Zafirov v. Florida Medical Associates, LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

UNITED STATES OF AMERICA

ex rel. CLARISSA ZAFIROV,

Relator/Plaintiff,

v. CASE NO. 8:19-cv-1236-KKM-SPF

PHYSICIAN PARTNERS, LLC;

FLORIDA MEDICAL ASSOCIATES,

LLC d/b/a VIPCARE; ANION

TECHNOLOGIES, LLC; FREEDOM

HEALTH, INC.; and OPTIMUM

HEALTHCARE, INC.,

Defendants.

_____________________________/

ORDER

Before the Court is Relator’s Motion to Compel Discovery from Provider Defendants1

Regarding Affiliate Providers (Doc. 178), Provider Defendants’ Response in Opposition to

Relator’s Motion to Compel Discovery Regarding Affiliated Providers (Doc. 193), Relator’s

Reply in Support of Motion to Compel Discovery from Provider Defendants Regarding

Affiliate Providers (Doc. 214), and Relator’s Sur-Reply in Support of Motion to Compel

Discovery Regarding Affiliate Providers (Doc. 276). The Court held a hearing on Relator’s

Motion on June 18, 2024 (Doc. 302). At the hearing, the Court directed the parties to submit

certain deposition testimony in support of their respective positions, and the parties timely

complied with the Court’s order (Docs. 314, 315). Now, upon consideration, the Court finds

that Relator’s Motion to Compel is due to be GRANTED.

1 The “Provider Defendants” are Physician Partners, LLC (“Physician Partners”); Florida

Medical Associates, LLC d/b/a VIPcare (“VIPcare”); and Anion Technologies, LLC

(“Anion”).

BACKGROUND

On May 20, 2019, Relator/Plaintiff Clarissa Zafirov (“Relator”), a board-certified

family care physician, brought this qui tam action under the False Claims Act (“FCA”), 31

U.S.C. § 3729 et seq., against Defendants (Doc. 1). Relator was employed as a primary care

physician by Defendant VIPcare from October 2018 through March 2020. In her Amended

Complaint (Doc. 86), Relator alleges that Defendants acted in concert to falsely increase the

risk adjustment scores of thousands of Medicare Advantage patients for the purpose of

obtaining more funding from the United States than was rightfully owed.

On December 15, 2022, Relator served Defendants with her First Requests for

Production (Doc. 143-1). Therein, Relator defined the term “Physician Partners physician”

to mean “any physician who is either (1) employed by Physician Partners, or (2) who

associated with Physician Partners through a practice management contract or any other

similar relationship other than an employment contract.” (Id. at 72). In their discovery

responses, each Provider Defendant objected to that definition as “vague and ambiguous and

susceptible to multiple interpretations,” but did not assert that the definition was overbroad,

unduly burdensome, or otherwise disproportionate to the needs of the case (Doc. 178-1 at 10).

Instead, each Provider Defendant stated that, “[f]or the purpose of responding to the Requests

and interpreting any Definitions or Instructions that incorporate this term, [the respective

Provider Defendant] interprets ‘Physician Partners physician’ to mean a physician either

directly employed by Physician Partners or associated with Physician Partners through a

practice management contract.” (Id.).

In November 2023, the Provider Defendants indicated to Relator that they would

agree to an extension of discovery deadlines if “the parties can reach an agreement on the

non-discovery of affiliated providers.” (Doc. 178-2). Relator represents that this was the

Provider Defendants’ first attempt to narrow the scope of discovery to only employed

physicians in contrast to their earlier discovery responses. While the parties ultimately agreed

on a discovery extension, Relator invited the Provider Defendants to send a letter outlining

their position on the scope of discovery with respect to affiliate physicians. Relator never

received any such letter, and Defendants never amended their discovery responses to update

their objection to the definition of “Physician Partners physician.”

