MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Patricia Mikes, M.D., a former employee of Defendants Marc Straus, M.D., Jeffrey Ambinder, M.D., and Eliot Friedman, M.D., brought an action following her termination as qui tarn relator and as plaintiff in her individual capacity against Defendants under the False Claims Act, 81 U.S.C. § 3729 et seq. (1994) (“FCA”) for (1) submission of fraudulent Medicare claims based on improperly performed spi-rometry tests, (2) use of false records of spirometry tests to obtain Medicare reimbursement, and (3) conspiracy by Defendants to defraud the Government by filing false Medicare claims. Defendants counterclaimed for extortion. Defendants have moved for summary judgment on Mikes’s FCA claims, and Mikes has cross-moved for partial summary judgment on the first two elements of her FCA claims. For the reasons that follow, Defendants’ motion is granted in its entirety.
Background
Defendants are physicians licensed in New York who specialize in oncology and hematology. In or around 1991, Defendants formed Pulmonary and Critical Care Associates (“PCCA”), a medical practice with a focus on treatment of pulmonary, or lung-related, conditions, which maintains offices in various locations in Westchester and Putnam Counties. Mikes, a pulmonol-ogist, was employed by PCCA beginning on or about July 1, 1991, and was based in PCCA’s White Plains office. She was hired pursuant to an employment contract, which allowed PCCA to terminate her with or without cause, and provided that cause included failure to maintain consulting and admitting privileges at local hospitals.
Mikes avers that in the fall of 1991, she met with Defendant Straus to express her concerns about the administration of spiro-metry tests, which are used to measure the speed and volume at which patients can exhale, to patients at PCCA. 1 Specifically, Mikes alleges that she told Straus that the test results might not be accurate because the equipment was not being calibrated using a three-liter syringe or checked for calibration on a daily basis and after being moved, as per the recommendation of the American Thoracic Society (ATS). She further claims that she voiced her worry to Straus over the fact that the tests were being performed by foreign medical school graduates, employed as medical assistants, who she felt were inadequately trained to perform the tests. Mikes also claims that she requested that PCCA purchase a calibration syringe for the purpose of ensuring the accuracy of spirometry tests, and offered to train the medical assistants who carried out the tests.
Subsequent to this conversation, Mikes’s employment relationship with Defendants deteriorated, for reasons disputed by the parties. Mikes contends that Defendants became hostile toward her as a result of her expressed disapproval of the performance of spirometry tests at PCCA. Defendants respond that tension developed between Mikes and themselves due to contentious behavior by Mikes toward her peers and incompetence with respect to patients. Whatever the reason, Mikes was
Mikes brought the present action on April 16,1992. The case comes before this Court following a lengthy procedural history. In May 1994, Mikes’s original five-count complaint, including claims for unwarranted and improperly performed spi-rometry and Magnetic Resonance Imaging (MRI) tests under the FCA, retaliatory discharge under the FCA and New York Labor Law, and unpaid wages under the New York Labor Law, was dismissed by Judge Broderick of this Court for,
inter alia,
fading to plead fraud with particularity pursuant to Fed.R.Civ.P. 9(b).
See United States ex rel. Mikes v. Straus,
In their Answer to Mikes’s Second Amended Complaint, Defendants asserted a counterclaim against Mikes for extortion on the basis of her FCA suit. As of October 18, 1999, Mikes had not filed a responsive pleading with respect to the counterclaim, and on that date Defendants filed a Motion for Entry of Default under Fed.R.Civ.P. 55(a), which was denied at oral argument before this Court on October 29,1999.
Standard for Summary Judgment
Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.
