# Pilat v. Amedisys, Inc.

> District Court, W.D. New York · February 7, 2025

URL: https://www.frixlaw.com/law-library/cases/10796070

## Case

- **Court:** District Court, W.D. New York
- **Decided:** February 7, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

MLE WISE

UNITED STATES DISTRICT COURT FEB 07 2025
WESTERN DISTRICT OF NEW YORK dog □□
Wee ~LOEWENGUTE. sow
rs TERN DIsTRICLE
UNITED STATES OF AMERICA ex rel.
MICHAEL PILAT and
PHILIP MANISCALCO,
Plaintiffs, 17-CV-136 (JLS) (LGF)
v.
AMEDISYS, INC. and DOES 1-100,
Defendants.

DECISION
Relators Michael Pilat and Philip Maniscalco filed this False Claims Act
(“FCA”) suit against Amedisys, Inc. and Does 1-100. Dkt. 82.1 Amedisys moved to
dismiss Relators’ fourth amended complaint. On November 4, 2024, this Court
issued an order denying the motion to dismiss in its entirety. Dkt. 88. This
decision sets forth the reasons for that order.
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.
Dkt. 1; Dkt. 18. In 2021, the United States, as well as the named states and the
District of Columbia, informed the Court that they declined to intervene. Dkt. 38.

1 Harlier versions of the complaint in this case varied slightly in parties and claims.
See Dkt. 1; Dkt. 18; Dkt. 40; Dkt. 58. The operative version of the complaint is the
fourth amended complaint. Dkt. 82.

The Court unsealed the case the same day. Dkt. 39. On August 9, 2021, Relators
filed a second amended complaint, which Amedisys moved to dismiss. Dkt. 40; Dkt.
51.
Rather than oppose that motion, Relators filed a third amended complaint
(Dkt. 58), which Amedisys moved to dismiss (Dkt. 61). On March 13, 2023, the
Court granted Amedisys’s motion to dismiss Relators’ third amended complaint and
denied leave to amend. Dkt. 72. Relators appealed. Dkt. 74. On January 17, 2024,
the Second Circuit affirmed in part, vacated in part, and, on March 11, 2024,
remanded the case to this Court. Dkt. 78.
After remand, the Court held a status conference, at which the parties
discussed next steps and set a schedule. Dkt. 80. On April 17, 2024, Relators filed
their fourth amended complaint. Dkt. 82. Amedisys moved to dismiss the fourth
amended complaint. Dkt. 83. Relators responded (Dkt. 84), and Amedisys replied
(Dkt. 85). The Court heard oral argument and reserved decision. Dkt. 86. On
November 4, 2024, the Court issued an order denying Amedisys’s motion—and did
so before a written decision could be completed—so that the parties could begin
discovery without further delay. Dkt. 88. Today’s decision sets forth the reasons for
denial of the motion.

THE SECOND CIRCUIT DECISION
The Second Circuit’s decision on Relators’ third amended complaint provides
the framework for analyzing the fourth amended complaint.
I, Retaliation
First, regarding Relators’ retaliation claims, the Second Circuit concluded
that Relators sufficiently alleged that both Pilat and Maniscalco engaged in
protected activity. See Dkt. 78, at 5—7.2 The Circuit stated that Maniscalco’s
“refus[al] [to follow] instructions by his supervisors to recertify [a patient for] a
third time, [by] insisting that she was completely independent and it would be
unethical to do so”—after his “supervisors had already overruled his
recommendations for [that] specific Medicare patient twice and recertified the
patient after two six-week programs’—was sufficient to allege that he acted to stop
one or more FCA violations. See id. at 6 (internal quotation marks omitted). The
Circuit further concluded that Pilat’s repeated emails to his supervisor “about the
inability of the nurses and therapists to keep up with Amedisys’s extensive volume
of patients,” including one specific instance in November 2016, where Pilat told his
supervisor that “he had to schedule visits for 3 times as many patients as was safe,”
were sufficient to allege that he acted to stop one or more FCA violations. Id. at 6—7
(internal quotation marks omitted).

