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Landau v. Lucasti

January 6, 2010


The opinion of the court was delivered by: Simandle, District Judge


This matter is before the Court on Plaintiff Silvana Landau's motion for partial summary judgment [Docket Item 66] and a motion for summary judgment filed by Defendants Christopher Lucasti, D.O., South Jersey Infectious Diseases, Inc. ("SJID"), and Access One, Inc.*fn1 [Docket Item 65]. Plaintiff has brought a qui tam action*fn2 under the False Claims Act ("FCA"), 31 U.S.C. § 3729, in which the United States has declined to intervene. Plaintiff now seeks summary judgment on the question of liability, maintaining that there is no genuine dispute that Dr. Lucasti and his practice, SJID, knowingly presented false claims to the United States in which they sought payment from Medicare for services "incident to" Dr. Lucasti's outpatient intravenous antibiotic therapy treatment, when Dr. Lucasti was not actually present in his office during the infusions. Defendants also seek summary judgment, arguing that Plaintiff has not presented sufficient evidence that the subject claims were false or that Dr. Lucasti had the scienter necessary for liability under the FCA. For the reasons discussed below, the Court will deny Defendants' motion in part, and grant Defendants' motion in part, as it relates to Medicare claims submitted prior to January 1, 2002 and the claims against Access One. The Court will further deny Plaintiff's motion for partial summary judgment as to liability, but grant partial summary judgment in favor of Plaintiff as to the unambiguous meaning and applicability of the post-January 1, 2002 Medicare regulations outlining the requirements for services "incident to" the services of a physician.


A. Relevant Medicare Regulations

The federal Medicare program, administered by the Centers for Medicare and Medicaid Services ("CMS"),*fn3 provides health care to elderly and disabled Americans by offering insurance for hospital services (Medicare Part A) and supplemental benefits for physician and outpatient services (Medicare Part B). 42 U.S.C. §§ 1395-1395ii. Part B covers "medical and other health services," 42 U.S.C. § 1395k(a), which includes "services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician's professional service," 42 U.S.C. § 1395x(s)(2). Agency regulation governs whether a service is "incident to" a physician's service. 42 C.F.R. § 410.26.

The current regulations (effective January 1, 2002) governing payment for a physician's medical services read, in relevant part:

(b) Medicare Part B pays for services and supplies incident to the service of a physician (or other practitioner)....

(5) Services and supplies must be furnished under the direct supervision of the physician (or other practitioner). The physician (or other practitioner*fn4) directly supervising the auxiliary personnel need not be the same physician (or other practitioner) upon whose professional service the incident to service is based.

42 C.F.R. § 410.26(b)(5). "Direct supervision" is defined as "the level of supervision by the physician (or other practitioner) of auxiliary personnel as defined in § 410.32(b)(3)(ii)." 42 C.F.R. § 410.26(a)(2). Section 410.32(b)(3)(ii) states:

Direct supervision in the office setting means the physician must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed.

42 C.F.R. § 410.32(b)(3)(ii).

Prior to January 1, 2002, however, 42 C.F.R. § 410.26 stated only this:

Medicare Part B pays for services and supplies incident to a physician's professional services, including drugs and biologicals that cannot be self-administered, if the services or supplies are of the type that are commonly furnished in a physician's office or clinic, and are commonly furnished either without charge, or included in the physician's bill.

42 C.F.R. § 410.26(a)(2001).

In addition, there are separate provisions, in effect for the entire relevant period, governing payment for services incident to the services of a physician's assistant or nurse practitioner:

A physician assistant's, nurse practitioner's, and clinical nurse specialists' services, and services and supplies furnished incident to their professional services, are paid in accordance with the physician fee schedule. The payment for a physician assistants' services may not exceed the limits at § 414.52 of this chapter. The payment for a nurse practitioners' and clinical nurse specialists' services may not exceed the limits at § 414.56 of this chapter.

42 C.F.R. § 405.520(a). Both Section 414.52 and Section 414.56 limit payment for such physician's assistant or nurse practitioner services to no more (and sometimes less) than 85 percent of the physician fee schedule amount. 42 C.F.R. §§ 414.52, 414.56.

B. Facts

Plaintiff Silvana Landau worked as the office manager at SJID from August 1998 through the Summer of 2005. (Landau Dep. at 19, 31.) Dr. Lucasti is a doctor of osteopathy who specializes in the treatment of infectious disease, including outpatient intravenous antibiotic treatment (or infusion treatment). (Lucasti Dep. at 9.) Included among his patients were those covered by Medicare. (Id. at 26-32.) In order to seek reimbursement from Medicare for infusion treatments made to Medicare patients, Dr. Lucasti and his practice were required to submit Health Insurance Claim Form CMS-1500 to CMS. (CMS-1500, Pl. Exh. B.) That form includes the following language:

I hereby certify that the services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision, except as otherwise expressly permitted by Medicare or CHAMPUS regulations. (Id.) Defendants also included the medical provider's identification number and a code describing the treatment given in each Medicare claim. (Morey Dep. at 67; Health Law Network Report, Pl. Exh. I.) SJID billed the vast ...

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