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United States v. The General Hospital Corp.

United States District Court, D. Massachusetts

April 2, 2018

UNITED STATES OF AMERICA and COMMONWEALTH OF MASSACHUSETTS, Relators, ex rel., LISA WOLLMAN, M.D., Relator,
v.
THE GENERAL HOSPITAL CORPORATION et al., Defendants.

          MEMORANDUM AND ORDER ON MOTION TO DISMISS

          ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE

         Relator Lisa Wollman, M.D., a former anesthesiologist at Defendant Massachusetts General Hospital (“MGH”), brings this qui tam action under the False Claims Act, 31 U.S.C. § 3729 et seq. (“FCA”) and the Massachusetts False Claims Act (“MFCA”), Mass. Gen. Laws ch. 12, § 5B et seq. against MGH, Massachusetts General Hospital's Physician Organization (“MGHPO”), and Partners Healthcare System (“Partners”).[1] She alleges that Defendants fraudulently billed Medicare and Medicaid for “overlapping” surgeries in which a teaching physician concurrently performed two or three surgical procedures. Now pending before the Court is Defendants' motion to dismiss the Amended Complaint for failure to state a claim. [ECF No. 39]. For the reasons set forth below, the Amended Complaint is DISMISSED without prejudice. Relator is GRANTED leave to file a second amended complaint within 45 days of the entry of this Order.

         I. BACKGROUND

         The following facts are taken from the Amended Complaint [ECF No. 31], accepting the well-pleaded allegations as true and drawing all reasonable inferences in favor of Relator. United States ex rel. Booker v. Pfizer, Inc., 9 F.Supp.3d 34, 41 (D. Mass. 2014) (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)).

         Between 2010 and 2015, Relator was a treating anesthesiologist at MGH, a teaching hospital that provides medical services to, among others, Medicare and Medicaid beneficiaries. Am. Compl. ¶¶ 3-4, 27. MGH receives funds under Medicare Part A and other federal and state government programs to train residents (medical school graduates who are training in a medical specialty) and fellows (who have completed a residency program). Id ¶¶ 12, 21-25. Such funding covers salaries for residents and fellows and other costs or expenses related to their training. Id ¶¶ 24-26. Teaching hospitals like MGH are not typically reimbursed for the services provided by residents or fellows. Id. ¶¶ 31, 38. They may, however, seek payment under Medicare Part B and Medicaid for services provided by the teaching physicians who are charged with training the residents and fellows and supervising the services that they provide to patients. Id ¶¶ 22, 26, 32-36.

         A. Medicare and Medicaid Rules and Regulations

         Relator's allegations rely upon the following rules and regulations of Medicare and Medicaid, as discussed further below: (1) billing and record keeping for overlapping surgeries; (2) billing for the administration of anesthesia; and (3) informed consent.

         1. Overlapping Surgeries

         To receive Medicare payments for services performed by a teaching physician, the services must either be (1) “personally furnished by a physician who is not a resident;” or (2) “furnished by a resident in the presence of a teaching physician, ” except as provided in, inter alia, 42 C.F.R. § 415.172. 42 C.F.R. § 415.170; Am. Compl. ¶ 39. Under section 415.172, if a resident participates in providing a service, MGH may be reimbursed “only if a teaching physician is present during the key portion of any service or procedure for which payment is sought.” 42 C.F.R. § 415.172(a); Am. Compl. ¶ 40. “In the case of surgical, high-risk, or complex procedures, ” the teaching physician must be present during “all critical portions” of the procedure and “immediately available to furnish services during the entire service or procedure.” 42 C.F.R. § 415.172(a)(1); Am. Compl. ¶ 41. When conducting overlapping surgeries, only once “all of the key portions of the initial procedure have been completed” may the teaching physician “begin to become involved in a second procedure.” Centers for Medicare and Medicaid Services, Medical Claims Processing Manual: Chapter 12 - Phyisicans/Nonphyiscian Practitioners 160 (2017), available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c12.pdf (“CMS Manual”); see id. (“[T]he critical or key portions [of both procedures] may not take place at the same time.”); Am. Compl. ¶ 42. “When a teaching physician is not present during non-critical or non-key portions of the procedure and is participating in another surgical procedure, [he or she] must arrange for another qualified surgeon to immediately assist the resident in the other case should the need arise.” CMS Manual at 160; Am. Compl. ¶ 44. The teaching physician must also “personally document in the medical record that [he or she] was physically present during the critical or key portion(s) of both procedures.” CMS Manual at 160; Am. Compl. ¶ 49. No reimbursement is available for triple-booked surgeries. CMS Manual at 160; Am. Compl. ¶ 46.[2]

