Salters v. American Family Health Care Inc, No. 5:2010cv02843 - Document 121 (N.D. Ala. 2017)

Court Description: MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 4/18/2017. (PSM)

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Salters v. American Family Health Care Inc Doc. 121 FILED 2017 Apr-18 PM 03:01 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA NORTHEASTERN DIVISION UNITED STATES OF AMERICA, ex rel . ANITA C. SALTERS, Plaint if f, vs. AMERICAN FAMILY CARE, INC., Defendant . ) ) ) ) ) ) ) ) ) 5: 10-cv-2843-LSC MEMORANDUM OF OPINION I. Introduction Plaint if f/ Relat or Anit a C. Salt ers (“ Salt ers” ) filed t his act ion against her former employer American Family Care (“ AFC” ) alleging t hat AFC violat ed t he False Claims Act (“ FCA” ), 31 U.S.C. § 3729, by submit t ing false claims t o t he Government , and t hat it engaged in physician referrals in violat ion of t he St ark Law, 42 U.S.C. § 1395nn. She furt her alleges t hat she was unlawfully t erminat ed in ret aliat ion for report ing t hese pot ent ial violat ions t o her superiors cont rary t o t he FCA’ s ant i-ret aliat ion provision. 31 U.S.C. § 3730(h). Bef ore t he Court is defendant AFC’ s mot ion for part ial summary j udgment on t he FCA claims (Doc. 101), which has been Page 1 of 46 Dockets.Justia.com fully briefed and is ripe for review. For t he reasons set out below, AFC’ s mot ion is due t o be grant ed in part and denied in part . II. Background AFC operat es sixt y-eight walk-in medical clinics which provide primary, f amily, and urgent care. Throughout it s clinics, AFC employs 165 physicians. Most of AFC’ s of fices are open seven days a week, from 8:00 am t o 6: 00 pm. However, a few are open for longer hours, and t he Hunt sville clinic is only open five days a week. All full-t ime physicians execut e a Medicare approved Reassignment of Benefit s f orm, which assigns t he physician’ s right t o fees f or services perf ormed t o AFC. AFC t hen submit s “ claims” or bills t o Federal payors— such as Medicare, Medicaid, and Tricare— a group pract ice, using Current Procedural as Terminology (“ CPT” ) codes t o ident ify services performed and Int ernat ional Cert ificat ion of Diseases (“ ICD” ) codes t o ident ify diagnoses made. CPT codes “ describe medical services such as t reat ment s, t est s, and procedures, and are an accept ed means of report ing such medical services t o [G]overnment and healt h insurance programs.” U.S. ex rel . Sikkenga v. Regence Bl uecross Bl ueshi el d of Ut ah, 472 F.3d 702, 708 n.9 (10t h Cir. 2006). ICD codes “ describe t he diagnosis or medical condit ion for which medical services are rendered when Medicare claims are Page 2 of 46 submit t ed t o Medicare carriers.” Id. at 708 n. 8. AFC est imat es t hat it submit s t housands of t hese claims t o Federal payors every year, and underst ands t hat when claims are submit t ed t o t he Federal Government , AFC cert ifies t hat it is complying wit h applicable rules and regulat ions. AFC hired Salt ers as an audit supervisor in January 2007 and promot ed her t o direct or of t he Claims Processing Cent er (“ CPC” ) in December 2007. (Salt ers Dep. at 14, Kerr Dep. at 103. ) Her dut ies as direct or of t he CPC included ensuring t hat t he claims submit t ed were in compliance wit h all applicable regulat ions, collect ing all sums due t o AFC wit hin a reasonable period of t ime, and supervising approximat ely t went y-five ot her employees in t he CPC. (Salt ers Dep. at 190, Johansen Dep. at 37 & 72, Hawley Dec. ¶ 5. ) a. Locum Tenens Physicians A l ocum t enens physician fills in when a physician is absent , and bills as if he were t he regular physician. Medicare Claims Processing Manual (“ MCPM” ) Ch. 1 § 30. 2. 11. To supplement it s physician employees, AFC uses l ocum t enens physicians, one of which was Dr. Charles Buckmast er (“ Dr. Buckmast er” ), who worked at AFC clinics bet ween 2006 and 2011, subst it ut ing f or several dif ferent providers at various AFC locat ions. b. Ear Popper Page 3 of 46 The “ Ear Popper” is a device t hat shoot s air up t hrough t he nost ril for t he purpose of balancing inner ear pressure wit h out side pressure. AFC purchased sixt een Ear Poppers for it s offices, and billed Federal payors for t heir usage according t o t he recommendat ions of t he Ear Popper manuf act urer— is cust omary in t he healt hcare indust ry. (Salt ers Dep. at as 75 & 77.) Salt ers herself visit ed t he manuf act urer’ s websit e, found CPT code 69401, and print ed t he art icle t o show AFC management . (Id. at 7374.) However, she t est ified t hat t he day af t er she print ed t he art icle, she could no longer find it on t he manufact urer’ s websit e. (Id. ) In 2008, Blue Cross and Blue Shield of Alabama (“ BCBS” ) invest igat ed AFC for billing t he Ear Popper under code 69401— ear surgery eust achian t ube inflat ion t ransnasal wit hout cat herizat ion— and concluded t hat t he device was experiment al. As a result of t his det erminat ion, BCBS decided t hat it would not pay f or Ear Popper usage and required AFC t o refund previous Ear Popper payment s. AFC paid BCBS $28, 534.36 in refunds f or t he Ear Popper bills. However, t he Government never quest ioned, invest igat ed, or request ed a refund based on AFC’ s billing of t he Ear Popper under CPT code 69401. Despit e a handwrit t en not e on t he refund request let t er from BCBS t hat read “ check wit h [Medicare], ” AFC never cont act ed t he Government t o inquire about t he propriet y of billing t he Page 4 of 46 Ear Popper under t his code, and never refunded any Federal payor for Ear Popper payment s received. Aft er ref unding BCBS on April 7, 2008, AFC cont inued t o use t he Ear Popper, but st opped billing all insurers for Ear Popper usage. c. Stark Law & Anti-Kickback Statute Dr. Ronald McCoy (“ Dr. McCoy” ) was an Ot olaryngologist (ENT) who had offices in Bessemer and Birmingham. In January of 2000, Dr. McCoy ent ered int o a writ t en cont ract wit h AFC t o see pat ient s at AFC locat ions, as well as at his privat e pract ices. The cont ract provided for compensat ion based on a formula which paid him a percent age of t he amount of revenue he generat ed. However, t his formula did not include any collect ions from Medicare pat ient s. Therefore, his pay did not reflect t he volume of Medicare business t hat he generat ed. The rat e of pay was commercially reasonable and consist ent wit h what ot her physicians are paid in Alabama for services rendered t o a group pract ice. Furt her, Dr. McCoy reassigned all t he Medicare reimbursement s from his work at AFC clinics t o AFC. Dr. McCoy was never an employee of AFC, always performing services as an independent cont ract or and did not have ownership shares in AFC or t he AFC lab. While working at AFC, he oft en referred pat ient s for t est ing Page 5 of 46 at t he AFC lab. Generally, t hese pat ient s were seen at AFC locat ions first , but AFC admit s t hat on five occasions, Dr. McCoy sent Medicare pat ient s t o get blood allergy t est s done at t he AFC lab wit hout first seeing t he pat ient s at an AFC clinic. However, AFC claims t hat t hese referrals were done wit hout AFC’ s knowledge or approval. AFC billed Medicare f or t hese five visit s, but Medicare only paid for t hree of t hem. Two of t hese t hree pat ient s were exist ing AFC pat ient s at t he t ime t he t est s were performed, t hough Dr. McCoy saw t hem in his privat e offices. AFC claims t hat t he pat ient who was not an AFC pat ient when t he blood t est was performed did fill out new pat ient paperwork before t he blood draw. Dr. McCoy also referred a Railroad Medicare pat ient — Wilma H.