Wrong Physician Name on Invoice Not Material to Payment; United States District Court for the Eastern District of Kentucky, No. 16-148-DLB-EBA, U.S. ex rel. Robert C. O’Laughlin M.D. v. Radiation Therapy Services P.S.C., et al.


The district court granted in part and denied in part the defendants’ motion to dismiss a qui tam complaint alleging they submitted fraudulent claims to Medicare in relation to radiation oncology services. The court found the relator adequately alleged the defendants billed for services using physician billing codes, when the services had in fact been performed by technicians, and that the defendants failed to maintain required documentation for certain services. The court also found the relator adequately alleged scienter and conspiracy. However, the court dismissed some claims alleging fraudulent billing. While the relator argued that invoices were submitted under the name of a physician who had not performed the services, the court found that the name of the attending physician was not material. Rather, Medicare rules required only that a physician conduct or supervise the relevant services. The court also found it possible that another physician may have substituted for the physician named on the invoice. Because the relator did not assert there was no physician involvement in the services, the court found no violation of Medicare rules.

Radiation Therapy Services P.S.C. and its co-defendants moved to dismiss a qui tam complaint alleging they submitted fraudulent representations to Medicare, Medicaid, and other federal programs regarding radiation oncology and chemotherapy services they provided.

Relator Robert O’Laughlin M.D. based his complaint on his observations working as a radiation oncologist with the defendants from July 2012 through October 2015. The relator alleged that from July 2012 until at least October 2015, the defendants presented false claims for reimbursement that certified either expressly or by implication that O’Laughlin provided, or supervised, the radiation oncology services billed when, in fact, he did not. Further, the services were not delegated to a physician qualified to perform the radiation oncology services. Count I also alleged that the defendants falsely certified that a physician qualified to perform radiation oncology services “reviewed and approved guidance images produced prior to each daily treatment within 24 hours or prior to the next treatment delivery. The relator also alleged the defendants submitted billings for other services purportedly provided by other physicians, who in fact did not actually perform the services.

Finally, the relator alleged that the defendants submitted fraudulent claims related to simulation procedures, as the claims falsely represented by implication (1) that the treating physician prepared a record of the simulation procedure and signed or initialed the record of the procedure, (2) that the defendants maintained the required documentation of simulation procedures, and (3) that a radiation oncologist had performed the simulations. The relator also brought related false record and conspiracy claims.

The defendants moved to dismiss, arguing that the false presentment and false records claims should be dismissed for failing to state a claim. The defendants argued that the relator alleged they falsely certified that a radiation oncologist either performed or supervised certain radiation oncology services, when in fact there is no such requirement. Although a physician must supervise the radiation services, the defendant argued there is no rule requiring that such services be supervised by a radiation oncologist, in particular.

In support, the defendants pointed to Medicare policy, which they maintained allowed for the performance of these services by technical staff, with physician supervision. The court found the policy states that a physician need not directly perform the oncology services in question, but also found that the policy specifically provides that physician supervision does not represent a physician’s service and cannot be billed as a Part B service.

According to the court, the defendants misstated the relator’s allegations. The relator did not allege that technicians were not allowed to perform the services, but that the defendants were not allowed to bill for physician time when technicians did perform the services. The relator pointed to certain billing codes that are reserved for physician services, alleging the defendants used those codes to bill for technician services. The court found this adequate to survive a motion to dismiss.

However, the court found the relator failed to show that other radiation services required supervision by a physician certified in radiation oncology services, as opposed to another type of physician. The court found nothing in Medicare policy or regulation to support this claim, an dismissed this portion of the complaint.

Similarly, the court found the relator failed to cite Medicare policy or regulation stating that simulation services must be performed or supervised by a radiation oncologist. Rather, the court agreed with the defendants that the regulations state only that the services must be supervised by a physician, not necessarily a radiation oncologist. Accordingly, the court granted the motion to dismiss to the extent the complaint alleged the defendants falsely certified that a radiation oncologist performed simulation services.