See
Fed. R.Civ.P. 56(c);
Anderson v. Liberty Lobby, Inc.,
False Claims Act
The FCA, as amended, imposes liability on any person who (1) “knowingly presents, or causes to be presented, to ... the United States Government ... a false or fraudulent claim for payment or approval, (2) ‘knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government,’ ” or (3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid. 31 U.S.C. § 3729(a)(l)-(3). The statute defines “knowingly” as meaning that an individual has “actual knowledge” of the information, acts in “deliberate ignorance” of the truth or falsity of the information, or acts in “reckless disregard” of the truth or falsity of the information, and provides that “no proof of specific intent to defraud is required.” § 3729(b)(l)-(3). A private individual — the qui tarn relator— may bring an action for a violation of § 3729 on his or her own behalf as well as that of the Government. See § 3730(b)(1).
To prevail on a claim under § 3729(a)(1), a relator must establish four things: (1) the defendant presented or caused to be presented a claim to the United States for payment or approval; (2) the claim was false or fraudulent; (3) the defendant knew the claim was false or fraudulent; and (4) the United States suffered damages as a result of the false or fraudulent claim.
See Blusal Meats, Inc. v. United States,
The parties do not appear to dispute that Defendants made “claims” within the meaning of the FCA when they submitted claims for Medicare reimbursements for the spirometry tests that they performed on patients at PCCA. Rather, Defendants challenge Mikes’s contention that the Medicare claims made by Defendants were false or fraudulent. Defendants correctly point out that Mikes is unable to point to a single identifiably false claim made during her employment at PCCA.
2
Instead, she cites a number of
However, Mikes also invokes 42 U.S.C. § 1320c-5(a), a provision of the Social Security Act that prescribes various standards to which physicians must adhere in order to qualify for the Medicare program. That section requires that any “health care practitioner” who provides health care services for which payment may be made pursuant to Medicare “to assure ... that services or items ordered or provided by such practitioner or person to beneficiaries and recipients under this chapter (1) will be provided economically and only when, and to the extent, medically necessary; (2) will be of a quality which meets professionally recognized standards of health care; and (3) will be supported by evidence of medical necessity and quality in such form and fashion and at such time as may reasonably be required by a reviewing peer review organization in the exercise of its duties and responsibilities.” Compliance with these standards is a requirement for reimbursement under the Medicare program. A violation of any of them by a health care provider may result in the sanction of exclusion from Medicare or imposition of fines at the discretion of the Secretary- of Health and Human Services. See § 1320c-5(b)(l), (3).
Mikes argues that Defendants’ spirome-try practices failed to meet professionally recognized standards of health care. From this, she reasons that their Medicare claims violated the “legal requirement” of § 1320c-5(a), thereby rendering those claims per se false under the FCA. (Mikes Brief at 14.) This assertion is wrong as a matter of law.
The Second Circuit does not appear to have addressed this theory. However, in
Luckey v. Baxter Healthcare Corp., 2
F.Supp.2d 1034, 1045 (N.D.Ill.1998),
aff'd,
The Seventh Circuit rejected Luckey’s argument and upheld the district court’s decision granting summary judgment against her False Claims Act complaint. The district court distinguished the case from
Ab-Tech,
noting that the defendant in
Ab-Tech
had been required to submit a “Statement of Cooperation” included on the Government’s payment vouchers. The Statement attested to the claimant’s cooperation with the requirements for eligibility in a Small Business Administration (“SBA”) program for minority-owned businesses. The
Ab-Tech
Court ruled that the defendant’s submission of the vouchers amounted to an implied certification of compliance with the applicable provisions of the Small Business Act.
See Ab-Tech,
Other courts have similarly construed the implied false certification theory. In
United States ex rel. Hopper v. Anton,
Consistent with
Anton,
the Fifth Circuit in
United States ex rel. Thompson v. Columbia/HCA Healthcare Corp.,
Cases such as
Luckey, Anton,
and
Thompson,
taken together, can be read to stand for the proposition that implied false certification is to be found only in those exceptional circumstances where the claimant’s adherence to the relevant statutory or regulatory mandates lies at the core of its agreement with the Government, or, in more practical terms, where the Government would have refused to pay had it been aware of the claimant’s non-compliance. Outside that context, as the Seventh Circuit concluded in
Lamers,
“the FCA is not an appropriate vehicle for policing
Mikes relies on the only case that finds that a defendant’s non-compliance with 1320c-5(a) was actionable as an implied false certification under the FCA.
