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United States ex rel. Deane v. Dynasplint Systems, Inc.

United States District Court, E.D. Louisiana

February 24, 2015

UNITED STATES OF AMERICA, ex rel., MEREDITH MONOHAN DEANE,
v.
DYNASPLINT SYSTEMS, INC. and GEORGE HEPBURN, Section

ORDER AND REASONS

KURT D. ENGELHARDT, District Judge.

Presently before the Court is the Government's Motion for Partial Summary Judgment (Rec. Doc. 80) and Defendants' Cross-Motion for Partial Summary Judgment (Rec. Doc.82). For the reasons stated herein,

IT IS ORDERED that the Government's Motion (Rec. Doc. 80) and Defendants' Motion (Rec. Doc. 82) are hereby GRANTED IN PART and DENIED IN PART in that the Court finds that certification does, in fact, implicate the durable medical equipment ("DME") prohibition contained in 42 U.S.C. § 1395x(n); however, the presumption that a facility is "primarily engaged" in providing the statutorily required level of care is rebuttable.

I. Background

Defendants, Dynasplint Systems, Inc. ("Dynasplint") and its president, George Hepburn ("Hepburn"), supply DME, specifically the product called the Dynasplint System ("the Splint"), to persons participating in Medicare. (Rec. Doc. 80-3). Meredith Deane, a former employee at Dynasplint, filed this qui tam action in July of 2010 alleging, inter alia, claims that Dynasplint had a policy of submitting claims for payment for Splints provided to beneficiaries covered under Medicare Part A and then billing Part B for payment. (Rec. Doc. 1). The claims allege violations of the False Claims Act and its state law equivalents. ( Id. ). The United States Government joined the suit and filed a complaint in intervention alleging violations of the False Claims Act as well. (Rec. Doc. 20).

A person is liable under the False Claims Act who:

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government... a false or fraudulent claim for payment or approval...; [or]
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government...
is liable to the United States Government for a civil penalty of not less than $5, 000 and not more than $10, 000, plus 3 times the amount of damages which the Government sustains because of the act of that person....

United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 901 (5th Cir. 1997) (citing 31 U.S.C. § 3729(a)). "[C]laims for services rendered in violation of a statute do not necessarily constitute false or fraudulent claims under the FCA." Id. Where legitimate grounds for disagreement over the scope of regulatory provision exists, a person cannot be held to have knowingly presented a false claim. United States v. Southland Management Corp., 326 F.3d 669, 684 (5th Cir. 2003) (citing United States ex rel. Lamers v. City of Green Bay, 168 F.3d. 1013, 1018 (7th Cir. 1999) (declaring "imprecise statements or differences in interpretation growing out of a disputed legal question are similarly not false under the FCA.")).

The Government and Dynasplint each filed motions for partial summary judgment on the issue of whether Medicare-certified SNFs are categorically ineligible for Part B DME coverage under the applicable law. (Rec. Doc 80-3 at p. 1; Rec. Doc. 82-1 at p. 7).

II. Law & Analysis

A. Legal Principles

1. Summary ...


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