IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT IN AND FOR LEON COUNTY, FLORIDA STATE OF FLORIDA, ) OFFICE OF THE ATTORNEY ) GENERAL, DEPARTMENT OF ) LEGAL AFFAIRS, ) ) ) CASE NO. Plaintiff, ) v. ) ) NORTH FLORIDA LIVING FACILITIES ) INCORPORATED, ) ) ) Defendant. ) COMPLAINT FOR DAMAGES AND OTHER RELIEF UNDER THE FLORIDA FALSE CLAIMS ACT Plaintiff, STATE OF FLORIDA, OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS (the Department ), files this complaint against Defendant, NORTH FLORIDA LIVING FACILITIES INCORPORATED ( NFLF ), and alleges: INTRODUCTION 1. This is a civil action to recover damages in excess of $15,000.00, plus all applicable civil penalties and other relief from Defendant, for knowingly presenting or causing to be presented false claims during the period September 1, 2001 to August 25, 2004, for payment or approval by the State of Florida s Medicaid Program. The claims were false due to Defendant s conduct in failing to provide minimum or otherwise appropriate staffing levels, billing for services not rendered, and employing convicted felons to provide personal services to Medicaid recipients. Defendant also knowingly made,
used, or caused to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the State of Florida s Medicaid Program. 2. The Department seeks recovery against NFLF under the Florida False Claims Act, 68.081-68.092, Fla. Stat., and under the common law theories of unjust enrichment and breach of contract. 3. This Court has jurisdiction over the parties to and the subject matter of this action pursuant to the provisions of Art. V, 20(3), Fla. Const. and 26.012, Fla. Stat. 4. Venue is proper in Leon County pursuant to 68.083(3), Fla. Stat. PARTIES 5. Plaintiff, the Department, is acting on behalf of the Florida Agency for Health Care Administration ( AHCA ), which administers the Florida Medicaid Program pursuant to 409.902, Fla. Stat., and pursuant to the Department s own authority under 409.920 and 68.083(1), Fla. Stat. 6. Defendant, NFLF, is a Florida corporation that, at all material times, provided assistive care services to eligible Medicaid recipients pursuant to a Medicaid Provider Agreement and 409.907, Fla. Stat., under Medicaid provider number 1400495-00. The Florida Medicaid Program makes payments to Medicaid providers for assistive care services rendered to eligible Medicaid recipients pursuant to 409.906(25), Fla. Stat., and Fla. Admin. Code Ann. ch. 59G-4. THE FLORIDA MEDICAID PROGRAM 7. The Medicaid Program, enacted under title XIX of the Social Security Act of 1965, encoded at 42 USC 1396a, et seq., provides funding for health care for indigent individuals. 2
8. The Florida Medicaid Program is a joint federal and state program in which the United States provides approximately 55% of the funding and the State of Florida provides the remaining 45%. 9. The State of Florida Medicaid Program is administered by AHCA, which in turn, contracts with a private fiscal intermediary to adjudicate and pay the claims submitted by Medicaid providers. The fiscal intermediary for the time frame encompassed in this complaint was Consultec, Inc. (which has since been renamed Affiliated Computer Services, Inc., or ACS ). 10. To be paid for providing covered services to an eligible Medicaid recipient, a provider electronically or otherwise transmits a claim to this fiscal intermediary requesting payment. These claims are transmitted to Tallahassee, Leon County, Florida. Payments are made to a provider, such as NFLF, from Tallahassee, Leon County, Florida. 11. To be reimbursed by the Florida Medicaid Program, a provider must enter into a Medicaid Provider Agreement with AHCA for the specific types of service the provider intends to provide to eligible Medicaid recipients. 12. NFLF entered into a Medicaid Provider Agreement with AHCA on October 26, 2000, effective as of September 1, 2001, to provide assistive care services to eligible Medicaid recipients. See Exhibit A. 13. Pursuant to 409.907, Fla. Stat., and the terms of the Medicaid Provider Agreement, AHCA may make payments for medical assistance and related services rendered to eligible Medicaid recipients only to a provider performing services in accordance with federal, state, and local law, and in compliance with federal, state, and local laws pertaining to licensure. 3