See United States ex rel. Aranda v. Community Psychiatric Centers of Oklahoma, Inc.,
The record in the present case falls short of the Luckey standard. Mikes has failed to produce any evidence or legal authority indicating that the reimbursements made to Defendants by Medicare for spirometry tests were conditioned upon Defendants’ compliance with § 1320c-5. To the contrary, the required certifications included on Form HCFA-1500, the document Defendants submitted for payment, do not include any certification of compliance with regulations concerning conformity to a relevant standard of care. The form requires a health care provider to certify by his or her signature that “the services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by [the provider] or were furnished incident to [his or her] professional service by [his or her] employee under [his or her] immediate personal supervision, except as otherwise expressly permitted by [governing] regulations.” The provision goes on to state that for services to be considered incident to a physician’s professional service, they must be (1) rendered under the physician’s immediate supervision by his or her employee; (2) an integral part of the physician’s service; and (3) of kinds commonly furnished in physician’s offices. Finally, the services of nonphysicians must be included on the physician’s bills. (Form HCFA-1500, attached as Exhibit 15 to Relator’s Memorandum of Law in Opposition to Summary Judgment.)
It is also noteworthy in this regard that the only sanctions authorized by § 1320c-5 are exclusion from Medicare after the Secretary of Health and Human Services agrees with the recommendation of a peer review organization to bar the offending provider from further receipt of benefits, or, at the Secretary’s election, fines of up to $10,000 for each unnecessary or improper procedure. See § 1320c-5(b)(l), (3). That the only enforcement mechanism of § 1320c-5 consists of post-review punitive measures, rather than a precedent certification requirement, strongly suggests that receipt of payment under Medicare is not conditioned upon compliance with the statute. Rather, the Government has opted to deter Medicare claims for negligently performed procedures through the means of future exclusion from the program or monetary penalties once payment has already been made. Thus, I cannot conclude that compliance with 1320c-5 lay “at the heart of’ Defendants’ agreement with Medicare. Mikes therefore cannot rely upon the implied certification theory to satisfy the second element of her FCA claim. 3
Nor has this showing been made by her allegation that Defendants committed fraud against the Government by failing to ensure that spirometry tests were per
Mikes further attempts to establish the falsity of Defendants’ spirometry claims by citing the Court to the following statutory and regulatory provisions, all of which expressly require compliance with ATS standards for spirometry: (1) section 902(10) of the Longshore and Harbor Workers’ Compensation Act, 88 ' U.S.C. § 901 et seq., which defines “disability” (as covered by the Act) as an “incapacity” determined under “the guides to the evaluation of permanent impairment promulgated ... by the American Medical Association,” section 5.2 of which recommends the standards of the ATS for spirometry tests; (2) subsection (d)(l)(ii)(B)(l) of 28 C.F.R. § 79.36, which details the requirements for claims by uranium miners pursuant to the Radiation Exposure Compensation Act, 42 U.S.C. § 2210 note;. (3) 20 C.F.R. § 718 Appendix B, which governs the determination of total disability or death due to pneumoconiosis of coal miners under the Federal Coal Mine Heath and Safety Act of 1969, as amended, 30 U.S.C. § 901 et seq.; and (4) 1993 amendments to Part A of Appendix 1 to Subpart P of 20 C.F.R. § 404, concerning the determination of entitlement to Federal Old-Age, Survivors and Disability Insurance benefits. 4 Mikes argues that the express incorporation of the ATS standards for spirometry into these regulations means that Defendants’ failure to comply with those standards in its practice necessarily rendered their claims false under the FCA.
