U.S. ex rel. Gelbman v. City of New York

United States of America ex rel. Andrew Gelbman, Plaintiffv.The City of New York and New York City Health and Hospitals Corporation, Defendants

OPINION & ORDER  Relator Andrew Gelbman (“Relator” or “Gelbman”) brings this action under the qui tam provisions of the civil False Claims Act (“FCA”), which permit a private person to file an action on behalf of the Government. Before me are the motions of Defendants the City of New York (“City”) and New York City Health and Hospitals Corporation (“HHC”) to dismiss the second amended complaint pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. Because Relator fails to plausibly allege any type of false claim under the FCA and the second amended complaint otherwise fails to meet the pleading standard set forth in Rule 9(b), Defendants’ motions are GRANTED.I. BackgroundA. Regulatory BackgroundThe Medicaid Act, enacted in 1965 as Title XIX of the Social Security Act, 42 U.S.C. §§1396, et seq., is a cooperative federal-state program designed to provide medical assistance to persons with insufficient resources to meet the costs of their necessary medical care. Although states are not required to participate in Medicaid, states that choose to do so must formulate a “state plan” — a plan of administration that complies with both the Medicaid Act and regulations promulgated by the United States Department of Health and Human Services (“HHS”). See 42 U.S.C. §1396a. Federal Medicaid funds are made available to states that have such a state plan that has been approved by HHS. See 42 U.S.C. §§1396a(b), 1396b.New York State participates in Medicaid pursuant to New York Social Services Law. Federal law requires states to designate a “single state agency” to administer the state plan. See 42 U.S.C. §§1396a(a)(4) & (5); 42 C.F.R. §431.10(b). In New York the designated agency is the New York State Department of Health (“NYSDOH”). See N.Y. Pub. Health Law §201(1)(v); N.Y. Soc. Serv. Law §§363-a(1)-(3). Among other responsibilities, NYSDOH “promulgates all necessary regulations and guidelines for [Medicaid] Program administration.”¹Although NYSDOH is primarily responsible for administering Medicaid in New York, some aspects of program administration are spread across other state agencies and local departments of social services. N.Y. Soc. Serv. Law §§365-n(2), (4). The five counties representing the City of New York share one local department of social services (“LDSS”). N.Y. Soc. Serv. Law §61(1). LDSSs are responsible for denying or approving recipients’ Medicaid eligibility applications and for determining Medicaid recipients’ access to certain services. See N.Y. Soc. Serv. Law §364(1)(a); N.Y. Comp. Codes R. & Regs. tit. 18, §404.1.Medical providers (e.g., physicians, hospitals, or nursing homes) that wish to participate as providers in the Medicaid program must submit an enrollment application to NYSDOH and, if approved by NYSDOH, sign a provider agreement with the New York State. N.Y. Comp. Codes R. & Regs. tit. 18, §§504.2(b); 504.4(a), (e). Participating providers who furnish services to Medicaid recipients submit their claims for payment to NYSDOH. N.Y. Soc. Serv. Law §367-b(2); N.Y. Comp. Codes R. & Regs. tit. 18, §§540.6(b), 635.1(a). Most providers submit their claims electronically through eMedNY, a software system.NYSDOH uses eMedNY to process Medicaid claims and payments for services. See N.Y. Soc. Serv. Law §367-b(1)(c). Specifically, eMedNY “[r]eceives, reviews and pays claims submitted by the providers of health care for services rendered to eligible patients (enrollees).”² Claims in eMedNY may be paid, pended, or denied. See N.Y. Soc. Serv. Law §367-b(8)(b)(1) (requiring prior to payment a “review for proper coding and such other review as may be deemed necessary”); N.Y. Comp. Codes R. & Regs. tit. 18, §504.8(c) (delineating prepayment review that “may deny claims, adjust claims to eliminate noncompensable items…correct…errors, pend claims for further audit or review, or approve the claim for payment”).LDSSs play a role in approving coverage of certain services that under State law are subject to a “prior approval” or “prior authorization” requirement.³ When required, prior approval and prior authorization must be completed before a provider may submit a claim for services — a claim may be denied if prior approval and/or prior authorization were not completed or were denied for the service.⁴B. The Second Amended Complaint⁵Since October 5, 2006, Gelbman has worked as an “Information Specialist II” at NYSDOH. (Doc. 52 (“SAC”)4.) Gelbman’s employment duties and responsibilities include, among other things, performing business and systems analysis for eMedNY. (Id.