In U.S. ex rel. Sonyika v. ApolloMD, Inc. et al., 2021 WL 1222379 (N.D. Ga. Mar. 31, 2021), a Georgia federal court allowed a relator’s Amended Complaint alleging a fraudulent scheme involving improper billing for services rendered by Advanced Professional Practitioners (APP) in violation of the False Claims Act (FCA) and the Georgia-equivalent to proceed. The court found that the relator’s personal experience as a participant in the alleged billing scheme provided adequate indicia of reliability with respect to his “presentment claim” and his “use claim” under the FCA and claim under the Georgia State False Medicaid Claims Act that the defendants caused increase reimbursement for APP services in emergency rooms than should have been billed. On the other hand, the court dismissed claims related to violation of the AKS and non-Georgia false claims statutes.

Relator, an emergency medicine physician who worked for the defendants at various medical centers in Georgia, alleged that the defendants regularly engaged in a fraudulent billing scheme whereby claims for services rendered solely by APPs were submitted to the Centers for Medicare & Medicaid Services (CMS) for reimbursement at the full physician rate as though the patient has been seen by both an APP and a physician. In emergency rooms, Medicare will pay the full physician rate for shared visits. This is not the case in physician practices where such shared or split visits are billed at the APP rate that is 85 percent of what a physician received if the “incident to” requirements are not met. Relator alleged that at the core of this scheme was a requirement that emergency physicians sign every APP chart at the end of each shift indicating that the physician also treated the patient. This mandatory physician participation, according to relator, resulted in significantly increased payment to physicians because a physician’s compensation was directly tied to the number of patients recorded as having been treated by such physician.

In support of his claims, the relator presented a screenshot he alleged reflected his own compensation payment history, which purported to show a breakdown of payments based on mid-level provider patients and patients seen only by the relator. The relator claimed that the volume of patients reflected in this screenshot would have been physically impossible for the relator to have treated during the designated time period. The relator also provided various emails from leadership requesting or reminding physicians to attest to or sign mid-level provider charts, which the relator claimed further evidenced the alleged scheme. The court made specific mention of information submitted by the defendants to the Physician Quality Reporting System (PQRS), which the relator alleged as having raised questions among physicians as to why services they had not actually performed were attributed to them.

As noted, the court ruled that the relator’s personal knowledge of and involvement in the alleged scheme provided sufficient indicia of reliability for the presentment and use claims under the FCA. Despite the defendants’ motions that the relator had no examples of actual fraud and lacked first-hand knowledge of the defendants’ specific billing practices, the court recognized the legal standard to evaluate the defendants’ motion to dismiss was whether the relator plead with particularity the circumstances constituting fraud, meaning that the relator must plead the precise misconduct, which may be satisfied if the facts as to time, place, and substance of the alleged fraud are pled.   After citing several examples of past decisions in which the relator’s allegations satisfied the indicia of reliability standard despite failing to plead with particularity examples of false claims presented to or paid by the government, the court, noting the relator’s eight years of service at two different locations of the defendants, his “close review of his own billing and payment data,” and the email correspondence from the defendants’ leadership the relator submitted as evidence of the alleged scheme, allowed the case to proceed with respect to the “presentment claim” and “use claim” under the FCA. The court similarly allowed the relator to move forward with his Georgia state law claims, but dismissed his claims in other states where the defendants’ policies could have differed.

While the outcomes of the relator’s surviving claims have yet to be determined, this case is illustrative of the concerns providers can face in billing for non-physician services. As noted above, APPs are typically paid 85 percent of what a physician receives. Medical practices that bill for these services under the physician’s provider number can lead to audit, potential overpayment recovery, and significant FCA liability if the practice bills for or receives an additional 15 percent Medicare reimbursement than the practice is otherwise entitled to bill or receive. In this case, which pertains to an emergency room setting and not an office setting, billing for and receiving the higher physician rate for patient services rendered by an APP requires the physician and the APP to both treat the same patient as part of a split/shared visit. Because there are different rules for split/shared visits depending on the setting, providers need to be careful to ensure they engage in appropriate billing practices.

It is of note that the U.S. government and at least one state government declined to intervene after the relator filed his initial complaint. When the government declines to intervene in an FCA case, it is not an uncommon practice to see defendants focus FCA defenses in motions to dismiss. That the relator’s FCA claims have proceeded without government involvement and survived a subsequent motion to dismiss should not be overlooked, and a successful outcome for the relator in this case could embolden other potential relators to pursue claims even in the absence of government backing.  If the relator in this case succeeds in his FCA claims, APP provider billing practices could become subject to greater scrutiny by potential relators, the U.S. Department of Justice and state agencies, with defendants facing significant penalties if found to be non-compliant. Medical practices and physician practice management companies should monitor and regularly evaluate their provider billing practices and educate providers to ensure ongoing compliance. McGuireWoods will continue to monitor the progress of this case and provide further updates as the matter unfolds.