific reasons for why such

information is peculiarly within another’s knowledge and providing “specific facts

supporting a strong inference of fraud.” Chorches, 865 F.3d. at 82-83. In that case,

Chorches conceded that he could not identify exact billing numbers, dates, or

amounts for claims to the government. /d. at 82. Nevertheless, the Second Circuit

10

concluded that the complaint survived dismissal under Rule 9(b) because the

complaint (1) adequately alleged that the billing information was peculiarly within

the knowledge of the defendant, and (2) further alleged specific and plausible facts

from which the court could infer that records were actually falsified and that those

false records were actually submitted to the government for reimbursement. Id. at

82-86.

In a subsequent case, the Second Circuit affirmed the dismissal of an FCA

complaint under Rule 9(b), distinguishing the allegations from those in Chorches.

See Gelbman, 790 F. App’x at 249. Regarding allegations based on his personal

knowledge, Gelbman failed to identify specific expense reports that were actually

submitted to the federal government and could not attest to any details about the

eligibility of Medicaid claims at the time of their submission to the federal

government. Id. at 248. Nor could Gelbman rely on information and belief

because—compared to the plausible and particularized allegations in Chorches—

Gelbman offered “no such detail” regarding his reasons for not having personal

knowledge of the reports or providing specifics of the alleged scheme. Id. at 249.

Gelbman’s “speculation and conclusory allegations’—lacking any information of

how the claims were rigged or who did the rigging—failed to satisfy Rule 9(b)’s

particularity standard. Id. at 248-250.

The Third Amended Complaint in this case similarly suffers this “fatal

deficiency.” Duhaine. 2022 WL 3226631, at *6. It provides conclusory allegations

and hypothetical statements regarding a purported fraudulent scheme orchestrated

11

by Amedisys—but, critically, fails to allege actual instances where the schemes

occurred or false claims were submitted to the Government for reimbursement.

Relators purport to provide specific instances and examples of the alleged

fraud in relation to services provided by Amedisys. For example, Relators cite two

instances in which a physician prevented Amedisys from providing care to a patient

without approval. See Dkt. 58 9§ 78-79. Relators then attempt to contrast the

“rare exception” of these two patients with others by vaguely stating that they are

“personally aware that many, if not most, patients did in fact receive care without

proper approval and authorization from a physician.” Jd. □ 80. Relators allege that

this was Amedisys’s “normal practice,” but they do not identify any specific names

or details concerning this presumably large population of patients. Jd.

In other examples, Relators cite their “personal knowledge,” but do not

provide any details as to patients, invoices, records, providers, dates, supervisors,

etc. As for the allegation regarding “upcoding” patients, Relator Maniscalco claims

he was personally aware that executives and clinical staff instructed therapists and

others to “upcode” patients to maximize billings—and if they did not, offsite coding

specialists would doit. Jd. § 102. But for specific examples, the complaint is

sparse: in Summer 2016, Relator Maniscalco was directed to continue treating a

“patient in her late-50s with Parkinson’s” who was no longer in need of care, see id.

109, 121a.; he objected when a Medicare patient with sitting to standing

ambulation was recertified three to four times more than necessary, see id. {J 110,

121b.; and two executive-level employees and the Regional Director instructed staff

12

(presumably including Maniscalco) to code each case a particular way in order to get

higher reimbursements, see id. § 112. Other “specific examples” of the fraudulent

conduct recite two of the above examples, see id. 4 121a., 121b., but with little

elaboration on the “who, what, where, when” of the treatment, claims, and

submissions related to these patients. Id. § 121a.-c. Again, while not every detail is

required, “at least some” of this information is critical to pleading an FCA

violation—and not enough is provided here. Duhaine, 2022 WL 3226631, at *6.