I reject this argument. All of the provisions cited by Mikes, by their very terms, were enacted for the purpose of verifying an individual patient’s eligibility for dis-
Even if Mikes had been able to demonstrate the falsity of the spirometry claims submitted to Medicare, she cannot establish the third element of her claim, that Defendants submitted Medicare claims with the requisite scienter. A relator is not required to demonstrate specific intent to defraud the Government,
see United States ex rel. Hagood v. Sonoma County Water Agency,
Significantly, when Congress clarified in 1986 amendments to the FCA that specific intent to defraud would no longer be required to satisfy the scienter element of the Act, it explained that its purpose in lowering that threshold was to impose upon individuals and contractors receiving public funds “some duty to make a limited inquiry so as to be reasonably certain they are entitled to the money they seek,” and to “preclude ‘ostrich’ type situations where an individual has ‘buried his head in the sand’ and failed to make any inquiry that would have revealed the false claim.”
See
S.Rep. No. 99-345 at 20-21, reprinted in 1986 U.S.C.C.A.N. 5266, 5285. Hence, the FCA’s mental state provisions were intended to apply to facts markedly different from those on the record in the present case. Mikes has produced no evidence to suggest that Defendants neglected to investigate adequately their entitlement to reimbursement for spirometry tests, or that they remained intentionally ignorant about the legality of their claims. Indeed,
There is, of course, a reckless disregard of knowledge (or “ostrich”) standard under the FCA, and Mikes points out that several courts have determined that this standard may be satisfied where the claimant has reason to believe that his or her claim is based on inaccurate information, but fails to make an investigation as to the veracity of the information conveyed to the Government.
See United States ex rel. Compton v. Midwest Specialties, Inc.,
As to damages in the present case, Mikes has provided only an affidavit of a self-titled expert in “data processing and data analysis,” who has calculated the amount of Medicare payments for spirome-try tests performed at PCCA between 1986 and 1993. (Mikes Exh. 2.) This submission, obviously, does nothing to establish that the Government suffered damages, as opposed to merely having paid for legitimate claims. Thus, if I were confident that the Second Circuit would follow the Federal and Third Circuit rule (which I find to be the more persuasive position), I would grant Defendants’ motion for summary judgment on this ground as well. However, it is not necessary for me to predict how the Second Circuit will rule in order to dispose of the complaint, and I decline to do so.
Mikes also alleged in her complaint that Defendants performed spirometry tests unnecessarily. She did not address this claim in her brief. Her attorneys raised the issue at oral argument before this court, but it must be dismissed. Mikes has made absolutely no showing that any spirometry test performed by Defendants was medically unnecessary. This claim is therefore dismissed along with her other FCA claims.
The record is utterly devoid of evidence to support Mikes’s conspiracy to defraud claim under § 3729(a)(3). Her supporting papers contain nothing to suggest the existence of a conspiracy among the Defendants, nor does she direct the Court to any such evidence. Accordingly, summary judgment is granted with respect to this claim as well.
Thus, the only remaining claim in this action is Defendants’ counterclaim for extortion, which I anticipate to go to trial during the first quarter of 2000. The parties are therefore directed to file with the Court within 10 days of receipt of this memorandum decision and order a revised Pretrial Order dealing solely with the counterclaim.
This constitutes the order and decision of the Court.
ORDER DENYING RELATOR’S MOTION FOR RECONSIDERATION
On November 18, 1999, this Court dismissed Relator’s claims under the False Claims Act, 31 U.S.C. § 3729
et seq.,
against her former employers. The facts of this case, with which familiarity is assumed, are discussed in that memorandum decision and order. Relator has moved for reconsideration pursuant to Federal Rule of Civil Procedure 59(e) and Local Rule 6.3.
1
The United States, which had previously declined to appear in this
qui tam
action, has filed a brief as
amicus curiae,
in which it disdains any interest in the resolution of this particular matter, but seeks clarification or reversal of certain findings allegedly made by this Court in its
To prevail on a motion for reconsideration, the movant must demonstrate “an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.”
