United States District Court, District of Columbia
UNITED STATES OF AMERICA, et al., ex rel. TINA D. GROAT, Plaintiffs,
BOSTON HEART DIAGNOSTICS CORPORATION, Defendant.
B. WALTON UNITED STATES DISTRICT JUDGE.
plaintiff/relator, Tina D. Groat, M.D., initiated 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. On June 9, 2017, the Court granted
in part and denied in part Boston Heart's motion to
dismiss the relator's complaint. See United States ex
rel. Groat v. Boston Heart Diagnostics Corp., 255
F.Supp.3d 13, 17, 32-33 (D.D.C. 2017) (Walton, J.). Currently
before the Court is Boston Heart Diagnostics
Corporation's Motion for Reconsideration of the
Court's Order on the Motion to Dismiss (“Def.'s
Mot.”). Upon careful consideration of the parties'
submissions,  the Court concludes that it must
grant in part and deny in part Boston Heart's motion for
Court discussed the factual background and statutory
authority pertinent to this case in its Memorandum Opinion
issued on June 9, 2017, see Groat, 255 F.Supp.3d at
17-20, and will not reiterate those facts and authorities
again here. In that opinion, the Court declined to dismiss
the relator's presentment claim under §
3729(a)(1)(A) and false statements claim under §
3729(a)(1)(B), as well as her analog presentment and false
statements claims under various state false claims act
statutes, but dismissed her “reverse false
claims” under § 3729(a)(1)(G) and the analog state
statutes. See id. at 30-33. On June 23, 2017, Boston
Heart filed its present motion, requesting that the Court
reconsider its conclusion “that Boston Heart has an
obligation to establish that the tests for which it seeks
government reimbursement are medically necessary, ”
id. at 25, which “underlies [the Court's]
conclusions with respect to both falsity and knowledge as to
[the r]elator's presentment . . . [and] false statements
allegations, ” Def.'s Mot. at 9 (internal citations
STANDARD OF REVIEW
Federal Rule of Civil Procedure 54(b), any order or decision
that does not constitute a final judgment “may be
revised at any time before the entry of a judgment
adjudicating all the claims and all the parties' rights
and liabilities.” Fed.R.Civ.P. 54(b). Although
“district court[s] ha[ve] ‘broad discretion to
hear a motion for reconsideration brought under Rule 54(b),
'” Univ. of Colo. Health at Mem'l Hosp. v.
Burwell, 164 F.Supp.3d 56, 62 (D.D.C. 2016) (quoting
Isse v. Am. Univ., 544 F.Supp.2d 25, 29 (D.D.C.
2008)), district courts grant motions for reconsideration of
interlocutory orders only “as justice requires, ”
Capitol Sprinkler Inspection, Inc. v. Guest Servs.,
Inc., 630 F.3d 217, 227 (D.C. Cir. 2011) (quoting
Greene v. Union Mut. Life Ins. Co. of Am., 764 F.2d
19, 22-23 (1st Cir. 1985)).
deciding whether “justice requires” reversal of a
prior interlocutory order, courts assess circumstances such
as “whether the court ‘patently'
misunderstood the parties, made a decision beyond the
adversarial issues presented, made an error in failing to
consider controlling decisions or data, or whether a
controlling or significant change in the law has
occurred.” In Defense of Animals v. Nat'l
Insts. of Health, 543 F.Supp.2d 70, 75 (D.D.C. 2008)
(quoting Singh v. George Wash. Univ., 383 F.Supp.2d
99, 101 (D.D.C. 2005)); see also Davis v. Joseph J.
Magnolia, Inc., 893 F.Supp.2d 165, 168 (D.D.C. 2012)
(“[A] motion for reconsideration is discretionary and
should not be granted unless the movant presents either newly
discovered evidence or errors of law or fact that need
correction.”). “The burden is on the moving party
to show that reconsideration is appropriate and that harm or
injustice would result if reconsideration were denied.”
United States ex rel. Westrick v. Second Chance Body
Armor, Inc., 893 F.Supp.2d 258, 268 (D.D.C. 2012)
(citing Husayn v. Gates, 588 F.Supp.2d 7, 10 (D.D.C.
