Health Law Daily Wrap Up, FALSE CLAIMS ACT—D.N.J.: FCA claims against cardiology practice survive despite skipping a few beats, (Dec 29, 2015)

By Mary Damitio, J.D.

A relator who filed a qui tam action against her former employer, a physician and his cardiology practice, sufficiently pleaded various violations of the False Claims Act (FCA) (31 U.S.C. § 3729 et seq.) and the Anti-Kickback Statute (AKS) (42 U.S.C. § 1320a-7b) based on the physician’s alleged failure to interpret test results, failure to provide required supervision, and waiving of copayments. The relator’s remaining claims relating to medically unnecessary testing and kickbacks were insufficiently pleaded and dismissed without prejudice (Flanagan v. Bahal, December 22, 2015, Hillman, N.).

Lawsuit. The relator was a medical assistant and receptionist at Advanced Cardiology of South Jersey (Advanced Cardiology) from June 2010 through May 2012, during which she administered electronic and paper patient charts. The relator brought a qui tam action under the FCA alleging that the physician and Advanced Cardiology (collectively, the physician) engaged in various Medicare billing schemes that included changing service dates to increase reimbursements, providing medically necessary services, failing to review test results and ensuring that tests were supervised, and waiving copayments. She also alleged that the physician provided kickbacks to patients in violation of the AKS. The physician moved to dismiss the complaint.

Sufficiently pleaded. The relator adequately pleaded violations of the FCA based on the physician’s alleged failure to read cardiology studies and interpret diagnostic tests. She specifically alleged that the physician failed to review and interpret monitor data of 40 patients and that the physician submitted claims for ultrasounds that were that were factually false because the physician did not interpret them as required by statute. The relator also alleged that she personally performed certain tests without a physician being present in violation of Medicare’s supervision requirements (42 C.F.R. Sec. 410.32).

Copayments. The court found that the relator set forth specific facts to support her allegations that the physician violated the FCA and the AKS by regularly waiving required copayments, which resulted in the price of the services being misstated and Medicare overpaying for patient visits. She also alleged sufficient facts that the physician waived the copayments as an inducement to generate more business that would be reimbursed by Medicare.

Failure state claim. The relator’s claim that the physician changed service dates so as to avoid CMS’ Multiple Procedure Payment Reduction Policy (“MPPR”) was dismissed without prejudice because the policy was not in place when the claims were submitted and she failed to provide an alternative factual or legal basis for her claims that the physician’s conduct caused a loss to the government.

Insufficiently pleaded. The relator did not sufficiently plead false claims based on medically unnecessary testing and scans because she provided no information as to why the tests were unnecessary. The relator also failed to plead that the physician violated the AKS by paying kickbacks to patients in the form of narcotic prescriptions because she only stated in a conclusory fashion that the drugs were not medically necessary and did not provide any facts to support her allegations.

The case is No. 1:12-cv-02216-NLH-JS.

Attorneys: James M. Ficaro (The Weiser Law Firm, PC) for Elizabeth Flanagan. Nicholas C. Harbist (Blank Rome, LLP) for Dr. Vishal Bahal, D.O.

Companies: Advanced Cardiology of South Jersey

Cases: CaseDecisions CMSNews AntikickbackNews BillingNews FCANews FraudNews PartBNews QuiTamNews NewJerseyNews