— o AFC t for blood allergy t est ing wit hout seeing her at an AFC f acilit y. Medicare reimbursed AFC for t his visit . However, prior t o t he blood draw, Wilma H. saw anot her AFC physician for dermat it is. III. Standard of Review Summary j udgment is appropriat e “ if t he movant shows t hat t here is no genuine disput e as t o any mat erial fact and t he movant is ent it led t o j udgment as a mat t er of law. ” Fed. R. Civ. P. 56(a). A mat erial fact is one t hat “ might af fect t he out come of t he case.” Urquil l a-Diaz v. Kapl an Univ., 780 F. 3d 1039, 1049 (11t h Cir. 2015). A disput e is genuine if “ t he Page 6 of 46 record t aken as a whole could lead a rat ional t rier of fact t o find for t he nonmoving part y. ” Id. The t rial j udge should not weigh t he evidence, but det ermine whet her t here are any genuine issues of fact t hat should be resolved at t rial. Anderson v. Li bert y Lobby, Inc. , 477 U.S. 242, 249 (1986). In considering a mot ion for summary j udgment , t rial court s must give deference t o t he non-moving part y by “ considering all of t he evidence and t he inferences it may yield in t he light most f avorable t o t he nonmoving part y.” McGee v. Sent inel Of f ender Servs., LLC, 719 F. 3d 1236, 1242 (11t h Cir. 2013) (cit ing El l is v. Engl and, 432 F.3d 1321, 1325 (11t h Cir. 2005)). In making a mot ion f or summary j udgment , “ t he moving part y has t he burden of eit her negat ing an essent ial element of t he nonmoving part y’ s case or showing t hat t here is no evidence t o prove a fact necessary t o t he nonmoving part y’ s case. ” Id. Alt hough t he t rial court s must use caut ion when grant ing mot ions for summary j udgment , “ [ s]ummary j udgment procedure is properly regarded not as a disfavored procedural short cut , but rat her as an int egral part of t he Federal Rules as a whole. ” Cel ot ex Corp. v. Cat ret t , 477 U.S. 317, 327 (1986). IV. Discussion A. FCA Generally Page 7 of 46 Salt ers claims t hat AFC violat ed t he FCA in a number of different ways: 1) falsely cert ifying compliance wit h l ocum t enens regulat ions 2) failing t o reimburse t he Government for improper payment s f or t he Ear Popper 3) submit t ing f alse claims f or t he Ear Popper 4) f alsely cert ifying compliance wit h t he St ark Law 5) f alsely cert ifying compliance wit h t he Ant i Kickback St at ut e 6) submit t ing false claims cont aining an af t er- hours billing code 7) submit t ing f alse claims during t he Global Surgery Period 8) by submit t ing f alse claims for level one office visit s when pat ient s came in solely for inj ect ions and 9) f alsely submit t ing unbundled claims for venipunct ures, inj ect ion administ rat ions, vaccine administ rat ions, and pulse oximet ry. The FCA allows individuals t o file qui t am act ions and recover damages on behalf of t he Unit ed St at es. U.S. ex rel. Cl ausen v. Lab. Corp. of Am., 290 F. 3d 1301, 1307 (11t h Cir. 2002). These act ions may be filed against a person or ent it y t hat “ knowingly present s, or causes t o be present ed, a false or fraudulent claim for payment or approval; . . . [or] knowingly makes, uses or causes t o be made or used, a false record or st at ement mat erial t o a false or fraudulent claim. ” 31 U.S.C. § 3729(a)(1)(A) & (B). Healt hcare providers can be found liable under t he FCA for “ t he submission of a fraudulent claim t o t he Government ,” i.e. Page 8 of 46 for submit t ing a claim t hat cont ains f alse informat ion. Urquil l a-Di az, 780 F. 3d at 1045. B. Use of Locum Tenens Physicians In her complaint , Salt ers alleges t hat AFC violat ed t he FCA by allowing new physicians t o work in it s clinics as l ocum t enens physicians for mont hs while t heir paperwork was being complet ed. (Doc. 1 at 23. ) The complaint specifically alleges t hat Dr. St even Hef t er (“ Dr. Heft er” ), Dr. Eugene Evans (“ Dr. Evans” ), Dr. Buckmast er, and Dr. Syed Hasan (“ Hasan” ) were regularly used as l ocum t enens physicians in violat ion of t he FCA. (Id.) She also claims t hat “ [ AFC] is improperly billing for t hese long t erm Locum Tenens physicians under provider numbers for physicians who were not present in t he facilit y.” (Id. at 24. ) In it s mot ion for summary j udgment , AFC argued t hat claims for Dr. Hasan, Dr. Buckmast er, and Dr. Evans were properly billed. In her response t o AFC’ s mot ion f or summary j udgment , Salt ers addressed her claims for improper billing based only on Dr. Buckmast er’ s l ocum t enens work. (Doc. 105 at 17-22.) Salt ers f ailed t o ment ion Dr. Hasan, Dr. Heft er, or Dr. Evans in her response t o summary j udgment , and “ grounds alleged in t he complaint but not relied upon in summary j udgment are deemed abandoned.” Resol ut ion Trust Corp. v. Dunmar Page 9 of 46 Corp. , 43 F. 3d 587, 599 (11t h Cir. 1995). Therefore, Salt ers’ s claims against AFC f or improper billing based on Dr. Hasan’ s, Dr. Heft er, and Dr. Evans’ s l ocum t enens work are deemed abandoned. The only locum t enens claim t hat remains in t his act ion is Salt ers’ s claim based on AFC’ s billing f or Dr. Buckmast er’ s work. In her opposit ion t o AFC’ s mot ion for summary j udgment , Salt ers argues t hat AFC violat ed t he FCA by f alsely cert ifying compliance wit h t he MCPM’ s requirement s for l ocum t enens doct ors. Liabilit y under t he FCA can arise from “ a ‘ false cert ificat ion t heory,’ ” when a provider “ falsely cert if[ies] . . . t hat it will comply wit h [ F]ederal law and regulat ions.” Urquil l a-Di az, 780 F. 3d at 1045. In order t o prove FCA liabilit y under a f alse cert ificat ion t heory, a relat or must show “ ‘ (1) a false st at ement or fraudulent course of conduct , (2) made wit h scient er, (3) t hat was mat erial, causing (4) t he [G] overnment t o pay out money or forfeit moneys due. ’ ” Id. at 1052 (quot ing U.S. ex rel . Hendow v. Univ. of Phx., 461 F. 3d 1166, 1174 (9t h Cir. 2006)). However, “ ‘ [ m]ere regulat ory violat ions do not give rise t o a viable FCA act ion,’ ” because “ ‘ [i] t is t he false cert ificat ion of compliance which creat es liabilit y.’ ” Id. (quot ing Hendow, 461 F.3d at 1171). The Elevent h Circuit explained t hat “ [l]iabilit y under t he [FCA] arises from submission of a fraudulent claim t o t he [G]overnment , not t he disregard Page 10 of 46 of [ G] overnment regulat ions or failure t o maint ain proper int ernal policies. ” Corsel l o v. Lincare, Inc. , 428 F.3d 1008, 1012 (11t h Cir. 2005). A relat or must t herefore prove t hat t he “ false st at ement ” was a prerequisit e and a mat erial cause of t he Government ’ s decision t o pay t he provider’ s claim. Id. The MCPM cont ains t he following condit ions for billing a l ocum t enens physician: 1) “ [t ]he regular physician is unavailable,” 2) “ [t ]he Medicare beneficiary has arranged or seeks t o receive t he visit services from t he regular physician,” 3) “ [t ]he regular physician pays t he l ocum t enens for his/ her services on a per diem or similar feefor-t ime basis, ” 4) t he subst it ut e physician does not provide t he visit services t o Medicare pat ient s over a cont inuous period of longer t han 60 days,” and 5) “ [t ]he regular physician ident ifies t he services as subst it ut e physician services . . . by ent ering . . . code modifier Q6 . . . aft er t he procedure code.” MCPM Ch. 1 § 30. 2. 11. In her response t o summary j udgment , Salt ers alleges t hat AFC violat ed t hese requirement s by improperly paying Dr. Buckmast er based on product ivit y and failing t o use t he required Q6 code modifier when billing Medicare for his work. (Doc. 105 at 20-21.) She does not allege t hat Dr. Buckmast er worked more t han t he maximum sixt y cont inuous days. Page 11 of 46 AFC argues t hat Salt ers cannot raise argument s t hat AFC improperly paid Dr. Buckmast er based on product ivit y in her response t o summary j udgment , because she did not raise t hese argument s in her complaint . The Elevent h Circuit held t hat “ [ a] plaint iff may not amend her complaint t hrough argument in a brief opposing summary j udgment . ” Gil mour v. Gat es, McDonal d & Co., 382 F. 3d 1312, 1315 (11t h Cir. 2004). Here, Salt ers at t empt s t o raise new fact s and a new t heory of liabilit y in her response t o summary j udgment . However, t hough Salt ers was ent it led t o raise t hese fact s aft er learning about t hem in discovery, “ t he proper procedure for plaint if fs t o assert a new claim is t o amend t he complaint in accordance wit h Fed.R.Civ. P. 15(a). ” Id. In her complaint , Salt ers did not ment ion t hat AFC improperly paid Dr. Buckmast er based on product ivit y. She will not be allowed t o raise a new t heory of liabilit y at t his st age of proceedings. See Merl e Wood & Assocs., Inc. v. Trinit y Yacht s, LLC, 714 F. 3d 1234 (11t h Cir. 2013); Georgi aCarry.Org, Inc. v. Georgia, 687 F.3d 1244, 1258 n.27 (11t h Cir. 2012). However, Salt ers’ s claims based on t he Q6 modifier is not a new claim, because in her complaint , Salt ers alleges t hat “ [ AFC] is improperly billing for t hese long t erm Locum Tenens physicians under provider numbers for [ot her] physicians. ” By allegedly f ailing t o append t he Q6 modifier, Page 12 of 46 Salt ers was billing for it s l ocum t enens providers using t he numbers of ot her physicians, wit h no designat ion t o show t hat t he claims relat ed t o a different doct or. As evidence of t his failure t o append t he Q6 modifier, Salt ers provided her expert report , which includes a finding t hat “ [o]f t he . . . lines reflect ing Dr. Buckmast er’ s direct involvement in providing care, . . . 