Petition for Writ of Certiorari — Thomas E. Parker, et al., Petitioners v. Sea-Mar Community Health Center

No. 21In the

Supreme Court of the United States

THOMAS E. PARKER, JR., QUI TAM PLAINTIFF

FOR AND ON BEHALF OF THE UNITED

STATES OF AMERICA AND THE

STATE OF WASHINGTON,

Petitioner,

v.

SEA-MAR COMMUNITY HEALTH CENTER, A

WASHINGTON PUBLIC BENEFIT CORPORATION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of A ppeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Douglas Cloud

Law Office of

Douglas R. Cloud

1008 Yakima Avenue,

Suite 202

Tacoma, WA 98405

A aron P. Orheim

Counsel of Record

Talmadge/Fitzpatrick

2775 Harbor Avenue SW

Third Floor, Suite C

Seattle, WA 98126

(206) 574-6661

aaron@tal-fitzlaw.com

Counsel for Petitioner

307078

A

(800) 274-3321 • (800) 359-6859

i

QUESTION PRESENTED

Does a plaintiff state a claim under the False Claims

Act by alleging a purposeful scheme to fraudulently double

rates charged to Medicaid for pediatric dental patients by

requiring patients to attend two separate appointments

for their yearly six-month checkup, when only one is

necessary and appropriate under the prevailing standard

of care?

ii

STATEMENT OF RELATED CASES

• Parker for & on behalf of United States v. SeaMar Cmty. Health Ctr., No. 3:18-cv-05395-RBL,

U. S. District Court for the Western District of

Washington. Judgment entered Aug. 13, 2020.

• Parker v. Sea-Mar Cmty. Health Ctr., No. 2035825, U. S. Court of Appeals for the Ninth

Circuit. Judgment entered Jul. 13, 2021. Motion

for Rehearing En Banc denied Aug. 18, 2021.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . i

STATEMENT OF RELATED CASES . . . . . . . . . . . . . ii

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . iii

TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . . v

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . vi

PETITION FOR WRIT OF CERTIORARI . . . . . . . . . 1

OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CONST I T U T IONA L A N D STAT U T ORY

PROVISIONS AT ISSUE . . . . . . . . . . . . . . . . . . . . . . 2

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . 3

(1) Sea-Mar Provides Medical and Dental Care

to Thousands of Patients and Receives

Reimbursement for Services from the

Federal Government . . . . . . . . . . . . . . . . . . . . . . . 3

(2) Parker, a former Sea-Mar Employee, Stated

a Claim Under the FCA and its State

Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

iv

Table of Contents

Page

(a) Sea-Mar Engages in Systematic

Patient Churning and Unbundling to

Defraud Medicaid . . . . . . . . . . . . . . . . . . . . . . 6

(b) Parker Alleged that Providing Only

Ne c e s s a r y S e r v ic e s A c c or d i ng

to the Standard of Care and Is a

Condition of Payment Under Applicable

Billing Rules and Regulations . . . . . . . . . . 10

(c) Parker Alleged that Sea-Mar Created

False Records to Further its Patient

Churning/Unbundling Scheme . . . . . . . . . . 13

(3) Procedural History . . . . . . . . . . . . . . . . . . . . . . . 15

REASONS FOR GRANTING THE PETITION . . . . 15

I.

The Ninth Circuit’s Decision Conflicts

with Supreme Court Precedent on an

Issue of National Importance . . . . . . . . . . . . . . . 15

II. The Court Should Grant Review of this

Important Federal Question to Ensure

Uniform Application of Federal Law . . . . . . . . . 22

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

v

TABLE OF APPENDICES

Page

APPENDIX A — MEMORANDUM OF THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT, FILED JULY 13, 2021 . 1a

APPENDIX B — ORDER OF THE UNITED

STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF WASHINGTON,

FILED AUGUST 13, 2020 . . . . . . . . . . . . . . . . . . . . . 5a

APPENDIX C — DENIAL OF REHEARING

OF THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT,

DATED AUGUST 18, 2021 . . . . . . . . . . . . . . . . . . . . 14a

APPENDIX D — RELEVANT STATUTORY

PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16a

vi

TABLE OF CITED AUTHORITIES

Page

Cases

Bishop v. Wells Fargo & Co.,

870 F.3d 104 (2d Cir. 2017) . . . . . . . . . . . . . . . . . . . . . 20

Cook Cty., Ill. v. U.S. ex rel. Chandler,

538 U.S. 119, 123 S. Ct. 1239, 155 L. Ed. 2d 247

(2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Mayall on Behalf of H.C. v.

USA Water Polo, Inc.,

909 F.3d 1055 (9th Cir. 2018) . . . . . . . . . . . . . . . . . . . . 3

McClellan v. Sundholm,

574 P.2d.371 (Wash. 1978) . . . . . . . . . . . . . . . . . . . 16, 17

Mikes v. Straus,

274 F.3d 687, (2d Cir. 2001) . . . . . . . . . . . . . . . . . . . . 23

O’Hare Truck Serv., Inc. v. City of Northlake,

518 U.S. 712, 116 S. Ct. 2353, 135 L. Ed. 2d 874

(1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 20

State v. Black,

676 P.2d 963 (Wash. 1984) . . . . . . . . . . . . . . . . . . . . . 16

State v. Lowery,

475 P.3d 505, 511 (Wash. Ct. App. 2020) . . . . . . . . . . 22

U.S. ex rel. Doe v. DeGregorio,

510 F. Supp. 2d 877 (M.D. Fla. 2007) . . . . . . . . . . . . 24

vii

Cited Authorities

Page

United States ex rel. Campie v. Gilead Scis., Inc.,

862 F.3d 890 (9th Cir. 2017), cert. denied,

139 S. Ct. 783 (2019) . . . . . . . . . . . . . . . . . . . . 16, 21, 22

United States ex rel. Dooley v.

Metic Transplantation Lab, Inc.,

No. CV 13-07039 SJO (JEMx), 2017 WL 4323142

(C.D. Cal. June 27, 2017) . . . . . . . . . . . . . . . . . . . . . . . 22

United States ex rel. Gerald Polukoff, M.D. v.

St. Mark’s Hosp.,

2020 WL 2927865 (D. Utah June 3, 2020) . . . . . . . . 23

United States ex rel. Jackson v.

DePaul Health Sys.,

454 F. Supp. 3d 481 (E.D. Pa. 2020) . . . . . . . . . . . . . 23

United States ex rel. Lockyer v.

Hawaii Pac. Health,

490 F. Supp. 2d 1062 (D. Haw. 2007) . . . . . . . . . . 22, 23

United States ex rel. Polukoff v. St. Mark’s Hosp.,

895 F.3d 730 (10th Cir. 2018) . . . . . . . . . . . . . . . . 20, 23

United States ex rel. Rose v. Stephens Inst.,

909 F.3d 1012 (9th Cir. 2018), cert. denied,

139 S. Ct. 1464 (2019) . . . . . . . . . . . . . . . . . . . . . . . . . 20

United States ex rel. Salters v.

Am. Family Care, Inc.,

262 F. Supp. 3d 1266 (N.D. Ala. 2017) . . . . . . . . . . . . 24

viii

Cited Authorities

Page

United States ex rel. Schultz v.

Naples Heart Rhythm Specialists, P.A.,

2020 WL 1852432 (M.D. Fla. Apr. 13, 2020) . . . 23-24

United States v. Niefert White Co.,

390 U.S. 228, 88 S. Ct. 959, 19 L. Ed. 2d 1061

(1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 21

Universal Health Servs., Inc. v.

United States (Escobar),

579 U.S. 176, 136 S. Ct. 1989, 195 L. Ed. 2d 348

(2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

Winter ex rel. United States v.

Gardens Regional Hosp. & Med. Ctr., Inc.,

953 F.3d 1108 (9th Cir. 2020), cert. denied,

2021 WL 666435 (2021) . . . . . . . . . . . . . . . . . 20-21, 23

Statutes and Other Authorities

28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

28 U.S.C. § 1331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

28 U.S.C. § 1367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

31 U.S.C. § 3729 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2

31 U.S.C. § 3729(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 14, 16

ix

Cited Authorities

Page

31 U.S.C. § 3729(a)(1)(G) . . . . . . . . . . . . . . . . . . . . . . 14, 16

31 U.S.C. § 3729(b)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . 10

31 U.S.C. § 3730 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2

Dental exam for children, Mayo Clinic . . . . . . . . . . . . 18

Dental Exam, MedlinePlus . . . . . . . . . . . . . . . . . . . . . .18

Dr. Michael W. Davis, DDS, FQHCs Churn

Patients in a Big Scam, Today’s Dental News

October 16, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Fed. R. Civ. P. 12(b)(6) . . . . . . . . . . . . . . . . . . . 3, 15, 20, 21

Mike Carter, Sea Mar to pay $3.65M to settle

probe into Medicaid billings, Seattle Times,

January 16, 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Press Release, Health Center Pays $350K to Settle

Improper Billing Allegations Related to Medicaid

Dental Services, United States Department of

Justice, United States Attorney ’s Office,

District of Connecticut (August 11, 2021) . . . . . 8, 9

Press Release, New York State Attorney General,

A.G. Schneiderman Announces $325,000 Medicaid

Fraud Settlement with Erie County Dental Clinic

(January 9, 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

x

Cited Authorities

Page

Wash. Admin. Code § 182-502-0100(1)(c) . . . . . . . . . . . . 10

Wash. Admin. Code § 182-535-1079(1)(c) . . . . . . . . . 10, 17

Wash. Admin. Code § 182-535-1079(1)(f) . . . . . . . . . 10, 17

Wash. Admin. Code § 182-548-1450(2) . . . . . . . . . . . . . . 19

Wash. Admin. Code ch. 182-502 . . . . . . . . . . . . . . . . . . . . 4

Wash. Rev. Code § 74.66.010(7)(a)(b), . . . . . . . . . . . . . . . 10

Wash. Rev. Code § 74.66.020 . . . . . . . . . . . . . . . . . . . . 1, 16

Wash. Rev. Code § 74.66.020(1)(a) . . . . . . . . . . . . . . . . . .14

Wash. Rev. Code § 74.66.020(1)(g) . . . . . . . . . . . . . . . . . 14

1

PETITION FOR WRIT OF CERTIORARI

Petitioner Thomas E. Parker, Jr., Qui Tam Plaintiff

for and on behalf of the United States of America and the

State of Washington, respectfully petitions this Court for

a Writ of Certiorari to review the decision of the United

States Court of Appeals for the Ninth Circuit.

