Zeman ex rel. U.S. v. USC Univ. Hosp. (Summary)

QUI TAM SUIT

Zeman ex rel. U.S. v. USC Univ. Hosp., No. CV 11-05755 DDP (MRWx) (C.D. Cal. Nov. 12, 2014)

The U.S. District Court for the Central District of California granted a hospital’s motion for summary judgment against a qui tam suit filed by a patient.

The patient, a Medicare beneficiary, had undergone several outpatient orthopedic surgeries at an ambulatory surgical center owned and operated by the hospital, with occasional return visits for follow-up care from her surgeons. A dispute arose after the patient received bills for some of these follow-up visits. The additional fees amounted to approximately $95.63.

The patient argued that the bills were illegal under the Medicare regulations, which prohibit charges for follow-up care within 90 days of certain kinds of major surgery. Based on this, the patient brought a qui tam complaint for violation of the False Claims Act, alleging that the hospital knowingly presented false or fraudulent claims to Medicare and used false records to get such claims approved. The hospital disputed this and insisted that it had only billed for legitimate facility fees.

In discovery, the patient further alleged that the hospital did not qualify for “provider-based status” under the Medicare regulations, and thus could not be eligible for any exceptions to the 90-day global surgery rule. The court was unpersuaded, concluding that the patient’s legal position was “untenable” and failed to provide the hospital with fair notice. In particular, it explained that the patient could not proceed under her newly raised theory about the hospital’s “provider-based status” because she had not pleaded it in the complaint. Since this “provider-based status” claim was the crux of the patient’s argument, the court ruled against her and granted the hospital’s motion for summary judgment.