Idaho District Court grants US partial summary judgment in speech therapy whistleblower case

by Ben Vernia | March 17th, 2010

In a decision on March 10 in U.S. ex rel. Putnam v. Eastern Idaho Regional Medical Center, et al., District Judge William Shubb granted in part, and denied in part, the United States’ motion for summary judgment, finding that factual issues concerning knowledge and presentment stood in the way of judgment for the government.

The case involves time for speech pathology services performed by aides or assistants. To be reimbursable under Medicaid, such services must be performed by a licensed speech pathologist. The defendants conceded that they lumped time spent by aides and assistants together with the time of licensed speech pathologists, and submitted bills for these services to a hospital which in turn billed Medicaid.

Judge Shubb first addressed the applicability of the amendments of the 2009 Fraud Enforcement Recovery Act on the False Claims Act, and concluded, like prior courts, that in the Act’s section abrogating the Supreme Court’s decision in the Allison Engine Co. case, the term “claims” could refer only to claims for payment submitted to the government which were pending on the date of the Act; accordingly, the FERA amendments did not apply to the case.

With respect to the government’s direct (31 USC 3729(a)(1)) claim – Judge Shubb found that the US had established that the hospital’s bills and cost reports included false claims because they sought reimbursement for speech therapy services provided by aides or assistants, and that because the defendants’ invoices to the hospital were intended to be used and were in fact used to determine requests for Medicaid reimbursement, the defendants had caused false claims to be presented to the government.

The Court balked, however, at finding that the defendants acted with knowledge under the Act (because the evidence could support the inference that the defendants believed that the hospital was charging Medicaid a flat rate, and each session included some time spent with a licensed pathologist).

Looking at the government’s claims for the use of a false record (31 USC 3729(a)(2)), the Court likewise found that the evidence fell short of removing a material issue of fact concerning knowledge and presentment. On the latter issue, Judge Shubb wrote:

At most, it would be reasonable to infer that defendants may have wanted Medicaid to reimburse Madison [the hospital] in an amount equal to or exceeding the charges defendants invoiced because Medicaid’s reimbursement at a lesser amount may have jeopardized defendants’ continued relationship with Madison. Even if defendants harbored such an intent, the “direct link” between defendants’ false statement and Medicaid’s decision to reimburse Madison is too “attenuated” to establish liability.

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