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United States ex rel. Clemente v. Lead Teach Mentor LLC

United States District Court, E.D. Arkansas, Western Division

March 20, 2019

UNITED STATES OF AMERICA ex rel., JACQUELINE CLEMENTE, COLLIN DA VIES, MIA GORDON, KATHI KINDER, and MAUREEN SKINNER PLAINTIFFS
v.
LEAD TEACH MENTOR LLC; CURTISS ROBINSON; and VICKI ROBINSON DEFENDANTS

          ORDER

          SUSAN WEBBER WRIGHT UNITED STATES DISTRICT JUDGE.

         Former employees of mental health counseling franchises commenced this qui tarn action as relators for the United States, charging that the franchise owners and others submitted fraudulent insurance claims in violation of the False Claims Act ("FCA"). By order entered April 11, 2018, the Court dismissed claims against separate defendants Thriveworks Franchising LLC, Thriveworks, Inc., VIP Solutions LLC, and Anthony Centore. Now before the Court is a motion for summary judgment by the remaining defendants, Lead Teach Mentor LLC ("LTM") and Curtiss and Vicki Robinson. The time for filing a response has expired, and the plaintiffs have not responded. After careful consideration, and for reasons that follow, the motion for summary judgment is granted and claims against LTM and Curtiss and Vicki Robinson are dismissed with prejudice. LTM's counterclaims against Jacqueline Clemente, Collin Davies, and Maureen Skinner remain outstanding. LTM is directed to file a status report, within five days from the entry of this order, stating whether it will proceed with these counterclaims.

         I.

         Defendant LTM is an Arkansas LLC owned by Curtiss and Vicki Robinson, who are husband and wife. LTM owns and operates Thriveworks counseling centers that offer mental health counseling services and receive insurance reimbursements, paid at least in part by the federal government. Plaintiffs are individuals who worked at LTM's Thriveworks counseling centers.

         The FCA imposes a civil penalty for any person who "knowingly presents, or causes to be presented, [to a federal official] a false or fraudulent claim for payment or approval," or "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim[.]" 31 U.S.C. § 3729(a)(1)(A)-(B). Plaintiffs charge that the defendants submitted fraudulent claims for government reimbursement by two means. First, they allege that defendants engaged in the corporate practice of medicine, in violation of the Arkansas Medical Corporation Act ("MCA") and submitted claims for insurance reimbursement without disclosing this noncompliance with Arkansas law.[1] Second, Plaintiffs claim that defendants submitted false claims for government reimbursement by billing for services that were never provided and submitted claims with erroneous billing codes.

         II.

         Defendants move for summary judgment, asserting that (1) they did not engage in the practice of corporate medicine and were not required to comply with MCA licensing requirements and (2) Plaintiffs have no proof that Defendants submitted false claims.

         Corporate Practice of Medicine

         Plaintiffs allege that the defendants violated the MCA because Curtiss and Vicki Robinson owned and operated Thriveworks counseling centers and did not possess a license to practice psychology. Plaintiffs further charge that defendants submitted false claims for reimbursement from government-backed insurance programs by implicitly representing that the Thriveworks franchises were operating in accordance with Arkansas law.

         The MCA permits one or more persons "licensed to practice medicine pursuant to the Arkansas Medical Practices Act" to associate to form a corporation "to own, operate, and maintain an establishment for the study, diagnosis, and treatment of human ailments and injuries, whether physical or mental, and to promote medical, surgical, and scientific research and knowledge." Ark. Code Ann. § 4-29-305(a). The MCA also provides that "medical or surgical treatment, consultation, or advice may be given by employees of the corporation only if they are licensed pursuant to the Arkansas Medical Practices Act[, ]" Ark. Code Ann. § 4-29-305(b), and all officers, directors, and shareholders of a corporation subject to the MCA "shall at all times be persons licensed pursuant to the Arkansas Medical Practices Act." Ark. Code Ann. § 4-29-307.

         The MCA, by its plain language, applies to persons "licensed to practice medicine pursuant to the Arkansas Medical Practices Act." Ark. Code Ann. § 4-29-305(a). Defendants correctly note that Arkansas law defines the "practice of psychology" separately from "the practice of medicine." Compare Ark. Code Ann. § 17-95-202(3) (defining the "practice of medicine") with Ark. Code Ann. § 17-97-102(2)(defining the "practice of psychology"). Furthermore, the Arkansas Medical Practices Act sets forth licensing requirements for physicians, not psychologists.[2] Statutory provisions that are separate from the Arkansas Medical Practices Act govern the licensing and practice of psychologists and psychological examiners, with the intent that "the practice of psychology . . . should not infringe the practice of medicine." Ark. Code Ann. § 17-97-101.

         Defendants present undisputed evidence that Thriveworks offers counseling and social work services and does not engage in the practice of medicine. Given these facts and statutory provisions that clearly distinguish the practice of psychology from the practice of medicine, the Court agrees that Defendants were not required to comply with MCA licensing requirements.

         False Claims

         To succeed with a claim under the FCA, a plaintiff must show (1) the defendant made a claim against the United States, (2) the claim was false or fraudulent, and (3) the defendant knew the claim was false or fraudulent. See United States ex rel. Raynor v. Nat'l Rural Utilities Co-op. Fin., Corp.,690 F.3d 951, 955 (8th Cir. 2012)(quoting United States v. Basin Elec. Power Coop.,248 F.3d 781, 803 (8th Cir.2001)). Here, Plaintiffs claim that Curtiss ...


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