14. NFLF is licensed by AHCA as an Assisted Living Facility ( ALF ), pursuant to 400.401-400.454, Fla. Stat. An ALF provides housing, meals, and one or more personal services for a period exceeding 24 hours to elderly persons or adults with disabilities. 400.402(6), Fla. Stat. The regulations applicable to an ALF are found at Fla. Admin. Code Ann. ch. 58A-5. 15. Pursuant to 409.907(2), Fla. Stat., a provider entering into a Medicaid Provider Agreement also agrees to comply with all laws and rules pertaining to the Florida Medicaid Program when furnishing a service to a Medicaid recipient. 16. The rules pertaining to the Florida Medicaid Program include the Medicaid Provider Handbooks issued by AHCA. 17. A Medicaid Provider Handbook exists for each type of provider participating in the Florida Medicaid Program. AHCA furnishes the applicable Handbooks to each provider. The Medicaid Provider Handbooks are available on the internet as well at floridamedicaid.acs-inc.com. 18. The Medicaid Provider Handbook applicable to an ALF, such as NFLF, is the Assistive Care Services and Assisted Living for the Elderly Waiver Coverage and Limitations Handbook (rev. July 2001) ( Handbook ). See Fla. Admin. Code Ann. r. 59G- 4.025. 19. NFLF received a copy of the Handbook, other relevant Medicaid Provider Reimbursement Handbooks, and any updates to the handbooks. 20. NFLF had actual knowledge of the criteria for properly billing the Florida Medicaid Program for assistive care services. 4
21. An ALF, such as NFLF, is paid for all of their assistive care service components by means of a per diem rate for each eligible Medicaid recipient. Handbook, pp. 3-2, A-1. In order to receive Medicaid reimbursement, an ALF, such as NFLF, must provide scheduled and unscheduled care on a 24-hour per day basis when needed by an eligible Medicaid recipient residing at the facility. Handbook, p. 1-2. 22. By presenting claims for payment, NFLF certified to AHCA that the services were provided in accordance with local, state, and federal laws, as well as rules and regulations applicable to the Florida Medicaid Program, including the Handbook. See Exhibit A. FACTS 23. Pursuant to Fla. Admin. Code Ann. r. 58A - 5.019(4)(a), each ALF with 6-15 residents (as was the case for NFLF for the time frame encompassed in this complaint) shall maintain a minimum of 212 staff hours per week. Fla. Admin. Code Ann. r. 58A - 5.019(4)(b) further requires each ALF to have enough qualified staff to provide resident supervision, and to provide or arrange for resident services on a 24-hour per day basis, notwithstanding the specified minimum staffing requirements. 24. NFLF did not maintain the minimum staff hours per week for at least January 3, 2002 to March 25, 2002, and May 1, 2003 to August 25, 2004, in violation of Fla. Admin. Code Ann. r. 58A - 5.019(4)(a). Discovery may reveal the existence of other time periods that do not meet the minimum staffing requirements or time periods involving a violation of Fla. Admin. Code Ann. r. 58A - 5.019(4)(b). 25. Additionally, NFLF has presented claims for days when Medicaid recipients were absent from the facility. Since AHCA provides reimbursement on a per diem rate for 5
each eligible Medicaid recipient, a provider cannot bill AHCA for those days it is not providing services to an eligible Medicaid recipient. Handbook, pp. 2-14, 3-3, and E-1. NFLF improperly billed AHCA on a per diem rate for August 8, 2004 to August 10, 2004, when a Medicaid recipient left the facility on August 8, 2004 and did not return until August 11, 2004. Discovery may reveal the existence of other time periods where NFLF presented false claims for payment for absent Medicaid recipients. 26. Finally, NFLF employed convicted felons who performed personal services for Medicaid recipients, in violation of 400.4174(2) and 435.03, Fla. Stat., throughout the time frame encompassed in this complaint. NFLF further falsely certified to AHCA that it had complied with 400.4174(2), Fla. Stat. NFLF also falsely represented to AHCA that the convicted felons it employed were not performing personal services for Medicaid recipients. COUNT I VIOLATION OF THE FLORIDA FALSE CLAIMS ACT 27. Plaintiff realleges and incorporates paragraphs 1 through 26 as though fully set forth herein. 28. Defendant knowingly presented, or caused to be presented, false Medicaid claims for payment to AHCA. The billing and receipt of remuneration for such claims where, in fact, the appropriate services for such claims had not been provided, create liability for a false claims action pursuant to 68.082, Fla. Stat. 29. As a result of the conduct described herein, AHCA or its fiscal intermediary paid the improper Medicaid claims. AHCA has suffered actual damages in excess of $15,000. 6
