USDC IN/ND case 2:18-cv-00210-APR document 63 filed 05/05/21 page 1 of 11
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF INDIANA
`HAMMOND DIVISION
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`OPINION AND ORDER
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`This matter is before the court on the Motion to Dismiss [DE 29] filed by the defendants,
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`THE UNITED STATES OF AMERICA
`and the STATE OF INDIANA ex rel.
`DION SNIDER,
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`Plaintiffs,
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`v.
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`CENTERS FOR PAIN CONTROL, INC.
`and CHETAN PURANIK, M.D.,
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`Defendants.
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`Case No. 2:18-cv-210
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`Centers for Pain Clinic, Inc. and Chetan Puranik, M.D., on May 31, 2019. For the following
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`reasons, the motion is DENIED.
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`Background
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`On May 31, 2019, the plaintiff, Dr. Dion Snider, on behalf of the United States of
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`America and the State of Indiana, filed this action against the defendants, Centers for Pain Clinic,
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`Inc. (CPC) and Chetan Puranik, M.D., alleging that they violated the False Claims Act, 31
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`U.S.C. § 3729 (FCA), and the Indiana False Claims and Whistleblower Protection Act, Ind.
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`Code. § 5-11-5.5-1 (IFCA), when they engaged in illegal inducement under the federal Anti-
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`Kickback Statute, 42 U.S.C. § 1320a-7b (AKS). Additionally, Snider has asserted a claim for
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`retaliation under the FCA and IFCA against the defendants.
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`Dr. Dion Snider is a board-certified Chiropractor in the State of Indiana. In March 2016,
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`Dr. Snider alleges that Dr. Puranik, founder and CEO of CPC, approached him and proposed that
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`he become affiliated with CPC to provide chiropractic services, rehabilitation services, and
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`USDC IN/ND case 2:18-cv-00210-APR document 63 filed 05/05/21 page 2 of 11
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`monitor and advise CPC’s business systems, marketing efforts, and regulatory compliance at all
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`of CPC’s locations. Beginning in April 2016, Dr. Snider worked for CPC, first as an independent
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`contractor and then as an employee. In fulfilling his role as a member of CPC’s marketing group,
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`Dr. Snider alleges that he noticed that CPC had created flyers for prospective patients which
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`advertised “free massages” with the purchase of trigger point therapy. Dr. Snider claims that he
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`informed CPC that the flyer should include a disclaimer that the “free massages” did not apply to
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`Medicaid or Medicare beneficiaries but that his comments were ignored.
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`Dr. Snider claims that 90% of CPC’s patients received Medicaid or Medicare. Dr. Snider
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`alleges that CPC’s billing claims confirmed that CPC was not billing Medicare or Medicaid
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`patients for massage therapy sessions, where the patients were also receiving, and the respective
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`Government payer was being billed for, trigger point injections on the same date of service. As a
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`result, Dr. Snider claims that the defendants illegally induced Medicare and Medicaid patients
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`into purchasing trigger point therapy with the incentive of a free massage, thereby violating the
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`AKS, the FCA, and the IFCA.
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`Additionally, Dr. Snider claims that the defendants retaliated against him by first refusing
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`to pay him and then terminating him on March 23, 2018 because he objected to their practice and
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`pattern of violating the AKS.
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`In lieu of filing an answer to Dr. Snider’s complaint, the defendants filed the instant
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`motion to dismiss on March 31, 2019 pursuant to Federal Rules of Civil Procedure 12(b)(6) and
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`9(b). Dr. Snider responded in opposition on June 21, 2019, and the defendants filed their reply
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`on July 3, 2019. On December 14, 2020, Dr. Snider filed a motion requesting a hearing on this
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`motion. On April 23, 2021, the parties consented to the magistrate judge.
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`USDC IN/ND case 2:18-cv-00210-APR document 63 filed 05/05/21 page 3 of 11
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`Discussion
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`Federal Rule of Civil Procedure 12(b)(6) allows for a complaint to be dismissed if if it
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`fails to Astate a claim upon which relief can be granted.@ Allegations other than those of fraud
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`and mistake are governed by the pleading standard outlined in Rule 8(a), which requires a Ashort
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`and plain statement@ to show that a pleader is entitled to relief. Federal Rule of Civil
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`Procedure 8(a)(2). See Cincinnati Life Insurance Co. v. Beyrer, 722 F.3d 939, 946 (7th Cir.
