United States Ex Rel. Singh v. Bradford Regional Medical Center
752 F. Supp. 2d 602
W.D. Pa.2010Background
- BRMC is a non-profit Pennsylvania hospital facing change in referrals from V&S and doctors Vaccaro and Saleh after they started their own nuclear camera practice.
- V&S is a physician-owned LLC (Drs. Vaccaro and Saleh) that leased a GE nuclear camera to BRMC and later sought to develop an under-arrangements joint venture with BRMC.
- BRMC adopted a Policy on Competing Financial Interests to bar physicians with competing interests from privileges; Vaccaro and Saleh were informally scrutinized and faced potential loss of hospital privileges.
- BRMC and V&S entered into an Equipment Sublease for the GE camera with a covenant not to compete; BRMC expected referrals from Vaccaro/Saleh as consideration for the lease.
- After negotiations, BRMC paid through a pass-through sublease and a 10% billing/collection fee to V&S; later Philips leased a new camera and BRMC guaranteed lease obligations, with continued involvement and payments.
- Relators allege the arrangement was designed to induce or reward referrals and violate Stark and Anti-Kickback provisions, leading to False Claims Act liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a financial relationship existed under Stark Act | Relators: direct/indirect financial ties tie BRMC to Vaccaro and Saleh. | BRMC/V&S: no unlawful financial relationship; payments are arm's-length or within exceptions. | Yes, a financial relationship existed under Stark Act. |
| Whether the relationship falls within Stark Act exceptions or safe harbors | Relators: no applicable exception applies; payments take into account referrals. | Defendants: arrangement fits safe harbors; compliant with fair market value. | No valid Stark exception or safe harbor applied. |
| Whether BRMC submitted Medicare claims based on prohibited referrals | Relators: BRMC submitted numerous claims tied to Vaccaro/Saleh referrals. | BRMC disputes linkage to prohibited referrals; some records contested. | BRMC violated Stark Act; damages/damages methodology to be determined. |
| Whether the Anti-Kickback Act was violated and the requisite intent established | Remuneration intended to induce or reward referrals. | Intent contested; fact-finder must resolve credibility. | Issue of intent not resolved; material facts exist precluding summary judgment. |
| Whether the False Claims Act requires scienter for liability | NA | NA | Scienter not proven as a matter of law; fact-specific inquiry needed. |
Key Cases Cited
- Kosenske v. Carlisle HMA, Inc., 554 F.3d 88 (3d Cir.2009) (defines direct/indirect compensation and 'stands in the shoes' concept under Stark)
- Schmidt v. Zimmer, Inc., 386 F.3d 235 (3d Cir.2004) (discusses FCA pleading and falsity standards in medical device context)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard: genuine issue of material fact; credibility not weighed)
- Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000) (non-movant's evidence viewed in light of proper burden; causation of summary judgment)