2 Page references to docket entries in this case are to the numbering automatically
generated by CM/ECF, which appears in the header of each page.

These allegations—related to concerns about patient care—amounted to
fraud, the court continued, because Relators also alleged that “Amedisys still billed
for the services ... as if the clinician had actually fully performed them, ... even
though many patients were seen only for a few minutes rather than an amount of
time commensurate with the Government billing.” Jd. at 7 (internal quotation
marks omitted).
The Second Circuit “express[ed] no view” about whether Pilat and Maniscalco
sufficiently alleged the remaining prongs of their retaliation claims, and left it to
this Court “to address those questions in the first instance.” Id.
Il. FCA Violations
Next, the Second Circuit considered whether Relators satisfied the specificity
requirements of Federal Rule of Civil Procedure 9(b), guided by United States ex rel.
Chorches v. American Medical Response, Inc., 865 F.3d 71, 86 (2d Cir. 2017).
As to the first Chorches prong, the Second Circuit held that Relators did not
allege sufficient facts to demonstrate that billing information was peculiarly within
Amedisys’s knowledge. Dkt. 78, at 11-12. The Circuit recognized that tension
existed between Relators’ allegations that (1) “in some cases[,] [Maniscalco] was
able to later review the forms [submitted by therapists outlining services
performed] and noticed changes . . . made by the billing department that specifically
increased the revenue to Amedisys,” and that (2) Relators only had contact with the
billing department “when coding specialists initiated conversations by reaching out
over telephone,” and “neither Relator was privy to the submission of the bills or

invoices to Government Funded Healthcare Programs.” Id. (internal quotation
marks omitted).
The Second Circuit noted that Relators could fix this pleading defect by
explaining “any distinction between the treatment forms they had access to and the
actual bills that comprised the false claims.” Jd. at 15. Relators also could “attempt
to reconcile their access to some forms used by the billing department with their
allegations that the billing department operated out of their purview.” Jd. And
Relators could “describe their digital access to treatment and billing records at
Amedisys, and explain whether and how they could virtually access the billing
record at issue.” Jd. at 15-16 (emphasis in original).
Regarding the second Chorches prong, the Second Circuit concluded that
Relators sufficiently alleged a strong inference that Amedisys submitted false
claims to the government. See id. at 8-11. It cited examples alleged in the third
amended complaint, in which “a clinician was instructed either to document patient
information falsely to allow for treatments for which the patient did not qualify, or
to recommend an unnecessary course of treatment.” Id. at 9-10. Relators also
“identified multiple specific instances in which Amedisys falsified timesheets,”
including by assigning nurses a weekly caseload that “made it physically impossible
to spend adequate time with each patient and resulted in billing for work never
performed.” Id. at 10.

III. State FCA Claims and Leave to Amend
The Second Circuit affirmed this Court’s dismissal of Relators’ state FCA
claims. See id. at 16. It also concluded that Relators should have leave to amend
their federal FCA claims, but not their state FCA claims. Jd. at 16-17.
FOURTH 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.
Dkt. 82 Jf 1-7. In May 2015, Pilat began working at Amedisys’s Amherst, New
York home health center as a clinical manager assistant and, in June 2015,
Maniscalco began working there as a physical therapist. Id. {4 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. Id. J 12; see also id. § 1. Amedisys allegedly sought
government payment for home health services that were not eligible for
reimbursement because it: (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

3 This section contains a brief summary of the fourth amended complaint. For a full
recitation of the facts alleged in the fourth amended complaint, see Dkt. 82.

