United States Ex Rel. Colucci v. Beth Israel Medical Center
2011 U.S. Dist. LEXIS 35708
S.D.N.Y.2011Background
- Colucci, on behalf of the United States, sues BIMC and individuals under the FCA for alleged false Medicare claims tied to GME reimbursements after consolidating satellite hospitals under BIMC’s provider number.
- BIMC acquired Doctors Hospital (1992) and Kings Highway (1995); satellites were non-teaching and maintained separate operations; consolidation merged provider numbers.
- Consolidation is alleged to have inflated Medicare reimbursements by increasing discharges, Medicare Penetration, and Acuity, affecting DME, IME, nursing-school costs, and Part B outpatient reimbursements.
- Colucci asserts four FCA claims under §3729(a)(1)-(3) and relies on theories of factual falsity and express false certification, including a current version §3729(a)(1)(B) post-FERA.
- Judge previously described the relevant Medicare framework and cost-report certification requirements and the 2009–2010 statutory amendments; in March 2011 motion to dismiss was granted.
- Procedural posture includes original FCA filing in 2006, government declined intervention in 2007, Colucci substituted as relator in 2008, and this dismissal ruling follows the amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Colucci pleads a false or fraudulent claim under the FCA. | Colucci argues four FCA theories (factually false and express certification). | BIMC argues the claims are not false and certifications are too general. | No plausible false or fraudulent claim pleaded. |
| Whether the factual falsity theory supports FCA liability. | Consolidation led to inflated reimbursement calculations for DME, IME, nursing, and Part B. | No underlying regulation prohibited consolidation or misbilling; increased rates do not prove falsity. | Factual falsity not established; no misdescription of services or billing for unprovided services. |
| Whether the express false certification theory supports FCA liability. | The ICR certification purportedly certifies compliance with laws and regulations. | Certification is too general and not a precondition to payment. | Certification was too general to support express false certification liability. |
| Whether the knowledge requirement is satisfied. | Executives’ familiarity with accounts suggests knowledge of fraud. | Lack of clear regulatory violation means no knowing misconduct; ambiguity negates knowledge. | Insufficient to plead knowing conduct; no plausible inference of knowingly false claims. |
Key Cases Cited
- United States ex rel. Mikes v. Straus, 274 F.3d 687 (2d Cir.2001) (defining false/ fraudulent claim theories under FCA (factually and legally false))
- United States ex rel. Kirk v. Schindler Elevator Corp., 601 F.3d 94 (2d Cir.2010) (recognizing express and implied certifications; limited circumstances)
- Quinn v. Omnicare, Inc., 382 F.3d 432 (3d Cir.2004) (illustrating lack of authority to credit Medicaid; relevance to misbilling rationale)
- United States ex rel. Conner v. Salina Reg. Health Ctr., Inc., 543 F.3d 1211 (10th Cir.2008) (implied false certification limitations)
- Bellevue Hosp. Ctr. v. Leavitt, 443 F.3d 163 (2d Cir.2006) (IPPS/DRG framework; cost-based reimbursement context)
- Huntington Hosp. v. Thompson, 319 F.3d 74 (2d Cir.2003) (DRG-based reimbursement and cost concepts)
- United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301 (11th Cir.2002) (FCA pleading standards and reliance on certifications)
- United States v. Hefner v. Hackensack Univ. Med. Ctr., 495 F.3d 103 (3d Cir.2007) (case law on knowing conduct under FCA)