United States District Court, E.D. New York
LORETTA E. LYNCH, United States Attorney, Laura D. Mantell, Assistant U.S. Attorney, Eastern District of New York, Brooklyn, NY, Attorney for Plaintiff.
John J. Tracy, Esq., TRACY & STILWELL, P.C., Staten Island, New York, Attorneys for Defendants.
MEMORANDUM AND ORDER
JOHN GLEESON, District Judge.
In this action, the United States claims that Gilbert Lederman, a doctor working at the Staten Island University Hospital ("SIUH"), improperly billed for medical procedures. It seeks damages under both the False Claims Act, 31 U.S.C. §§ 3729-3733, and common law. Both sides have moved for summary judgment. For the reasons given below, the government's motion is granted in part and denied in part, and Lederman's is denied.
A. Factual Background
Unless otherwise noted, the following facts are taken from the parties' Local Rule 56.1 statements and affidavits and are uncontroverted.
Lederman is a doctor who has performed various radiological procedures - usually for cancer treatment - since the 1980s. In 1987, he became Director of Radiation Oncology at Staten Island University Hospital, a position he held through the period relevant to this lawsuit (1996 through 2003). Lederman performed both conventional radiation treatment and stereotactic radiosurgery. The latter procedure, key to the dispute in this case, "is a form of radiation therapy that focuses high-power energy on a small area of the body." U.S. National Library of Medicine, "Stereotactic radiosurgery - Gamma Knife, " at http://www.nlm.nih.gov/medlineplus/ency/article/007577.htm (last visited May 13, 2014); accord Stone Decl., ECF No. 166, Ex. 4 and 5.
This case centers on allegations that the federal government was improperly billed for health services under Medicare. As I previously described in deciding a motion of third-party defendants to dismiss in this case,
The Medicare program was established by enactment of Title XVIII of the Social Security Act. Part B of the Medicare program provides federal funding for certain physician services provided to Medicare beneficiaries. Claims under Part B for Medicare payment for physician services are administered by private carriers ("Part B carriers"), which enter into contracts with the Secretary of Health and Human Services. Physicians bill their services to these carriers using standard 5-digit billing codes, which are based on codes designated by the American Medical Association... called "Physicians' Current Procedural Terminology" ("CPT") codes. Part B carriers determine the reimbursement amount of each claim based on the lesser of the actual charge and a standardized fee schedule for the appropriate CPT code.
U.S. ex rel. Ryan v. Staten Island Univ. Hosp., 04-CV-2483 JG CLP, 2011 WL 1841795, at *1 (E.D.N.Y. May 13, 2011) (" Ryan I ").
By statute, "no payment may be made" under Medicare coverage for services that are not "reasonable and necessary for the diagnosis or treatment of illness or injury." 42 U.S.C. § 1395y(a)(1)(A). Deciding what is "reasonable and necessary" is delegated in the first instance to the Secretary of Health and Human Services ("HHS"), and HHS may decide whether to exclude certain types of treatments by promulgating national coverage determinations ("NCDs"). 42 U.S.C. §§ 1395y, 1395ff; see also State of N.Y. on Behalf of Bodnar v. Sec'y of Health & Human Servs., 903 F.2d 122, 124-25 (2d Cir. 1990). HHS contracts with Part B carriers to provide services, and carriers may create more refined guidelines. These are now called "local coverage determinations" ("LCDs"), but were previously known as "local medical review policies" ("LMRPs"). See 42 C.F.R. § 400.202. "LMRP's, which are now known as Local Coverage Determinations, set regional coverage determinations that govern in the absence of or as an adjunct to a national policy." United States v. Prabhu, 442 F.Supp.2d 1008, 1012 (D. Nev. 2006) (citing 68 Fed.Reg. 63, 692, 63, 693 (Nov. 7, 2003)). "Once an LMRP is adopted by the carrier, it acts as a filter, or screen, to ensure that only claims meeting the LMRP criteria for medical necessity are paid." Arruejo v. Thompson, CV-00-2402(JG)(SMG), 2001 WL 1563699, at *4 (E.D.N.Y. July 3, 2001), adopted, ECF No. 33 (Aug. 28, 2001).
The Part B carrier for the claims in this case, Empire Medical Services ("Empire"), issued two significant LMRPs related to stereotactic radiosurgery. First, on October 21, 1996, Empire issued an LMRP that, among other things, defines stereotactic radiosurgery as "high doses of ionizing radiation to a small intracranial target, usually 4 cm or less in diameter" delivered while the patient "wears a stereotactic frame affixed to the skull." Stone Decl., Ex. 4, at 1. The LMRP also lists eight conditions for which stereotactic radiosurgery would be covered (along with corresponding ICD-9 codes). Id. at 1-2. Second, on August 31, 2001, Empire issued an LMRP defining stereotactic radiosurgery as "a form of computer-assisted radiation therapy for intracranial and some extracranial lesions...." Stone Decl., Ex. 5, at 1. Notably, the second LMRP states under "limitations" that "treatment of below the neck diseases such as lung carcinoma with stereotactic radiosurgery is considered investigational at this time." Id. at 2.
The government has not made entirely clear which claims for payment were allegedly improper, and the issue will be further developed at a trial on damages. For this motion, it is enough to note that, between 1996 and 2003, the government claims that Lederman performed and submitted unauthorized claims to Empire for at least 300 below-the-neck stereotactic radiosurgeries. See Govt.'s Corrected 56.1 Statement ¶ 33, ECF No. 172. Lederman does not dispute the 300 figure. See Lederman 56.1 Counterstatement ¶ 33.
B. Procedural History
In 2004, Elizabeth Ryan filed a False Claims Act complaint under seal in this Court; she brought claims against Lederman, his incorporated professional practice, and SIUH. See ECF No. 1. In 2008, the case was unsealed when the government filed a complaint in intervention as to some of the claims. See ECF Nos. 8, 9, 16. Shortly thereafter, the government settled all claims against SIUH for about $25 million. See ECF No. 30.
After substantial discovery, the parties filed cross motions for summary judgment in December of 2013. I heard argument on the motions on March 21, 2014.
A. Summary Judgment Standard
A court may grant summary judgment where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A fact is "material" if its resolution "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is "genuine" when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In determining whether there are genuine disputes of material fact, the court must "resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003).
The mere fact that I have been presented with cross motions for summary judgment does not require that I grant judgment to one side or the other; rather, I must evaluate each motion separately, each time resolving ambiguities in favor of the non-moving party. See, e.g., Schwabenbauer v. Bd. of Ed. of City Sch. Dist. of City of Olean, 667 F.2d 305, 313-14 (2d Cir. 1981).
B. The False Claims Act
As relevant here, the False Claims Act creates liability for "any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval, " 31 U.S.C. § 3729(a)(1)(A), or who "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim, " id. § 3729(a)(1)(B). The Second Circuit has interpreted the statute to require five elements: the plaintiff must show that a defendant "(1) made a claim, (2) to the United States government, (3) that is false or fraudulent, (4) knowing of its falsity, and (5) seeking payment from the federal treasury." Mikes v. Straus, 274 F.3d 687, 695 (2d Cir. 2001).
Although both sides have moved for summary judgment, I will consider their motions together where possible. I address ...