In December 2023, Relator served Interrogatories on Physician Partners and Anion,

which included the definition of “Physician Partners physician” as “any provider who has

been listed in a Physician Partners Provider Directory” (which includes both employed and

affiliated providers) (Doc. 178-3). Physician Partners and Anion each raised the same

detailed objection to this definition:

Physician Partners objects to the definition of “Physician Partners physician”

to the extent it purports to include physicians who were not employed by

Florida Medical Associates, LLC d/b/a VIPcare (“VIPcare”) or any other

Defendant or related entity but were only affiliates. Employed physicians, such

as Dr. Zafirov, are W-2 employees who work exclusively for VIPcare. As

employees, those physicians receive most, if not all, of their income and

benefits from VIPcare. Employed physicians have an employment agreement

with VIPcare, and their compensation is comprised mostly of a base salary,

with the possibility of various additional incentive payments. By contrast,

affiliated physicians are independent owners and operators of their respective

practices. In general, affiliated physicians’ income derives from several sources,

only one of which is Physician Partners. That is because those physicians

typically have contractual relationships with other Medicare Advantage plans,

as well as other independent physician associations. Physician Partners’

contracts with affiliates also vary whereby some affiliates are paid on a fee-for-

service basis, while others have chosen a capitation payment model. In other

words, there may be stark differences even among Physician Partners’ affiliated

physicians. Moreover, as independent business owners, affiliated physicians

have autonomy over their facilities and patient scheduling. Employed

physicians, such as Dr. Zafirov, do not. Rather, VIPcare enjoys unfettered

access to the facilities, and employed physicians’ patient scheduling is dictated

by VIPcare. In addition, affiliated physicians hire and manage their own staff;

employed physicians do not. Affiliated physicians select their own EMR, but

employed physicians must use the eClinicalWorks EMR. Further, affiliated

physicians typically manage their own coding, billing, and referrals. Employed

physicians, on the other hand, have their billing processed by VIPcare, with

support from Anion Technologies, LLC (“Anion”). Affiliate physicians are

documenting and adding or deleting diagnoses and diagnosis codes, creating

and managing medical records, and doing coding and billing of claims to health

plans in all kinds of different EMR systems than the eClinicalWorks EMR

system used by VIPcare physicians, which would greatly increase the burden

on the parties in having to deal with multiple different EMR systems on all

these issues if affiliate physicians were included in discovery. There are

significant differences between employed physicians on the one hand and

affiliated physicians on the other. Also, there are significant variations among

the affiliated physicians, such as how they are paid by Physician Partners and

how those affiliated physicians manage their practices. These differences make

discovery regarding affiliated physicians not relevant to Dr. Zafirov’s claims.

For these reasons, along with the other objections noted in Physician Partners’

written objections to Dr. Zafirov’s discovery requests in this matter, Physician

Partners will not provide discovery regarding affiliated physicians. Physician

Partners answers the Interrogatories only with regard to VIPcare employed

physicians, and only in relation to Medicare Advantage beneficiaries of

Freedom and Optimum, not other patients or plans.

(Doc. 178-4 at 7–9). In a telephone meet-and-confer on February 2, 2024, the Provider

Defendants also represented to Relator that they did not intend to produce documents

regarding its affiliate providers in response to Relator’s First Request for Production. As such,

Relator moves to compel the Provider Defendants to respond to all discovery requests using

the definition to which the Provider Defendants themselves created and agreed to nearly a

year ago: “Physician Partners physician” means “a physician either directly employed by

Physician Partners or associated with Physician Partners through a practice management

contract.”

ANALYSIS

Motions to compel discovery are committed to the sound discretion of the trial court.

See Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir. 1984). Discovery under

the Federal Rules is governed by the principle of proportionality. Federal Rule of Civil

Procedure 26(b)(1) defines the scope of discoverability as follows:

Parties may obtain discovery regarding any nonprivileged matter that

is relevant to any party’s claim or defense and proportional to the needs of the

case, considering the importance of the issues at stake in the action, the amount

in controversy, the parties’ relative access to relevant information, the parties’

resources, the importance of the discovery in resolving the issues, and whether

the burden or expense of the proposed discovery outweighs its likely benefit.

Fed. R. Civ. P. 26(b)(1). The proponent of a motion to compel discovery bears the initial

burden of proving that the information sought is relevant. Moore v. Lender Processing Servs. Inc.,

No. 3:12-CV-205-J, 2013 WL 2447948, at *2 (M.D. Fla. June 5, 2013). “A party resisting

discovery must establish ‘lack of relevancy or undue burden in supplying the requested

information.’” Craig v. Kropp, No. 2:17-cv-180-FtM-99CM, 2018 WL 1121924, at *3 (M.D.

Fla. Mar. 1, 2018) (quoting Gober v. City of Leesburg, 197 F.R.D. 519, 521 (M.D. Fla. 2000)).

Qui Tam complaints filed by relators in FCA actions must comply with Rule 9(b). See

Corsello v. Lincare, Inc., 428 F.3d 1008, 1012 (11th Cir. 2005) (“This Court has held that

complaints alleging violations of the False Claims Act are governed by Rule 9(b).”); Fed. R.

Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake.”). Thus, for FCA cases, the actual submission

of the claim must be pleaded with particularity. Corsello, 428 F.3d at 1013; see also United States

ex rel. Atkins v. McInteer, 470 F.3d 1350, 1359 (11th Cir. 2006) (“The public policy

underpinnings of Rule 9(b), the FCA, and qui tam actions mandate this conclusion.”); United

States ex rel. Bledsoe v. Cmty Health Sys., Inc., 501 F.3d 493, 510 (6th Cir. 2007) (“Specifically,

we hold that the examples that a relator provides will support more generalized allegations of

fraud only to the extent that the relator’s examples are representative samples of the broader

class of claims.”) (citations omitted) (emphasis in original). As a result, “discovery in qui tam

actions must be limited and tailored to the specificity in the complaint.” United States ex rel.

Bane v. Breathe Easy Pulmonary Servs., Inc., No. 8:06-cv-40-T-24MAP, 2008 WL 4057549, at *1

(M.D. Fla. Aug. 27, 2008) (citations omitted); see also Atkins, 470 F.3d at 1359 (“The

particularity requirement of Rule 9 is a nullity if Plaintiff gets a ticket to the discovery process

without identifying a single claim.”).

Relator argues that her proposed scope of discovery is proper because (1) the Amended

Complaint alleges a fraudulent scheme implicating affiliate providers as well as employee

providers; (2) in a related case, the court found no distinction between employed and affiliated

physicians; (3) documents produced thus far confirm that Defendants treated employed and

affiliated providers equally; and (4) Physician Partners fails to demonstrate any undue burden

or lack of relevance (Doc. 178). The Provider Defendants respond that the motion should be

denied because (1) Relator’s Amended Complaint fails to plead a single exemplar of a claim

submitted by Provider Defendants on behalf of an affiliated physician; (2) only affiliated

physicians, not Provider Defendants, select diagnosis codes on their own electronic medical

records (“EMR”) systems; and (3) it would be extraordinarily unduly burdensome to gather,

review, and produce every medical record over a four-year period from 240 non-party

affiliated physicians who serviced over 56,000 patients and used over 20 different types of

EMR systems at many different locations (Doc. 193).

a. The Amended Complaint

First, Relator argues that discovery related to affiliate providers is relevant because the

Amended Complaint alleges a scheme that implicates both affiliate and employed providers.

The Provider Defendants respond that any allegations related to affiliate providers in the

Amended Complaint are conclusory, and the Amended Complaint does not include a single

exemplar of a claim submitted on behalf of an affiliated physician.

In the Amended Complaint, Relator details a purported scheme through which

Physician Partners, for itself and through its subsidiaries Anion and VIPcare, submitted

unsupported diagnosis codes to Freedom and Optimum, who encouraged and accepted the

inflated codes and then paid Physician Partners with the government’s money (Doc. 86, ¶ 1).

In particular, Relator alleges that, “[t]hrough policies, practices and procedures imposed on

both contracted and employed physicians, Physician Partners and Anion systematically

manipulate patient health records to document and submit unsupported conditions to

increase their patients’ “risk adjustment scores,” which in turn substantially increases the

amount that Medicare pays for the patients’ care.” (Id. at ¶ 5).

Relator states that “the principal vehicle used by Physician Partners to implement its

scheme is a document called a ‘5 Star Checklist,’ an Anion-generated form which ‘suggests’

diagnoses that are ostensibly based on a patient’s medical history, but in reality only suggests

conditions that would increase a patient’s risk score, and thus increase the amount that

Medicare pays for that patient’s care.” (Id. at ¶ 8). Moreover, Relator alleges that through

coordinated efforts to maximize profits, Physician Partners engaged in high-pressure

directives to ensure their physicians selected only risk-adjusting hierarchical condition

categories (“HCCs”), including tying the physicians’ compensation to their willingness to

comply with the system (Id. at ¶ 91). The primary vehicle for this pressure was through the

“Financial Performance Bonus” program, which incentivized physicians to boost risk

adjustment scores for Freedom Medicare Advantage Patients (Id. at ¶¶ 127–30). The bonus

also encouraged physicians to reduce expenses, typically associated with hospital admissions,

specialist referrals, and prescription drugs (Id. at ¶ 131). Through this bonus, physicians could

earn up to $100,000.00 per year (Id. at ¶ 129). Relator also alleges that Physician Partners

exercised this pressure on its physicians by “engag[ing] with its physicians – both employed

and contracted – in person, in writing, via Zoom, and through pre-recorded training videos

to convey and enforce its expected coding protocols.” (Id. at ¶ 138). And when the videos

and published guidance were not successful in convincing a doctor to code in the manner

which inflates risk scores, Physician Partners began directly applying pressure to the resisting

physician (Id. at ¶ 151). After describing this scheme, Relator lists specific examples of

patients for whom false claims were submitted as a result of this scheme (Id. at ¶¶ 203–95).

