By Jeffrey H. Brochin, J.D.
Two related Indiana medical practices that schemed to bill Medicaid nine times for patients’ single urine sample screenings had notice that use of the multiple billing code was improper, and they had knowledge of the coverage and payment rules applicable to the Indiana Medicaid claims, a federal district court in Indiana has ruled. However, the U.S. failed to properly plead the intra-corporate conspiracy doctrine as among the separate medical entities, and therefore that claim was dismissed (U.S. v. Wagoner, September 20, 2018, Springmann, T.).
Multiplexed opioid screening. Indiana medical practices operated by two physicians who had formed two separate practice entities had a routine of requiring patients seeking a prescription for opioid pills or other pain medicine to submit a urine sample for qualitative testing for the presence or absence of nine or more drugs and drug classes. One type of qualitative urine drug test kit, known as a multiplexed screening kit, is designed to use a single urine sample to test for multiple drugs or drug classes of abused drugs in the patient’s system. In contrast, quantitative testing determines the quantity of the particular drug or drug class in the urine sample, often using chromatographic equipment. The medical practices never possessed or used chromatography equipment to analyze urine samples.
After certain urine test billing claims were denied by Indiana Medicaid, the physicians allegedly devised a scheme whereby they could be paid nine or more times for each drug screen test using a single urine sample from a single patient on a single day with a multiplexed screening kit. Despite protests by their billing department, the practices continued to utilize codes enabling the multiple billing. The U.S. and Indiana Medicaid filed a False Claims Act (FCA) claim, and the practices moved for dismissals, which, for the reasons cited below were granted in part and denied in part.
Sufficiency of notice and knowledge. The practitioners contended that the complaint failed to allege that they received notice of the change in Indiana Medicaid’s coverage and payment rules effective January 1, 2011. However, the court noted that the complaint in fact alleged that all enrolled Indiana Medicaid providers, including the instant providers, received IHCP bulletin BT201062 announcing a new CPT Code 80104, and that 2011 CPT code book, which became available before 2011, explained the proper code to be used for qualitative analysis by multiplexed screening kit for multiple drugs or drug classes. The complaint further stated that the providers received an explanation of the 91 modifier billing rules in an IHCP bulletin in March 2009, as well as reminders of the 91 modifier billing rules in IHCP bulletins. Accordingly, the court found that the providers had proper notice and knowledge of the proper billing code to use for the multiplexed screenings.
Intra-corporate conspiracy doctrine. The providers also moved to dismiss the claims that they conspired to violate the federal FCA and Indiana FCA based on the intra-corporate conspiracy doctrine. To plead an FCA conspiracy claim, the government needed to allege that the providers had an agreement, combination, or conspiracy to defraud the government by getting a false or fraudulent claim allowed or paid and that they did so for the purpose of obtaining or aiding to obtain payment from the government or approval of a claim against the government. The court found that the complaint failed to state conspiracy claims and therefore granted their motion to dismiss those claims.
The case is No. 2:17-cv-00478-TLS-JEM.
Attorneys: Wayne T. Ault, U.S. Attorney's Office, for the United States. Steven A. Hunt, Indiana Attorney General's Office, for the State of Indiana. Christopher A. Melton (Wyatt, Tarrant & Combs LLP) for Don J. Wagoner, Marilyn L. Wagoner, Wagoner Medical Center, LLC and Wagoner Medical Center, P.C.
Companies: State of Indiana; Wagoner Medical Center, LLC; Wagoner Medical Center, P.C.
MainStory: TopStory CaseDecisions CMSNews AuditNews BillingNews FCANews FraudNews LaboratoryNews ProgramIntegrityNews ProviderNews IndianaNews
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