United States District Court, E.D. Missouri, Southeastern Division
UNITED STATES OF AMERICA, ex rel. PAUL CAIRNS, ET AL., Plaintiff,
D.S. MEDICAL, L.L.C., ET AL., Defendants.
MEMORANDUM AND ORDER
G. FLEISSIG UNITED STATES DISTRICT JUDGE.
qui tam action under the False Claims Act, 31 U.S.C.
§§ 3729-33 (“FCA”) is before the Court
on Defendants' motion (ECF. No. 219) to strike (1) the
November 29, 2016 Declaration of Timothy Minden, Special
Agent for the Department of Health and Human Services, Office
of the Inspector General, submitted by the government in
connection with its motion for partial summary judgment; and
(2) portions of the government's Statement of
Uncontroverted Material Facts supporting the motion for
partial summary judgment, which Defendants assert are
irrelevant. For the reasons set forth below, this motion will
be denied with respect to the government's Statement of
Uncontroverted Material Facts, but granted with respect to
Agent Minden's Declaration.
operative complaint (ECF No. 26) claims that the four
Defendants - Dr. Sonjay Fonn, a neurosurgeon; Midwest
Neurosurgeons, LLC, a company formed and operated by Dr.
Fonn; Deborah Seeger, Dr. Fonn's fiancée; and D.S.
Medical, LLC, a company formed and created by Seeger for the
distributorship of spinal implant devices - violated the FCA
by submitting or causing to be submitted to the federal
Medicare and Medicaid programs false claims for reimbursement
for Dr. Fonn's services in performing spinal surgeries at
St. Francis Medical Center (“SFMC”) in Cape
Girardeau, Missouri, between December 2008 and March 2012,
and for the purchase of implant devices used in those
surgeries. The claims for reimbursement were allegedly false
because they did not disclose that they were the result of
alleged kickbacks that violated the federal criminal
Anti-Kickback Statute (“AKS”).
the complaint alleges that Dr. Fonn would select the devices
he would use during surgeries at SFMC based, at least in
part, on the fact that DSM would serve as the local
distributor for the manufacturer of those devices. DSM would
then be paid commissions by the manufacturers, and DSM and
Seeger would in turn share those commissions with Dr. Fonn.
The alleged illegal kickbacks are from Seeger and DSM to Dr.
Fonn, and from spinal manufacturers to DSM in the form of
inflated commissions. Based on the same alleged facts, the
complaint also asserts common law claims for payment by
mistake, unjust enrichment, and fraud.
to the complaint as exhibits are three charts: “Part A
Inpatient Claims” (ECF No. 26-2 at 1-8); “Dr.
Sonjay Fonn (Part B Billings)” with the added notation,
“Pt B / Pt A Overlaps: Subtotal by patient” (ECF
No. 26-2 at 9-17); and “Sonjay Fonn = Attending Phys
Medicaid Hospital Claims” (ECF No. 26-2 at 13-17). The
Part A chart lists by date, 91 spinal fusion surgeries
purportedly performed by Dr. Fonn from December 2008 through
March 2012, and includes a column showing payment amounts
made by Medicare Part A in connection with each of these
surgeries. The Part B chart list 151 dollar amounts in a
column entitled, “SumOfAmt Paid.” Other columns
(amended) motion for partial summary judgment, the government
seeks an order under Rule 56(g) that essentially holds that
Defendants, individually and/or jointly, “arranged,
” within the meaning of the AKS, for spinal devices to
be purchased for 228 surgeries performed by Dr. Fonn, and
that Defendants, individually and/or jointly, presented or
caused to be presented, claims to Medicare and Medicaid for
Dr. Fonn's professional services connected to those
surgeries. ECF. No. 252. Attached to the government's
Statement of Uncontroverted Material Facts in support of its
motion for partial summary judgment is a list by date, from
January 19, 2009, through March 20, 2012, of the dollar
amounts of 173 claims made to Medicare Part A and/or Medicare
Part B, and 55 claims made to Medicaid, for a total of 228
claims. ECF No. 201-1.
challenged Declaration, Agent Minden notes his 13 years of
experience investigating Medicare and Medicaid fraud, and
describes how he and individuals working at his direction
retrieved the data underlying the charts in the record from
databases maintained by federal and state agencies and a
government data contractor. He explains that the Center for
Medicare and Medicaid Services (“CMS”) collects
data about Medicare claims from various sources, and compiles
the data in a data repository that government contractors can
then access and make the data “available to users via
the STARS database.” This data included names of
patients; dates of surgical services; names of the performing
physician; the hospital in which the surgery was performed;
and how much Medicare/Medicaid paid for each surgery. Agent
Minden then explains how he created the above-noted charts,
including the chart of 228 claims, that he calls the
“Master Claims Chart, ” from data he obtained
from the STARS database, and how he determined that these
claims were associated with spinal surgeries performed by Dr.