See Doe v. New York City Dept. of Soc. Servs.,
The Relator’s motion is denied. Relator does not raise a single new argument or adduce a single additional piece of evidence. Nor does she indicate that the Court has overlooked anything in its lengthy opinion disposing of her claims. Rather, Relator argues yet again the same points she pressed (with little or no eviden-tiary support, despite the posture of the ease) in opposition to the original motion. Relator thinks I am wrong. I think I am right. The Second Circuit will no doubt have the last word on the subject. But this busy Court hardly needs to redo work it has already done just because the losing party is dissatisfied with the result.
The United States approaches the Court far too late in the day for me to give its papers serious consideration. This action is over seven years old. The Government has repeatedly declined to intervene and take over the prosecution. When the case was reassigned to me last summer, I invited the Government to make a final decision by a date certain — before I undertook the arduous task of familiarizing myself with an extensive record and disposing of the pending summary judgment motion. The Government declined to do so. If it had something to say to me on a subject it obviously considers to be of some importance (even though it has no interest in Relator’s particular situation), it should have accepted my earlier invitation. The Court would have welcomed the Government’s expertise and guidance at that point. I cannot say I am happy to have it now.
The amicus brief (which, presumptuously, was not even accompanied by an application for leave to present it) asserts that the Court misapprehended two points. After reading it, and re-reading my decision of November 18, I am persuaded that it is the Government that misapprehends the import of the Court’s decision.
First, the Government seems to be under the misimpression that this Court ruled that the “false implied certification” doctrine precluded False Claims Act cases for Medicare items and services “not reasonably necessary” for the treatment of illness or injury. (Amicus Br. at 6.) This Court articulated no such ruling. Relator did contend in her pleading that Defendants submitted Medicare reimbursement claims for unnecessary testing, but she failed to substantiate that charge with so much as a scintilla of evidence — a fact I
The Government then cites me to
Goodman v. Sullivan,
Whether medical providers are required to certify compliance with Medicare each time they file or just the first time they file is beside the point. The point, which the Government apparently misapprehends, is that the certifications in this case — including any pre-certification made as part of Defendants’ original Health Care Provider/Supplier Application (the text of which is set out in Amicus Br. at 10) — did not, either explicitly or implicitly, suggest that the spirometry machines used to measure patients’ lung function had been calibrated in accordance with standards that the Government has neither promulgated nor adopted in any statute, regulations or manual governing Medicare. I have no reason to reconsider my conclusion in this regard, and do not see it as any threat to the Government’s ability to use the False Claims Act to root out legitimate fraud.
Finally, the Government urges this Court to reconsider its finding that the existence of the anti-fraud remedy specified in § 1320c-5(b)(l) and (3) of the Social Security Act preempts the False Claims Act and precludes FCA liability. I made no such finding. Rather, I found that the existence of the Medicare statute’s anti-fraud remedy supported my conclusion (reached on other grounds) that compliance with § 1320c-5 did not “lay ‘at the heart of Defendants’ agreement with Medicare” (Decision and Order at 9)— which, per Luckey, I held to be the standard for imposition of False Claims Act liability in an implied false certification case. Had I found that compliance with § 1320c-5 did lie “at the heart of’ the agreement between Medicare and Defendants, and that Defendants had impliedly certified that the machines in their office met standards that the Government concedes the Secretary has not explicitly imposed on providers, then there could of course be liability under both the Medicare anti-fraud provision and the False Claims Act. Likewise, if I had determined that this was not an implied false certification case at all, but rather one in which Defendants had made an explicit false certification, Defendants might have been liable under both statutes. But those are not our facts.
I suspect that the reason the Government chose not to intervene in this matter is its recognition that Relator’s allegations (independent of her lack of evidence to
This constitutes the decision and order of the Court.
Notes
. Spirometry tests, according to Defendants, are used to evaluate pulmonary function, particularly in patients who are being treated with anti-cancer drugs that entail the potential side effect of pulmonary toxicity. (Def. Br. at 4 n. 1.)
. Mikes testified as follows:
Q. [C]an you tell us what patient files you reviewed to form the basis of that complaint [to Straus regarding inaccurate results]?
