Salters v. American Family Health Care Inc

Filing 121

MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 4/18/2017. (PSM)

FILED
2017 Apr-18 PM 03:01
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
UNITED STATES OF AMERICA,
ex rel. ANITA C. SALTERS,
Plaintiff,
vs.
AMERICAN FAMILY CARE,
INC.,
Defendant.

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5:10-cv-2843-LSC

MEMORANDUM OF OPINION
I.

Introduction

Plaintiff/Relator Anita C. Salters (“Salters”) filed this action against
her former employer American Family Care (“AFC”) alleging that AFC
violated the False Claims Act (“FCA”), 31 U.S.C. § 3729, by submitting
false claims to the Government, and that it engaged in physician referrals
in violation of the Stark Law, 42 U.S.C. § 1395nn. She further alleges that
she was unlawfully terminated in retaliation for reporting these potential
violations to her superiors contrary to the FCA’s anti-retaliation provision.
31 U.S.C. § 3730(h).

Before the Court is defendant AFC’s motion for

partial summary judgment on the FCA claims (Doc. 101), which has been

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fully briefed and is ripe for review. For the reasons set out below, AFC’s
motion is due to be granted in part and denied in part.
II.

Background

AFC operates sixty-eight walk-in medical clinics which provide
primary, family, and urgent care. Throughout its clinics, AFC employs 165
physicians. Most of AFC’s offices are open seven days a week, from 8:00
am to 6:00 pm. However, a few are open for longer hours, and the
Huntsville clinic is only open five days a week. All full-time physicians
execute a Medicare approved Reassignment of Benefits form, which
assigns the physician’s right to fees for services performed to AFC.
AFC then submits “claims” or bills to Federal payors—such as Medicare,
Medicaid, and Tricare—as a group practice, using Current Procedural
Terminology

(“CPT”)

codes

to

identify

services

performed

and

International Certification of Diseases (“ICD”) codes to identify diagnoses
made. CPT codes “describe medical services such as treatments, tests,
and procedures, and are an accepted means of reporting such medical
services to [G]overnment and health insurance programs.” U.S. ex rel.
Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 708 n.9
(10th Cir. 2006). ICD codes “describe the diagnosis or medical condition
for which medical services are rendered when Medicare claims are
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submitted to Medicare carriers.” Id. at 708 n.8. AFC estimates that it
submits thousands of these claims to Federal payors every year, and
understands that when claims are submitted to the Federal Government,
AFC certifies that it is complying with applicable rules and regulations.
AFC hired Salters as an audit supervisor in January 2007 and promoted
her to director of the Claims Processing Center (“CPC”) in December
2007. (Salters Dep. at 14, Kerr Dep. at 103.) Her duties as director of the
CPC included ensuring that the claims submitted were in compliance with
all applicable regulations, collecting all sums due to AFC within a
reasonable period of time, and supervising approximately twenty-five
other employees in the CPC. (Salters Dep. at 190, Johansen Dep. at 37 &
72, Hawley Dec. ¶ 5.)
a. Locum Tenens Physicians
A locum tenens physician fills in when a physician is absent, and bills
as if he were the regular physician. Medicare Claims Processing Manual
(“MCPM”) Ch. 1 § 30.2.11. To supplement its physician employees, AFC
uses locum tenens physicians, one of which was Dr. Charles Buckmaster
(“Dr. Buckmaster”), who worked at AFC clinics between 2006 and 2011,
substituting for several different providers at various AFC locations.
b. Ear Popper
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The “Ear Popper” is a device that shoots air up through the nostril for
the purpose of balancing inner ear pressure with outside pressure. AFC
purchased sixteen Ear Poppers for its offices, and billed Federal payors
for their usage according to the recommendations of the Ear Popper
manufacturer—as is customary in the healthcare industry. (Salters Dep. at
75 & 77.) Salters herself visited the manufacturer’s website, found CPT
code 69401, and printed the article to show AFC management. (Id. at 7374.) However, she testified that the day after she printed the article, she
could no longer find it on the manufacturer’s website. (Id.)
In 2008, Blue Cross and Blue Shield of Alabama (“BCBS”) investigated
AFC for billing the Ear Popper under code 69401—ear surgery eustachian
tube inflation transnasal without catherization—and concluded that the
device was experimental. As a result of this determination, BCBS decided
that it would not pay for Ear Popper usage and required AFC to refund
previous Ear Popper payments. AFC paid BCBS $28,534.36 in refunds for
the Ear Popper bills. However, the Government never questioned,
investigated, or requested a refund based on AFC’s billing of the Ear
Popper under CPT code 69401. Despite a handwritten note on the refund
request letter from BCBS that read “check with [Medicare],” AFC never
contacted the Government to inquire about the propriety of billing the
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Ear Popper under this code, and never refunded any Federal payor for Ear
Popper payments received. After refunding BCBS on April 7, 2008, AFC
continued to use the Ear Popper, but stopped billing all insurers for Ear
Popper usage.
c. Stark Law & Anti-Kickback Statute
Dr. Ronald McCoy (“Dr. McCoy”) was an Otolaryngologist (ENT) who
had offices in Bessemer and Birmingham. In January of 2000, Dr. McCoy
entered into a written contract with AFC to see patients at AFC locations,
as well as at his private practices. The contract provided for
compensation based on a formula which paid him a percentage of the
amount of revenue he generated. However, this formula did not include
any collections from Medicare patients. Therefore, his pay did not reflect
the volume of Medicare business that he generated. The rate of pay was
commercially reasonable and consistent with what other physicians are
paid in Alabama for services rendered to a group practice. Further, Dr.
McCoy reassigned all the Medicare reimbursements from his work at AFC
clinics to AFC.
Dr. McCoy was never an employee of AFC, always performing services
as an independent contractor and did not have ownership shares in AFC or
the AFC lab. While working at AFC, he often referred patients for testing
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at the AFC lab. Generally, these patients were seen at AFC locations first,
but AFC admits that on five occasions, Dr. McCoy sent Medicare patients
to get blood allergy tests done at the AFC lab without first seeing the
patients at an AFC clinic. However, AFC claims that these referrals were
done without AFC’s knowledge or approval. AFC billed Medicare for these
five visits, but Medicare only paid for three of them. Two of these three
patients were existing AFC patients at the time the tests were
performed, though Dr. McCoy saw them in his private offices. AFC claims
that the patient who was not an AFC patient when the blood test was
performed did fill out new patient paperwork before the blood draw.
Dr. McCoy also referred a Railroad Medicare patient—Wilma H.—to AFC
for blood allergy testing without seeing her at an AFC facility. Medicare
reimbursed AFC for this visit. However, prior to the blood draw, Wilma H.
saw another AFC physician for dermatitis.
III.

