U.S. v. R&F Properties of Lake County, Inc.

Decision Date30 December 2005
Docket NumberNo. 04-15283.,04-15283.
Citation433 F.3d 1349
PartiesUNITED STATES, ex rel., Plaintiff, Karyn L. Walker, a.k.a. Karyn L. Denk-Walker, Plaintiff-Appellant Cross-Appellee, v. R&F PROPERTIES OF LAKE COUNTY, INC., A Florida Professional Association, Defendant-Appellee Cross-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

Bernard H. Dempsey, Jr., Nancy A. Johnson, Dempsey & Associates, Winter Park, FL, for Walker.

Michael John Bittman, Gray Robinson, P.A., Francis E. Pierce, III, Gurney & Handley, P.A., Orlando, FL, Monterey Campbell, Gray, Harris, Lane, Trohn, Lakeland, FL, for R&F Properties.

Steve In-hyuk Ro, Am. Med. Ass'n, Chicago, IL, for Amicus Curiae.

Appeal from the United States District Court for the Middle District of Florida.

Before BIRCH, WILSON and COX, Circuit Judges.

COX, Circuit Judge:

Plaintiff Karyn L. Walker is a qui tam relator, seeking recovery on behalf of the United States pursuant to the False Claims Act, 31 U.S.C. § 3729. Walker appeals a summary judgment granted to Defendant R&F Properties of Lake County, Inc., formerly known as Leesburg Family Medicine, (LFM). And Walker contends that the district court erred in limiting the scope of information discoverable in the case to that information relevant to the time period during which she was employed by LFM as a nurse practitioner. LFM cross-appeals, contending that the district court erred in denying its motion to dismiss Walker's Amended Complaint.

We conclude that the district court erred in holding that Walker had not produced sufficient evidence of the falsity of the claims submitted by LFM to resist summary judgment. Therefore, we reverse the district court's judgment. We also find error in the district court's order limiting discovery. We find no error in the district court's denial of LFM's motion to dismiss.

I. BACKGROUND & PROCEDURAL HISTORY

The Medicare Program is a system of health insurance administered by the United States Department of Health and Human Services, through the Center for Medicare and Medicaid Services (CMS). CMS was formerly known as the Health Care Financing Administration (HCFA). Medicare Part B is a federally subsidized, voluntary health insurance program that pays a portion of the costs of certain health services, including the costs of clinic visits to healthcare providers (among them, physicians, physician assistants, and nurse practitioners). Reimbursement for Medicare Part B claims is made through CMS, which contracts with private insurance carriers throughout the United States to administer and pay claims within their regions from the Medicare Trust Fund. These insurance carriers are known as Fiscal Intermediaries, or FIs. In general, when a healthcare service is rendered to a patient covered by Medicare Part B, the healthcare provider bills Medicare/CMS through the FI. The FI reviews the bill and pays the healthcare provider. CMS publishes a series of manuals that provide billing and payment instructions to the Medicare community. Among these manuals are the Medicare Carrier's Manual, directed to the FIs, and the Provider Reimbursement Manual, directed to healthcare providers.

LFM operates medical clinics in Leesburg and Lady Lake, Florida. At these clinics, physicians, physician assistants, and nurse practitioners provide medical services to the community. Many, if not most, of LFM's patients are covered by Medicare Part B. LFM submits claims for Medicare reimbursement for healthcare services rendered by physicians, physician assistants and nurse practitioners to its FI, Blue Cross Blue Shield of Florida, pursuant to a contract between LFM and Blue Cross Blue Shield. These claims are made on HCFA 1500 forms in electronic form, as required by the Medicare regulations, and signed electronically by LFM's physicians. Each HCFA 1500 form states:

SIGNATURE OF PHYSICIAN OR SUPPLIER

(MEDICARE, CHAMPUS, FECA AND BLACK LUNG)

I certify that the services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision, except as otherwise expressly permitted by Medicare or CHAMPUS regulations.

For services to be considered "incident" to a physician's professional service, 1) they must be rendered under the physician's immediate personal supervision by his/her employee, 2) they must be an integral, although incidental part of a covered physician's service, 3) they must be of kinds commonly furnished in physician's offices, and 4) the services of nonphysicians must be included on the physician's bills.