The Court finds that Relator’s Amended Complaint describes a scheme that is

inclusive of affiliate providers. Provider Defendants represent, however, that the specific

examples of false claims in the Amended Complaint are limited to claims submitted on behalf

of VIPcare employed physicians.2 Thus, Provider Defendants argue that the allegations of

false claims are only pleaded with particularity with respect to employed physicians, and as a

result, affiliated physicians should not be included in discovery. Relator responds that the

purported distinctions between affiliated and employed physicians are not supported by the

record. The Court agrees.

b. Employed and Affiliated Providers

While Relator attempts to emphasize the similarities between employed and affiliate

providers, Defendants attempt to distinguish the two groups. In support of their response to

Relator’s motion, Provider Defendants submitted the declaration of James Daniel Kollefrath,

2 Relator states in her sur-reply that discovery has revealed that the representative patients in

the Amended Complaint were also treated by affiliated physicians (Doc. 276).

President of Physician Partners (Doc. 193-1), which describes various differences between

employed and affiliated physicians. First, Mr. Kollefrath states that employed physicians are

W-2 employees employed by VIPcare pursuant to employment agreements, while affiliated

physicians associate with Physician Partners through affiliate agreements (which are

negotiable and vary from affiliate to affiliate) (Id. at ¶ 4). To that end, VIPcare physicians

receive all of their income from VIPcare, whereas affiliated physicians’ income derives from

multiple sources, only one of which is Physician Partners (Id. at ¶ 5). In addition, affiliated

physicians are independent owners and operators of their practices, who are responsible for

their facilities, the selection of insurance programs, patient scheduling, and staff hiring and

management (Id. at ¶ 6). For employed physicians, on the other hand, VIPcare takes

ownership of the facilities and responsibility for these items (Id.). Finally, affiliated physicians

are free to select their own electronic medical records (“EMR”) software, on which the

affiliated providers (not the Provider Defendants) select diagnosis codes, while VIPcare

physicians are required to use the eClinical Works EMR software provided by VIPcare (Id. at

¶ 7).3

Relator responds that these purported distinctions are inconsistent with the facts of the

case. For example, patients were often transferred between affiliated and employed

physicians, and employed and affiliated physicians are treated the same way in Freedom’s

contract with Physician Partners (Doc. 214). Relator also cited testimony tending to

undermine the importance or relevance of these distinctions. First, Emily Gallman, the Vice

President of Healthcare Operations at VIPcare, testified that she had access to claims data

3 Mr. Kollefrath later clarified that both employed and affiliated physicians select their own

diagnosis codes (Doc. 315-1 at 214:3–215:19).

submitted by both VIPcare and affiliated physicians (Doc. 277-1 at 98:1–11). Ms. Gallman

also confirmed that Physician Partners prepared and distributed monthly reports (including

data-driven provider-specific utilization reports) to both employed and affiliated physicians

(Id. at 264:19–265:6). Relator also pointed to the testimony of Sajitha Johnson, a Quality

Analyst and then Senior Provider Educator for Physician Partners, who confirmed that 5 Star

Checklists were available to both employed and affiliated providers (Doc. 277-2 at 89:12–24).

Finally, Relator also provided testimony from Dr. Dennis Mihale, who stated that he drew

no distinction between affiliated or employed providers, and provided training to both groups

of providers as well (Doc. 277-3 at 108:18–109:1, 123:1–20).

At the hearing, Relator further represented that Mr. Kollefrath’s deposition testimony

undermined the weight of the representations in his declaration, while Provider Defendants

represented that it affirmed the identified distinctions. As a result, the Court ordered the

parties to designate relevant portions of Mr. Kollefrath’s testimony as well as any other

additional testimony that would be relevant to this issue. The parties then identified relevant

excerpts of Mr. Kollefrath’s testimony as well as relevant testimony from the corporate

representatives of Physician Partners and VIPcare. This additional testimony establishes that,

while there may be distinctions between employed and affiliated physicians, these distinctions

are not sufficiently meaningful to exclude affiliated physicians from discovery.