Maniscalco also claims that he is personally aware that Amedisys knowingly

enrolled Medicare and Medicaid patients who are not homebound and submitted

fraudulent billings to the government for these services. Jd. §§ 133-138. But the

“egregious examples” provided in the complaint remain conclusory: a female patient

who is approximately 70 years old who was recertified and provided care longer

than Maniscalco recommended; and a 50-year-old man who was, in Maniscalco’s

view, independent, but was continued therapy treatment nonetheless. Id. | 1837a.-c.

In another example, Pilat states that “at least one Medicare patient enrolled in

November 2015 with severe Alzheimer’s disease” was recertified beyond the initial

coverage period when that patient “no longer benefitted from the treatment being

performed.” Jd. 4 97. These nominal details, combined with conclusory statements

regarding false forms for reimbursement, are inadequate. Nowhere in these

examples is any particularized allegation that Amedysis submitted an actual claim

or the government paid a claim for any of the services provided to these patients.

See Mooney, 2018 WL 1346022, at *3 (pleadings are inadequate unless “linked to

13

allegations, stated with particularity, of the actual false claims submitted to the

government”).

In contrast to Relators’ allegations here, the Chorches complaint provided a

detailed overview of a scheme by AMR involving revising or recreating the

electronic patient care reports to include false statements demonstrating medical

necessity to ensure that ambulance runs would be reimbursable by Medicare. 865

F.3d at 76. Besides identifying general categories of patients who were susceptible

to having their runs falsely revised or reported, the complaint in Chorches identified

examples—more than ten specific runs—for which the relator was ordered to alter

the patient care records to include false or misleading information. Id. at 76-77.

The descriptions of these runs included numerous narrative details, including, but

not limited to, specific dates, patient conditions, and instructions from supervisors

and staff to falsify the reports in particular ways. Id. at 77-78. Relators’

allegations here are not analogous to the precise, detailed allegations required

under Rule 9(b) or exemplified in Chorches.

Nor have Relators adequately alleged that the billing information was

peculiarly within the knowledge of Amedisys to be able to proceed “upon

information and belief.” The complaint in Chorches provided specific reasons why

the information regarding particular bills submitted for reimbursement was

peculiarly within AMR’s knowledge—including how all ambulance personnel

generally were unable to enter the administrative building where billing took place

and were not able to participate in billing procedures. 865 F.3d at 82. Indeed, the

14

Second Circuit remarked that the particular circumstances of AMR’s billing

procedures—as thoroughly described in the complaint—*made it virtually

impossible for most employees to have access to all of the information necessary to

certify on personal knowledge both that a particular invoice was submitted for

payment and that the facts stated to justify the invoice were false.” Id.

Further, the plaintiffs in Chorches satisfied the second component of

providing “specific facts supporting a strong inference of fraud.” Id. at 83 (citing

Wexner, 902 F.2d at 172)). The complaint there detailed the specifics of the scheme

whereby AMR falsified reports—including naming supervisory personnel who

instructed paramedics and staff to revise the reports to insert false information,

identifying the time period as well as dates as to many particular runs, and

specifics on the exact method of using hard-copy markups that were later destroyed

and ordering staff, under threat of suspension or termination, to revise the reports

with false or misleading information so that the runs were certified as medically

necessary. Id. at 83. As discussed, Chorches also provided many examples of

specific runs—with information like the date, patient name, and original reason for

transport—for which a plaintiff was told to alter the reports with false or

misleading information. Id. at 83-84.

As compared with the complaint in Chorches, Relators’ Third Amended

Complaint fails to allege that identification of particular claims is peculiarly within

the knowledge of Amedisys and also fails to support a strong inference that specific

false claims were indeed submitted to the government. Relators allege that

15

Amedisys operated an independent billing department that operated outside of

their knowledge and purview. Dkt. 58 94 154-155. But Maniscalco admits to being

able to review some forms after they were submitted to the billing department—

enough to notice certain alleged changes made by that department that increased

revenue to Amedisys. Jd. This and other allegations based on Relators’ own

interactions with management and coding discussions suggest that Relators had

some—albeit limited—access to billing information.

