U.S. ex rel. Hobbs v. MedQuest Assocs., Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Hobbs v. MedQuest Assocs., Inc., No. 11-6520 (6^th Cir. Apr. 1, 2013)

In this False Claims Act case, the Sixth Circuit Court of Appeals reversed a lower court’s grant of summary judgment for the relators who had brought the action. An employee brought suit against a diagnostic testing company for Medicare fraud. The employee claimed that the company used supervising physicians who were not enrolled in Medicare and failed to enroll one of the company’s independent diagnostic testing facilities in Medicare and used another physician’s billing number.

The court held that the use of unapproved physicians did not constitute fraud. As for the supervision method used, the court stated that Medicare regulations require only that a physician be present in the office – the physician does not have to be in the room where the procedure is being performed. The court stated that the company provided this level of supervision, even though the physicians were not enrolled in the Medicare program. The court also noted that the False Claims Act does not govern this type of technical compliance with federal regulations.

The court also held that the failure to reregister the testing facility was not a legitimate claim under the False Claims Act. The court stated that this was nothing more than a failure to update enrollment information, which was not a violation of the conditions of payment. The federal government also failed to cite any regulation governing the diagnostic testing company’s conduct which showed wrongful action taken by the company under the Act.