U.S. v. Breathe Easy Pulmonary Services, Inc.

• Decision Date: 23 January 2009
• Docket Number: Case No. 8:06-cv-40-T-33MAP.
• Citation: 597 F.Supp.2d 1280
• Parties: UNITED STATES of America, ex rel. Ben BANE, Plaintiff, v. BREATHE EASY PULMONARY SERVICES, INC. et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

597 F.Supp.2d 1280

UNITED STATES of America, ex rel. Ben BANE, Plaintiff, v. BREATHE EASY PULMONARY SERVICES, INC. et al., Defendants.

Case No. 8:06-cv-40-T-33MAP.

United States District Court, M.D. Florida, Tampa Division.

January 23, 2009.

COPYRIGHT MATERIAL OMITTED

Barry A. Cohen, Christopher P. Jayson, Kevin J. Darken, Cohen, Jayson & Foster, PA, Tampa, FL, for Plaintiff.

Stephen Vincent Iglesias, Law Office of Stephen V. Iglesias, PA, Tampa, FL, for Defendants.

ORDER

VIRGINIA M. HERNANDEZ COVINGTON, District Judge.

This matter comes before the Court pursuant to Lincare's Motion for Summary Judgment (Doc. # 199), and Breathe Easy Pulmonary Services, Inc.'s and Premier Cardio Pulmonary Medical, Inc.'s Motion for Summary Judgment (Doc. # 201), both filed on November 3, 2008. Relator Ben Bane filed responses thereto (Doc. ## 209, 210) on November 26, 2008. For the reasons stated below, Lincare's motion for summary judgment is due to be granted and Breathe Easy/Premier's motion for summary judgment is due to be denied.

I. Background

On July 24, 2007, Bane filed his Second Amended Complaint (Doc. # 35) against Breathe Easy Pulmonary Services, Inc., and Premier Cardio Pulmonary Medical, Inc., (collectively "Breathe Easy"), along with Lincare Holdings, Inc, and Lincare, Inc. (collectively "Lincare"), seeking to recover damages and civil penalties pursuant to the Federal Civil False Claims Act ("FCA"), 31 U.S.C. §§ 3729, et seq. The United States has declined to intervene in this qui tam action. (Doc. # 2.) Bane alleges that Lincare, a durable medical equipment company (DME), conspired with Breathe Easy, two independent diagnostic testing facilities (IDTFs), and other IDTFs around the country to submit fraudulent claims for payment to Medicare for medically unnecessary and redundant additional services performed in conjunction with pulse oximetry testing.

Lincare is a national provider of oxygen and other home respiratory services. (Doc. # 1 at ¶ 9.) Breathe Easy, a Medicare-approved IDTF and state licensed health care clinic, offers a variety of diagnostic testing including oximetry testing to qualify Medicare recipients for oxygen-related durable medical equipment. (Doc. # 201 at 4.) Kimberly Johns is the president and owner of both Breathe Easy entities. (Doc. # 35 at ¶ 10.)

Bane has worked in the industry for many years, both as an employee of another DME and as an owner of his own DMEs performing services similar to Lincare's. (Id. at ¶¶ 13-15.) During his years as owner of a DME, Bane communicated with Breathe Easy and other IDTFs relating to their provision of pulse oximetry testing to his clients. (Id. at ¶ 16.) In addition, Bane allegedly entered into negotiations in 2004 for Lincare to purchase his DME. (Id. at ¶ 19.) Based on his discussions with employees of Breathe Easy and Lincare during the period from 2000 to 2004, Bane contends that he observed "suspicious circumstances" surrounding Lincare's relationship with Breathe Easy and other IDTFs. (Id. at ¶¶ 16-21.) Thereafter, Bane began independently investigating Lincare's procedures in referring its clients to IDTFs such as Breathe Easy. (Id. at ¶¶ 21-23.) Based on his experience in the industry, his prior dealings with Lincare and Breathe Easy, and information gained during his investigation, Bane asserts to have direct and independent knowledge of the facts giving rise to this qui tam action. (Id. at ¶ 24.)

According to Bane, Defendants' scheme to submit fraudulent Medicare claims was accomplished as follows. A physician, believing that his patient's health condition required in-home oxygen therapy, would contact Lincare to supply the oxygen and necessary equipment.¹ Medicare will not pay providers like Lincare for oxygen unless qualifying scores on oximetry tests have been obtained on the patients by an independent lab such as Breathe Easy. (Doc. # 209 at 3.) Therefore, Lincare would often refer the physician to an IDTF to perform the qualifying tests. If Breathe Easy was the referral IDTF, Lincare would provide the physician with an "Oxygen Assessment Referral Form" or "Pulmonary Compliance Order Form" and instruct the physician to fill out the form, sign it, and return it to Breathe Easy.² (Id. at 3-4; Doc. ## 11-2, 11-3) These order forms authorized Breathe Easy to perform certain tests and provided supporting documentation for Breathe Easy's subsequent submission of claims to Medicare for payment for the tests.

