Flood v. Laser Spine Institute, LLC

Middle District of Florida, flmd-8:2017-cv-01672

COMPLAINT against Laser Spine Institute, LLC with Jury Demand Filing fee $ 400, receipt number 44664 filed by Mark A. Flood.

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0 PageID 1 file UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA,FLORIDA 2017 Jll 12 flMfO.-39 UNITED STATES OF AMERICA, m&SVSS, ex rel. TAMPA.FLORIDA " MARK A.FLOOD,D.O., CASE NO.; Plaintiffs, DIVISION: V. LASER SPINE INSTITUTE, LLC, FILED IN CAMERA UNDER SEAL Defendants. / COMPLAINT UNDER THE FALSE CLAIIVIS ACT 31 U.S.C. S 3730(b) Relator, Mark A. Flood, D.O., on behalf of the United States of America, files this Complaint to recover treble damages and civil penalties against LASER SPINE INSTITUTE, LLC, (hereinafter "LSI"), pursuant to the Federal Civil False Claims Act, Title 31 U.S.C. §§ 3729 et seq., as amended (hereinafter "FCA"), and the common law theories of payment by mistake and unjust enrichment, and states: 1. THE PARTIES 1. Under the FCA, a person or persons with knowledge of false or fraudulent claims against the government(a "relator") may bring an action on behalf of the federal government and themselves. 2. Relator is an "original source" of the information underlying this Complaint, as defined in the FCA. Relator has direct and independent knowledge, within the meaning of 31 U.S.C. § 3730(e)(4)(B), of the information on which the allegations set forth in this Complaint are based. 0 PageID 2 A. Relator Mark A. Flood, D.O. 3. Mark A. Flood, D.O.("Dr. Flood"), is a resident of Pinellas County, Florida. Dr. Flood is Board Certified in Orthopedic Surgery by the American Osteopathic Board of Orthopedic Surgery. 4. From October 2008 through 2010, Dr. Flood was employed by Defendant LSI as an Orthopedic Spine Surgeon. In 2010, his contract was not renewed. However, in 2011, Dr. Flood was recruited by LSI to return as an Orthopedic Spine Surgeon and Chief of Surgical Innovation. Dr. Flood held both of these positions until May 2017. B. Defendant Laser Spine Institute 5. Defendant LSI is a Florida for-profit limited liability company, with its former principle address at 3031 N. Rocky Point Drive W., Tampa, Florida 33607, and its current headquarters at 5332 Avion Park Drive, Tampa, Florida 33607. 6. LSI considers itself the "leader" in minimally invasive spine surgeries. LSI maintains it performs more minimally invasive surgeries each month than any other spine surgery facility in the nation. Based on information and belief, LSI surgeons perform between 800 and 1,300 surgeries per month, and have been doing so since 2008. 7. The medical procedures substantially serving as the basis for this Complaint were performed at the LSI "Clinic" and the Laser Spine Surgical Center at LSI. Through its "business model," LSI has grown exponentially over a short period of years and currently operates facilities in Scottsdale, AZ; Philadelphia, PA; Oklahoma City, OK; Cleveland, OH; St Louis, MO;and Cincinnati, OH. IL JURISDICTION AND VENUE 8. LSI is headquartered in, and transacts business in, the Middle District of Florida. 0 PageID 3 9. This Court has jurisdiction over the subject matter of this action pursuant to 31 U.S.C. § 3732(a), which specifically confers jurisdiction on this Court for actions brought pursuant to The False Claims Act, as well as 28 U.S.C. § 1345. 10. This Court has personal jurisdiction over Defendant pursuant to 31 U.S.C. § 3732(a), which authorizes nationwide service of process. 11. Venue is proper in this District pursuant to 31 U.S.C. § 3732(a) and 28 U.S.C. § 1391 because LSI is headquartered in and transacts business in the Middle District of Florida, and many ofthe alleged acts occurred within this District. 12. No allegation set forth in this Complaint is based on a public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or General Accounting Office report, hearing audit, or investigation, or from the news media. III. FACTUAL BACKGROUND A. The LSI "Streamlined" Experience 13. Dr. James St. Louis founded LSI in 2005 to provide minimally invasive spine surgery. At that time. Dr. St. Louis was one of between four and ten surgeons in the country who specialized in endoscopic minimally invasive spine surgery. Then and now, LSI maintains and asserts that minimally invasive spine surgery is the safe and effective alternative to traditional "open" neck or "open" back surgery. 