76% were present ed f or payment wit hout t he Q6 modifier.” (Doc. 116 at Ex. O pg. 20.) Though it assert s t hat it followed t he proper billing procedures f or l ocum t enens physicians, AFC did not provide evidence t hat it did append t he Q6 modifier. Therefore, viewing t he fact s in t he light most favorable t o t he non-movant , t here is a mat erial issue of f act as t o whet her AFC properly billed for it s l ocum t enens physicians. However, in order t o make out a claim under a false cert ificat ion t heory, Salt ers must show t hat AFC’ s mispayment and misbilling was a mat erial f act in t he Government ’ s decision t o pay out AFC’ s claim f or work done by Dr. Buckmast er. Proving mat erialit y is a high burden f or t he relat or, because “ [ a] misrepresent at ion cannot be deemed mat erial merely because t he Government designat es compliance wit h a . . . requirement as a condit ion of payment .” Universal Heal t h Servs. , Inc. v. U.S. ex rel . Escobar, __ U.S. __, 136 S.Ct . 1989, 2003 (2016). A “ minor or Page 13 of 46 insubst ant ial” violat ion is also not mat erial, and “ it is [not ] suf ficient for a finding of mat erialit y t hat t he Government would have t he opt ion t o decline t o pay if it knew of t he defendant ’ s noncompliance.” Id. A plaint if f can prove mat erialit y by providing “ evidence t hat t he defendant knows t hat t he Government consist ent ly refuses t o pay claims in . . . cases based on noncompliance wit h t he . . . requirement .” Id. Conversely, “ if t he Government regularly pays a part icular t ype of claim in full despit e act ual knowledge t hat cert ain requirement s were violat ed . . . t hat is st rong evidence t hat t he requirement s are not mat erial. ” Id. at 2003-04. As evidence of mat erialit y, Salt ers provides t he opinion of her expert , who st at es t hat “ [f ]ailure t o append t he modifier Q6 may result in improper payment s or allegat ions of false claims, part icularly when a provider f ails t o comply wit h all of t he provisions associat ed wit h proper l ocum t enens arrangement s. ” (Doc. 116 at Ex. O pg. 10.) However, AFC provides a declarat ion from Susan Garrison, a cert ified medical coder, which st at es t hat “ [t ]he failure t o use a Q6 modifier on a locum t enens claim does not af fect t he amount Medicare will pay on a claim,” and t hat “ [it ] is a t echnical billing error, which is not mat erial t o Medicare’ s decision t o pay t he claim provided t he ot her l ocum t enens payment rules Page 14 of 46 are being followed.” (Garrison Dec. at ¶ 9. ) Viewing t he evidence in t he light most favorable t o t he non-movant , Salt ers has provided suf ficient proof of mat erialit y. Last ly, Salt ers must show t hat AFC made t hese alleged f alse st at ement s wit h scient er. In order t o show t he requisit e scient er, Salt ers must provide evidence t hat AFC act ed wit h “ act ual knowledge of t he informat ion; . . . deliberat e ignorance of t he t rut h or f alsit y of t he informat ion; or . . . reckless disregard of t he t rut h or falsit y of t he informat ion. ” 31 U.S.C. § 3729 (b)(1)(A). Salt ers claims t hat because AFC oft en scheduled Dr. Buckmast er for “ very close t o t he 60-day limit bef ore t aking him of f of l ocum t enens dut y, ” AFC must have known t hat it had t o comply wit h t he l ocum t enens rules. (Doc. 105 at 20. ) She also provides deposit ion t est imony from AFC president Randy Johansen (“ Johansen” ) t hat AFC management reviewed t he l ocum t enens requirement s for each of it s insurance providers. (Johansen Dep. at 255. ) Therefore, viewing t he evidence in light most favorable t o t he non-movant , t here is a mat erial issue of f act as t o whet her AFC knowingly falsely cert ified compliance wit h applicable rules. Summary j udgment as t o t his claim is due t o be denied. C. Billing for Ear Popper Page 15 of 46 1. Reverse False Claim In her complaint , Salt ers also alleges t hat AFC violat ed t he FCA by not ret urning money it was paid for “ [ applying] t he surgical code 69401 Eust achian t ube inflat ion, t ransnasal, wit hout cat herizat ion, t o bill for using [t he Ear Popper] in t he of fice.” (Doc. 1 at 22.) Salt ers cont ends t hat aft er BCBS required AFC t o refund BCBS for all Ear Popper payment s, AFC should have refunded t he Government as well. Providers can be f ound liable under t he FCA based on a “ reverse f alse claim” t heory. This t heory allows relat ors t o file suit against a provider who “ knowingly makes, uses, or causes t o be made or used, a false record or st at ement t o conceal, avoid, or decrease an obligat ion t o pay or t ransmit money or propert y t o t he Government .” 31 U.S.C. § 3729(a)(7), amended by Pub. L. No. 111-21, § 4, 123 St at . 1617, 16211625 (2009). The st at ut e was amended on May 20, 2009 by t he Fraud Enforcement and Recovery Act (“ FERA” ). See § 4, 123 St at . at 1625. However, t his amendment only applies t o “ conduct on or aft er t he dat e of enact ment .” See P. L. No. 1111-2221, § 386, 123 St at . 1617 (2009). Therefore, t he pre-FERA 31 U.S.C. § 3729(a)(7) will apply t o conduct before May 20, 2009, and post -FERA 31 U. S.C. § 3729(a)(1)(G) will apply t o conduct on or af t er May 20, 2009. Page 16 of 46 Liabilit y under t he pre-FERA “ reverse false claim” t heory “ result s from avoiding t he payment of money due t o t he [ G] overnment , as opposed t o submit t ing t o t he [ G]overnment a f alse claim.” U.S. ex rel. Mat heny Medco Heal t h Sol ut ion, Inc. , 671 F. 3d 1217, 1222 (11t h Cir. 2012). The element s of a pre-FERA reverse f alse claim are (1) a false record or st at ement ; (2) t he defendant ’ s knowledge of t he falsit y; (3) t hat t he defendant made, used, or causes t o be made or used a f alse st at ement or record; (4) for t he purpose t o conceal, avoid, or decrease an obligat ion t o pay money t o t he [G] overnment ; and (5) t he mat erialit y of t he misrepresent at ion. Id. Salt ers cont ends t hat AFC’ s dut y t o refund t he Government arose from t he post -FERA FCA. However, AFC correct ly not es t hat t his provision only applies t o AFC’ s conduct on or aft er May 20, 2009. The part ies agree t hat AFC did not bill for t he Ear Popper under code 69401 aft er April 7, 2008. 1 Therefore, because t he conduct in quest ion occurred before May 20, 2009, t he pre-FERA 31 U.S.C. § 3729(a)(7) applies t o all alleged inst ances of improper billing for t he Ear Popper. Salt ers argues t hat AFC had an obligat ion t o report overpayment s for t he Ear Popper t o t he Government and pay t he money back, and AFC count ers t hat it had no such obligat ion. 1 The part ies agree t hat AFC st opped t his pract ice aft er paying BCBS a refund of $28,534.36 for doing so. According t o t he record, t he dat e of t hat payment is April 7, 2008. Page 17 of 46 The current version of t he FCA defines “ obligat ion” as “ an est ablished dut y . . . arising from an express or implied cont ract , grant or-grant ee, or licensor-licensee relat ionship, from a fee-based or similar relat ionship, from a st at ut e or regulat ion, or from t he ret ent ion of any overpayment . ” 31 U.S.C. § 3729 (b)(2)(B)(3) (emphasis added). However, t his version of t he st at ut e was creat ed by FERA, and is only applicable t o “ conduct on or aft er t he dat e of enact ment ,” which was May 20, 2009. P. L. No. 111-21, § 4, 123 St at . 