United States District Court, D. Arizona
United States of America, ex rel. J. Scott, Plaintiff,
Arizona Center for Hematology and Oncology PLC; Christopher Biggs; Devinder Singh; Daniel Reed; and Terry Lee, Defendants.
G. Campbell Senior United States District Judge
relator J. Scott (“Relator”) filed a motion to
dismiss the counterclaim by Defendant Arizona Center for
Hematology and Oncology PLC, d/b/a Arizona Center for Cancer
Care (“AZCCC”). Doc. 114. AZCCC did not respond,
but filed an amended counterclaim. Doc. 122. Relator again
moves to dismiss. Doc. 123. The motion is fully briefed and
the Court finds that oral argument is not needed. Docs. 126,
128. For the following reasons, the Court will deny
Court takes the allegations of AZCCC's counterclaim as
true for purposes of a motion to dismiss. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). AZCCC is a
“multispecialty cancer treatment center” that
cares for patients throughout Phoenix. Doc. 122 at 49 ¶
7. In 2008, AZCCC hired Relator to work as billing manager of
the Radiation Oncology Department to develop and implement
its billing system. Id. at 49
8-9. Relator's responsibilities included:
“analyzing billing and claims for accuracy and
completeness; serving as the . . . expert on coding and
billing processes; ensuring that . . . billing operations
[wer]e conducted in a manner consistent with payor rules and
guidelines; . . . and keeping up-to-date with current coding,
billing, and compliance requirements.” Id.
¶ 10. Relator was, “essentially[, ] the
architect” of the billing system, and AZCCC relied on
him to “ensure all claims were properly coded and
compliant with applicable billing requirements prior to
submission.” Id. at 49-50 ¶¶ 9, 11.
billing policy included routine monitoring of overpayments
and prompt refunds. Id. at 51 ¶ 17. An
overpayment “is any payment that a healthcare provider
receives in excess of amounts due and payable under the
payor's policies.” Id. ¶ 17. As a
senior-level employee, Relator had the sole responsibility of
overseeing insurance refunds and was authorized to
“immediately approve and issue” identified
overpayments. Id. at 51 ¶¶ 15-16, 18.
AZCCC alleges Relator failed to complete required refunds,
and that in several instances Relator reviewed an account
multiple times, noted an overpayment, but failed to issue a
necessary refund on the account. Id. at 52
¶¶ 19-20. Relator's failure to issue refunds
interfered with AZCCC's contractual relationships with
payors and exposed it to a risk of liability. Id. at
53 ¶ 23.
account is not collectible, AZCCC will sometimes “write
off accounts receivable - monies owed to it. Id. at
54 ¶ 26. AZCCC's policy required Relator to
“confer with and obtain consent from the physician
associated with the account receivable” before writing
off an account. Id. ¶ 27. “Relator was
not authorized to write off accounts without approval.”
Id. ¶ 26. But Relator wrote off
“approximately $250, 000 in accounts receivable without
obtaining the requisite consent from an AZCCC
physician.” Id. at 54-56 ¶¶ 28-32.
Relator also used an incorrect code when billing a particular
procedure, resulting in underpayments and lost revenue to
AZCCC in the amount of approximately three million dollars
between 2008 and 2017. Id. at 57-61 ¶¶
October 26, 2016, Relator, individually and on behalf of the
United States, sued AZCCC and several of its doctors - Dr.
Christopher Biggs, Dr. Devinder Singh, Dr. Daniel Reed, and
Dr. Terry Lee - for violations of the False Claims Act, 31
U.S.C. §§ 3729 et seq.
(“FCA”). Doc. 1. The case originally was sealed,
but was unsealed in February 2017. Doc. 9. AZCCC was served
on June 6, 2017 (Docs. 117 ¶ 45; 18), terminated Relator
(Doc. 124 at 6-7), and counterclaimed, alleging breach of
fiduciary duty (Doc. 122 at 62, 64).
successful motion to dismiss under Rule 12(b)(6) must show
either that the complaint lacks a cognizable legal theory or
fails to allege facts sufficient to support its theory.
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1990). A complaint that sets forth a
cognizable legal theory will survive a motion to dismiss as
long as it contains “sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Iqbal, 556 U.S.
at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). A claim has facial plausibility when
“the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id., 556
U.S. at 678 (citing Twombly, 550 U.S. at 556).
“The plausibility standard is not akin to a
‘probability requirement,' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id. (citing Twombly, 550
U.S. at 556).
Relator's Motion to Dismiss.
never responded to Relator's first motion to dismiss
(Doc. 114), and has since filed an amended counterclaim (Doc.
122). The Court will deny Relator's first motion as moot
and consider only Relator's subsequent motion to dismiss.
Doc. 124. Relator argues that AZCCC's claim is barred by
the statute of limitations (id. at 12), fails
sufficiently to plead breach of fiduciary duty (id.
at 8-15), and violates Arizona's anti-SLAPP statute
(id. at 15).
Statute of Limitations.
statute of limitations defense . . . may be raised by a
motion to dismiss . . . [i]f the running of the statute is
apparent on the face of the complaint.” Jablon v.
Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.
1980). But even if the relevant dates alleged in the
complaint are beyond the statutory period, the
“‘complaint cannot be dismissed unless it appears
beyond doubt that the plaintiff can prove no set of facts
that would establish the timeliness of the claim.'”
Hernandez v. City of El Monte, 138 F.3d 393, 402
(9th Cir. 1998) (quoting Supermail Cargo, Inc. v. United
States, 68 F.3d 1204, 1206 (9th Cir. 1995)); see
Cervantes v. City of San Diego, 5 F.3d 1273, 1275 (9th
Cir. 1993). Indeed, “[d]ismissal on statute of
limitations grounds can be granted pursuant to Fed.R.Civ.P.
12(b)(6) ‘only if the assertions of the complaint, read
with the required liberality, would not permit the plaintiff
to prove that the statute was tolled.'”
TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir.
1999) (citing Vaughan v. Grijalva, 927 F.2d 476, 478
(9th Cir. 1991) (quoting Jablon, 614 F.2d at 682));
see Pisciotta v. Teledyne Indus., Inc., 91 ...