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United States ex rel. Norris v. Shaughnessy-Kaplan Rehab. Hosp., Inc.

United States District Court, D. Massachusetts

November 23, 2015

UNITED STATES OF AMERICA, ex rel. KATHLEEN NORRIS
v.
THE SHAUGHNESSY-KAPLAN REHABILITATION HOSPITAL, INC., d/b/a SPAULDING REHABILITATION CENTER FOR CONTINUING MEDICAL CARE--NORTH SHORE

          For United States of America, Plaintiff: Brian Perez-Daple, United States Attorney's Office, District of Massachusetts, Boston, MA; Jeffrey A. Newman, Law offices of Jeffrey A. Newman, One Story Terrace, Marbehead, MA.

         For Kathleen Norris, Ex Rel, Plaintiff: David P. Angueira, LEAD ATTORNEY, Swartz & Swartz, Boston, MA; Jeffrey A. Newman, Law offices of Jeffrey A. Newman, One Story Terrace, Marbehead, MA.

         For The Shaughnessy-Kaplan Rehabiltation Hospital, Inc., doing business as, Spaulding Rehabilitation Hospital For Continuing Medical Care-North Shore, Defendant: Robert Reid Hamel, Jr., LEAD ATTORNEY, Hamel, Marcin, Dunn and Reardon, PC; Matthew Grygorcewicz, Seema A. Lynch, Hamel, Marcin, Dunn, Reardon & Shea, P.C., Boston, MA.

         MEMORANDUM AND ORDER

         RYA W. ZOBEL, UNITED STATES DISTRICT JUDGE.

         On May 26, 2011, the Shaughnessy-Kaplan Rehabilitation Hospital, Inc., doing business as the Spaulding Rehabilitation Center for Continuing Medical Care--North Shore (" Spaulding" or " the hospital" ), fired Kathleen Norris. Norris's responsibilities with Spaulding included managing Medicare compliance. In the course of her work, Norris grew worried that Spaulding overbilled Medicare for certain patients in violation of the program's " midnight rule" and occasionally brought these concerns to management.

         After her termination, Norris sued Spaulding under the federal False Claims Act (" FCA" ) for defrauding the federal government and for retaliating against her. The parties have settled the fraud claims and only Norris's retaliation claim remains. Spaulding has moved for summary judgment on this claim, arguing that Norris falls outside the FCA's protections and that, in any event, it fired her for poor performance. For the reasons that follow, Spaulding's motion is allowed.

         I. Background

         Norris started at Spaulding in October 2007. She worked as the hospital's Minimum Data Set (" MDS" ) Coordinator, a position whose duties required her to ensure Spaulding's compliance with Medicare regulations. Early on, Norris noticed that Spaulding transferred certain patients to Salem Hospital for evening and nighttime treatments, and that these patients often did not return to Spaulding before midnight. Nonetheless, Norris claims, Spaulding billed Medicare for these patients' beds for the day of transfer in violation of the " midnight rule," a Medicare policy that prohibits billing for the bed on the day of transfer if the patient does not return before midnight. Norris discussed this with her supervisor, Laurie Flynn, who reassured Norris that Spaulding had previously sought guidance on the midnight rule and billed appropriately. Until Norris again began to draw attention to the midnight rule nearly four years later, she had one more relevant encounter with Spaulding management. In October of 2010, Norris received a disciplinary warning, though she contested its findings and Spaulding later removed it from her permanent record.

         Norris revived her concerns in late 2010 and early 2011 and mentioned to Flynn and Bruce Glass, the administrator of Norris's division, that Spaulding billed Medicare in violation of the midnight rule. Norris remained alert for potential violations of the midnight rule, discussing it with several senior staff at Spaulding beginning in January 2011.

         On May 1, 2011, the Massachusetts Department of Public Health (" DPH" ), Spaulding's state regulator, announced a surprise multi-day visit. Spaulding employees, including Norris, knew that such visits could carry tremendous consequences for the hospital. If DPH officials find Spaulding to be out of compliance with state or federal regulations, DPH may issue a deficiency finding against Spaulding, and these deficiency findings can affect Medicare reimbursement rates.

         As Spaulding's MDS Coordinator, Norris's chief role concerning the DPH visit was to ensure that she had completed and submitted MDS assessments for Spaulding patients in a timely fashion. Before the DPH visit, Norris's supervisors learned that she had fallen behind on her MDS assessments; on the second day of the DPH visit, those supervisors admonished her to complete the assessments before DPH examined them. Despite these exhortations, Norris failed to complete the MDS assessments on time, causing DPH to issue a Statement of Deficiencies on May 6, 2011. The Statement of Deficiencies cited only the failure to ensure timely completion of the MDS assessments, which led several Spaulding employees to express concern over Norris's performance and to call for her termination.

         On May 12, 2011, Timothy Lynch, Spaulding's Vice President of Hospital Operations, decided to dismiss Norris pending the hiring of a replacement, which he anticipated doing within a week. The email thread discussing Norris's termination, which includes several of Norris's supervisors, mentions only her failure during the DPS visit to explain the decision. Nowhere does any participant mention Norris's advocacy or investigation concerning the midnight rule. On May 25, Norris sent an email concerning potential violations of the midnight rule to her colleagues. The day after, May 26, Spaulding fired Norris. Spaulding offered her a transition package, but Norris declined, opting instead to leave her post immediately.

         Immediately after her termination, Norris sought to " build a rebuttal case" against the hospital, and filed this case on July 11, 2011. On behalf of the government, Norris alleged that Spaulding, by ignoring the Medicare midnight rule, defrauded the federal government and violated the FCA. These claims were settled in 2013. Only a single claim remains: Norris's allegation that her termination ran afoul of the FCA's antiretaliation provision.

         II. ...


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