Moreover, Relators do not provide sufficient specific facts supporting a strong

inference of fraud. Indeed, Relators’ claims that they were being walled off from

any billing information could permit them, pursuant to Chorches, to proceed on

information and belief—but only if the complaint contained other “specific and

plausible facts” filling in the gaps regarding the particular claims and the execution

of the purported scheme. As explained in Chorches, pleading on “information and

belief’ in this context is not a relaxation of the standard under Rule 9(b)—“this

standard ‘must not be mistaken for license to base claims of fraud on speculation

and conclusory allegations.” 865 F.3d at 86 (citing Wexner, 902 F.2d at 172). This

so-called “relaxation” of the standard “does not mean that a plaintiff can plead no

detail at all.” Duhaine, 2022 WL 3226631, at *7 (citing U.S. ex rel. Kester v.

Novartis Pharms. Corp., No. 11 CIV. 8196 CM, 2014 WL 2619014, at *6 (S.D.N.Y.

June 10, 2014)). Unlike the categories of patients and ten specific runs described in

detail in Chorches, Relators’ examples do not fillin the gaps. They have no

sufficient examples. As discussed above, the Third Amended Complaint in this case

16

fails to provide those crucial details, based on personal knowledge, present in

Chorches.

Accordingly, the Third Amended Complaint does not establish the

exceptional circumstances described in Chorches and does not satisfy the

requirements of Rule 9(b).

II. STATE LAW CLAIMS ALSO FAIL

Relators also allege violations of different state analogues of the FCA as well

as the District of Columbia False Claims Act.4 See Dkt. 58 97 181-303. Each count

consists of about six nearly identical paragraphs. The first paragraph states that

“Relators repeat and incorporate by reference the allegations contained” in all

preceding paragraphs. See, e.g., id. § 175. The remaining paragraphs contain a

basic recitation of false claims being submitted and each affected state government.

None of these causes of action identifies any false claims submitted to any

particular state, or in violation of state law.

“Rule 9(b) also apphes to claims brought under state analogues of the FCA in

federal court.” United States ex rel. SW Challenger, LLC v. EviCore Healthcare

MSI, LLC, No. 19 CIV. 2501 (VM), 2021 WL 3620427, at *7 (S.D.N.Y. Aug. 13, 2021)

(quoting United States v. Lab’y Corp. of Am. Holdings, No. 107 Civ. 05696, 2015 WL

7292774, at *3 (S.D.N.Y. Nov. 17, 2015) (citations omitted). The state law causes of

action similarly do not meet the Rule 9(b) standard. First, these causes of action do

4 For ease of description in this case, the Court’s references to “states,” “state

governments,” “state law analogues,” etc. in this section include the District of

Columbia.

17

not allege any facts and contain conclusory allegations closely tracking the language

of the federal statute. See United States ex rel. Piacentile v. Amgen, Inc., 386 F.

Supp. 3d 119, 139 (E.D.N.Y. 2018) (describing similar sparse state law causes of

action). The factual allegations elsewhere in the complaint concern events

occurring in New York, and do not contain any substantive, specific facts relating to

any other state.

Further, even assuming that the facts underlying the state claims are the

same as those underlying the federal FCA causes of action, they would fail to meet.

the Rule 9(b) standard for the same reasons set forth above. Piacentile, 336 F.

Supp. 8d at 139; see also Lab’y Corp. of Am. Holdings, 2015 WL 7292774, at *7

(“Because Relator does not meet the Rule 9(b) pleading standard for any of its

allegations, its state-law claims must be dismissed.”).

THE RETALIATION CLAIMS ARE ALSO DEFICIENT

The FCA’s anti-retaliation provision states:

[a]Jny employee .. . shall be entitled to all relief necessary to make that

employee ... whole, if that employee .. . is discharged, demoted,

suspended, threatened, harassed, or in any other manner discriminated

against in the terms and conditions of employment because of lawful

acts done by the employee... in furtherance of an action under this

section or other efforts to stop 1 or more violations of [the FCA].