Standard of Review

Summary judgment is appropriate “if the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). A material fact is
one that “might affect the outcome of the case.” Urquilla-Diaz v. Kaplan
Univ., 780 F. 3d 1039, 1049 (11th Cir. 2015). A dispute is genuine if “the
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record taken as a whole could lead a rational trier of fact to find for the
nonmoving party.” Id. The trial judge should not weigh the evidence, but
determine whether there are any genuine issues of fact that should be
resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986).
In considering a motion for summary judgment, trial courts must give
deference to the non-moving party by “considering all of the evidence
and the inferences it may yield in the light most favorable to the
nonmoving party.” McGee v. Sentinel Offender Servs., LLC, 719 F.3d
1236, 1242 (11th Cir. 2013) (citing Ellis v. England, 432 F.3d 1321, 1325
(11th Cir. 2005)). In making a motion for summary judgment, “the moving
party has the burden of either negating an essential element of the
nonmoving party’s case or showing that there is no evidence to prove a
fact necessary to the nonmoving party’s case.” Id. Although the trial
courts must use caution when granting motions for summary judgment,
“[s]ummary judgment procedure is properly regarded not as a disfavored
procedural shortcut, but rather as an integral part of the Federal Rules as
a whole.” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
IV.

Discussion

A. FCA Generally
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Salters claims that AFC violated the FCA in a number of different ways:
1) falsely certifying compliance with locum tenens regulations 2) failing
to reimburse the Government for improper payments for the Ear Popper
3) submitting false claims for the Ear Popper 4) falsely certifying
compliance with the Stark Law 5) falsely certifying compliance with the
Anti Kickback Statute

6) submitting false claims containing an after-

hours billing code 7) submitting false claims during the Global Surgery
Period 8) by submitting false claims for level one office visits when
patients came in solely for injections and 9) falsely submitting unbundled
claims

for

venipunctures,

injection

administrations,

vaccine

administrations, and pulse oximetry.
The FCA allows individuals to file qui tam actions and recover
damages on behalf of the United States. U.S. ex rel. Clausen v. Lab.
Corp. of Am., 290 F.3d 1301, 1307 (11th Cir. 2002). These actions may be
filed against a person or entity that “knowingly presents, or causes to be
presented, a false or fraudulent claim for payment or approval; . . . [or]
knowingly makes, uses or causes to be made or used, a false record or
statement material to a false or fraudulent claim.” 31 U.S.C. §
3729(a)(1)(A) & (B). Healthcare providers can be found liable under the
FCA for “the submission of a fraudulent claim to the Government,” i.e.
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for submitting a claim that contains false information. Urquilla-Diaz, 780
F.3d at 1045.
B. Use of Locum Tenens Physicians
In her complaint, Salters alleges that AFC violated the FCA by allowing
new physicians to work in its clinics as locum tenens physicians for
months while their paperwork was being completed. (Doc. 1 at 23.) The
complaint specifically alleges that Dr. Steven Hefter (“Dr. Hefter”), Dr.
Eugene Evans (“Dr. Evans”), Dr. Buckmaster, and Dr. Syed Hasan
(“Hasan”) were regularly used as locum tenens physicians in violation of
the FCA. (Id.) She also claims that “[AFC] is improperly billing for these
long term Locum Tenens physicians under provider numbers for physicians
who were not present in the facility.” (Id. at 24.) In its motion for
summary judgment, AFC argued that claims for Dr. Hasan, Dr.
Buckmaster, and Dr. Evans were properly billed.
In her response to AFC’s motion for summary judgment, Salters
addressed her claims for improper billing based only on Dr. Buckmaster’s
locum tenens work. (Doc. 105 at 17-22.) Salters failed to mention Dr.
Hasan, Dr. Hefter, or Dr. Evans in her response to summary judgment,
and “grounds alleged in the complaint but not relied upon in summary
judgment are deemed abandoned.” Resolution Trust Corp. v. Dunmar
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Corp., 43 F.3d 587, 599 (11th Cir. 1995). Therefore, Salters’s claims
against AFC for improper billing based on Dr. Hasan’s, Dr. Hefter, and Dr.
Evans’s locum tenens work are deemed abandoned.
The only locum tenens claim that remains in this action is Salters’s
claim based on AFC’s billing for Dr. Buckmaster’s work. In her opposition
to AFC’s motion for summary judgment, Salters argues that AFC violated
the FCA by falsely certifying compliance with the MCPM’s requirements
for locum tenens doctors. Liability under the FCA can arise from “a ‘false
certification theory,’” when a provider “falsely certif[ies] . . . that it will
comply with [F]ederal law and regulations.” Urquilla-Diaz, 780 F.3d at
1045. In order to prove FCA liability under a false certification theory, a
relator must show “‘(1) a false statement or fraudulent course of
conduct, (2) made with scienter, (3) that was material, causing (4) the
[G]overnment to pay out money or forfeit moneys due.’” Id. at 1052
(quoting U.S. ex rel. Hendow v. Univ. of Phx., 461 F.3d 1166, 1174 (9th
Cir. 2006)). However, “‘[m]ere regulatory violations do not give rise to a
viable FCA action,’” because “‘[i]t is the false certification of compliance
which creates liability.’” Id. (quoting Hendow, 461 F.3d at 1171). The
Eleventh Circuit explained that “[l]iability under the [FCA] arises from
submission of a fraudulent claim to the [G]overnment, not the disregard
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of [G]overnment regulations or failure to maintain proper internal
policies.” Corsello v. Lincare, Inc., 428 F.3d 1008, 1012 (11th Cir. 2005).
A relator must therefore prove that the “false statement” was a prerequisite and a material cause of the Government’s decision to pay the
provider’s claim. Id.
The MCPM contains the following conditions for billing a locum tenens
physician:
1) “[t]he regular physician is unavailable,” 2) “[t]he Medicare
beneficiary has arranged or seeks to receive the visit services
from the regular physician,” 3) “[t]he regular physician pays the
locum tenens for his/her services on a per diem or similar feefor-time basis,” 4) the substitute physician does not provide the
visit services to Medicare patients over a continuous period of
longer than 60 days,” and 5) “[t]he regular physician identifies
the services as substitute physician services . . . by entering . . .
code modifier Q6 . . . after the procedure code.”
MCPM Ch. 1 § 30.2.11. In her response to summary judgment, Salters
alleges that AFC violated these requirements by improperly paying Dr.
Buckmaster based on productivity and failing to use the required Q6 code
modifier when billing Medicare for his work. (Doc. 105 at 20-21.) She does
not allege that Dr. Buckmaster worked more than the maximum sixty
continuous days.