14. There is no standard definition of minimally invasive surgical techniques. There are, however, a number of approaches to minimally invasive spine surgery. Typically, a small incision, 1-inch or less, is made and a tubular retractor is used for progressive dilation of the soft tissues. The surgeon may utilize an endoscope, microscope, or fluoroscope to assist with the 0 PageID 4 performance of the surgery. The touted benefits of minimally invasive spine surgery include better cosmetic results from the smaller incision, less blood loss, less muscle damage, reduced infection rates, faster recovery, and, for procedures done at an ambulatory surgery center such as LSI, no lengthy hospital stay. 15. LSI operates an ambulatory surgery center located within its headquarters, but organized as a separate limited liability corporation, known as Laser Spine Surgical Center (hereinafter,"LSSC). For all intents and purposes, LSI and LSSC are one and the same. LSSC markets and advertises its medical services under the LSI trademark in extensive nationwide marketing, advertising, and social media campaigns. In 2016, its television advertising budget was approximately $35 million. In that same year, its budget for direct marketing campaigns on search engines, such as Google, Yahoo, and Bing, was approximately $13 million. LSI identifies their target demographic as individuals, male or female, between the ages of 35 and 65. These efforts result in approximately 300 prospective patients(known internally as "leads") each day. 16. Under the LSI umbrella, LSSC widely disseminates its status and capabilities in its commercials, brochures, emails, and other marketing materials, including the representation that LSI is the largest spine surgery center in the nation. LSI and LSSC make no distinction between the two corporate entities to the public or their patients. Nor are any patients informed of any distinction between LSI and LSSC. The distinction between LSI and LSSC exists, apparently, only for billing purposes. 17. LSI refers to its employees as "teammates" and utilizes a "One Team" approach to the sale of surgeries. As part of its "team," LSI's "Patient Acquisition Department" employs Patient Care Coordinators or Spine Care Consultants (hereinafter "Spine Care Consultants"), to field incoming phone calls and follow-up on all leads. The Spine Care Consultants obtain 0 PageID 5 information on the initial phone call from the lead, including current symptoms and prior treatment, to determine whether an LSI procedure may be appropriate. Spine Care Consultants do not have any medical education, training, or background, other than in-house seminars. Spine Care Consultants are paid a base salary plus bonuses. The bonuses are based on, among other things, time spent on the phone with leads, the number ofsurgeries scheduled, and the number of surgeries performed. Spine Care Consultants are required to meet a quota of performed surgeries each month, ranging from 16-18 surgeries. If the quota is not met, the Spine Care Consultant will not receive their full bonus, and faces additional consequences, including demotion and termination. 18. LSI tracks both inbound and outbound calls to ensure the Spine Care Consultants spend the majority of their day - 8-9 hours — on the phone with leads. In 2013, there were approximately 30-40 Spine Care Consultants working in the Tampa headquarters of LSI. By 2016,there were closer to 100. 19. During the initial phone call with leads, the Spine Care Consultants request the execution of a release in order to obtain the lead's most current MRI report. Once received, the MRI report is sent to another department whose sole function is to review MRI reports. By 2015, the department received, uploaded, and transcribed up to 500 MRI reports per day. This department was known as the MRI Review Team and Report Intake Team, and has now been renamed the MRI Administration Specialists. Although LSI maintained to the public this department was headed by a Board Certified surgeon, LSI knew it was unlikely the MRI report would ever be reviewed by a physician of any certified specialty. On a rare occasion, Michael W. Perry, M.D. (hereinafter, "Dr. Perry") an intemal medicine physician, LSTs medical director, and one of the founders of LSI, might review the report. The typical process was for an MRI 0 PageID 6 Administration Specialist to review the report for key words and report back to the Spine Care Consultant that the lead was a surgical candidate. In short, a non-physician was providing a synopsis of the MRI report to another non-physician, who would then inform the lead they were a surgical candidate. If an MRI report had no key words which indicated surgical intervention may be appropriate, the Spine Care Consultant would request