OPINIONS BELOW

The panel opinion of the Ninth Circuit is unpublished

and included as Petitioners’ Appendix (“app.”) 1a-4a. The

Ninth Circuit’s order denying en banc review is available

at app. 14a-15a. The unpublished decision of the district

court is available at 2020 WL 4698813 and is included at

app. 5a-13a.

JURISDICTION

The district court had jurisdiction under federal

question jurisdiction authorized under 28 U.S.C. § 1331

for petitioner, Thomas E. Parker’s, claims as a qui tam

plaintiff against Sea-Mar Community Health Center

(“Sea-Mar”), under the False Claims Act, 31 U.S.C. § 3729,

et seq., and 31 U.S.C. § 3730, et seq. The district court had

supplemental jurisdiction of Parker’s state law claims

under 28 U.S.C. § 1367, which Parker brought under

Washington’s Medicare Fraud False Claims Act, Wash.

Rev. Code § 74.66.020, et seq. Parker filed a timely appeal

to the Ninth Circuit Court of Appeals. On July 13, 2021, a

panel of the Ninth Circuit issued a memorandum opinion

affirming the district court’s dismissal of Parker’s case,

and the panel denied Parker’s petition for rehearing en

banc on August 18, 2021.

2

This Court has jurisdiction under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS AT ISSUE

This case involves the False Claims Act, 31 U.S.C.

§ 3729, et seq., and 31 U.S.C. § 3730, et seq. (“FCA”), the

relevant portions of which are provided at app. 16a-32a.

INTRODUCTION

A child’s routine, six-month dental exam includes a

tooth cleaning that does not require a second appointment.

Any parent or person who received pediatric dental

care in the past several decades knows that a routine

dental exam requires one visit; that is the standard of

care in Washington State and everywhere else in this

country, as appellant, Thomas E. Parker, alleged in his

complaint, supported by expert testimony. Requiring a

second appointment for routine tooth cleanings is a wellrecognized scheme to defraud Medicaid, as recognized by

states like New York and the federal government through

the Department of Justice who have successfully secured

settlements against Medicaid providers to end such this

exact fraudulent billing practice.

In an outlier opinion, that conflicts with precedent

from this Court, the other Circuits of the Court of

Appeals, and state and federal enforcement actions

across the country, the Ninth Circuit wrongfully found

that Parker did not plead a case under the FCA. Parker

stated a claim under an implied false certification theory

blessed by this Court in Universal Health Servs., Inc. v.

United States (Escobar), 579 U.S. 176, 136 S. Ct. 1989, 195

3

L. Ed. 2d 348 (2016) (“Escobar”), because he alleged that

Sea-Mar Community Health Center Sea-Mar knowingly,

and systematically submitted claims for payment that did

not meet Washington’s required billing regulations. The

Ninth Circuit’s decision conflicts with this, and other,

precedent, warranting certiorari.

STATEMENT OF THE CASE1

(1) Sea-Mar Provides Medical and Dental Care to

Thousands of Patients and Receives Reimbursement

for Services from the Federal Government

Sea-Mar is a FQHC authorized under federal law.

3-ER-567. FQHCs provide Medicaid beneficiaries a

managed care option instead of a traditional fee for

service method which pays Medicaid providers a set fee

for individual identified medical/dental services. 3-ER568–69. FQHCs in Washington State must be primarily

engaged in providing outpatient health services. 3-ER569. FQHCs in general are “safety net” medical providers,

and Sea-Mar mostly serves Medicaid beneficiaries. Id.

Sea-Mar and other FQHCs provide medical care,

dental services, and behavioral health services, together

with some other health care services, as well as housing.

1. In this appeal from a Fed. R. Civ. P. 12(b)(6) dismissal,

a court must accept all allegations in the complaint as true and

construe them in the light most favorable to the plaintiff. E.g.,

O’Hare Truck Serv., Inc. v. City of Northlake, 518 U.S. 712, 715,

116 S. Ct. 2353, 2355, 135 L. Ed. 2d 874 (1996); Mayall on Behalf

of H.C. v. USA Water Polo, Inc., 909 F.3d 1055, 1060 (9th Cir.

2018). Thus, the facts are largely taken directly from Parker’s

final amended complaint. 3-ER-566–87.

4

3-ER-567–68. Sea-Mar’s network of health care service

providers consists of more than 90 medical, dental, and

behavioral health clinics in 12 Washington counties.

3-ER-570. Sea-Mar serves tens of thousands of Medicaid

beneficiaries each year, including thousands of pediatric

dental patients. 3-ER-567. Most of these patients are

children and young adults; many are from disadvantaged

financial and social circumstances. 3-ER-573.

Sea-Mar’s Medicaid related claims are paid by the

State of Washington after submission to Washington’s

Health Care Authority (“HCA”). Id. Washington State

promulgates regulations and billing manuals that regulate

Sea-Mar’s billing practices. See Wash. Admin. Code ch.

182-502.

FQHCs are, for most dental services, subject to a

prospective payment system which categorizes most

dental and health care visits to a FQHC as an “encounter”

subject to a single payment of a set “encounter” fee

for most health care services provided to a client on a

single day. 3-ER-569–70. The encounter rate is intended

to provide for a method for the delivery of health care

services which combines several routine health care

services at a single health care appointment on a single day

and resulting in a single billing to Medicaid. Id. Combining

several routine health care services at a single health care

appointment allows for increased access to health care

by under-served communities by reducing the number

of necessary health care visits by a patient, leading to

reduced patient transportation time, less inconvenience,

less pain and suffering, and resulting in less lost time

for work and school obligations to attend medical/dental

appointments by Medicaid beneficiaries and their parents.

5

3-ER-579–82. Providing several services during a single

visit is common and reduces the strain on limited health

care resources. 3-ER-578, 579–82.

The applicable billing manual defines “encounter”

as “a face-to-face visit between a client and an FQHC

provider of healthcare services who exercises independent

judgment when providing healthcare services to the

individual client.” 3-ER-499. The manual states that

services and supplies that are “incidental” to the primary

encounter, here the dental exam, “are factored into the

encounter rate and will not be paid separately.” 3-ER500–01. Specifically, with regard to dental encounters,

the manual states that only one dental encounter fee

may be provided in a single day. 3-ER-507. But it lists

an exception: “When a dental service requires multiple

visits (e.g., root canals, crowns, dentures), an encounter

code must be billed with the number of visits, when the

dental services are complete.” 3-ER-507.

The encounter fee reimbursement rate leads to a

reimbursement amount which is typically much greater

in amount than a traditional “fee for service” payment

system which pays a set fee for a single specific dental

or health care treatment. E.g., 3-ER-577. For each

single treatment for a “fee for service” payment system,

a separate fee is earned for each service provided. Id.

Encounter fees typically pay much more than a single “fee

for service” payment for each of the sometimes several

health care services provided in a single day because of

the intended combining or “bundling” of several health

care treatments into one visit on one date. 3-ER-500–01.

In Washington, the “fee for service” reimbursement

rate for Medicaid beneficiaries for routine dental

6

prophylaxis cleaning is $36.25 for individuals over 13

years old and $22.98 for individuals under 13 years old.

Sea-Mar’s current encounter rate is over $190.00 for

dental services, showing an obvious incentive to charge

two encounter rates, even though a single six-month

preventative tooth exam and cleaning requires just one.

3-ER-577.

(2) Parker, a former Sea-Mar Employee, Stated a Claim

Under the FCA and its State Equivalent

Parker worked for Sea-Mar as a dental assistant from

2001 until 2013. Parker became deeply knowledgeable of

the workings of Sea-Mar during his employment and his

complaint stems from his personal knowledge of Sea-Mar’s

operations. 3-ER-570. When he filed his complaint, Parker

and his family continued to receive healthcare, including

dental health services, from Sea-Mar. Parker remained in

contact with former employees of Sea-Mar, including two

who provided information in his complaint and identified

in it as confidential informants. 3-ER-570.

Parker also engaged a well-qualified expert in dental

practices, a dentist Dr. Michael Davis, to review SeaMar’s practices. 3-ER-579–81. Parker included Dr. Davis’s

conclusions in his complaint. Id.

(a) Sea-Mar Engages in Systematic Patient

Churning and Unbundling to Defraud Medicaid

The standard of dental care in Washington requires

that routine dental examinations, radiographic imaging,

related services, and prophylaxis (i.e., routine, preventive)

cleaning should ordinarily be provided on one day during

7

a single dental care visit. 3-ER-579–82. This standard of

care applies to around 95 percent of pediatric patients

who do not require a more thorough deep-clean or other

treatment that may take place at a second dental visit.

3-ER-578, 579–82. Again, Parker alleged that a separate

visit for dental cleaning is rare; less than five percent of

a pediatric patients require more extensive cleanings

that require a separate dental appointment. Id. This is

confirmed by the billing manual which gives examples of

services that might require a second visit, listing intensive

procedure like root canals, crowns, or dentures that are

nothing like a routine dental cleaning. 3-ER-507.

Despite this standard of care, Sea-Mar adopted a

policy that requires a dental examination by a dentist and

radiographic imaging by a dental assistant on one day

and the administration of prophylaxis dental cleaning on

another day performed by a dental hygienist. 3-ER-578.

This allows Sea-Mar to bill two separate encounter fees at

$190.00 each, when only one is required. Id. Parker alleged

that this policy has existed since at least 2013. 3-ER-573.