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AFC argues that Salters cannot raise arguments that AFC improperly
paid Dr. Buckmaster based on productivity in her response to summary
judgment, because she did not raise these arguments in her complaint.
The Eleventh Circuit held that “[a] plaintiff may not amend her complaint
through argument in a brief opposing summary judgment.” Gilmour v.
Gates, McDonald & Co., 382 F.3d 1312, 1315 (11th Cir. 2004). Here,
Salters attempts to raise new facts and a new theory of liability in her
response to summary judgment. However, though Salters was entitled to
raise these facts after learning about them in discovery, “the proper
procedure for plaintiffs to assert a new claim is to amend the complaint
in accordance with Fed.R.Civ.P.15(a).” Id. In her complaint, Salters did
not mention that AFC improperly paid Dr. Buckmaster based on
productivity. She will not be allowed to raise a new theory of liability at
this stage of proceedings. See Merle Wood & Assocs., Inc. v. Trinity
Yachts, LLC, 714 F.3d 1234 (11th Cir. 2013); GeorgiaCarry.Org, Inc. v.
Georgia, 687 F.3d 1244, 1258 n.27 (11th Cir. 2012).
However, Salters’s claims based on the Q6 modifier is not a new claim,
because in her complaint, Salters alleges that “[AFC] is improperly billing
for these long term Locum Tenens physicians under provider numbers for
[other] physicians.” By allegedly failing to append the Q6 modifier,
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Salters was billing for its locum tenens providers using the numbers of
other physicians, with no designation to show that the claims related to a
different doctor. As evidence of this failure to append the Q6 modifier,
Salters provided her expert report, which includes a finding that “[o]f the
. . . lines reflecting Dr. Buckmaster’s direct involvement in providing
care, . . . 76% were presented for payment without the Q6 modifier.”
(Doc. 116 at Ex. O pg. 20.) Though it asserts that it followed the proper
billing procedures for locum tenens physicians, AFC did not provide
evidence that it did append the Q6 modifier.

Therefore, viewing the

facts in the light most favorable to the non-movant, there is a material
issue of fact as to whether AFC properly billed for its locum tenens
physicians.
However, in order to make out a claim under a false certification
theory, Salters must show that AFC’s mispayment and misbilling was a
material fact in the Government’s decision to pay out AFC’s claim for
work done by Dr. Buckmaster. Proving materiality is a high burden for the
relator, because “[a] misrepresentation cannot be deemed material
merely because the Government designates compliance with a . . .
requirement as a condition of payment.” Universal Health Servs., Inc. v.
U.S. ex rel. Escobar, __ U.S. __, 136 S.Ct. 1989, 2003 (2016). A “minor or
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insubstantial” violation is also not material, and “it is [not] sufficient for
a finding of materiality that the Government would have the option to
decline to pay if it knew of the defendant’s noncompliance.” Id. A
plaintiff can prove materiality by providing “evidence that the defendant
knows that the Government consistently refuses to pay claims in . . .
cases based on noncompliance with the . . . requirement.” Id.
Conversely, “if the Government regularly pays a particular type of claim
in full despite actual knowledge that certain requirements were violated
. . . that is strong evidence that the requirements are not material.” Id.
at 2003-04.
As evidence of materiality, Salters provides the opinion of her expert,
who states that “[f]ailure to append the modifier Q6 may result in
improper payments or allegations of false claims, particularly when a
provider fails to comply with all of the provisions associated with proper
locum tenens arrangements.” (Doc. 116 at Ex. O pg. 10.) However, AFC
provides a declaration from Susan Garrison, a certified medical coder,
which states that “[t]he failure to use a Q6 modifier on a locum tenens
claim does not affect the amount Medicare will pay on a claim,” and that
“[it] is a technical billing error, which is not material to Medicare’s
decision to pay the claim provided the other locum tenens payment rules
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are being followed.” (Garrison Dec. at ¶ 9.) Viewing the evidence in the
light most favorable to the non-movant, Salters has provided sufficient
proof of materiality.
Lastly, Salters must show that AFC made these alleged false
statements with scienter. In order to show the requisite scienter, Salters
must provide evidence that AFC acted with “actual knowledge of the
information; . . .

deliberate ignorance of the truth or falsity of the

information; or . . . reckless disregard of the truth or falsity of the
information.” 31 U.S.C. § 3729 (b)(1)(A). Salters claims that because AFC
often scheduled Dr. Buckmaster for “very close to the 60-day limit before
taking him off of locum tenens duty,” AFC must have known that it had to
comply with the locum tenens rules. (Doc. 105 at 20.) She also provides
deposition testimony from AFC president Randy Johansen (“Johansen”)
that AFC management reviewed the locum tenens requirements for each
of its insurance providers. (Johansen Dep. at 255.) Therefore, viewing the
evidence in light most favorable to the non-movant, there is a material
issue of fact as to whether AFC knowingly falsely certified compliance
with applicable rules. Summary judgment as to this claim is due to be
denied.
C. Billing for Ear Popper
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1. Reverse False Claim
In her complaint, Salters also alleges that AFC violated the FCA by not
returning money it was paid for “[applying] the surgical code 69401
Eustachian tube inflation, transnasal, without catherization, to bill for
using [the Ear Popper] in the office.” (Doc. 1 at 22.) Salters contends that
after BCBS required AFC to refund BCBS for all Ear Popper payments, AFC
should have refunded the Government as well.
Providers can be found liable under the FCA based on a “reverse false
claim” theory. This theory allows relators to file suit against a provider
who “knowingly makes, uses, or causes to be made or used, a false
record or statement to conceal, avoid, or decrease an obligation to pay
or transmit money or property to the Government.” 31 U.S.C. §
3729(a)(7), amended by Pub. L. No. 111-21, § 4, 123 Stat. 1617, 16211625 (2009). The statute was amended on May 20, 2009 by the Fraud
Enforcement and Recovery Act (“FERA”). See § 4, 123 Stat. at 1625.
However, this amendment only applies to “conduct on or after the date
of enactment.” See P. L. No. 1111-2221, § 386, 123 Stat. 1617 (2009).
Therefore, the pre-FERA 31 U.S.C. § 3729(a)(7) will apply to conduct
before May 20, 2009, and post-FERA 31 U.S.C. § 3729(a)(1)(G) will apply
to conduct on or after May 20, 2009.
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Liability under the pre-FERA “reverse false claim” theory “results from
avoiding the payment of money due to the [G]overnment, as opposed to
submitting to the [G]overnment a false claim.” U.S. ex rel. Matheny
Medco Health Solution, Inc., 671 F.3d 1217, 1222 (11th Cir. 2012). The
elements of a pre-FERA reverse false claim are
(1) a false record or statement; (2) the defendant’s knowledge of
the falsity; (3) that the defendant made, used, or causes to be
made or used a false statement or record; (4) for the purpose to
conceal, avoid, or decrease an obligation to pay money to the
[G]overnment; and (5) the materiality of the misrepresentation.
Id.
Salters contends that AFC’s duty to refund the Government arose from
the post-FERA FCA. However, AFC correctly notes that this provision only
applies to AFC’s conduct on or after May 20, 2009. The parties agree that
AFC did not bill for the Ear Popper under code 69401 after April 7, 2008. 1
Therefore, because the conduct in question occurred before May 20,
2009, the pre-FERA 31 U.S.C. § 3729(a)(7) applies to all alleged instances
of improper billing for the Ear Popper. Salters argues that AFC had an
obligation to report overpayments for the Ear Popper to the Government
and pay the money back, and AFC counters that it had no such obligation.

1

The parties agree that AFC stopped this practice after paying BCBS a refund of
$28,534.36 for doing so. According to the record, the date of that payment is April 7,
2008.