treatment, including patients who were not homebound or who no longer required
treatment; (3) falsified time records 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 than they actually did. See id. { 66(a)—(e); id. J 67-156.
Amedisys primarily employed these strategies at the direction, and under the
guidance, of senior regional personnel and officers from its headquarters. Id. { 17.
From at least 2015 onward, these practices resulted in fraudulent billing practices
and thousands of violations of the FCA and of the state false claims acts. Id. { 23.4
The fourth amended complaint contains claims for: (1) presentation of false
claims, in violation of 31 U.S.C. § 3729(a)(1)(A), see Dkt. 82 § 183-85; (2) making
or using a false record or statement to cause a claim to be paid, in violation of 31
U.S.C. § 3729(a)(1)(B), see Dkt. 82 J] 186—88; and (8) retaliation as to each Relator,
in violation of 31 U.S.C. § 3730(h), see id. 94 189-91.
LEGAL STANDARDS
I. Motion to Dismiss
On a motion pursuant to Federal Rule of Civil Procedure 12(b)(6), a “court’s
task is to assess the legal feasibility of the complaint.” Lynch v. City of N.Y., 952

4 As discussed above, the Second Circuit affirmed this Court’s dismissal of Relators’
state FCA claims. See Dkt. 78, at 16-17.

F.3d 67, 75 (2d Cir. 2020). 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, 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) (internal quotation marks and citation omitted). Courts “are not bound
to accept as true a legal conclusion couched as a factual allegation,” and
“[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Jd. (internal quotation marks and citation
omitted).
This standard demands “more than a sheer possibility that a defendant has
acted unlawfully.” Jd. Plausibility depends on many 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
[the] plaintiffs inferences unreasonable.” Fink v. Time Warner Cable, 714 F.3d 739,
741 (2d Cir. 2018) (internal quotation marks and citation omitted).
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.”
Chorches, 865 F.3d at 81 (quoting Kellogg Brown & Root Servs., Inc. v. U.S. ex rel.
Carter, 575 U.S. 650, 653 (2015)) (internal quotation marks omitted). 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 (quoting 31 U.S.C. § 3729(b)(2)(A)).
Substantive FCA allegations are subject to the heightened pleading
requirements of Federal Rule of Civil Procedure 9(b). Id. (first citing U.S. ex rel.
Ladas v. 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). An FCA complaint alleging
fraud} ordinarily must “(1) specify the statements that the plaintiff contends were
fraudulent, (2) identify the speaker, (8) state where and when the statements were
made, and (4) explain why the statements were fraudulent.” Chorches, 865 F.3d at
81 Gnternal quotation marks and citation omitted). Courts sometimes characterize
this pleading standard “as the ‘who, what, when, where, and how’ of the alleged
fraud.” United States ex rel. Monda v. Sikorsky Aircraft Corp., No. 3:99CV1026

5 The pleading requirements for retaliation claims are discussed infra.

(JBA), 2005 WL 1925908, 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 (internal quotation marks and citation
omitted). Courts have described the “threefold” purpose of Rule 9(b) as “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 (internal quotation
marks and citation omitted). A court must dismiss a complaint under Rule 9(b)
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 N.Y., 790 F. App’x 244, 249 (2d Cir. 2019))
(internal quotation marks omitted).
Despite Rule 9(b)’s strict 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 (internal quotation marks and 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
(internal quotation marks and citation omitted).

10

DISCUSSION
Amedisys argues that the Court should dismiss the fourth amended
complaint in its entirety. See Dkt. 83-1, at 6. In particular, Amedisys argues that
Relators did not allege that Amedisys was aware of either Pilat’s or Maniscalco’s
protected conduct, and did not allege that either Pilat or Maniscalco was terminated
in retaliation for that conduct. See id. at 22-26. Amedisys also argues that
Relators’ FCA claims do not satisfy Rule 9(b), under Chorches. See id. at 18-18.
Finally, Amedisys argues that Relators do not allege falsity because several of their
theories of falsity cannot support an FCA violation, do not allege a false certification
claim (express or implied), and do not allege a false-records claim. See id. at 18-22.
As reflected in the order denying the motion to dismiss, this Court disagrees.
I. The Fourth Amended Complaint Sufficiently Alleges Retaliation
Claims as to Pilat and Maniscalco

The FCA’s anti-retaliation provision states:
[aJny 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. § 8730(h)(1).6

6 Before 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 (quoting 31 U.S.C. § 3730(h)
(2006)) Gnternal quotation marks omitted).
11

