MENOLD v. LOTUS FAMILY MEDICINE

CourtDistrict Court, D. New Jersey
DecidedFebruary 4, 2022
Docket3:17-cv-01728
StatusUnknown

This text of MENOLD v. LOTUS FAMILY MEDICINE (MENOLD v. LOTUS FAMILY MEDICINE) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MENOLD v. LOTUS FAMILY MEDICINE, (D.N.J. 2022).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

UNITED STATES OF AMERICA, ex. rel., KATHLEEN MENOLD, M.S.N., APRN, Civil Action No.: FNP-C; and THE STATE OF NEW JERSEY, 3:17-cv-1728-PGS-LHG

Plaintiffs, MEMORANDUM v. AND ORDER LOTUS FAMILY MEDICINE, et al., Defendants.

This matter comes before the court on a qui tam action brought by Plaintiff-Relator Kathleen Menold (“Relator”), a registered nurse who filed this action in March 2017 against Defendants Lotus Family Medicine (“Lotus”), Vedat Obuz, M.D. (“Dr. Obuz”), and Ozlem Obuz (“Ms. Obuz”), alleging fraudulent medical billing under the federal False Claims Act (31 U.S.C. § 3729 et seq) and the New Jersey False Claims Act (N.J.S.A. 2A:32 C1). The False Claims Act claims having since been settled, Relator now moves for attorney fees and costs. (ECF No. 20). For the reasons set forth below, Relator’s motion is granted in part and denied in part. I. On March 13, 2017, Relator filed the original complaint (ECF No. 1) under seal and amended it shortly after on August 14, 2017. (ECF No. 5). Relator alleged that, during her employment as a nurse with Defendant Lotus, Defendants committed numerous violations of the federal False Claims Act and the New Jersey False Claims Act with relation to Medicare, Medicaid, and TRICARE payments when they: (1) purposely and routinely used inaccurate E/M CPT codes1 to inflate billing receivables; (2) billed for services provided by licensed personnel when the services were actually provided by unlicensed personnel; (3) directed patients to fill their prescriptions at the pharmacy adjacent to Defendant Lotus without informing patients the pharmacy was owned by Ms. Obuz; and (4) billed for services by licensed personnel using the names of former Lotus staff even after said staff members had separated from Lotus. (Amended

Compl. at ¶¶2-6, ECF No. 5).2 One such instance here, reasonably representative of the many alleged violations, entailed a patient visit on January 8, 2016 for prescription refills and a review of lab results. (Id. at ¶54). Relator alleged this visit took no longer than five minutes and the only things of note on the chart were a set of six health observations, such as low B12 levels, and a list of the seven medications prescribed. (Id. at ¶¶54, 56; Ex. C to Amended Compl. at 1, ECF No. 5-3). Despite this, Defendants billed the visit to Medicare as 99214, an E/M CPT code intended for detailed assessments of moderate to severe problems, are meant to take approximately twenty-five minutes, and must be accompanied by at least two of the following three components: a detailed

history, a detailed examination, and/or a medical decision making of moderate complexity. (Ex. A to Amended Compl. at 4, ECF No. 5-1; Ex. C at 2). After the amended complaint was filed, Relator’s counsel and the United States proceeded with the investigation and research of the claims for the next four years until the

1Current Procedural Terminology (“CPT”) refers to a series of codes assigned to the many individual medical treatments, services, and interactions healthcare providers offer to patients in order to more easily identify what services were provided for the purposes of billing and administration. See generally United States v. Vaid, 2019 U.S. Dist. LEXIS 92416, at *11 (E.D. Mo. Apr. 11, 2019) (“CPT codes refer to five digit codes listed in the Physicians’ Current Procedural Terminology, an annual publication of the American Medical Association.”). Evaluation and Management CPT (“E/M CPT”) codes refer to specific CPT codes (99211, 99212, 99213, 99214, and 99215) pertaining to outpatient visits for established patients and differ based on time and complexity. (Ex. A to Amended Compl. at 3-4, ECF No. 5-1). 2 The amended complaint also included a third claim for relief from retaliatory treatment and constructive discharge, but this count remains open and separate from the present fee petition. (Amended Compl. at ¶¶101-04). United States intervened on March 8, 2021 (ECF No. 18) to facilitate a $100,956 settlement agreement, $63,097 of which was for restitution plus $2,271 in interest, (Relator Br. at 2, ECF No. 20-1). The present motion for fees and costs was subsequently filed on March 24, 2021, the Court heard oral argument on September 20, 2021, and additional briefing was requested on November 29, 2021. (ECF No. 36).