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The current version of the FCA defines “obligation” as “an established
duty . . . arising from an express or implied contract, grantor-grantee, or
licensor-licensee relationship, from a fee-based or similar relationship,
from a statute or regulation, or from the retention of any overpayment.”
31 U.S.C. § 3729 (b)(2)(B)(3) (emphasis added). However, this version of
the statute was created by FERA, and is only applicable to “conduct on or
after the date of enactment,” which was May 20, 2009. P. L. No. 111-21,
§ 4, 123 Stat. 1617 (2009). The pre-FERA version of the statute contains
no definition of obligation. See 31 U.S.C. § 3729, amended by Pub. L. No.
111-21, § 4, 123 Stat. 1617 (2009).
In United States v. Pemco Aeroplex, Inc., the Eleventh Circuit found an
that the defendant’s contract with the Government created an “existing
[and] legal” pre-FERA obligation. 195 F.3d 1234, 1237 (11th Cir. 1999).
While the Eleventh Circuit has not elaborated on the requirements for the
finding of this obligation, other circuits have interpreted the “existing
[and] legal” language to mean that “the making or using of [a] false
record or statement is not sufficient in itself to create an obligation”
because “the obligation must arise from some independent legal duty.”
U.S. ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1195 (10th Cir.
2006); see also U.S. ex rel. Bain v. Ga. Gulf Corp., 386 F.3d 648, 657 (5th
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Cir. 2004), Am. Textile Mfr. Inst.; Inc. v. The Limited, Inc., 190 F.3d 729,
734-37 (6th Cir. 1999); United States v. Q Int’l Courier, Inc., 131 F.3d
770, 772-74 (8th Cir. 1997). Further, the Fifth Circuit stated that
the reverse false claims act does not extend to the potential
or contingent obligations to pay the [G]overnment fines or
penalties which have not been levied or assessed (and as to
which no formal proceedings to do so have been instituted)
and which do not arise out of an economic relationship
between the [G]overnment and defendant (such as a lease or
contract or the like) under which the [G]overnment provides
some benefit to the defendant wholly or partially in exchange
for an agreed or expected payment or transfer of property by
(or on behalf of) the defendant to (or for the economic
benefit of) the [G]overnment.
Bain, 386 F.3d at 657.
Salters argues that AFC had an “obligation” to refund the Government
for overpayments, which arose out of the definition of obligation in the
post-FERA 31 U.S.C. § 3729 (b)(2)(B)(3), and 42 C.F.R. § 401.305, which
became effective on March 14, 2016. Neither one of these authorities is
applicable to pre-2009 conduct. Further, Salters does not provide
evidence of any other legal duty AFC may have had to report these
overpayments. Salters testified that she researched and found that the
manufacturer of the Ear Popper listed 69401 as the proper code for the
Ear Popper. (Salters Dep. at 73-4.) She claims that AFC knew or should
have known that the code was incorrect because: 1) BCBS determined
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that the billing was improper in February 2008; 2) AFC stopped billing all
insurers separately for the Ear Popper after the BCBS incident; 3) Irwin or
Johansen handwrote a note on the BCBS Ear Popper letter that stated
“check w[ith] other states & M[edic]are,” 4) and AFC never checked the
appropriateness of the billing with the Government. However, none of
these arguments establish that the Ear Popper was improperly billed to
Medicare. Instead, they establish that the use of the code was improper
under BCBS guidelines. Further, Salters does not allege that BCBS and
Medicare used the same standards or guidelines for coding and payments.
AFC alleges, and Salters does not dispute, that there was no Federal
policy or regulation that prohibited billing for an Ear Popper under the
69401 code. She has provided no evidence that AFC knew of a legal duty
to refund Ear Popper overpayments, or that one existed at all. At most,
she has alleged that AFC’s billing practices could have subjected them to
liability, penalties, or fines from Medicare, but potential obligations to
pay the Government do not create reverse false claims liability under the
pre-FERA 31 U.S.C. § 3729(a)(7). Therefore, summary judgment in AFC’s
favor is due to be granted as to Salter’s claim for reverse false claim
liability for Ear Popper billing.
2. False Claim Liability
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Salters also argues that the facts support an action for “a direct false
claim for payment in violation of 31 U.S.C. § 3729(A), because claiming a
surgical code for a hand-held, non-invasive air puffer was knowingly false
at the time of submission.” (Doc. 105 at 24.) The Court interprets this
assertion as intending to claim that AFC violated 31 U.S.C. §
3729(a)(1)(A), which allows a cause of action against a provider who
“knowingly presents, or causes to be presented, a false or fraudulent
claim for payment or approval.” To bring a claim under this section, a
plaintiff must show “(1) a false or fraudulent claim; (2) which was
presented, or caused to be presented, by the defendant to the United
States for payment or approval; (3) with the knowledge that the claim
was false.” United States v. R&F Props. of Lake Cnty., Inc., 433 F.3d
1349, 1355 (11th Cir. 2005).
However, as explained above, Salters has provided no evidence that
AFC knew that it was improperly billing for the Ear Popper. Therefore,
she cannot make out a claim for “knowingly present[ing] . . . a false or
fraudulent claim for payment or approval.” Summary judgment in AFC’s
favor is due to be granted as to Salter’s claim for false claim liability for
the billing of the Ear Popper.
D. Stark Law
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Salters alleges that AFC violated the Stark Law by paying Dr. McCoy for
referrals. The parties do not dispute that Dr. McCoy referred patients to
the AFC laboratory for blood allergy testing. However, Salters alleges that
in exchange for these referrals, AFC agreed to bill for the testing under
his provider number, and send him a check for a percentage of the value
of these tests. Thus, Salters claims, Dr. McCoy was paid by AFC for
services that he was not present for and did not perform—but simply
referred patients to receive.
The Stark Law, codified at 42 U.S.C. § 1395nn, prohibits physicians
from referring patients to entities with which they have financial
relationships, and also forbids entities from presenting a claim for
payment “for designated health services furnished pursuant to a
[prohibited] referral.” 42 U.S.C. § 1395nn(a)(1)(B). The statute lists
exceptions that apply in specific circumstances. Further, the Stark Law is
enforced through regulations promulgated by the Secretary of Health and
Human Services, which describe exemptions to the statute.

See

Fresenius Med. Care Holdings, Inc. v. Tucker, 704 F.3d 935, 937 (11th Cir.
2013). While the Stark law does not provide “its own right of action,”
Salters alleges that AFC is liable for the alleged Stark Law violation under
a FCA false-certification theory. Ameritox, Ltd. v. Millennium Labs., Inc.,
Page 22 of 46

