Landau v. Lucasti

• Decision Date: 06 January 2010
• Docket Number: Civil No. 06-1229 (JBS).
• Citation: 680 F.Supp.2d 659
• Parties: Silvana LANDAU, Plaintiff, v. D.O. Christopher LUCASTI, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

680 F.Supp.2d 659

Silvana LANDAU, Plaintiff,

v.D.O. Christopher LUCASTI, et al., Defendants.

Civil No. 06-1229 (JBS).

United States District Court, D. New Jersey.

Decided: Jan. 6, 2010.

Joseph A. Martin, Esq., John Patrick Kahn, Esq., Rebecca L. Rakoski, Esq. Archer & Greiner, P.C., Haddonfield, NJ for Plaintiff Silvana Landau.

Carl D. Poplar, Esq., David Poplar Esq., Carl D. Poplar, P.A., Cherry Hill NJ, for Defendants Christopher Lucasti, Access One, Inc., and South Jersey Infectious Diseases, Inc.

OPINION

SIMANDLE, District Judge:

This matter is before the Court on Plaintiff Silvana Landau's motion for partial summary judgment [Docket Item 66] and a motion for summary judgment filed by Defendants Christopher Lucasti, D.O South Jersey Infectious Diseases, Inc. ("SJID"), and Access One, Inc.¹ [Docket Item 65]. Plaintiff has brought a qui tam action² under the False Claims Act ("FCA"), 31 U.S.C. § 3729, in which the United States has declined to intervene. Plaintiff now seeks summary judgment on the question of liability, maintaining that there is no genuine dispute that Dr. Lucasti and his practice, SJID, knowingly presented false claims to the United States in which they sought payment from Medicare for services "incident to" Dr. Lucasti's outpatient intravenous antibiotic therapy treatment, when Dr. Lucasti was not actually present in his office during the infusions. Defendants also seek summary judgment, arguing that Plaintiff has not presented sufficient evidence that the subject claims were false or that Dr. Lucasti had the scienter necessary for liability under the FCA. For the reasons discussed below, the Court will deny Defendants' motion in part, and grant Defendants' motion in part, as it relates to Medicare claims submitted prior to January 1, 2002 and the claims against Access One. The Court will further deny Plaintiffs motion for partial summary judgment as to liability, but grant partial summary judgment in favor of Plaintiff as to the unambiguous meaning and applicability of the post-January 1, 2002 Medicare regulations outlining the requirements for services "incident to" the services of a physician.

I. BACKGROUND

A. Relevant Medicare Regulations

The federal Medicare program, administered by the Centers for Medicare and Medicaid Services ("CMS"), ³ provides health care to elderly and disabled Americans by offering insurance for hospital services (Medicare Part A) and supplemental benefits for physician and outpatient services (Medicare Part B). 42 U.S.C §§ 1395-1395ii. Part B covers "medical and other health services," 42 U.S.C. § 1395k(a), which includes "services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician's professional service," 42 U.S.C. § 1395x(s)(2). Agency regulation governs whether a service is "incident to" a physician's service. 42 C.F.R. § 410.26.

The current regulations (effective January 1, 2002) governing payment for a physician's medical services read, in relevant part:

(b) Medicare Part B pays for services and supplies incident to the service of a physician (or other practitioner)....

(5) Services and supplies must be furnished under the direct supervision of the physician (or other practitioner). The physician (or other practitioner [⁴]) directly supervising the auxiliary personnel need not be the same physician (or other practitioner) upon whose professional service the incident to service is based.

42 C.F.R. § 410.26(b)(5). "Direct supervision" is defined as "the level of supervision by the physician (or other practitioner) of auxiliary personnel as defined in § 410.32(b)(3)(ii)." 42 C.F.R.

§ 410.26(a)(2). Section 410.32(b)(3)(h) states:

Direct supervision in the office setting means the physician must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed.

42 C.F.R. § 410.32(b)(3)(ii).

Prior to January 1, 2002, however, 42 C.F.R. § 410.26 stated only this:

Medicare Part B pays for services and supplies incident to a physician's professional services, including drugs and biologicals that cannot be self-administered, if the services or supplies are of the type that are commonly furnished in a physician's office or clinic, and are commonly furnished either without charge, or included in the physician's bill.

42 C.F.R. § 410.26(a) (2001).

In addition, there are separate provisions, in effect for the entire relevant period, governing payment for services incident to the services of a physician's assistant or nurse practitioner:

A physician assistant's, nurse practitioner's, and clinical nurse specialists' services, and services and supplies furnished incident to their professional services, are paid in accordance with the physician fee schedule. The payment for a physician assistants' services may not exceed the limits at § 414.52 of this chapter. The payment for a nurse practitioners' and clinical nurse specialists' services may not exceed the limits at § 414.56 of this chapter.

