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Feinwachs v. Minnesota Hospital Association

United States District Court, D. Minnesota

November 15, 2017


          Brian E. Wojtalewicz, WOJTALEWICZ LAW FIRM, LTD, for plaintiff.

          Lee A. Lastovich and Elizabeth S. Gerling, JACKSON LEWIS P.C., for defendants.



         Plaintiff David Feinwachs brought this action against the Minnesota Hospital Association and its subsidiary the MCCA (referred to collectively as “MHA”), alleging that MHA violated anti-retaliation provisions in the federal False Claims Act (“FCA”), the Minnesota False Claims Act (“MFCA”), and the Minnesota Whistleblower Act (“MWA”) by firing him because of his efforts to expose unlawful conduct by various health maintenance organizations (“HMOs”). MHA now moves for summary judgment on all remaining claims. Because genuine disputes of fact remain regarding all the elements of Feinwachs' FCA and MFCA claims, the Court will deny MHA's motion to dismiss those claims. But because the Court will find that Feinwachs has failed to present evidence that he exposed what MHA already knew, the Court will grant MHA's motion to dismiss Feinwachs' MWA claim.



         A. The Parties

         Defendant MHA is a trade association comprised of Minnesota hospitals and hospital systems. (Decl. of Elizabeth Gerling (“Gerling Decl.”) ¶ 4, Ex. 15 at 2-3, May 1, 2017, Docket No. 117.) MHA performs a variety of services, including advocacy for public policies aligned with members' interests, educational programs, general legal counsel, public-relations assistance, and expertise in operational and governance issues. (Id.; Sealed Ex. 4 (“Feinwachs I Massa Dep.”) vol. 1 at 16:5-17:22, May 1, 2017, Docket No. 120.)[1] Defendant MCCA is a subsidiary of MHA. (Sealed Ex. 1 (“Feinwachs Dep.”) at 59:17-62:9, May 1, 2017, Docket No. 118.) MCCA is the organization that employs the people who do the work of MHA. (Gerling Decl. ¶ 4, Ex. 15 at 2-3.)

         Plaintiff David Feinwachs was a 30-year employee for MHA, working as General Counsel and directing legislative advocacy. (Third Am. Compl. ¶ 9, July 9, 2014, Docket No. 43.) He provided legal advice to MHA's members and counseled MHA on internal legal matters. (Gerling Decl. ¶ 4, Ex. 16 at 1; Sealed Ex. 4 (“Feinwachs I Massa Dep.”) vol. 1 at 17:2-20:13, May 1, 2017, Docket No. 120.) He also led MHA's lobbying efforts and became known as MHA's chief lobbyist at the legislature. (Gerling Decl. ¶ 4, Ex. 16 at 1; Sealed Ex. 2 (“Feinwachs I Feinwachs Dep.”) vol. 1 at 122:13-124:12, May 1, 2017, Docket No. 119.)

         B. The MCHP (the “Plans”)

         The Minnesota Council of Health Plans (MCHP) (collectively, the “Plans”) is an association of licensed nonprofit health-care organizations that provide health insurance. (Gerling Decl., Ex. 10 (“Feinwachs I Brunner Dep.”) at 17:19-20:1.) Many MHA members and leaders themselves were associated with health systems and Plans. (Gerling Decl., Ex. 3 (“Massa Dep.”) at 23:2-26:10.)

         Some Plans manage certain Minnesota public-health programs involving Medical Assistance (“Medicaid”). (Third Am. Compl. ¶¶ 18-21.) The Minnesota Department of Human Services (“DHS”) delegates the administration of specific Medicaid programs to these Plans. (Id.) Under a prepaid contract, DHS pays Plans based on individual Medicaid recipients enrolled with a particular Plan, and the Plans then pay the actual providers of medical care. (Id. ¶ 22.) This arrangement is known as the Pre-Paid Medical Assistance Program (“PMAP”). (Id.) MHA's leaders and the Plans purportedly shared several common interests and sought to work collaboratively on many advocacy efforts. (Gerling Decl. ¶ 4, Ex. 18; Feinwachs I Massa Dep. vol. 1 at 54:10-55:24, 203:22-205:21; Feinwachs I Feinwachs Dep. vol. 1 at 156:9-157:24.)

         C. The MPC

         The Minnesota Provider Coalition (“MPC”) is an association representing physicians, chiropractors, dentists, podiatrists, and other medical-provider groups. (Feinwachs I Feinwachs Dep. vol. 1 at 158:16-159:18.) Feinwachs, on behalf of MHA, started working with the MPC in late 2009. (Id. at 160:12-14; Massa Dep. at 62:22-64:21.) According to MHA, MPC participants met as representatives of their client organizations, not as individuals on their own time. (Gerling Decl., Ex. 5 (“Kunz Dep.”) at 114:4-115:13.)

         D. MHA's Transparency Goals

         MHA set a goal in 2010 to “[a]dvocate for greater transparency of state public health program data, ” including PMAP. (Gerling Decl. ¶ 4, Exs. 24-25; Feinwachs Dep. at 136:8-137:18.) “Advocating for greater transparency” remained a goal for MHA throughout 2010, and MHA continued to pursue that objective after Feinwachs' termination. (Gerling Decl. ¶ 4, Ex. 26.)

