The opinion of the court was delivered by: SPORKIN
This matter comes before the Court on remand from the Court of Appeals' decision in this case, United States v. Krizek, 324 U.S. App. D.C. 175, 111 F.3d 934 (1997) ("Krizek III"). Dr. Krizek was a psychiatrist who practiced in Washington, D.C. for over twenty years. On January 11, 1993, the Government brought suit against Dr. George Krizek and his wife, seeking over $ 80 million in penalties and damages on the basis of false Medicare and Medicaid reimbursement claims. The Government sought damages on the basis of unjust enrichment and violations of the False Claims Act.
The False Claims Act, 31 U.S.C. § 3729(a), requires that violators be held liable for triple the amount unjustly paid to them and fined between $ 5,000 and $ 10,000 for each claim in violation of the Act. The Act is violated when one "knowingly" submits a false claim to the Government. See 31 U.S.C. § 3729(b). A defendant may be deemed to have "knowingly" violated the Act if he or she acted with "reckless disregard as to the truth or falsity of the information." Id.
After hearings and related proceedings, including supplemental hearings before a special master, this Court issued two memorandum opinions and orders. See United States v. Krizek, 859 F. Supp. 5 (D.D.C. 1994)("Krizek I "); United States v. Krizek, 909 F. Supp. 32 (D.D.C. 1995) ("Krizek II "). Initially, the Court held all claims submitted for a single day in excess of 9 hours would be presumed to be in violation of the False Claims Act. See Krizek I, 859 F. Supp. at 12. On the basis of this presumption, the Government presented evidence and the special master found that on 264 days, the Defendants submitted more than 9 hours worth of claims. Krizek II, 909 F. Supp. at 33. Based on the special master's findings, the Court concluded that the Defendants submitted 1,149 claims for which they were paid $ 47,105.39, and it awarded this sum to the Government as unjust enrichment. Id. However, for the False Claims Act violations, which required knowing or reckless conduct, the Court decided that the 9-hour presumption was insufficient to prove the requisite intent. The Court set a 24-hour presumption "so that there can be no question as to the falsity of the claims." Id. at 34. Based on the special master's findings, there were three days in which the Defendants billed Medicare/Medicaid in excess of 24 hours in a day. There were a total of 11 claims in excess of the 24-hour presumption. When multiplied by $ 10,000 for each claim in violation of the False Claims Act, the Defendants were held liable to the Government for $ 110,000. Combined with the unjust enrichment damages, the Court awarded $ 157,105.39 to the Government. The Court also required the Krizeks to pay $ 11,000 for the costs of the special master. See Krizek II, 909 F. Supp. at 34.
Both the Government and the Defendant appealed. The Court of Appeals affirmed most of the Court's rulings, but reversed on two issues. First, the Court of Appeals held that each line item (or code) on a HCFA 1500 form
did not constitute a separate false claim. Second, the Court of Appeals held that the parties should have been given the opportunity to present evidence after the adoption of the 24-hour standard. The Court of Appeals' instructions were clear. This Court was to permit the parties to present additional evidence regarding whether the Defendants submitted claims in excess of the 24-hour standard fixed by the Court:
While this higher standard may have been permissible, the District Court erred in issuing judgment based on the new presumption without permitting the parties to introduce additional evidence. We do not hold, as urged by the government, that the District Court was prohibited from revisiting its earlier finding and replacing it with twenty-four hour presumption. Krizek III, 111 F.3d at 938.
I. Government's Requests for Discovery
At the first status conference the Court held on remand, the Government made demands for discovery that were staggering and uncalled for. First, the Government demanded that the Defendants disclose all of the names of Dr. Krizek's private pay patients. In light of the questionable relevance of the names of these patients as well as the need to protect the privacy of individuals seeking psychiatric care, the Court refused to order that the names of the patients be divulged. Instead, the Court permitted the Government information on how many hours were billed to private pay patients on particular days. See Transcript, September 9, 1997, at 37-38.
Second, the Government requested that the Defendants provide all information about billing to private pay patients for all 1825 days in question. The Court, in the interest of economy, limited discovery to 10 days, of the Government's choosing, which would represent the most egregious billing practices by the Defendants. The Court indicated it would permit additional discovery if the evidence from these days suggested that more discovery would prove fruitful. The Government submitted a discovery request to the Defendants for 25 days. Although the Court limited the Government to 10 days, the Defendants provided responses for all 25 days. Nevertheless, the Government remains unsatisfied; not only does it request discovery for all 1825 days, but it also asks for numerous depositions. This Court concludes that it granted the Government more than a reasonable amount of discovery. The Government's search of the 25 most egregious days yielded only two days involving potential False Claims Act violations under the 24-hour presumption. The meager fruit of any further discovery is clearly outweighed by the vast time, expense, and burden on the Defendants. The Court of Appeals did not remand this case so that the Government could go on a fishing expedition.
Third, the Government claimed that the Court should order more discovery regarding unjust enrichment liability. This request was clearly uncalled for since the remand only concerned additional proof to be submitted regarding the 24-hour presumption on the False Claims Act violations. Accordingly, the Court denied the Government's request.
Finally, the Government requested discovery concerning the appropriateness of the 24-hour presumption. As with the unjust enrichment issue, the Court of Appeals did not require that this Court revisit the 24-hour presumption. The Government, by continuing to demand that almost every aspect of this case be reopened, severely misreads the Court of Appeals' narrow remand.
The Government now submits its new proof based upon the private pay patient information for the 25 days it requested. After all the time and expense necessary to produce that information, the Government has discovered only two days where the combined hours worked (for Medicare/Medicaid patients as well as private paid patients) exceeded the 24-hour presumption. The Government claims to have identified additional false claims on the original three days. The Defendants submitted proof stating that the Government's calculations on the three initial days as well as the two additional days were in error. According to the Defendants, on no day were the total hours worked over 24 hours.
The problem with the Government's argument is that the Government cannot prove that the claims in excess of 24 hours were the ones billed to Medicare/Medicaid as opposed to those billed to non-Medicare/Medicaid private patients. In order to establish a False Claims Act violation, the Government must prove that Dr. Krizek's improper claims were made knowingly or recklessly. But in a day involving an excess of 24 hours of billing, which includes both private pay claims and Medicare/Medicaid claims, the Government must prove that it was the Medicare/Medicaid claims that were fraudulent. The Government argues that the Court must find that the improper claims in excess of the 24 hour presumption should be assumed to be Medicare/Medicaid claims rather than private pay claims. However, there is simply no way to know this based upon the evidence presented. As the Special Master correctly recognized, "there are no records that reflect when a particular service was performed; thus it is impossible to identify the ...