Health Law Daily Non-compliance with CMS national coverage determination grounds for FCA liability
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Monday, March 23, 2020

Non-compliance with CMS national coverage determination grounds for FCA liability

By Jeffrey H. Brochin, J.D.

An NCD is not merely a guideline, but rather the basis for determination of Medicare coverage for a procedure.

A federal district court in Ohio has denied the motion to dismiss filed by UC Health, LLC (UC Health) in a False Claims Act (FCA) (21 U.S.C. §3729 et seq) lawsuit brought by a physician who alleged that the medical center’s billings for Transcatheter Aortic Valve Replacement (TAVR) procedures violated CMS regulations and therefore defrauded Medicare. The court further ruled that the U.S. DOJ, although it declined to intervene in the FCA case, could nevertheless file a Statement of Interest as a real party in interest in the lawsuit (U.S. ex rel. Lynch v. University of Cincinnati Medical Center, LLC, March 20, 2020, Litkovitz, K.).

CMS’ TAVR NCD. A TAVR is a procedure used to treat aortic stenosis in which a catheter is used to insert a bioprosthetic valve in the patient’s native aortic valve. An interventional cardiologist and a cardiothoracic surgeon jointly participate in the procedure. CMS issued an NCD listing the criteria that both a hospital and a physician must meet before beginning a TAVR program. When the NCD was first issued, the only way a program could get experience was if they had been part of a clinical trial because the device was not FDA approved. Since then the device has received FDA approval, and therefore a program may get experience without being part of a trial.

The NCD listed two different sets of "volume requirements," one of which applied to a hospital program without TAVR experience. UC Health fell into this first category and therefore had to demonstrate a certain volume of aortic valve replacements (AVRs) (50 in a year) in order to be eligible to bill Medicare for a TAVR procedure.

NCD ineligibility asserted. The relator, a cardiologist, alleged in his FCA lawsuit that UC Health had failed to reach the minimum number of AVRs to qualify to perform TAVRs, but that they submitted billings for their TAVR program not withstanding their ineligibility, and that therefore the TAVR billings were unlawful and violated the FCA. He cited a specific example of TAVR billing being submitted to the VA and three more to Medicare. UC Health moved to dismiss the complaint on the basis that no CMS regulations were violated since the NCD was only a non-binding guideline, and failure to adhere to that guideline did not violate the FCA.

Defense of technical violation. Besides arguing that the NCD was not a duly promulgated CMS regulation, UC Health further argued that any failure to adhere to the requirements of the NCD constituted a "technical violation" that did not amount to fraud under the FCA. UC Health further argued that the relator’s complaint should be dismissed due to its failure to plead with particularity and asserted that no objective falsehood could be proven in the absence of a showing that the TAVR cardiologists were unqualified or that the TAVR patients were not proper candidates.

NCDs not mere guidelines. The court rejected UC Health’s arguments, finding that CMS NCDs are not non-binding guidelines, but rather are regulations that can give rise to liability under the FCA. Because the number of ACR procedures required to be performed within a certain timeframe was an objective quantity, the misrepresentation of that required number appeared to the court to be an objective falsehood, and they accordingly denied UC Health’s motion to dismiss the FCA complaint.

The case is No. 1:18-cv-00587-SJD-KLL.

Attorneys: Brandi M. Stewart, U.S. Attorneys Office, for the United States. Jonathan Travis Brollier (Bricker & Eckler LLP) for University of Cincinnati Medical Center, LLC and UC Health, LLC.

Companies: University of Cincinnati Medical Center, LLC; UC Health, LLC

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