To state a retaliation claim 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., Ltd., 752 F. App’x 99, 100 (2d Cir. 2019) (quoting Chorches, 865 F.3d at
95) (internal quotation marks omitted). 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, 1804 (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.”).
Rather, a plaintiff must “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) (internal quotation marks and citation omitted).
Ultimately, the conduct must be “directed at exposing a fraud upon the
government.” Mirza v. Garnet Health, No. 20-CV-556 (PMH), 2022 WL 826410, at
*9 (S.D.N.Y. Mar. 17, 2022) (internal quotation marks and citations omitted).
As explained above, the Second Circuit held that both Pilat and Maniscalco
engaged in protected activity under the statute. This Court must consider whether

12

the fourth amended complaint sufficiently alleges that Amedisys was aware of
Pilat’s and Maniscalco’s protected activity, and whether Amedisys took adverse
action against Pilat and Maniscalco because of their protected activity.
A. Pilat
The fourth amended complaint contains sufficient allegations regarding each
of the remaining two prongs as to Pilat.
Regarding Amedisys’s awareness of his protected activity, the fourth
amended complaint alleges that “Pilat relayed... nurses’ messages about unsafe
workload”—specifically, scheduled patient visits numbering fifteen to seventeen per
day, rather than the standard five to six—“to Amedisys supervisors.” Dkt. 82 J 127.
It also alleges that Pilat “notified management about the unsafe clinician
scheduling,” including telling Director of Operations Jake Wilkens, in a November
2016 email, that “he had to schedule visits for ‘3 times as many patients as was
safe.” Id. § 129. More generally, the fourth amended complaint alleges that, in
“several emails between .. . Pilat and his supervisor, Wilkens, .. . Pilat repeatedly
expressed concerns about the inability of the nurses and therapists to keep up with
Amedisys’s extensive volume of patients.” Id. § 177. These allegations plausibly
allege that Amedisys was aware of Pilat’s protected activity.
Amedisys argues that this conduct did not put it on notice to Pilat’s protected
conduct because his conduct amounted to raising concerns about patient scheduling,
which was within his job duties. See Dkt. 83-1, at 23-24. A job-duty argument
sometimes prevails, but not here.

13

The cases Amedisys relies on for application of this argument here are
distinguishable—especially against the backdrop of the Circuit’s decision in this
case. See Hennrick v. MIR Sci., LLC, No. 21 Civ. 4945 (LGS), 2021 WL 6052118, at
*1, *4 (S.D.N.Y. Dec. 21, 2021) (plaintiff “responsible for overseeing Defendant's
laboratory practices, complying with applicable FDA regulations, [and] applying for
and receiving [New York State Department of Health] ... approval” of Defendant’s
test did not put Defendant on notice of FCA violations by reporting issues with
submitted data because “it was Plaintiffs job to raise concerns about the accuracy of
data being submitted to the FDA and [the New York State Department of Health]
in Defendant’s applications”); Ortiz v. Todres & Co., No. 15 Civ. 1506 (LGS), 2019
WL 1207856, at *1, *5 (S.D.N.Y. Mar. 14, 2019) (plaintiff auditor did not put
defendant on notice of FCA violations by stating that “issuing the financial
statements any other way would be a misrepresentation” because plaintiff was not
“doing anything other than what he was hired to do”).
Here, by contrast, Pilat “was responsible for supporting the clinical
management teams, including scheduling staff for patient care and managing
patient referrals.” Dkt. 82 § 8. He was not responsible for alerting Amedisys to
concerns about patient care or safety. Pilat’s protected conduct of repeatedly
notifying his supervisor “about the inability of the nurses and therapists to keep up
with Amedisys’s extensive volume of patients,” including that “he had to schedule
visits for 3 times as many patients as was safe,” Dkt. 78, at 6-7 Gnternal quotation
marks omitted); see Dkt. 82 ¢ 129, went “beyond [his] assigned task,” and was thus

