U.S. v. Cabrera-Diaz

• Decision Date: 23 June 2000
• Docket Number: No. Civ. 99-2416(JAF).,Civ. 99-2416(JAF).
• Parties: UNITED STATES of America, Plaintiff, v. Manuel A CABRERA-DIAZ and Esther Arbona, Defendants.
• Court: U.S. District Court — District of Puerto Rico

Page 234

106 F.Supp.2d 234

UNITED STATES of America, Plaintiff, v. Manuel A CABRERA-DIAZ and Esther Arbona, Defendants.

No. Civ. 99-2416(JAF).

United States District Court, D. Puerto Rico.

June 23, 2000.

Asst. U.S. Attorney Jose M. Pizarro-Zayas, Guillermo Gil, United States Attorney, San Juan, PR, for plaintiff.

OPINION AND ORDER

FUSTE, District Judge.

The United States filed this action under the False Claims Act, 31 U.S.C. § 3729 et seq., and common law to recover damages and civil penalties from the Dr. Manuel A. Cabrera Díaz and his secretary, Esther Arbona, for their false claims made in violation of federal and common law under the terms of the Medicare program. Manuel A. Cabrera Díaz, hereafter referred to as Dr. Cabrera, was personally served by the U.S. Marshal Service with copy of the summons and complaint on January 21, 2000. Co-defendant Esther Arbona, hereinafter referred to as Arbona, was personally served by the U.S. Marshal Service with copy of the summons and complaint on January 14, 2000. On February 15, 2000, the United States requested the Entry of Default against both defendants in this case, for failure appear, answer, plead, or otherwise defend, under Rule 55 of the Federal rules of civil Procedure. The Clerk of the Court enter the default of both defendants on February 16, 2000. As of this date defendants have failed to appear, answer, plead or otherwise defend in this case.

This court has jurisdiction over this matter pursuant to 28 U.S.C. § 1345 and its general equitable jurisdiction.

We have before us a Motion for Judgment by Default filed by the United States of America. It appearing from the record on file in this proceeding that default was entered by the Clerk of this Court upon defendants' failure to answer or otherwise plead in this case, and upon review of the allegations contained in the Complaint and in the Motion for Judgment by Default, which have been supported by Affidavits, Sworn or Verified Statements and other documentary evidence, we find Plaintiff is entitled to a Judgment by Default under Rule 55(b)(2) of the Federal Rules of Civil Procedure, and we now enter our findings and conclusions.

I. THE FACTS

Dr. Cabrera is a physician who, at all relevant times, provided anesthesia services within the District of Puerto Rico. He is a Medicare participant with provider # 28289. Arbona was the billing secretary to CABRERA who, at all relevant times, was responsible for preparing, computing, calculating and submitting to Medicare the claims for anesthesia services provided by Dr. Cabrera. During the years 1994 and 1995, Cabrera and Arbona presented, or caused to be presented claims for anesthesia services, or made or caused to be made statements to get claims for anesthesia services paid or approved, to Medicare Part B carrier, Triple S, Inc. for the amounts of $400,140.22 in and $304,563.78 for each one of those years.

Anesthesia services is a covered service under Medicare, Part B. The fee schedule amount for physician anesthesiology services is based on allowable base and 15 minute time units multiplied by an anesthesia conversion factor specified for each locality. Anesthesia time involves the continuous actual presence of the anesthesiologist and starts when the anesthesiologist begins to prepare the patient for anesthesia care in the operating room and ends when the patient may be safely placed under post-operative care, under the care of another.

Medicare, Part B, is administered in Puerto Rico by Triple S, Inc. which acts as an agent of the United States of America pursuant to a contract entered into with the Secretary of HHS in accordance with the Medicare Act. 42 U.S.C. § 1395u; 42 C.F.R. Part 431, Subpart C. As Medicare contractor for Part B, Triple S receives, evaluates, processes, reviews, adjusts, rejects, and pays Medicare claims in its capacity as agent of HHS. 42 C.F.R. § 421.200. Under the authority of 42 U.S.C. § 1395u(a)(1)(C) and 42 C.F.R. § 421.200(e), Triple S, Inc. conducted a post payment Comprehensive Medical Review (CMR) or audit of the claims for anesthesia service provided by Dr. Cabrera to Medicare patients during the years 1994 and 1995.

In order to perform this audit, Triple S selected a statistical valid random sample (SVRS), following Medicare methodology and guidelines, which take into account the adequate size of the sample, stratifies the sample, and provides for the random selection of the claims by strata. Following the aforementioned method, a statistical valid random sample of 230 claims filed by Dr. Cabrera for the year 1994 and 231 claims for the year 1995 were selected.

