Order — Integra Med Analytics v. Creative Solutions in Healthcare (Western District of Texas, Document 86)

Summary

An Order, Document 86, filed 06/22/21 in Case 5:17-cv-01249-XR, United States of America ex rel. Integra Med Analytics, LLC, Relator v. Creative Solutions in Healthcare, Inc., SA-17-CV-01249-XR, in the United States District Court for the Western District of Texas, San Antonio Division. The order recounts that the Relator brought a False Claims Act case to recover more than $94.97 million paid by Medicare and Medicaid to skilled nursing facilities run by Creative Solutions, which operates 48 facilities in Texas, alleging unnecessary Ultra High Rehab billing, and that the United States declined to intervene on December 12, 2018. After a hearing on June 21, 2021, it orders updated initial disclosures and phased discovery, with the first phase covering documents and ESI on Ultra High Rehab billing, and defers patient files until the first phase ends.

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        Case 5:17-cv-01249-XR          Document 86       Filed 06/22/21        Page 1 of 5




                       IN THE UNITED STATES DISTRICT COURT
                        FOR THE WESTERN DISTRICT OF TEXAS
                               SAN ANTONIO DIVISION


UNITED STATES OF AMERICA,                           §
EX.REL.; AND INTEGRA MED                            §
ANALYTICS, LLC, RELATOR;                            §                SA-17-CV-01249-XR
              Plaintiffs                            §
                                                    §
-vs-                                                §
                                                    §
CREATIVE SOLUTIONS IN                               §
HEALTHCARE, INC.,
             Defendant



                                            ORDER

       On December 11, 2017, Plaintiff/Relator Integra Med Analytics LLC (“Relator”) on behalf

of the United States of America initially filed this Federal False Claims Act case. The Amended

Complaint is the live complaint. Dkt. No. 14.

       Relator brings this action to recover more than $94.97 million paid by Medicare and

Medicaid to a network of skilled nursing facilities (“SNFs”) run by Creative Solutions in

Healthcare, Inc. Creative Solutions operates 48 facilities throughout Texas.

       Relator alleges that it “uncovered that Defendant fraudulently billed Medicare and

Medicaid for unnecessary and unreasonable ‘Ultra High Rehab’—the most intensive therapy

provided by SNFs—and kept patients in Ultra High Rehab longer than necessary.” Dkt. No. 14 ¶

2. Relator also alleges that “[b]y increasing the quantity of rehab provided, without otherwise

changing any other care to a patient, an SNF [a skilled nursing facility] can move the patient’s

claim to a higher RUG [resource utilization group] category and therefore get a higher per-diem

payment amount [from Medicare].” Dkt. No. 14 ¶ 23.




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       Relator further alleges that Creative “collaborated with two rehab contractors, Century

Rehab (“Century”) and Reliant Rehabilitation (“Reliant”)” to provide instruction to staff to keep

RUG rates as high as possible. Id. ¶ 26.

       Prior to bringing suit, Relator interviewed several employees at facilities located in

Longview, Hearne, Beaumont, Brownwood II, Devine, Fairfield, Lubbock II, Memphis,

Wellington, Lufkin, and Vidor. The complaint alleges numerous fraudulent acts were committed

in an alleged attempt to secure more payments from Medicare and Medicaid than authorized. Id.

¶¶ 27–47.

       In addition, prior to suing, Relator secured data from the Centers for Medicare and

Medicaid Services. “Relator compared the rate of Ultra High therapy provided at Creative to the

rate of Ultra High therapy provided at other SNFs for patients with comparable principal diagnosis

codes.” Id. ¶ 49. Based upon its statistical analysis, Relator concluded that Creative engaged in a

“systematic effort to excessively bill Medicare for Ultra High Rehab.” Id. ¶ 56.

       This case was abated for a period of time to allow the United States Government to decide

whether it would intervene. On December 12, 2018, the United States declined to intervene.

