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July 18, 1994

United States of America, Plaintiff,
George E. Krizek and Blanka H. Krizek, Defendants.

The opinion of the court was delivered by: STANLEY SPORKIN


 On January 11, 1993, the United States filed this civil suit against George O. Krizek, M.D. and Blanka H. Krizek under the False Claims Act, 31 U.S.C. §§ 3729-3731, and at common law. The government brought the action against the Krizeks' alleging false billing for Medicare and Medicaid patients. The five counts include claims for (1) "Knowingly Presenting a False or Fraudulent Claim", 31 U.S.C. § 3729(a)(1); (2) "Knowingly Presenting a False or Fraudulent Record", 31 U.S.C. § 3729(a)(2); (3) "Conspiracy to Defraud the Government"; (4) "Payment under Mistake of Fact"; and (5) "Unjust Enrichment". In its claim for relief, the government asks for triple the alleged actual damages of $ 245,392 and civil penalties of $ 10,000 for each of the 8,002 allegedly false reimbursement claims pursuant to 31 U.S.C. § 3729.

 The government alleges two types of misconduct related to the submission of bills to Medicare and Medicaid. The first category of misconduct relates to the use of billing codes found in the American Medical Association's "Current Procedural Terminology" ("CPT"), a manual that lists terms and codes for reporting procedures performed by physicians. The government alleges that Dr. Krizek "up-coded" the bills for a large percentage of his patients by submitting bills coded for a service with a higher level of reimbursement than that which Dr. Krizek provided. As a second type of misconduct, the government alleges Dr. Krizek "performed services that should not have been performed at all in that they were not medically necessary." Original Complaint P 24.

 Given the large number of claims, and the acknowledged difficulty of determining the "medical necessity" of 8,002 reimbursement claims, it was decided that this case should initially be tried on the basis of seven patients and two hundred claims that the government believed to be representative of the Dr. Krizek's improper coding and treatment practices. See Order of March 9, 1994. It was agreed by the parties that a determination of liability on Dr. Krizek's coding practices would be equally applicable to all 8,002 claims in the complaint. A three week bench trial ensued.

 Findings of Fact

 Dr. Krizek is a psychiatrist. Dr. Krizek's wife, Blanka Krizek was responsible for overseeing Dr. Krizek's billing operation for a part of the period in question. Dr. Krizek's Washington, D.C. psychiatric practice consists in large part in the treatment of Medicare and Medicaid patients. Much of Doctor Krizek's work involves the provision of psychotherapy and other psychiatric care to patients at the Washington Hospital Center.

 Under the Medicare and Medicaid systems, claims for reimbursement are submitted on documents known as Health Care Financing Administration ("HCFA") 1500 Forms. These forms are supposed to contain the patient's identifying information, the provider's Medicaid or Medicare identification number, and a description of the provided procedures for which reimbursement is sought. These procedures are identified by a standard, uniform code number as set out in the American Medical Association's "Current Procedural Terminology" ("CPT") manual, a book that lists the terms and codes for reporting procedures performed by physicians.

 Dr. Krizek was a voluntary "participating provider" in the Medicare and Medicaid programs. As a participating provider, Dr. Krizek was required to follow the billings and documentation requirements of Medicare/Medicaid and Pennsylvania Blue Shield ("PBS"), the Medicare carrier for the greater Washington, D.C. area. Providers were informed of Medicare/Medicaid rules and directions through the CPT manual and the Medicare Reports and Medicare Bulletins.

 The Medicare reports that Dr. Krizek received indicated that he was to maintain documentation for each claim he submitted to Medicare. These reports noted that hospital progress notes and patient office records must verify that a service 1) actually was provided, 2) was performed at the level reported, and 3) was medically necessary. The Medicare Reports stated that refunds would be requested for any payments made by Blue Shield not supported by hospital records. See Gov. Exh. 6 & 7.

 The CPT manuals contained billing numbers to be used by providers when submitting claims to Medicare/Medicaid for reimbursement. The claim number submitted by or on behalf of the provider describes by code the service rendered and constitutes the provider's claim for such service. The submission of a claim on the HCFA 1500 form is a certification by the provider to the government of the correctness of the information submitted and, among other things, that the services were performed by the provider, and that the provider will maintain "such records as are necessary to disclose fully the extent of the services provided. . . ." See Government Exh. 5.

 The government in its complaint alleges both improper billing for services provided and the provision of medically unnecessary services. The latter of these two claims will be addressed first.