Fonn. ECF No. 201-9.
challenge Agent Minden's Declaration on the ground that
it is not based on his personal knowledge, as he does not
know how the government agencies and the contractor involved
obtain, process, or handle the data upon which he relied.
Defendants point to Agent Minden's deposition testimony
that he did not independently validate the underlying data he
used for the charts at issue. Defendants maintain that the
underlying data is inadmissible hearsay, and thus the charts
Agent Minden created are not admissible under Federal Rule of
Evidence 1006, which allows the use of summaries when the
volume of documents being summarized is so large as to make
their use impractical. Defendants also maintain that there
are discrepancies between the information in the charts and
other information in the case, such as patients' medical
records with regard to, for example, the date a surgery
associated with a claim was performed.
noted above, the motion under consideration seeks to strike
not only Agent Minden's Declaration, but also portions of
the government's Statement of Uncontroverted Material
Facts. These portions discuss who Defendants are, who was
employed by their companies, where Dr. Fonn performed
surgeries, generally how Dr. Fonn selected the spinal devices
at issue and arranged for them to be distributed through D.S.
Medical for the surgeries at issue, how SFMC and Dr.
Fonn's neurosurgery practice submitted claims for payment
to Medicare and Medicaid, and the federal funding behind
government responds that the portions of its Statement of
Uncontroverted Material Facts that Defendants seek to strike
are all relevant to the case, and in any event, a motion to
strike is not a proper way to address relevance objections.
With respect to Agent Minden's Declaration, the
government argues that Agent Minden's 13 years'
experience investigating Medicare and Medicaid fraud provides
him with enough personal knowledge to support his
Declaration. The government points to Agent Minden's
deposition testimony that he had used similar data in his
investigations routinely for years and never had any reason
to doubt the data's accuracy. The government argues that
the discrepancies noted by Defendants do not genuinely call
into question that Dr. Fonn performed the surgeries listed in
the Master Claims Chart on patients at SFMC and that SFMC
submitted Medicare and/or Medicaid claims related to those
Rule of Civil Procedure 56(c)(4) requires that an affidavit
supporting a motion for summary judgment “must be made
on personal knowledge, set out facts that would be admissible
in evidence, and show that the affiant or declarant is
competent to testify on the matters stated.”
Fed.R.Civ.P. 56(c)(4). Affidavits or declarations that are
not based on personal knowledge or that contain inadmissible
hearsay should be stricken from the summary judgment record.
Goliday v. GKN Aerospace-St. Louis Aerospace, No.
4:11CV729 JCH, 2012 WL 2856499, at *1 (E.D. Mo. July, 10,
2012). “Affidavits asserting personal knowledge must
include enough factual support to show that the affiant
possesses that knowledge.” Id. (citation
the Court concludes that Defendants' motion to strike
Agent Minden's Declaration is well taken. The problem is
that Agent Minden is not employed by, or an agent of, the
government agencies or government contractor that collected
and maintained the underlying data. Indeed, a case relied on
heavily by the government, United States v. Kuthuru,
665 F. App'x 34 (2d Cir. 2016), brings this point home.
In that case, the Second Circuit held that data about
Medicare claims was properly admitted in a FCA Medicare fraud
case as business records of a Medicare contractor that
maintained data of Medicare claims in a data warehouse,
because a Medicare investigator employed by the
contractor testified how the data was collected and
maintained, and this testimony was accompanied by a
certification of the contractor's custodian of records.
Id. at 39-40; see also United States ex rel.
Pogue Diabetes Treatment Ctrs. of Am., 565 F.Supp.2d
153, 160-61 (D.D.C. 2008) (allowing the government to
establish at the summary judgment stage of a Medicare fraud