ex rel. Megen Duffy, Civil Action No. 2:14-cv-02256-SAC-JPO...

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IN THE UNITED STATES DISTRICT COURT DISTRICT OF KANSAS

THE UNITED STATES OF AMERICA ex rel. Megen Duffy,

Plaintiffs,

v.

LAWRENCE MEMORIAL HOSPITAL,

Defendant.

) ) ) ) ) ) ) ) ) )

Civil Action No. 2:14-cv-02256-SAC-JPO

ANSWER AND COUNTERCLAIMS

OF DEFENDANT LAWRENCE MEMORIAL HOSPITAL

COMES NOW Defendant Lawrence Memorial Hospital (“LMH”), a municipal hospital

established pursuant to Kan. Stat. Ann. § 12-1615, and for its Answer to the numbered

allegations1 beginning at page 8 of Relator Megen Duffy’s Second Amended Complaint (the

“Complaint”) (Doc. 18), states as follows pursuant to Fed. R. Civ. P. 8(b):

1. Answering paragraph 1, LMH admits that the Court has jurisdiction over claims

purporting to be brought under the Federal False Claims Act, but denies that jurisdiction is

proper pursuant to 31 U.S.C. § 3730(e)(4)(A)(ii) to the extent the allegations are based on

substantially the same transactions already disclosed in government audits.

2. Answering paragraph 2, LMH admits that it transacts business in this District but

denies that the venue provisions of 31 U.S.C. § 3732(a) are applicable, to the extent this Court

lacks jurisdiction for the reasons set out in paragraph 1 supra.

1 Relator’s 50-page Complaint begins with a sweeping and redundant 7-page “Introductory

Statement,” and it is not until page 27 that Relator arrives at the section of her Complaint setting out “Facts and Allegations.” These unduly lengthy and conclusory allegations (which the U.S. Department of Justice has twice declined to pursue) do not comply with the applicable rules mandating that a Complaint set out a “short and plain” statement of the facts entitling the Plaintiff to relief, and would therefore properly be stricken by this Court. See Fed. R. Civ. 10(b), 8(a)(2). To the extent any response is required to Relator’s “Introductory Statement,” LMH denies any allegations not expressly admitted in this Answer.

Case 2:14-cv-02256-SAC-JPO Document 26 Filed 10/13/15 Page 1 of 41

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3. Answering paragraph 3, LMH denies the allegations of this paragraph and refers

to paragraph 1 supra.

4. Answering paragraph 4, LMH denies that it hired Relator in August 2009, as

Relator’s actual date of hire was September 14, 2009. LMH admits that it terminated Relator for

cause on October 31, 2013 for actions including sending threatening text messages involving a

fellow Emergency Department employee that made statements such as “I’m on her like white on

rice. She made a BIG mistake fucking with me,” and “You know I usually let things go if it can

be worked out but I am going to do everything I can do to get her back,” as well as engaging in

disruptive behavior that negatively impacted the Emergency Department’s operations. LMH

admits that Relator purports to be a “Relator” and appears to have previously provided the same

information set out in the Complaint to the United States, which has twice declined to pursue

Relator’s allegations (See Doc. No. 9, Notice of Election by U.S. to Decline Intervention, Feb. 5,

2015; and Doc. No. 19, Notice of Election by U.S. to Decline Intervention Regarding Second

Amended Complaint, Aug. 10, 2015). LMH is without sufficient information to admit or deny

the remaining allegations of this paragraph and therefore denies those not expressly admitted

above.

5. Answering paragraph 5, LMH admits the allegations of paragraph 5.


7. Answering paragraph 7, LMH states that paragraph 7 is based on statutory

language, matters of public record and legal conclusions for which no response is required. In

the event any response is necessary, LMH admits that the Medicaid program exists as generally

described by Relator, but denies Relator’s characterization of these matters of public record as

relevant to or supporting Relator’s meritless Complaint.


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language, matters of public record and legal conclusions for which no response is required. In

the event any response is necessary, LMH admits that the Federal Deficit Reduction Act exists as

generally described by Relator, but denies Relator’s characterization of these matters of public

record as relevant to or supporting Relator’s meritless Complaint.

9. Answering paragraph 9, LMH admits the allegations of paragraph 9 but denies

Relator’s characterization of these allegations as relevant to or supporting Relator’s meritless

Complaint.

10. Answering paragraph 10, LMH states that paragraph 10 is based on matters of

public record which speak for themselves, as well as legal conclusions for which no response is

required. In the event any response is necessary, LMH admits that the Attestation required of

KMAP providers is substantially similar, if not identical, to that set out in paragraph 10, but

denies Relator’s characterization of these allegations as relevant to or supporting Relator’s

meritless Complaint.



required. In the event any response is necessary, LMH admits the allegations of paragraph 11

but denies Relator’s characterization of these allegations as relevant to or supporting Relator’s




required. In the event any response is necessary, LMH admits that such sanctions exist for the


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matters described but denies Relator’s characterization of these allegations as relevant to or

supporting Relator’s meritless Complaint.

13. Answering paragraph 13, LMH states that paragraph 13 is a hypothetical scenario

based on Relator’s unsupported allegations and incorrect understanding of reporting obligations,

on matters of public record which speak for themselves, and on legal conclusions for which no

response is required. In the event any response is necessary, LMH admits that healthcare

providers are required to certify compliance with the Deficit Reduction Act but denies Relator’s

characterization of these allegations as relevant to or supporting Relator’s meritless Complaint.