803 F.3d 518, 522 (11th Cir. 2015) (quoting U.S. ex rel. Drakeford v.
Tuomey Healthcare Sys., Inc., 675 F.3d 394, 395 (4th Cir. 2012)).
AFC argues that the Stark Law applies only to services billed to
Medicare, and not to those billed to other Federal programs. However,
the Eleventh Circuit has stated that the Stark Law applies to Medicaid and
Medicare patients. Fresenius, 704 F.3d at 937. Further, “[f]alsely
certifying compliance with the Stark or Anti-Kickback Acts in connection
with a claim submitted to a federally funded insurance program is
actionable under the FCA.” U.S. ex rel. Schmidt v. Zimmer, Inc., 386 F.3d
235, 243 (3d Cir. 2004) (emphasis added); see also U.S. ex rel. Keeler v.
Eisai, Inc., 568 F. App’x 783, 799 (11th Cir. 2014) (citing Schmidt, 386
F.3d at 243).
As with all other false-certification claims, the applicability of Stark
Law requirements will depend on the entity’s certifications, because
“[m]erely alleging a violation of the Stark and Anti-kickback statutes does
not sufficiently state a claim under the FCA. It is the submission and
payment of a false . . . claim and false certification of compliance with
the law that creates FCA liability.” U.S. ex rel. Mastej v. Health Mgmt.
Assocs., Inc., 591 F. App’x 693, 706 (11th Cir. 2014); see also UrquillaDiaz, 780 F.3d at 1045. Therefore, because AFC certified that it complied
Page 23 of 46

with the Stark Law in its submissions to Federal programs, it may be held
liable for a violation of the FCA based on those submissions.
AFC alleges that it did not violate the Stark Law because Dr. McCoy
received no financial benefit from referring his patients to AFC’s labs for
testing. AFC points to Dr. McCoy’s employment contract, which excluded
“all Medicare or Medicaid charges for ‘designated health services’ within
the meaning of [the Stark Law]” from his compensation. (Doc. 102-17.)
Salters does not dispute that Dr. McCoy’s compensation did not violate
the Stark Law as to Medicare patients. However, Salters argues that the
compensation did include impermissible payments for Medicaid, TriCare,
and Railroad Medicare patients. In support of this contention, Salters
provides deposition testimony from Hawley which contains the following
exchange:
Q: When you say [the compensation formula excluded]
Medicare, did it also [exclude] Medicaid and TriCare?
A: No, but I’m not—as I recall, he didn’t see Medicaid in our
facilities, but I, I don’t know what he did on TriCare.
Q: But the formula did not—
A: It did not back it out.
(Hawley Dep. at 196.) She also provides billing analyses that shows that
Medicare and Railroad Medicare were accounted separately by AFC. (Doc.
106 at Ex. 104 pgs. 11-101.)

Page 24 of 46

Salters further cites to an affidavit from Mark Garst (“Garst”), who is
the director of the AFC CPC, which states that one patient, “Wilma H.,”
was a Railroad Medicare patient who underwent a blood allergy test at
AFC based on Dr. McCoy’s referral. (Doc. 102-2 at ¶ 15.) Salters alleges
that

claims submitted to Railroad Medicare

include

a required

certification of compliance with the Stark Law. While AFC claims that the
Stark Law applies only to Medicare, it does not dispute that it certified
compliance with the law when it submitted its claims under Railroad
Medicare.
Instead, AFC claims that it did not submit false claims based on a
Stark Law violation because a number of Stark Law exceptions apply.
First, AFC alleges that the “fair market compensation” exception applies.
42 C.F.R. § 411.357(l). In order to meet this exception, AFC must show
that “[t]he arrangement is in writing, signed by the parties, and covers
only identifiable items or services, all of which are specified in writing.”
Id. AFC presents a copy of its contract for Dr. McCoy’s services as
evidence that the arrangement meets the fair market compensation
exception. (Doc. 102-17.)
The contract is in writing and signed by Irwin and another individual,
whose name is not indicated. (Id. at 9-10.) AFC alleges that the contract
Page 25 of 46

was between AFC and Dr. McCoy’s professional corporation. However, the
contract contains a blank space where the name of the professional
corporation (“P.C.”) should be, thus stating that the contract is between
“[AFC] and _________ P.C. for the services of Ronald C. McCoy.” (Id. at
1.) Further, the signature page simply contains an unidentified signature,
and leaves the space for the P.C.’s name empty. (Id. at 9.) AFC has
provided no evidence that the signature on the contract belongs to an
individual who has the authority to bind the P.C., and has therefore
failed to show that “[t]he arrangement is in a writing[] signed by the
parties,” as required by 42 C.F.R. § 411.357(l). As AFC has not established
that the “fair market compensation” exception applies, summary
judgment cannot be granted based on that exception.
AFC also argues that its relationship with Dr. McCoy meets the
“personal services arrangement” exception. This exception requires an
“arrangement [] set out in writing, [] signed by the parties [that]
specifies the services covered by the arrangement.” 42 C.F.R. §
411.357(d). As described above, AFC has not shown that the contract is
signed by the parties and therefore has not met its burden of showing
that the “personal services arrangement” exception applies.

Page 26 of 46

Lastly, AFC claims that it did not violate the Stark Law because Dr.
McCoy’s

referrals

qualify

for

the

“[i]n-office

ancillary

services”

exception. 42 C.F.R. § 411.355(b). In order to qualify for this exception, a
number of requirements must be met. First, AFC must show that the
services “are furnished personally by one of the following individuals: . . .
[a]n individual who is supervised by the referring physician, or, if the
referring physician is in a group practice, by another physician in the
group practice, provided that the supervision complies with all other
applicable Medicare payment and coverage rules for the services.” Id.
AFC argues—and Salters does not dispute—that AFC is a group practice
within the meaning of the Stark Law. Therefore, in order to meet the inoffice ancillary services exception, AFC must show that a “physician in
the group practice” supervised or furnished the testing. However, AFC
argues that blood allergy tests are exempted from this requirement,
because they are listed in the CPT under the 80000 series. See 42 C.F.R. §
410.32(b)(2)(vi) (exempting “[p]athology and laboratory procedures listed
in the 80000 series of the [CPT] published by the American Medical
Association [‘AMA’]” from supervision requirements). Further, AFC
correctly argues that a doctor’s office staff may furnish diagnostic
laboratory tests to his patients. See 42 C.F.R. § 410.32(d).
Page 27 of 46

AFC claims that it fits the supervision requirement for the “in-office
ancillary services” exception because it complies with Medicare’s
supervision requirements. However, 42 C.F.R. § 411.355(b) does not state
that complying with Medicare’s supervision requirements is enough to fit
the exception. Instead, it describes a specific situation in which an entity
would be excepted from the Stark Law’s requirements. AFC has not
provided any evidence that the blood tests were performed under the
supervision of any of AFC’s physicians. Therefore, it does not fit the inoffice ancillary services exception, and summary judgment cannot be
granted on that basis.
For the reasons stated above, AFC’s arguments as to its purported
violation of the Stark Law in relation to referrals made by Dr. McCoy fail.
Therefore, viewing the evidence in the light most favorable to the nonmovant, issues of fact remain as to whether AFC violated the FCA by
submitting claims in violation of the Stark Law. Summary judgment as to
the claims based on violations of the Stark Law is due to be denied.
E. Anti-Kickback Statute
AFC moved for summary judgment on Salter’s claims under the AntiKickback Statute. Salters does not mention the Anti-Kickback Statute in
her memorandum in opposition to AFC’s motion for partial summary
Page 28 of 46

judgment. 2 Because “grounds alleged in the complaint but not relied
upon in summary judgment are deemed abandoned,” Salters’s claims
against AFC under the Anti-Kickback Statute are deemed abandoned.
Resolution Trust Corp., 43 F.3d at 599.