42 C.F.R. § 405.520(a). Both Section 414.52 and Section 414.56 limit payment for such physician's assistant or nurse practitioner services to no more (and sometimes less) than 85 percent of the physician fee schedule amount. 42 C.F.R. §§ 414.52, 414.56.

B. Facts

Plaintiff Silvana Landau worked as the office manager at SJID from August 1998 through the Summer of 2005. (Landau Dep. at 19, 31.) Dr. Lucasti is a doctor of osteopathy who specializes in the treatment of infectious disease, including outpatient intravenous antibiotic treatment (or infusion treatment). (Lucasti Dep. at 9.) Included among his patients were those covered by Medicare. (Id. at 26-32.) In order to seek reimbursement from Medicare for infusion treatments made to Medicare patients, Dr. Lucasti and his practice were required to submit Health Insurance Claim Form CMS-1500 to CMS. (CMS1500, PI. Exh. B.) That form includes the following language:

I hereby 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 un- der my immediate personal supervision except as otherwise expressly permitted by Medicare or CHAMPUS regulations.

(Id.) Defendants also included the medical provider's identification number and a code describing the treatment given in each Medicare claim. (Morey Dep. at 67; Health Law Network Report, PL Exh. I.) SJID billed the vast majority of infusion therapy claims to Medicare under Dr. Lucasti's provider number. (Morey Dep. at 67; Health Law Network Report, PL Exh. I at 7.)

SJID performed infusion therapy seven days a week, from 9 a.m. to 5 p.m. during the week and 9 a.m. to noon on the weekends. (Mayer Dep. at 15-16; DeSantis Dep. at 37.) Registered nurses hired by SJID generally provided the infusion treatments. (DeSantis Dep. at 18-19.) Dr. Lucasti testified during his depositions that he was not always in his office when Medicare patients were receiving infusion therapy, though he was available at all times on his cellular phone, and that he did bill Medicare for treatment given as incident to his professional service even when he was not present during the period between 2000 and 2006. (Lucasti Dep. at 29, 46.) Dr. Deborah Bayer, whom SJID employed from August 1999 until May 2003, similarly testified that SJID nurses provided infusion therapy without a doctor in the office. (Bayer Dep. at 21.) Dr. Lucasti testified that he believed the Medicare regulations only required him to be "[slimply available, either in the office suite or via telephone or where I'm available to my nurses." (Lucasti Dep. at 27.) He was apparently open about this practice, for according to Plaintiffs testimony Dr. Lucasti described his practice to another doctor interested in starting an infusion practice during a dinner in 2004. (Landau Dep. at 70-73.)

According to Plaintiff, in the fall of 2001, she and Deborah Morey, who has been responsible for billing at SJID since 2000, attended an infectious disease seminar in Nashville, Tennessee. (Landau Dep. at 50-51; Morey Dep. at 15, 142.) During this seminar Plaintiff and Ms. Morey developed concerns that SJID's practice for providing infusion therapy under treatment code 90780 was in conflict with Medicare regulations and requirements—specifically, Ms. Morey was concerned that Dr. Lucasti was not providing "direct supervision" as required by the regulations. (Landau Dep. at 53; Morey Dep. at 120.) Both Plantiff and Ms. Morey understood "direct supervision" to require the doctor to be physically on the premises during the infusion. (Landau Dep. at 54; Morey Dep. at 121-22.) After returning from the seminar Plaintiff and Ms. Morey met with Dr. Lucasti in his office, and Ms. Morey brought with her a copy of the 90780 billing code and a Medicare document giving the definition of "direct supervision." (Landau Dep. at 53-54.) Plaintiff and Ms. Morey expressed their concerns regarding "direct supervision" and its requirement that the doctor be physically present, and Dr. Lucasti responded that he believed he was providing "direct supervision," which only required him to be immediately available. (Landau Dep. at 54-55; Morey Dep. at 121-22.) Plaintiff again warned Dr. Lucasti about his practice sometime in 2004. (Landau Dep. at 57.)

Meanwhile, the current regulations defining "direct supervision" took effect January 1, 2002. Sometime in January 2002 Barbara Nolet, President of NW Management Associates, prepared recommendations for SJID's preparation for the Joint Commission on the Accreditation of Health Care Organizations ("JCAHO") accreditation survey. (Nolet Report, PL Exh. G.) Included in the report was a manual entitled "Outpatient Parenteral...