Thereafter, Defendant requested that the case be abated because it needed to devote its attention

to the COVID-19 pandemic and the court again abated this matter from March 13, 2020 to June 7,

2021. Now both parties agree the case can be resumed, but they disagree about how discovery

should be conducted. At the request of the parties the Court held a hearing on June 21, 2021, to

discuss the discovery stalemate.

       As a general matter, this judge normally will not engage in discovery matters until such

time as a party files some motion to compel or protective order. Discovery is supposed to be

conducted by the parties in good-faith and without court intervention. In this case the Court will



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make an exception because of the volume of discovery anticipated and the chasm that exists

between the parties on how to proceed.

        First, the parties are ordered to make or supplement their initial discovery disclosures

pursuant to Fed. R. Civ. P 26(a)(1).

        Second, discovery will be conducted in phases. Phase 1 in this case will consist of requiring

the Defendants to: (a) produce documents, email or ESI between its corporate officers and

employees that refer to billing Medicare or Medicaid for Ultra High Rehab or moving a patient to

a higher RUG to secure higher per-diem payments; (b) produce documents, email or ESI between

Defendants and Century Rehab that refer to billing Medicare or Medicaid for Ultra High Rehab or

moving a patient to a higher RUG to secure higher per-diem payments; (c) produce documents,

email or ESI between Defendants and Reliant Rehabilitation that refer to billing Medicare or

Medicaid for Ultra High Rehab or moving a patient to a higher RUG to secure higher per-diem

payments; and (d) produce documents, email or ESI between Creative Solutions corporate office

and a select number of the 48 facilities (the number and facility to be selected jointly by the parties)

that refer to billing Medicare or Medicaid for Ultra High Rehab or moving a patient to a higher

RUG to secure higher per-diem payments. The parties should not understand the above direction

to be the sole interrogatories or requests for production that will be allowed. The above is merely

meant to serve as a guide in this discovery dispute. In the event the parties cannot agree to the

number and location of facilities for this first round of discovery, the Court will choose the number

and location.

        The parties indicate that they could also not agree on what keywords to use during

discovery. Defendants argue that the keywords proposed by the Plaintiffs have resulted in many

hits (apparently indicating non-relevant data). Defendants, however, have not disclosed to



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Plaintiffs any particulars to justify their objections. The Court has not been provided the proposed

keywords. The parties are ordered to again meet and confer regarding this issue. Generally, little

good and much damage can be done by defaulting to a judicial officer to inflict keywords upon

the parties.

        Defendants have requested that Plaintiff produce the user agreement it reached with the

U.S. Centers for Medicare & Medicaid Services (CMS) and that Plaintiff also produce its statistical

analysis referenced in the amended complaint. Relator’s counsel is ordered to confer with CMS

to determine if CMS has any objection to the release of this information to the Defendants. If CMS

does not object to the release of this information, Relator is ordered to produce the material to

Defendants, subject to a confidentiality order. If CMS objects to this production, the Defendants

should notify the Court that this discovery dispute remains outstanding.

        The parties are ordered to meet and confer as to a deadline when Phase 1 discovery will be

completed. In the event the parties cannot agree to such a deadline, the Court will unilaterally issue

a deadline.

        Once Phase 1 discovery is completed another status conference will be held to discuss what

additional discovery is required. The parties are urged to reach agreement on this issue without the

necessity of court intervention. In the event court intervention is required, Relator should be

prepared to discuss what information was uncovered during Phase 1, whether documents or ESI

are needed from any additional custodians or facilities, and why such data is needed. Defendants

should be prepared to discuss why additional discovery is not required, and if Defendants raise

any proportionality concerns, what evidence exists to justify their proportionality concerns. Left

unresolved at this time is how patient files are to be produced. Relator argues that a random sample

of patient files could be produced to assess what percentage of these files evidence improper



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billing. Defendants argue that it is the Relator’s burden to establish liability, intent, and actual

improper billing on every patient file. This issue will be taken up after Phase 1 discovery is

completed. Accordingly, production of patient files is not required at this stage.

       It is so ORDERED.

       SIGNED this 22nd day of June, 2021.




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