14

sufficient to put Amedisys on notice of that protected activity, see Ortiz, 2019 WL
1207856, at *5 (internal quotation marks and citation omitted).
The fourth amended complaint also plausibly alleges that Amedisys took
adverse action against Pilat because of his protected conduct. In particular, it
alleges that “Pilat was fired a short time after” his November 2016 email to Wilkens
expressing concerns about patient scheduling. Dkt. 82 129. Amedisys terminated
Pilat’s employment “in December 2016, 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. { 178. These allegations are sufficient for
Pilat’s retaliation claim to proceed to discovery. Compare Beckles-Canton v.
Lutheran Soc. Servs. of N.Y., Inc., No. 20 Civ. 48379 (KPF), 2021 WL 3077460, at *9-—
*10 (S.D.N.Y. July 20, 2021 (“A seven-month gap is itself ‘not prohibitively remote’
and [is] ‘within the temporal range that [the Second Circuit has] found sufficient to
raise an inference of causation.”) (citations omitted), and United States v. N. Adult
Daily Health Care Ctr., 205 F. Supp. 3d 276, 300 (E.D.N.Y. 2016) (denying motion to
dismiss FCA retaliation claim where plaintiff met with employer “in January of
2010 to respond to his complaints and . . . was constructively discharged in April of
2010”), with McAllan v. Von Essen, 517 F. Supp. 2d 672, 686 (S.D.N.Y. 2007)
(granting summary judgment for defendant on FCA retaliation claim, in part
because “plaintiff had continued to work for almost three years after commencing
his FCA action without incident”).

15

Amedisys argues that the fourth amended complaint does not sufficiently
allege but-for causation as to Pilat’s termination. See Dkt. 83-1, at 24-25. The
allegation that Pilat was terminated “at least in part for” his protected conduct
(Dkt. 82 J 178) is not inconsistent with but-for causation. If, for example, there was
some deficiency with Pilat’s job performance that Amedisys was willing to endure
until Pilat expressed concerns about patient care and volume of cases assigned to
nurses, then Pilat’s protected conduct would be a but-for cause for his termination.
Any evidence will be revealed—or not—during discovery. And Amedisys may raise
that issue again at summary judgment.
B. Maniscalco
As to Maniscalco’s retaliation claim, Amedisys challenges only the third
prong: whether Amedisys took adverse action against Maniscalco because of his
protected activity. The Court, therefore, will only briefly address the notice prong.
The fourth amended complaint alleges that, “on numerous occasions, . . .
Maniscalco reported concerns about the admission of and continued treatment of
patients who were either not homebound or otherwise not covered by Government
Funded Healthcare Programs, which resulted in violations of the FCA.” Dkt. 82
4 179. It further alleges that, “when... Maniscalco raised his concerns to Wilkens
in May 2017, Wilkens told him his goal was to ensure the ‘best possible outcome for
reimbursement.” Jd. § 180. These allegations satisfy the notice prong of
Maniscalco’s retaliation claim.

16

Amedisys argues that the fourth amended complaint does not sufficiently
allege that Maniscalco was terminated because of his protected conduct because the
claim relies solely on the timeframe of his termination in relation to his protected
conduct. See Dkt. 83-1, at 25-26. The fourth amended complaint alleges that, “[a]s
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
[his May 2017] conversation [with Wilkens].” Dkt. 82 § 181. This alleged temporal
proximity, combined with the allegations about Maniscalco’s protected conduct,
satisfies the causation prong at this stage. See Beckles-Canton, 2021 WL 3077460,
at *9-—*10; N. Adult Daily Health Care, 205 F. Supp. 3d at 300.
II. The Fourth Amended Complaint Sufficiently States FCA Violations
Amedisys also seeks dismissal of Relators’ claims for presentation of false
claims and making or using a false record—based both on Chorches and substantive
deficiencies. Each argument fails.
A. The Fourth Amended Complaint Satisfies Chorches
Relators must rely on Chorches to plead their FCA violations because they do
not allege the actual submission of false claims.? The Second Circuit has concluded
that Relators did not allege sufficient facts to demonstrate that billing information
was peculiarly within Amedisys’s knowledge—in other words, they did not satisfy