This practice by Sea-Mar is a well-known fraud

perpetrated on state Medicaid payment agencies by

FQHCs around the United States. 4-ER-627–33 (Dr.

Michael W. Davis, DDS, FQHCs Churn Patients in

a Big Scam, Today ’s Dental News October 16, 2019).

The practice is often known as “patient churning.” Id.

Patient churning is the institutional practice of inflating

revenues by maximizing visits/encounters when payment

is determined by the number of encounters and not by the

procedures accomplished. 4-ER-627–33. This method of

fraud has been described and labeled as Medicaid fraud

by both Washington and the National Commentators,

8

including the American Dental Association and the

former editor of the WSDA news, the publication of the

Washington State Dental Association. 3-ER-580.

The type of fraud perpetrated by Sea-Mar for

dental services is widely recognized and publicized as

fraudulent within the FQHC industry. 2-ER-71. Other

states, including New York, have successfully settled FCA

claims against FQHCs that use this scheme. 4-ER-639–44

(e.g., Press Release, New York State Attorney General,

A.G. Schneiderman Announces $325,000 Medicaid Fraud

Settlement with Erie County Dental Clinic (January

9, 2012) (“The audit-investigation determined that in

addition to performing unnecessary procedures, the clinic

performed procedures that should have been done in one

visit [including ‘cleanings, X-rays, and dental exams’]

over multiple visits, resulting in additional fraudulent

reimbursements”).

Indeed, the Department of Justice also prosecutes

such fraudulent practices, as shown by a very recent

example from its Connecticut office. Press Release,

Health Center Pays $350K to Settle Improper Billing

Allegations Related to Medicaid Dental Services,

United States Department of Justice, United States

Attorney ’s Office, District of Connecticut (August 11,

2021), https://www.justice.gov/usao-ct/pr/health-centerpays-350k-settle-improper-billing-allegations-relatedmedicaid-dental. As stated in that release:

…CORN ELL SCO T T HILL HEA LT H

CORPORATION (“CSH”) has entered into a

civil settlement agreement with the federal and

state governments and has paid $350,000 to

9

resolve allegations that CSH improperly billed

the Connecticut Medicaid program for certain

dental services.

CSH is a Federally Qualified Health Center

(“FQHC”) that provides a variety of health

care services, including dental services, to

Connecticut Medicaid beneficiaries and other

individuals.

…

The allegations against CSH arise out of

improper billing for certain dental services,

specifically prophylactic cleanings and dental

exams. The government alleges that CSH

implemented a policy that required Medicaid

patients to receive prophylactic cleanings and

dental exams on separate days, resulting in

CSH getting paid two encounter rates instead

of just one rate.

To resolve their liability, CSH paid $350,000

to the federal and state governments for

conduct occurring between January 1, 2017

through December 31, 2019. In addition, CSH

has agreed to change its policy and offer all

Medicaid beneficiaries the option of scheduling

a prophylactic cleaning and dental examination

on the same day.

Parker’s allegations were no different; he alleged a policy

“require[ing] Medicaid patients to receive prophylactic

cleanings and dental exams on separate days.” Id.

10

Parker argued that these kinds of investigations

supported his claim and showed, among other things,

Sea-Mar’s knowledge and scienter; Sea-Mar cannot deny

that they knew of, or should have known of, this common

scheme by FQHCs to defraud Medicaid. 2 2-ER-71, 79.

(b) Parker Alleged that Providing Only Necessary

Services According to the Standard of Care and

Is a Condition of Payment Under Applicable

Billing Rules and Regulations

As a condition of payment by Washington State’s

Medicaid processor for dental treatment provided to

Medicaid beneficiaries, Sea-Mar must only provide

services that are “medically necessary” and must meet

“accepted dental or medical practice standards” in the

delivery of that dental care. Wash. Admin. Code §§ 182535-1079(1)(c) and (f). Parker argued that by “patient

churning,” and “unbundling,” (i.e., separating dental

care that is normally performed in one visit into a second

medically unnecessary visit to maximize encounter

fees) Sea-Mar violates conditions of payment set forth

in Wash. Admin. Code §§ 182-535-1079(1)(c) and (f). E.g.,

2-ER-75; 3-ER-579 (arguing that Sea-Mar subjected

patients to unnecessary appointments). Parker alleged

that the HCA will not pay for dental care that does not

meet the prevailing standard of care. 3-ER-579; Wash.

Admin. Code § 182-502-0100(1)(c) (billing “according to

agency rules and billing instructions” is a “condition[] of

payment”).

2. “Knowing” or “Knowingly,” as defined by 31 U.S.C.

§ 3729(b)(1)(A) and Wash. Rev. Code § 74.66.010(7)(a)(b), includes

“deliberate ignorance” or “reckless disregard” of the truth or

falsity of the information and does not require proof of any specific

intent to defraud.

11

Parker also alleged that by providing dental services

below the standard of care, Sea-Mar abuses their

Medicaid dental patients by subjecting them to the added

pain and suffering that results from unnecessary dental

appointments. 3 3-ER-582.

As discussed above, Parker obtained review by

a consulting expert, Dr. Davis, regarding Sea-Mar’s

splitting of dental appointments and included the

expert’s conclusions in his Third Amended Complaint.

3-ER-579–81. Dr. Davis stated that Sea-Mar’s policy

of unbundling prophylaxis tooth cleaning from routine

dental exams violates the standard of care in Washington

State for dentistry and is a well-known method FQHCs

use to defraud Medicaid in the dental industry. Id. This

practice systematically violates the standard of care,

subjects approximately 95 percent of Sea-Mar patients

to unnecessary dental appointments, and allows Sea-Mar

to overbill Medicaid by charging two encounter fees for

dental care that should only require one. Id.

Indeed, Sea-Mar has been investigated for such

practices in the past. Washington’s Attorney General,

though its “false claims unit,” recently investigated Sea3. Parker alleged that Sea-Mar under mines the

philosophic basis for the FQHC encounter fee: that health care

services are delivered more efficiently and more comprehensively

to underserved communities when multiple health care services

are provided on a single day at one health care visit. Sea-Mar

unnecessarily imposes multiple medical appointments on patients,

which may be considered a form of medical abuse, and, in the

process, violates the standard of care by scheduling routine dental

care treatments on separate days that should occur together on

one day. 3-ER-582.

12

Mar for very similar deceptive practices to that described

in Parker’s complaint – unbundling dental services and

charging encounter fees for services that do not require

multiple visits. 3-ER-570–72. The State discovered that

Sea-Mar systematically administered routine fluoride

treatments at a separate appointment from a patient’s

routine dental exam, charging a separate encounter fee.

Sea-Mar agreed to pay $3.65 million as a result of the

investigation. Id. The Seattle Times reported the details of

the case and settlement based nearly identical allegations

to those that Parker alleged:

Sea Mar Community Health Centers, which

provides health services to mostly poor and

many minority residents in 10 counties,

has agreed to pay $3.65 million to settle an

investigation by the state Attorney General’s

Office into improper Medicaid billings.

Attorney General Bob Ferguson said the 2½year investigation revealed the healthcare

provider overbilled Medicaid for thousands

of dental appointments, according to a news

release.

Ferguson said his office’s false-claims unit

raised concerns over the billings, which

occurred between 2010 and 2014, and involved

routine anti-cavity fluoride treatments.

The AG’s office alleged that the f luoride

treatments, which could have been performed

by dental assistants as part of a patient’s

regular six-month checkups, were instead billed

13

at a higher rate as stand-alone appointments

with a dentist or hygienist.

4-ER-608–10 (Mike Carter, Sea Mar to pay $3.65M

to settle probe into Medicaid billings, Seattle Times,

January 16, 2015). Parker alleged essentially the same

facts, that Sea-Mar routinely unbundled dental services,

prophylaxis cleaning, to churn patients and artificially

increase unnecessary encounter fees. See generally, 3-ER566-87 (complaint).

Again, Parker alleged that this recent investigation

and settlement provided other evidence for the elements

of a FCA claim – that Sea-Mar acted with scienter and

that its unbundling practices are material to Washington

State’s decision to make payments for dental services

provided to Medicaid patients. 3-ER-586.

(c) Parker Alleged that Sea-Mar Created False

Records to Further its Patient Churning/

Unbundling Scheme

Parker also alleged that Sea-Mar filed false claims for

reimbursement and created false documents pertaining to

dental services in support of claims for payment submitted

to HCA for services provided to Medicaid beneficiaries.

3-ER-586. Parker alleged that his occurred for years, but

this policy was formally announced to Sea-Mar employees

by Sea-Mar’s directors. 3-ER-575, 4-ER-615–17.

Pursuant to Sea-Mar policy, all patient prophylaxis

cleanings which are exclusively provided by dental

hygienists are falsely billed to HCA under a dentist’s

NPI number and taxonomy code. 3-ER-572–75. When

14

submitting claims for dental services performed by

dental hygienists for the unbundled services, Sea-Mar

always falsely represents to HCA that these services were

provided or “rendered” by named dentists under their

NPI numbers and a dentist’s taxonomy code. Id. Parker

alleged that Sea-Mar creates false documents in support

of their false claims because the dentists so identified did

not render the billed for services. Id. He alleged that this

practice violates the False Claims Act and HCA billing

guidelines as Sea-Mar knows. Id., 3-ER-586.

By failing to properly identify the health care provider

who provided the care by using the provider’s true NPI

and taxonomy code, Sea-Mar violated billing guidelines,

creating false documents and filing false claims with

Medicaid in express violation of applicable Medicaid billing

policies, rules, and regulations. 3-ER-585–86. Sea-Mar,

in submitting these bills using false taxonomy codes and

thereby concealing the true provider who “rendered”

the billed for services, made false claims for Medicaid

reimbursement. Id.

By failing to bill using the correct health care provider

and taxonomy codes, Parker alleged that Sea-Mar

furthered its unbundling and patient churning scheme

by concealing its practice to separate routine dental

services to obtain duplicate encounter fees. Id. Parker

alleged that by billing Medicaid under an NPI number and

taxonomy code assigned to a dentist who did not provide

any treatment to a Medicaid beneficiary, Sea-Mar violated

31 U.S.C. § 3729(a)(1)(A), 31 U.S.C. § 3729(a)(1)(G) and

Wash. Rev. Code §§ 74.66.020(1)(a) and (g). Id.