1617 (2009). The pre-FERA version of t he st at ut e cont ains no definit ion of obligat ion. See 31 U.S.C. § 3729, amended by Pub. L. No. 111-21, § 4, 123 St at . 1617 (2009). In Unit ed St at es v. Pemco Aeropl ex, Inc., t he Elevent h Circuit found an t hat t he defendant ’ s cont ract wit h t he Government creat ed an “ exist ing [and] legal” pre-FERA obligat ion. 195 F. 3d 1234, 1237 (11t h Cir. 1999). While t he Elevent h Circuit has not elaborat ed on t he requirement s for t he finding of t his obligat ion, ot her circuit s have int erpret ed t he “ exist ing [and] legal” language t o mean t hat “ t he making or using of [ a] f alse record or st at ement is not sufficient in it self t o creat e an obligat ion” because “ t he obligat ion must arise from some independent legal dut y.” U.S. ex rel . Bahrani v. Conagra, Inc., 465 F. 3d 1189, 1195 (10t h Cir. 2006); see al so U.S. ex rel . Bain v. Ga. Gul f Corp. , 386 F. 3d 648, 657 (5t h Page 18 of 46 Cir. 2004), Am. Text il e Mf r. Inst .; Inc. v. The Li mit ed, Inc., 190 F.3d 729, 734-37 (6t h Cir. 1999); Unit ed St at es v. Q Int ’ l Courier, Inc. , 131 F.3d 770, 772-74 (8t h Cir. 1997). Furt her, t he Fift h Circuit st at ed t hat t he reverse false claims act does not ext end t o t he pot ent ial or cont ingent obligat ions t o pay t he [G] overnment fines or penalt ies which have not been levied or assessed (and as t o which no formal proceedings t o do so have been inst it ut ed) and which do not arise out of an economic relat ionship bet ween t he [G]overnment and defendant (such as a lease or cont ract or t he like) under which t he [G]overnment provides some benefit t o t he defendant wholly or part ially in exchange for an agreed or expect ed payment or t ransfer of propert y by (or on behalf of) t he defendant t o (or for t he economic benefit of) t he [G] overnment . Bain, 386 F.3d at 657. Salt ers argues t hat AFC had an “ obligat ion” t o refund t he Government for overpayment s, which arose out of t he definit ion of obligat ion in t he post -FERA 31 U.S.C. § 3729 (b)(2)(B)(3), and 42 C. F.R. § 401.305, which became effect ive on March 14, 2016. Neit her one of t hese aut horit ies is applicable t o pre-2009 conduct . Furt her, Salt ers does not provide evidence of any ot her legal dut y AFC may have had t o report t hese overpayment s. Salt ers t est ified t hat she researched and found t hat t he manuf act urer of t he Ear Popper list ed 69401 as t he proper code f or t he Ear Popper. (Salt ers Dep. at 73-4. ) She claims t hat AFC knew or should have known t hat t he code was incorrect because: 1) BCBS det ermined Page 19 of 46 t hat t he billing was improper in February 2008; 2) AFC st opped billing all insurers separat ely for t he Ear Popper aft er t he BCBS incident ; 3) Irwin or Johansen handwrot e a not e on t he BCBS Ear Popper let t er t hat st at ed “ check w[it h] ot her st at es & M[edic] are,” 4) and AFC never checked t he appropriat eness of t he billing wit h t he Government . However, none of t hese argument s est ablish t hat t he Ear Popper was improperly billed t o Medicare. Inst ead, t hey est ablish t hat t he use of t he code was improper under BCBS guidelines. Furt her, Salt ers does not allege t hat BCBS and Medicare used t he same st andards or guidelines for coding and payment s. AFC alleges, and Salt ers does not disput e, t hat t here was no Federal policy or regulat ion t hat prohibit ed billing for an Ear Popper under t he 69401 code. She has provided no evidence t hat AFC knew of a legal dut y t o refund Ear Popper overpayment s, or t hat one exist ed at all. At most , she has alleged t hat AFC’ s billing pract ices could have subj ect ed t hem t o liabilit y, penalt ies, or fines from Medicare, but pot ent ial obligat ions t o pay t he Government do not creat e reverse false claims liabilit y under t he pre-FERA 31 U.S.C. § 3729(a)(7). Therefore, summary j udgment in AFC’ s favor is due t o be grant ed as t o Salt er’ s claim f or reverse false claim liabilit y f or Ear Popper billing. 2. False Claim Liability Page 20 of 46 Salt ers also argues t hat t he f act s support an act ion for “ a direct false claim f or payment in violat ion of 31 U.S.C. § 3729(A), because claiming a surgical code for a hand-held, non-invasive air puffer was knowingly f alse at t he t ime of submission. ” (Doc. 105 at 24. ) The Court int erpret s t his assert ion as int ending t o claim t hat AFC violat ed 31 U.S.C. § 3729(a)(1)(A), which allows a cause of act ion against a provider who “ knowingly present s, or causes t o be present ed, a f alse or fraudulent claim for payment or approval.” To bring a claim under t his sect ion, a plaint if f must show “ (1) a f alse or fraudulent claim; (2) which was present ed, or caused t o be present ed, by t he defendant t o t he Unit ed St at es for payment or approval; (3) wit h t he knowledge t hat t he claim was false. ” Unit ed St at es v. R&F Props. of Lake Cnt y. , Inc. , 433 F. 3d 1349, 1355 (11t h Cir. 2005). However, as explained above, Salt ers has provided no evidence t hat AFC knew t hat it was improperly billing for t he Ear Popper. Therefore, she cannot make out a claim for “ knowingly present [ing] . . . a false or fraudulent claim f or payment or approval. ” Summary j udgment in AFC’ s favor is due t o be grant ed as t o Salt er’ s claim for f alse claim liabilit y for t he billing of t he Ear Popper. D. Stark Law Page 21 of 46 Salt ers alleges t hat AFC violat ed t he St ark Law by paying Dr. McCoy for referrals. The part ies do not disput e t hat Dr. McCoy referred pat ient s t o t he AFC laborat ory for blood allergy t est ing. However, Salt ers alleges t hat in exchange for t hese referrals, AFC agreed t o bill for t he t est ing under his provider number, and send him a check for a percent age of t he value of t hese t est s. Thus, Salt ers claims, Dr. McCoy was paid by AFC for services t hat he was not present f or and did not perform— but simply referred pat ient s t o receive. The St ark Law, codified at 42 U.S.C. § 1395nn, prohibit s physicians from referring pat ient s t o ent it ies wit h which t hey have financial relat ionships, and also forbids ent it ies from present ing a claim for payment “ f or designat ed healt h services furnished pursuant t o a [prohibit ed] referral.” 42 U.S.C. § 1395nn(a)(1)(B). The st at ut e list s except ions t hat apply in specific circumst ances. Furt her, t he St ark Law is enforced t hrough regulat ions promulgat ed by t he Secret ary of Healt h and Human Services, which describe exempt ions t o t he st at ut e. See Fresenius Med. Care Hol dings, Inc. v. Tucker, 704 F. 3d 935, 937 (11t h Cir. 2013). While t he St ark law does not provide “ it s own right of act ion, ” Salt ers alleges t hat AFC is liable for t he alleged St ark Law violat ion under a FCA f alse-cert ificat ion t heory. Ameri t ox, Lt d. v. Mil l ennium Labs. , Inc. , Page 22 of 46 803 F. 3d 518, 522 (11t h Cir. 2015) (quot ing U.S. ex rel . Drakef ord v. Tuomey Heal t hcare Sys., Inc. , 675 F.3d 394, 395 (4t h Cir. 2012)). AFC argues t hat t he St ark Law applies only t o services billed t o Medicare, and not t o t hose billed t o ot her Federal programs. However, t he Elevent h Circuit has st at ed t hat t he St ark Law applies t o Medicaid and Medicare pat ient s. Fresenius, 704 F. 3d at 937. Furt her, “ [ f] alsely cert ifying compliance wit h t he St ark or Ant i-Kickback Act s in connect ion wit h a claim submit t ed t o a f ederal l y f unded insurance program is act ionable under t he FCA.” U.S. ex rel . Schmidt v. Zimmer, Inc., 386 F. 3d 235, 243 (3d Cir. 2004) (emphasis added); see al so U.S. ex rel . Keel er v. Eisai , Inc., 568 F. App’ x 783, 799 (11t h Cir. 2014) (cit ing Schmidt , 386 F. 3d at 243). As wit h all ot her false-cert ificat ion claims, t he applicabilit y of St ark Law requirement s will depend on t he ent it y’ s cert ificat ions, because “ [m]erely alleging a violat ion of t he St ark and Ant i-kickback st at ut es does not sufficient ly st at e a claim under t he FCA. It is t he submission and payment of a f alse . . . claim and false cert ificat ion of compliance