LMH expressly denies any suggestion that it has violated the False Claims Act.


terms and other matters of public record, as well as legal conclusions and argument, for which no

response is required. In the event any response is necessary, LMH admits that employees must

be educated as to fraud detection and reporting, and states that Relator in fact received extensive

training regarding fraud detection and reporting, contrary to her false allegations elsewhere in the

Complaint. LMH denies Relator’s characterization of these allegations as relevant to or



public record and legal conclusions for which no response is required. In the event any response

is necessary, LMH admits that a healthcare provider must do more than provide a website in

order to properly educate employees, but denies any implication that LMH’s employee-education

programs, including those courses attended by Relator as set out in further detail below, were

insufficient or limited to a website as this paragraph insinuates.


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and states legal conclusions for which no response is required. In the event any response is

necessary, LMH admits that a healthcare provider must inform employees of means of reporting

fraud outside the chain of the employee’s supervision, and admits that Relator completed

numerous training programs from 2009 forward including such topics as “How to Report any

Suspected Illegal, Unethical or Questionable Activity,” and “How to Report Suspected

Compliance Violations or Concerns,” which provided information about how to report suspected

compliance issues to an anonymous hotline operated by a third party. LMH denies any

implication that LMH’s employee-education programs were insufficient.


public record and statutes which speak for themselves, as well as legal conclusions for which no

response is required. In the event any response is necessary, LMH admits that the Medicare

Program exists as generally described by Relator, but denies Relator’s characterization of these

allegations as relevant to or supporting Relator’s meritless Complaint.


public record and statutes which speak for themselves, as well as legal conclusions for which no

response is required. In the event any response is necessary, LMH admits that IQR requires

reporting of certain measures by hospitals such as LMH; that if measures are not reported, the

IPPS payment is reduced by two percent; that payment is based on reporting, not results; that the

record-validation process requires that the hospital demonstrate a 75 percent accuracy; that since

2011 CMS has selected LMH for OQR validation eight times and for IQR validation three times;

and that in all instances it scored above 75 percent. LMH denies the allegations of paragraph 18


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to the extent not admitted above and to the extent they mischaracterize the relevant obligations or

suggest that IQR requirements support Relator’s meritless Complaint.


public record and regulations which speak for themselves, as well as legal conclusions for which

no response is required. In the event any response is necessary, LMH admits that the cited

materials exist generally as described by Relator, but denies Relator’s characterization of these



public record and regulations which speak for themselves, as well as legal conclusions for which

no response is required. In the event any response is necessary, LMH admits that the cited

materials exist generally as described by Relator, but denies Relator’s characterization of these




required. In the event any response is necessary, LMH denies the allegations of paragraph 21 to

the extent they mischaracterize the IQR program in ways including (a) incorrectly implying that

CMS has adopted all National Quality Forum measures; (b) incorrectly characterizing median

time to ECG2 as an IQR measure; (c) incorrectly suggesting that the cited reporting measures

mandate administration of the technologies discussed, as opposed to mandating reporting as a

tool to measure adoption of “best practices;” and (d) incorrectly implying that the reporting

measures relating to fibrinolytic therapy and PCI measure the time window associated with

provision of these interventions, as opposed to percentage of patients who receive these

interventions as part of their treatment for acute myocardial infarction.

2 The term ECG and EKG are synonymous for electrocardiogram.


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required. In the event any response is necessary, LMH admits that the Specifications Manual

exists generally as described by Relator, but denies Relator’s characterization of the

Specifications Manual or its contents as supporting Relator’s meritless Complaint.



required. In the event any response is necessary, LMH denies the allegations of paragraph 23 as

mischaracterizing and selectively quoting from the Specifications Manual, including overlooking

provisions that “The arrival time may differ from the admission time;” that the “Emergency

Department record” is an “Acceptable source” of Arrival Time; and that “ED [Emergency

Department] ECG reports” may be used to document Arrival Time. Either willfully or out of

ignorance, Relator fundamentally mischaracterizes these terms and associated reporting

obligations throughout her Complaint.


public record, which speak for themselves, as well as legal conclusions for which no response is


the extent they selectively quote from and mischaracterize reporting obligations as described in

the preceding and following paragraph.



required. In the event any response is necessary, LMH denies the allegations of paragraph 25 as

selectively quoting from and mischaracterizing reporting obligations, and to the extent they


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imply that the cited excerpt of the manual supports Relator’s meritless Complaint. For example,

the cited section of the manual instructs reporting entities to not blindly enter times that are

obviously mistakes (such as those resulting from an obvious error in inputted date or time) but

provides the following example demonstrating that time of ECG is an acceptable means of

documenting “arrival.”

○ “ED ECG timed as 1742. ED Greet Time 2125. ED Triage Time 2130. There is no documentation in the Only Acceptable Sources which suggests the 1742 is an obvious error. Enter 1742 for Arrival Time.”

Specifications Manual at 1-77 (emphasis in original).




the extent they mischaracterize and provide Relator’s selective interpretation of reporting

obligations, or imply that the cited portion of the manual supports Relator’s meritless Complaint.