         MHA asked Feinwachs as its lobbyist and General Counsel to pursue its transparency objective. (Feinwachs Dep. at 136:8-137:18, 156:5-157:3.) Feinwachs does not dispute MHA's goal of greater transparency, and he admits that the scope of his duties for MHA included investigative efforts, including obtaining data, reviewing documents, and researching transparency. (Id. at 130:24-131:19, 174:5-176:14.)

         E. Feinwachs' Conduct Leading Up to Termination

         In 2010, Feinwachs started participating in what he calls “an intensive lobbying and political campaign” aimed at “warn[ing] Minnesota legislators and healthcare professionals about the apparent impropriety of PMAP contractors receiving millions in excessive reserves from [Medicaid] without any true audits and inadequate accountability.” (Third Am. Compl. ¶ 95.) Much if not all of the informational basis for Feinwachs' PMAP-related statements and actions came from pre-2010 public sources. (Id. ¶¶ 23, 28, 30-31, 33-36, 79, 82, 86, 102; Feinwachs Dep. at 154:2-156:1.)

         In February 2010, Feinwachs testified before the Minnesota legislature in support of the “Abeler Amendment, ” which proposed modifying PMAP administration. (Feinwachs I Feinwachs Dep. at 176:1-178:1.) During his legislative testimony, Feinwachs described Minnesota's approach to PMAP as “basically busting off a giant hunk of the state budget, giving it to every vendor who steps up to the counter, and say, go in peace; hope it works out.” (Gerling Decl. ¶ 4, Ex. 28 at 7.) Representative Abeler immediately tried to withdraw the Amendment after Feinwachs' “provocative” testimony. (Id.)

         In May, Feinwachs hired an attorney, Brian Wojtalewicz (his counsel of record in this action), to “investigate fraud involving . . . the government and the health plans.” (Feinwachs Dep. at 91:10-92:13.) Feinwachs claims that his purpose in hiring Wojtalewicz was “to pursue a [qui tam] claim under the [FCA]” and that Wojtalewicz's hiring “overlapped” with the work that Feinwachs was performing for MHA on the transparency issue. (Id. at 178:18-179:9.) Among other things, Wojtalewicz interviewed a former DHS employee about potential improprieties with the Plans and Medicaid. (Id. at 91:10-92:13.) Feinwachs did not tell anyone at MHA that he had hired Wojtalewicz nor did he seek permission from his boss, Lawrence Massa (the President and CEO of MHA) or anyone else at MHA to hire Wojtalewicz. (Id. at 91:10-92:13, 178:4-17.) Feinwachs did not pay Wojtalewicz with MHA money - he hired Wojtalewicz on a contingent-fee basis. (Feinwachs I Feinwachs Dep. vol. 3 at 18:9-21.) Massa would not learn that Feinwachs had hired Wojtalewicz until late July. (Id. vol. 3 at 17:11-18:2)

         In June, Massa told Feinwachs that MHA would not be pursuing the transparency issue via legislation. Massa instructed Feinwachs that he was not to testify before the legislature, but that Feinwachs should continue working on the transparency issue. (Id. vol. 1 at 195:1-196:13; Feinwachs I Massa Dep. at 49:19-54:6.) Massa gave Feinwachs permission to work with MPC on transparency, but Massa told Feinwachs that he needed to “back off in terms of his tactics.” (Feinwachs I Massa Dep. vol. 1 at 199:1-203:18.)

         Around July 20, after the state legislative session had ended in May, Feinwachs made - but had not yet distributed or published - a video highlighting the issue of PMAP money and the Plans. (Third Am. Compl. ¶ 102; Feinwachs I Feinwachs Dep. vol. 1 280:21-281:12.) The video was a “year-end legislative summary, ” portraying that there is not a “clear regulatory mechanism for the operation of the PMAP program by the vendors, ” that there is “confusion” about “who is in charge of what and where the money goes, ” and that some of the numbers “don't add up.” (Feinwachs I Feinwachs Dep. vol. 1 at 280:2-283:24; see also Gerling Decl. ¶ 4, Ex. 31.)

         Coincidentally, during the same few days in July, Brian Osberg, the director of the state Medicaid program, learned that Feinwachs had hired Wojtalewicz to interview the former DHS employee. (Feinwachs I Massa Dep. vol. 1. at 59:2-60:12.) Osberg called Massa and told Massa about what he had just learned. (Id.)

         On July 22, [2] Massa met with Feinwachs along with Matt Anderson, a vice president at MHA. Massa asked Feinwachs if he had hired Wojtalewicz to interview the former DHS employee, and Feinwachs responded that he had. (Feinwachs Dep. at 176:15-178:10.) According to Massa, Feinwachs was instructed to “stop the antics, ” that MHA was “done supporting [MPC], ” and that even Feinwachs acting on his own could not “create the kind of separation [between MHA and the MPC] that apparently [Feinwachs] thought it would.” (Massa Dep. at 90:7-92:2.) According to Feinwachs, Massa instructed Feinwachs to no longer participate with MPC “in an official capacity.” (Feinwachs Dep. at 183:21-184:1, 195:2-12.)

         Feinwachs did not explicitly mention the FCA or his plans for a qui tam action during the July 22 meeting. (Id. at 179:10-180:10.) But Feinwachs testified that Massa asked him during the July 22 meeting if he had hired Wojtalewicz for “some kind of whistleblower thing, ” and, if so, who the plaintiffs were. (Id. at 139:2-140:8.) Feinwachs testified that he said “yes, that's exactly what it is, ” and that he and David Kunz, another MPC member, were the ...

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