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`2013). The Supreme Court clarified its interpretation of the Rule 8(a)(2) pleading standard in a
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`decision issued in May 2009. While Rule 8(a)(2) does not require the pleading of detailed
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`allegations, it nevertheless demands something more Athan an un-adorned, the-defendant-
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`unlawfully-harmed-me accusation.@ Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937,
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`1949, 173 L.Ed.2d 868 (2009). In order to survive a Rule 12(b)(6) motion, a complaint Amust
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`contain sufficient factual matter, accepted as true, to >state a claim to relief that is plausible on its
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`face.= @ Iqbal, 556 U.S. at 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127
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`S. Ct. 1955, 167 L.Ed.2d 929 (2007)); Cincinnati Life Insurance, 722 F.3d at 946 (“The
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`primary purpose of [Fed.R.Civ.P. 8 and 10(b) ] is to give defendants fair notice of the claims
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`against them and the grounds supporting the claims”)(quoting Stanard v. Nygren, 658 F.3d 792,
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`797 (7th Cir. 2011)); Peele v. Clifford Burch, 722 F.3d 956, 959 (7th Cir. 2013) (explaining that
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`one sentence of facts combined with boilerplate language did not satisfy the requirements of
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`Rule 8); Joren v. Napolitano, 633 F.3d. 1144, 1146 (7th Cir. 2011); United States ex rel.
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`Berkowitz v. Automation Aids, Inc., 896 F.3d 834, 839 (7th Cir. 2018). This pleading standard
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`applies to all civil matters. Iqbal, 556 U.S. at 684.
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`The decision in Iqbal discussed two principles that underscored the Rule 8(a)(2) pleading
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`standard announced by Twombly. See Twombly, 550 U.S. at 555 (discussing Rule 8(a)(2)=s
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`USDC IN/ND case 2:18-cv-00210-APR document 63 filed 05/05/21 page 4 of 11
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`requirement that factual allegations in a complaint must Araise a right to relief above the
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`speculative level@). First, a court must accept as true only factual allegations pled in a complaint;
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`A[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
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`statements, do not suffice.” Automation Aids, Inc., 896 F.3d 834, 839 (internal citations
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`omitted). Next, only complaints that state Aplausible@ claims for relief will survive a motion to
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`dismiss: if the pleaded facts do not permit the inference of more than a Amere possibility of
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`misconduct,@ then the complaint has not met the pleading standard outlined in Rule 8(a)(2).
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`Iqbal, 556 U.S. at 678–79; see also Brown v. JP Morgan Chase Bank, 2009 WL 1761101, *1
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`(7th Cir. June 23, 2009) (defining Afacially plausible@ claim as a set of facts that allows for a
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`reasonable inference of liability). The Supreme Court has suggested a two-step process for a
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`court to follow when considering a motion to dismiss. First, any Awell-pleaded factual
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`allegations@ should be assumed to be true by the court. Next, these allegations can be reviewed
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`to determine if they Aplausibly@ give rise to a claim that would entitle the complainant to relief.
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`Iqbal, 129 S. Ct. at 1949-50; Bonte v. U.S. Bank, N.A., 624 F.3d 461, 465 (7th Cir. 2010).
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`Reasonable inferences from well-pled facts must be construed in favor of the plaintiff. Murphy
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`v. Walker, 51 F.3d 714, 717 (7th Cir. 1995); Maxie v. Wal-Mart Store, 2009 WL 1766686, *2
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`(N.D. Ind. June 19, 2009)(same); Banks v. Montgomery, 2009 WL 1657465, *1 (N.D. Ind. June
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`11, 2009)(same).
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`Allegations of fraud or mistake “are subject to the heightened pleading requirements of
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`Rule 9(b). Automation Aids, Inc., 896 F.3d at 839. The plaintiff must state the circumstances
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`surrounding the fraud or mistake Awith particularity,@ although these allegations are still bound
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`by the standards of Rule 8(a)(2). Fed. R. Civ. P. 9(b); see Iqbal, 129 S. Ct. at 1954 (explaining
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`that the heightened pleading standard of Rule 9(b) does not grant a Alicense to evade@ the
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`USDC IN/ND case 2:18-cv-00210-APR document 63 filed 05/05/21 page 5 of 11
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`constraints of Rule 8). However, what constitutes sufficient particularity may “depend on the
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`facets of a given case.” Automation Aids, Inc., 896 F.3d at 839.
