United States v. University of Pittsburgh Medical Center, No. 18-1693 (3d Cir. 2019)Annotate this Case
University of Pittsburgh Medical Center includes 20 hospitals. Its more than 2,700 doctors are employed by Medical Center subsidiaries. Each surgeon had a base salary and an annual Work-Unit quota. Every medical service is worth a certain number of Work Units, which are one component of Relative Value Units (RVUs). RVUs are the units that Medicare uses to measure how much a medical procedure is worth. The surgeons were rewarded or punished based on how many Work Units they generated. The number of Work Units billed by the Neurosurgery Department more than doubled in 2006-2009. The relators accuse the surgeons of artificially boosting their Work Units: The surgeons said they acted as assistants on surgeries and as teaching physicians when they did not and billed for procedures that never happened. They did surgeries that were medically unnecessary or needlessly complex. Most of the surgeons reported total Work Units that put them in the top 10% of neurosurgeons nationwide. Whenever a surgeon did a procedure at one of the hospitals, the Medical Center billed for hospital and ancillary services. The United States intervened in a suit as to the physician services claims, settling those claims for $2.5 million. It declined to intervene in the hospital services claims. The Third Circuit reversed the dismissal of those claims. The relators adequately pleaded violations of the Stark Act, 42 U.S.C. 1395nn(b)(4), which forbids hospitals to bill Medicare for certain services when the hospital has a financial relationship with the doctor who requested those services. It is likely that the surgeons' pay is so high that it must take referrals into account. Stark Act exceptions work like affirmative defenses; the burden lies with the defendant, even under the False Claims Act, 31 U.S.C. 3729(a)(1)(A).