Summary judgment in AFC’s

favor is due to be granted as to Salters’s claims under the Anti-Kickback
Statute.
F. After-Hours Billing Code
Salters concedes, in her memorandum in opposition to AFC’s motion
for partial summary judgment, that “there is insufficient evidence of
false claims to overcome summary judgment on the after-hours billing
claim.” (Doc. 105 at 28.) Therefore, summary judgment in AFC’s favor is
due to be granted as to Salters’s claims for improper after hours billing.
G. Global Surgery Period
Salters claims that AFC violated the FCA by improperly billing for visits
which should have been included in the Global Surgery Period. Medicare
compensates surgical procedures through a Global Surgery Package (“GS
Package”). MCPM Ch. 12 at § 40.1. These packages include compensation
for various “services related to the surgery when furnished by the

2

In her recitation of facts, Salters does state that in billing Medicare, providers
certify compliance with Stark and Anti-Kickback Statute. However, she does not
respond to AFC’s arguments that it is not liable under the Anti-Kickback Statute.

Page 29 of 46

physician who performs the surgery” performed during the Global Surgery
Period. Id. The Medicare Fee Schedule Data Base sets out the appropriate
Global Surgery Period for surgical procedures—generally zero, ten, or
ninety days after a surgery.3 Id. Therefore, Medicare will not pay, and
providers cannot bill, for services that are included in the GS Package. Id.
at § 40.2. Services improperly billed during the Global Surgery Period are
thus “false or fraudulent claim[s]” which can lead to liability under the
FCA. See U.S. ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1302 & n.
2 (11th Cir. 2010) (plaintiff asserting false claims based on violation of
MCPM); see also U.S. ex rel. Prather v. Brookdale Senior Living Cmtys.,
Inc., 838 F.3d 750, 780 (6th Cir. 2016) (McKeague, J., concurring in part
and dissenting in part) (basing analysis of FCA claim on MCPM guidelines).
Salters provides evidence that AFC submitted claims for services that
Dr. Park performed during the Global Surgery Period. First, Salters
presents records of visits from patient BJF, who was seen for an excision
of a benign or malignant breast tumor with reconstruction on May 21,
2009, which has a ninety-day Global Surgery Period. Dr. Park also billed
for an office visit for BJF for the same day as the surgery, and for another
office visit on June 4, 2009. The June 4, 2009 visit was for an “open
3

The MCPM instructs that the Global Surgery Period should also include the day of the
surgery and—for major procedures—the day before the surgery.

Page 30 of 46

wound of the breast without mention of complication.” Medicare was
further billed another office visit for BJF with the same diagnosis on June
18, 2009. Second, Salters provides records of billing for patient MH, who
was operated on by Dr. Park on November 16, 2010, for “excision of
malignant lesion including margins, trunk, arms or legs excised diameter
over 4 cm,” which has a Global Surgery Period of ten days. However, on
November 22, 2010, AFC billed for an office visit for MH with a diagnosis
of “unspecified malignant neoplasm of the skin upper limb, including
shoulder,” which Salters alleges is the same diagnosis as the date of
surgery.
AFC does not dispute that it billed for these visits during the
Global Surgery Period. Instead, it claims that Salters should not be
allowed to assert these claims because she did not advance them in her
complaint. AFC alleges that the only claims in Salters’s complaint related
to the Global Surgery Period asserted that AFC failed to use the “24”
modifier properly. However, Salters’s complaint specifically alleges that
“Dr. Park routinely charged additional office visits for follow-ups and
hospital visits, which were covered by the original surgical charge.” (Doc.
1 at 18.) Therefore, Salters’s claims for improper billing of visits during
the Global Surgery Period are properly before this Court. Further, AFC
Page 31 of 46

provides no evidence that its billing during the Global Surgery Period was
proper. Thus, viewing the evidence in the light most favorable to the
non-movant, Salters has established that AFC presented false or
fraudulent claims under the FCA.
However, false claims only lead to liability under the FCA if they are
knowingly presented. 31 U.S.C. § 3729(a)(1)(A). Salters appears to allege
that Dr. Park personally submitted these claims with knowledge of their
falsity. She also claims that AFC knowingly presented these claims.
“Knowingly” is defined in the FCA as meaning that “a person, with
respect to the information—(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or falsity of the information;
or (iii) acts in reckless disregard of the truth of the information.” 31
U.S.C. § 3729 (b)(1). There is no requirement of a showing of “specific
intent to defraud.” Id.
In support of her claim, Salters provides evidence that Dr. Park
completed his own superbill, and that he was responsible for the
accuracy of the claims that he presented for payment. Further, Dr. Park’s
deposition testimony establishes that he knew that Global Surgery Periods
existed but never researched the length of those periods. Thus, Salters
concludes, Dr. Park filled out his own superbill while being willfully
Page 32 of 46

ignorant of the proper Global Surgery Periods and their effects on billing.
AFC, however, provides Dr. Park’s deposition testimony that he was not
involved in billing, and did not know about it, and was simply involved in
patient care. He stated that he “put down what [his] activity has been
with the patient, and it’s up to the other departments to determine the
billing.” (Park Dep. at 42.)
Salters also provides evidence that Dr. Park’s wife, Kay Park (“Kay”),
who worked at AFC, knew that Salters believed the billing was improper,
but instructed other AFC employees to continue this improper practice.
This evidence includes emails between Salters and Kay, in which Salters
describes her concerns with Global Surgery Periods, and points Kay to a
listing of the periods and corresponding surgeries.4 Salters also advances
an email from Diana Hensley (“Hensley”), an AFC employee, which states
that “I read an email from Kay stating that per Dr. Irwin, ‘[w]e are also
supposed to charge an office visit on the follow-up visits even if it is
within the [Global Surgery Period].’” (Pl. Ex. 6 at AFC 400512.) Further,
Johansen’s deposition testimony confirms that Irwin’s policy was that
doctors should bill for their office visits during the Global Surgery Period.
However, Johansen testified that Irwin’s policy was that doctors should
4

Salters emailed directions for finding the Global Surgery Periods on March 9, 2009.