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`To plead fraud with the required particularity, “the complaint must state the identity of
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`the person making the misrepresentation, the time, the place, and content of the
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`misrepresentation, and the method by which the misrepresentation was communicated to the
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`plaintiff.” U.S. ex rel. Grenadyor v. Ukrainian Village Pharmacy, Inc., 772 F.3d 1102, 1106
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`(7th Cir. 2014); see Automation Aids, 896 F.3d at 840 (quoting Pirelli Armstrong Tire Corp.
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`Retiree Med. Benefits Trust v. Walgreens Co., 631 F.3d 436, 442 (7th Cir. 2011)) (finding that
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`the plaintiff must describe the “who, what, when, where, and how of the fraud – the first
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`paragraph of any newspaper story”). Although the misrepresentation that a plaintiff claims was
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`fraudulent must be stated in his complaint, Rule 9(b) does not demand that the plaintiff=s Atheory
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`of the case@ be explained; the sufficiency of this portion of a claim is tested under Rule 12(b)(6).
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`Midwest Commerce Banking Co. v. Elkhart City Ctr., 4 F.3d 521, 523-24 (7th Cir. 1993);
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`Trustees of Teamsters Union No. 142 Pension Trust v. Cathie’s Cartage, Inc., 2014 WL
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`1117447, at *4 (N.D. Ind. Mar. 20, 2014).
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`In Elkhart, the court found that the plaintiff=s complaint, which alleged that a law firm
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`fraudulently failed to inform the plaintiff that a loan agreement remained unsigned, satisfied Rule
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`9(b) because it Aset forth the date and content of the statements. . . that it claimed to be
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`fraudulent.@ 4 F.3d at 524. Importantly, it is in the complaint, and not in a party=s subsequent
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`brief, where the Arequisite particularity@ must first be pled. Kennedy, 348 F.3d at 593.
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`As to count I of the complaint, the violation of the FCA and IFCA, the defendants argue
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`that Dr. Snider has failed to plead with particularity the requisite elements of his claim. A
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`violation of the AKS occurs when a person “knowingly and willfully offers or pays any
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`renumeration … to any person to induce such person … to purchase … any service … for which
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`payment may be made in whole or in part under a Federal health care program.” 42 U.S.C. §
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`1320a-7b(b)(2)(B). In turn, a violation of the AKS constitutes a false or fraudulent claim for
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`purposes of the FCA, as well as the IFCA because the two acts mirror each other. 42 U.S.C.
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`1320-7b(g); 31 U.S.C. § 3729(a)(1)(A); see U.S. v. Wagner, 2018 WL 4539819, at *4, fn. 2
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`(N.D. Ind. 2018) (noting that “the Court's discussion of the FCA claims applies with equal force
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`to the Indiana FCA claims [b]ecause the Indiana FCA mirrors the Federal FCA in all material
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`respects”) (internal quotations and citations omitted).
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`The parties do not dispute that in order to establish a violation of the AKS, Dr. Snider
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`must have alleged that (1) the defendants knowingly and willfully (2) offered or provided free
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`massage therapy (3) to induce patients or prospective patients to obtain trigger point therapy (4)
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`which was payable in whole or in part by Medicare or Medicaid.
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`First, the defendants claim that the complaint contains no allegation that anyone from
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`CPC ever offered any patient or prospective patient free massage services in exchange for
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`obtaining trigger point injections. Rather, they claim that Dr. Snider seeks to create “the illusion
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`of an offer” by alleging he saw a flyer advertising “free massages.” They argue that Dr. Snider
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`never alleges that any patient saw the flyer and that Dr. Snider has not alleged who he told at
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`CPC that the flyer needed a disclaimer, where the conversation took place, or how he told them.
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`Next, the defendants argue that Dr. Snider has not alleged any facts indicating that the unbilled
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`massage therapy was provided to induce any patient to obtain the trigger point injections.