wit h t he law t hat creat es FCA liabilit y.” U.S. ex rel . Mast ej v. Heal t h Mgmt . Assocs., Inc., 591 F. App’ x 693, 706 (11t h Cir. 2014); see al so Urquil l aDiaz, 780 F.3d at 1045. Therefore, because AFC cert ified t hat it complied Page 23 of 46 wit h t he St ark Law in it s submissions t o Federal programs, it may be held liable for a violat ion of t he FCA based on t hose submissions. AFC alleges t hat it did not violat e t he St ark Law because Dr. McCoy received no financial benefit from referring his pat ient s t o AFC’ s labs f or t est ing. AFC point s t o Dr. McCoy’ s employment cont ract , which excluded “ all Medicare or Medicaid charges for ‘ designat ed healt h services’ wit hin t he meaning of [t he St ark Law]” from his compensat ion. (Doc. 102-17.) Salt ers does not disput e t hat Dr. McCoy’ s compensat ion did not violat e t he St ark Law as t o Medicare pat ient s. However, Salt ers argues t hat t he compensat ion did include impermissible payment s for Medicaid, TriCare, and Railroad Medicare pat ient s. In support of t his cont ent ion, Salt ers provides deposit ion t est imony from Hawley which cont ains t he following exchange: Q: When you say [ t he compensat ion formula excluded] Medicare, did it also [exclude] Medicaid and TriCare? A: No, but I’ m not — I recall, he didn’ t see Medicaid in our as facilit ies, but I, I don’ t know what he did on TriCare. Q: But t he formula did not — A: It did not back it out . (Hawley Dep. at 196.) She also provides billing analyses t hat shows t hat Medicare and Railroad Medicare were account ed separat ely by AFC. (Doc. 106 at Ex. 104 pgs. 11-101.) Page 24 of 46 Salt ers furt her cit es t o an af fidavit from Mark Garst (“ Garst ” ), who is t he direct or of t he AFC CPC, which st at es t hat one pat ient , “ Wilma H., ” was a Railroad Medicare pat ient who underwent a blood allergy t est at AFC based on Dr. McCoy’ s referral. (Doc. 102-2 at ¶ 15.) Salt ers alleges t hat claims submit t ed t o Railroad Medicare include a required cert ificat ion of compliance wit h t he St ark Law. While AFC claims t hat t he St ark Law applies only t o Medicare, it does not disput e t hat it cert ified compliance wit h t he law when it submit t ed it s claims under Railroad Medicare. Inst ead, AFC claims t hat it did not submit f alse claims based on a St ark Law violat ion because a number of St ark Law except ions apply. First , AFC alleges t hat t he “ f air market compensat ion” except ion applies. 42 C.F.R. § 411. 357(l). In order t o meet t his except ion, AFC must show t hat “ [t ]he arrangement is in writ ing, signed by t he part ies, and covers only ident ifiable it ems or services, all of which are specified in writ ing.” Id. AFC present s a copy of it s cont ract for Dr. McCoy’ s services as evidence t hat t he arrangement meet s t he fair market compensat ion except ion. (Doc. 102-17. ) The cont ract is in writ ing and signed by Irwin and anot her individual, whose name is not indicat ed. (Id. at 9-10.) AFC alleges t hat t he cont ract Page 25 of 46 was bet ween AFC and Dr. McCoy’ s professional corporat ion. However, t he cont ract cont ains a blank space where t he name of t he professional corporat ion (“ P.C.” ) should be, t hus st at ing t hat t he cont ract is bet ween “ [AFC] and _________ P.C. for t he services of Ronald C. McCoy.” (Id. at 1.) Furt her, t he signat ure page simply cont ains an unident ified signat ure, and leaves t he space f or t he P.C.’ s name empt y. (Id. at 9. ) AFC has provided no evidence t hat t he signat ure on t he cont ract belongs t o an individual who has t he aut horit y t o bind t he P.C., and has t herefore failed t o show t hat “ [t ]he arrangement is in a writ ing[] signed by t he part ies, ” as required by 42 C. F.R. § 411. 357(l). As AFC has not est ablished t hat t he “ f air market compensat ion” except ion applies, summary j udgment cannot be grant ed based on t hat except ion. AFC also argues t hat it s relat ionship wit h Dr. McCoy meet s t he “ personal services arrangement ” except ion. This except ion requires an “ arrangement [ ] set out in writ ing, [ ] signed by t he part ies [t hat ] specifies t he services covered by t he arrangement .” 42 C. F.R. § 411. 357(d). As described above, AFC has not shown t hat t he cont ract is signed by t he part ies and t herefore has not met it s burden of showing t hat t he “ personal services arrangement ” except ion applies. Page 26 of 46 Last ly, AFC claims t hat it did not violat e t he St ark Law because Dr. McCoy’ s referrals qualify for t he “ [i]n-office ancillary services” except ion. 42 C. F.R. § 411.355(b). In order t o qualify for t his except ion, a number of requirement s must be met . First , AFC must show t hat t he services “ are furnished personally by one of t he following individuals: . . . [a]n individual who is supervised by t he referring physician, or, if t he referring physician is in a group pract ice, by anot her physician in t he group pract ice, provided t hat t he supervision complies wit h all ot her applicable Medicare payment and coverage rules f or t he services. ” Id. AFC argues— and Salt ers does not disput e— hat AFC is a group pract ice t wit hin t he meaning of t he St ark Law. Therefore, in order t o meet t he inoffice ancillary services except ion, AFC must show t hat a “ physician in t he group pract ice” supervised or furnished t he t est ing. However, AFC argues t hat blood allergy t est s are exempt ed from t his requirement , because t hey are list ed in t he CPT under t he 80000 series. See 42 C. F.R. § 410. 32(b)(2)(vi) (exempt ing “ [p]at hology and laborat ory procedures list ed in t he 80000 series of t he [CPT] published by t he American Medical Associat ion [‘ AMA’ ] ” from supervision requirement s). Furt her, AFC correct ly argues t hat a doct or’ s of fice st af f may furnish diagnost ic laborat ory t est s t o his pat ient s. See 42 C.F.R. § 410. 32(d). Page 27 of 46 AFC claims t hat it fit s t he supervision requirement for t he “ in-office ancillary services” except ion because it complies wit h Medicare’ s supervision requirement s. However, 42 C.F.R. § 411.355(b) does not st at e t hat complying wit h Medicare’ s supervision requirement s is enough t o fit t he except ion. Inst ead, it describes a specific sit uat ion in which an ent it y would be except ed from t he St ark Law’ s requirement s. AFC has not provided any evidence t hat t he blood t est s were performed under t he supervision of any of AFC’ s physicians. Therefore, it does not fit t he inoffice ancillary services except ion, and summary j udgment cannot be grant ed on t hat basis. For t he reasons st at ed above, AFC’ s argument s as t o it s purport ed violat ion of t he St ark Law in relat ion t o referrals made by Dr. McCoy fail. Therefore, viewing t he evidence in t he light most f avorable t o t he nonmovant , issues of fact remain as t o whet her AFC violat ed t he FCA by submit t ing claims in violat ion of t he St ark Law. Summary j udgment as t o t he claims based on violat ions of t he St ark Law is due t o be denied. E. Anti-Kickback Statute AFC moved for summary j udgment on Salt er’ s claims under t he Ant iKickback St at ut e. Salt ers does not ment ion t he Ant i-Kickback St at ut e in her memorandum in opposit ion t o AFC’ s mot ion f or part ial summary Page 28 of 46 j udgment . 2 Because “ grounds alleged in t he complaint but not relied upon in summary j udgment are deemed abandoned, ” Salt ers’ s claims against AFC under t he Ant i-Kickback St at ut e are deemed abandoned. Resol ut ion Trust Corp. , 43 F. 3d at 599. Summary j udgment in AFC’ s favor is due t o be grant ed as t o Salt ers’ s claims under t he Ant i-Kickback St at ut e. F. After-Hours Billing Code Salt ers concedes, in her memorandum in opposit ion t o AFC’ s mot ion for part ial summary j udgment , t hat “ t here is insufficient evidence of false claims t o overcome summary j udgment on t he aft er-hours billing claim. ” (Doc. 105 at 28.) Therefore, summary j udgment in AFC’ s f avor is due t o be grant ed as t o Salt ers’ s claims for improper aft er hours billing. G. Global Surgery Period Salt ers claims t hat AFC violat ed t he FCA by improperly billing f or visit s which should have been included in t he Global Surgery Period. Medicare compensat es surgical procedures t hrough a Global Surgery Package (“ GS Package” ). MCPM Ch. 12 at § 40.1. These packages include compensat ion for various “ services relat ed t o t he surgery when furnished by t he 2 In her recit at ion of f act s, Salt ers does st at e t hat in billing Medicare, providers cert ify compliance wit h St ark and Ant i-Kickback St at ut e. However, she does not respond t o AFC’ s argument s t hat it is not liable under t he Ant i-Kickback St at ut e. Page 29 of 46 physician who performs t he surgery” performed during t he Global Surgery Period. Id. The Medicare Fee Schedule Dat a Base set s out t he appropriat e Global Surgery Period f or surgical procedures— generally zero, t en, or ninet y days aft er a surgery. 