In U.S. v. Anesthesia Servs. Assocs., PLLC, Case No. 3:16-cv-0549 2019 WL 7372510 (M.D. Tenn. Dec. 31, 2019), the court ruled that recognized medically unnecessary nondiagnostic tests can form the basis of an FCA claim. The defendant is a now dissolved entity that, during the relevant time period, operated over 60 pain management clinics across 12 states, employing approximately 250 healthcare providers and serving about 48,000 patients per month. The government alleged that the defendant defrauded various government healthcare programs by billing for nonreimbursable and/or medically unnecessary urine drug testing, blood testing for genetic risk factors and psychological testing using iPads. In fact, the defendant developed guidelines that stated that all new patients were to be urine drug tested, and that established patients receiving narcotics would be tested at least six times per year. The defendant distributed these guidelines to its providers. The complaint alleges, in sum, that the defendant should not have utilized this standing order for urine drug testing because the defendant did not allow for an individualized determination of patient-specific risk and medical necessity, did not comply with the requirements of various Medicare Administrative Contractors (MACs), and performed medically unnecessary and duplicative testing. The complaint also alleged that the defendant ordered a variety of other medically unnecessary tests, or did not use the results of certain tests in the treatment of patients. The defendant moved to dismiss the complaint, arguing that the express false certification claims, premised upon false certifications of medical necessity, fail to state a claim for which relief may be granted, because opinions about medical necessity cannot be objectively false. The defendant also argued that the government's implied false certification claims must fail, because the local coverage determinations (LCDs) issued by various MACs are nonbinding interpretive guidance, and the FCA claims premised upon "[a]llegations of false certification of compliance with such guidance therefore cannot state a claim under the FCA." The court disagreed and ruled that the government adequately alleged there was no medical need or basis for submitting certain claims, and met all its requirements at the pleading stage. The court also found that violation of an LCD may give rise to an FCA claim, and that based on the spare record offered at the current stage of the proceedings, this possibility was not foreclosed by Azar v. Allina Health Servs., 139 S. Ct. 1804 (2019).
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