The opinion of the court was delivered by: Wigenton, District Judge.
Before the Court is plaintiff the United States of America's (the "United States") motion for partial summary judgment against the defendant Joseph Campbell ("Defendant Campbell" or "Campbell") on Count I of the Amended Complaint filed September 19, 2008 to recover statutory damages and civil penalties under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33 for violation of the Anti-Self Referral Act (also known as the "Stark Act"), 42 U.S.C. § 1395nn, and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b ("Motion for Partial Summary Judgment").
Also before the Court are motions for summary judgment on all three counts of the Answer to the Amended Complaint and Amended Third Party Complaint of Defendant Campbell filed September 24, 2008 (also referred to as "Amended Third Party Complaint"). These motions for summary judgment were filed individually by the following third party defendants: the University of Medicine and Dentistry of New Jersey ("UMDNJ"), Merwin Richard, M.D. ("Richard") and Jerrold J. Ellner, M.D. ("Ellner")(collectively referred to as the "Third Party Defendants").*fn1
The Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1345 and 1331. Venue is proper pursuant to 28 U.S.C. § 1391 and 31 U.S.C. § 3732(a). The Court, having considered the parties' submissions, decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78.
For the reasons discussed below, the Court denies the Motion for Partial Summary Judgment by the United States and grants the Third Party Motions for Summary Judgment as to Counts I and II of the Amended Third Party Complaint.*fn2
UMDNJ is the state's university for health sciences, the components of which are the UMDNJ-New Jersey Medical School ("NJMS") and the UMDNJ-University Hospital ("University Hospital" or "UH"). University Hospital was a Level 1 Trauma Center licensed and regulated by the state of New Jersey. (Am. Compl. ¶ 19.) Maintenance of this license was dependent on the annual performance of a certain number of cardiac procedures, including cardiac catheterizations and cardiothoracic surgeries. (Id.) However, since 1995 the University Hospital failed to perform the requisite number of cardiac procedures to maintain its Level 1 Trauma Center license. (Id. at ¶ 22.)
During Spring 2002, in an effort to increase the number of cardiothoracic patients that were referred to UMDNJ and to avoid losing its Level 1 accreditation, UMDNJ engaged in a cardiology recruitment initiative to increase the number of cardiothoracic patients referred to University Hospital. (Id. at ¶ 23; Pl.'s Br. 10.) Pursuant to this initiative, UMDNJ entered into part-time employment contracts with local community cardiologists in private practices, who had patients they could refer to University Hospital for cardiac-related procedures. (Am. Compl. ¶ 23; Pl.'s Br. 10.) These cardiologists were contracted to work part-time at University Hospital as Clinical Assistant Professors ("CAP"), performing various services for UMDNJ including teaching, lecturing and research in exchange for an annual salary. (Am. Compl. ¶ 24.) Pursuant to the CAP contracts, these local or community cardiologists received annual salaries of between $50,000 and $180,000. (Id. at ¶ 25.)
Defendant Campbell was a cardiologist in private practice who was approached by UMDNJ. He is a medical doctor licensed to practice in the state of New Jersey with a private medical practice specializing in cardiology located in Irvington, New Jersey. (Campbell Cert. ¶ 2.) After a series of meetings and negotiations with UMDNJ administration (including doctors Ellner and Richard) in January of 2003, Defendant Campbell accepted a position as a part-time CAP at NJMS. (Am. Compl. ¶ 28; Pl.'s Br., Ex. 4-C, Campbell's CAP Contract.) Pursuant to the employment contract, a letter agreement dated January 15, 2003, Defendant Campbell was required to spend his "part-time (48%) service" performing the following activities on behalf of the University Hospital and NJMS:
1. [Teaching] fellows at cardiac catheterization procedures.
2. [Interpreting] hospital electrocardiograms.
3. [Attending] weekly cardiology conferences.
4. Physical diagnosis course for second year medical students
5. Office-based teaching for medical students, internal medicine residents, cardiology fellow and other students (e.g. nursing, technical)
6. Lecturing in areas of special expertise.
7. Support research efforts with patient identification from your practice.
8. Complete Medicare time studies or such other documents required for documenting services under the program and for documenting services as outlined in this letter.
(Pl.'s Br., Ex. 4-C, Campbell's CAP Contract 1; Am. Compl.¶ 28.) In exchange for these services, Defendant Campbell was compensated at an annual rate of $75,000. (Pl.'s Br., Ex. 4-C, Campbell's CAP Contract 1; Am. Compl.¶ 28.) Defendant Campbell states that he "duly performed all of the services enumerated in the contract which he was given the opportunity to perform, and that he was compensated until the contract was canceled." (Answer to Am. Compl. and Am. Third Party Compl. 4 at ¶ 29.)
Ellner was Chairman of UMDNJ's Department of Medicine and oversaw several divisions, including the division where Defendant Campbell worked as a CAP. (See Answer to Am. Compl. and Am. Third Party Compl. 10 at ¶ 3.) Richard was the Interim Director of UMDNJ's Catherization Laboratory and was involved with CAP recruiting. (Id. at 10-11, ¶¶ 2-4.) In late 2002, Richard, Ellner and other UMDNJ representatives met with Defendant Campbell for an introductory meeting to solicit his employment with UMDNJ as a CAP. (Id. at 11, ¶ 4.) After subsequent conversations, Richard informed Campbell that he was awarded the contract. (Id. at 11, ¶¶ 4-7.) Richard said he would confirm that the employment contract and arrangement did not violate the Stark Act. (Id. at 11, ¶ 8.) Two weeks later, Richards informed Defendant Campbell that "UMDNJ's attorneys had confirmed that the proposed employment contract and arrangement were lawful and acceptable." (Id.) Defendant Campbell claims he relied on these assurances and did not consult independent legal counsel in connection with the legality of the contract as a result. (Id.; Id. at 13-14, ¶¶ 15, 17; Pl.'s Br. at 25.)
UMDNJ participates in the Medicare program and submits claims through its financial intermediary to Medicare for medical services it renders to beneficiaries. (Am. Compl.¶ 20.) From January 2003 to December 2003, "Medicare paid UMDNJ over $230,000 for cardiac-related medical procedures that were performed at UMDNJ on at least 8 patients referred from Defendant Campbell's private cardiology practice." (Pl.'s Br. 12.)*fn3 A W-2 form provides that during this same time period Defendant Campbell received payments from UMDNJ totaling approximately $70,000. (Id.; Pl.'s Br., Ex. 4-D.) The United States contends that the primary service Defendant Campbell performed under his employment contract was to refer patients from his private cardiology practice to UMDNJ for inpatient and outpatient hospital services. (Pl.'s Br. 12.) Many of these services were paid for by Medicare and Medicaid. (Am. Compl. ¶¶ 54-62.)
During Defendant Campbell's tenure as a CAP for UMDNJ, he was allegedly suspended multiple times for failing to prepare medical charts on a timely basis. (Richard's Br. 4 at ¶ 18.) Defendant Campbell denies this claim. (6/24/10 Def.'s Resp. Statement to Ellner ¶¶ 94.) In an e-mail dated December 1, 2003, Richard recommended to Ellner that Defendant Campbell be terminated because of persistently being on the physician suspension list and having a "60% normal cardiac cath rate for [the] quarter, well above state limits." (Richard's Br. 4 at ¶ 18; 4/26/10 Gibbs Cert., Ex. K.) On ...