7 See Chorches, 865 F.3d at 82~83 (recognizing that, that, in some cases, a plaintiff
may satisfy the more rigid pleading requirements of Rule 9(b) by (1) asserting
specific reasons why such information is peculiarly within another’s knowledge, and
(2) providing “specific facts supporting a strong inference of fraud”) (internal
quotation marks omitted).
17

the first Chorches prong. Dkt. 78, at 11-12. It noted that Relators could cure this
deficiency by (1) explaining “any distinction between the treatment forms they had
access to and the actual bills that comprised the false claims,” (2) “reconcil[ing] their
access to some forms used by the billing department with their allegations that the
billing department operated out of their purview,” and (8) “describ[ing] their digital
access to treatment and billing records at Amedisys, and explain[ing] whether and
how they could virtually access the billing records at issue.” Id. at 15-16 (emphasis
in original). Because the fourth amended complaint does so, it alleges FCA
violations with sufficient specificity.
First, the fourth amended complaint describes, in detail, Amedisys’s
structure—including its “billing procedures[, which] are... layered and
compartmentalized, giving only Amedisys’s central billing department (located in
Baton Rouge, LA) access to the actual bills submitted to the Government.” Dkt. 82
4, 157; see also id. §| 158 (describing structure of nationwide branches, regions, local
branches, and regional groups). Each branch had a business office manager, whose
“primary responsibility, as it related to patient billing, was to ensure that all the
information necessary for converting clinical therapy services into bills was
completed, including patient treatment/evaluation forms and OASIS assessments.”8
Id. § 159.

8 OASIS is Outcome and Assessment Set, which is a tool to “determine the patient’s
care needs,” using clinical, functional, and service factors, that helps nurses
evaluate eligibility for Medicare home health care. Id. { 55.
18

Relators worked at Amedisys’s Amherst, New York facility. Id. 4 8 (Pilat), 9
(Maniscalco). The assistant director of operations responsible for Amherst, and
Maniscalco’s direct supervisor, was Sue Troy, who reported to Director of
Operations Jake Wilkens. Jd. {| 10, 11. Wilkens “oversaw the operations of the
individual facility.” See id. 158. Troy “had a team of clinicians or therapists that
worked for [her] out in the field handling patient visits.” See id.; see also id. | 160
(assistant directors of operations “directly managed therapists who worked in the
field”).
Second, the fourth amended complaint explains the software Amedisys used
for clinical information. Each therapist, including Maniscalco, “was issued a tablet,
which gave [him or her] access to a software tool called ‘PointCare.” Id. § 160.
PointCare assisted with “collection of all pertinent treatment and OASIS
information for a given patient.” Id. § 161. It was “a central portal for the
collection of all clinical information that was later used to support the conversion of
services into bills.” Id. Therapists used PointCare to submit “OASIS assessment|s]
and their clinical treatment and evaluation forms,” usually “following the initial
visit[,] which documented . . . the patient condition and prescribed treatment
regimen.” Id. { 162; see also id. § 170 (“Maniscalco’s Amedisys tablet enabled him
to submit his OASIS assessments and clinical treatment forms through
PointCare.”).
Next, the fourth amended complaint details how the treatment-related forms
were submitted for billing. Business office managers ensured that all necessary

19

forms were completed in PointCare, approved them, and “submitted [them] to a
centralized billing department at Amedisys headquarters in Baton Rouge, LA.” Id.
{| 164; see also id. § 172. “All patient billing” occurred “at this centralized location],
and] no government patient billing was conducted at a local branch facility.” Jd.
] 164; see also id. { 173.
Finally, the fourth amended complaint contrasts the treatment-related forms
Relators did have access to, with the billing information that they did not have
access to. Relators allege that neither of them “had any access to the compilation, .
maintenance, or submission of bills or invoices to Government Funded Healthcare
Programs’ because “Amedisys operated an off-site billing department that gathered
treatment forms submitted by therapists detailing information collected during
patient visits and converted those treatment forms to billings to the Government.”
Id. { 166. Not only that, but even area vice presidents, directors of operations,
assistant directors of operations, and business office managers lacked access to
specific patient billing information; they “had access [only] to certain aggregated
treatment and revenue data used evaluate performance and set business targets.”
Id. { 165.
Pilat, specifically, “had no access to any internal digital billing systems or
billing software.” Id. § 167. He “was provided a workstation with a computer and
an email address,” but “the vast majority of [his] work was conducted with paper
scheduling records.” Jd. His responsibilities were limited to “coordinating the

