United States District Court, S.D. Mississippi, Southern Division
JAMES ALDRIDGE, RELATOR, on behalf of UNITED STATES OF AMERICA PLAINTIFF
H. TED CAIN, JULIE CAIN, CORPORATE MANAGEMENT, INC., STONE COUNTY HOSPITAL, INC., STONE COUNTY NURSING AND REHABILITATION CENTER, INC. QUEST MEDICA SERVICES, INC. QUEST REHAB, INC; TERRI BEARD, THOMAS KULUZ, and STARANN LAMIER, AND JOHN DOES I-XX DEFENDANTS
T. WINGATE, UNITED STATES DISTRICT JUDGE.
this court are two motions: 1) Defendants' Motion to
Unseal the Case [doc. no. 163]; and 2)
Motion by the Intervenor, United States, to strike the Answer
to the Amended Complaint or for Partial Summary Judgment on
Defendants' Affirmative Defenses [Doc. no.
motion, Defendants' Motion to Dismiss the United
States' Amended Complaint in Intervention [doc. no. 161]
remains pending before this court; the court, however, is
persuaded to reserve ruling on that motion until after its
ruling on whether to unseal the record in this case. Should
the court record be unsealed, Defendants will be allowed an
opportunity to review the record and to supplement their
motion to dismiss accordingly, should they so choose.
an action brought by the Relator, James Aldridge, under the
False Claims Act(FCA), 31 U.S.C. §3729(a)(1) and (2).
The Defendant Corporate Management Inc. (CMI), owned,
managed, and operated hospitals and other health care
facilities in South Mississippi, including the other named
corporate Defendants (Stone County Hospital, Stone County
Nursing & Rehab, Quest Medical Services Inc., and Quest
Rehab, Inc.). The Defendant H. Ted Cain is the incorporator,
president, treasurer, secretary and director of all of these
health care providers. The individual Defendants (Julie Cain,
Starr Ann Lamier and Terri Beard) are officers of Stone
Relator alleges that Defendants violated the Medicare Anti
-Kickback Statuteswhich prohibit 1) solicitation or receipt
of remuneration in return for referrals of Medicare patients
and 2) the offer of payment or remuneration to induce such
referrals. See e.g., United States ex. rel. Thompson v.
Columbia/HCA Healthcare Corp., 125 F.3d 889, 903
(5th Cir. 1997). Defendants are also alleged to
have violated the Stark Laws,  which prohibit physicians from
referring Medicare patients to an entity for certain health
services, if the referring physician has a “financial
relationship” with such entity. 42 U.S.C.
§1394nn(a)(1); Id. at 902. The Defendants have
submitted claims for payment to Medicaid and Medicare in
which they certified that they were in compliance with
healthcare laws and regulations; plaintiffs claim they were
not in compliance, however, because of violations of the
above laws. These false certifications of compliance to
collect payment, say plaintiffs, constitute violations of the
court has jurisdiction over this action pursuant to 28 U.S.C.
§ 1345 and 31 U.S.C. §§
3730(b) and 3732(a). Venue is also proper in this
district in accordance with 31 U.S.C. § 3732(a).
hearing on the outstanding motions was conducted by this
court on July 17, 2017, during which oral arguments were
presented by the government and the Defendants. Attorneys for
the United States, for the Relator and for the Defendants
TO STRIKE AFFIRMATIVE DEFENSES OR FOR PARTIAL SUMMARY
court first considers the motion of the United States to
strike the Defendants' affirmative answers to the Amended
Complaint, or for partial summary judgment on the affirmative
defenses. This court announced its ruling on this motion from
the bench at the conclusion of the July 17, hearing. During
the hearing, the Defendants agreed to withdraw the following
First Defense: Failure to state a claim upon which
relief may be granted.
Second Defense: Failure to exhaust administrative
Fourth Defense: Failure to state claims with
Fifteenth Defense: Failure to allege facts or causes
of action sufficient to support a claim for attorney's
fees, and costs, treble ...