3 Id. Therefore, Medicare will not pay, and providers cannot bill, for services t hat are included in t he GS Package. Id. at § 40. 2. Services improperly billed during t he Global Surgery Period are t hus “ f alse or fraudulent claim[s]” which can lead t o liabilit y under t he FCA. See U.S. ex rel . Sanchez v. Lymphat x, Inc., 596 F.3d 1300, 1302 & n. 2 (11t h Cir. 2010) (plaint if f assert ing f alse claims based on violat ion of MCPM); see al so U.S. ex rel . Prat her v. Brookdal e Senior Li ving Cmt ys., Inc., 838 F. 3d 750, 780 (6t h Cir. 2016) (McKeague, J. , concurring in part and dissent ing in part ) (basing analysis of FCA claim on MCPM guidelines). Salt ers provides evidence t hat AFC submit t ed claims for services t hat Dr. Park performed during t he Global Surgery Period. First , Salt ers present s records of visit s from pat ient BJF, who was seen for an excision of a benign or malignant breast t umor wit h reconst ruct ion on May 21, 2009, which has a ninet y-day Global Surgery Period. Dr. Park also billed for an office visit for BJF f or t he same day as t he surgery, and for anot her office visit on June 4, 2009. The June 4, 2009 visit was for an “ open 3 The MCPM inst ruct s t hat t he Global Surgery Period should also include t he day of t he surgery and—for maj or procedures—t he day before t he surgery. Page 30 of 46 wound of t he breast wit hout ment ion of complicat ion. ” Medicare was furt her billed anot her of fice visit for BJF wit h t he same diagnosis on June 18, 2009. Second, Salt ers provides records of billing f or pat ient MH, who was operat ed on by Dr. Park on November 16, 2010, for “ excision of malignant lesion including margins, t runk, arms or legs excised diamet er over 4 cm,” which has a Global Surgery Period of t en days. However, on November 22, 2010, AFC billed for an of fice visit for MH wit h a diagnosis of “ unspecified malignant neoplasm of t he skin upper limb, including shoulder, ” which Salt ers alleges is t he same diagnosis as t he dat e of surgery. AFC does not disput e t hat it billed for t hese visit s during t he Global Surgery Period. Inst ead, it claims t hat Salt ers should not be allowed t o assert t hese claims because she did not advance t hem in her complaint . AFC alleges t hat t he only claims in Salt ers’ s complaint relat ed t o t he Global Surgery Period assert ed t hat AFC failed t o use t he “ 24” modifier properly. However, Salt ers’ s complaint specifically alleges t hat “ Dr. Park rout inely charged addit ional of fice visit s for follow-ups and hospit al visit s, which were covered by t he original surgical charge.” (Doc. 1 at 18.) Therefore, Salt ers’ s claims for improper billing of visit s during t he Global Surgery Period are properly before t his Court . Furt her, AFC Page 31 of 46 provides no evidence t hat it s billing during t he Global Surgery Period was proper. Thus, viewing t he evidence in t he light most favorable t o t he non-movant , Salt ers has est ablished t hat AFC present ed false or fraudulent claims under t he FCA. However, f alse claims only lead t o liabilit y under t he FCA if t hey are knowingly present ed. 31 U.S.C. § 3729(a)(1)(A). Salt ers appears t o allege t hat Dr. Park personally submit t ed t hese claims wit h knowledge of t heir falsit y. She also claims t hat AFC knowingly present ed t hese claims. “ Knowingly” is defined in t he FCA as meaning t hat “ a person, wit h respect t o t he informat ion— has act ual knowledge of t he informat ion; (i) (ii) act s in deliberat e ignorance of t he t rut h or falsit y of t he informat ion; or (iii) act s in reckless disregard of t he t rut h of t he informat ion. ” 31 U.S.C. § 3729 (b)(1). There is no requirement of a showing of “ specific int ent t o defraud. ” Id. In support of her claim, Salt ers provides evidence t hat Dr. Park complet ed his own superbill, and t hat he was responsible f or t he accuracy of t he claims t hat he present ed for payment . Furt her, Dr. Park’ s deposit ion t est imony est ablishes t hat he knew t hat Global Surgery Periods exist ed but never researched t he lengt h of t hose periods. Thus, Salt ers concludes, Dr. Park filled out his own superbill while being willfully Page 32 of 46 ignorant of t he proper Global Surgery Periods and t heir effect s on billing. AFC, however, provides Dr. Park’ s deposit ion t est imony t hat he was not involved in billing, and did not know about it , and was simply involved in pat ient care. He st at ed t hat he “ put down what [his] act ivit y has been wit h t he pat ient , and it ’ s up t o t he ot her depart ment s t o det ermine t he billing.” (Park Dep. at 42. ) Salt ers also provides evidence t hat Dr. Park’ s wife, Kay Park (“ Kay” ), who worked at AFC, knew t hat Salt ers believed t he billing was improper, but inst ruct ed ot her AFC employees t o cont inue t his improper pract ice. This evidence includes emails bet ween Salt ers and Kay, in which Salt ers describes her concerns wit h Global Surgery Periods, and point s Kay t o a list ing of t he periods and corresponding surgeries. 4 Salt ers also advances an email from Diana Hensley (“ Hensley” ), an AFC employee, which st at es t hat “ I read an email from Kay st at ing t hat per Dr. Irwin, ‘ [w]e are also supposed t o charge an of fice visit on t he follow-up visit s even if it is wit hin t he [Global Surgery Period].’ ” (Pl. Ex. 6 at AFC 400512.) Furt her, Johansen’ s deposit ion t est imony confirms t hat Irwin’ s policy was t hat doct ors should bill f or t heir office visit s during t he Global Surgery Period. However, Johansen t est ified t hat Irwin’ s policy was t hat doct ors should 4 Salt ers emailed direct ions for f inding t he Global Surgery Periods on March 9, 2009. Page 33 of 46 bill for all t heir visit s and procedures, and t he audit ing depart ment should remove t he charges for services t hat were conduct ed during t he Global Surgery Period. According t o Salt ers’ s t est imony, Kay was also responsible for audit ing Dr. Park’ s claims. AFC disput es t his cont ent ion, claiming inst ead t hat t he billing was “ handled by [Hensley], and audit ed by t he AFC audit ors. ” (Doc. 111 at 14.) As evidence t hat Kay did not audit Dr. Park’ s claims, AFC point s t o an email chain, which includes an email from Liann West wood (“ West wood” ) t o Hensley, in which West wood spoke about her own impending mat ernit y leave, st at ed t hat Salt ers would check Hensley’ s work while she was on leave, and inst ruct ed Hensley t o “ t ry t o encourage [Dr. Park] t o get you [ his] hospit al charges in a t imely manner.” (Doc. 111-1 at AFC 502364. ) It also includes an email in which Salt ers direct ed West wood on how t o fix some mist akes t hat she was allegedly making. AFC claims t hat t hese emails prove t hat Hensley was in charge of billing for Dr. Park, t hat West wood audit ed t he charges, and t hat West wood report ed t o Salt ers. Viewing t he fact s in t he light most favorable t o t he non-movant , Salt ers has provided evidence t hat Kay billed f or Dr. Park, t hat she was aware of t he Global Surgery Periods, and t hat false claims were billed f or Page 34 of 46 Dr. Park aft er Kay became aware of t he Global Surgery Periods. While AFC disput es t his evidence, t he sufficiency of t he evidence is a quest ion for t he j ury, and t herefore, summary j udgment as t o billing during t he