Category

Upcoding

21 October 2019

Ninth Circuit Invited To Weigh In On Public Disclosure Bar, Falsity

On October 8, 2019, a judge in the United States District Court for the Central District of California granted a stay and certified two questions for interlocutory appeal in relator Integra Med Analytics’ FCA suit against Providence Health & Services (“Providence”), its affiliates, and J.A. Thomas and Associates, Inc. (“JATA”), a clinical documentation consultant.  The case, on which we have previously reported here, involves allegations that Providence perpetrated an upcoding scheme whereby it trained its doctors to describe medical conditions with language that would support increasing the severity levels of the DRGs that Providence reported to Medicare, leading to inflated Medicare reimbursements.

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11 September 2019

DOJ Defends Medicare Advantage Upcoding Claims Against Sutter

On August 28, 2019, the United States filed a brief in opposition to Sutter’s June 14, 2019 motion to dismiss the Department of Justice’s Complaint-in-Intervention in a False Claims Act suit alleging Sutter knowingly submitted and caused the submission of unsupported diagnosis codes for Medicare Advantage Organization (MAO) patients in order to inflate Medicare reimbursements.  On the same day, the Relator, Kathy Ormsby, also filed a similar brief in opposition to Sutter’s motion to dismiss.  We previously discussed Sutter’s motion to dismiss here and the Department of Justice’s Complaint-in-Intervention here.

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22 August 2019

Medicare Advantage Providers Pay $5M to Settle FCA Allegations Relating to Unsupported Diagnosis Codes

On August 8, 2019, Beaver Medical Group L.P. (“Beaver”) and a Beaver-affiliated physician, Dr. Sherif Khalil, agreed to pay a combined total of $5 million to resolve allegations that the providers knowingly submitted diagnosis codes that were not supported by the medical records in order to inflate reimbursements from Medicare.  The qui tam action was brought by a former employee of Beaver, Dr. David Nutter, and DOJ intervened.  The settlement reflects DOJ’s continuing efforts to use its enforcement power to pursue fraud in the Medicare Advantage space despite recent setbacks in the UnitedHealthcare Insurance Co. v. Azar, 330 F. Supp. 3d 173 (D.D.C. 2018), which vacated a portion of CMS’s 2014 Final Overpayment Rule applicable to the Medicare Advantage program, previously discussed here.  Indeed, in its press release, DOJ emphasized that preventing Medicare Advantage fraud remains a top priority:  “As enrollment in Medicare Advantage continues to grow, investigation into accuracy of diagnosis data becomes ever more important….Those who inflate bills sent to government health programs can except to pay a heavy price.”  We will continue to monitor and provide updates on these issues as they develop.

DOJ’s press release can be found here.

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21 August 2019

District Court Dismisses FCA Suit in Medicare Advantage Upcoding Case

On August 6, 2019, the United States District Court for the Western District of Texas granted a motion to dismiss filed by Baylor Scott & White Health (“Baylor”), a network of inpatient short-term acute care hospitals, in a False Claims Act suit alleging that Baylor submitted “more than $61.8 million in false claims” by upcoding certain diagnosis codes.  The Court dismissed all claims with prejudice, finding that the Relator, Integra Med Analytics LLC, alleged only “naked assertions devoid of further factual enhancement” that were “insufficient under Rule 8’s pleading standards.”  The Department of Justice declined to intervene in the suit.

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28 June 2019

Sutter Health Files Motion to Dismiss Criticizing DOJ’s Outdated FCA Theories in Medicare Advantage Case

On June 14, 2019, Sutter Health (“Sutter”) filed a Motion to Dismiss the Department of Justice’s Complaint-in-Intervention in a False Claims Act suit alleging Sutter knowingly submitted and caused the submission of unsupported diagnoses codes for Medicare Advantage patients in order to inflate Medicare reimbursements.  The Department of Justice filed its Complaint-in-Intervention on March 4, 2019, which we previously discussed here.

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08 March 2019

DOJ Files Complaint-in-Intervention in Medicare Advantage Case Against Sutter Health

On March 4, 2019, the Department of Justice filed its Complaint-in-Intervention against Sutter Health (“Sutter”) and its affiliate Palo Alto Medical Foundation (“PAMF”) in a False Claims Act suit alleging that the Defendants knowingly submitted and caused the submission of unsupported diagnosis codes for Medicare Advantage patients in order to increase reimbursements from Medicare.  DOJ had previously announced its decision to intervene on December 11, 2018, as we previously discussed here.

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02 November 2016

Fourth Circuit Appears Inclined to Avoid Sampling Question

As we reported here and here, the question of whether statistical sampling can be used to establish FCA liability became intertwined in a Fourth Circuit interlocutory appeal challenging the government’s assertion that it has unfettered authority to veto FCA settlements.  United States ex rel. Michaels v. Agape Senior Cmty., Inc., No. 15-2145 (4th Cir.).  During oral arguments last week, the Fourth Circuit panel demonstrated a clear preference for avoiding the sampling component of the appeal, likely leaving the lower courts to continue to develop a piecemeal approach.

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13 September 2016

Seventh Circuit Holds Allegations of Specific Claims Not Required to Satisfy Rule 9(b), but Sets High Bar For Pleading Claims Based on Allegations of Medically Unnecessary Services

In another recent False Claims Act (“FCA”) case decided on Rule 9(b) grounds, the Seventh Circuit rejected the contention that allegations regarding specific claims submitted are necessary to survive a motion to dismiss, but set a very high bar for pleading FCA claims premised on a lack of medical necessity.

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20 January 2016

Relators Argue Fourth Circuit Must Permit Use of Sampling to Establish FCA Liability

The Fourth Circuit has agreed to consider on interlocutory appeal whether statistical sampling can be used to establish FCA liability, as we previously reported hereSee United States ex rel. Michaels v. Agape Senior Cmty., Inc., No. 15-2145 (4th Cir.).  Because no circuit court has yet ruled on the issue, the Fourth Circuit’s decision could significantly impact the development of this hotly-debated issue in FCA litigation.

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23 November 2015

District Court Dismisses Claims Based on Inflated CMS Star Ratings But Allows Kickback Claims to Proceed

A district court recently denied a relator’s efforts to translate alleged manipulation of skilled nursing facility (“SNF”) CMS Star Ratings into a claim under the FCA, while allowing the relator to proceed with allegations that the CEO of a SNF chain oversaw a kickback scheme designed to churn business.  See U.S. ex rel. Orten v. North Amer. Health Care, Inc., No. 14-cv-02401 (N.D. Cal. Nov. 9, 2015).  The case reinforces well-established precedent that FCA suits alleging regulatory violations cannot proceed where the government does not condition payment on complete regulatory compliance.  The government’s Statement of Interest arguing that the public disclosure bar was triggered as to certain claims demonstrates the DOJ’s growing wariness of opportunistic behavior by relators seeking to capitalize on pre-existing government investigations to which they did not contribute.

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