15

Parker alleged that the State of Washington is

unaware that Sea-Mar is separating services to receive

unearned duplicate encounter fees, in part, because of

this deception. 2-ER-75. Again, Parker argued that had

Washington known of Sea-Mar’s concealment, the claims

would not have been paid. Id.

(3) Procedural History

Sea-Mar never answered Parker’s complaint; it moved

to dismiss for failure to state a claim under Federal Rule

of Civil Procedure 12(b)(6). 6-ER-1283–89. No discovery

occurred in the district court. 2-ER-67.

Parker amended his complaint twice, before the

district court, the Honorable Judge Leighton, dismissed

his third amended complaint with prejudice, incorrectly

concluding that Parker failed to state a claim under the

FCA or its state equivalent. 1-ER-3–9.

Parker timely appealed. 6-ER-1289. The Court of

Appeals for the Ninth Circuit issued a memorandum

opinion affirming dismissal on July 13, 2021. Parker timely

field a motion for rehearing en banc, which was denied on

August 18, 2021. This timely petition follows.

REASONS FOR GRANTING THE PETITION

I.

The Ninth Circuit’s Decision Conf licts with

Supreme Court Precedent on an Issue of National

Importance

Review is warranted to resolve conflicts on an issue

of national importance. Parker’s complaint alleged a FCA

16

claim based on the implied false certification theory, a

theory this Court blessed in Escobar.4 There, this Court

overruled conflicting case law among the circuits, holding

that a valid FCA claim does not require an affirmative false

statement. Rather, liability under the FCA “encompasses

claims that make fraudulent misrepresentations, which

include certain misleading omissions.” 136 S.Ct. at 1999.

“When, as here, a defendant makes representations in

submitting a claim but omits its violations of statutory,

regulatory, or contractual requirements, those omissions

4. The elements of an FCA qui tam action are well established.

A defendant is liable under the FCA if it knowingly presents a

false or fraudulent claim for approval, 31 U.S.C. § 3729(a)(1)(A),

or if it makes or uses a false record or material statement to the

Government calculated to avoid or decrease an obligation to pay

money to the Government. 31 U.S.C. § 3729(a)(1)(G). Under the

Act, a plaintiff must allege: “(1) a false statement or fraudulent

course of conduct, (2) made with the scienter, (3) that was material,

causing, (4) the government to pay out money or forfeit moneys

due.” United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d

890, 899 (9th Cir. 2017), cert. denied, 139 S. Ct. 783 (2019). The

statute is unique in that private citizens are permitted to bring

FCA claims as relators on behalf of the United States – but this

speaks to its board and liberally interpreted purpose to reach all

types of fraud discussed below.

Washington State’s Medicare Fraud False Claims

Act, Wash. Rev. Code § 74.66.020, et seq., mirrors its federal

counterpart. Given a lack of authority to the contrary, neither

party argued that an analysis under state law is any different

than the FCA. This makes sense given that Washington interprets

state statutes in line with existing federal analogs. State v. Black,

676 P.2d 963 (Wash. 1984) (construing the Washington Consumer

Protection Act by looking to the federal counterpart); McClellan

v. Sundholm, 574 P.2d.371 (Wash. 1978) (construing the State’s

Securities Act by looking to the federal counterpart).

17

can be a basis for liability if they render the defendant’s

representations misleading with respect to the goods or

services provided.” Id.5

Here, applicable billing regulations state that SeaMar must only bill for services that are “medically

necessary,” and those services must meet “accepted dental

or medical practice standards” (i.e., the standard of care).

Wash. Admin. Code §§ 182-535-1079(1)(c) and (f). Parker

alleged that these are necessary conditions of payment.

Parker pleaded an FCA claim by alleging that Sea-Mar

submits claims for payment while falsely certifying that

unbundling routine cleanings to double encounter fees is

necessary and meets the standard of care in Washington.

By submitting for payment two encounter fees for every

routine six-month dental appointment for its pediatric

5. This broad reading only makes sense, given that the

purpose of the FCA is “to reach all types of fraud, without

qualification, that might result in financial loss to the Government.”

United States v. Niefert White Co., 390 U.S. 228, 232, 88 S. Ct.

959, 19 L. Ed. 2d 1061 (1968). The Act itself dates back to the Civil

War when Congress learned that “the United States had been

billed for nonexistent or worthless goods, charged exorbitant

prices for goods delivered, and generally robbed in purchasing

the necessities of war.” Escobar, 136 S. Ct. at 1996. Congress

allowed private citizens to file qui tam suits on the government’s

behalf, evidence that curbing waste and fraudulent charges to

the government are important federal objectives that are often

inadequately addressed by bureaucratically stagnated and

politically motivated enforcement agencies. See, e.g., Cook Cty.,

Ill. v. U.S. ex rel. Chandler, 538 U.S. 119, 133, 123 S. Ct. 1239,

155 L. Ed. 2d 247 (2003) (discussing legislative history of FCA

and the qui tam provision for which Congress has “enhanced the

incentives for relators to bring suit”).

18

patients, Sea-Mar certified that those two fee-generating

encounters were necessary, among the “accepted dental

or medical practice standards.” But expert testimony,

commonsense, and identical enforcement actions from

Medicaid regulators across the country confirmed that

they were not. Therefore, Parker stated a claim under

Escobar.

Parker did more than enough to support his allegations

for purposes of the pleading stage. He submitted evidence

from a dental expert, the Washington and American

Dental Associations, false claims settlements from other

states, as well as publications from the United States

National Library of Medicine,6 showing that the accepted

dental practice standard is for several services to be

provided during and incidental to a single biannual exam,

including prophylaxis (preventative) tooth cleanings. SeaMar knowingly violates this accepted dental standard

to artificially inflate Medicaid payments, and the core

function of the FCA is to curtail such fraudulent behavior

leading to governmental overpayment and waste. The

district court and Court of Appeals should have construed

this evidence in Parker’s favor and allowed him to conduct

discovery and attempt to prove the merits of his case in

court.

6. See Dental Exam, M edlineP lus , https://medlineplus.

gov/lab-tests/dental-exam/ (last accessed November 9, 2021) (“A

typical dental exam will include a cleaning by a hygienist, x-rays

on certain visits, and a checkup of your mouth by the dentist.”);

see also Dental exam for children, M ayo Clinic, https://www.

mayoclinic.org/tests-procedures/dental-exam-for-children/about/

pac-20393745 (last accessed November 9, 2021) (“During a dental

exam, the dentist or hygienist will clean your child’s teeth and

evaluate your child’s risk of tooth decay.”) (emphasis added).

19

But even if that evidence were not enough, the billing

manual and regulations also state that services and

supplies that are “incidental” to the primary encounter,

here the dental exam, “are factored into the encounter

rate and will not be paid separately.” 3-ER-500–01;

Wash. Admin. Code § 182-548-1450(2). The Ninth Circuit

made no mention of this aspect of Parker’s argument.

Parker alleged that a routine tooth cleaning, commonly

administered on the same day as a dental exam by a dental

hygienist, is more like an incidental service than it does a

separate encounter. 3-ER-578. Sea-Mar unbundled this

service and systematically churned its patients in knowing

violation of the policies and regulations on dental billing

to double its encounter fees. Id. Again, these fraudulent

practices have been grounds for enforcement actions by

the Department of Justice and various states including

Washington and New York, as shown by the press releases

and serious fines imposed above. At the very least, a

jury could find that Sea-Mar wrongfully double-billed

encounter fees for routine checkups, and Parker should

have a chance to conduct discovery and pursue his claims.

Here, the Ninth Circuit disregarded the applicable

billing regulations. In doing so, it seemingly inserted

a requirement that billing regulations or manual must

expressly forbid the exact fraudulent practice alleged

to state an actionable claim. App. at 3a (“Nothing in the

statute, regulations or guidance prohibits scheduling

dental exams and cleanings in separate visits and billing

each as an encounter.”). That is not the standard this

Court set in Escobar, or by the various Circuits of the

Court of Appeals since this Court decided Escobar.7 See,

7. Even if it were the standard, Parker met this burden by

alleging that Sea-Mar violated regulations and manuals that were

20

e.g., Bishop v. Wells Fargo & Co., 870 F.3d 104, 107 (2d

Cir. 2017) (there is no “particularity requirement” for “the

underlying statute or regulation upon which the plaintiff

relies” to “expressly state[] the provider must comply in

order to be paid.”) (emphasis in original); United States ex

rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 743 (10th

Cir. 2018) (medical procedures must be “reasonable and

necessary” to be reimbursed under Medicare, meaning

they are “[f ]urnished in accordance with accepted

standards of medical practice” and “[a]ppropriate

including the duration and frequency that is considered

appropriate for the item or service” as can be established

by testimony from the medical community) (particular

heart procedure not prohibited for payment, but testimony

from doctors showed it was being provided unnecessarily

and to an inappropriate number of patients). 8

conditions of payment – by systematically violating prevailing

dental standards in order to charge a separate encounter fee

for incidental services – thereby stating an FCA claim under

an implied false certification theory. The Ninth Circuit created

further conflicts by refusing to accept as true the allegations in

Parker’s complaint for purposes of a 12(b)(6) motion. E.g., O’Hare,

518 U.S. at 715 (a “complaint’s factual allegations are taken as

true”).

8. The Ninth Circuit’s opinion conflicts even with its own

precedent. There is no requirement that a particular medical

practice be expressly forbidden if it is generally impermissible

to submit unnecessary or inappropriate procedures to increase

fees on a systematic scale. See, e.g., United States ex rel. Rose v.