Relator alleges that the order forms, which were created by Breathe Easy, were intentionally designed to authorize Breathe Easy to do a comprehensive pulmonary diagnostic exam (hereafter "diagnostic exam") even though the physician completing the form believed he was ordering a simple oximetry test.³ (Doc. # 35 at ¶¶ 27-29.) Breathe Easy used multiple versions of its order form.⁴ (See Sealed Doc. # S-11, Composite Ex. 1, 2.) They all allowed the physician to indicate by checking a box whether the purpose of the exam was to "pre-qualify," "post-qualify," or "requalify" the patient for oxygen therapy. (Id.) One version of the form lists specific testing options and others refer only to the diagnostic exam. (Id.) None of the forms list oximetry as a testing option. (Id.) According to Breathe Easy, their services automatically include a diagnostic exam unless the physician specifically instructs Breathe Easy not to do the diagnostic exam. (Doc. # 210-2, Johns Dep. at 94:18-96-15.)

Bane asserts that Lincare participated in this deception by hand delivering the order form to the physician and directing her to sign the form, or by partially filling out the order form to authorize the diagnostic exam before forwarding it for the physician's signature. (Doc. # 35 at ¶ 27.) In other instances, it is alleged that Lincare forwarded unsigned order forms to Breathe Easy along with prescriptions signed by the physician that ordered only a pulse oximetry test. (Doc. # 210 at 15-16.)

According to Bane, upon receiving the completed order form from Lincare, Breathe Easy would then send a nurse practitioner to the patient's home to perform the diagnostic exam and oximetry. (Doc. # 35 at ¶¶ 27-28.) Breathe Easy asserts that it sent the test results to the physician, but Relator alleges that the results were sent to Lincare, who only forwarded the oximetry results to the physician. (Id. at ¶ 30.) The physician then signed a certificate of medical necessity that permitted Lincare to bill Medicare for the oxygen. (Id.) Meanwhile, Breathe Easy submitted a claim to Medicare for the more expensive diagnostic exam.⁵

Bane asserts that since at least 2000, and continuing up to the date that this suit was filed, numerous claims for these diagnostic exams have been fraudulently submitted to and paid by Medicare. (Id. at ¶ 32.) According to Bane, the claims are fraudulent because the diagnostic exams were not authorized by the physicians, the results were not provided to the physicians, and the evaluations were not medically necessary because the physicians already performed their own patient assessments before contacting Lincare for oxygen therapy. (Id. at ¶ 29.) Bane further alleges that Lincare participated in the fraudulent submissions by obtaining physicians' signatures on referral forms or forwarding unsigned forms with prescriptions for oximetry testing only, knowing that Breathe Easy was going to perform the unauthorized and medically unnecessary diagnostic exam. (Id. at ¶¶ 27-28, 30.)

Bane brought suit alleging violations of § 3729(a) of the FCA based on Breathe Easy and Lincare's (1) claims for medically unnecessary and redundant services performed in conjunction with pulse oximetry testing, and (2) violation of the Anti-Kickback Act, 42 U.S.C. § 1320a-7b. (Id. at ¶¶ 46-61.) Count II of the Second Amended Complaint for violation of the Anti-kickback Act was dismissed on February 5, 2008. (Doc. # 86.) As to the remaining count, Bane seeks damages on behalf of the Government of triple the loss to Medicare and civil penalties of between $5,500 and $11,000 for each violation, as well as a share of the recovery on his own behalf of the maximum amount allowed under 31 U.S.C. § 3730(d).

Breathe Easy and Lincare have both filed motions for summary judgment, arguing that Relator's claims under the FCA must fail because Relator has offered no evidence that Defendants presented or caused to be presented a specific false claim to Medicare or that they made or used a false statement or record to get a fraudulent claim paid by Medicare, nor has he shown that Breathe Easy and Lincare had a conspiratorial agreement to defraud the Government. (Doc. ## 199 at 16-24; 201 at 14-17.) In addition, Lincare asserts that Defendant Lincare Holdings Inc., as a holding company that provides no services or products and does not bill Medicare, cannot have engaged in conduct that violated the FCA. (Doc. # 199 at 24.) The Court will consider each of these motions in turn.

II. Summary Judgment Standard

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A factual dispute alone is not enough to defeat a properly pled motion for summary judgment; only the existence of a genuine issue of material fact will preclude a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir.1996) (citing Hairston v. Gainesville Sun Publ'g Co., 9 F.3d 913, 918 (11th Cir.1993)). A fact is material if it may affect the outcome of the suit under the governing law. Allen v. Tyson Foods, Inc., 121 F.3d...