27. Answering paragraph 27, LMH denies the allegations of paragraph 27.

28. Answering paragraph 28, LMH denies the allegations of paragraph 28 as

mischaracterizing reporting obligations and suggesting incorrectly that time of ECG

administration (including ECG administration in an ambulance en route to the hospital) may not

be used as “arrival time” in the Emergency Department for reporting purposes. LMH further

denies the allegations of paragraph 28 to the extent they are based on American College of

Cardiology standards discussing time of diagnosis by ECG, a separate measure from arrival

time.



required. In the event any response is necessary, LMH states that Relator has overstated the


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significance of the cited measures from a reporting standpoint, which are taken into account for

incentive payments only as a sub-process of a sub-process, and that the measures used as part of

IQR change from year to year. Relator accordingly denies the allegations of paragraph 29 and

denies any characterization of these measures as potentially supporting Relator’s meritless

Complaint.



required. In the event any response is necessary, LMH admits that the Inpatient Prospective

Payment System includes requirements to track and report the measures described, but denies

any characterization of these matters as potentially supporting Relator’s meritless Complaint.



and accordingly denies the allegations of paragraph 31. LMH further denies the allegations of

paragraph 31 to the extent they insinuate that a hospital may not report ECG time as time of

“arrival” in the Emergency Department.



and accordingly denies the allegations of paragraph 32. LMH expressly denies that any patients

“waited as unregistered patients” for an ECG, and affirms that LMH’s policy is to administer an

ECG to potential cardiac patients as soon as possible. LMH further denies the allegations of

paragraph 32 to the extent they insinuate that a hospital may not report ECG time as time of

“arrival” in the Emergency Department, and denies that administration of an ECG as soon as

possible “jeopardizes patient safety.”


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based on Relator’s unsupported allegations and incorrect understanding of reporting

requirements, as well as a legal conclusion to which no response is required. In the event any

response is necessary, LMH specifically denies the allegations of paragraph 33 to the extent they

insinuate that LMH has violated any reporting requirements.

34. Answering paragraph 34, LMH states that paragraph 34 sets forth matters of

public record and legal conclusions to which no response is required. In the event any response

is necessary, LMH admits that the Tax Relief and Health Care Act exists as generally described

by Relator, but denies any characterization of these allegations as relevant to or supporting

Relator’s meritless Complaint.

35. Answering paragraph 35, LMH admits that OQR requires reporting of certain

measures by hospitals such as LMH; that if measures are not reported, the OPPS payment is

reduced by two percent; that payment is based on reporting, not results; that the record-validation

process requires that the hospital demonstrate a 75 percent accuracy; that since 2011 CMS has

selected LMH for OQR validation eight times and for IQR validation three times; and that in all

instances it scored above 75 percent. LMH denies the allegations of paragraph 35 to the extent

not admitted above and to the extent they mischaracterize the relevant obligations or suggest that

OQR requirements support Relator’s meritless Complaint.

36. Answering paragraph 36, LMH refers to and incorporates its response to

paragraph 35 supra.


public record or legal conclusions to which no response is required. In the event that any

response is necessary, LMH admits that the cited measures exist as generally described by


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Relator, but denies Relator’s characterization of these measures as “suspended” and “called into

question,” and further denies any characterization of these allegations as relevant to or




response is necessary, LMH admits that such reporting requirements exist as generally described

by Relator but denies any characterization of these allegations as relevant to or supporting

Relator’s meritless Complaint.



and accordingly denies the allegations of paragraph 39. LMH expressly denies any implication

that a hospital may not report time of ECG as time of arrival in the Emergency Department.



which, like all of the allegations of Relator’s complaint, relies wholly on the improper

assumption that time of ECG administration may not be used as “arrival time” for reporting

purposes. LMH accordingly denies the allegations of paragraph 40.





purposes. LMH accordingly denies the allegations of paragraph 41. LMH specifically denies

any allegation that it has violated any reporting requirements or “knowingly falsified” data as


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alleged by Relator, and denies the allegations to the extent they are based on Relator’s improper

understanding of acceptable reporting times for patient arrival. LMH expressly denies any

insinuation that it has “destroyed” evidence, and states that records documenting patient arrival

times are electronically maintained and have been made available to the government in

connection with the numerous validation surveys of LMH’s reported data.



response is necessary, LMH admits that “Aspirin at Arrival” was a standard reportable measure

but denies the characterization of these allegations as relevant to or supporting Relator’s

meritless complaint.



response is necessary, LMH specifically denies the allegations of paragraph 43 to the extent they

are based on Relator’s incorrect understanding of reporting obligations and the acceptable

measures of “arrival time.”



which, like all of the allegations of Relator’s Complaint, relies wholly on the improper



45. Answering paragraph 45, LMH states that paragraph 45 sets forth a legal

conclusion to which no response is required. In the event any response is necessary, LMH denies


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the allegations of paragraph 45 to the extent they insinuate that LMH has violated any reporting

requirements.

46. Answering paragraph 46, LMH states that paragraph 46 sets forth a legal

conclusion to which no response is required. In the event any response is necessary, LMH denies

the allegations of paragraph 46 to the extent they insinuate that LMH has violated any reporting

requirements.


public record or legal conclusions to which no response is required. In the event any response is

necessary, LMH admits that the Patient Protection and Affordable Care Act of 2010 exists as

generally described by Relator, but denies any characterization of these allegations as relevant to

or supporting Relator’s meritless Complaint.



necessary, LMH admits that hospitals submit data as generally described by Relator, but denies

any characterization of these allegations as relevant to or supporting Relator’s meritless

Complaint.



necessary, LMH admits that the HVBP program exists as generally described by Relator, but

denies any characterization of these allegations as relevant to or supporting Relator’s meritless

Complaint.




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Complaint.





Complaint.





Complaint.