30. Pursuant to 68.082(2) and 68.086, Fla. Stat., the State of Florida is entitled to a cause of action for treble the actual damages sustained, not less than $5,000 and not more than $10,000 penalty per claim, all other relief set forth in said statutes, and attorney s fees, expenses, and costs. COUNT II VIOLATION OF THE FLORIDA FALSE CLAIM ACT 31. Plaintiff realleges and incorporates paragraphs 1 through 26 as though fully set forth herein. 32. Defendant knowingly made, used, or caused to be made or used a false record or statement to get false Medicaid claims paid or approved by AHCA. The billing and receipt of remuneration for such claims where, in fact, the appropriate services for such claims had not been provided, create liability for a false claims action pursuant to 68.082, Fla. Stat. 33. As a result of the conduct described herein, AHCA or its fiscal intermediary paid the improper Medicaid claims. AHCA has suffered actual damages in excess of $15,000. 34. Pursuant to 68.082(2) and 68.086, Fla. Stat., the State of Florida is entitled to a cause of action for treble the actual damages sustained, not less than $5,000 and not more than $10,000 penalty per claim, all other relief set forth in said statutes, and attorney s fees, expenses, and costs. COUNT III UNJUST ENRICHMENT 7
35. Plaintiff realleges and incorporates by reference paragraphs 1 through 26 as though fully set forth herein. 36. As a result of the conduct described herein, Defendant was paid Medicaid funds to which it was not entitled. 37. As a consequence of the acts set forth above, Defendant was unjustly enriched at the expense of the State of Florida Medicaid Program in an amount in excess of $15,000.00. 38. In equity and good conscience, Defendant should not be permitted to retain monies wrongfully received from AHCA. COUNT IV BREACH OF CONTRACT 39. Plaintiff realleges and incorporates by reference paragraphs 1 through 26 as though fully set forth herein. 40. As a result of the conduct described herein, Defendant breached its contract with AHCA and was paid Medicaid funds to which it was not entitled. 41. As a consequence of the breaches of contract, AHCA has suffered actual damages in an amount in excess of $15,000.00. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands that judgment be entered in favor of the State of Florida against Defendant as follows: On Count I, for treble the amount of the false claims submitted by Defendant, plus a civil penalty of $10,000 for each and every false claim, payment of prejudgment interest, attorney s fees, expenses, and costs, and for such other and further relief as the Court deems just and equitable. 8
On Count II, for treble the amount of the false claims submitted by Defendant, plus a civil penalty of $10,000 for each and every false claim, payment of prejudgment interest, attorney s fees, expenses, and costs, and for such other and further relief as the Court deems just and equitable. On Count III, for return of all Medicaid funds by which Defendant was unjustly enriched, plus prejudgment interest and costs, and for such other and further relief as the Court deems just and equitable. On Count IV, for the amount of the State of Florida s damages, plus prejudgment interest and costs, and for such other and further relief as the Court deems just and equitable. DEMAND FOR JURY TRIAL The STATE OF FLORIDA respectfully demands trial by jury of all issues so triable. Respectfully submitted, this day of October, 2004. CHARLES J. CRIST, JR. ATTORNEY GENERAL Russell S. Kent Florida Bar No. 20257 Assistant Attorney General Office of the Attorney General PL-01, The Capitol Tallahassee, Florida 32399-1050 (850) 414-3600 9