Johnson v. Golden Gate National Senior Care, L.L.C.

Background

This qui tam case was brought under the False Claims Act, a federal law that allows certain private parties to pursue claims on behalf of the United States. Ricia Johnson and Health Dimensions Rehabilitation, Inc. alleged that the defendants submitted false Medicare claims for physical and occupational therapy services provided to nursing-home patients at the Golden LivingCenter–Hillcrest of Wayzata facility.

The court divided the case into phases based on different time periods. The order addressed Phase II, which was limited to the Hillcrest facility and periods from May 2002 through November 2005 and from April 2007 through March 2012. Defendants separately moved for summary judgment on the Phase II claims, but the court stated that it was addressing that motion in a separate order.

Motion to Strike Essling’s Report

Defendants asked the court to strike the expert report of Mark Essling. They argued that the report relied on information not timely disclosed during fact discovery and that the relators had not properly provided their damages calculations under Rule 26 of the Federal Rules of Civil Procedure. Defendants characterized the report as causing unfair surprise and asserted that they had not had a sufficient opportunity to conduct fact discovery concerning the claims identified in the report.

The relators responded that the report was disclosed within the schedule agreed to by the parties and adopted by the court. They also argued that defendants had long known the issues involved, knew the identities of people with relevant knowledge, and had not been prejudiced.

The court denied the motion to strike. It found that Essling’s opinions were timely disclosed under the agreed discovery schedule and addressed issues that had been part of the case from the beginning. The court found no basis to exclude the report for unfair surprise, prejudice, or failure to comply with the discovery rules. The court declined to award the relators attorney fees or costs at that time.

Motion to Exclude Expert Testimony

Defendants also sought to exclude testimony from Essling and Elisa Bovee. Under Rule 702 and the court’s role as a gatekeeper, expert testimony may be admitted when the expert’s specialized knowledge will help the factfinder, the testimony rests on sufficient facts or data, reliable methods, and a reliable application of those methods to the case.

Essling

Essling was the chief executive officer and general counsel of Health Dimensions Rehabilitation. Based on his experience with Medicare billing and nursing-home records, and his review of relevant patient files, he identified 805 claims that he said involved representations to Medicare concerning therapy provided by assistants working exclusively or primarily in the facility’s Wellness Center. His report also included damages calculations.

Defendants argued that Essling’s opinions were speculative, unsupported by the records he reviewed, and based on an unreliable methodology. They challenged his selection of patient files, his treatment of Medicare payments, and his calculation of damages.

The court rejected those arguments. It found sufficient evidence to support Essling’s opinions and concluded that his damages estimates were reasonably based on available relevant evidence. The court also determined that disputes about the factual basis or methodology of his opinions generally concerned the credibility and weight of the testimony, rather than whether it was admissible. Defendants could address those concerns through cross-examination.

Bovee

Bovee had more than 20 years of experience in the long-term-care industry, including work as an occupational therapist, rehabilitation-therapy director, Medicare appeals coordinator, and Medicare compliance consultant. Her opinions concerned Medicare requirements for skilled therapy in nursing facilities and how the defendants allegedly violated those requirements.

Defendants argued that Bovee’s testimony was irrelevant to Phase II, speculative, and based on an unsupported assumption that activities in the Wellness Center during Phase II were consistent with activities during Phase I. The relators argued that her testimony addressed Medicare requirements relevant to Phase II and was supported by the record.

The court found Bovee’s opinions relevant and reliable. It found an adequate factual basis for her assumption about the Wellness Center’s activities and rejected the argument that patient improvement made her testimony irrelevant. The court stated that her testimony remained subject to the limitations imposed in the earlier phase of the case: she could not take over the factfinder’s role or offer opinions applied to particular facts in the prohibited manner.

Disposition

The court denied defendants’ Motion to Strike Mark Essling’s Expert Report, Doc. No. 466. It declined to award the relators attorney fees or costs. The court also denied defendants’ Motion to Exclude Expert Testimony of Mark Essling and Elisa Bovee, Doc. No. 483. Judge Donovan W. Frank signed the order on April 22, 2020.