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Karen E. Tucker v. Kathleen Sebelius

July 25, 2011


The opinion of the court was delivered by: Kugler, United States District Judge:

NOT FOR PUBLICATION (Doc. Nos. 37, 38, 40)


Plaintiff is a podiatrist who claims that the Secretary of the Department of Health and Human Services failed to process or pay thousands of payment requests for services that Plaintiff allegedly rendered to Medicare beneficiaries. Plaintiff moves for reconsideration of the Court's July 12, 2010 Opinion and Order dismissing her Complaint for lack of subject matter-jurisdiction under Federal Rule of Civil Procedure 12(b)(1). For the reasons discussed below, Plaintiff's motion is denied.


Plaintiff practiced podiatry in Texas from 1994 until at least December 1998. During that time, most of her patients were nursing home residents. Plaintiff received payment for her services by submitting claims (either directly or through a billing agent) to Blue Cross Blue

Shield of Texas, which is a Medicare Part B Carrier. In 1996, Plaintiff was investigated for health care fraud. Plaintiff was subsequently indicted and charged with multiple counts of health care fraud and released pending trial.

In connection with the above criminal investigation and prosecution, a search warrant was issued for documents at Plaintiff's residence in May 1996. Pursuant to the warrant, the government seized certain of Plaintiff's records on May 6, 1996. In October 1996, Blue Cross Blue Shield notified Plaintiff that based on credible evidence that Plaintiff's Medicare claims were inaccurate it was suspending payment on Plaintiff's claims, but that it would continue to process her claims and notify her of claim determinations.

During the criminal investigation, the Medicare Fair Hearing Office notified Plaintiff that approximately 7,000 of her claims were not supported by adequate documentation and that Plaintiff should submit support for her claims. In December 1997 and January 1998, the Medicare Fair Hearing Officers notified Plaintiff that it was dismissing those claims because Plaintiff failed to provide the requested documentation, but that Plaintiff could move to vacate the dismissals if she provided the paperwork within six months.*fn3

While Plaintiff was out on bond awaiting her criminal trial, she contacted various physicians regarding issues relevant to the underlying criminal charges. Thus, the government moved for the revocation of Plaintiff's bond. Magistrate Judge Jeff Kaplan of the Northern District of Texas denied the government's motion but imposed certain conditions on Plaintiff's release, including: (1) that Plaintiff refrain from practicing podiatry; (2) that she "avoid all contact with any persons who may be a witness in this case, including any health care providers, nursing homes, Medicare personnel, and patients." (Compl. Ex. 5). Plaintiff understood this order to permit her to retain a third-party to submit legitimate Medicare claims on her behalf for services rendered before Judge Kaplan entered the order. Thus, she continued to submit Medicare claims through a third party.

In April 1998, the government again moved to revoke Plaintiff's bond because she had hired a third-party to submit payments on her behalf. The government argued that the terms of Plaintiff's release prohibited her from submitting Medicare claims. Magistrate Judge Kaplan declined to rule on the motion for procedural reasons. The government then filed a statement that it did not object to Plaintiff continuing to practice medicine while on pretrial release, but requesting that Plaintiff not be allowed to file Medicare claims while on pretrial release. The government also noted that, in any event, Medicare would not pay any of Plaintiff's claims until the conclusion of her criminal proceedings.

In December 1998, Plaintiff pled guilty to one count of health care fraud. On March 5, 1999, Plaintiff was sentenced to six months home confinement, three years probation, and was required to pay $26,402 in restitution to the United States. Following Plaintiff's guilty plea and sentencing, she began to pursue unpaid Medicare claims and to seek permission to submit untimely claims for treatment given as early as January 1996. In July 1999, she contacted Medicare requesting information as to how to appeal certain claims. Ultimately, Plaintiff was informed that her time to challenge approximately 7,000 disputed claims had lapsed. Specifically, the claims were denied, appealed to the carrier hearing level, and then dismissed for abandonment pursuant to 42 C.F.R. § 405.832(b). Because Plaintiff did not timely submit necessary supporting documentation, she was barred for reinstating her appeals. The Department of Health and Human Services also rejected claims by Plaintiff that she did not submit until after her sentencing because they were untimely based on the treatment date.

In May 2007, after other correspondence with Blue Cross and the Fair Hearings Department, Plaintiff filed the Complaint requesting payment of all claims, interest, and costs. The Secretary timely moved to dismiss the Complaint for lack of subject-matter jurisdiction based on Plaintiff's failure to exhaust her administrative remedies. The Court granted the Secretary's motion on July 12, 2010. In holding that Plaintiff failed to exhaust her administrative remedies, the Court expressly rejected Plaintiff's arguments that the Court should waive the exhaustion requirement because: (1) the government seized relevant documentation in May 1996 when it executed the warrant; (2) Plaintiff could not timely submit supplemental documentation in support of her Medicare claims without violating Judge Kaplan's order; and (3) Plaintiff could not submit supplemental documentation in support of her Medicare claims without risking further criminal indictment.

Plaintiff now moves for reconsideration of the Court's Opinion granting the Secretary's motion to dismiss.*fn4 Plaintiff argues that that the "Court's opinion reflects a misunderstanding of the reasons why plaintiff could not file requested documentation for services [she] rendered [to] patients . . . ." (Pl.'s Brief in Supp. of Mot. for Reconsideration, at 1). Plaintiff again argues that she could not submit the required documentation because: (1) the government confiscated relevant documents in May 1996 when it executed the warrant and did not return those documents until August 1999; (2) she could not submit necessary documentation without risking further indictment for ...

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