         When submitting a claim for reimbursement, a teaching physician must state whether a resident participated in the service provided and must fully comply with the CMS Manual. CMS Manual at 165; Am. Compl. ¶ 48. MGH submits claims to Medicare using Form 1500 provided by the Centers for Medicare and Medicaid Services (“CMS”), which administers Medicare. Am. Compl. ¶¶ 27, 29-30, 38. By completing Form 1500, MGH certifies that the information on the form is true, accurate and complete; that sufficient information has been provided to allow the government to make an informed eligibility and payment decision; that the claim complies with all applicable Medicare rules and regulations for payment; and that the services provided were medically necessary. Id ¶ 38.

         2. Anesthesia

         Medicare reimburses anesthesia practitioners for “anesthesia time, ” which is defined as “the period during which an anesthesia practitioner is present with the patient.” CMS Manual at 121; Am. Compl. ¶ 57. Anesthesia time “starts when the anesthesia practitioner begins to prepare the patient for anesthesia services in the operating room or an equivalent area and ends when the anesthesia practitioner is no longer furnishing anesthesia services to the patient, that is, when the patient may be placed safely under postoperative care.” CMS Manual at 121; Am. Compl. ¶ 57. To the extent that Medicare generally excludes from coverage any claims for procedures that “are not reasonable and necessary for the diagnosis or treatment of illness or injury, ” 42 U.S.C. § 1395y(a)(1)(A), Relator asserts that unnecessarily prolonged administration of anesthesia may not be reasonable or necessary and therefore is not reimbursable. Am. Compl. ¶ 58.

         3. Informed Consent

         Medicare and Medicaid beneficiaries must give informed consent in order for the services provided to them to be reimbursed. Am. Compl. ¶¶ 60-63; see CMS, State Operations Manual: Appendix A - Survey Protocol, Regulations and Interpretive Guidelines for Hospitals 3 (2017), available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals /downloads/som 107apahospitals.pdf (hospitals must be “in compliance with the Federal requirements set forth in the Medicare Conditions of Participation [] in order to receive Medicare/Medicaid payment”); 42 C.F.R. § 482.13(b)(1) (Condition of Participation includes patient's right “to participate in the development and implementation of his or her plan of care” and “right to make informed decisions regarding his or her care”); 42 C.F.R. § 482.51 (Condition of Participation includes “a properly executed informed consent form for the operation” being completed before surgery). CMS's guidelines further provide that a “well-designed consent process” might include a discussion of whether, besides the lead surgeon, other physicians (including residents or fellows) will perform important tasks related to the surgery. CMS, Revisions to the Hospital Interpretive Guidelines for Informed Consent 6 (Apr. 13, 2007), available at https://www.cms.gov/medicare/ provider-enrollment-and-certification/ surveycertificationgeninfo/downloads/scletter07-17.pdf.