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`Therefore, the defendants claim that Dr. Snider has not alleged any facts demonstrating the
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`allegedly unbilled massage services had any casual connection to the claim for trigger point
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`injection services. In other words, the defendants argue, Dr. Snider presents no allegations that
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`the patients would not have obtained the trigger point injections but for the alleged unbilled
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`massage therapy. Finally, the defendants argue that Dr. Snider has not alleged that any of the
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`claims for trigger point therapy were actually submitted to the government.
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`In measuring Dr. Snider’s complaint against the heightened pleading standards of Rule
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`9(b), the court is mindful of the Seventh Circuit’s “warning” that “courts and litigants often
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`erroneously take an overly rigid view of the formulation and that the precise details that must be
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`included in a complaint may vary on the facts of a given case.” U.S. ex rel. Presser v. Acadia
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`Mental Health Clinic, LLC, 836 F.3d 770, 776 (7th Cir. 2016) (internal quotations omitted). The
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`court recognizes that Dr. Snider must “use some … means of injecting precision and some
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`measure of substantiation into [his] allegations of fraud,” but as “a requirement of proof beyond
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`a reasonable doubt need not exclude all possibility of innocence … a pleading [need not] exclude
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`all possibility of honesty in order to give the particulars of fraud. It is enough to show in detail,
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`the nature of the charge, so that vague and unsubstantiated accusations of fraud do not lead to
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`costly discovery and public obloquy.” 836 F.3d at 776; U.S. ex rel Lusby v. Rolls-Royce Corp.,
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`570 F.3d 849, 844-55 (7th Cir. 2009).
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`Dr. Snider has sufficiently plead that the defendants knowingly and willfully offered free
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`massage therapy by claiming that the defendants created a flyer advertising free massages in
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`exchange for the purchase of trigger point therapy. Dr. Snider claims that he informed the
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`defendants of their unlawful practice as soon as he became aware, showing that, at a minimum,
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`the defendants had constructive knowledge that what they were doing was illegal. Dr. Snider has
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`supported his allegation that the defendants provided the free massage services to patients on the
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`same date they purchased trigger point therapy by providing instances of six patents who were
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`not charged for a massage that they received on the same date they purchased trigger point
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`therapy. Additionally, he has provided allegations that patients who were charged for massages
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`did not purchase the trigger point therapy on the same date. Finally, he pled that 90% of CPC’s
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`patients were Medicare or Medicaid beneficiaries. This leads to the reasonable inference that
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`patients receiving Medicare or Medicaid viewed the flyer and purchased trigger point therapy
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`with the incentive of receiving a free massage.
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`The defendants’ argument that Dr. Snider fails to plead with sufficient particularity that
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`that claims were submitted to Medicare or Medicaid is incorrect. First, Dr. Snider has alleged
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`that 90% of CPC’s patients receive either Medicaid or Medicare. Second, Dr. Snider has
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`provided factual allegations showing the billing codes used for patients who received free
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`massages on the same date they purchased trigger point therapy and a different billing code for
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`those who received a massage on a date when trigger point therapy was not purchased. The
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`Seventh Circuit’s case law “establishes that a plaintiff does not need to present, or even include
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`allegations about, a specific document or bill that the defendants submitted to the Government.
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`Acadia, 836 F.3d at 777 (citing Lusby, 570 F.3d at 849).
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`For example, in Acadia, the Seventh Circuit found that the particularity requirements of
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`Rule 9(b) were met where the plaintiff stated in her complaint that she was told that almost all of
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`Acadia’s patients were on Title 19 and that they delt with Medicare. Acadia, 836 F.3d at 778.
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`Additionally, the plaintiff’s complaint “made clear that the questionable practices and procedures
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`were applied to all patients at the clinic.” 836 F.3d at 778. The Seventh Circuit held, “for now,
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`an inference [that Acadia billed the government for their services] wa[s] enough.” 836 F.3d at
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`778. Here, Dr. Snider claims that 90% of CPC’s patients were Medicare or Medicaid
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`beneficiaries, therefore creating a reasonable inference that at least some of the patients who
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`purchased trigger point therapy for the free massage incentive received government aid.
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`Accordingly, Dr. Snider has sufficiently plead that the defendants violated the AKS which is a
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`violation of the FCA.
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`As stated above, the FCA mirrors the IFCA, therefore the analysis for a violation of the
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`FCA is identical to that of a violation of the IFCA. Therefore, a separate analysis of whether Dr.