2008)). And, motions for reconsideration are not vehicles for
either reasserting arguments previously raised and rejected
by the court or presenting arguments that should have been
raised previously with the court. See Estate of Gaither
ex rel. Gaither v. District of Columbia, 771 F.Supp.2d
5, 10 & n.4 (D.D.C. 2011).
Heart urges the Court to reconsider its conclusion
“that Boston Heart has an obligation to establish that
the tests for which it seeks government reimbursement are
medically necessary, ” Groat, 255 F.Supp.3d at
25, for three reasons, see Def.'s Mot. at 1-2.
The Court agrees that this conclusion warrants correction to
clarify that a laboratory may rely on the ordering
physician's determination of medical necessity in the
laboratory's certification to HHS on the CMS-1500 form.
Nonetheless, the Court concludes that despite its correction
of the medical necessity ruling, its denial of Boston
Heart's motion to dismiss the relator's federal and
state presentment and false statements claims was proper.
The Court's Conclusion Regarding Laboratories'
Obligations with Respect to Medical Necessity
HHS Compliance Program Guidance for Clinical
Boston Heart argues that the Court's prior medical
necessity conclusion “conflicts directly with the
longstanding position of the Office of the Inspector General
for the Department of Health and Human Services . . . that
‘laboratories do not and cannot treat patients or make
medical necessity determinations.'” Id. at
1 (quoting Publication of OIG Compliance Program Guidance for
Clinical Laboratories (“OIG Guidance”), 63 Fed.
Reg. 45, 076, 45, 079 (Aug. 24, 1998)); see also id.
at 3-5 (discussing the OIG guidance). The relator argues in
response that the OIG Guidance “firmly establishes a
lab[oratory]'s duty to only submit claims for medically
necessary tests and directly aligns with the CMS Form 1500
requirement for [a] ‘physician or supplier' to
certify” the medical necessity of each test ordered.
Relator's Opp'n at 6. Although the Court agrees with
the relator that a laboratory has a “legal duty to
ensure that it is not submitting false or incorrect claims to
Government . . . payors, ” OIG Guidance, 63 Fed. Reg.
at 45, 077, it concludes for the reasons set forth below that
a laboratory cannot and is not required to determine medical
necessity, but rather is permitted to rely on the ordering
physician's determination that the laboratory tests
billed to Medicare are medically necessary.
Guidance was issued “to refine and build on the
original model guidance plan for clinical laboratories,
” which was published in 1997 as part of an effort
“to engage the private health care community in
combating fraud and abuse.” OIG Guidance, 63 Fed. Reg.
At 45, 076. This supplemental guidance was “intended to
assist clinical laboratories in developing effective internal
controls that promote adherence to applicable . . . law[s, ]
. . . [and to] advance the prevention of fraud, abuse, and
waste in the clinical laboratory industry.”
Id. at 45, 077. The OIG Guidance identifies for
laboratories “specific areas of potential fraud,
” including, as relevant to this case, “marketing
schemes, [ ] coding issues, . . . and improper claims
submission.” Id. at 45, 078.
Guidance section devoted to “Medical Necessity”
states, among other things, that
[l]aboratory compliance programs, to be effective, should
communicate to physicians that claims submitted for services
will only be paid if the service is covered, reasonable, and
necessary for the beneficiary, given his or her clinical
condition. Laboratories should take all reasonable steps to
ensure that [they are] not submitting claims for services
that are not covered, reasonable and necessary. Upon request,
a laboratory should be able to produce or obtain from the
treating physician . . . the documentation to support the
medical necessity of the service the laboratory has provided
and billed to a Federal . . . health care program. We
recognize that laboratories do not and cannot treat patients
or make medical necessity determinations. However, there are
steps that such facilities can take to assure compliance with
the applicable statutes, regulations and the requirements of
Federal . . . health plans.
Id. at 45, 079 (footnote omitted).
Guidance recommends various processes a laboratory can
implement to ensure that laboratories do not submit claims
for unnecessary tests. For example, the OIG Guidance
encourages a laboratory to construct [its] requisition form
capture the correct program information as required by
Federal . . . health care programs and to promote the
conscious ordering of tests by physicians . . . . The
laboratory should construct the requisition form to ensure
that the physician . . . has made an independent medical
necessity decision with regard to each test the laboratory
will bill. Laboratories should encourage physicians . . . to
submit diagnosis information for all tests ordered, as
documentation of the medical necessity of ...