Mr. Kollefrath testified that the operating agreement operating agreement between

Physician Partners and Freedom states that Physician Partners shall require both affiliated

and employed physicians to maintain records (Doc. 315-1 at 95:16–96:17). While affiliate

agreements are negotiable and can vary from affiliate to affiliate, they are each based on a

template agreement (Id. at 206:15–23). And while “arguably” each term was negotiable, the

“primary” change would be the financial arrangement (Id. at 207:21–210:9). He also testified

that Physician Partners reviews affiliates’ medical records (Id. at 219:1–21). Physician

Partners provided quality training manuals, a poster with ICD-10 and HCC codes, and 5 Star

Checklists to both sets of providers (Id. at 220:5–221:12). It identifies care gaps and generates

reports reflecting validation rates of HCC codes as well as MRA scores for both groups as

well (Id. at 221:20–222:18). Finally, Mr. Kollefrath confirmed that there is a shared surplus

bonus available to affiliated physicians, though there are some differences from the surplus

bonus program available to VIPcare physicians (Id. at 269:20–275:13).

The parties also submitted additional testimony from Emily Gallman, this time in her

capacity as corporate representative of VIPcare (Doc. 315-2). Ms. Gallman describes VIPcare

as “an affiliate group of” Physician Partners, meaning it has “contracted with Physician

Partners to then contract on our behalf with Medicare Advantage insurance entities.” (Id. at

36:20–37:1). She then testified that any interaction between VIPcare and Physician Partners

would have been documented through the physician affiliate agreement, and her

understanding is that “Physician Partners uses it for all of their affiliate physicians and so with

VIPcare being an affiliate provider of Physician Partners that would have been a document

that memorialized our agreement and our participation in the health plans.” (Id. at 40:2–24).

Finally, the parties submitted testimony from Christopher Barber, the corporate

representative of Physician Partners (Doc. 315-3). Mr. Barber explained that, as Vice

President of Business Development for Better Health Group, he provides services for

Physician Partners, VIPcare, and “all of our affiliate providers.” (Id. at 20:20–21:15). He also

explained that Physician Partners has access to affiliate providers’ electronic medical records

except when the “provider has refused that anyone have outside access or the provider is on

paper charts, which is very rare these days,” although it was apparently more common during

the relevant period (Id. at 59:13–21). Mr. Barber also confirmed that there are shared surplus

bonus programs available to VIPcare physicians and affiliated physicians, though the

eligibility requirements differed (Id. at 106:5–109:9).

Taken together, while there do appear to be differences between employed and

affiliated providers, the Court does not find these differences to be relevant or significant

enough to exclude affiliated providers from discovery. Indeed, three primary aspects of the

scheme alleged in Relator’s Amended Complaint—the 5 Star Checklist, the bonus program,

and training materials—were available to and used by both groups of physicians. As a result,

Relator has shown their relevance.

c. Undue Burden

Finally, the Court addresses Provider Defendants’ contention that included affiliated

physicians in discovery would impose an undue burden on Provider Defendants. Provider

Defendants represent that “discovery related to the 240 affiliate physicians at issue will

implicate millions of pages of documents, which would likely cost at least hundreds of

thousands of dollars and perhaps more to gather, review, and produce[.]” (Doc. 193-1 at ¶

10). Provider Defendants represent that this will be particularly burdensome considering

Relator has requested “all medical and bill records related to any Physician Partners patient

whose services were paid in whole or in part by any Government health insurance program.”

(Doc. 193 at 14 (quoting Zafirov Request for Production No. 43)). To the extent individual

requests are overly broad and unduly burdensome, Defendants may raise an appropriate

objection. Moreover, the Court has already ordered the parties to confer on an appropriate

sample of medical records to be produced (Doc. 316) and would expect the parties to confer

on any specific requests implicated by this ruling. The Court orders the parties to confer on

the number of medical records to be produced, as well as the scope of any specific requests

implicated by this order, on or before September 13, 2024.

Considering the foregoing, the Court finds affiliate providers are included in the scope

of discovery. Accordingly, it is hereby ORDERED that Relator’s Motion to Compel

Discovery from Provider Defendants Regarding Affiliate Providers (Doc. 178) is

GRANTED.

ORDERED in Tampa, Florida, September 3, 2024.

□□ Eee

SEAN P. FLYNN

UNITED STATES MAGISTRATE JUDGE

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