United States v. Mount Sinai Hospital
256 F. Supp. 3d 443
S.D.N.Y.2017Background
- Plaintiffs (former billing employees) allege Mount Sinai’s outpatient radiology billing department used “cheat sheets” (per manager Daniel Dorce) to substitute participating physicians’ names on Medicare/Medicaid claims regardless of who rendered or referred the service; some substitutions were voluntarily disclosed to OMIG and resulted in a refund for two unenrolled radiologists.
- Plaintiffs identified additional billing misconduct: seven specific instances of upcoding, phantom billing, or duplicate billing; Ortiz (a billing employee) reported the name‑switching practice internally in 2010.
- Defendants outsourced billing to McKesson in Feb. 2011; Dorce resigned Aug. 2010 and later invoked the Fifth at deposition.
- Government (U.S. & NY) declined intervention; the case proceeded as a qui tam FCA and NYSFCA action brought by relators Ortiz and Gaston.
- On summary judgment, defendants moved to dismiss claims as immaterial, barred by public disclosure, lacking scienter, redundant as reverse‑false‑claim allegations, or unsupported by identification of specific false claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Materiality of "doctor‑swapping" (misidentifying rendering/referring physicians) | Misstated provider identity has a natural tendency to influence payment; Medicare/Medicaid witnesses say such misrepresentations could make claims nonpayable | Misidentification of an eligible physician alone is immaterial (citing Rockey) | Denied summary judgment on doctor‑swapping; materiality is a triable issue |
| Public disclosure bar | Letter to OMIG did not disclose the full, systematic wrongdoing; relators are original source | March 3, 2011 OMIG disclosure publically disclosed the conduct, barring the qui tam | Denied as to rendering‑physician switching on Medicare — OMIG letter not a public disclosure here; relator claims survive |
| Intent re: seven billing errors (upcoding/phantom/duplicate) | Evidence (Ortiz affidavit, coworkers’ testimony, pattern of practices, Dorce's silence) creates fact issues as to knowing/intentional misconduct | Billing staff and responsible coder (Guzman) say errors were inadvertent/data‑entry mistakes | Denied summary judgment — disputed facts on scienter preclude ruling |
| Reverse false claims (failure to repay fraudulently obtained funds) | Should be permitted; addresses separate statutory duty to repay | Claims redundant because same acts underpresentment/false statements also underlie reverse‑claim theory | Granted — reverse false‑claim allegations dismissed as duplicative of presentment/false‑statement claims |
| Identification of specific false claims (Medicare vs Medicaid misidentifications) | Point to stipulation and internal evidence showing specific misidentifications | Plaintiffs cannot identify specific Medicare claims where referring physicians were swapped, nor Medicaid claims where rendering physicians were misidentified | Mixed: Plaintiffs proved some Medicaid referrals were misidentified (defense stipulation) but failed to prove misidentifications of referring physicians to Medicare or rendering physicians to Medicaid; those claims dismissed |
Key Cases Cited
- Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (U.S. 2016) (materiality standard for FCA claims)
- U.S. ex rel. Feldman v. van Gorp, 697 F.3d 78 (2d Cir. 2012) (instructions on claim forms can show materiality)
- U.S. ex rel. Rockey v. Ear Inst. of Chicago, LLC, 92 F. Supp. 3d 804 (N.D. Ill. 2015) (misstated provider identity immaterial where government would have paid regardless)
- U.S. ex rel. Taylor v. Gabelli, 345 F. Supp. 2d 313 (S.D.N.Y. 2004) (reverse false‑claim theory cannot duplicate presentment/false‑statement claims)
- Union Carbide Corp. v. Exxon Corp., 77 F.3d 677 (2d Cir. 1996) (dueling declarations creating triable issues defeats summary judgment)