Complaint.



necessary, LMH admits that the cited public documents exist as generally described by Relator,

but denies any characterization of these allegations as relevant to or supporting Relator’s



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Complaint.



necessary, LMH admits that the HVBP program and associated reporting measures exist as

generally described by Relator, but denies any characterization of these allegations as relevant to

or supporting Relator’s meritless Complaint.



necessary, LMH admits that the cited reporting measures are associated with the HVBP program


meritless Complaint. LMH expressly denies the allegations to the extent they rely on Relator’s

fundamentally incorrect assumption that time of ECG administration may not be used as “arrival

time” for reporting purposes.



necessary, LMH admits that the HVBP program uses weighted measures, but denies any

characterization of these allegations as relevant to or supporting Relator’s meritless Complaint.


based on matters of public record, argument, or legal conclusions to which no response is


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required. In the event any response is necessary, LMH states that it lacks sufficient information

to admit or deny Relators’ characterization of the practices of “most hospitals” and therefore

denies the allegations of paragraph 59.


based on matters of public record, argument, or legal conclusions to which no response is

required. In the event any response is necessary, LMH admits that a Total Performance Score is

calculated for purposes of the HVBP program, and that the matter for calculating the same is set

forth in published materials, but denies Relator’s characterization of how the scores are measured

and denies any characterization of these allegations as relevant to or supporting Relator’s











purposes. LMH accordingly denies the allegations of paragraph 62. LMH affirmatively states

that during the time period encompassed by Relator’s allegations, it reported a zero-minute

median time from arrival to ECG in only two out of 11 quarters, and that Relator’s insinuations

are therefore based on mischaracterization of LMH’s actual reporting data.


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necessary, LMH admits that comments published in the Federal Register exist generally as

described by Relator, but expressly denies the allegations of paragraph 63 to the extent they

equate “diagnosis by EKG” with time of administering ECG, and to the extent they

mischaracterize the relevant reporting guidelines.



necessary, LMH expressly denies the allegations of paragraph 64 to the extent they equate

“diagnosis by EKG” with time of administering ECG, and to the extent they mischaracterize the

relevant reporting guidelines. LMH admits that the governing standards for reporting the various

measures set out in Relator’s Complaint are published at www.qualitynet.org, and that these

guidelines confirm that Emergency Department “ECG reports” are one of the types of

documentation that may be used to document hospital “Arrival Time,” contrary to Relator’s

allegations.

65. Answering paragraph 65, LMH denies the allegations of paragraph 65 for the

same reasons set out in paragraph 64 supra.







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based on Relator’s unsupported allegations, argument, and incorrect understanding of reporting

obligations, which, like all of the allegations of Relator’s Complaint, relies wholly on the

improper assumption that time of ECG administration may not be used as “arrival time” for

reporting purposes. LMH accordingly denies the allegations of paragraph 67.








necessary, LMH admits that the cited Act exists as generally described by Relator, but denies

any characterization of these allegations as relevant to or supporting Relator’s meritless

Complaint.



necessary, LMH admits that EHR reporting incentives exist as generally described by Relator,







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72. Answering paragraph 72 states that paragraph 72 sets forth matters of public

record or legal conclusions to which no response is required. In the event any response is














75. Answering paragraph 75, states that paragraph 75 sets forth matters of public






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necessary, LMH admits that the Federal False Claims Act exists as generally described by

Relator, but denies any characterization of these allegations as relevant to or supporting Relator’s

meritless Complaint. LMH expressly denies any allegation that it has violated reporting

requirements or the False Claims Act.














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requirements or the False Claims Act















necessary, LMH admits that the definition of “claim” exists as generally described by Relator,




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84. Answering paragraph 84, LMH denies the stated date that Relator began working

for LMH and admits that Relator was a Registered Nurse who worked in the Emergency

Department.

85. Answering paragraph 85, LMH admits that Relator was terminated for valid cause

but denies Relator’s characterization of the termination in paragraph 85 to the extent it suggests

the termination was unexpected or improper. LMH lacks information as to Relator’s definition

of the terms “multiple accolades,” “positive performance reviews” and “no negative reviews”

and accordingly denies them. LMH admits that Relator had some positive attributes as an

employee at some times during her employment, prior to her termination for cause as described

supra.

86. Answering paragraph 86, LMH admits that its Emergency Department is an

outpatient department that treats many patients with complaints of “chest pain.” LMH denies the

remaining allegations of paragraph 86 to the extent they rely on the improper assumption that

time of ECG administration may not be used as “arrival time” for reporting purposes, and

expressly denies any suggestion that it has not reported ER data properly and accurately.

87. Answering paragraph 87, LMH denies that the Affordable Care Act changed any

reporting requirements in a way that is relevant to or supports Relator’s claim, and denies that

LMH changed its Emergency Department documentation as a result of the Affordable Care Act

in any manner that is relevant to or supports Relator’s meritless Complaint.

88. Answering paragraph 88, LMH admits that it has policies in place in its

Emergency Department to quickly identify patients with chest pain and to administer an ECG as

soon as possible to those patients even prior to completing admissions paperwork, including in

an ambulance en route to the hospital if possible, but denies the remaining allegations of


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paragraph 88. LMH expressly denies the allegations of paragraph 88 to the extent they insinuate

that LMH violated any reporting requirements, and to the extent they insinuate that it is in any

way improper to administer critical treatment prior to completing patient registration.


