Litigation > False Claims Act/Qui Tam Defense > State FCA Resource Center > Implied False Certification FCA Claims Against Ambulatory Surgery Centers Survive Motion to Dismiss
05 Feb '15

A California federal court recently denied a motion to dismiss implied false certification claims brought under the California and federal False Claims Acts (FCA) against several ambulatory surgery centers and physicians (“defendants”) for allegedly failing to perform mandatory presurgical health assessments on patients. The court’s opinion in this case, titled United States v. AmSurg Corp., et al., Case No. 2:12–cv–02218–TLN–CKD, is notable for two reasons.

First, the court held that the plaintiffs were not required to establish that claims were actually submitted to Medicare. Instead, they had to only “allege enough facts giving rise to a reasonable expectation that discovery will reveal evidence of submitted claims.”

Second, the court held that, because defendants expressly certified compliance with “Medicare laws, regulations and program instructions” when they signed Medicare Form CMS–855B (“Form 855–B”), certification of compliance was implied with each claim for payment submitted. The court did not, therefore, reach the issue of whether the Medicare regulations at issue constitute conditions of payment, which can form the basis of an FCA claim, versus conditions of participation, which cannot. The court’s decision—if widely accepted—may render this distinction irrelevant for Medicare providers who execute Form 855-B.

The case was brought by two certified registered nurse anesthetists who worked at the defendant’s centers. Plaintiffs alleged that defendants violated the federal FCA and the California FCA by failing to comply with Medicare regulations that required defendants to perform and place in patient records (1) medical history and physical assessment (“H & P”) (2) presurgical assessment and (3) anesthetic risk assessment on patients before surgery. 42 C.F.R. § 416.42(a); 42 C.F.R. § 416.52(a). Plaintiffs alleged that the defendant physicians either did not perform an H & P and presurgical assessment, or performed them in such a cursory manner that plaintiffs did not have adequate information to properly assess whether the patient was fit to receive anesthesia or undergo surgical procedures. The complaint also alleged that defendants did not properly acquire and place patients’ H & Ps in their medical records. The complaint provided four examples of the defendant physicians’ failure to perform H & Ps and presurgical assessments on patients.

Plaintiffs also alleged that, when defendants applied to become Medicare providers, they signed Form 855–B, which includes a “certification statement” that states:

I agree to abide by the Medicare laws, regulations and program instructions that apply to this supplier. The Medicare laws, regulations, and program instructions are available through the Medicare contractor. I understand that payment of a claim by Medicare is conditioned upon the claim and the underlying transaction complying with such laws, regulations, and program instructions (including, but not limited to, the Federal anti-kickback statute and the Stark law), and on the supplier’s compliance with all applicable conditions of participation in Medicare.

Plaintiffs allege that, based on the certification in Form 855-B, each instance in which defendants submitted a claim for payment by Medicare constituted a false certification that defendants complied with 42 C.F.R. § 416.42(a) and 42 C.F.R. § 416.52(a).

Defendants moved to dismiss on two grounds. They first argued that plaintiffs did not plead their claims with sufficient specificity because they failed to identify any claims submitted to a government payor or to provide reliable indicia leading to a strong inference that claims were actually submitted. The court rejected this argument, finding that plaintiffs included specific allegations about incidents involving four patients. The court noted that plaintiffs also alleged that they observed the defendant physicians routinely failing to perform H & Ps and presurgical assessments. The court held that these allegations sufficed to “lead to a strong inference that false claims were actually submitted.” The court further held that “[a]t the pleading stage, Plaintiffs must simply allege enough facts giving rise to a reasonable expectation that discovery will reveal evidence of submitted claims.”

Defendants then argued that plaintiffs did not identify any false claims or statements material to a government payment. The court rejected this argument too. After noting that the 9th Circuit had adopted the implied false certification theory, the court found that it did not have to reach the issue of whether the Medicare regulations at issue constituted conditions of payment or conditions of participation, because defendants signed Form 855-B. By signing Form 855-B, defendants “undertook an obligation to expressly comply with Medicare regulations 42 C.F.R. § 416.42(a) and 42 C.F.R. § 416.52(a).” The court thus held that plaintiffs properly stated a claim that defendants violated the FCA under the theory of implied certification.