United States ex rel. Duffy v. Lawrence Mem'l Hosp.
| Decision Date | 02 October 2018 |
| Docket Number | Case No. 14-2256-SAC-TJJ |
| Parties | UNITED STATES OF AMERICA, ex rel. Megen Duffy, Relator-Plaintiff, v. LAWRENCE MEMORIAL HOSPITAL, Defendant. |
| Court | U.S. District Court — District of Kansas |
Plaintiff has brought this False Claims Act ("FCA") lawsuit against defendant Lawrence Memorial Hospital ("LMH"). This case is before the court upon LMH's motion for summary judgment (Doc. No. 322) and plaintiff's motions for partial summary judgment (Doc. Nos. 318) and for summary judgment against LMH's counterclaims (Doc. No. 320).
Plaintiff alleges that LMH made two kinds of false statements in this case. First, plaintiff asserts that LMH falsely reported information involving patients' arrival time to the Government to increase Medicare reimbursement. Plaintiff asserts:
that LMH knowingly manipulated the apparent order of timed patient events in medical records, so as to maximize Medicare reimbursement. In carrying out this scheme, LMH knew that the Specifications Manuals instructed LMH to abstract the earliest event in the medical record as "arrival time." So LMH made sure electrocardiogram ("EKG") times were the earliest times appearing in the records of chest-pain patients. Of course, these patients had necessarily arrived at the hospital well before receiving an EKG. The proof is in the proverbial pudding. LMH began reporting "zero" minute arrival-to-EKG times in 2011.
Doc. No. 333, p. 1. Plaintiff claims this misinformation "directly impacted LMH's Medicare reimbursement rate because of [its] impact on the Outpatient Quality Reporting ('OQR'), Inpatient Quality Reporting ('IQR'), and Hospital Value Based Purchasing ('HVBP') programs." Id.
Plaintiff's second claim is that LMH knowingly, recklessly and falsely certified compliance with employee anti-fraud education requirements set out by Section 6032 of the Deficit Reduction Act of 2005 ("DRA") as a condition of payment from the Medicaid program. Id. at p. 2. Plaintiff seeks partial summary judgment in her favor on this claim. Doc. No. 318.
LMH has alleged state law breach of contract and fraudulent misrepresentation counterclaims against plaintiff. These claims arise from a settlement agreement LMH and plaintiff entered which resolved discrimination claims plaintiff raised in administrative complaints. A broadly-stated release was part of the agreement. The settlement agreement was struck a few months after plaintiff filed this FCA action under seal. LMH did not know of the FCA action at the time of the settlement agreement. LMH contends that plaintiff breached the settlement agreement and made fraudulent misrepresentations which LMH relied upon to enter the settlementagreement. Plaintiff asks for summary judgment against the counterclaims. Doc. No. 320.
As explained below, the court finds that LMH's motion for summary judgment should be granted because plaintiff cannot demonstrate an essential element of her FCA claims, that is the materiality of the alleged false statements made by LMH. For the same reasons, plaintiff's motion for partial summary judgment should be denied. With these rulings, the court shall decline to exercise jurisdiction over LMH's counterclaims. Therefore, plaintiff's motion for summary judgment against the counterclaims is moot.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED.R.CIV.P. 56(a). A "genuine dispute as to a material fact" is one "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. At the summary judgment stage, the court's job Id. at 249-50.
The moving party bears the initial burden of showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial as to those dispositive matters for which the nonmoving party carries the burden of proof. Nahno-Lopez v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010). The non-movant may not rely on the party's own pleadings; rather, the non-movant must come forward with facts supported by competent evidence. Id. (interior quotations omitted). The essential inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. 251-52.
The following facts are uncontroverted or construed in the light most favorable to plaintiff. Some additional facts, particularly as to plaintiff's DRA contentions, may be included in the court's later discussion of LMH's arguments.
In November 2013, plaintiff called a Centers for Medicare & Medicaid Services ("CMS") hotline to report LMH for falsifying patient charts and charging Medicare for services LMH was notproviding so that LMH would receive increased Medicare reimbursement. Her allegations were investigated by NCI Advance Med, a CMS contractor that investigates fraud allegations. That investigation was closed around July 2014.
Plaintiff filed her initial complaint under seal on May 30, 2014. The U.S. Department of Justice was served with the complaint. The Health and Human Services Office of Inspector General was notified and plaintiff was interviewed by the U.S. Attorney's Office for the District of Kansas. The Department of Justice has declined to intervene in this case. Plaintiff filed an amended complaint on June 16, 2015. DOJ was served with the complaint and again declined to intervene.
LMH makes daily claims to the Medicare program for interim payment to a Medicare Administrative Contractor. LMH is paid for services to Medicare patients through interim payments received most business days.
The charges LMH submits for payment are based upon LMH's chargemaster which is LMH's official rates for individual procedures, services and goods at the hospital. CMS determines the payment rate for LMH's charges for Medicare patient services prior to the services being delivered. LMH has a contract with CMS to provide services to Medicare patients for the rates determined by CMS.
The payment rate is impacted positively by LMH's participation in reporting programs. The Inpatient Quality Reporting Program ("IQR") is a "pay-for-reporting" program. Under this program, hospitals report certain designated quality measures regarding their inpatient encounters to CMS. The Outpatient Quality Reporting Program ("OQR") is also a "pay-for-reporting" program. Under this program, hospitals report certain designated quality measures regarding their outpatient encounters to CMS. In return for submitting data for these reporting programs, hospitals avoid a reduced payment for the provision of services to Medicare patients.
LMH's Quality Services Department abstracts data from patient charts and submits that data to CMS for IQR and OQR reports. The data abstraction is done using Specifications Manuals promulgated by CMS. Because abstractors do not and cannot alter patient records or even investigate the accuracy of the patient records, inaccuracies in patient records are simply carried over to the abstracted data reported to CMS on IQR and OQR measures.
Each fiscal year from 2011 to 2018, LMH completed Data Accuracy and Completeness Acknowledgements ("DACA" forms) and submitted those certifications to CMS. The DACA forms acknowledge that the information reported for the IQR program is accurate and complete and that the acknowledgement is required for the IQR program.
Each year CMS randomly selects 450 hospitals for each of the IQR and OQR programs to verify the accuracy of the abstraction of data from medical records. In addition, there are 50 targeted hospitals. LMH has been randomly selected three times since 2011. LMH satisfied the 75 percent accuracy threshold in these audits. The audits, however, do not assess the accuracy of the medical records themselves.
The HVBP program is a budget-neutral program. Under the HVBP, CMS withholds a percentage from the total annual Medicare payments to all hospitals nationally, and places it in a separate fund used to increase or decrease the reimbursement rate upon claims for payment in following years, depending upon performance on certain measures calculated with IQR data.
All amounts in the HVBP fund are paid out to hospitals each year. CMS does not retain any of the money.
"Arrival time" is a component of certain measures in the IQR and OQR programs. There are numerous other measures which do not use "arrival time" as a component.
Performing an ECG prior to registering a patient results in the "arrival time" reported to CMS being the same as the ECG time in the patient record, where the ECG is the earliest documented event in the medical record.
An expert witness for plaintiff has testified that, based upon his review of documents, LMH failed to properly record theactual arrival times of ER chest pain patients by delaying registration until after an ECG was obtained. Doc. No. 333-14, p. 3. There is other evidence discussed in the orders denying LMH's first motion for summary judgment and LMH's motion for reconsideration (Doc. No. 204, pp.8-9, 16-19; Doc. No. 234, p. 4 n.2), that LMH knowingly falsified patient records with the intent of causing abstracted "arrival times" to be later than they would have been absent the...
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