the actual films from the lead s provider. The actual film would be reviewed by a specific radiology panel, as detailed below. If the lead did not have a current MRI(within six months), the Spine Care Consultant would advise them to go get one, and reach back out to LSI for review. Once the MRI review confirms surgical candidacy, the Spine Care Consultant provides the newly acquired patient with appointment times, which include a surgery date. 20. LSI advertises a "streamlined patient experience" so patients can receive "all necessary treatment related to their spine condition in as little as one week." The patient's conservative care (including, but not limited to, physical therapy, chiropractic treatments, or injections) is of little importance in the determination of surgical candidacy. In fact, most patients have not received any conservative care before arriving at LSI for surgery. 21. On the first day at LSI, a history and physical, known as a "Patient Evaluation," is completed by a mid-level provider, usually a nurse practitioner. If the patient's MRI is not recent enough, or if there are subtle or complex MRI findings, the patient is either sent out for another MRI, or, currently, an MRI is conducted at LSI's headquarters. At this first appointment, LSI provides patients with pre-operative and post-operative instructions. At this juncture, even though the patient has not even been seen by a surgeon, surgery is a foregone conclusion. 22. The patient is then seen either that day or the following day by a pain medicine physician - again, not a surgeon - for an "MRI Discussion." The patient is then advised 0 PageID 7 regarding the most appropriate surgical procedure for their symptoms. The pain management physician may refer the patient for a discogram or selective nerve root blocks in the event of "subtle or complex MRI findings" so as to purportedly justify the need for surgical intervention. Following the MRI Discussion or diagnostic testing, a surgical order is completed by the pain medicine physician. While the surgical order will eventually bear the signature of a surgeon, the procedure is pre-determined by a non-surgeon, and the surgeon's signature is nothing more than a perfunctory action to give the appearance that a surgeon had been involved in a process in which he was actually a non-participant. Furthermore, LSI fails to record the name of either the surgeon or the physician who sign the surgical order. It simply bears two signatures with no identification of the person who has signed the order, in defiance of medical recordkeeping protocols. 23. Following either the Patient Evaluation or MRI Discussion, the patient meets with an anesthesiology provider for surgical clearance from an anesthesiology standpoint, again all of this occurring without ever having met the surgeon. 24. The patient then returns to LSI at the time allotted during the initial scheduling phone call for the scheduled surgery. Prior to admission into the operating room, after changing into a surgical gown, and after the start of IV medications, the patient finally meets the operating surgeon for the first time. 25. LSI's standard procedure is to send the surgical schedule to surgeons the night before or the actual morning of surgery. The majority of the time, surgeons do not know which patients they are operating on or which procedures they will perform until they arrive at LSI for that day's work. Surgeons operate 5 days a week, performing up to 8 surgeries per day, and fi-equently more than 100 surgeries per month. 0 PageID 8 B. The "One Team" Way 26. In order to meet revenue goals and profit benchmarks, LSI set monthly goals in order to maximize the number of patients contacted and drive up the number of surgeries performed. It is and was a business model designed around profit rather than any patient's welfare. LSI carried out its scheme with a "One Team" approach so that all employees were striving toward the goal of constantly increasing the number of surgical procedures performed each month. By 2015, that goal was to perform over 1,200 surgeries per month, with no regard as to whether the surgeries were medically necessary or provided any medical benefit whatsoever. As a result, patients derived no benefit and too often suffered significant harm and detriment from unnecessary and inappropriate surgeries. 27. This scheme, national in scope, was largely carried out through LSl's headquarters in Tampa. The downside to this scheme was that insurers, including government insurance programs, paid for expensive operations which were medically unnecessary, provided little to no medical benefit, and too often resulted in patient harm thereby rendering the operations completely worthless. 