United States v. R&F Properties of Lake County, Inc.

Karyn Walker (plaintiff) was a nurse practitioner at Leesburg Family Medicine (LFM), currently known as R&F Properties of Lake County (R&F) (defendant). At LFM, Walker, and other nurses, administered medical services to patients without a physician being physically present in the medical office. Physicians were available by phone or pager. LFM filed reimbursement claims with Medicare for Walker’s services and classified them as “services incident to the service of a physician.” Services billed as “services incident to the service of a physician” received a higher rate of Medicare reimbursement than services billed under a nurse’s Unique Provider Identification Number (UPIN). In January 2002, the Medicare statute was amended to clarify that “services incident to the service of a physician” meant services provided under the direct, in-person supervision of a physician. Even after the January 2002 amendment, LFM continued to file Medicare reimbursement claims under “services incident to the service of a physician” for services provided by a nurse without the in-person supervision of a physician. Walker, as a qui tam relator on behalf of the United States (plaintiff), filed suit under the False Claims Act for LFM’s fraudulent billing practices both before and after the January 2002 Medicare amendment. Walker produced evidence of Medicare publications, training manuals, and seminars reviewed and attended by LFM personnel demonstrating that the January 2002 amendment simply codified the already-existing understanding in the Medicare-provider community that “services incident to the service of a physician” meant services rendered under the direct, in-person supervision of a physician. The district court granted summary judgment to LFM, holding that the Medicare statute could not support a false claims action because the language defining “services incident to the service of a physician” was ambiguous.