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`Snider sufficiently plead a violation of the IFCA is not necessary. See generally U.S. v. Wagner,
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`2018 WL 4539819, at *4.
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`Next, the defendants argue that Dr. Snider has failed to state a claim against Dr. Puranik,
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`individually, because he raised no specific allegations pertaining to Dr. Puranik’s involvement in
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`the alleged fraudulent scheme. Dr. Snider has alleged, and the defendants do not dispute, that Dr.
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`Puranik is the CEO of CPC. In his complaint, Dr. Snider claimed that Dr. Purnaik approached
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`him and eventually hired him to work for CPC in 2016. Dr. Snider claims that he “notified
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`Defendant Puranik that CPC’s pattern and practice and practice of giving patients free massages
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`as long as they undergo a trigger point injection on the same date of service, amounts to illegal
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`inducement. (DE 1 at ¶¶ 30-31). While CEOs have varying involvement levels depending on the
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`company, the fact that Dr. Snider has claimed that he informed Dr. Puranik of CPC’s illegal
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`practices and, as a result, Dr. Puranik withheld pay and eventually terminated him points to the
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`reasonable conclusion that Dr. Puranik was an actor in alleged scheme.
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`Finally, the defendants claim that Dr. Snider has failed to state a claim for retaliation
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`against both CPC and Dr. Puranik. First, the defendants argue that Dr. Snider’s retaliation claim
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`is invalid because he failed to plead a valid claim for violation of the FCA. This argument is
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`incorrect for all of the reasons stated above. The court has established that Dr. Snider has
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`sufficiently plead a violation of the FCA and IFCA.
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`Under the FCA, “any employee … shall be entitled to all relief necessary to make that
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`employee … whole, if that employee … is discharged … because of lawful acts done by the
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`employee … in furtherance of an action under this section or other efforts to stop 1 or more
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`violations of this subchapter.” 31 U.S.C. § 3730(h)(1). In order to state a claim for § 3730(h)
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`retaliation, the plaintiff must show that (1) his actions were taken in furtherance of an FCA
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`enforcement action and were therefore protected by the statute; (2) his employer knew that he
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`was engaged in such protected activity; and (3) his discharge was motivated, at least in part, by
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`the protected activity. Kuhn v. LaPorte County Mental Health Council, 2008 WL 4099883, at *
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`3 (N.D. Ind. Sep. 4, 2008) (citing Brandon v. Anesthesia & Pain Mgmt. Assoc., Ltd., 277 F.3d
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`936, 944 (7th Cir. 2002). In determining whether an employee’s actions are protected under §
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`3730(h), the Seventh Circuit has found that “an employee need not have actual knowledge of the
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`FCA for his actions to be considered ‘protected activity,’” as long as “the employee in good faith
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`believes, and a reasonable employee in the same or similar circumstances might believe, that the
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`employer is committing fraud against the government.” Fanslow v. Chicago Mfg. Center, Inc.,
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`384 F.3d 469, 479-80 (7th Cir. 2004).
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`The defendants argue that Dr. Snider’s alleged complaint to CPC did not discuss
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`treatment provided to Medicare or Medicaid beneficiaries, did not allege that he discussed any
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`prior or potential claim being submitted for payment to the government, and did not discuss any
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`actual transactions or patient records. Rather, they claim, he only has alleged generalized
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`suspicions. The court disagrees with the defendants’ assessment. Dr. Snider has alleged that
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`90% of CPC’s patients were Medicare or Medicaid recipients, and he has provided examples of
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`patients who were not billed for massages on the same date they purchased trigger point therapy.
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`For that reason, he informed CPC and Dr. Puranik that the flyers needed to contain a disclaimer
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`that the free massage incentive was only available to patients who did not receive government
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`benefits. As a result, he has alleged that Dr. Puranik refused to pay him and eventually
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`terminated him. Based on the complaint, it was only after Dr. Snider informed CPC and Dr.
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`Puranik about their illegal practice that they retaliated against him. Dr. Snider has sufficiently
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`stated a claim against the defendants for retaliation.
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`Based on the foregoing reasons, the Motion [DE 24] is DENIED and the Motion for
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`Hearing [DE 59] is DENIED as moot.
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`ENTERED this 5th day of May, 2021.
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`/s/ Andrew P. Rodovich
`United States Magistrate Judge
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`11
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