         B. Relator's Allegations

         Relator contends that Defendants violated Medicare and Medicaid billing standards for overlapping surgeries, reasonable and necessary administration of anesthesia, and adequate informed consent. In support of her claims, she alleges that beginning in or around 2010, she was assigned to provide in-patient anesthesia services to surgical patients in MGH's department of orthopedic surgery. Am. Compl. ¶ 65. She witnessed the department's practice of scheduling overlapping surgeries that required the participation of residents and fellows outside of the presence of a teaching physician, but she never observed a double-booked surgeon designate another teaching physician to be immediately available while he or she was involved in an ongoing procedure. Id ¶¶ 65-68, 79. Orthopedic surgeons at MGH regularly scheduled two surgeries concurrently in the morning and in the afternoon of the same day. Id ¶ 66. Relator provides the date, surgeon (five in total), scheduled start time, location, duration, and surgery type for over twenty sets of overlapping surgeries that were performed between July 2011 and March 2013. Id ¶ 74. In each of these overlapping surgeries, at least one of the patients involved was “65 years of age or older, ” meaning that “Medicare eligible patients were involved in the submissions of claims for these specific procedures.” Id ¶¶ 74-75. She describes certain surgeries in more detail, including instances in which a double-booked surgeon (1) did not scrub in until one and a half hours after the patient was put under anesthesia; (2) appeared in the operating room for only nine minutes and the patient was kept under anesthesia for an excessive period of time waiting for the surgeon to arrive; and (3) did not appear in the operating room at all for one of the overlapping surgeries. Id ¶¶ 69, 70, 88. Surgeons conducting overlapping surgeries also allegedly falsified or failed to adequately annotate in the treatment records their presence or availability for the key or critical portions of concurrent procedures. Id ¶¶ 69, 106-108, 114. To the extent that MGH's informed consent forms and practices provided inadequate information to patients prior to participating in overlapping surgeries, Relator asserts that every concurrent surgery performed at MGH violated a material requirement for reimbursement. Id. ¶¶ 60-62, 93-105, 114.[3]

         Relator first raised concerns about MGH's concurrent surgery practices to MGH's senior leadership in May 2012, particularly with regard to a procedure in which the lead surgeon “never scrubbed into the case” and another instance in which that same surgeon was seeing patients in another building on MGH's campus while his overlapping surgery patients waited for his arrival, one of whom was under sedation. Id ¶¶ 110-12.[4] The former chairman and chief executive officer of MGHPO told Relator that MGH had begun an internal investigation of MGH's overall concurrent surgery practices. Id ¶¶ 111-12. The investigation concluded in the spring of 2012 but resulted in minimal changes to MGH's practices. Id ¶ 115. When Relator raised similar concerns to her supervisors and MGH's Director of the Operating Rooms about the same surgeon's failure to appear in the operating room on another occasion, Relator was told that she may have violated the privacy rights of patients whose charts she reviewed to draw her conclusions and that she may be subject to disciplinary action. Id ¶ 89. After reporting to her MGH supervisors that this particular surgeon tripled-booked concurrent surgeries on June 28, 2012, she was prohibited from working on cases with that surgeon. Id ¶¶ 116-17.

         II. PROCEDURAL HISTORY

         Under the FCA and MFCA, either the Attorney General or a private party may initiate a lawsuit alleging fraud on the government. 31 U.S.C. § 3730(a)-(b); M.G.L. c. 12, § 5C(3)-(4). “A private enforcement action under the FCA is called a qui tam action, with the private party referred to as the ‘relator.'” United States ex rel. Eisenstein v. City of New York, 556 U.S. 928, 932 (2009) (quoting Vermont Agency of Nat. Resources v. United States ex rel. Stevens, 529 U.S. 765, 769 (2000)). “Qui tam complaints are initially filed under seal, and relators must allow the government sixty days to intervene and assume primary responsibility for prosecuting the action.” United States ex rel. Duxbury v. Ortho Biotech Prods., LP., 719 F.3d 31, 33 (1st Cir. 2013) (citing 31 U.S.C. §§ 3730(b)(2)-(3), (c)). If the government declines to intervene, the relator “may pursue the action on its behalf.” United States ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 53 (1st Cir. 2009) (citing 31 U.S.C. § 3730(b)(4)). Regardless of the government's intervention, “‘[a] private relator is entitled to a portion of any proceeds from the ...


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