90. Answering paragraph 90, LMH denies the allegations of paragraph 90. LMH

expressly denies the allegations to the extent they rely on Relator’s improper assumption that

time of ECG administration may not be used as “arrival time” for reporting purposes, or

insinuate that it is in any way improper to administer critical treatment prior to completing

patient-registration paperwork.


expressly denies the allegations to the extent they rely on Relator’s improper assumption that

time of ECG administration may not be used as “arrival time” for reporting purposes, or

insinuate that it is in any way improper to administer critical treatment prior to completing

patient registration.


93. Answering paragraph 93, LMH generally admits the allegations of paragraph 93,

but denies the characterization of these allegations as relevant to or supporting Relator’s


94. Answering paragraph 94, LMH admits that it has policies in place to quickly

administer critical treatment to patients experiencing chest pain that may be cardiac in nature, but

denies the remaining allegations of paragraph 94. LMH expressly denies that any patient was

required to “wait as an unregistered patient” for an ECG, and refers to and reincorporates its

response to paragraph 32 supra.


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95. Answering the first sentence of paragraph 95, LMH admits that it delayed

registration by clerical personnel until a patient was clinically screened by qualified medical

personnel to rule out an emergency medical condition, and only after ruling out or treating an

emergency medical condition would the hospital register the patient. LMH denies the remaining

allegations of paragraph 95 to the extent they rely on Relator’s improper assumption that time of

ECG may not be used as “arrival time” for reporting purposes, or insinuate that it is in any way

improper to administer critical treatment prior to completing patient registration.

96. Answering paragraph 96, LMH denies the allegations of paragraph 96 which are

based on Relator’s improper assumption that time of ECG administration may not be used as

“arrival time” for reporting purposes.


98. Answering paragraph 98, LMH denies the allegations of paragraph 98 and states

that the subject of a presentation given by Karen Shumate in January 2013 was the Value-Based

Purchasing program, not “Meaningful Use and Medicare reimbursement.”

99. Answering paragraph 99, LMH admits that it is an institutional priority to quickly

deliver needed treatment including ECGs and to quickly admit patients following a decision to

admit, but denies the remaining allegations of paragraph 99.



expressly denies any suggestion in Relator’s Complaint that administering an ECG for potential

cardiac patients prior to completing registration paperwork delays necessary patient care.


further states that any delay in registering patients pending administration of an ECG would


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result only in a delay in completing paperwork associated with physician “orders” and would not

prevent a cardiac patient from receiving needed treatment.


refers to and incorporates by reference its response to paragraph 64 supra, with regard to

Relator’s mischaracterization of American College of Cardiologists guidelines.

104. Answering paragraph 104, LMH admits that Joan Harvey sent an email

containing the language cited in Relator’s complaint and, as reflected in the email, LMH made

appropriate arrangements to allow for patients to be registered as soon as possible whenever

“necessary due to patient acuity.” LMH denies any characterization of these allegations as

relevant to or supporting Relator’s meritless Complaint.


expressly denies any insinuation that it has ever engaged in “trading patient care for favorable

reimbursement data,” or that any financial incentive exists to falsely report time from arrival to

ECG administration. LMH affirms its commitment to placing necessary patient care ahead of

paperwork.


further states that LMH’s reporting data has been validated by the Centers for Medicare &

Medicaid Services in multiple surveys.


expressly denies falsifying any reporting measures, and asserts that Relator’s innuendo and

speculation fails to comply with Fed. R. Civ. P. 8(a) and 9(b).



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109. Answering paragraph 109, LMH denies the allegations of paragraph 109 and

incorporates by reference its response to paragraph 64 regarding Relator’s misquoting of

American College of Cardiology guidelines by improperly conflating “time of diagnosis by

EKG” with time of ECG administration.

110. Answering paragraph 110, LMH denies the allegations of paragraph 110, which

are based on Relator’s improper assumption that time of ECG administration may not be used as

“arrival time” for reporting purposes.


public record and legal conclusions to which no response is required. In the event any response

is necessary, LMH refers to and reincorporates its response to paragraph 61 supra and denies the

allegations of paragraph 111 for the same reasons as those stated in paragraph 61.



“arrival time” for reporting purposes, whether by LMH or by other hospitals nationwide.



“arrival time” for reporting purposes, and on Relator’s mischaracterization of the nature of

incentive payments.


115. Answering paragraph 115, LMH states that paragraph 115 is based on legal

conclusions or matters of public record to which no response is required. In the event any

response is necessary, LMH admits that the “throughput” measure exists as generally described

by Relator, and states that it has engaged in a process to optimize its procedures for minimizing


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delay between “decision to admit” and admission in keeping with its commitment to providing

the highest quality patient care, but denies any characterization of these allegations as relevant to

or supporting Relator’s meritless Complaint, and states that no economic incentive exists to alter

reported “throughput” times as Relator insinuates.







122. Answering paragraph 122, LMH admits that it terminated Relator for cause on

October 31, 2013, but denies the remaining allegations of paragraph 122.


124. Answering paragraph 124, LMH admits that it set a goal of meeting or exceeding

the “National Top 10%” benchmark for time elapsed between decision to admit and admission in

keeping with its commitment to providing the highest quality patient care, but states that this

goal was 42 minutes, not 30 minutes, and denies Relator’s allegations accordingly. LMH further


Complaint, and states that no economic incentive exists to alter reported “throughput” times as

Relator insinuates.

125. Answering paragraph 125, LMH admits that Relator was terminated for cause on

October 31, 2013 as described above and that the individuals listed in paragraph 125 were

present during the termination.