28. William Home ("Home"), LSl's former CEO and a current board member, personally pressured surgeons to increase the number of surgeries performed each month. Surgeons were publicly congratulated through company-wide emails on their ability to reduce cancellations by reviewing all possible surgical and treatment options. Surgeons were discouraged from advising patients that conservative care, inpatient or "open" surgical procedures would be more appropriate for their symptomatology. Surgeons were also encouraged to offer LSI procedures as the best way to find relief, with a smaller incision, faster recovery, and no hospital stay, even if the procedure was not medically necessary. Surgeons 8 0 PageID 9 were further incentivized through the payment of bonuses which were based, in large part, on the corporate performance of LSI, including revenue growth, profitability, and cash flow. 29. If a surgeon cancelled a surgery. Home and the LSI executive directors were informed literally within the hour. Home would send the cancelling surgeon an email with instmctions to do whatever it took to avoid cancelling the surgery. The surgeon was required to seek out a second opinion from another LSI surgeon. Home tracked all cancellations, required a written explanation for any cancellation, and sent out a daily cancellation report. At the end of the month, each surgeon received a report card, grading them on their adherence to the cancellation policy. The pressure to avoid cancellations almost guaranteed the surgeons would proceed with a surgery. 30. As a result of the "One Team" way, surgeries were ordered and performed that were not medically necessary. In order to meet its profit goals, LSI, through a common course of action, educated, trained, directed, and ensured that its employees and contracted panel radiologists did things the "One Team" way. 31. The "One Team" way meant falsifying the existence of moderate to severe stenosis in order to bill for unnecessary surgical procedures, requiring patients undergo frequently unnecessary diagnostic tests, including MRIs, selective nerve root blocks, and discograms, ordering and performing unnecessary surgical procedures, and staging multiple and separate surgical procedures which could be accomplished in a single surgery. This multiple surgery approach was done in order to fraudulently bill for separate and multiple surgeries to increase reimbursement. 32. This scheme could not have succeeded without the willing and active participation of LSI employees and LSI partner radiologists, as detailed further below. Defendant 0 PageID 10 and its partner radiology companies have profited greatly from the fraud perpetrated on the United States and private insurers. The fraudulent conduct continues to this day. 33. Dr. Flood was initially hired by LSI in October 2008 as an employee at the Scottsdale, AZ, location. He was subsequently transferred to the Tampa, PL, location, where he remained until May 2017. Throughout his tenure at LSI, Dr. Flood would travel to other LSI facilities located throughout the United States to assist with opening those facilities and to perform surgical procedures. Dr. Flood has first-hand knowledge of the systemic fraudulent practices and culture at LSI. C. The Systematic Falsification and Overstatement of Pathology to Demonstrate Medical Necessity 34. Medicare considers medically necessary health care services or supplies those which are needed to prevent, diagnose, or treat an illness, injury, condition, disease or its symptoms that meet accepted standards of medicine. Medicare covers only those services deemed medically necessary. There must be adequate, supportive documentation for the diagnoses and surgical services rendered in order to deem those services "medically necessary." 35. According to the Social Security Act, only medically reasonable and necessary services are covered by Medicare. If a procedure or device lacks scientific evidence regarding safety and efficacy because it is investigational or experimental, the service is non-covered as not reasonable and necessary to treat illness or injury. 36. Because LSI was in the business of selling surgery, regardless of whether or not there was prior conservative care, LSI agents and employees sought out pathology to justify immediate surgical intervention. LSI required re-reads and over-reads of MRI films in the event a patient presented with an MRI, or underwent an MRI at LSI headquarters, which did not demonstrate sufficient pathology to justify surgical intervention. 