Global Surgery Periods is due t o be denied. AFC also alleges t hat it did not misuse t he 24 modifier when billing during t he Global Surgery Periods. However, in her response t o AFC’ s mot ion, Salt ers fails t o ment ion any misuse of t he 24 modifier for billing during t he Global Surgery Period. Therefore, because “ grounds alleged in t he complaint but not relied upon in summary j udgment are deemed abandoned, ” Salt ers’ s claims against AFC based on t he misuse of t he 24 modifier during t he Global Surgery Period are deemed abandoned. Resol ut ion Trust Corp., 43 F.3d at 599. Summary j udgment as t o claims based on t he misuse of t he 24 modifier is due t o be grant ed. H. Level One Office Visit Encounters Billing for Inj ection Only Patient In her complaint , Salt ers alleges t hat AFC violat ed t he FCA by “ charging a Level 1 of fice visit , Code 99211, when a pat ient came in f or j ust a shot or vaccinat ion and saw only a nurse or nurse assist ant .” (Doc. 1 at 16. ) Salt ers claims t hat inj ect ion only visit s should be billed under an inj ect ion code, and t hat AFC overcharged Medicare, Medicaid, Tricare and Champus by misbilling t hese visit s. However, AFC provides evidence Page 35 of 46 t hat an inj ect ion-only code and a level one of fice visit code are compensat ed at “ virt ually ident ical” rat es. (Doc. 102-2 at ¶ 17. ) Therefore, AFC claims, any misbilling t hat allegedly occurred did not result in overpayment s. AFC also alleges t hat it did not knowingly submit bills cont aining t he wrong code, and cit es t o apparent ly conflict ing sect ions in t he MCPM t o support t his assert ion. Salt ers does not respond t o AFC’ s argument about compensat ion levels, and also does not provide any evidence t hat AFC submit t ed t hese claims wit h knowledge of t heir f alsit y. Inst ead, Salt ers at t empt s t o base t his claim on a reverse false claim t heory, assert ing t hat AFC had a dut y t o ret urn overpayment s it received as a result of it s misbilling. In her Supplement al Evident iary Submission (Doc. 116), Salt ers provides an expert report t hat concludes t hat AFC received overpayment s of $261.29 in relat ionship t o it s immunizat ion claims. (Doc. 116 at Ex. 5.) However, none of t hose overpayment s result ed from a billing of Code 99211 and t herefore are irrelevant t o t his claim. Furt her, because AFC provides evidence t hat it received no overpayment s from it s misbilling because t he compensat ion rat es were “ virt ually ident ical” and Salt ers does not provide any evidence t o t he cont rary, she cannot make out a claim based Page 36 of 46 on a reverse false claim t heory. 5 Wit hout an overpayment , t here cannot be a dut y t o ret urn an overpayment . See Mat heny Medco, 671 F. 3d at 1222 (set t ing out t he element s for reverse f alse claim liabilit y). Viewing t he evidence in t he light most f avorable t o t he non-movant , Salt ers cannot make out a claim for violat ion of t he FCA based on level one office billing for inj ect ion-only of fice visit s. Summary j udgment in AFC’ s favor is due t o be grant ed as t o t his claim. I. Unbundling Salt ers claims t hat AFC knowingly submit t ed unbundled claims— i.e. billed f or t hem separat ely when t hey should have been billed t oget her. As evidence of AFC’ s scient er, she submit s her own t est imony t hat she discussed her concerns about unbundling wit h Irwin, who replied t hat “ t his was somet hing he had always done . . . and t here was not hing wrong wit h it and it would cont inue t o be unbundled. ” (Salt ers Dep. at 219-20.) She also st at ed t hat “ Irwin’ s posit ion . . . was t hat AFC was going t o unbundle and writ e off what t he insurance companies . . . caught , ” and t hat AFC had an “ unbundling report ,” which list ed “ t he 5 Salt ers does point t o deposit ion t est imony from Johansen t hat st at es t hat AFC simult aneously billed for bot h t he off ice visit and t he inj ect ion administ rat ion code. However, Johansen’ s t est imony was about unbundling of inj ect ion codes when a pat ient was also seen by a doct or, not about inj ect ion-only visit s. Therefore, his t est imony is irrelevant t o t his claim. Page 37 of 46 amount s t hat [were] writ t en off because of bundling or unbundling.” (Id. at 221-22. ) AFC responds, assert ing t hat Medicare did not provide clear direct ion about bundled/ unbundled services, and t herefore, AFC could not have knowingly submit t ed false claims in t his area. Each separat e inst ance of unbundling will be addressed individually below. 1. Venipunctures A venipunct ure involves collect ing a blood sample by “ insert ing int o a vein a needle wit h syringe or vacut ainer t o draw t he specimen. ” MCPM Ch. 16 § 60. 1. In her complaint , Salt ers alleges t hat AFC “ had a pract ice of unbundling t he lab draw fee and t he inj ect ion administ rat ion codes 36415 and 90772 (2008 and before) and 96372 (2009)” which should have been billed as part of an of fice visit . (Doc. 1 at 17.) In response, AFC assert s t hat venipunct ures are not bundled services. As evidence for t his assert ion, AFC claims t hat MCPM does not ment ion venipunct ures in it s sect ion on bundled services. See MCPM Ch. 12 § 20.3 (sect ion on bundled services referring t o rout inely bundled procedures, inj ect ion services, GS Packages, int ra-operat ive and/ or duplicat ive procedures, and EKG int erpret at ions). Page 38 of 46 AFC also argues t hat t he MCPM specifically allows physicians t o charge for specimen drawing in some circumst ances. MCPM Ch. 16 § 60.1.1. Furt her, AFC point s t o t est imony from Salt ers’ s expert , which st at es t hat “ as it pert ains t o unbundling of [ venipunct ures] . . . we did not find t hat [Salt ers’ s] allegat ion in t hat case was legit imat e. ” (Melnykovych Dep. at 79.) Last ly, AFC assert s t hat t hrough 2013, code 36415 for venipunct ures was not list ed as a bundled code in t he Medicare Newsline published by Cahaba Government Benefit Administ rat ors (“ CGBA” ). 2013 Bundl ed Services, Medicare B Newsline (Cahaba Gov’ t Benefit Adm’ rs, LLC, Birmingham, Ala.), March 2013 at 11-12. However, Salt ers provides her deposit ion t est imony— a medical as coder— hat if a venipunct ure was done during an of fice visit , and t he t est t was done at an AFC lab, AFC should have only billed for an office visit and not for t he blood draw. She also claims t hat t he MCPM, t hough it does not list venipunct ures in t he bundled services sect ion, does st at e t hat “ [ s]eparat e payment is never made for rout inely bundled services and supplies. ” MCPM Ch. 12 § 20. 3. Furt her, Salt ers indicat es t hat t hough t he MCPM allows a specimen collect ion fee, t his only applies when “ (1) it is t he accept ed and prevailing pract ice among physicians in t he localit y t o make separat e Page 39 of 46 charges for drawing or collect ing a specimen, and (2) it is t he cust omary pract ice of t he physician performing such services t o bill separat e charges for drawing or collect ing t he specimen.” MCPM Ch. 16 § 60. 1. 1. Salt ers claims t hat t his language does not apply t o blood draws because it is “ [c] ommon pract ice . . . f or nurses, not physicians, t o perf orm blood draws. ” (Doc. 105 at 36. ) AFC responds t hat physicians bill Medicare f or medical services performed by t heir st aff , as t hey are not generally involved in services such as blood draws, vaccine administ rat ions, and inj ect ions. Therefore, while AFC provides evidence t hat venipunct ures were not list ed as bundled codes in t he Manual or in CGBA’ s newslet t er— which was published aft er t hese claims were submit t ed— ers cit es t o language in Salt t he Manual which provides t hat “ rout inely bundled” claims are not paid for separat ely. Viewing t he evidence in t he light most f avorable t o Salt ers, t here remains a quest ion of fact about whet her venipunct ures are “ rout inely bundled” claims. Therefore, t he quest ion of whet her AFC submit t ed f alse claims for unbundled venipunct ures will be det ermined by t he j ury. AFC also claims t hat even if it submit t ed false claims for unbundled venipunct ures, it did not do so knowingly. In support of t his assert ion, it Page 40 of 46 provides deposit ion t est imony from Johansen which st at es t hat he believed t hat “ submit t ing a separat e charge for a blood draw along wit h t he office visit by t he physician is appropriat e in all circumst ances t o Medicare.” (Doc. 94-3 at 87-88.) However, Salt ers’ s t est imony t hat Irwin int ended t o submit unbundled claims, apparent ly wit hout checking t heir legit imacy, and t hen simply “ writ e off ” t he ones t hat insurance companies did not accept , raises t he possibilit y t hat AFC billed wit h “ deliberat e ignorance of t he t rut h or falsit y of t he informat ion” or wit h “ reckless disregard of t he t rut h of t he informat ion.” 31 U.S.C. § 3729(b)(1). Thus, viewing t he evidence in t he light most favorable t o t he non-movant , t here is a mat erial disput e of f act as t o scient er, and summary j udgment as t o t his claim is due t o be denied. See Urquil l aDiaz, 780 F. 3d at 1061 (holding t hat exist ence of scient er is a j ury quest ion). 