Triple S requested from the Bayamón Family Hospital (formerly Hospital Matilde Brenes) the medical records related to the anesthesia services billed by Dr. Cabrera of those patients in the sample. The operation reports, anesthesia records, and nursing notes of the patients included in the sample, that were furnished to Triple S by the hospital in which the anesthesia services were provided, were reviewed to check the actual (real) anesthesia time. The medical records of 73 patients included in the sample that were requested by Triple S to the hospital were never provided. Since no information was furnished to support, document or determine the amount due in these 73 claims in the sample, the full amount paid to Dr. Cabrera in these 73 claims was considered as an overpayment.

The time reported in the claim forms submitted by Dr. Cabrera and Arbona to Triple S (Medicare) were compared to the time reported in the operating reports, anesthesia records and nursing notes obtained from the hospital. This audit revealed that Dr. Cabrera and Arbona had overstated, falsely reported, unsupported or undocumented the anesthesia time in all but six of the 461 sampled claims. In the year 1994, on the sample alone, Dr. Cabrera and Arbona billed for 99,270 minutes of anesthesia time, when the evidence provided to Triple S only supported 21,371 minutes of anesthesia time, for a difference of 77,899 of overstated, falsely claimed, unsupported or undocumented anesthesia time. In the year 1995, on the sample alone, Dr. Cabrera and Arbona billed for 90,930 minutes of anesthesia time, when the evidence provided to Triple S only supported 20,987 minutes of anesthesia time, for a difference of 69,943 of overstated, falsely claimed, unsupported or undocumented anesthesia time.

The amount overpaid to Dr. Cabrera based on the overstated, falsely reported, undocumented or unsupported anesthesia time was $75,338.75 in 1994 and $56,448.99 in 1995, on the sampled claims only.

The results of the aforementioned audit were then projected or extrapolated to the entire universe of claims paid to Dr. Cabrera for the years 1994 and 1995. After applying the standard deviation and allowing for a percentage of sampling error, the result was an estimated overpayment to Dr. Cabrera on account of overstated, falsely claimed, unsupported or undocumented anesthesia time of $237,600.39 for the year 1994 and $211,773.89 for the years 1995.

In addition, Triple S estimates their cost to perform this post payment audit and investigating the claims filed by Dr. Cabrera and Arbona for the years 1994 and 1995 in the amount of $8,929.57.

II. THE FALSE CLAIMS ACT

Plaintiff contends that Judgment by Default should be entered in its favor under the False Claims Act (31 U.S.C. § 3729 et seq). The False Claims Act establishes seven acts, each of which constitutes a basis for liability. 31 U.S.C. § 3729(a). The most common provisions impose liability on any person who:

(1) knowingly presents, or causes to be presented to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;

(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;

(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;

(4) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government

...

31 U.S.C. § 3729(a).

A. Claim against the government:

In this case, Dr. Cabrera and Arbona presented or caused to be presented, claims or made or caused to be made statements to get claims paid or approved, to Medicare Part B carrier, Triple S, Inc. These claims are paid with funds provided by the Health Care Financing Administration (HCFA), a component of the United States Department of Health and Human Services (HHS). During the year 1994 CABRERA was paid $400,140.22 and in 1995 $304,563.78 for anesthesia services provided to Medicare beneficiaries. Claims under the Medicare program are claims "upon or against the Government of the United States or any department or officer thereof". Under the Medicare program, claims are not submitted directly to a federal agency but rather to a fiscal intermediaries which contract with the Health Care Financing Administration (HCFA), an agency of HHS, to process Medicare claims. The fiscal intermediaries are usually insurers, that are subsequently reimbursed by the United States. False Medicare claims, however, have been held uniformly to be within the ambit of the False Claims Act. Peterson v. Weinberger, 508 F.2d 45 (5th Cir.) cert. denied, 423 U.S. 830, 96 S.Ct. 50, 46 L.Ed.2d 47 (1975); United States v. Lorenzo, 768 F.Supp. 1127 (E.D.Pa.1991); United States v. Pani, 717 F.Supp. 1013 (S.D.N.Y.1989); United States v. Oakwood Downriver Medical Center, 687 F.Supp. 302 (E.D.Mich.1988).

Also, in the 1986 amendment to the False Claims Act, Congress defined "claim" to include

Any request or demand ... made to a contractor, grantee, or other recipient if the United States government provides any portion of the money or property which is requested...