United States v. Bos. Heart Diagnostics Corp.

• Citation: 255 F.Supp.3d 13
• Decision Date: 09 June 2017
• Docket Number: Civil Action No. 15-487 (RBW).
• Parties: UNITED STATES of America, et al. EX REL. Tina D. GROAT, Plaintiffs, v. BOSTON HEART DIAGNOSTICS CORPORATION, Defendant.
• Court: United States District Courts. United States District Court (Columbia)

255 F.Supp.3d 13

UNITED STATES of America, et al. EX REL. Tina D. GROAT, Plaintiffs,

v.BOSTON HEART DIAGNOSTICS CORPORATION, Defendant.

Civil Action No. 15-487 (RBW).

United States District Court, District of Columbia.

Signed June 9, 2017

Russell D. Paul, Sherrie R. Savett, Berger & Montague, Phildelphia, PA, David Lawrence Scher, The Employment Law Group, P.C., Steven A. Skalet, Richard E. Condit, Mehri & Skalet, PLLC, Washington, DC, for Plaintiffs.

Hope Schwarz Foster, Karen S. Lovitch, Laurence J. Freedman, Michael S. Gardener, Samantha P. Kingsbury, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C, Washington, DC, Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON, United States District Judge

The plaintiff/relator, Tina D. Groat, M.D., brings this qui tam action against the defendant, Boston Heart Diagnostics Corporation ("Boston Heart"), under the federal False Claims Act, 31 U.S.C. § 3729 (2012), and various analog state false claims statutes. See Relator's Second Amended Complaint Pursuant to the Federal False Claims Act, 31 U.S.C. §§ 3729 et seq. and Pendent State False Claims Acts ("2d Am. Compl.") ¶ 1. Currently before the Court are the Relator's Motion for Judicial Notice ("Relator's Mot.") and Boston Heart Diagnostics Corporation's Motion to Dismiss Relator's Second Amended Complaint ("Def.'s Mot."), which seeks dismissal of the plaintiff's Second Amended Complaint pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). See Def.'s Mot. at 2. Upon careful consideration of the parties' submissions,¹ the Court concludes that it must grant the relator's motion for judicial notice and grant in part and deny in part Boston Heart's motion to dismiss.

I. BACKGROUND

A. Statutory Background

A brief overview of the Medicare program will help elucidate the relator's allegations in this case. Medicare is a federal health insurance program for the elderly and people with disabilities. See 42 U.S.C. § 1395c (2012). Medicare Part B, which provides outpatient coverage for, among other things, diagnostic laboratory tests, see 42 C.F.R. § 410.32 (2016), only covers medical services that are "reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member," 42 U.S.C. § 1395y(a)(1)(A). "[Laboratory t]ests that are performed in the absence of signs, symptoms, complaints, personal history of disease, or injury are not covered except when there is a statutory provision that explicitly covers tests for screening as described." Medicare Claims Processing Manual: Chapter 16—Laboratory Services § 120.1, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104C16.pdf (last visited May 16, 2017).

Medicare establishes its national payment policy for covered items or services through national coverage determinations, which are formal decisions by the Secretary of Health and Human Services regarding whether, and under what circumstances, Medicare covers a particular item or service. See 42 U.S.C. § 1395ff(1) ; 42 C.F.R. § 405.1060(a). National coverage determinations are binding on both Medicare contractors and administrative law judges, who preside over Medicare coverage appeals. See 42 U.S.C. § 1395ff(1)(A)(i) ; 42 C.F.R § 405.1060(a). Medicare contractors process and pay Medicare claims within a specified jurisdiction on behalf of the Centers for Medicare and Medicaid Services ("CMS"), and have authority to issue local coverage determinations for that jurisdiction. See 42 U.S.C. § 1395ff(f)(2) ; see also id.§ 1395m–1(g)(noting that Medicare contractors may issue local coverage determinations regarding clinical diagnostic laboratory tests under the same process). Local coverage determinations, like national coverage determinations, govern Medicare coverage for a particular item or service. See id.§ 1395ff(f)(2)(b). Administrative law judges "give substantial deference" to local coverage determinations, but they are not bound by them. 42 C.F.R. § 405.1062.

An entity seeking reimbursement for services provided to Medicare patients must submit a CMS–1500 form to the Medicare contractor. See United States ex rel. Hobbs v. MedQuest Assocs., Inc., 711 F.3d 707, 711 (6th Cir. 2013). "The[ CMS–1500] form[ ] reflect[s] the treatment or services provided and identif[ies] the [entity that] provided them. Tests, supplies, and services are correlated to a series of unique numbers, called CPT codes, which quickly convey to the [claims processor] what reimbursable expenses the [entity] has incurred." Id. at 711. The CMS–1500 form requires the entity to certify that, among other things, "the services on this form were medically necessary." Health Insurance Claim Form ("CMS–1500") at 2, available at https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS1500.pdf (last visited May 16, 2017).