2. Injection Administration Salt ers claims t hat AFC improperly billed Federal payors for an inj ect ion administ rat ion fee— codes 96372 and 90772— which should have been bundled wit h t he of fice visit . AFC moved f or summary j udgment , claiming t hat it properly billed for inj ect ion administ rat ions in conj unct ion wit h office visit s, and cit ing t he MCPM t o support t his Page 41 of 46 cont ent ion. In support of her assert ion, Salt ers provides her t est imony t hat Medicare didn’ t pay for an inj ect ion administ rat ion and for an of fice visit separat ely unless modifier 25 was added. (Salt ers Dep. at 61-62.) This modifier, according t o Salt ers, is only properly added if an inj ect ion was administ ered for a separat e diagnosis t han t he diagnosis at t ached t o t he original office visit . (Id. at 178-79. ) According t o Salt ers, AFC misused t his modifier, and t herefore, unbundled inj ect ion administ rat ions, billing separat e diagnosis codes for what she believes were t he same problems. (Id. at 178-80. ) However, she admit s t hat t his cont ent ion is based on her opinion and her “ reading t he [ medical] record.” (Id.) Salt ers also assert s t hat AFC had a policy and t rained it s employees t o rout inely bill for office visit s t hat included inj ect ion administ rat ions by adding t he separat e diagnosis modifier. (Id. at 177-80.) As evidence of t his policy, she provides an email she sent t o Valencia McAdory (“ McAdory” ), a fellow AFC employee, which direct s her t o “ not approve any claims t hat have t he 96372 Admin. Fee wit hout adding t he ‘ 25’ Modifier on t he Of fice Visit . ” (Pl. Ex. 46.) The MCPM st at es t hat CPT code 99211 [ of fice visit ] cannot be paid if it is billed wit h a drug administ rat ion service . . . Therefore, when a medically necessary, significant , and separat ely ident ifiable Page 42 of 46 E/ M service (which meet s a higher complexit y level t han CPT code 99211) is perf ormed, in addit ion t o one of t hese drug administ rat ion services, t he appropriat e E/ M CPT codes should be report ed wit h modifier -25 . . . For an E/ M service provided on t he same day, a dif ferent diagnosis is not required. MCPM Ch. 12 § 30.6.7. This sect ion makes it clear t hat Medicare will not pay for an office visit coded at 99211 in conj unct ion wit h a drug administ rat ion service. 6 Inst ead, it will only pay for an office visit “ which meet s a higher complexit y level t han CPT code 99211,” billed wit h modifier 25. However, despit e Salt ers’ s allegat ions t o t he cont rary, t he MCPM also makes it clear t hat “ [f ]or an [of fice visit ] provided on t he same day, a different diagnosis is not required.” Salt ers’ s claims t hat AFC required it s coders t o rout inely add a 25 modifier when billing inj ect ion codes wit h an office visit do not amount t o a claim of wrongdoing, because t he MCPM requires t hat all claims f or office visit s which are billed in conj unct ion wit h an inj ect ion be coded wit h a 25 modifier. AFC can only be held liable f or billing false claims if it fraudulent ly coded of fice visit s as “ meet [ing] a higher complexit y level t han CPT code 99211, ” when t here was not a “ medically necessary, significant , and separat ely ident ifiable E/ M service.” 6 The abbreviat ion “ E/ M” refers t o Evaluat ion and Management Services, and generally relat es t o an office visit by a pat ient . See Dep’ t of Healt h & Human Servs., Ct rs. For Medicare & Medicaid Servs. , ICN 006764, Evaluat ion and Management Services (2016). Page 43 of 46 The only evidence Salt ers provides t o show t hat AFC was improperly billing t hese of fice visit s is a chart produced by AFC, which purport s t o show “ inj ect ion administ rat ion . . . when billed wit h an of fice visit for Medicare, Medicaid, and Tricare Claims. ” (Pl. Ex. 27.) This chart only list s one inst ance of code 99211 billed in conj unct ion wit h an inj ect ion administ rat ion code. In accordance wit h t he MCPM, t he chart shows a payment amount of $0 for t his visit , presumably because it was misbilled. Furt her, Salt ers’ s expert ’ s report did not find any misbilling for inj ect ion administ rat ion codes t hat cont ained t he 25 modifier. (Doc. 116 at Ex. 5 & 6 t o Ex. O. ) Therefore, viewing t he evidence in t he light most favorable t o t he non-movant , Salt ers did not provide any evidence t hat AFC present ed fraudulent claims which unbundled inj ect ion administ rat ions. Summary j udgment as t o t his claim is due t o be grant ed in AFC’ s f avor. 3. Vaccine Administration Salt ers alleges t hat “ AFC also unbundled vaccinat ion inj ect ions from office visit s t hat should have been billed simply as part of t he of fice visit . The codes for vaccinat ions are 90471 and 90472.” (Doc. 1 at 17. ) AFC, however, cit es t o t he MCPM, which st at es t hat If a physician sees a beneficiary for t he sole purpose of administ ering t he influenza virus vaccine, t he pneumococcal vaccine, and/ or t he hepat it is B vaccine, t hey may not Page 44 of 46 rout inely bill for an office visit . However, if t he beneficiary act ually receives ot her services const it ut ing an “ of fice visit ” level of service, t he physician may bill for a visit in addit ion t o t he vaccines and t heir administ rat ion, and Medicare will pay for t he visit in addit ion t o t he vaccines and t heir administ rat ion if it is reasonable and medically necessary. MCPM Ch. 18 §10. 2. Salt ers provides no evidence t hat AFC violat ed t his rule. Inst ead, she present s her expert report , which does not cont ain proof of any unbundling for codes 90471 and 90472. (Doc. 116 at Ex. 7 & 8 t o Ex. O.) Furt her, t he expert t est ified t hat she did not find any unbundling relat ed t o t hese codes. (Melnykovych Dep. at 78-84 & 95.) Viewing t he evidence in t he light most f avorable t o t he non-movant , t here is no evidence t hat AFC present ed f alsely unbundled claims relat ed to vaccinat ion administ rat ions. Summary j udgment as t o t his claim is due t o be grant ed in AFC’ s f avor. 4. Pulse Oximetry Salt ers concedes t hat summary j udgment in AFC’ s favor is due t o be grant ed as t o t his claim. J. Conclusion For t he reasons st at ed above, AFC’ s mot ion f or part ial summary j udgment is due t o be GRANTED in part and DENIED in part . Summary j udgment in AFC’ s favor is due t o be grant ed as t o Salt ers’ s claims based Page 45 of 46 on billing for t he Ear Popper, violat ion of t he Ant i-Kickback St at ut e, billing for aft erhours claims, billing for inj ect ion-only claims, and unbundling of inj ect ion administ rat ion, vaccine administ rat ions, and pulse oximet ry. Summary j udgment as t o Salt ers’ s claims for billing for l ocum t enens physicians, violat ions of t he St ark Law, billing of of fice visit s during t he Global Surgery Period, and venipunct ure unbundling is due t o be denied. A separat e order consist ent wit h t his opinion will be ent ered DONE and ORDERED t his 18t h day of April 2017. _____________________________ L. Scot t Coogler Unit ed St at es Dist rict Judge 186291 Page 46 of 46

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