U.S. ex rel. Polukoff v. St. Mark’s Hosp. — Jan. 2017 (Summary)

FALSE CLAIMS ACT – QUI TAM

U.S. ex rel. Polukoff v. St. Mark’s Hosp.
Case No. 2:16-cv-00304-JNP-EJF (D. Utah Jan. 19, 2017)

The United States District Court for the District of Utah granted three motions to dismiss brought by a medical center, physician, and hospital in a qui tam lawsuit under the False Claims Act (“FCA”).  The relator alleged that the physician violated the FCA by performing medically unnecessary patent foramen ovale (“PFO”) closures and subsequently billed the government for the procedures through Medicare and Medicaid.  In addition, the relator alleged that the medical center and hospital were liable for fraudulently billing the government for hospital costs associated with the alleged unnecessary PFO procedures.

The physician was initially employed by the medical center, but after violating an agreement to discontinue performing PFO closures in noncompliance with the medical center’s policies, the physician resigned and began performing PFO closures at another hospital.  The relator began working for the physician’s practice before the physician resigned at the medical center.  While serving as an employee of the physician’s practice and entertaining the possibility of purchasing the physician’s practice, the relator obtained the physician’s billing documents and a hard drive with eight years of billing records, which he used as the basis for his qui tam claim.

The court ultimately found that the relator failed to allege that the physician, medical center, and hospital knowingly made an objectively false representation to the government that caused the government to remit payment.  The relator alleged that the medical center, hospital, and physician represented to the government that the closures performed by the physician were medically reasonable and necessary, which was objectively false.  However, the court reasoned that the relator’s contentions were based on his own subjective medical opinion which could not be proven to be objectively false.

The relator relied on recommendations issued by the American Heart Association/American Stroke Association to support his claim of when the procedures performed by the physician were not medically reasonable or necessary, but Medicare does not require compliance with an industry standard.  Because the government had not created an objective standard, the relator was only able to rely on his own subjective and ambiguous “reasonable and necessary” standard, but violations of the FCA cannot be sustained absent an objectively false representation.  Thus, the court found that the relator’s claims failed as a matter of law and the court dismissed all the causes of action asserted against the physician, hospital, and medical center.