U.S. ex rel. Polukoff v. St. Mark’s Hosp. — Apr. 2016 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Polukoff v. St. Mark’s Hosp.
No. 3:12-cv-01277 (M.D. Tenn. Apr. 13, 2016)

The United States District Court for the Middle District of Tennessee dismissed a physician’s False Claims Act suit, brought against a healthcare system and its affiliated corporate body, premised upon fraudulent Medicare/Medicaid billing by a hospital and physician for medically unnecessary patent foramen ovale (“PFO”) closures.  The plaintiff claimed that many PFOs do not require treatment and billing for the closure of a PFO is appropriate only if the closure is medically necessary.  In support of his claim that the defendants billed for medically unnecessary closures, the physician claimed that the physician in question performed 861 closures in 2010 while, during the same time period, all of the doctors at the Cleveland Clinic combined performed 37 such procedures.  The physician claimed that the hospital and health care system turned a blind eye to the volume of procedures being performed by the surgeon.

The district court held that the affiliated corporate body could not be held liable for a violation of the False Claims Act by the affiliated healthcare system/hospitals since the physician alleged no facts regarding the corporate body’s knowledge of or participation in any scheme to bill for medically unnecessary services.

Additionally, the district court held that the physician failed to allege sufficient facts necessary to overcome the heightened pleading standard for fraud.  Specifically, the district court found the physician failed to allege how the corporation would have known the medically unnecessary procedures were being performed, what actions the corporation could have taken to stop the alleged procedures, or reimbursement or reports sought by the corporation from the government for the procedures in question.  Additionally, although the physician alleged the corporation conspired with the hospital and the physician performing the procedures to defraud the government, the district court found the physician failed to identify any communication between the corporation and the other parties to the case.