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specifically denies any implication that there was a “fabricated reason” for Relator’s termination,

which was for actions including sending threatening text messages involving a fellow

Emergency Department employee and engaging in disruptive behavior that negatively impacted

the Emergency Department’s operations, as discussed in paragraph 4 supra.

127. Answering paragraph 127, LMH lacks information as to how Relator perceived

her termination and therefore denies the allegations of paragraph 127. LMH admits that

Relator’s attendance at work in October 2013 was limited but denies any suggestion that

Relator’s absence from work would have prevented the occurrence of the events for which

Relator was terminated. LMH further states that an Emergency Department employee requested

a security escort while leaving the hospital in response to the threat posed in Relator’s text

message, as further described below.


129. Answering paragraph 129, LMH admits that Relator made statements

substantially similar to those described in paragraph 129, and that those present at Relator’s

termination did not show her the text-message statements at issue. LMH denies any suggestion

that it did not conduct a “thorough investigation” as Relator insinuates, and denies Relator’s

characterization of the threatening text-message statements as the “supposed text.” LMH further

asserts that the text-message statements at issue, sent October 8, 2015, included statements

addressed at a fellow employee such as “I’m on her like white on rice. She made a BIG mistake

fucking with me,” and “You know I usually let things go if it can be worked out but I am going

to do everything I can do to get her back.”


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130. Answering paragraph 130, LMH denies the allegations of the first sentence of

paragraph 130. LMH admits that Relator’s termination occurred shortly after she returned to

work after recovering from surgery, as alleged in the second sentence of paragraph 130, but

states that the termination was for the causes described above, which arose prior to Relator’s

absence from work for much of October 2013.


specifically denies Relator’s false assertion that prior to her termination she was not “able to

determine how and where to report” alleged fraud, given that Relator completed the courses

described in paragraph 16 supra including “How to Report any Suspected Illegal, Unethical or

Questionable Activity,” and “How to Report Suspected Compliance Violations or Concerns.”

132. Answering paragraph 132, LMH lacks information sufficient to admit or deny the

allegations of paragraph 132 and therefore denies them.

133. Answering paragraph 133, LMH admits that Relator returned to the LMH

Emergency Department as a patient in February 2014. LMH denies the remaining allegations of

paragraph 133.

134. Answering paragraph 134, LMH admits the allegations of paragraph 134, but


Complaint.

135. Answering paragraph 135, LMH admits the allegations of paragraph 135, but


Complaint.


expressly denies Relator’s fabricated and groundless suggestion that it instructed staff members


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to commit fraud. LMH further restates and reincorporates its response to paragraph 16 supra

regarding the numerous compliance-related training programs LMH provided to Relator prior to

her termination, on topics including “How to Report any Suspected Illegal, Unethical or

Questionable Activity,” and “How to Report Suspected Compliance Violations or Concerns.”




affirms that it has a robust corporate compliance plan and Code of Conduct, and that all

employees are required to undergo regular training on these subjects, contrary to Relator’s false

allegations.

140. Answering paragraph 140, LMH denies that Relator had any lack of “information

or training” as to how to report suspected fraud and therefore denies the allegations of paragraph

140 and the improper assumptions on which it is based. LMH admits that it is not aware of

Relator ever raising the allegations she makes in this lawsuit during the course of her

employment with LMH, either to management or in her online blog, where she regularly aired

complaints about perceived workplace problems.

141. Answering paragraph 141, LMH denies the duplicative allegations of paragraph

141 for the same reasons as stated in paragraph 131 supra.

142. Answering paragraph 142, LMH admits that it has a link on its website providing

information regarding fraud reporting, which complements LMH’s robust corporate compliance

and employee training program as described above. LMH denies the allegations of paragraph

142 to the extent not admitted above, including Relator’s conclusory manifesto alleging


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“complex fraud schemes apparently crafted and directed from the highest levels of Defendant’s

Administration.”


affirms that it has a robust corporate-compliance program as discussed supra including in

paragraphs 136 and 139.

144. Answering paragraph 144, LMH denies the allegations of paragraph 144 as

improperly and falsely characterizing LMH’s Corporate Compliance Program to include only a

web page. LMH refers to and reincorporates its response to paragraph 16 supra regarding the

training provided to Relator and other employees on the subject of reporting suspected fraud.


denies these allegations not only because they rely entirely on Relator’s improper assumption

that time of ECG administration may not be treated as “arrival time” for reporting purposes, but

also because they conflate Medicaid payments with the outcome-reporting requirements

discussed supra.


147. Answering paragraph 147, LMH states that it lacks information about Relator’s

state of mind and accordingly denies the allegations of paragraph 147. LMH further states that

such innuendo and speculation fails to comply with Fed. R. Civ. P. 8(a) or 9(b), or the relevant

pleading standards.

148. Answering paragraph 148, LMH denies the allegations of paragraph 148,

reincorporates its response to paragraph 147 supra, and reaffirms its commitment to providing

the highest level of patient care and legal compliance in all of its departments. LMH expressly


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denies any suggestion that it has violated the False Claims Act in any way with regard to any of

its departments.


conclusions and matters of public record to which no response is required. In the event any

response is necessary, LMH admits that reporting measures exist as generally described by







refers to and reincorporates its response to paragraph 147 supra.


refers to and reincorporates its response to paragraph 147 supra.



157. Answering paragraph 157, LMH reincorporates its responses to paragraphs 1

through 156 above.


conclusions and matters of public record to which no response is required, and is duplicative of

paragraphs 77-79 of Relator’s Complaint. In the event any response is necessary, LMH refers to

and reincorporates its response to paragraph 77 supra.