(R.2-79 Ex. G.)

Healthcare providers may bill Medicare Part B for the services of physician assistants and nurse practitioners in one of two ways; the amount of reimbursement the providers receive is dependent on the billing method. Physician assistant or nurse practitioner services may be billed as services "incident to the service of a physician." 42 CFR §§ 410.10, 410.26. To be correctly billed in this manner, the physician assistant or nurse practitioner services must have been provided under certain circumstances.1 When physician assistant or nurse practitioner services are billed as "incident to the service of a physician," the physician's Unique Provider Identification Number (UPIN) is used on the bill submitted to the FI. Alternatively, a provider may bill Medicare for physician assistant and nurse practitioner services under the physician assistant's or nurse practitioner's own UPIN. Billing Medicare in this second way indicates that the physician assistant or nurse practitioner has performed the service under some level of supervision by a physician, but the requirements of 42 CFR § 410.26 have not necessarily been met. For services billed under a physician assistant's or nurse practitioner's UPIN, the FI pays 85% of what it would pay for the same services billed under a physician's UPIN.

Walker worked for LFM from February 1997 until May 1999 as a nurse practitioner. During that time, there were many occasions when she saw patients independently without physician supervision. Physicians were not always physically present in the LFM clinic while Walker and other nurse practitioners and physician assistants saw patients, but physicians were always available for consultation by pager and telephone.

II. CONTENTIONS OF THE PARTIES

Walker brings this suit as a qui tam relator under the False Claims Act. She alleges that LFM filed false claims for Medicare reimbursement by billing Medicare for services rendered by nurse practitioners and physician assistants as if those services were rendered "incident to the service of a physician," even though LFM knew that the nurse practitioner and physician assistant services did not meet several of the criteria necessary for billing in that manner. Chief among Walker's complaints is that LFM billed all nurse practitioner and physician assistant services as "incident to the service of a physician," even though the nurse practitioners and physician assistants often treated patients at LFM's clinics when no physician was physically present in the clinic. She contends that a physician's physical presence within the office suite was required in order for the nurse practitioner's or physician assistant's service to have been rendered "incident to the service of a physician," as used in 42 CFR § 410.26 and "under the physician's immediate personal supervision" as certified by the physician on each HCFA 1500 claim form. Walker further contends that LFM knew that its billing practice was fraudulent and that LFM knew the proper way to bill the services (as services rendered directly by the nurse practitioner or physician assistant rather than as services "incident to the service of a physician"). Walker alleges that, as a result of the fraudulent manner in which LFM billed Medicare, LFM was paid 15% more than it should have been paid for nurse practitioner and physician assistant services to Medicare patients.

LFM admits that physicians were not always physically present in the clinic while nurse practitioners and physician assistants treated patients. LFM also admits that it submitted HCFA 1500 forms to Blue Cross Blue Shield requesting Medicare reimbursement for services of nurse practitioners and physician assistants performed "incident to the service of a physician," even if the nurse practitioner and physician assistant services were performed while no physician was physically present in the LFM office suite. LFM further concedes that the submission of the HCFA 1500 forms constitutes the presentation of claims for purposes of the False Claims Act. However, LFM argues that, as a matter of law, these claims could not have been false within the meaning of the False Claims Act because the phrase "incident to the service of a physician" was, at least until January 1, 2002, vague and subject to reasonable interpretations other than that championed by Walker. It further argues that the "immediate personal supervision" language in the HCFA 1500 certification is similarly vague and therefore, as a matter of law, cannot be the basis for a false claim.

The parties also disagree about the time period relevant to Walker's lawsuit. Walker maintains that LFM made false claims for physician assistant and nurse practitioner services performed from the time it first hired a physician assistant in 1994 through the date Walker filed her complaint, and she argues that her complaint properly alleges the existence of false claims throughout this entire period. LFM, on the other hand, contends that Walker could allege properly only that false claims were presented from February 1997 through May 1999, the dates of her employment at LFM.2

The district court granted LFM summary judgment because it found that LFM's requests for reimbursement could not be false as a matter of law....

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