United States District Court, D. Colorado
UNITED STATES OF AMERICA ex rel. TERRY LEE FOWLER and LYSSA TOWL, Plaintiff,
EVERCARE HOSPICE, INC., n/k/a Optum Palliative and Hospice Care, a Delaware corporation, OVATIONS, INC., a Delaware corporation, OPTUMHEALTH HOLDINGS, LLC, a Delaware limited liability corporation, and UNITED HEALTHCARE SERVICES, INC., a Minnesota corporation, Defendants.
A. BRIMMER United States District Judge
matter is before the Court on Relators Fowler's and
Towl's Motion to Determine Relators' Share of
Settlement Proceeds [Docket No. 175]. The United States
opposes relators' motion in part. Docket No. 185. The
Court has jurisdiction pursuant to 28 U.S.C. § 1331.
action arises under the False Claims Act (“FCA”),
31 U.S.C. § 3729 et seq. Relators Fowler and
Towl (the “relators”) initiated a qui tam action
on March 15, 2011 alleging that defendants knowingly
submitted, or caused to be submitted, claims for Medicare
hospice expenses for patients who were ineligible for such
benefits. See Docket No. 1. The complaint was filed
about one month before Mr. Fowler resigned and two months
after Ms. Towl was terminated from Evercare Hospice, Inc.
(“Evercare”). Docket No. 176 at 12, ¶ 23;
Docket No. 176-4 at 15, ¶ 31.
5, 2013, Sharlene Rice, another former Evercare employee,
filed her own qui tam action in the United States District
Court for the Northern District of Illinois. See
Docket No. 154-2. That case was transferred to the United
States District Court for the District of Colorado, see
United States ex rel. Rice v. Evercare Hospice, Inc.,
Civil Action No. 14-cv-01647-PAB, and consolidated with this
action on June 24, 2014. Docket No. 28. The United States
intervened in the consolidated action on August 25, 2014,
Docket No. 34, and filed a consolidated complaint on November
10, 2014. Docket No. 46. On September 21, 2015, the Court
denied Evercare's motion to dismiss the government's
complaint and granted in part and denied in part
Evercare's motion to dismiss the relators' second
amended complaint. Docket No. 120.
13, 2016, Evercare agreed to pay $18 million to resolve the
claims in the consolidated action. Docket No. 183. On
September 12, 2016, Mr. Fowler and Ms. Towl filed a motion
pursuant to 31 U.S.C. § 3730(d)(1) requesting that the
Court order the United States to pay 23 percent of the $18
million settlement to the relators. Docket No.
relators filed their complaint under seal on March 15, 2011.
Docket No. 1. Before filing the complaint, Mr. Fowler and Ms.
Towl provided disclosures to the government. Docket No. 176-4
at 6, ¶ 13; Docket No. 176 at 6, ¶ 12. Mr.
Fowler's pre-filing disclosure described an independent
review of 129 denied Medicare claims, a copy of documentation
regarding hospice-related denials that were not appealed by
Evercare, examples of patients for whom bills were submitted
despite Medicare denials, and a description of Evercare's
policies that were designed to maintain ineligible patients
on their rolls. Docket No. 176-4 at 6-8, ¶14. Ms.
Towl's pre-filing disclosure included descriptions of
internal policies related to the underlying fraud and a
roster of 146 Denver patients relating their hospice
certifications to their diagnosis and whether they had seen a
physician. Docket No. 176 at 6-8, ¶ 13.
Fowler and Ms. Towl provided supplemental documentation to
the government related to Evercare's fraud after the
government intervened. See, e.g., Docket No. 176-4
at 8, ¶ 15 (discussing the delivery of 11 documents to
the government). They also provided the government with draft
search terms, id. at 11, ¶ 19, witness lists,
id. at 11, ¶ 20, and a collection of Evercare
emails. Id. at 11, ¶ 21.
complaint in this action was filed one month before Mr.
Fowler resigned from his position and two months after Ms.
Towl was terminated by Evercare. Mr. Fowler states that he
was induced into leaving Evercare by his supervisors, who
provided contradictory instructions and repeatedly
reprimanded him before placing him on a corrective action
plan. Id. at 14-15, ¶¶ 29-30. Mr. Fowler
resigned from Evercare in April 2011. Id. at 15,
¶ 31. Subsequently, Mr. Fowler obtained employment at
¶ 20 percent reduced salary, which he maintained for a
year and a half before being laid off. Id. at 15,
¶ 32. After an additional period of unemployment, Mr.
Fowler was employed at a further salary reduction through
August 2015, when he retired. Id. at 15, ¶ 33.
Evercare terminated Ms. Towl in January 2011. Docket No. 176
at 12, ¶ 23. She started her own business, which she now
considers to be a success. Id. at 12-13, ¶ 25.
The complaint in this action was filed under seal and was not
provided to defendants until June 2012. See Docket
No. 11 and subsequent order.
False Claims Act allows a private citizen, “the
relator, ” to file a qui tam lawsuit on behalf of the
United States to recover the government's damages. 31
U.S.C. § 3730. If the government elects to intervene in
a qui tam suit, as the government did here, a relator is
entitled to 15 percent to 25 percent of the “proceeds
of the action or settlement of the
claim.” 31 U.S.C. § 3730(d)(1). The amount of
compensation is determined by the “extent to which the
person substantially contributed to the prosecution of the
action.” Id. “[D]etermination of the
relator's share is left largely to the Court's
informed discretion.” United States ex rel.
Alderson v. Quorum Health Grp., Inc., 171 F.Supp.2d
1323, 1331 (M.D. Fla. 2001). While the statute is silent
about the factors that determine whether a contribution is
substantial, courts may consider legislative history,
internal Department of Justice (“DOJ”) guidelines
in FCA matters, and case law in determining the correct
percentage to award to relators. Alderson, 171
F.Supp.2d at 1331.
legislative history of the FCA provides three factors that
courts often consider in determining the amount relators
should recover: the significance of the information provided
by the relator, the relator's contribution to the final
outcome, and whether the government was previously aware of
the fraud. Alderson, 171 F.Supp.2d at 1332
(citing S. Rep. No. 99-345, at 28 (1986),
reprinted in 1986 U.S.C.C.A.N. 5266, 5293).
courts have also considered the DOJ guidelines for
determining the relators' share. The DOJ guidelines
identify the following factors to consider in ...