On March 7, the U.S. Court of Appeals for the Fifth Circuit affirmed a grant of summary judgment by the U.S. District Court for the Northern District of Texas in favor of Kaner Medical Group and its owner, David Kaner, in a qui tam suit brought under the False Claims Act (FCA).  United States ex rel. Johnson v. Kaner Med. Grp., 2016 WL 873816 (5th Cir. Mar. 7, 2016).  The suit was filed by a former employee of the group, who alleged that the group submitted false claims for reimbursement to Medicare and TRICARE, and that she was terminated in retaliation for raising concerns regarding the group’s billing practices.

The relator’s FCA claims were based on the group’s practice of entering the National Provider Identifier (NPI) of the provider who referred a patient to the group’s allergy clinic on Medicare claims in a box that, according to instructions from the Centers for Medicare & Medicaid Services (CMS), should have contained the NPI of the provider who supervised the work carried out at the allergy clinic on the day the patient received the service.  The district court found that, although the summary judgement record indicated the possibility that a large number of the group’s claims forms had incorrect provider information, the evidence did not show that the performing medical assistants lacked the requisite supervision or that the services were rendered under circumstances that would cause the group not to be entitled to payment.  U.S. ex rel. Johnson v. Kaner Med. Grp., 2015 WL 631651 (N.D. Tex. Feb. 12, 2015).  Instead, the record “provide[d] evidence that defendants perhaps were negligent in their indications on some of the forms of healthcare provider information.”

In affirming the district court, the appeals court found that the relator presented no evidence that the group acted “knowingly,” i.e., with actual knowledge of information or in deliberate ignorance or reckless disregard with respect to the truth or falsity of the information.  Instead, the appeals court agreed with the district court that the record indicated that “at most, [the group’s] misunderstanding of CMS’s requirements was negligent, which is not sufficient to attach liability under the FCA.”  As the court found in favor of the group on summary judgment, it also found that the relator did not engage in protected activity under the whistleblower protections of the FCA, and affirmed the dismissal of her retaliation claim.

As the outcome in this case demonstrates, the fact that a health care provider has improperly billed Medicare is not enough to support an FCA claim.  Among other things, a plaintiff must raise a genuine dispute of material fact that a defendant knowingly asked Medicare to pay amounts it does not owe.  As the court noted, the FCA “is not a general ‘enforcement device’ for federal statutes, regulations and contracts. . . but the Government’s ‘primary litigation tool’ for recovering losses resulting from fraud.”