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conclusions and matters of public record to which no response is required, and is duplicative of

paragraph 82 of Relator’s Complaint. In the event any response is necessary, LMH refers to and

reincorporates its response to paragraphs 77 and 82 supra.






conclusions and matters of public record to which no response is required, and repeats verbatim

the allegations of paragraph 81 of Relator’s Complaint. In the event any response is necessary,

LMH refers to and reincorporates its response to paragraph 77 supra.






conclusions and matters of public record to which no response is required, and repeats verbatim

the allegations of paragraphs 164 and 81 of Relator’s Complaint. In the event any response is

necessary, LMH refers to and reincorporates its response to paragraph 77 supra.





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178. Answering paragraph 178, LMH denies the allegations of paragraph 178, and

further asserts that the United States has twice declined, on February 5, 2015 (Doc. 9), and

August 10, 2015 (Doc. 19), to pursue Relator’s meritless allegations.

179. Answering paragraph 179, LMH denies the allegations of paragraph 179. As

stated above, Relator’s Complaint is based entirely on her improper assumption that time of ECG

administration may not be used as “arrival time” for reporting purposes.

AFFIRMATIVE DEFENSES

1. Relator’s Complaint fails to state a claim upon which relief may be granted.

2. LMH lacked any intent necessary to establish a violation of the False Claims Act.

3. Plaintiff the United States of America, on whose behalf Relator purports to bring

her action, has suffered no cognizable injury or damages.

4. Relator’s Complaint is barred to the extent it is based in whole or in part on

information already publicly disclosed, both in connection with audits by the Centers for

Medicaid Services and to the extent they rely on Relator’s incorrect understanding of the

reporting measures set out in publicly available documents.

5. Relator’s Complaint sets forth matters known by and approved by the

Government at all relevant times.

6. Relator’s Complaint is barred to the extent the reporting incentives at issue are not

“claims” within the meaning of the False Claims Act, and to the extent LMH was not reimbursed


35

for the contents of the data it reported, but rather for its reporting of numbers with 75 percent

accuracy as verified by federal audits.

7. Relator’s Complaint is barred by Relator’s previous binding release of LMH as

discussed more fully below.

8. Relator’s Complaint is barred by a valid and binding accord and satisfaction.

9. Relator’s Complaint is barred by the doctrines of waiver and ratification.

COUNTERCLAIMS OF DEFENDANT LAWRENCE MEMORIAL HOSPITAL

In addition to the Answer and Affirmative Defenses set out above, LMH further brings

the following claims for (1) Breach of Contract and (2) Fraud against purported Relator Megen

Duffy.3 In support of these claims, LMH states as follows:

1. On or about September 26, 2014, following Duffy’s complaint to the Equal

Employment Opportunity Commission and the Kansas Human Rights Commission alleging

violations by LMH of the Kansas Act Against Discrimination, the Family and Medical Leave

Act and the Health Insurance Portability and Accountability Act in connection with events

leading up to Duffy’s for-cause termination on October 31, 2013, Duffy entered into a binding

“Confidential Settlement Agreement and Release of All Claims” with LMH (hereinafter the

“Agreement”).

2. The terms of the Agreement provided that Duffy would be paid $900 for alleged

but disputed lost wages and $8,100 for alleged but disputed nonwage compensatory damages;

and that her attorney, Theodore J. Lickteig, would be paid $6,000.

3 LMH expressly reserves the right to pursue an action for malicious prosecution against both

Duffy and her counsel upon termination of this action in LMH’s favor.


36

3. The Agreement provided that Duffy would “never again seek employment with or

the opportunity to otherwise perform service on behalf of LMH, or with any known affiliated

entity,” and would refrain from publicly disparaging LMH.

4. The Agreement provided that LMH “has at all times vigorously denied that it has

violated any law or breached any contractual, common law or statutory obligation or duty, and

continues to deny that it is liable in any fashion to Duffy,” but that the “purpose of the settlement

is to avoid the expense of litigation and resolve all disputes between the parties.”

5. The Agreement stated, “Duffy agrees that, as a material representation to induce

LMH to provide the consideration under this Agreement, Duffy guarantees that there are not any

other charges, petitions, complaints, grievances, work-related injuries or claims pending by her

against LMH or any person or entity affiliated with LMH” (emphases added).

6. The Agreement included a Release that stated Duffy’s intention to release LMH

from “any and all claims and causes of action of any kind or nature for all claims of money…

that Duffy has or may have against LMH” (emphasis added).

7. Duffy acknowledged in the Agreement that she had discussed the Agreement with

her attorney and fully understood its terms. The Agreement included an “Attorneys’

Acknowledgement and Release of Lien” signed by Mr. Lickteig.

8. Contrary to Duffy’s representations in connection with the September 26, 2014

Agreement, Duffy had at the time of the Agreement in fact leveled the above-described meritless

charges against LMH purporting to be brought under the False Claims Act, which Duffy had

filed under seal on or about May 30, 2014 and had not disclosed to LMH as of the date of the

settlement Agreement. See Doc. No. 1, Complaint.


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9. Had LMH known that Duffy had filed this action under seal (despite her

representations to the contrary), LMH would not have entered into the Agreement to resolve her

purported but meritless claims under the Kansas Act Against Discrimination, the Family Medical

Leave Act and the Health Insurance Portability and Accountability Act, for nuisance value and

as a business decision.