10 0 PageID 11 37. LSI utilized, and continues to utilize, a specific panel of radiologists from Virtual Radiology (hereinafter "vRad") or Rose Radiology to read films for LSI. In the instances in which an MRI report did not describe sufficient pathology to justify surgical intervention, LSI would have the films re-read by vRad or Rose Radiology. These are the only radiology groups interpreting radiological films for LSI. 38. LSI, and specifically Dr. Perry, determined for a surgery to be classified as "medically necessary," and therefore eligible for insurance reimbursement, the MRI findings must indicate, at the very least, moderate findings. LSI knew that if the phrase "mild" was involved at the level of operation, payment would be denied. As a result. Dr. Perry notified the "team" re-reads and over-reads were to be done to justify LSI's surgeries and make the surgeries eligible for reimbursement in the event the pathology was actually mild. 39. With regard to vRad, in September 2016, Dr. Perry notified the team that if a re read was obtained, and the opinion did not change from the original report, he needed to be notified so he could discuss it with a radiologist at vRad directly. Dr. Perry advised the team that he had a "radiologist that is open to different opinions and may be able to document our observations." This practice had been going on prior to September 2016. If a radiologist was not open to over-reads, the radiologist would be identified, vRad would be made aware of the issue, and vRad, Dr. Perry, or Dr. Weiss would reach out to the individual radiologist to "educate." The radiologist would be placed on LSI's "rehab" list. If the problem continued, and the radiologist would not edit his report to document more serious conditions, the radiologist would be removed from the LSI panel. 40. With regard to Rose Radiology, Michael C. Weiss, D.O., the Chairman of the Department of Surgery, "educated" the radiologists at Rose Radiology. He advised the 11 0 PageID 12 radiologists to look for stenosis and how the condition needed to be documented in their reports. LSI, through Dr. Weiss and Dr. Perry, mandated that the Rose Radiology document moderate to severe stenosis even if only mild stenosis was actually demonstrated. As a customary business practice, a report with mild stenosis was sent back for a re-read and over-read. As with vRad, radiologists who refused to re-write their reports would be removed from the LSI panel. 41. The falsification of pathology, as described above, allowed LSI to bill and be reimbursed for medically unnecessary surgical procedures and collect moneys to which it was not entitled. D. Fraudulent Billing, Coding, and Documentation 42. The Administrative Simplification Act of the Health Insurance Portability and Accountability Act ("HIPAA") of 1996 mandates the use of national coding and transaction standards. HIPAA requires that the AMA's Current Procedural Terminology("CPT")system be used to report professional services, including physician services. Correct use of CPT coding requires using the most specific code that matches the services provided based on the code's description. The medical record must document specific elements necessary to satisfy the criteria for the level of service as described in the CPT code. The level of service provided and documented must be medically necessary based on the clinical situation and needs ofthe patient. 43. The services provided to a patient must be clearly documented in the medical record with all pertinent information regarding the patient's condition to substantiate the need and medical necessity for services provided. As detailed above, LSI falsifies pathology for the express purpose of substantiating medical necessity. LSI also engages in upcoding, unbundling, and billing for services not provided. 1. Upcoding, Unbundling, and Billing for Services Not Provided 12 0 PageID 13 44. During his tenure at LSI, both in Arizona and Tampa, Dr. Flood noticed LSI continued to systematically and intentionally misrepresent billed services/procedures rendered, upcoded procedures and various items, misused modifiers for financial gain, and '^unbundled procedures. 45. "Upcoding" is a fraudulent practice in which provider services are billed for higher CPT procedure codes than for the medical services that were actually performed, resulting in a higher payment by Medicare or third-party payors. Upcoding violations are subject to civil monetary penalties of not more than $10,000 for each item or service. See 42 U.S.C. § 1320a- 7a(a)(l)(A). 