Stephens Inst., 909 F.3d 1012, 1017 (9th Cir. 2018), cert. denied, 139

S. Ct. 1464 (2019) (theory applies “when an entity has previously

undertaken to expressly comply with a law, rule or regulation [but

does not], and that obligation is implicated by submitting a claim

for payment”); Winter ex rel. United States v. Gardens Regional

Hosp. & Med. Ctr., Inc., 953 F.3d 1108, 1116 (9th Cir. 2020), cert.

21

The FCA does not impose such a strict bar as the

Ninth Circuit imposed. Quite the opposite; as this Court

has explained, the purpose of the FCA is “to reach all

types of fraud, without qualification, that might result in

financial loss to the Government.” Niefert, 390 U.S. at 232.

Thus, the FCA must be liberally interpreted achieve its

goals of curbing government waste. The Ninth Circuit’s

opinion is an outlier post-Escobar and should be corrected

to ensure uniform application of the FCA.

The Ninth Circuit also created conflicts when it stated

that Parker had a duty to “rebut” the evidence that because

Washington paid Sea-Mar’s claims in the past, Sea-Mar’s

misleading claims were not material to its decision to

pay. App. at 4a. Parker has no such duty on a 12(b)(6)

motion. Even the Ninth Circuit has held that “[m]ere

[government] approval [of claims submitted for payment]

cannot preclude False Claims Act liability.” Campie,

862 F.3d at 905. Rather, payment by the government is

merely evidence against materiality if the government

had “actual knowledge that certain requirements were

violated.” Escobar, 136 S.Ct. at 2003–04. To the extent

there is any doubt, such matters are “matters of proof, not

legal grounds to dismiss relators’ complaint.” Id. at 907.

Parker plainly alleged that the payor would not pay

Sea-Mar’s claims if it had actual knowledge that they

violate applicable billing regulations. Actual knowledge

is a question of fact, as even the Ninth Circuit recognized

denied, 2021 WL 666435 (2021) (hospital submitted false Medicare

claims by certifying that patients’ inpatient hospitalizations were

necessary, a condition of payment under federal regulations and

billing guides).

22

in Campie. 862 F.3d at 907 (what the government knew is

a question of “evidence”); see also, State v. Lowery, 475

P.3d 505, 511 (Wash. Ct. App. 2020) (analogous state FCA

claim) (actual knowledge is a question of fact). The Ninth

Circuit’s conflicting analysis necessitates correction.

Certiorari review and reversal is warranted in this

case.

II. The Court Should Grant Review of this Important

Federal Question to Ensure Uniform Application

of Federal Law

The Court should grant review to settle this issue

and ensure uniform application of federal law. With the

lower courts’ decisions in place, there exists a divide

over whether courts permit an FCA claim to go forward

based on testimony that a medical or dental procedure is

unnecessary and violates the standard of care.

Here, the district court entered its flawed dismissal

based on outdated caselaw. It stated:

[C]ourts have repeatedly held that “billing for

medical services that do not meet the standard

of care does not give rise to a [sic] FCA violation’

because the FCA ‘is an inappropriate vehicle

for policing quality of care, which is better left

to local regulation and enforcement.”

1-ER-6 (citing United States ex rel. Lockyer v. Hawaii

Pac. Health, 490 F. Supp. 2d 1062, 1076 (D. Haw. 2007)

and United States ex rel. Dooley v. Metic Transplantation

Lab, Inc., No. CV 13-07039 SJO (JEMx), 2017 WL 4323142

at *26 (C.D. Cal. June 27, 2017)) (quotation omitted).

23

Those cases, both from district courts and one

unpublished, hinged on overturned case law. Lockyer cited

an outdated case from the Second Circuit to support its

decision. 490 F. Supp. 2d at 1076 (“The Court agrees with

the reasoning in Mikes v. Straus, 274 F.3d 687, (2d Cir.

2001), which held that billing for medical services that

do not meet the standard of care does not give rise to a

FCA violation.”). But this Court unanimously abrogated

Mikes in Escobar, 136 S. Ct. at 1999, finding that its

holding was too narrow. Again, this Court clarified that

“[w]hen, as here, a defendant makes representations in

submitting a claim but omits its violations of statutory,

regulatory, or contractual requirements, those omissions

can be a basis for liability if they render the defendant’s

representations misleading with respect to the goods or

services provided.” Id.

It is no wonder that more recent decisions have come

the opposite conclusion than the outdated cases like those

on which the district court relied. See Winter, supra,

(allegations that treatment was not medically necessary

supported an FCA claim); Polukoff, 895 F.3d 730, supra,

and United States ex rel. Gerald Polukoff, M.D. v. St.

Mark’s Hosp., 2020 WL 2927865 at *4 (D. Utah June 3,

2020) (declarations from doctors about the standard of

care for performing certain medical procedures were

admissible and relevant to prove FCA case against doctors

who allegedly overbilled for medical services that were

unnecessary); United States ex rel. Jackson v. DePaul

Health Sys., 454 F. Supp. 3d 481, 494 (E.D. Pa. 2020)

(standard of care is relevant because a claim is “factually

false [and actionable under the FCA] due to the provision

of worthless services where a defendant sought federal

reimbursement for a procedure with no medical value.”)

(quotation omitted); United States ex rel. Schultz v. Naples

24

Heart Rhythm Specialists, P.A., 2020 WL 1852432 at *3

(M.D. Fla. Apr. 13, 2020) (standard of care is relevant to

show medical necessity of treatment billed to Medicare).

Contrary to the Ninth Circuit’s outlier opinion, this

can include unbundling and patient churning where such

practices are not necessary but meant to artificially inflate

federally paid fees. United States ex rel. Salters v. Am.

Family Care, Inc., 262 F. Supp. 3d 1266, 1285 (N.D. Ala.

2017) (finding that allegations of unbundling supports

a claim under the FCA where the applicable billing

manual “provides that ‘routinely bundled’ claims are not

paid for separately.”); U.S. ex rel. Doe v. DeGregorio,

510 F. Supp. 2d 877, 885 (M.D. Fla. 2007) (allegations of

unbundling medical services to inflate claims for federal

reimbursement supports a valid claim under the FCA).

Parker’s complaint is no different.

The lack of uniformity is astonishing given that as

recently as several weeks before this petition was filed, the

Department of Justice came to a $350,000 settlement to

end another FQHC’s identical practice of “implement[ing]

a policy that required Medicaid patients to receive

prophylactic cleanings and dental exams on separate days,

resulting in CSH getting paid two encounter rates instead

of just one rate.” In addition to the monetary penalty,

the FQHC agreed to “agreed to change its policy and

offer all Medicaid beneficiaries the option of scheduling

a prophylactic cleaning and dental examination on the

same day.” Parker alleged identical fraudulent behavior.

Granting certiorari and reviewing this case would

further the goals of the FCA, properly algin the lower

courts on their various interpretations of the FCA,

and call attention to particular fraudulent practice on a

25

national scale. This would potentially save the American

taxpayer millions, not to mention the state and federal

enforcement agencies who have to pursue FQHC’s one by

one, in jurisdiction after jurisdiction, to prevent this fraud.

Supreme Court review is appropriate and necessary to

resolve the important federal questions raised by this case.

CONCLUSION

Parker respectfully requests that the petition for a

writ of certiorari should be granted. This Court should

step in to ensure uniform application of the FCA, an

important federal tool that can save the American

taxpayer millions if property enforced, which the Ninth

Circuit failed to do.

Respectfully submitted,

A aron P. Orheim

Counsel of Record

Talmadge/Fitzpatrick

2775 Harbor Avenue SW

Third Floor, Suite C

Seattle, WA 98126

(206) 574-6661

aaron@tal-fitzlaw.com

Douglas Cloud

Law Office of

Douglas R. Cloud

1008 Yakima Avenue,

Suite 202

Tacoma, WA 98405

Counsel for Petitioner

APPENDIX

1a

A

Appendix A —Appendix

memorandum

of the

united states court of appeals for the

ninth circuit, filed july 13, 2021

United States Court of Appeals

for the Ninth Circuit

No. 20-35825

THOMAS E. PARKER, Jr., Qui Tam Plaintiff

for and on behalf of the United

States of America and the

State of Washington,

Plaintiff-Appellant,

and

UNITED STATES OF AMERICA, ex rel;

STATE OF WASHINGTON, ex rel,

Plaintiffs,

v.

SEA-MAR COMMUNITY HEALTH CENTER, a

Washington Public Benefit Corporation,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Washington.

D.C. No. 3:18-cv-05395-RBL.

Ronald B. Leighton, District Judge, Presiding.

2a

Appendix A

July 6, 2021, Argued and Submitted,

Seattle, Washington;

July 13, 2021, Filed

MEMORANDUM*

Parker appeals from the dismissal of his False Claims

Act lawsuit. We have jurisdiction under 28 U.S.C. § 1291

and affirm the district court.

Parker claims that Sea Mar Community Health

Center, a federal qualified health center, is defrauding

Medicaid through how it schedules and bills for oral

prophylaxis cleanings. Sea Mar moved to dismiss Parker’s

lawsuit. Dismissal under Rule 12(b)(6) may be based

on either: (1) lack of a cognizable legal theory, or (2)

insufficient facts under a cognizable legal theory. Godecke

ex rel. United States v. Kinetic Concepts, Inc., 937 F.3d

1201, 1208 (9th Cir. 2019) (quoting Balistreri v. Pacifica

Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)). As False

Claims Act lawsuits sound in fraud, the complaint must

satisfy Federal Rule of Civil Procedure 9(b). Winter ex rel.

United States v. Gardens Reg’l Hosp. & Med. Ctr., Inc., 953

F.3d 1108, 1116 (9th Cir. 2020). Parker is required to plead

“with particularity the circumstances constituting fraud,”

Fed. R. Civ. P. 9(b), and to plead “’the who, what, when,

where, and how of the misconduct charged,’ including

what is false or misleading about a statement, and why

it is false,” United States v. United Healthcare Ins. Co.,

848 F.3d 1161, 1180 (9th Cir. 2016) (quoting Ebeid ex rel.

United States v. Lungwitz, 616 F.3d 993, 998 (9th Cir.