Page 33 of 46

bill for all their visits and procedures, and the auditing department
should remove the charges for services that were conducted during the
Global Surgery Period.
According to Salters’s testimony, Kay was also responsible for auditing
Dr. Park’s claims. AFC disputes this contention, claiming instead that the
billing was “handled by [Hensley], and audited by the AFC auditors.”
(Doc. 111 at 14.) As evidence that Kay did not audit Dr. Park’s claims,
AFC points to an email chain, which includes an email from Liann
Westwood (“Westwood”) to Hensley, in which Westwood spoke about her
own impending maternity leave, stated that Salters would check
Hensley’s work while she was on leave, and instructed Hensley to “try to
encourage [Dr. Park] to get you [his] hospital charges in a timely
manner.” (Doc. 111-1 at AFC 502364.) It also includes an email in which
Salters directed Westwood on how to fix some mistakes that she was
allegedly making. AFC claims that these emails prove that Hensley was in
charge of billing for Dr. Park, that Westwood audited the charges, and
that Westwood reported to Salters.
Viewing the facts in the light most favorable to the non-movant,
Salters has provided evidence that Kay billed for Dr. Park, that she was
aware of the Global Surgery Periods, and that false claims were billed for
Page 34 of 46

Dr. Park after Kay became aware of the Global Surgery Periods. While
AFC disputes this evidence, the sufficiency of the evidence is a question
for the jury, and therefore, summary judgment as to billing during the
Global Surgery Periods is due to be denied.
AFC also alleges that it did not misuse the 24 modifier when billing
during the Global Surgery Periods. However, in her response to AFC’s
motion, Salters fails to mention any misuse of the 24 modifier for billing
during the Global Surgery Period. Therefore, because “grounds alleged in
the complaint but not relied upon in summary judgment are deemed
abandoned,” Salters’s claims against AFC based on the misuse of the 24
modifier during the Global Surgery Period are deemed abandoned.
Resolution Trust Corp., 43 F.3d at 599. Summary judgment as to claims
based on the misuse of the 24 modifier is due to be granted.
H. Level One Office Visit Billing for Injection Only Patient
Encounters
In her complaint, Salters alleges that AFC violated the FCA by
“charging a Level 1 office visit, Code 99211, when a patient came in for
just a shot or vaccination and saw only a nurse or nurse assistant.” (Doc.
1 at 16.) Salters claims that injection only visits should be billed under an
injection code, and that AFC overcharged Medicare, Medicaid, Tricare
and Champus by misbilling these visits. However, AFC provides evidence
Page 35 of 46

that an injection-only code and a level one office visit code are
compensated at “virtually identical” rates. (Doc. 102-2 at ¶ 17.)
Therefore, AFC claims, any misbilling that allegedly occurred did not
result in overpayments. AFC also alleges that it did not knowingly submit
bills containing the wrong code, and cites to apparently conflicting
sections in the MCPM to support this assertion.
Salters does not respond to AFC’s argument about compensation
levels, and also does not provide any evidence that AFC submitted these
claims with knowledge of their falsity. Instead, Salters attempts to base
this claim on a reverse false claim theory, asserting that AFC had a duty
to return overpayments it received as a result of its misbilling. In her
Supplemental Evidentiary Submission (Doc. 116), Salters provides an
expert report that concludes that AFC received overpayments of $261.29
in relationship to its immunization claims. (Doc. 116 at Ex. 5.) However,
none of those overpayments resulted from a billing of Code 99211 and
therefore are irrelevant to this claim.

Further, because AFC provides

evidence that it received no overpayments from its misbilling because the
compensation rates were “virtually identical” and Salters does not
provide any evidence to the contrary, she cannot make out a claim based

Page 36 of 46

on a reverse false claim theory. 5 Without an overpayment, there cannot
be a duty to return an overpayment. See Matheny Medco, 671 F.3d at
1222 (setting out the elements for reverse false claim liability). Viewing
the evidence in the light most favorable to the non-movant, Salters
cannot make out a claim for violation of the FCA based on level one
office billing for injection-only office visits. Summary judgment in AFC’s
favor is due to be granted as to this claim.
I. Unbundling
Salters claims that AFC knowingly submitted unbundled claims—i.e.
billed for them separately when they should have been billed together.
As evidence of AFC’s scienter, she submits her own testimony that she
discussed her concerns about unbundling with Irwin, who replied that
“this was something he had always done . . . and there was nothing
wrong with it and it would continue to be unbundled.” (Salters Dep. at
219-20.) She also stated that “Irwin’s position . . . was that AFC was
going to unbundle and write off what the insurance companies . . .
caught,” and that AFC had an “unbundling report,” which listed “the

5

Salters does point to deposition testimony from Johansen that states that AFC
simultaneously billed for both the office visit and the injection administration code.
However, Johansen’s testimony was about unbundling of injection codes when a
patient was also seen by a doctor, not about injection-only visits. Therefore, his
testimony is irrelevant to this claim.

Page 37 of 46

amounts that [were] written off because of bundling or unbundling.” (Id.
at 221-22.)
AFC responds, asserting that Medicare did not provide clear direction
about bundled/unbundled services, and therefore, AFC could not have
knowingly submitted false claims in this area. Each separate instance of
unbundling will be addressed individually below.
1. Venipunctures
A venipuncture involves collecting a blood sample by “inserting into a
vein a needle with syringe or vacutainer to draw the specimen.” MCPM
Ch. 16 § 60.1. In her complaint, Salters alleges that AFC “had a practice
of unbundling the lab draw fee and the injection administration codes
36415 and 90772 (2008 and before) and 96372 (2009)” which should have
been billed as part of an office visit. (Doc. 1 at 17.) In response, AFC
asserts that venipunctures are not bundled services. As evidence for this
assertion, AFC claims that MCPM does not mention venipunctures in its
section on bundled services. See MCPM Ch. 12 § 20.3 (section on bundled
services referring to routinely bundled procedures, injection services, GS
Packages, intra-operative and/or duplicative procedures, and EKG
interpretations).

Page 38 of 46

AFC also argues that the MCPM specifically allows physicians to charge
for specimen drawing in some circumstances. MCPM Ch. 16 § 60.1.1.
Further, AFC points to testimony from Salters’s expert, which states that
“as it pertains to unbundling of [venipunctures] . . . we did not find that
[Salters’s] allegation in that case was legitimate.” (Melnykovych Dep. at
79.) Lastly, AFC asserts that through 2013, code 36415 for venipunctures
was not listed as a bundled code in the Medicare Newsline published by
Cahaba Government Benefit Administrators (“CGBA”). 2013 Bundled
Services, Medicare B Newsline (Cahaba Gov’t Benefit Adm’rs, LLC,
Birmingham, Ala.), March 2013 at 11-12.
However, Salters provides her deposition testimony—as a medical
coder—that if a venipuncture was done during an office visit, and the test
was done at an AFC lab, AFC should have only billed for an office visit and
not for the blood draw. She also claims that the MCPM, though it does not
list venipunctures in the bundled services section, does state that
“[s]eparate payment is never made for routinely bundled services and
supplies.” MCPM Ch. 12 § 20.3.
Further, Salters indicates that though the MCPM allows a specimen
collection fee, this only applies when “(1) it is the accepted and
prevailing practice among physicians in the locality to make separate
Page 39 of 46

charges for drawing or collecting a specimen, and (2) it is the customary
practice of the physician performing such services to bill separate charges
for drawing or collecting the specimen.” MCPM Ch. 16 § 60.1.1. Salters
claims that this language does not apply to blood draws because it is
“[c]ommon practice . . . for nurses, not physicians, to perform blood
draws.” (Doc. 105 at 36.) AFC responds that physicians bill Medicare for
medical services performed by their staff, as they are not generally
involved in services such as blood draws, vaccine administrations, and
injections.
Therefore, while AFC provides evidence that venipunctures were not
listed as bundled codes in the Manual or in CGBA’s newsletter—which was
published after these claims were submitted—Salters cites to language in
the Manual which provides that “routinely bundled” claims are not paid
for separately. Viewing the evidence in the light most favorable to
Salters, there remains a question of fact about whether venipunctures
are “routinely bundled” claims. Therefore, the question of whether AFC
submitted false claims for unbundled venipunctures will be determined
by the jury.
AFC also claims that even if it submitted false claims for unbundled
venipunctures, it did not do so knowingly. In support of this assertion, it
Page 40 of 46

