Health Law Daily Nurse anesthetist sufficiently raised TEFRA Seven Steps violations
Thursday, November 16, 2017

Nurse anesthetist sufficiently raised TEFRA Seven Steps violations

By Jeffrey H. Brochin, J.D.

A qui tam relator’s claims that an anesthesia management company violated the False Claims Act (FCA) by failure to follow the requisite Seven Steps for Medicare reimbursement were sufficiently pleaded to overcome the employer’s motion to dismiss; however, his allegations as to the period preceding his employment and afterwards were dismissed (U.S. ex rel. Lord v. NAPA Management Services Corp., November 14, 2017, Mannon, M.).

Background. The relator was a certified registered nurse anesthetist (CRNA) who was employed by NAPA Management Services Corporation(NAPA) from June 2011 through June 21, 2013. The employer is an anesthesia and perioperative management company. The relator alleged that NAPA violated the FCA by submitting claims to Medicare for reimbursement based on services which did not meet the TEFRA Seven Steps rules. In particular, the relator alleged that bills were submitted for the higher rate "medical direction" procedures when in fact those procedures occurred under the lesser paying "medical supervision" category of oversight. Furthermore, he alleged that anesthesiologists signed off at the beginning of a procedure on attestations that all Seven Steps had been performed when in fact the doctor could not attest to that until the completion of the procedure. The employer moved to dismiss the claims, and for the reasons stated below, the court granted in part and denied in part the motion.

Medical direction versus medical supervision. In reimbursing anesthesiology services, CMS regulations distinguish between four levels of services provided by anesthesiologists and CRNAs. Among the levels of services are "medical direction" which generally occurs when an anesthesiologist directs CRNAs in two to four concurrent anesthesia cases and satisfies the Seven Steps regulation; and "medical supervision" which occurs when the anesthesiologist is involved in medically directing more than four concurrent cases or performs other services while directing concurrent cases.

TEFRA of Seven Steps. Medicare’s basic conditional regulations—known as the TEFRA of Seven Steps rules—are required prior to reimbursement for "medical direction" services, and require the following to be documented: (1) perform a pre-anesthetic examination and evaluation; (2) prescribe the anesthesia plan; (3) personally participate in the most demanding aspects of the anesthesia plan, including, if applicable, induction and emergence; (4) ensure that any procedures in the anesthesia plan that he does not perform are performed by a qualified individual; (5) monitor the course of anesthesia administration at frequent intervals; (6) remain physically present and available for immediate diagnosis and treatment of emergencies; and (7) provide indicated post-anesthesia care.

No medical direction during break time. The relator alleged that the billing should have been submitted pursuant to the "medical supervision" billing regime, because during the anesthesiologist’s breaks a replacement anesthesiologist was not "immediately available" as required under step six to cover "medical direction" of the concurrent procedures. The employer objected that the relator had not alleged sufficient facts to proceed with the FCA claims. However, the court found that the relator alleged that he had direct knowledge of the material facts underlying the actual fraudulent billing scheme being conducted by NAPA which violated Medicare and TEFRA rules.

False attestations. The court also found that the relator sufficiently alleged facts in support of the false attestation claims because throughout his employment he routinely witnessed anesthesiologists pre-sign the Anesthesia Records in violation of Medicare and TEFRA rules and in furtherance of their scheme to fraudulently bill for "medically directed" services whether or not TEFRA rules were indeed fulfilled.

Allegations of before and after employment. The employer argued that although the relator might have knowledge of what occurred during the time of his employment (June 2011 through June, 2013), that portion of his complaint referencing pre-June 2011 and post-June 2013 time periods should be dismissed. The court noted that original-source relators—such as the instant relator—could pursue the entire fraudulent scheme for which they have direct and independent knowledge of the operative substantive facts, and not be limited to the specific time periods for which they have direct and independent knowledge. However, in the present case, the relator failed to identify any facts showing that NAPA’s allegedly improper conduct occurred before his employment started and that it continued after his employment ended, and for that reason, they dismissed those claims falling outside of his term of employment.

For the foregoing reasons, the court denied NAPA’s motions to dismiss as to insufficient TEFRA Seven Steps violations allegations, but granted it as to the relevant employment time period.

The case is No. 3:13-cv-02940-MEM.

Attorneys: Gerald Lawrence (Lowey Dannenberg, PC) and Melissa A. Swauger, U.S. Attorney's Office, for the United States. Brian K. French (Nixon Peabody LLP) and Thomas J. Campenni (Rosenn, Jenkins & Greenwald, LLP) for NAPA Management Services Corp. and North American Partners In Anesthesia [Pennsylvania], LLC.

Companies: NAPA Management Services Corp.; North American Partners In Anesthesia [Pennsylvania], LLC

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