* This disposition is not appropriate for publication and is not

precedent except as provided by Ninth Circuit Rule 36-3.

3a

Appendix A

2010)). We review the district court’s dismissal of a case

de novo. Winter, 953 F.3d at 1116.

Parker fails to state a legally cognizable theory that

“unbundling” routine dental cleanings from dental exams

and billing the cleanings under the supervising dentist’s

National Provider Identifier (“NPI”) rather than the

NPI of the dental hygienist who performed the cleaning

constitutes “a false statement or fraudulent course

of conduct.” United States ex rel. Hendow v. Univ. of

Phoenix, 461 F.3d 1166, 1174 (9th Cir. 2006). Nothing in

the statute, regulations or guidance prohibits scheduling

dental exams and cleanings in separate visits and billing

each as an encounter. Contra Wash. Admin. Code § 182548-1450(3) (2017) (requiring fluoride treatments and

sealants be provided on the same day as an encountereligible service). There is also nothing prohibiting billing

under the supervising dentist’s NPI. To the contrary,

a dentist must supervise a dental hygienist performing

in-clinic cleanings, Wash. Admin. Code § 246-817-550(9),

and the billing guidelines note that “a dental hygienists

may bill an encounter only when s/he provides a service

independently — not jointly with a dentist.” Parker fails

to plead a legally cognizable theory that the alleged billing

and scheduling of cleanings by Sea Mar are fraud against

Medicaid as Sea Mar’s billing procedures comport with

Washington law.

The complaint also fails to plead scienter as to the

alleged fraudulent nature of the unbundling and using

the dentist’s NPI to bill cleanings performed by a dental

hygienist. As these practices are not prohibited by

statute, regulations, or guidelines, Sea Mar could not have

submitted the claims with the “knowledge of the falsity

and with intent to deceive.” See Hendow, 461 F.3d at 1175.

4a

Appendix A

Finally, Parker does not adequately plead the

materiality of the alleged wrongdoing by Sea Mar. It would

be clear on the face of the Medicaid claims if Sea Mar were

scheduling cleanings separate from dental exams as the

claim form requires the procedure code for all services

provided. As the Washington Health Care Authority paid

the claims without objection, there “is strong evidence”

that the alleged unbundling, even if below the standard

of care, is not material. See Universal Health Servs., Inc.

v. United States ex rel. Escobar, 136 S. Ct. 1989, 2004,

195 L. Ed. 2d 348 (2016). It is also clear on the face of the

claim forms that a dentist’s NPI was being used to bill

services typically performed by dental hygienists, such

as dental cleanings. Again, the Washington Health Care

Authority knowingly paid these claims. Plaintiff failed to

adequately rebut the strong evidence that any alleged false

statements or fraudulent course of action was material to

the government payor.

AFFIRMED.

5a

B the UNITED

Appendix B —Appendix

ORDER of

STATES DISTRICT COURT FOR THE WESTERN

DISTRICT OF WASHINGTON, FILED

August 13, 2020

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

CASE NO. C18-5395RBL

THOMAS E. PARKER, JR., QUUI TAM PLAINTIFF

FOR AND ON BEHALF OF THE UNITED

STATES OF AMERICA AND THE

STATE OF WASHINGTON,

Plaintiff,

v.

SEA-MAR COMMUNITY HEALTH CENTER, A

WASHINGTON PUBLIC HEALTH CORPORATION,

Defendant.

August 13, 2020, Decided

August 13, 2020, Filed

ORDER

THIS MATTER is before the Court on Defendant’s

Motion to Dismiss Third Amended Complaint [Dkt.

#55]. The Court has reviewed the materials filed for and

against the motion. Oral argument is not necessary. The

6a

Appendix B

Court wrote a comprehensive Order explaining why the

Plaintiff’s Second Amended Complaint was Dismissed

[Dkt. #51]. The Court finds nothing new in the Third

Amended Complaint which can save the Third Amended

Complaint from the same fate. For the reasons stated

below, the Motion to Dismiss Third Amended Complaint

[Dkt. #55] is GRANTED and the claims are DISMISSED

WITH PREJUDICE.

A. Relator’s Unbundling Claim Fails to Satisfy Rule

8, and the Relator Offers No New Arguments This

Court Has Not Already Considered and Rejected.

1.

Nothing in the statutes, regulations or Billing

Guides requires a prophylaxis cleaning to occur

during the same visit as a dental examination,

and there are no plausible allegations of any

false representation.

Relator’s Response reiterates—almost word for

word—his prior argument in response to Sea Mar’s

Motion to Dismiss his second amended complaint (SAC),

that a dental hygienist’s services are “incidental” to a

dentist’s examination. However, this Court has already

held that this argument is “both contrary to the definition

of a dental encounter, and misplaced” and determined

that “nothing in the statutes or regulations or Billing

Guides generally requires the treatment or prevention

of a dental problem (such as a cleaning) occur during the

same visit as the administration of radiographs and a

dentist’s examination.” April 28 Order at 13:13-15, 14:47. [Dkt. #41]. Indeed, “the FQHC Billing Guide makes

7a

Appendix B

clear which services must be billed together and when;

similarly, it provides clearly when a service should be

billed separately as fee-for-service.” Id. at 14:8-10. Once

again, it is telling that Relator has not alleged Sea Mar

violated these guidelines.

It is also undisputed that Sea Mar must bill the

procedure codes for each service rendered. Sea Mar

asserted this argument in its prior dismissal motion as

well, and Relator still does not argue to the contrary.

Indeed, because HCA calculates the reimbursement

amount by taking the difference between the encounter

rate and the fee-for-service payment for the particular

procedure code submitted, it needs the procedure codes in

order to reimburse Sea Mar. Relator’s conclusory assertion

that Sea Mar has attempted to “conceal” the unbundling

is thus nonsensical. There is no false representation as to

what services were provided on what day.

2.

Relator’s materiality and scienter assertions

are conclusory and nonsensical.

Relator has merely recycled his prior materiality and

scienter arguments by cutting and pasting—with a few

changed words—from Relator’s response to Sea Mar’s

prior motion to dismiss. These arguments thus suffer the

same flaws as before.

Significantly, Relator does not dispute that the bills

clearly show which services were provided on which day

nor does Relator allege that the government refused

to pay any claims. As it did before, the Relator cannot

8a

Appendix B

adequately allege that the “unbundling” was material

to the government’s decision to pay. Relator previously

tried to clear this hurdle by arguing the government’s

“knowledge of a fraud is...not a defense to an FCA claim”

but now concedes “except to the extent it is pertinent

to the issue of materiality.” Under Escobar, “if the

Government pays a particular claim in full despite its

actual knowledge that certain requirements were violated,

that is very strong evidence that those requirements are

not material.” Universal Health Servs., Inc. v. United

States ex rel. Escobar, 136 S. Ct. 1989, 2003, 195 L. Ed.

2d 348 (2016).

Relator, however, continues to speculate that HCA

“is apparently unaware that Sea Mar is separating

services” (Response at 7:2-3) and that “[h]ad the State of

Washington known of Sea Mar’s concealment, the claims

would not have been paid” (Response at 7:3-4). But as

explained above and in Sea Mar’s motions to dismiss, and

as reflected in the Court’s April 28 Order, this speculation

is implausible because the procedure codes for each

service rendered are provided to and are apparent to

HCA. See April 28 Order at 15:5-10. [Dkt. #51].

Relator’s scienter argument is similarly conclusory

and unpersuasive. It is recycled from Realtor’s prior

response brief to Sea Mar’s motion to dismiss the SAC.

The Court is confused by how the use of a dentist versus

hygienist NPI code would make the dates of service of

the prophylaxis cleanings and dental examinations any

more or less apparent to HCA. Nor, does the dentist

versus hygienist NPI code make any difference as to the

encounter payment to Sea Mar.

9a

Appendix B

B. Relator’s Standard of Care Claims Should Be

Dismissed for Failure to Satisfy Rule 8.

1.

FCA is an inappropriate vehicle for alleged

standard of care violations.

As an initial matter, as reflected in this Court’s April

28 Order, courts have repeatedly held that “‘billing for

medical services that do not meet the standard of care

does not give rise to a [sic] FCA violation’ because the FCA

‘is an inappropriate vehicle for policing quality of care,

which is better left to local regulation and enforcement.’”

See April 28 Order at 16:12-15 [Dkt. #51] (citing United

States ex rel. Lockyer v. Hawaii Pac. Health, 490 F. Supp.

2d 1062, 1076 (D. Haw. 2007) and United States ex rel.

Dooley v. Metic Transplantation Lab, Inc., No. CV 1307039 SJO (JEMx), 2017 U.S. Dist. LEXIS 99506, 2017

WL 4323142, at *26 (C.D. Cal. June 27, 2017)).

Relator attempts to distinguish Lockyer by arguing

that it does not support Sea Mar’s position. Relator offers

no real explanation, except to claim that Washington has

two specific administrative rules which require that a

Medicaid provider meet the standard of care, making

Lockyer distinguishable from this case. The regulations

upon which Relator relies do not impose a standard of care

for scheduling prophylaxis cleaning, as Relator claims.

Accordingly, Lockyer controls, because Relator “does

not point to a provision . . . that requires” scheduling of

services be completed in accordance with any standard

of care “in order to bill [Medicaid].” See Lockyer, 490 F.

Supp. 2d at 1076.

10a

Appendix B

Relator also argues that Lockyer has been implicitly

overruled by Escobar. But nothing in Escobar is contrary

to Lockyer’s holding that a breach of standard of care

allegation “by itself does not give rise to a[n] FCA claim.”

Id. Cf., Escobar, 136 S. Ct. at 2001. Indeed, Escobar

supports that the FCA is not an appropriate vehicle for

policing quality of care. See id., 136 S. Ct. at 2004 (“We

emphasize . . . that the False Claims Act is not a means

of imposing treble damages and other penalties for

insignificant regulatory . . . violations. This case centers

on allegations of fraud, not medical malpractice.”).

