A court in the District of Maryland again dismissed a declined qui tam action in which the relator, a bariatric surgeon, alleged that two medical device companies violated the AKS by providing surgeons with free advertising in exchange for physicians using the companies’ LAP-BAND medical devices in bariatric surgeries. See United States ex rel. Fitzer v. Allergan, Inc., 17-cv-00668 (D. Md. Mar. 22, 2022). We reported on the court’s prior dismissal of the relator’s second amended complaint for failure adequately to plead a knowing and willful violation of the AKS here. Relator fared no better on his third attempt; as the court found, he failed to adequately plead presentment and causation.
In this latest complaint, the relator repeated his allegations that the defendants operated a website that provided free advertising and marketing to bariatric surgeons who used LAP-BANDs. Among other features, the website included a physician locator that directed patients to local bariatric surgeons who had the skills and training necessary to implant the device. Relator alleged that the physician locator “provided constant exposure and flow of business to the included surgeons,” and actually functioned as a kickback scheme “by providing surgeons with valuable free advertising on [the website] in order to induce surgeons to recommend Defendants’ . . . medical device instead of alternative operations.” Relator alleged that physicians would only be listed on the website if they agreed to meet a quota of 40 surgeries per year.
In response to defendants’ motion to dismiss, the court focused on whether the relator had properly alleged that false claims were, in fact, submitted to the government for payment and whether any claims for LAP-BAND surgeries resulted from the alleged AKS violations.
With respect to presentment, the court noted the relator’s complaint included two tables purportedly showing Medicare claims data for procedures performed by several doctors who appeared on the physician locator in 2013 and 2014. But instead of showing claims for LAP-BAND procedures specifically, the tables listed claims using the code 43770, a code that corresponds to adjustable gastric band procedures using either the LAP-BAND device or a competitor’s device. While relator claimed that the listed physicians were not qualified to perform surgeries using the competitor’s device, the court found that assertion to be unsupported. The court found such allegations merely pled that the AKS scheme “could have led to presentment,” but did not “necessarily [lead] to a false claim being submitted,” and did not satisfy relator’s burden to plead the submission of false claims for LAP-BAND devices.
As to causation, the court began by acknowledging a split of authority on whether an AKS violation must be the but for cause or proximate cause of a false claim. The court adopted a “middle of the road” approach requiring the relator to show that “the defendants’ referral actually sat in the causal chain.” The court found that relator’s allegations fell short. The complaint did not adequately allege that the claims in the tables were related to LAP-BAND surgeries, and failed to link those surgeries to any particular patient who was exposed to an illegal recommendation or referral. Additionally, the tables were missing information such as the date of procedure and date of claims submission, which would be required to support an inference that the relevant surgeons were listed on the physician locator at the time they submitted the claims for reimbursement. The court noted in this regard that an “AKS violation cannot be causally related to a claim for reimbursement if the provider was never aware of the alleged kickback in the first place.” As such, the complaint left open the “possibility that the providers were never aware of their listing on the physician locator,” and Rule 9(b) precluded the court from taking relator’s “unsupported word for it.”
The court’s opinion can be found here.