20

schedules of nurses and therapists”—clinicians in the field—“with whom he
communicated via email.” Id.
Maniscalco worked primarily offsite, “travel[ing] from his home directly to
patients’ homes and rehabilitation facilities to provide home health services nearly
every day.” Id. J 168. He occasionally “attend[ed] meetings at the Amedisys branch
to discuss his patients, patient loads, and patient treatments,” but this was “the
only time he was onsite at an Amedisys office.” Id. “Specific patient billing detail
was never discussed at these meetings.” Id. 169.
As described above, Maniscalco had access to treatment-related forms. But
those forms “contained only relevant clinical, treatment information, including
patient identification information, patient conditions, and patient treatments.” Jd.
4171. They “did not contain any billing information, such as treatment codes,
billing dates, or billing amounts.” Id. Occasionally, Maniscalco could “view
treatment forms that had been changed by off-site coding specialists in the
PointCare software portal,”? but “the changes related only to the types of
treatments he performed and the conditions of the patients.” Id. J 174. He did
not—and could not—see patient billing information “because PointCare did not
store patient specific billing information,” and PointCare “was the only Amedisys
program he had access to.” Id.

9 Relators allege that remote coding specialists sometimes “unilaterally
manipulated the treatment forms to falsely enhance Amedisys’s reimbursements
from Government Funded Healthcare Programs,” including by “fabricat[ing] patient
conditions, treatment severity, and duration” to “maximize reimbursement.” Id.
163.

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In sum, Relators allege that neither Pilat nor Maniscalco had “information
regarding what was included in the bills, how the bills were created, how the bills
were submitted, when the bills were submitted, or who at Amedisys specifically was
responsible for processing the bills,” and they did not have access to any of this
information. Id. § 175.
These allegations address each category of information the Second Circuit
suggested could cure the pleading defects with Relators’ prior complaint and,
thereby, satisfy Chorches.!° They explain the difference between treatment forms
and bills, which were generated based on information in the treatment forms, but
separately from them. The additional allegations explain how Maniscalco had
access only to the treatment-related information and the software platform through
which such information was transmitted, and Pilat did not even have access to that
software. Finally, the additional allegations clarify that the billing information was
both physically and electronically segregated from Pilat, Maniscalco, and the
Amherst branch—and that neither Relator could access bills or billing information,
either physically or digitally.

10 These allegations also are similar to those in Chorches, where the Second Circuit
concluded that the relators satisfied the first prong. See Chorches, 865 F.3d at 82
(complaint alleged that all ambulance personnel (like the relator) generally were
unable to enter the administrative building where billing took place and were not
able to participate in billing procedures; these particular circumstances “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”).
22

The fourth amended complaint, therefore, alleges FCA violations with
sufficient specificity, pursuant to Chorches.
B. Relators Allege Sufficient Theories of Falsity to Support Their
FCA Claims
Amedisys also challenges the substance of Relators’ FCA violations. In
particular, Amedisys argues that Relators fail to allege falsity because several
alleged theories of falsity do not concern illegal or fraudulent conduct to support an
FCA violation, and that Relators do not allege false certification. See Dkt. 83-1, at
18-21. Because the Second Circuit endorsed certain theories of falsity that also
appear in the fourth amended complaint, the Court concludes that the complaint
sufficiently alleges FCA violations.
To state a claim under Sections 3729(a)(1)(A) and (B), a plaintiff must allege
that “(1) defendant submitted a claim for payment to the government, (2) the claim
for payment was false or misleading, (3) the defendant acted knowingly in making
that false or misleading claim for payment, and (4) the false or misleading
statement was material to the government’s decision to pay.” United States ex rel.
Bonzani 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).
Here, Relators allege various theories of falsity as the basis for their FCA
claim, including: (1) improperly recruiting and enrolling patients; (2) providing,
and billing for, unnecessary and/or non-covered patient treatments;
(3) fraudulently billing for services not rendered or improperly rendered;
(4) upcoding services provided to patients; and (5) falsifying time entries by making
23

