The district court granted in part and denied in part the defendant’s motion to dismiss a realtor’s complaint alleging healthcare fraud. The relator alleged that the defendant billed Medicare and Medicaid for services rendered by mid-level practitioners using identification codes for physicians, thereby fraudulently increasing the reimbursement rate. The defendant argued that the relator failed to show that any false claims had been submitted, but the court disagreed. The court found that as a physician who was asked to participate in the scheme, the relator had firsthand knowledge of the billing improprieties. The relator also submitted internal communications showing the defendant expressly instructed physicians to sign-off on patient charts, regardless of whether they had participated in care. The relator also provided documentation of his own compensation, which showed different amounts paid based on his own patient records and those he had signed without providing services. While the defendant did not identify any specific claims for payment, the court found he sufficiently presented reliable indicia that such claims had been presented. The court granted the motion to dismiss the relator’s kickback claims, finding that the scheme did not amount to a violation of the AKS, despite the improper payments to physicians. The court also dismissed most of the state claims, finding the relator did not provide evidence the scheme extended outside his home state.
ApolloMD Inc. moved to dismiss a qui tam complaint alleging healthcare fraud.
Relator Chionesu Sonyika alleged that ApolloMD submitted claims for reimbursement for services allegedly provided by physicians or physicians in conjunction with physicians assistants or nurse practitioners, when in fact the services were rendered solely by assistants or nurse practitioners. According to the relator, this allowed the defendant to bill at a higher rate, because physician services are reimbursed at a 100 percent rate, while the services of mid-level providers are reimbursed at 85 percent. The relator alleged he learned of the conduct while employed by the defendant as an independent contractor physician.
The relator alleged that the defendant’s executives emailed all emergency department physicians to explicitly state that for all Medicare patients, services should be billed under the physician’s identification number, regardless of whether the physicians actually saw the patient. According to the relator, because the ID number automatically triggers the reimbursement rate, this fact serves as an admission of fraud and establishes the existence of the scheme.
While healthcare entities may bill at the 100 percent rate when a physician and mid-level practitioner both engage with a patient, the relator argued this scenario was rare. Nonetheless, physicians were allegedly required to sign and approve every mid-level chart and attest that they had seen the patient, regardless of whether they had.
The relator also alleged that the defendant paid illegal kickbacks to physicians that were directly tied to the physicians’ required participation in the scheme. According to the complaint, ApolloMD paid physicians for each mid-level chart they signed, regardless of whether they had seen the patient. As support, the relator submitted his own payment history, which showed payments totaling $97,378 over six months. Given the volume of patients identified in the reports, the relator argued that it would be impossible for a single physician to conduct that number of patient visits, even in conjunction with mid-level providers. For example, the relator pointed to an area of the history showing he received credit for treating as many as 811 patients in one month, even though he worked only 15 days that month.
According to the relator, other physicians questioned why certain services had been attributed to them in the defendant’s CMS reports, when they had not actually performed the services. The relator appended other internal communications in which the defendant asked physicians to sign-off on services provided by mid-levels, even when they had not seen the patients, and specifically tied this activity to physician paychecks. The relator alleged that these emails showed that ApolloMD aligned the physicians’ financial incentives with their participation in the scheme.
The defendants moved to dismiss the counts of false claims and false records or statements, arguing the relator failed to plead the complaint with particularity. The defendants argued the relator failed to identify a single claim presented to the government and that he admitted he had no examples of actual fraud. The defendants also argued that the complaint lacked reliable indicia of fraud because the relator had no first-hand knowledge of their billing practices.
While the relator did not identify any single claim, the court found his allegations did not solely rely on his beliefs about improper practices. In addition to his personal knowledge of how physicians were expected to notate their charts to further the scheme, the relator provided the history of his personal reimbursement for patient services he did not provide. According to the allegations in the complaint, these payments were a direct flowthrough from the reimbursements actually received by ApolloMD from Medicare and Medicaid for the fraudulently coded claims.
The relator also alleged that the defendant submitted false information to CMS, that physicians questioned these records, and that company executives required physicians to continue signing charts produced by mid-level practitioners as though they had seen the patients themselves. The court found the relator alleged an adequate factual basis for his personal knowledge of the scheme, including that claims had been submitted. The court found the evidence of the relator’s own compensation particularly compelling, as was the evidence of the involvement of the defendant’s executives. Accordingly, the court denied the motion to dismiss Counts 1 and 2.
In Count 3, the relator alleged the defendants violated the Anti-Kickback Statute. The defendants argued that the AKS is a criminal statute that provides no private right of action. However, the court explained that the AKS itself says that a violation of the statute constitutes a false or fraudulent claim under the FCA.
Nonetheless, the court found the relator failed to state a claim under the AKS, as he did not allege that the defendant submitted claims for reimbursement that resulted from the payment of kickbacks to obtain patient referrals. Instead, the relator appeared to assert a reverse false claim.
The relator alleged that the physicians knew that their compensation would increase in direct proportion to how many charts they signed attesting to having seen patients that they did not actually see, or who received treatment which should have been billed under the mid-level practitioner’s ID number instead. The court found this allegation a variation of the allegations in Count 1 and 2, and not an actual kickback or reverse kickback. Because the relator did not plead a violation of the AKS, the court dismissed this count.
The court also dismissed the relator’s state claims outside the state of Georgia, finding that he had not alleged sufficient facts to show that the scheme extended outside the defendant’s practices in Georgia. Because the relator had not shown an adequate foundation for knowledge of ApolloMD’s billing and claims process in states other than Georgia, the court dismissed the additional counts.
