By Jeffrey H. Brochin, J.D.
Although CMS is willing to call certain actions fraudulent, the intentional scheduling of beneficiaries’ imaging procedures on separate days in order to avoid the same-day procedure reimbursement reduction was merely inappropriate, inefficient, and unprofessional.
A federal district court in Indiana has granted the motion to dismiss filed by an Indiana MRI imaging service—The Neurological Institute and Specialty Centers PC—in a False Claims Act (FCA) lawsuit brought by a relator who alleged that the provider’s scheduling practice amounted to fraud. CMS’s Medicare’s Multiple Procedure Payment Reduction Policy (MPPRP) mandates a reduction in Medicare reimbursement when a beneficiary has multiple MRIs conducted by a provider on the same day. The court held although the policy forbids improper use of a multiple-day claim modifier for same-day procedures, the provider’s requiring the beneficiary to return on multiple days for a series of MRIs is only characterized as inappropriate, inefficient, and unprofessional—not the fraud envisioned by the FCA (U.S. ex rel. Spandereo v. The Neurological Institute and Specialty Centers PC, March 29, 2021, Bokkelen, J.).
Advantageous scheduling. Under the MPPRP, a provider must identify whether a beneficiary was provided multiple MRI imaging services on the same day, in which case, CMS reduces the reimbursement as per the policy. The relator alleged that in circumvention of the policy, the provider instructed MRI schedulers to have beneficiaries who needed multiple MRIs to come back on different days thereby avoiding the reimbursement reduction and maximizing the provider’s profits. When beneficiaries complained about the practice, the scheduler routinely denied requests to schedule multiple MRIs for the same person on the same day. The relator alleged that this practice violated the FCA.
Not a "false statement." The court reiterated that to plead an FCA claim, a relator must allege: (1) that the defendant made a statement in order to receive money from the government; (2) that the statement was false; and (3) that the defendant knew the statement was false. The provider argued that the relator’s allegations regarding scheduling multiple MRIs on separate days did not state a claim of fraud under the FCA because the allegations were not that the provider made a "false statement" as needed to satisfy the second element of an FCA claim. Specifically, the provider maintained that scheduling the MRIs in the manner in which they did was not prohibited, and, therefore, the claims submitted for such MRIs were not legally false.
CMS’s 2005 Final Rule. The relator asserted that CMS addressed his theory of falsity in a final rule with comment in 2005, wherein a commenter noted the potential for abuse by self-referring physicians writing separate prescriptions for imaging studies on different days. CMS had responded to that comment saying "Medicare carriers will establish edits to ensure that separate sessions are not inappropriately scheduled for contiguous body area imaging in attempts to bypass the reduction" and that use of a modifier to indicate multiple sessions on the same day "where not medically necessary in order to bypass the payment reduction constitutes fraud."
The court found that while the CMS statement regarding the scheduling of imaging applied to the instant case, the statement regarding the use of a modifier did not, because the allegations were that the provider performed imaging on separate days.
Unprofessional but not fraudulent. A later CMS statement called the scheduling of imaging on separate days to avoid the reduction policy "unprofessional," "inefficient," and "inappropriate." However, the court noted that although the earlier statement showed that CMS was willing to call certain actions fraudulent—such as the use of a modifier where not medically necessary—it did not name as fraudulent the actions alleged in the instant case, instead calling them inappropriate, inefficient, and unprofessional. The court further stated that the FCA is not a vehicle for punishing inappropriate, inefficient, and unprofessional behavior unattached to a false claim, stating that the FCA is not "an all-purpose antifraud statute," or a vehicle for punishing garden-variety breaches of contract or regulatory violations.
For the foregoing reasons, the court agreed with the provider and granted its motion to dismiss, but with leave granted to the relator to amend his complaint.
The case is No.: 2:14-cv-00158-JVB-JEM.
Attorneys: Bruce C. Howard PHV (Siprut PC) for the U.S. Andrew B. Howk (Hall Render Killian Heath & Lyman PC) for The Neurological Institute & Specialty Centers PC.
Companies: The Neurological Institute & Specialty Centers PC
MainStory: TopStory CaseDecisions CMSNews BillingNews FCANews FraudNews MedicareContractorNews PaymentNews PartANews PartBNews ProgramIntegrityNews ProviderNews IndianaNews
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