provides deposition testimony from Johansen which states that he
believed that “submitting a separate charge for a blood draw along with
the office visit by the physician is appropriate in all circumstances to
Medicare.” (Doc. 94-3 at 87-88.) However, Salters’s testimony that Irwin
intended to submit unbundled claims, apparently without checking their
legitimacy, and then simply “write off” the ones that insurance
companies did not accept, raises the possibility that AFC billed with
“deliberate ignorance of the truth or falsity of the information” or with
“reckless disregard of the truth of the information.” 31 U.S.C. §
3729(b)(1). Thus, viewing the evidence in the light most favorable to the
non-movant, there is a material dispute of fact as to scienter, and
summary judgment as to this claim is due to be denied. See UrquillaDiaz, 780 F. 3d at 1061 (holding that existence of scienter is a jury
question).
2. Injection Administration
Salters claims that AFC improperly billed Federal payors for an
injection administration fee—codes 96372 and 90772—which should have
been bundled with the office visit. AFC moved for summary judgment,
claiming that it properly billed for injection administrations in
conjunction with office visits, and citing the MCPM to support this
Page 41 of 46

contention. In support of her assertion, Salters provides her testimony
that Medicare didn’t pay for an injection administration and for an office
visit separately unless modifier 25 was added. (Salters Dep. at 61-62.)
This modifier, according to Salters, is only properly added if an injection
was administered for a separate diagnosis than the diagnosis attached to
the original office visit. (Id. at 178-79.) According to Salters, AFC misused
this modifier, and therefore, unbundled injection administrations, billing
separate diagnosis codes for what she believes were the same problems.
(Id. at 178-80.) However, she admits that this contention is based on her
opinion and her “reading the [medical] record.” (Id.)
Salters also asserts that AFC had a policy and trained its employees to
routinely bill for office visits that included injection administrations by
adding the separate diagnosis modifier. (Id. at 177-80.) As evidence of
this policy, she provides an email she sent to Valencia McAdory
(“McAdory”), a fellow AFC employee, which directs her to “not approve
any claims that have the 96372 Admin. Fee without adding the ‘25’
Modifier on the Office Visit.” (Pl. Ex. 46.)
The MCPM states that
CPT code 99211 [office visit] cannot be paid if it is billed with
a drug administration service . . . Therefore, when a
medically necessary, significant, and separately identifiable
Page 42 of 46

E/M service (which meets a higher complexity level than CPT
code 99211) is performed, in addition to one of these drug
administration services, the appropriate E/M CPT codes should
be reported with modifier -25 . . . For an E/M service provided
on the same day, a different diagnosis is not required.
MCPM Ch. 12 § 30.6.7. This section makes it clear that Medicare will not
pay for an office visit coded at 99211 in conjunction with a drug
administration service. 6 Instead, it will only pay for an office visit “which
meets a higher complexity level than CPT code 99211,” billed with
modifier 25. However, despite Salters’s allegations to the contrary, the
MCPM also makes it clear that “[f]or an [office visit] provided on the
same day, a different diagnosis is not required.”
Salters’s claims that AFC required its coders to routinely add a 25
modifier when billing injection codes with an office visit do not amount
to a claim of wrongdoing, because the MCPM requires that all claims for
office visits which are billed in conjunction with an injection be coded
with a 25 modifier. AFC can only be held liable for billing false claims if
it fraudulently coded office visits as “meet[ing] a higher complexity level
than CPT code 99211,” when there was not a “medically necessary,
significant, and separately identifiable E/M service.”
6

The abbreviation “E/M” refers to Evaluation and Management Services, and
generally relates to an office visit by a patient. See Dep’t of Health & Human Servs.,
Ctrs. For Medicare & Medicaid Servs., ICN 006764, Evaluation and Management
Services (2016).

Page 43 of 46

The only evidence Salters provides to show that AFC was improperly
billing these office visits is a chart produced by AFC, which purports to
show “injection administration . . . when billed with an office visit for
Medicare, Medicaid, and Tricare Claims.” (Pl. Ex. 27.) This chart only lists
one instance of code 99211 billed in conjunction with an injection
administration code. In accordance with the MCPM, the chart shows a
payment amount of $0 for this visit, presumably because it was misbilled.
Further, Salters’s expert’s report did not find any misbilling for injection
administration codes that contained the 25 modifier. (Doc. 116 at Ex. 5 &
6 to Ex. O.) Therefore, viewing the evidence in the light most favorable
to the non-movant, Salters did not provide any evidence that AFC
presented fraudulent claims which unbundled injection administrations.
Summary judgment as to this claim is due to be granted in AFC’s favor.
3. Vaccine Administration
Salters alleges that “AFC also unbundled vaccination injections from
office visits that should have been billed simply as part of the office visit.
The codes for vaccinations are 90471 and 90472.” (Doc. 1 at 17.) AFC,
however, cites to the MCPM, which states that
If a physician sees a beneficiary for the sole purpose of
administering the influenza virus vaccine, the pneumococcal
vaccine, and/or the hepatitis B vaccine, they may not
Page 44 of 46

routinely bill for an office visit. However, if the beneficiary
actually receives other services constituting an “office visit”
level of service, the physician may bill for a visit in addition to
the vaccines and their administration, and Medicare will pay
for the visit in addition to the vaccines and their
administration if it is reasonable and medically necessary.
MCPM Ch. 18 §10.2.
Salters provides no evidence that AFC violated this rule. Instead, she
presents her expert report, which does not contain proof of any
unbundling for codes 90471 and 90472. (Doc. 116 at Ex. 7 & 8 to Ex. O.)
Further, the expert testified that she did not find any unbundling related
to these codes. (Melnykovych Dep. at 78-84 & 95.) Viewing the evidence
in the light most favorable to the non-movant, there is no evidence that
AFC

presented

falsely

unbundled

claims

related

to

vaccination

administrations. Summary judgment as to this claim is due to be granted
in AFC’s favor.
4. Pulse Oximetry
Salters concedes that summary judgment in AFC’s favor is due to be
granted as to this claim.
J. Conclusion
For the reasons stated above, AFC’s motion for partial summary
judgment is due to be GRANTED in part and DENIED in part. Summary
judgment in AFC’s favor is due to be granted as to Salters’s claims based
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on billing for the Ear Popper, violation of the Anti-Kickback Statute,
billing for afterhours claims, billing for injection-only claims, and
unbundling of injection administration, vaccine administrations, and
pulse oximetry. Summary judgment as to Salters’s claims for billing for
locum tenens physicians, violations of the Stark Law, billing of office
visits during the Global Surgery Period, and venipuncture unbundling is
due to be denied. A separate order consistent with this opinion will be
entered
DONE and ORDERED this 18th day of April 2017.

_____________________________

L. Scott Coogler
United States District Judge
186291

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