The opinion of the court was delivered by: JOHN PENN, Senior District Judge
This matter came before the Court on Defendant's Motion for
Summary Judgment  and Relators' Motion for Partial Summary
Judgment on Seven Steps Liability . On October 8, 2004, the
Court issued Orders [581, 582] denying both motions because
genuine issues of material fact remain as to the claims set forth
in the Third Amended Complaint. This memorandum opinion sets
forth the reasons for those orders. Additionally, although the
Court addressed Defendant's Motion to Dismiss  separately,
see Mar. 25, 2005 Mem. Op., it reserved judgment on one issue
raised in that motion as well as in Defendant's Motion for
Summary Judgment which it addresses here.
Plaintiffs brought suit on behalf of the United States under
the qui tam provision of the False Claims Act ("FCA").
31 U.S.C. §§ 3729-3733. The qui tam plaintiffs ("relators"), four
Certified Registered Nurse Anesthetists ("CRNAs") formerly
employed by defendant at its hospital, allege that from 1989 to 1995, George Washington
University ("GWU") violated the FCA by: (1) knowingly presenting,
or causing presentation of, false submissions to the Health Care
Finance Administration for Medicare reimbursement, see
31 U.S.C. § 3729(a)(1); and (2) creating and using, or causing
creation or use of, false statements and records in order to
ensure payment of the fraudulent Medicare claims, see
31 U.S.C. § 3729(a)(2).*fn1 Third Am. Compl. ¶¶ 62-65. The claims
arise from defendant's anesthesiologists' provision of anesthesia
services to Medicare patients and the accompanying documentation
The Third Amended Complaint alleges that GWU knowingly or
recklessly submitted claims to Medicare for reasonable charge
reimbursement when, in fact, the anesthesiologists failed to
satisfy a requirement for reimbursement known as the "Seven
Steps" regulation. Third Am. Compl. ¶¶ 27-28, 30-35. Both
defendant and relators seek summary judgment on the Seven Steps
violation allegations, proffering different legal interpretations
of what the regulation required in support of their positions.
For purposes of these motions, the disputed issue is who may
perform the Seven Steps. Relators argue that the regulation
requires anesthesiologists to perform all of the Seven Steps
themselves and does not permit delegation of the steps to other
qualified medical professionals, such as CRNAs or medical
students. See, e.g., Rel.'s Mot. Part. Summ. J. at 2. Defendant
argues that the regulation permits anesthesiologists to delegate
performance of the Seven Steps to other qualified medical
personnel. See, e.g., Def.'s Mem. Summ. Mot. Summ. J. at 7-9.
The Third Amended Complaint also alleges that GWU knowingly or
recklessly submitted claims to Medicare for reimbursement at the highest rate, that of
"personal performance", when in fact the physician had not met
the requirements for billing at that rate. Third Am. Compl. ¶¶
24-26. Defendant has moved for dismissal of or summary judgment
on these claims, arguing that it was required by the regulation
to bill procedures known as "one-on-ones", in which a physician
was involved in one procedure with assistance from one medical
student or CRNA, as personally performed and thus there was no
violation. See, e.g. Def.'s Mot. Dismiss at 8-12.
I. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) mandates that summary
judgment shall be granted "if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10 (1986). The moving party bears
the initial burden of identifying evidence it believes
demonstrates the absence of any genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548,
2553 (1986). In response, "[a]n adverse party may not rest upon
the mere allegations or denials of the adverse party's pleading,
but the adverse party's response, by affidavits or as otherwise
provided in this rule, must set forth specific facts showing that
there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
Summary judgment will be granted "against a party who fails to
make a showing sufficient to establish the existence of an
element essential to that party's case, and on which the party
will bear the burden at trial." Celotex, 477 U.S. at 322,
106 S.Ct at 2552.
Whether a fact is material is determined by the substantive
law. "Only disputes over facts that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment."
Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A dispute about a
material fact is genuine "if the evidence is such that a
reasonable jury could return a verdict for the non-moving party."
Id. "If the evidence is merely colorable, or is not
significantly probative, summary judgment may be granted." Id.
at 249-50, 106 S.Ct. at 2511 (internal citations omitted). In
ruling on a motion for summary judgment, the Court assumes the
truth of all evidence proffered by the non-moving party and draws
all legitimate inferences in its favor. Id. at 255,
106 S.Ct. at 2513.
Relators claim liability under the False Claims Act which
states that an actor shall be liable if he:
1) knowingly presents, or causes to be presented, to
an officer or employee of the United States
Government . . . a false or fraudulent claim for
payment or approval; [or]
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
31 U.S.C. § 3729(a) (2000). The FCA defines "`knowingly' to mean
that a person . . . (1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the
information; or (3) acts in reckless disregard of the truth or
falsity of the information, and no proof of specific intent to
defraud is required. 31 U.S.C. § 3729(b) (2000). "Reckless
disregard," for purposes of the FCA, is "an extreme version of
ordinary negligence," and "an extension of gross negligence."
United States v. Krizek, 324 U.S. App. D.C. 175, 183,
111 F.3d 934, 942 (1997).
III. Regulatory Background The regulation at issue implemented section 1887(a)(1) of the
Social Security Act, codified at 42 U.S.C. 1395xx. See
48 Fed. Reg. 8902, 8907 (March 2, 1983). That section directed the
agency, the Health Care Financing Administration ("HCFA") of the
U.S. Department of Health and Human Services,*fn2
promulgate a regulation establishing criteria for distinguishing
which constitute professional medical services, which
are personally rendered for an individual patient by
a physician and which contribute to the diagnosis or
treatment of an individual patient, and which may be
reimbursed as physicians' services under part B [of
Medicare, from those] which constitute professional
services which are rendered for the general benefit
to patients in a hospital or skilled nursing facility
and which may be reimbursed only on a reasonable cost
basis. . . .
42 U.S.C. § 1395xx (a)(1). Thus, the regulation distinguished
"physicians' services to an individual patient, which are
reimbursable on a reasonable charge basis under Part B" of
Medicare from "physicians' services to a provider, which are
reimbursable only on a reasonable cost basis."
48 Fed. Reg. at 8,907. The regulation set forth criteria for reasonable charge
reimbursement of physicians designed to ensure that it was only
available for services in which they furnished personal and
identifiable service to patients. See 42 C.F.R. §§ 405.550,
While section 405.550 of the regulation set forth requirements
applicable to physicians generally, section 405.552 created two
requirements particular to physicians furnishing ...