Health Law Daily FCA case against pain management clinic that over tested patients moves forward
Tuesday, January 7, 2020

FCA case against pain management clinic that over tested patients moves forward

By Rebecca Mayo, J.D.

A district court denied motions to dismiss the claims against a pain management clinic accused of instituting policies and providing bonuses to providers for running medically unnecessary tests on patients.

A physician’s claim that medical tests were necessary in his professional opinion fails where the tests conducted can be shown to be objectively unnecessary. A Tennessee pain management clinic had a standard practice of conducting duplicative urinary drug testing, running genetic tests for conditions patients showed no signs of having, and running psychological tests that were not used for treating patients. A district court found that the government sufficiently pled facts showing that the tests were medically unnecessary and denied the pain management clinic’s motions to dismiss (US and Tennessee ex rel. Anesthesia Services Associates, PLLC, December 31, 2019, Trauger, A.).

Scheme. Medicare generally requires a positive indication of the presence of a drug on a qualitative urinary drug test (UDT), which detects the presence of a wide spectrum of drugs, before a secondary quantitative test is run to determine the concentration of that specific drug. A pain management clinic, Comprehensive Pain Specialists (CPS), had a standard practice of running both types of test at the same time on every patient every two months regardless of individualized need. CPS would also frequently prescribe pain medication, including opioids, without having the test results and would often not review or consider the results when making prescribing decisions even when the results did become available.

In 2016, the first of six qui tam complaints was filed against CPS and its Chief Medical Director (CMD), among others. According to the complaints, CPS submitted thousands of claims for medical test that were medically unnecessary, including UDT, specimen validity testing, genetic testing and psychological testing. The CMD also allegedly submitted over 2,500 claims which indicated that he was the rendering provider, when in fact he was out of the country on vacation. The government intervened and alleged that CPS misused UDT as a means to bilk the federal and state governments out of millions of dollars.

False certification. The government alleged that the CMD falsely certified on CMS reimbursement claim forms that claims he submitted were medically necessary when he knew that they were not. The CMD argued that the claims must fail because his professional opinion as to medical necessity could not be shown to be objectively false for the purposes of stating a claim under the FCA. However, the court found that the government adequately alleged that there was no medical need or basis for submitting claims for secondary drug testing on every patient tested, specimen validity testing, genetic testing, or the iPad psychological testing. Medicare coverage is limited to services that are reasonable and necessary and previous courts have recognized medically unnecessary nondiagnostic tests billed to the government can form the basis of an FCA claim.

Local coverage determinations. The CMD argued that an FCA claim cannot be premised upon non-compliance with a local coverage determination (LCD) because LCDs are not promulgated in accordance with notice and comment procedures. The court found that the caselaw the CMD relied on never established that all LCDs set forth substantive legal rights that require notice and comment procedures. Further, neither party in the present case briefed the question of whether the LCDs at issue should be considered to establish substantive legal standards.

The CMD further argued that the government attempted to impose liability on him based on purported violations of LCDs that occurred before the LCDs actually went into effect or based on purported violations of LCDs issued in other regions by other Medicare Administrative Contractors (MACs). The court disagreed, finding that the references to other MACs and other LCDs was intended to bolster the allegations that much of the testing that the CMD and other CPS providers were ordering was not medically necessary, regardless of whether a binding LCD reached the issue at the time.

Vicarious liability. Finally, the CMD argued that the government was trying to hold him vicariously liable for all allegedly false claims submitted by CPS personnel throughout the CMD’s tenure based on his ownership interest and leadership positions. He asserted that these claims should fail because the FCA does not permit a sweeping extension into vicarious liability and the FCA instead contains a rigorous scienter requirement that does not permit liability merely on the basis of negligent oversight. The court found that the government adequately alleged that the CMD directly caused the submission of false claims by CPS and CPS’s non-owner providers through the setting of CPS’s policies and the implementation of financial incentives designed to induce the submission of false claims.

The case is No. 3:16-cv-0549.

Attorneys: Kara F. Sweet, U.S. Attorney's Office, for the United States. Don McKenna (Hare, Wynn, Newell & Newton, LLP) for Suzanne Alt. Philip H. Bangle, Attorney General's Office, for the State of Tennessee. Andrew F. Solinger (Waller, Lansden, Dortch & Davis, LLP) for Anesthesia Services Associates, PLLC d/b/a Comprehensive Pain Specialists. Daniel T. Swanson (London & Amburn, P.C.) for Russell S. Smith.

Companies: Anesthesia Services Associates, PLLC d/b/a Comprehensive Pain Specialists

MainStory: TopStory CaseDecisions CMSNews BillingNews EnforcementNews FCANews FraudNews MedicaidNews MedicareContractorNews PartBNews TennesseeNews

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