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U.S. v. GEORGE WASHINGTON UNIVERSITY

August 31, 2005.

UNITED STATES OF AMERICA, ex rel. SHEILA EL-AMIN, et al., Plaintiffs/Relators,
v.
THE GEORGE WASHINGTON UNIVERSITY, Defendant.



The opinion of the court was delivered by: JOHN PENN, Senior District Judge

MEMORANDUM OPINION

INTRODUCTION

This matter came before the Court on Defendant's Motion for Summary Judgment [526] and Relators' Motion for Partial Summary Judgment on Seven Steps Liability [530]. 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 [170] 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.

  BACKGROUND

  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 and billing.

  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.

  ANALYSIS

  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.

  II. False Claims Act

  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 to promulgate a regulation establishing criteria for distinguishing services:
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, 405.552 (1989-95).*fn3 While section 405.550 of the regulation set forth requirements applicable to physicians generally, section 405.552 created two requirements particular to physicians furnishing ...

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