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United States v. The General Hospital Corp.

United States District Court, D. Massachusetts

June 17, 2019

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

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE

         Relator Lisa Wollman, M.D. (“Wollman”), a former anesthesiologist at Defendant Massachusetts General Hospital (“MGH”), brings this qui tam action[1] under the False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., and the Massachusetts False Claims Act (“MFCA”), Mass. Gen. Laws ch. 12, § 5B, against MGH, Massachusetts General Physicians Organization (“MGPO”), and Partners Healthcare System (“Partners”) (collectively “Defendants”).[2]

         Now pending before the Court is Defendants' motion to dismiss the Second Amended Complaint for failure to state a claim. [ECF No. 91]. For the reasons set forth below, the motion to dismiss [ECF No. 91] is DENIED.

         I. BACKGROUND

         The following facts are taken from the Second Amended Complaint. [ECF No. 89 (“SAC”)]. The Court, as it must, accepts the well-pleaded allegations as true and draws all reasonable inferences in favor of Wollman. See Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (citing Monahan v. Dorchester Counseling Ctr., Inc., 961 F.2d 987, 988 (1st Cir. 1992)). This procedural and factual summary largely restates the summary provided in the Court's memorandum and order on Defendants prior motion to dismiss. See generally United States ex rel. Wollman v. Gen. Hosp. Corp., No. 15-CV-11890-ADB, 2018 WL 1586027 (D. Mass. Mar. 30, 2018).

         Between 2010 and 2015, Wollman was a treating anesthesiologist at MGH, a teaching hospital that provides medical services to, among others, Medicare and Medicaid beneficiaries. SAC ¶¶ 3, 10, 15, 30. 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. ¶¶ 25-28. Teaching hospitals like MGH are therefore not typically reimbursed under Medicare Part B for services that residents and fellows provide. Id. ¶¶ 31, 34. They may, however, seek payment under Medicare Part B and Medicaid for services provided by the teaching physicians charged with training the residents and fellows and who supervise services that residents and fellows provide. Id. ¶¶ 29, 35-36.

         Wollman alleges that Defendants fraudulently billed Medicare and Medicaid for overlapping and concurrent surgeries in which a teaching physician performed two or three surgical procedures that required patients to be under anesthesia at the same time. Specifically, Wollman asserts that, in violation of applicable regulations promulgated by the Centers for Medicare and Medicaid Services (“CMS”), teaching surgeons in MGH's Orthopaedic Surgery Department routinely left patients who were undergoing surgery alone with residents and fellows in order to conduct concurrently scheduled surgeries, and that they did so without identifying another qualified teaching physician who would be immediately available in the event of an emergency and without keeping proper records. Id. ¶ 1. Wollman also asserts that this practice resulted in patients being under anesthesia for extended, medically unnecessary periods. Id. Additionally, Wollman claims that Defendants concealed the fact of concurrently scheduled surgeries from patients and failed to obtain patients' “informed consent” for the inadequately supervised role that residents and fellows played. Id.

         A. Procedural History

         Under the FCA and the MFCA, the Attorney General or a private party may initiate a lawsuit alleging fraud on the government. 31 U.S.C. § 3730(a)-(b); Mass. Gen. Laws ch. 12, § 5C(1)-(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 Vt. Agency of Nat. Res. 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., L.P., 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 suit.” United States ex rel. Duxbury v. Ortho Biotech Prods. L.P., 579 F.3d 13, 16 (1st Cir. 2009) (quoting United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 727 (1st Cir. 2007), overruled in part as recognized by United States ex rel. Wilson v. Bristol-Myers Squibb, Inc., 750 F.3d 111, 113-14 (1st Cir. 2014)).

         On May 19, 2015, Wollman filed the initial complaint in this action under seal. [ECF No. 1]. After several requests from the government for extensions of time to continue its investigation, on February 17, 2017, both the United States and the Commonwealth of Massachusetts declined to intervene in this matter. [ECF Nos. 19, 20]. The initial complaint was ordered unsealed on April 12, 2017. [ECF Nos. 21, 23].