C. Relator’s Unbundling and Standard of Care Claims

Also Fail To Satisfy Rule 9(b)

Beyond the single example involving L.C., Relator still

has not alleged any other specific examples of unbundling,

nor has he alleged any policy regarding unbundling.

Relator’s Unbundling and Standard of Care claims must

be dismissed again for failure to satisfy Rule 9(b).

1.

The September 2016 “policy” is not an

unbundling policy

Relator asserts in his Response that “Sea Mar has

formally adopted a policy that requires a dental examination

by a dentist ... on one day and the administration of

prophylaxis dental cleaning on another day performed

by a dental hygienist.” Response at 7:21-8:5. Relator’s

Response claims that this formal policy was announced in

the September 1, 2016 email, and refers to his allegations

at Third Amended Complaint (TAC) §§ XVI and XIX.

11a

Appendix B

No matter how many times one reads the September

1, 2016 “Plan of Action” email, one will never find

any reference to scheduling requirements for dental

examinations or prophylaxis cleanings, much less any

mention of unbundling the two procedures. See TAC Ex.

6. Indeed, the TAC describes the September 2016 “Plan

of Action” as a policy for “billing for services provided

solely by a dental hygienist under a dentist’s NPI” (TAC

§ XIX) and “list[ing] a dentist as the provider of the

service even when the service is performed by a dental

hygienist” (TAC § XVI).

The Court is not persuaded by the argument. Relator’s

Unbundling Claim (and related Standard of Care Claim)

are based entirely on one example, L.C.’s May 20, 2017

visit.

2.

Relator alleges only one example of a separate

prophylaxis cleaning appointment for one

patient—not 95% of Sea Mar’s patients

With no unbundling “policy” and no other specific

examples of unbundling, Relator’s argument that “every”

patient’s dental exam and prophylaxis cleaning are split

(Response at 1:24-25), or that this has damaged “over 95%

of Sea Mar patients” (Response at 6:10-11) are without

basis. As Sea Mar pointed out in its Motion, Relator’s

95% figure appears to be based solely on the allegation

that Dr. Davis (of Albuquerque, New Mexico) believes a

separate prophylaxis appointment would only be medically

necessary for 5% of all patients. Relator’s Response does

not contradict this. There are thus absolutely no factual

12a

Appendix B

allegations in the TAC that support a conclusion that

95% of Sea Mar’s patients have separately scheduled

prophylaxis cleanings.

3.

Relator has not satisfied Rule 9(b) with respect

to the Unbundling and Standard of Care

Claims

Relator attempts to argue that he has sufficiently

alleged the “who” “what” “where” “when” and “how” of the

unbundling, but makes little effort to satisfy the standard

set forth in this Court’s April 28, Order. Response at 24:1423. To the contrary, Relator’s effort to describe how he

has satisfied Rule 9(b) only draws attention to his failure

to meet this standard.

For example, Relator argues he has sufficiently

identified the “where” by generally alleging “Sea Mar’s

ninety healthcare clinics in Washington State.” But this

general allegation, unsupported by specific allegations,

is directly contrary to the standard set forth in the case

cited in the Court’s April 28 Order, United States ex

rel. Jorgenson v. Alan Ritchey, Inc. No. C01-588Z, 2007

U.S. Dist. LEXIS 31542, 2007 WL 1287932, at *3 (W.D.

Wash. Apr. 27, 2007) in which the court had dismissed the

fraud allegations related to defendant’s other locations

as they were unsupported by specific allegations of

fraud, explaining “alleged fraudulent activity at one

[location] does not constitute an allegation for a different

[location].” Similarly, although this Court expressly noted

Relator’s failure to “provide any dates, times...the relevant

treatments were provided,” (April 28 Order at 16) Relator

13a

Appendix B

argues conclusorily that “when” is sufficiently identified

by the general period “from 2013” on. Response at 24:1920. Relator argues he has sufficiently alleged the “who”

by identifying “Sea Mar and their employees,” including

Dr. Narvaez, and Valerie Hubbard. But nothing in the

TAC alleges that Dr. Narvaez or Valerie Hubbard were

involved in any unbundled treatment on any particular

date—rather they are referenced only in connection with

the September 2016 “Plan of Action” discussing NPI

numbers—and “Sea Mar and their employees” is hardly

specific enough to “identify the dental hygienists or billing

staff that were involved.” Once again, the argument is

unavailing.

Relator’s Unbundling and Standard of Care claims

should therefore also be dismissed for failure to satisfy

Rule 9(b).

CONCLUSION

The Motion to Dismiss is GRANTED. Because

Relator has now had four attempts to state a plausible

claim, and cannot do so, his claims are DISMISSED

WITH PREJUDICE.

Dated this 13th day of August, 2020.

/s/ Ronald B. Leighton

Ronald B. Leighton

United States District Judge

14a

AppendixOF

C REHEARING OF

APPENDIX C — DENIAL

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT, DATED AUGUST 18, 2021

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 20-35825

D.C. No. 3:18-cv-05395-RBL

Western District of Washington, Tacoma

THOMAS E. PARKER, JR., QUI TAM

PLAINTIFF FOR AND ON BEHALF OF THE

UNITED STATES OF AMERICA AND

THE STATE OF WASHINGTON,

Plaintiff-Appellant,

- and UNITED STATES OF AMERICA,

ex rel; STATE OF WASHINGTON, ex rel,

Plaintiffs,

v.

SEA-MAR COMMUNITY HEALTH CENTER, A

WASHINGTON PUBLIC BENEFIT CORPORATION,

Defendant-Appellee.

15a

Appendix C

ORDER

Before: HAWKINS, CLIFTON, and IKUTA, Circuit

Judges.

Judge Ikuta votes to deny the petition for rehearing

en banc, and Judge Hawkins and Judge Clifton so

recommend.

The full court has been advised of the petition for

rehearing en banc and no judge has requested a vote on

whether to rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing en banc (Docket Entry No.

38) is DENIED.

16a

D STATUTORY

APPENDIX D —Appendix

RELEVANT

PROVISIONS

31 U.S.C. § 3729

(a) Liability for Certain Acts.—

(1) In general.—Subject to paragraph (2), any person

who—

(A) knowingly presents, or causes to be presented, a false

or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a

false record or statement material to a false or fraudulent

claim;

(C) conspires to commit a violation of subparagraph (A),

(B), (D), (E), (F), or (G);

(D) has possession, custody, or control of property or

money used, or to be used, by the Government and

knowingly delivers, or causes to be delivered, less than

all of that money or property;

(E) is authorized to make or deliver a document certifying

receipt of property used, or to be used, by the Government

and, intending to defraud the Government, makes or

delivers the receipt without completely knowing that the

information on the receipt is true;

(F) knowingly buys, or receives as a pledge of an obligation

or debt, public property from an officer or employee of

the Government, or a member of the Armed Forces, who

lawfully may not sell or pledge property; or

17a

Appendix D

(G) knowingly makes, uses, or causes to be made or used,

a false record or statement material to an obligation to

pay or transmit money or property to the Government, or

knowingly conceals or knowingly and improperly avoids

or decreases an obligation to pay or transmit money or

property to the Government,

is liable to the United States Government for a civil

penalty of not less than $5,000 and not more than $10,000,

as adjusted by the Federal Civil Penalties Inflation

Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law

104–410 [1]), plus 3 times the amount of damages which

the Government sustains because of the act of that person.

(2) Reduced damages.—If the court finds that—

(A) the person committing the violation of this subsection

furnished officials of the United States responsible for

investigating false claims violations with all information

known to such person about the violation within 30 days

after the date on which the defendant first obtained the

information;

(B) such person fully cooperated with any Government

investigation of such violation; and

(C) at the time such person furnished the United States

with the information about the violation, no criminal

prosecution, civil action, or administrative action had

commenced under this title with respect to such violation,

and the person did not have actual knowledge of the

existence of an investigation into such violation,

18a

Appendix D

the court may assess not less than 2 times the amount of

damages which the Government sustains because of the

act of that person.

(3) Costs of civil actions.—

A person violating this subsection shall also be liable to the

United States Government for the costs of a civil action

brought to recover any such penalty or damages.

(b) Definitions.—For purposes of this section—

(1) the terms “knowing” and “knowingly”—

(A) mean that a person, with respect to information—

(i) has actual knowledge of the information;

(ii) acts in deliberate ignorance of the truth or falsity of

the information; or

(iii) acts in reckless disregard of the truth or falsity of the

information; and

(B) require no proof of specific intent to defraud;

(2) the term “claim”—

(A) means any request or demand, whether under a

contract or otherwise, for money or property and whether

or not the United States has title to the money or property,

that—

19a

Appendix D

(i) is presented to an officer, employee, or agent of the

United States; or

(ii) is made to a contractor, grantee, or other recipient,

if the money or property is to be spent or used on the

Government’s behalf or to advance a Government program

or interest, and if the United States Government—

(I) provides or has provided any portion of the money or

property requested or demanded; or

(II) will reimburse such contractor, grantee, or other

recipient for any portion of the money or property which

is requested or demanded; and

(B) does not include requests or demands for money or

property that the Government has paid to an individual

as compensation for Federal employment or as an income

subsidy with no restrictions on that individual’s use of the

money or property;

(3) the term “obligation” means an established duty,

whether or not fixed, arising from an express or implied

contractual, grantor-grantee, or licensor-licensee

relationship, from a fee-based or similar relationship,

from statute or regulation, or from the retention of any

overpayment; and

(4) the term “material” means having a natural tendency

to influence, or be capable of influencing, the payment or

receipt of money or property.

20a

Appendix D

31 U.S.C. § 3730

(b) Actions by Private Persons.—

(1) A person may bring a civil action for a violation of

section 3729 for the person and for the United States

Government. The action shall be brought in the name of

the Government. The action may be dismissed only if the

court and the Attorney General give written consent to

the dismissal and their reasons for consenting.

21a

Appendix D

Wash. Admin. Code § 182-502-0100

General conditions of payment.