31 U.S.C. § 3730(h)(1).5

5 Prior to 2009, Section 3730(h) provided a non-exclusive list. of specific “lawful acts”

done in furtherance of an FCA action that protected an employee—and did not

include the broader language of “other efforts to stop ... violations” that is now

included in Section 3730(h). Chorches, 865 F.3d at 97 (citing 31 U.S.C. § 3730(h)

(2006)).

18

To state a claim for retaliation under the FCA, courts “generally require[ |] a

plaintiff to show that (1) he engaged in activity protected under the statute, (2) the

employer was aware of such activity, and (3) the employer took adverse action

against him because he engaged in the protected activity.” Dhaliwal v. Salix

Pharms., Lid., 752 F. App’x 99, 100 (2d Cir. 2019) (quoting Chorches, 865 F.3d at

95). As stated by the Eleventh Circuit, “if an employee’s alleged actions are

sufficient to support a reasonable conclusion that the employer could have feared

being reported to the government for fraud or sued in a qui tam action by the

employee,” then the employee has stated a retaliation claim under Section 3730(h).

U.S. ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1304 (11th Cir. 2010).

FCA-based retaliation claims are not subject to the more stringent pleading

requirements of Rule 9(b). See Chorches, 865 F.3d at 95 (“The particularity

requirement of Rule 9(b) does not apply to retaliation claims under the FCA.”

(citations omitted)). Rather, a plaintiff “is required to show a ‘good faith basis,’ or

‘objectively reasonable basis,’ for believing that he or she was investigating matters

in support of a viable FCA case.” Swanson v. Battery Park City Auth., No. 15-CV-

6938 (JPO), 2016 WL 3198309, at *3 (S.D.N.Y. June 8, 2016) (quoting U.S. ex rel.

Sasaki v. New York Univ. Med. Ctr., No. 05-CV-6168, 2012 WL 220219, at *12

(S.D.N.Y. Jan. 25, 2012)). Ultimately, the conduct must be “directed at exposing a

fraud upon the government.” Mirza v. Garnet Health, No. 20-CV-00556 (PMH),

2022 WL 826410, at *9 (S.D.N.Y. Mar. 17, 2022) (citations omitted).

19

Generally, courts within this Circuit broadly interpret protected activity to

include two types of conduct: (1) lawful acts done by the employee in furtherance of

an action under the FCA, and (2) “other efforts” to stop one or more FCA violations.

Conte v. Kingston NH Operations LLC, 585 F. Supp. 3d 218, 242 (N.D.N.Y. 2022)

(quoting Swanson, 2016 WL 31983809, at *3). Within this second category of

protected conduct, “a retaliation claim can be stated so long as the employee was

engaged in efforts to stop an FCA violation, even if the employee’s actions were not

necessarily in furtherance of an FCA claim.” United States v. N. Adult Daily Health

Care Ctr., 205 F. Supp. 3d 276, 298 (E.D.N.Y. 2016) (citing Swanson, 2016 WL

3198309, at *3).

Here, Relators allege they repeatedly expressed their concerns with

Amedisys’s practice of seeking larger revenues through medically unnecessary

services at the expense of the patients’ health and Government’s funds. Dkt. 58 4

159. Pilat alleges he “repeatedly expressed concerns” to his supervisor via email

“about the inability of nurses and therapists to keep up with Amedysis’s extensive

volume of patients,” and that, as a result of this “negligent conduct, many patients

were only seen for a few minutes rather than an amount of time commensurate

with the Government billing.” Jd. ¢ 160. Pilat’s termination in December 2016 was

“at least in part for his refusal to be complicit with the known fraudulent and

dangerous conduct of Amedisys that resulted in violations of the FCA.” Id. 7 161.