         On June 7, 2017, Wollman filed her First Amended Complaint. [ECF No. 31]. Wollman's First Amended Complaint provided the surgery type, start time, and surgery duration for forty-six surgeries that occurred on sixteen different dates between July 2011 and March 2013. [ECF No. 31 ¶ 74]. Nearly all of the forty-six surgeries started at nearly the same time or substantially overlapped with one or two of the other listed surgeries. See id Wollman also alleged that at least one of the patients who underwent each pair or trio of the concurrent or overlapping surgeries was eligible for Medicare. See id ¶ 75. Although it asserted that claims for eligible patients had been submitted to Medicare and/or Medicaid, the First Amended Complaint lacked details establishing that the asserted claims had actually been submitted and paid. On March 30, 2018, following consideration of Defendants' motion to dismiss and Wollman's opposition, the Court dismissed the First Amended Complaint because although it “describe[d] an allegedly illegal ‘scheme,' [it] only refer[ed] to specific false claims in the most conclusory terms.” United States ex rel. Wollman, 2018 WL 1586027, at *6. In essence, Wollman's allegations had not identified the false claims for payment that had been submitted to the government, including the “who, what, when, where, and how” required by Federal Rule of Civil Procedure 9(b). [ECF No. 65 at 13-16, 20-21]; see also United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 232 (1st Cir. 2004) (“pleadings invariably are inadequate unless they are linked to allegations, stated with particularity, of the actual false claims submitted to the government that constitute the essential element of an FCA qui tam action”), abrogated on other grounds by Allison Engine Co., Inc. v. United States ex rel. Sanders, 553 U.S. 662 (2008).

         On August 13, 2018, Wollman filed her Second Amended Complaint. [ECF No. 89]. The Second Amended Complaint is largely the same as the First Amended Complaint, except that Wollman has added specifics about several of the allegedly fraudulent claims that were submitted to the government for payment. See SAC ¶¶ 71, 73-78, 83. For eleven of the forty-six patients whose overlapping or concurrent surgeries are listed as examples to show that applicable regulations and rules were violated, Wollman now provides specifics for the claims that were submitted to Medicare or Medicaid, including services billed for, physician name, the billing provider, the amount billed, and the amount paid by the patient and government payor. Id. ¶ 83 nn.36-46, Exs. A, B. The specifics of these claims have been redacted and/or filed under seal to protect patient and provider privacy. Id.

         Counts I and V allege violations of the FCA and MFCA, 31 U.S.C. § 3729(a)(1); Mass. Gen. Laws ch. 12, § 5B(a)(1), for knowingly causing false claims to be submitted to the government in violation of Medicare and Medicaid rules regarding overlapping surgeries, recordkeeping, informed consent, and unreasonable and unnecessary anesthesia. SAC ¶¶ 150-58, 168-71. Counts II and VI allege violations of the FCA and MFCA, 31 U.S.C. § 3729(a)(1)(B); Mass. Gen. Laws ch. 12, § 5B(a)(2), for knowing use of false records or statements that caused false claims to be paid by the government. SAC ¶¶ 155-58, 173-77. Counts III and VII allege violations of the FCA and MFCA, 31 U.S.C. § 3729(a)(1)(C); Mass. Gen. Laws ch. 12, § 5B(a)(3), for conspiracy to defraud the government. SAC ¶¶ 159-63, 178-82. Lastly, Counts IV and VIII allege violations of the FCA and MFCA, 31 U.S.C. § 3729(a)(1)(G); Mass. Gen. Laws ch. 12, § 5B(a)(9), for knowingly making false statements that were material to an obligation to pay money to the government. SAC ¶¶ 164-67, 183-86. Defendants move to dismiss all counts for failure to meet the heightened pleading standard required by Federal Rule of Civil Procedure 9(b) and for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). [ECF No. 91].

         B. Medicare and Medicaid Rules and Regulations

         Wollman alleges violations of rules and regulations for Medicare and Medicaid reimbursement covering: (1) billing and record-keeping for overlapping and concurrent surgeries; (2) billing for the administration of anesthesia; and (3) informed consent.

         1. Billing and Record-Keeping for Overlapping and Concurrent Surgeries

         To receive Medicare payments for services performed by a teaching physician, the services must either be either (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 in certain specified situations. See 42 C.F.R. §§ 415.170, 415.172; SAC ¶ 42. 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); SAC ¶ 43. “In the case of surgical, high-risk, or other 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); SAC ¶ 44. 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.” CMS, Medicare Claims Processing Manual: Chapter 12 - Phyisicans/Nonphyiscian Practitioners, 158-59 (2017) (“CMS Manual”) (“[T]he critical or key portions [of overlapping surgeries] may not take place at the same time.”), 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.”).

         “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 . . . should the need arise.” CMS Manual at 159; see SAC ¶ 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 159; SAC ¶ 52. No. reimbursement is available for triple-booked surgeries. CMS Manual at 159 (“In the case of three concurrent surgical procedures, the role of the teaching surgeon . . . in each of the cases is classified as a supervisory service to the hospital rather than a physician service to an individual patient and is not payable under the physician fee schedule.”); SAC ¶ 49.[3]

         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. MGH submits claims to Medicare using Form 1500 provided by the CMS, which administers Medicare. See SAC ΒΆΒΆ 30-33, 41. By completing a Form 1500, MGH certifies that the information on the form is true, accurate and complete, that the claim complies with all ...


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