B. Factual Background and Procedural History

The relator is a medical doctor and the National Medical Director of Women's Health and Genetics at United Healthcare ("United"), 2d Am. Compl. ¶ 6, which is a health insurance company that offers Medicare and Medicaid insurance coverage, TriCare health insurance coverage, as well as employer-sponsored and individual health insurance coverage, id.¶ 23. The relator alleges the following in her Second Amended Complaint.

Boston Heart is a clinical laboratory located in Framingham, Massachusetts, which "provides diagnostic testing related to cardiovascular health," 2d Am. Compl. ¶ 24, by "conducting laboratory tests that are ordered by doctors and other healthcare providers," id.¶ 50.² "To facilitate the ordering of those tests, [Boston Heart] supplies doctors with pre-printed test requisition forms which that doctor fills out and sends to the [Boston Heart] laboratory along with the patient's specimen that is to be tested." Id.

These test requisition forms include a list of the tests that the lab [oratory] performs for the doctor to select based on the doctor's examination of the patient and subsequent diagnosis. The form also groups certain tests together in test panels, which allows the doctor to easily order several tests at once simply by checking one box on the form.

Id.¶ 51. "After the lab[oratory] conducts the tests ordered, it bills the government [or government intermediary] ... for tests performed for Medicare [and other government health insurance] patients." Id.¶ 55.

The relator alleges that various genetic and non-genetic tests³ performed by Boston Heart are not medically necessary for patients with the following four diagnostic codes: (1) routine general medical examination at a health care facility; (2) essential hypertension (high blood pressure ); (3) other and unspecified hyperlipidemia (high cholesterol); and (4) other malaise and fatigue (collectively, "the four diagnostic codes"). See id.¶¶ 57–59. Specifically, the relator alleges:

when any of these four [ ] diagnostic codes are given to a patient in the absence of other diagnostic codes, the tests set forth above are ... known to be medically unnecessary because they (1) do not and cannot predict the patient's risk of future heart disease, (2) do not and cannot screen for any currently existing heart disease in the patient, and (3) provide no additional information regarding the cardiovascular-related diagnoses sometimes used to justify these tests, such as hypertension, hyperlipidemia, or malaise and fatigue, and (4) have no bearing on any potential treatments for those diagnoses.

Id.¶ 59. According to the relator, when these tests are ordered for patients with some or all of the four diagnostic codes, they are used solely for screening purposes on adults who do not exhibit "signs, symptoms, complaints, or personal history of heart disease," and thus are not covered by Medicare or other government health care programs. Id.¶ 70; see also id.¶ 67. To support her allegation, the relator relies on the Guideline for Assessment of Cardiovascular Risk in Asymptomatic Adults in November 2010 (the "Guideline"), jointly published by the American Heart Association and the American College of Cardiology, id.¶¶ 61–62 (noting that the Guideline "specifically recommends against certain of these tests to assess the risk of developing heart disease"), as well as various national and local coverage determinations made by the government and its contractors, respectively, id.¶¶ 67–69, 73–74.

The relator also relies on the data examined by her team at United, which, in order to "evaluat[e] the drivers of increased costs in women's care and genetic testing[,] ... examined the volume and type of genetic testing purportedly related to cardiac risk performed for thousands of patients by hundreds of laboratories that bill to United." Id.¶ 119. "Because [United] provides and services [health insurance plans that] are funded by Medicare and Medicaid dollars, [the r]elator received and evaluated [United] data that showed that Boston Heart submitted claims to [United] on behalf of patients insured under [government health insurance plans] for the tests at issue here." Id.¶ 136. "[B]y examining data for the year 2013," id.¶ 120, the relator "identified a combination of seven tests that are frequently performed and billed by Boston Heart and specifically compared Boston Heart's billing of that combination to other laboratories," id.¶ 121. According to the relator, the comparison revealed that "Boston Heart was an extreme outlier in the frequency of billing this combination of seven tests," id.¶ 122, and that examination "of specific claims submitted to United [ ] show that Boston Heart was billing for medically unnecessary tests to screen for cardiac-related issues and predict future cardiac risk," id.¶ 124. The relator alleges that "Boston Heart encourages providers to order these medically unnecessary tests," id.¶ 132, through marketing materials and test panels on pre-printed test requisition forms, see id.¶¶ 52, 94, 127, 132, and that "General Practitioners and other...