 Medical Necessity

 The record discloses that Dr. Krizek is a capable and competent physician. Dr. Krizek was originally trained in Prague, in what was then Czechoslovakia, at the Charles University School of Medicine. Dr. Krizek also received a medical degree from Rudolf's University, in Vienna, Austria. Dr. Krizek came to the United States in 1968, where he did a residency at Beth Israel Hospital in New York City. He arrived in the Washington, D.C. area in the early 1970's where he has been engaged in the practice of psychiatry for approximately 21 years. The trial testimony of Dr. Krizek, his colleagues at the Washington Hospital Center, as well as the testimony of a former patient, established that Dr. Krizek was providing valuable medical and psychiatric care during the period covered by the complaint. The testimony was undisputed that Dr. Krizek worked long hours on behalf of his patients, most of whom were elderly and poor.

 Many of Dr. Krizek's patients were afflicted with horribly severe psychiatric disorders and often suffered simultaneously from other serious medical conditions. For example, one of the seven representative patients had paranoid psychosis and organic brain dementia, coupled with a series of other medical problems including colon cancer, diabetes, herpes, and viral encephalitis. Another patient suffered from chronic depression and had accompanying delusions. A third had a history of repeated psychiatric hospitalizations, was in an acute schizophrenic state, and also suffered from epilepsy. A fourth patient suffered from suicidal and assaultive behavior, hallucinations, paralysis of the left-side of the body, and was an intravenous cocaine and heroin user.

 The government takes issue with Dr. Krizek's method of treatment of his patients, arguing that some patients should have been discharged from the hospital sooner, and that others suffered from conditions which could not be ameliorated through psychotherapy sessions, or that the length of the psychotherapy sessions should have been abbreviated. The government's expert witness's opinions on this subject came from a cold review of Dr. Krizek's notes for each patient. The government witness did not examine or interview any of the patients, or speak with any other doctors or nurses who had actually served these patients to learn whether the course of treatment prescribed by Dr. Krizek exceeded that which was medically necessary.

 Dr. Krizek testified credibly and persuasively as to the basis for the course of treatment for each of the representative patients. The medical necessity of treating Dr. Krizek's patients through psychotherapy and hospitalization was confirmed via the testimony of other defense witnesses. The Court credits Dr. Krizek's testimony on this question as well as his interpretation of his own notes regarding the seriousness of each patients' condition and the medical necessity for the procedures and length of hospital stay required. The Court finds that the government was unable to prove that Dr. Krizek rendered services that were medically unnecessary.

 Improper Billing

 On the question of improper billing or "up-coding", the government contends that for approximately 24 percent of the bills submitted, Dr. Krizek used the CPT Code for a 45-50 minute psychotherapy session (CPT Code 90844) when he should have billed for a 20-30 minute session (CPT Code 90843). The government also contends that for at least 33 percent of his patients, Dr. Krizek billed for a full 45-50 minute psychotherapy session, again by using CPT code 90844, when he should have billed for a "minimal psychotherapy" session (CPT 90862). These two latter procedures are reimbursed at a lower level than 90844, the 45-50 minute psychotherapy session, which the government has referred to as "the Cadillac" of psychiatric reimbursement codes.

 The primary thrust of the government's case revolves around the question whether Dr. Krizek's use of the 90844 CPT code was appropriate. For the most part, the government does not allege that Dr. Krizek did not see the patients for whom he submitted bills. Instead, the government posits that the services provided during his visits either did not fall within the accepted definition of "individual medical psychotherapy" or, if the services provided did fit within this definition, the reimbursable service provided was not as extensive as that which was billed for. In sum, the government claims that whenever Dr. Krizek would see a patient, regardless of whether he simply checked a chart, spoke with nurses, or merely prescribed additional medication, his wife or his employee, a Mrs. Anderson, would, on the vast majority of occasions, submit a bill for CPT code 90844--45-50 minutes of individual psychotherapy. In presenting its case that Dr. Krizek did not provide the billed-for services as required by the CPT, the government contends that the definition of the 90844 code requires 45-50 minutes of "face-to-face " contact with the patient. By example, if a doctor were to spend 10 minutes reviewing a patient's file and talking to nurses about the patient's condition, then spend 20 minutes in a face-to-face psychiatry session with the patient, and finally take an additional fifteen minutes after the session to consult with the patient's spouse or prescribe medication, this would, according to the government, count only as a 20-30 minute individual psychotherapy session, to be billed as code 90843. Under the government's interpretation of the code, even if as much as an hour of a physician's time is devoted to a patient's case, with half that time spent in a face-to-face psychotherapy session and the rest spent on related services, the doctor is only permitted reimbursement under the 90800 series of codes for the 30 minutes spent face-to-face. The 90800 series of codes is described as follows in the documents sent by PBS to the Krizeks during the relevant time period: Code Description of Services 90841 Individual medical psychotherapy by a physician, with continuing medical diagnostic evaluation, and drug management when indicated, including insight oriented, behavior modifying or supportive psychotherapy; time unspecified. 90843 Approximately 20 to 30 minutes. 90844 Approximately 45 to 50 minutes.


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