Maniscalco similarly states that he reported concerns about the admission of, and

continued treatment of, patients who were either not homebound or otherwise not

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covered by Government Funded Healthcare Programs, which resulted in violations

of the FCA—but that his supervisor told him in response that the goal was to

ensure the “best possible outcome for reimbursement.” /d. §§ 162-63. As a result of

his “complaints” and “refusal to comply with the continued fraudulent conduct,”

Maniscalco was terminated on June 7, 2017—less than a month after the discussion

with his supervisor. Id. { 164.

Taking these allegations as true, the Third Amended Complaint fails to state

a retaliation claim. Specifically, Relators have failed to allege facts that support an

inference that they engaged in protected conduct—that is, Amedisys “could not have

feared that [Relators were] contemplating filing a qui tam action or reporting

Amedisys to the government for fraud.” United States ex rel. Raney v. Amedisys,

Inc., No. 2:19-CV-01269-AKK, 2021 WL 4458874, at *4 (N.D. Ala. Sept. 29, 2021).

To be protected, the conduct must be specifically directed at “exposing or deterring

fraud.” Garcia v. Aspira of New York, Inc., No. 07 CIV. 5600 PKC, 2011 WL

1458155, at *4 (S.D.N.Y. Apr. 18, 2011) (citations omitted). As alleged, Pilat’s

“concerns” about being unable to keep up with the volume of patients and patients

being seen for only a few minutes rather than the time billed do not have anything

to do with potential false claims. Dkt. 58 4 160. Rather, they are more

appropriately characterized as concerns about patient care. See Adiram v. Catholic

Guardian Services, No. 138-cv-6235 (SLT) (JO), 2015 WL 5706935, at *5 (E.D.N.Y.

Sept. 23, 2015) (granting a motion to dismiss because plaintiffs well-pleaded

allegations concerned only health and safety, not fraud against the government).

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That Maniscalco expressed concerns about admission and treatment of patients who

were not homebound or covered is similarly conclusory and not clearly connected to

any false claims presented to the Government—as is the innocuous statement by

Mansicalco’s supervisor that the goal is to ensure the “best possible outcome for

reimbursement.” Id. {4 162-63.

In Dhaliwal v. Salix Pharms., Ltd., 752 F. App’x 99, 101 (2d Cir. 2019), the

relator had provided “insufficient evidence” for portions of her retaliation claim

where there was “nothing in the record indicating that she expressed concerns to

anyone at Salix that these practices were illegal or may lead to the submission of

false claims.” Jd. Similar to the vague concerns in this case, Dhaliwal’s

“seneralized concerns” could not put Salix on notice that the relators were engaged

in protected activity under the FCA. Id. at 101. The Second Circuit then

distinguished these “generalized concerns” from those related to a particular

speaker program—namely, where the relator alleged a specific instance where,

upon meeting someone from the FDA at an event, she telephoned a supervisor and

told her she wanted to raise concerns about improper marketing activity to a legal

compliance officer. Id. Dhaliwal continued to insist on contacting the legal

department, which the supervisor dissuaded her from doing. Id. No similar facts

are alleged here. Unlike Dhaliwal, neither Maniscalco nor Pilat provides specific

facts to support that their expressed concerns were legal-related or facts connecting

these concerns to the FCA.

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Whatever the seriousness of concerns about a defendant’s noncompliance

with a federal statute or about the health and safety of patients or residents, those

concerns still must be connected in some way to a fraud against the government. In

Adiram, for example, the court determined that allegations that the defendant

submitted invoices to the government for payment for services that were not

actually provided were “conclusory’—while the concerns about health and safety

were “serious,” the allegations did not “support an inference that [the plaintiffs

were engaged in any conduct ‘in furtherance of an action under [the FCA] or other

efforts to stop’ a violation of the FCA.” 2015 WL 5706935, at *5. Here, too,

Relators appear to have raised concerns about the quality of care provided to

patients, with vague references to billing. But absent facts connecting those

concerns to fraudulent billing, claims submitted to the Government, or mention of

liability, these allegations are insufficient to show that they engaged in protected

activity.

