United States v. Fadul (Summary)

FALSE CLAIMS ACT

United States v. Fadul, No. DKC 11–0385 (D. Md. Feb. 28, 2013)

A federal district court granted summary judgment to the government on its claim for payment by mistake of fact against a cardiovascular center, but denied the motion with respect to other claims under the False Claims Act (“FCA”).

The cardiovascular center provided mobile diagnostic services to residents of nursing homes. After completing a test, a technician electronically transferred the results to a radiologist who had been assigned by the cardiovascular center to read the test and produce a report. The mobile technicians and radiologists received compensation on a per-test basis.

The facility used billing software which required software-specific, non-CPT codes that were automatically translated to two CPT codes to bill insurers. This case involved two particular software-specific codes, which billed combination CPT codes automatically. First, the software-specific code for abdominal ultrasounds automatically generated CPT 76700 (abdominal ultrasound) and CPT 76770 (retroperitoneal ultrasound) codes. The government argued that these codes represented tests that require separate orders and are rarely performed on the same patient at the same appointment.

Second, the software-specific code for bilateral lower extremity venous studies automatically generated CPT 93970 (venous duplex ultrasound, bilateral) and CPT 93965 (non-invasive physiologic study of extremity veins) codes for billing. CPT 93965 was also billed when a technician reported that she had performed a unilateral lower extremity venous study. The government represented that these also were different tests. In fact, some of the center’s technicians admitted that they never performed CPT 93965 tests.

The cardiologist agreed that the tests were different and that automatic billing occurred, but disputed his knowledge of the practice and the extent of his involvement in the billing operations.

The government sought summary judgment on all of its claims.  As to its FCA claims, while it was undisputed that false claims were submitted to Medicare and Medicaid due to the automatic combination billing previously described, the claims had to be submitted “knowingly.”  Under the FCA, this can mean that a person actually knows that claims are improperly submitted, acts in deliberate ignorance of that fact, or acts in reckless disregard of whether false claims are being submitted.  In addition, the collective knowledge of employees cannot be used to prove knowledge on the part of a facility.  Rather, an individual employee must act knowingly to attribute the knowledge to the entity.  Because of disputes as to the cardiologist’s knowledge and involvement with the billing practices of the entity, the court denied the government’s motion for summary judgment as to its FCA claims.

However, the government also asserted a claim for payment by mistake of fact to recover claims that were improperly paid.  Because knowledge was not a requirement for that claim and the cardiologist did not dispute that claims were improperly paid, the court granted summary judgment to the government on the mistake of fact claim against the center in the amount of $682,947.74.