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United States ex rel. Mikes v. Straus

Citation. United States ex. rel. Mikes v. Straus, 274 F.3d 687, 2001)
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Brief Fact Summary.

Dr. Patricia S. Mikes (Plaintiff) brought a qui tam suit against Dr. Marc J. Straus (Defendant), and others, claiming that defendants submitted false requests for reimbursement to the government for spirometry services.

Synopsis of Rule of Law.

A false certification of compliance with a regulation or statute cannot be used as the basis of a qui tam action pursuant to the False Claims Act if payment is not conditioned on that certification.


Dr. Patricia S. Mikes (Plaintiff), a board-certified pulmonologist, was hired by Dr. Marc J. Straus (Defendant) as part of a physician’s partnership called Pulmonary and Critical Care Associates.  Plaintiff was hired specifically to provide pulmonary and critical care services.  However, she was terminated after discussing her concerns regarding invalid spirometry tests being conducted in the office with Defendant.  Spirometry encompasses various breathing tests which allow the doctors to evaluate the overall pulmonary or lung function of a patient.  Plaintiff had observed that the partnership’s failure to calibrate the Spirometry instruments caused the results to be false and unreliable.  Plaintiff filed suit for retaliatory termination and wages unlawfully withheld.  Plaintiff also initiated this qui tam suit pursuant to the False Claims Act alleging the partnership had submitted false Medicare reimbursement requests.  The false charges were for the allegedly false spirometry tests and for false referrals for Magnetic Resonance Imaging (MRI) where the partnership held a financial interest in the facilities that provided the testing.  The district court granted summary judgment in favor of the defendants finding Plaintiff’s claims did not satisfy the standard for constituting fraudulent certification and finding that the MRI claims were vexatious.  This appeal ensued.


Can a false certification of compliance with a regulation or statute be used as the basis of a qui tam action pursuant to the False Claims Act if payment is not conditioned on that certification?


(Cardamone, J.)  No.  A false certification of compliance with a regulation or statute cannot be used as the basis of a qui tam action pursuant to the False Claims Act if payment is not conditioned on that certification.  See 42 U.S.C. § 424, and U.S.C. § 1395y(a)(1)(A).  Plaintiff alleged that the spirometry testing Defendant was performing did not satisfy the clear medical standard of care for performance of these tests as the American Thoracic Society (ATS) outlined.  Plaintiff maintains that when Defendant certified the claims for Medicare reimbursement for having performed these tests that he must have falsified the certification because the testing failed to meet the applicable medical standard.  However, it must be demonstrated the services were not medically indicated or necessary in order to constitute fraud with the certification for Medicare reimbursement.  Plaintiff simply confuses the applicable standards.  There is no qualitative standard that applies to the certification for reimbursement, and Plaintiff does not establish that the testing ordered was not medically necessary.  This is a necessary distinction because to hold otherwise would federalize medical malpractice actions.  Plaintiff also can not imply fraud utilizing the Medicare statute by claiming that the charges were not reasonable and necessary for the diagnosis and treatment of the illness or injury pursuant to the Medicare statute.  The Medicare statute does add a qualitative standard as to the care actually delivered in 42 U.S.C. § 1320c-5(a).  Under that section the care must be medically necessary and the professionally recognized standard regarding the quality of care must be met.  While Plaintiff may correctly argue that the ATS standard has not been met, the Medicare statute does not condition payment on compliance with § 1320c-5(a) so the billing cannot be constituted as being fraudulent.  The government, in its amicus brief, claims the district court erred in its decision for failing to recognize the alternative theory that a claim for a “worthless” service does constitute fraud under the False Claims Act and does not depend on the false certification theory.  Because the spirometry tests were basically “worthless” due to Defendant’s failure to make sure their compliance with the applicable standard of care, then he was billing the government for worthless services, which is also fraudulent.  The government is correct that the worthless service claim is distinct from the false certification theory.  However, such a claim carries with it an element of scienter.  The party must be seeking reimbursement knowing the test was worthless.  The claim cannot be predicated on a party’s negligence or innocent mistake.  Plaintiff failed to establish that Defendant knowingly sought reimbursement for worthless medical testing so this claim also fails.  Summary judgment is affirmed.


A qui tam suit procedurally allows a party to raise another party’s rights that would otherwise lack standing to sue.  Accordingly, Plaintiff could file suit on behalf of the government claiming the government was being defrauded by being charged for services that were not being provided.  This procedure is allowed by the False Claims Act (FCA) to encourage whistle-blowing, and the government can choose to join and prosecute the suit or allow the individual party to proceed.  Either way, as an incentive to report the fraud, the whistle-blower is allowed to collect a portion of the funds recovered for the government.  Estimations indicate that up to 10 percent of money spent on health care annually in this country is collected fraudulently.  Therefore, of the 1.5 trillion dollars spent annually on health care, health care providers fraudulently bill and collect up to $150 billion.  There must be a showing that the billing itself was somehow fraudulent in order to meet the standards for violating the FCA and the Medicare statute.  Regarding the delivery of the health care services themselves, no qualitative standard is applied.  The FCA is particularly useful in situations where reimbursement is requested for “ghost patients” or exams, testing, or procedures that had not been performed on any patient.

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