However, the relator also raised an alternative basis for liability regarding the simulation services. Count VII also alleged that the simulation claims were false because they represented by implication that the required documentation had been prepared by the treating physician and was maintained by the defendants, when in fact: (a) the treating physician did not prepare a written record of the simulation procedure, (b) the treating physician did not sign or initial a written record; and (c) the defendants did not possess or maintain the required documentation at any time.

In response, the defendants argued that a failure to properly document simulation procedures did not give rise to FCA liability. However, the court noted the defendants did not argue that the documentation requirements were not a condition of payment. If the documents were a condition of payment, the relator would have a claim. Because the defendants cited no regulation or policy supporting its assertion, the court found dismissal of this claim would be premature.

Next, the defendants sought dismissal of the claims alleging that invoices were submitted in the names of specific physicians, when the physicians did not participate in those services. The relator named himself and Dr. Kirti Jain as two of the physicians named in fraudulent billings. The defendants argued that even if they did list the wrong physician, this type of clerical error could not serve as the basis of a false claim complaint.

The court agreed, finding that the relator had not shown that failing to comply with this regulatory requirement—naming the correct physician—was a precondition of payment. The court differentiated between conditions for participation and conditions for payment. Contrary to the relator’s assertion, the cited regulation did not support his argument that the actual, supervising physician must be named in order for the services at issue to be reimbursable. The relator cited to the following passage: “In general, services and supplies must be furnished under the direct supervision of the physician …. The physician supervising the auxiliary personnel need not be the same physician who is treating the patient more broadly. However, only the supervising physician may bill Medicare for incident to services.”

The relator argued that the final sentence meant that Medicare billings must be made only in the name of the actual providing or supervising physician. However, the court took a broader view, finding that the full passage, read as a whole, clarified that only one physician may bill for a single service. Thus, the court held that whether the particular named physician was actually the physician who supervised the service would not impact Medicare’s obligation to pay for the services, so long as they were directly supervised by a physician. The court found this count failed to assert an FCA violation.

In his response brief, the relator suggested the court interpret these counts as alleging that no physician provided or supervised the services. However, the court found the complaint unambiguous. Further, based on the allegations, the court could not infer that no physician supervised the procedures in lieu of the named physician. The court noted that there were three eligible physicians and found it reasonable one might have filled in for another, even if the billing reflected the name of the original physician.

Next, the defendants argued that the relator’s chemotherapy claims did not adequately plead materiality. The complaint alleged the defendants submitted false claims and created false records indicating that Dr. Jain provided or directly supervised certain chemotherapy services when, in reality, a nurse practitioner or physician’s assistant performed these services without his supervision. In addition to arguing the claims were false, the relator alleged they were inflated, because the services of physician assistants and nurse practitioners are reimbursed no more than 85 percent of the amount payable to a physician.

The defendants again argued that the relator did not allege that no physician supervised these services. Assuming Jain did not supervise the services, the defendants argued they could still properly bill at the physician rate, as long as another physician did supervise. The court agreed, finding the alleged violation not material to the government’s willingness to pay a claim.

Next, the defendants argued the relator failed to adequately plead they submitted false claims with the requisite scienter. However, the court disagreed. The court found the relator alleged that when the defendant A One Biz Solutions, a billing processor, processed information for claims, they manipulated information for the purpose of insuring that the claim would pass review, regardless of whether the information provided by the clinics was accurate, truthful, complete or misleading. The relator also alleged that Dr. Kirti Jain and Manish Jan knew this information was inaccurate.

Finally, the defendants argued that the conspiracy claim should be dismissed under the “intracorporate conspiracy doctrine,” which bars conspiracy claims where all the alleged conspirators are employees of the same corporate entity.

However, the court found this unpersuasive. While there was some overlap, the overlap was not complete. For example, while Dr. Jain was the president of two cancer centers and a manager of A One Biz Solutions, he was not a member of other named defendant entities, and he eventually left the employ of A One Biz during the time of the alleged misconduct. Thus, the court reasoned Jain could have conspired with those entities. The court found this sufficient to survive a motion to dismiss.

FCA - O'Laughlin v Radiation Therapy