December 2022 Labs in Court: FCA and a Sex Discrimination Case Dismissed

Key cases over the past month were the usual FCA-related fare, apart from a dismissed sex discrimination case.

Connecticut Primary Care Practice, MD Owner Settle Fraud Charges for $2.6 Million

Case: The U.S. Department of Justice (DOJ) socked Southington, Connecticut-based Feel Well Health Center (now doing business under the name Confida Health Institute) and its owner, Dr. Kevin Greene, with a laundry list of charges for alleged False Claims Act (FCA) and Anti-Kickback Statute (AKS) violations, including accepting bribes from Boston Heart Diagnostics Corp. in exchange for ordering lab tests for Medicare patients. Boston Heart allegedly paid Feel Well and Dr. Greene two forms of illegal remuneration: i.) Specimen “processing and handling” fees; and ii.) “Speaker” fees, at rates above fair market value. While denying all charges, the accused have agreed to shell out $2,656,685, plus interest, and enter into a three-year billing Integrity Agreement with the U.S. Department of Health and Human Services.

Significance: Other accusations covered by the settlement include allegedly submitting false claims for:

• Fitness-related services without a medical component provided by an unlicensed yoga instructor at a local gym, which the center billed as medical visits;
• Services furnished by Dr. Greene in an office setting at times when he was out of the country or not physically present in the office;
• Telehealth services that didn’t meet coverage rules for office location or use of an interactive telecommunications system; and
• Medically unnecessary neurofeedback procedures, ultrasounds, and autonomic function testing.¹

Catheter Lab’s Firing of Charge Nurse Was Not Sex Discrimination

Case: After getting fired, a catheter lab charge nurse sued Portercare Adventist Health System for sex discrimination and retaliation. Denver-based Portercare claimed it had legitimate, nondiscriminatory reasons to terminate, including the nurse’s continuing clashes with, insubordination toward, and lack of support for the lab manager. The federal district court sided with Portercare and dismissed the claim. The 10^th Circuit of Appeal found that the lower court’s ruling was reasonable and refused to reverse it.     

Significance: After having a great relationship with the previous manager, the charge nurse had a hard time accepting her replacement, admitting that she was “less than” "very friendly and open" toward or willing to assist her new boss in her transition. Beyond this lack of acceptance, Portercare cited specific incidents resulting in the nurse’s discipline and ultimate termination, including:

• Ignoring the manager’s requests for help completing necessary data reports during the first three months of the transition
• Doing a personal errand and taking her own sweet time after receiving the manager’s request that catheter lab personnel provide help to the OR
• Being absent from the lab without explanation on the day she was being counted on to provide orientation training to temporary staffers.

Despite receiving warnings, the nurse’s disdain for the manager grew deeper after the hospital denied the nurse’s request for a transfer [Wright v. Portercare Adventist Health Sys., 2022 U.S. App. LEXIS 31012, __ F.4th __, 2022 WL 16826565].

Texas Doctor Pleads Guilty to $54 Million Genetic Testing Fraud

Case: Dr. Daniel Canchola, 49, is facing up to 20 years in prison after pleading guilty to conspiracy to commit wire fraud for prescribing cancer genetic CGx tests and durable medical equipment (DME) for Medicare patients that he never actually saw. According to court documents, Canchola received $30 per prescription order that he electronically signed, knowing that the tests and DME would be subsequently billed to Medicare. From August 2018 through April 2019, he pocketed over $466,000 in kickback payments for $54 million worth of false claims.² 

Significance: The Canchola case followed what has become the typical pattern for CGx fraud schemes in which marketing firms recruit Medicare patients via telemarketing campaigns or at health fairs with offers of free tests. Using the patients’ Medicare information, marketers pay physicians bribes to prescribe the tests without seeing or, in many cases, even speaking to the patient. These schemes have become a priority target for federal enforcers. Thus, just five days before the announcement of the Canchola guilty plea, Ohio physician Mangesh Kanvinde agreed to pay $720,000 and accept a 15-year Federal Health Care Programs exclusion to settle charges for his role in such a scheme.³

No Attorney, No Qui Tam Whistleblower Lawsuit

Case: Plaintiff Eric P. filed a qui tam lawsuit against Oxford University and Astra Zeneca for carrying out, and the U.S. Department of Justice for refusing to investigate, an alleged “1-billion-dollar fraud against the American People through study and funding of Astra Zeneca.” His case was pro se, meaning that he wasn’t represented by an attorney. The federal Southern District of New York court held that a pro se plaintiff can’t file a qui tam lawsuit under the False Claims Act and dismissed the case.     

Significance: When you cut through all the Latin, the case illustrates an important point about FCA whistleblower lawsuits: individuals can’t file pro se qui tam lawsuits. Stated differently, a qui tam relator must be represented by an attorney. Explanation: While the FCA allows relators to sue on the government’s behalf, the relator represents the government’s rather than his/her own interest. In other words, a qui tam lawsuit is the government’s case, not the relator’s. By contrast, individuals can file pro se lawsuits only when bringing their own cases. While that may sound like a bunch of legal jargon, it has great practical significance because pro se cases enable plaintiffs to take their claims to court without having to hire an attorney. Allowing qui tam cases to be filed pro se would drastically reduce the costs of FCA whistleblower litigation, which would likely lead to a significant increase in the number of qui tam lawsuits [Perez v. Oxford Univ., 2022 U.S. Dist. LEXIS 196103, 2022 WL 15523951].  

References:

1. https://www.justice.gov/usao-ct/pr/physician-and-medical-office-pay-over-26-million-settle-false-claims-act-and-kickback
2. https://www.justice.gov/opa/pr/doctor-pleads-guilty-role-54-million-medicare-fraud-scheme
3. https://www.justice.gov/usao-wdky/pr/doctor-pays-720000-and-agrees-15-year-exclusion-federal-health-care-programs-violating