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Crosbie v. Highmark, Inc.

United States District Court, E.D. Pennsylvania

December 4, 2019



          BAYLSON, J.

         I. Introduction

         Plaintiff Alastair Crosbie is suing Highmark, Inc., Highmark Health Options (“HHO”; with Highmark, Inc., “Highmark Defendants”), and Gateway Health Plan for retaliating against Plaintiff in violation of the False Claims Act. According to his complaint, Defendants terminated Plaintiff because he opposed their working with a health care provider who was ineligible to receive reimbursements from federal funds.

         Because the Highmark Defendants' and Gateway's Rule 12(b)(6) Motions to Dismiss present similar arguments, the Court will address both Motions together. The Motions present four basic issues:

• First, the Highmark Defendants argue they did not have an employer-employee relationship with Plaintiff. (Gateway admits to employing Plaintiff.)
• Second, all Defendants argue Plaintiff is not a protected “whistleblower” under the anti-retaliation provision of the FCA, because Plaintiff's complaint does not show Defendants could be subject to a viable FCA action.
• Third, all Defendants argue Plaintiff did not engage in conduct protected under the FCA anti-retaliation provision.
• Fourth, all Defendants argue that Plaintiff failed to put them on notice of any engagement in protected conduct.
• Fifth and finally, all Defendants argue Plaintiff did not establish a causal connection between his alleged protected conduct and subsequent termination.

         For the reasons given below, Defendants' Motions to Dismiss will be DENIED.

         II. Factual and Procedural History

         A. Factual History

         Taking Plaintiff's allegations in the Amended Complaint as true, [1] and drawing all reasonable inferences in Plaintiff's favor, the facts are as follows. Highmark and its subsidiary corporation, HHO, contracted with Gateway to run a Managed Care Organization (MCO).[2] (Am. Compl. ¶¶ 13-18, ECF No. 17). To comply with federal integrity requirements, [3] Highmark and HHO established a “Payment Integrity” department, and Highmark hired Plaintiff, an “external” fraud expert, to investigate HHO's third-party medical service providers. Id. ¶¶ 22-25. Highmark “administered” Plaintiff's health benefits and corporate training, while Gateway furnished his paychecks and, together with HHO, employed Plaintiff's immediate supervisors. Id. ¶ 6, 66-69.

         Plaintiff's investigations uncovered defects in HHO's provider-credentialing system and identified a provider, Dr. Aslam, who was receiving Medicare/Medicaid reimbursements through Defendants despite not being an “Approved Provider.”[4] Id. ¶¶ 36, 48, 65; see also id. ¶ 51. Only “Approved Providers” are eligible to see patients covered by Medicare/Medicaid and receive reimbursements for the services provided. Id. ¶¶ 31, 33.

         Plaintiff reported this credentialing problem to his immediate supervisors and upper management. Id. ¶¶ 39, 41. After that failed, he “went outside his chain of command to report to upper management that both Gateway and Highmark were violating the False Claims Act by paying vendors who were prohibited from receiving federal funds.” Id. ¶ 41; see also id. ¶¶ 71- 75, 81. Plaintiff and his team also made “a mandatory referral” concerning Dr. Aslam's practices to the Delaware Department of Justice's Medicaid Fraud Control Unit and cooperated with investigators. Id. ¶ 104. Plaintiff made it clear to corporate management that he was cooperating and assisting in that investigation, and that the Defendants' conduct with regards to Dr. Aslam could subject them to FCA liability. Id. ¶ 105. Plaintiff was variously rebuffed, ignored, put off, or told nothing could be done, and the Defendants continued paying Dr. Aslam's practices. Id. ¶¶ 66, 72-75, 80, 106-107.

         In September or October of 2018, Plaintiff “intensified” his “efforts to get other divisions of Highmark and Gateway to cease violating the False Claims [A]ct.” Id. ¶¶ 108, 112, 114. That intensification included “more reports outside his chain of command and exceeding his job responsibilities by pressing the CCO and others to stop the fraud being committed in other divisions of the company.” Id. ¶ 115.

         Less than a week later, he was terminated after a coworker, Elise Kroop, accused him of directing a “noise that sounded like a pig” at her. Id. ¶ 112-114, 122. The allegation was made only hours prior to Plaintiff's termination.[5] Id. ¶ 120. This swift termination was quite different from Defendants' treatment of multiple harassment and stalking complaints he had made about Kroop. Id. ¶¶ 118-121.

         B. Procedural History

         Plaintiff filed the Original Complaint on March 22, 2019. (ECF No. 1). On May 22, 2019, Highmark and HHO, together, filed a Motion to Dismiss. (ECF No. 5). Two days later, Gateway separately filed a Motion to Dismiss Plaintiff's claim. (ECF No. 8). Plaintiff was granted leave to amend his Original Complaint on June 7, 2019. (ECF. No. 13). Plaintiff submitted an Amended Complaint on June 28, 2019. (ECF No. 17).

         Plaintiff's Amended Complaint alleges his investigation of Dr. Aslam's fraud and reporting to upper management of a potential FCA violation constituted protected conduct under the FCA's anti-retaliation provision, and the Defendants knew he was engaged in such protected conduct. Id. ¶¶ 130, 135, 136. Plaintiff further alleges the basis for his firing, the purported harassment, was a mere pretext to conceal Defendants' retaliatory intent. Id. ¶¶ 131-134. On July 12, 2019, Defendants filed Motions to Dismiss Plaintiff's claim pursuant to Rule 12(b)(6). (ECF Nos. 18, 19). Plaintiff responded on August 9 (ECF Nos. 23, 24), and Defendants filed replies on August 23 (ECF Nos. 25, 26).

         III. Legal Standard

         To survive a Rule 12(b)(6) motion, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court in Iqbal explained that, although a court must accept as true all of the factual allegations contained in a complaint, that requirement does not apply to legal conclusions; therefore, pleadings must include factual allegations to support the legal claims asserted. Iqbal, 556 U.S. at 678, 684. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678 (citing Twombly, 550 U.S. at 555).

         IV. ...

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