it appear that therapists spent longer with patients than they did. See Dkt. 82
4] 66(a)—-(e). They also allege specific examples to support these theories, as
discussed in more detail above. Together, these allegations underlie Relators’
claim that:

by providing medically unnecessary treatments to ineligible patients,
as well as falsifying patients’ medical reports and plans of care in
order to seek reimbursements for conditions that were more severe
than in reality and for durations longer than medically necessary,
Amedisys “knowingly present[ed], or cause[d] to be presented, to an
officer or employee of the United States Government or a member of
the Armed Forces of the United States a false or fraudulent claim for
payment or approval” in violation of 31 U.S.C. § 3729(a)(1).
Dkt. 82 | 184.
Amedisys focuses on Realtors’ improper recruitment/enrollment and
fraudulent billing theories, implicitly conceding that the remaining three theories
are sufficient to support an FCA violation. See Dkt. 83-1, at 18 (“[S]ome of
Relators’ legal theories .. . do not involve conduct that was improper, and these
theories ... cannot support a violation of the FCA.”). Indeed, Amedisys must so
concede because the Second Circuit recognized providing medically unnecessary
treatments and falsifying time sheets as fraud. Dkt. 78, at 6-7, 9-10; see also Dkt.
87 (transcript of oral argument), at 36 (“Medical necessity, falsification of time
records, we agree that those are two theories [for which] the Second Circuit found a
sufficient inference of fraud.”).
The Second Circuit’s decision, along with Amedisys’s resulting concessions,
allow Relators’ claim for presenting a false claim to survive. With a surviving FCA

24

claim, the Court declines Amedisys’s invitation to cull theories of falsity.1! The
parties will be able to address these issues during discovery and then, if
appropriate, at summary judgment.!2
C. Relators Sufficiently Allege a False-Records Claim
Amedisys argues that the Court should dismiss Relators’ false-records claim
because Relators (1) do not sufficiently allege false claims, and (2) do not plead the
false contents of the Form 485s, upon which their false records claim rely, with
sufficient specificity. See Dkt. 83-1, at 22; Dkt. 85, at 12. For the reasons
discussed earlier in this section, the fourth amended complaint alleges FCA
violations with sufficiently specificity. See supra Sections II.A & II.B. The Court,
therefore, denies Amedisys’s motion to dismiss Relators’ false-records claim.

11 At oral argument, defense counsel conceded that it would be helpful—perhaps,
more efficient—to trim Relators’ theories from the complaint at the motion-to-
dismiss stage, but that the parties could address Amedisys’s arguments later in the
case. See Dkt. 87, at 37.
12 Along the same lines, because the fourth amended complaint sufficiently alleges
an FCA violation via a direct false claim, the Court need not resolve Amedisys’s
arguments regarding false certification, at this time. See Dkt. 87 (transcript of oral
argument), at 39-44.
25

CONCLUSION
For the reasons discussed above, the Court has DENIED Amedisys’s motion
to dismiss the fourth amended complaint (Dkt. 83). Based on Relators’ counsel’s
agreement, see Dkt. 87, at 44, the Clerk of Court shall terminate Does 1-100 as
Defendants in this case.
SO ORDERED.

Dated: February 7, 2025
Buffalo, New York .
| Som f Aretha, fp
JOHN L. SINATRA, JR.
UNITED STATES DISTRICT JUDGE

26

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10796070. Public record. Not legal advice.