(1) The medicaid agency reimburses for medical services

furnished to an eligible client when all the following apply:

(a) The service is within the scope of care of the client’s

Washington apple health program;

(b) The service is medically or dentally necessary;

(c) The service is properly authorized;

(d) The provider bills within the time frame set in WAC

182-502-0150;

(e) The provider bills according to agency rules and billing

instructions; and

(f) The provider follows third-party payment procedures.

(2) The agency is the payer of last resort, unless the other

payer is:

(a) An Indian health service;

(b) A crime victims program through the department of

labor and industries; or

(c) A school district for health services provided under the

Individuals with Disabilities Education Act.

22a

Appendix D

(3) The agency does not reimburse providers for medical

services identified by the agency as client financial

obligations, and deducts from the payment the costs of

those services identified as client financial obligations.

Client financial obligations include, but are not limited

to, the following:

(a) Copayments (copays) (unless the criteria in chapter

182-517 WAC or WAC 182-501-0200 are met);

(b) Deductibles (unless the criteria in chapter 182-517

WAC or WAC 182-501-0200 are met); and

(c) Spenddown (see WAC 182-519-0110).

(4) The provider must accept medicare assignment for

claims involving clients eligible for both medicare and

Washington apple health before the agency makes any

payment.

(5) The provider is responsible for verifying whether a

client has Washington apple health coverage for the dates

of service.

(6) The agency may reimburse a provider for services

provided to a person if it is later determined that the

person was ineligible for the service when it was provided

if:

(a) The agency considered the person eligible at the time

of service;

23a

Appendix D

(b) The service was not otherwise paid for; and

(c) The provider submits a request for payment to the

agency.

(7) The agency does not pay on a fee-for-service basis for

a service for a client who is enrolled in a managed care

plan when the service is included in the plan’s contract

with the agency.

(8) Information about medical care for jail inmates is found

in RCW 70.48.130.

(9) The agency pays for medically necessary services on

the basis of usual and customary charges or the maximum

allowable fee established by the agency, whichever is lower.

24a

Appendix D

Wash. Admin. Code § 182-535-1079

Dental-related services—General.

(1) Clients described in WAC 182-535-1060 are eligible

to receive the dental-related services described in this

chapter, subject to coverage limitations, restrictions, and

client age requirements identified for a specific service.

The medicaid agency pays for dental-related services and

procedures provided to eligible clients when the services

and procedures:

(a) Are part of the client’s dental benefit package;

(b) Are within the scope of an eligible client’s Washington

apple health program;

(c) Are medically necessary;

(d) Meet the agency’s authorization requirements, if any;

(e) Are documented in the client’s dental record in

accordance with chapter 182-502 WAC and meet the

department of health’s requirements in WAC 246-817-305

and 246-817-310;

(f) Are within accepted dental or medical practice

standards;

(g) Are consistent with a diagnosis of a dental disease or

dental condition;

25a

Appendix D

(h) Are reasonable in amount and duration of care,

treatment, or service; and

(i) Are listed as covered in the agency’s rules and published

billing instructions and fee schedules.

(2) For orthodontic services, see chapter 182-535A WAC.

(3) The agency requires site-of-service prior authorization,

in addition to prior authorization of the procedure, if

applicable, for nonemergency dental-related services

performed in a hospital or an ambulatory surgery center

when:

(a) A client is not a client of the developmental disabilities

administration of the department of social and health

services (DSHS) according to WAC 182-535-1099;

(b) A client is age nine or older;

(c) The service is not listed as exempt from the site-ofservice authorization requirement in the agency’s current

published dental-related services fee schedule or billing

instructions; and

(d) The service is not listed as exempt from the prior

authorization requirement for deep sedation or general

anesthesia (see WAC 182-535-1098 (1)(c)(v)).

(4) To be eligible for payment, dental-related services

performed in a hospital or an ambulatory surgery center

must be listed in the agency’s current published outpatient

26a

Appendix D

fee schedule or ambulatory surgery center fee schedule.

The claim must be billed with the correct procedure code

for the site-of-service.

(5) Under the early and periodic screening, diagnostic,

and treatment (EPSDT) program, clients age twenty and

younger may be eligible for dental-related services listed

as noncovered. The standard for coverage for EPSDT is

found in chapter 182-534 WAC.

(6) The agency evaluates a request for dental-related

services that are:

(a) In excess of the dental program’s limitations or

restrictions, according to WAC 182-501-0169; and

(b) Listed as noncovered, according to WAC 182-501-0160.

27a

Appendix D

Wash. Rev. Code § 74.66.010

Unless the context clearly requires otherwise, the

definitions in this section apply throughout this chapter:

(1)(a) “Claim” means any request or demand made for

a medicaid payment under chapter 74.09 RCW or other

applicable law, whether under a contract or otherwise,

for money or property and whether or not a government

entity has title to the money or property, that:

(i) Is presented to an officer, employee, or agent of a

government entity; or

(ii) Is made to a contractor, grantee, or other recipient,

if the money or property is to be spent or used on the

government entity’s behalf or to advance a government

entity program or interest, and the government entity:

(A) Provides or has provided any portion of the money or

property requested or demanded; or

(B) Will reimburse such contractor, grantee, or other

recipient for any portion of the money or property which

is requested or demanded.

(b) A “claim” does not include requests or demands for

money or property that the government entity has paid

to an individual as compensation for employment or as an

income subsidy with no restrictions on that individual’s

use of the money or property.

28a

Appendix D

(2) “Custodian” means the custodian, or any deputy

custodian, designated by the attorney general.

(3) “Documentary material” includes the original or any

copy of any book, record, report, memorandum, paper,

communication, tabulation, chart, or other document, or

data compilations stored in or accessible through computer

or other information retrieval systems, together with

instructions and all other materials necessary to use

or interpret the data compilations, and any product of

discovery.

(4) “False claims act investigation” means any inquiry

conducted by any false claims act investigator for the

purpose of ascertaining whether any person is or has been

engaged in any violation of this chapter.

(5) “False claims act investigator” means any attorney or

investigator employed by the state attorney general who is

charged with the duty of enforcing or carrying into effect

any provision of this chapter, or any officer or employee

of the state of Washington acting under the direction and

supervision of the attorney or investigator in connection

with an investigation pursuant to this chapter.

(6) “Government entity” means all Washington state

agencies that administer medicaid-funded programs

under this title.

(7)(a) “Knowing” and “knowingly” mean that a person,

with respect to information:

29a

Appendix D

(i) Has actual knowledge of the information;

(ii) Acts in deliberate ignorance of the truth or falsity of

the information; or

(iii) Acts in reckless disregard of the truth or falsity of

the information.

(b) “Knowing” and “knowingly” do not require proof of

specific intent to defraud.

(8) “Material” means having a natural tendency to

influence, or be capable of influencing, the payment or

receipt of money or property.

(9) “Obligation” means an established duty, whether or

not fixed, arising from an express or implied contractual,

grantor-grantee, or licensor-licensee relationship, from a

fee-based or similar relationship, from statute or rule, or

from the retention of any overpayment.

(10) “Official use” means any use that is consistent with

the law, and the rules and policies of the attorney general,

including use in connection with: Internal attorney

general memoranda and reports; communications

between the attorney general and a federal, state, or

local government agency, or a contractor of a federal,

state, or local government agency, undertaken in

furtherance of an investigation or prosecution of a case;

interviews of any qui tam relator or other witness; oral

examinations; depositions; preparation for and response

to civil discovery requests; introduction into the record of

30a

Appendix D

a case or proceeding; applications, motions, memoranda,

and briefs submitted to a court or other tribunal; and

communications with attorney general investigators,

auditors, consultants and experts, the counsel of other

parties, and arbitrators or mediators, concerning an

investigation, case, or proceeding.

(11) “Person” means any natural person, partnership,

corporation, association, or other legal entity, including

any local or political subdivision of a state.

(12) “Product of discovery” includes:

(a) The original or duplicate of any deposition, interrogatory,

document, thing, result of the inspection of land or other

property, examination, or admission, which is obtained by

any method of discovery in any judicial or administrative

proceeding of an adversarial nature;

(b) Any digest, analysis, selection, compilation, or

derivation of any item listed in (a) of this subsection; and

(c) Any index or other manner of access to any item listed

in (a) of this subsection.

(13) “Qui tam action” is an action brought by a person

under RCW 74.66.050.

(14) “Qui tam relator” or “relator” is a person who brings

an action under RCW 74.66.050.

31a

Appendix D

Wash. Rev. Code § 74.66.020

(1) Subject to subsections (2) and (4) of this section, a

person is liable to the government entity for a civil penalty

of not less than the greater of ten thousand nine hundred

fifty-seven dollars or the minimum inflation adjusted

penalty amount imposed as provided by 31 U.S.C. Sec.

3729(a) and not more than the greater of twenty-one

thousand nine hundred sixteen dollars or the maximum

inflation adjusted penalty amount imposed as provided

by 31 U.S.C. Sec. 3729(a), plus three times the amount of

damages which the government entity sustains because

of the act of that person, if the person:

(a) Knowingly presents, or causes to be presented, a false

or fraudulent claim for payment or approval;

(b) Knowingly makes, uses, or causes to be made or used, a

false record or statement material to a false or fraudulent

claim;

(c) Conspires to commit one or more of the violations in

this subsection (1);

(d) Has possession, custody, or control of property or

money used, or to be used, by the government entity and

knowingly delivers, or causes to be delivered, less than

all of that money or property;

(e) Is authorized to make or deliver a document certifying

receipt of property used, or to be used, by the government

entity and, intending to defraud the government entity,

32a

Appendix D

makes or delivers the receipt without completely knowing

that the information on the receipt is true;

(f) Knowingly buys, or receives as a pledge of an obligation

or debt, public property from an officer or employee of the

government entity who lawfully may not sell or pledge

property; or

(g) Knowingly makes, uses, or causes to be made or used a

false record or statement material to an obligation to pay

or transmit money or property to the government entity,

or knowingly conceals or knowingly and improperly avoids

or decreases an obligation to pay or transmit money or

property to the government entity.