A. You’re asking for names, I can't—
Q. Any way you can describe it.
A. I can’t give you names.
Q. You can think of no way to identify a single patient whose file you are referring to in this complaint?
A. Not at this time I can't.
Q. Okay. Well, other than our taking your word for it, how are we supposed to know whether these claims are true or not?
A. I don't have, I don’t have an answer for you at this point. At the time when I took the issue to Dr. Straus, there would have beenmany ways for us to investigate it had we worked together.
Q.... I’m asking you if you can identify in any way, shape or form a single patient whose chart we can go back to, and you'll know we are going back to it because you’ll identify it for us, where the results would be, as you say, inconsistent as to be unusable.
A. I can’t give you any patient names or any identifiable information right now. As I am thinking of it now I can't give you anything that would allow you to go back to a specific file. (Deposition of Patricia Mikes, Attached as Exhibit 8 to Defendants’ Notice of Motion at 122-26.)
. Mikes argues that she was unable to adduce further evidence of false claims because her access to the files of patients who she claims underwent improperly performed spirometry tests were located in a "separate location” in Defendants' office that was "not readily accessible” to her. (Affidavit of Patricia Mikes ¶311>, attached as Exhibit 6 to Defendants’ Notice of Motion.) Apart from the vagueness of this assertion, it is incomprehensible that Mikes would have had no independent recollection of specific patients who received incorrect results or were given improperly administered tests, particularly given that she claims to have observed such results and procedures firsthand. (Affidavit of Patricia Mikes ¶ 32, attached as Exhibit 5 to Relator’s Brief.)
. Mikes has also cited the Court to 29 C.F.R. Part 1910, a portion of the Occupational Safety and Health Administration (OSHA) regulations defining the standards for determination of occupational exposure to benzene. She has directed the Court to an OSHA summary that accompanied changes the agency made to the regulations in 1987, which make reference to ATS guidelines, but she has neglected to cite a specific portion of the actual regulations that adopt the ATS standards. To the contrary, the references to spirometry in the regulations pertaining to benzene exposure do not specify a governing standard of care. See 29 C.F.R. §§ 1910.1001(1 )(l)(ii)(B), 1910.1028(i)(l)(iii).
.
See Kollias v. D & G Marine Maintenance,
. Straus averred that after Mikes told him that the spirometers were not being calibrated properly, he "requested that Dr. Mikes review test results to determine whether there was any evidence of an inaccurate result and that she provide guidance to the medical assistants performing the tests to insure [sic] that they were being properly performed and she agreed to do so.” Thereafter, Dr. Mikes never advised him "of any evidence of inaccurate test results nor to [his] knowledge did she ever provide any guidance to the medical assistants as to how to properly perform the test.” (Straus Aff. ¶ 23.)
. Mikes stated in one of her affidavits: "On or about September 15, 1991, I verbally informed defendant Straus that:
a. the tests as being performed did not conform with the minimum standards set by the ATS;
b. the tests as being currently performed and the failure to provide written interpretation precluded billing to Medicare for the tests;
c.the improper use of uncalibrated spiro-metry equipment in derogation of ATS standards would lead to material measurement errors;
e. the purchase and use of a Syringe was required in order to ensure that the spirome-ter was properly calibrated so that proper and accurate medical services were provided by the defendants to patients.” (Mikes Aff. ¶ 14.)
Straus stated in his affidavit that "[i]n September or October of 1991, Dr. Mikes advised me that she believed the spirometry tests being performed at our offices might be inaccurate because the equipment was not being calibrated properly” (Straus then goes on to state that he asked Mikes to review test results for evidence of inaccuracies and that she failed to do so). (Straus Aff. ¶ 23.)
. Relator's counsel in fact brought this motion under Fed.R.Civ.P. 54(b) (Relator’s Br. at 1.). While there is no clear indication of which Rule applies to a motion for reconsideration, courts generally consider a motion for modification of the judgment to be either
. By contrast, the Small Business Administration
does
tell participants in its minority-owned business program how to run their operations.
See Ab-Tech Construction, Inc.
v.
United States,