II. The federal False Claims Act (“FCA”) was written “to reach all types of fraud, without qualification, that might result in financial loss to the Federal Government.” Cook Cty. v. United States ex rel. Chandler, 538 U.S. 119, 123 (2003) (quoting United States v. Neifert-White Co., 390 U.S. 228, 232 (1968). “To incentivize its own enforcement, the FCA allows private individuals to sue for alleged violations—called qui tam suits—and offers them a percentage of an eventual recovery” if they “relate” their allegations of fraud to the United States to determine whether further investigation and ultimate intervention is necessary. See Chang v. Children’s Advocacy Ctr., 938 F.3d 384, 386 (3d Cir. 2019) (citing 31 U.S.C. § 3730(d)). Where such a case

“results in a settlement in which the defendant agrees to pay money[,]” relators are also entitled to “reasonable attorneys’ fees and costs” which “shall be awarded against the defendant.” See 31 U.S.C. § 3730(d); Simring v. Rutgers, 634 F. App’x 853, 857 (3d Cir. 2015). There is subject matter jurisdiction over the federal claim under 28 U.S.C. § 1331 and supplemental jurisdiction over the state law claim under 28 U.S.C. § 1367. III. Relator seeks fees and costs totaling $121,962.17, composed of 177.99 hours across three partners billing $675/hour each, five hours from what is presumed to be a paralegal at a rate of $90/hour, and $1,368.92 in costs. (Relator Br. at 7). Defendants do not dispute Relator’s entitlement to fees and costs, but strenuously object to the proffered rates and what they allege are excessive hours, arguing that opposing counsel have not provided sufficient documentation to support the current fee petition, and that total fees and costs should not exceed $40,000. (Steven Adler Certification at ¶27, ECF No. 21-1). Defendants in turn proffer multiple options to reduce the total fees and costs, in part including a flat award of one-third of the settlement total,

only permitting the billing of one partner rather than three, only permitting the billing of one partner and one hypothetical associate billing 60 hours at $300/hour, and overall reductions of hourly rates. (Ex. C to Steven Adler Certification). When requesting attorney’s fees, the initial burden lies with the fee petitioner to “prove that its request for attorney’s fees is reasonable” by “submit[ting] evidence supporting the hours worked and rates claimed.” See Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990) (citing Hensley v. Eckerhard, 461 U.S. 424, 433 (1983)).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Neifert-White Co.
390 U.S. 228 (Supreme Court, 1968)
Hensley v. Eckerhart
461 U.S. 424 (Supreme Court, 1983)
Blum v. Stenson
465 U.S. 886 (Supreme Court, 1984)
Missouri v. Jenkins Ex Rel. Agyei
491 U.S. 274 (Supreme Court, 1989)
Cook County v. United States Ex Rel. Chandler
538 U.S. 119 (Supreme Court, 2003)
Pawlak v. Greenawalt
713 F.2d 972 (Third Circuit, 1983)
Rode v. Dellarciprete
892 F.2d 1177 (Third Circuit, 1990)
Philip J. Lanni v. State Of New Jersey
259 F.3d 146 (Third Circuit, 2001)
S.D. v. Manville Board of Education
989 F. Supp. 649 (D. New Jersey, 1998)
Steven Simring v. Rutgers University
634 F. App'x 853 (Third Circuit, 2015)
Maldonado v. Houstoun
256 F.3d 181 (Third Circuit, 2001)
USA ex rel. Donald Palmer v. C&D Technologies Inc
897 F.3d 128 (Third Circuit, 2018)
Weih Chang v. Childrens Advocacy Center of D
938 F.3d 384 (Third Circuit, 2019)
Bell v. United Princeton Properties, Inc.
884 F.2d 713 (Third Circuit, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
MENOLD v. LOTUS FAMILY MEDICINE, Counsel Stack Legal Research, https://law.counselstack.com/opinion/menold-v-lotus-family-medicine-njd-2022.