Accordingly, Relators’ retaliation claims fail.

IV. LEAVE TO AMEND IS DENIED

Relators request leave to amend their pleading. Dkt. 65, at 18 n.4. Amedisys

points out that Relators filed the Third Amended Complaint in response to an

earlier motion to dismiss making the same arguments and, thus, have been given

ample opportunity to state □ claim. Dkt. 66, at 10.

Complaints dismissed under Rule 9(b) are “almost always’ dismissed with

leave to amend.” Piacentile, 336 F. Supp. 3d at 137 (quoting Pasternack vu. Shrader,

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863 F.3d 162, 175 (2d Cir. 2017)). Cases in which such leave is denied usually

involve plaintiffs who “already had one opportunity to plead fraud with greater

specificity or the defective allegations were made after full discovery in a related

case.” Id. (quoting Luce v. Edelstein, 802 F.2d 49, 56 (2d Cir. 1986). Amendment “is

not warranted absent some indication as to what [a plaintiff] might add to [his or

her] complaint in order to make it viable.” New York ex rel Khurana v. Spherion

Corp., No. 15 CIV. 6605 (JFK), 2016 WL 6652735, at *19 (S.D.N.Y. Nov. 10, 2016)

(quoting Shemian v. Research In Motion Ltd., 570 F. App’x 32, 87 (2d Cir. 2014)); see

also U.S. ex rel. Moore v. GlaxoSmithKline, LLC, No. 06 CIV. 6047 BMC, 2013 WL

6085125, at *6 (E.D.N.Y. Oct. 18, 2013) (denying leave to amend where plaintiff

alleged no facts that indicate that he would ever be in a position to allege plausibly

that a false claim was submitted and essentially conceded that he is not in

possession of such information).

The Court declines to grant leave to amend in this case. The earlier motion

to dismiss (preceding the Third Amended Complaint) raised similar—if not

identical—arguments as to why Relators’ complaint is insufficient. Compare Dkt.

51-1, with Dkt. 61-1. Relators have had ample opportunity to plead their claims,

and nothing suggests they would be successful if given another opportunity. See

United States v. Novartis Pharms. Corp., No. 18-CV-3700 (KMW), 2022 WL

4217749, at *10 (S.D.N.Y. Sept. 18, 2022) deave to amend denied where relator did

not cure deficiencies in amended complaint, even after court provided guidance on

particularity requirement); see also Ladas, 824 F.3d at 28 (no abuse of discretion in

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denial of leave to amend further where plaintiff was fully aware of Rule 9(b)

challenges and subsequent complaint failed to cure deficiencies); De Jesus v. Sears,

Roebuck & Co., Inc., 87 F.3d 65, 71-72 (2d Cir. 1996) (upholding district court

decision to dismiss without leave to replead a fifth time because plaintiffs had not

cured complaint’s deficiency); Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 115

(2d Cir. 1982) (district court did not abuse its discretion in refusing plaintiff a third

attempt to restate defective fraud allegations); Weinstein v. Appelbaum, 193 F.

Supp. 2d 774, 782 (S.D.N.Y. 2002) (dismissing with prejudice plaintiffs’ amended

complaint, their fourth attempt overall, after holding that plaintiffs had not pled

fraud with particularity). On the facts here, leave to amend 1s not warranted. The

Court therefore dismisses the Third Amended Complaint without leave to amend.

CONCLUSION

For the reasons discussed above, Amedisys’s Motion to Dismiss (Dkt. 61) the

Third Amended Complaint is GRANTED. The Clerk of Court shall close the case.

SO ORDERED.

Dated: March 18, 2023 ‘ =

Buffalo, New York ff 7 | or

JOEL. re J go

UNITED STATES DISTRICT JUDGE

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