10. Duffy has refused to withdraw her Complaint despite her counsel being notified

by the undersigned counsel for LMH that her action violates the terms of the Agreement.

COUNT 1: BREACH OF CONTRACT

11. LMH reincorporates and realleges the allegations of paragraphs 1-10 supra as if

fully set forth herein.

12. The “Confidential Settlement Agreement and Release of All Claims”

(“Agreement”) between Duffy and LMH is a binding contract between Duffy and LMH, which

imposes obligations and duties on both parties to the Agreement as set forth above.

13. By bringing a purported claim against LMH for alleged violations of the False

Claims Act, which was concealed by Duffy from LMH at the time she entered into the

Agreement, and by making the scurrilous accusations set out in her purported Complaint, Duffy

has breached the terms of the Agreement.

14. LMH has suffered damages as a result of Duffy’s willful breach of the Agreement

and material misrepresentations in the context of negotiating the Agreement. Those damages

include, but are not limited to, being denied the expected benefit of Duffy ceasing to bring

meritless allegations against LMH; enduring public disparagement caused by Duffy’s baseless

allegations; and incurring time and expense in defending the instant Action, and in attempting to

enforce the Agreement.


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WHEREFORE, LMH prays that this Court:

• Enter an Order declaring that Duffy has breached the Agreement;

• Award damages to compensate LMH for its foreseeable damages in connection with

Duffy’s breach, or in the alternative at LMH’s election, rescind the Agreement in

light of the fraud perpetrated by Duffy during contract formation; and

• Order such further relief as the Court deems just and proper.

COUNT II: FRAUD

15. LMH reincorporates and realleges the allegations of paragraphs 1-10 supra as if

fully set forth herein.

16. The material, factual representations made by Duffy in the September 26, 2014

Agreement -- namely the guarantee that there “are not any other charges, petitions, complaints,

grievances, work-related injuries or claims pending by her against LMH” -- were false.

17. Duffy had actual knowledge of the falsity of these allegations, as evidenced by

her filing of the sealed Complaint in this matter (Doc. 1) approximately four months prior to

entering the Agreement. At a minimum, Duffy acted with reckless disregard as to the truth of

her representations in the Agreement.

18. Duffy made the above-described false representations expressly “as a material

representation to induce LMH to provide the consideration under this Agreement.”

19. LMH reasonably relied upon and acted upon Duffy’s false representations by

finalizing the Agreement.

20. LMH has sustained damage by relying upon Duffy’s false representations,

including but not limited to paying Duffy a nuisance-value settlement without obtaining any of

the expected finality associated with such an agreement, as well as incurring time and expense in

defending the instant Action, and in attempting to enforce the Agreement.


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WHEREFORE, LMH prays that this Court:

• Enter an Order holding Duffy liable for fraud;

• Award compensatory damages to LMH;

• Award punitive damages to LMH for Duffy’s outrageous conduct, as a means of (a)

deterring others from making false representations in the context of settlement

agreements; (b) reinforcing public policy against entering into contracts on false

pretenses; and (c) deterring frivolous and burdensome litigation; and

• Order such further relief as the Court deems just and proper.

DEMAND FOR JURY TRIAL

Pursuant to Fed. R. Civ. P. 38(b), Defendant Lawrence Memorial Hospital (“LMH”)

hereby demands a jury trial as to all issues set forth in Relator’s Second Amended Complaint and

in LMH’s Answer and Counterclaims.

Respectfully submitted, LATHROP & GAGE LLP

By: s/ Andrew R. Ramirez


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Andrew R. Ramirez KS #10947 10851 Mastin Blvd. Building 82, Ste. 1000 Overland Park, KS 66210-1669 Telephone: (913) 451-5100 Facsimile: (913) 451-0875 [email protected] Jean Paul Bradshaw KS Fed. Dist. Ct. #70010 David R. Frye KS #18133 J. Eric Weslander KS #24549 2345 Grand Blvd., Ste. 2200 Kansas City, MO 64108-2618 Telephone: (816) 292-2000 Facsimile: (816) 292-2001 [email protected] [email protected] [email protected]

ATTORNEYS FOR DEFENDANT AND COUNTERCLAIM PLAINTIFF LAWRENCE MEMORIAL HOSPITAL


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CERTIFICATE OF SERVICE

I hereby certify that on October 13, 2015, I filed a copy of the foregoing Answer and Counterclaims of Defendant Lawrence Memorial Hospital using the Court’s Electronic Case Filing system, which generated a Notice of Electronic Filing for the following counsel of record who have consented to electronic service: Robert K. Collins Collins Law Office, LLC P.O. Box 4786 Olathe, KS 66063 Phone: 913-538-7472 Fax: 913-839-2446 Email: [email protected]

Jon P. Fleenor Office of United States Attorney 500 State Ave., Suite 360 Kansas City, KS 66101 Phone: 913-551-6730 Fax: 913-551-6541 Email: [email protected]

Theodore J. Lickteig Law Offices of Theodore J. Lickteig 12760 W. 87th St., Suite 112 Lenexa, KS 66215-2878 Phone; 913-894-1090 Fax: 913-894-1529 [email protected]

Robin R. Anderson Office of United States Attorney 500 State Ave., Suite 360 Kansas City, KS 66101 Phone: 913-551-6674 Fax: 913-551-6541 Email: [email protected]

s/ Andrew R. Ramirez Attorney for Defendant Lawrence Memorial Hospital


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