46. "Unbundling" occurs when an entity uses separate billing codes for services that have an aggregate billing code, or billing for each component of the service instead of billing with an all-inclusive code. See 63 F.R. No. 243, 70138, 70142. Unbundling results in higher reimbursements. 47. LSI engages in misrepresentation by billing for items or services that cannot be substantiated in the medical documentation. 48. Shortly after transferring to Tampa, Dr. Flood learned Dr. St. Louis performed and trained other surgeons at LSI to perform a "specialized procedure," which was essentially a full facetectomy. During this specialized procedure, the surgeon removes the entire facet joint, sometimes bilaterally. The removal of the entire facet joint results in spinal instability and increases the risk of additional surgeries to re-stabilize the spine, particularly when performed bilaterally. Because of the potential to cause spinal instability, if a fusion is not performed, the standard of care dictates the performance of a laminotomy (or partial facetectomy), rather than a full facetectomy. During a laminotomy, the joint is shaved down to relieve pain and nerve 13 0 PageID 14 pressure, and the facet is left intact. A full facetectomy takes approximately 15-30 minutes to perform. A laminotomy, on the other hand, may take up to two hours, depending on the condition of the patient's spine. By performing full facetectomies, LSI surgeons were able to perform more procedures each day, and thereby generate higher revenue. 49. During his employment with LSI, Dr. Flood became aware that LSI misrepresented procedures performed to obtain payment for non-covered services. LSI billed for services not rendered by billing for laminotomies even if a full facetectomy was performed. Further, the patients involved were never advised or provided consent forms which indicated the actual procedure performed. 50. Dr. Flood refused to leam how to perform LSI's "specialized procedure" and advised Dotty Bollinger, LSI's Risk Management Nurse, who later became LSI's President and Chief Operating Officer, that he could not stay on as a surgeon at LSI if this practice continued. Dr. Flood was assured LSI surgeons would be trained on the correct techniques. 51. Ms. Bollinger approached Dr. Flood on more than one occasion about serving as the medical director of LSI. Dr. Flood also met with the Chief Operating Officer("COO")of LSI to discuss the medical director position. Dr. Flood explained he could not serve as medical director because he would not take responsibility for the facetectomies performed under the guise of a laminotomy. He informed the COO, as well as Dr. St. Louis, that those surgeries did not meet the standard of care and such an approach would be met with harsh criticism from the spine community. Dr. St. Louis advised Dr. Flood that LSI "did not care what other spine surgeons thought." LSI surgeons continued to perform full facetectomies, and Dr. Flood was released from his contract in 2010. In 2011, Ms. Bollinger recruited Dr. Flood to return to LSI in 14 0 PageID 15 Tampa, to serve as Chief of Surgical Innovations. Dr. Flood spearheaded LSTs business expansion into minimally invasive fusions. 52. In patients with multi-level pathology, rather than perform a multi-level procedure, LSI required surgeons to "stage" the procedures by addressing one level at a time, and each stage of the procedure was billed as if it were a separate procedure, resulting in increased revenue through utilization of higher reimbursement rates. 53. The billing of surgical procedures requires pre-service, intra-service, and post- service care, which is all covered through a "global fee." Pre-service care requires the physician to review data not available on the unit (i.e., diagnostic and imaging studies). The surgeon must communicate with other professionals and with the patient or the patient's family. The surgeon must obtain and review necessary past results or records not available on the unit. The surgeon must perform an evaluation. Intra-service care requires a review of medical records and data available on the unit. The surgeon must obtain a comprehensive history and perform a comprehensive physical exam, consider relevant data, options and risks. Based on that data and information, the surgeon should develop a treatment plan and discuss the diagnosis and treatment options with the patient and/or family. Post-service care requires the surgeon to address interval data obtained and changes in condition. The surgeon must communicate results and further care plans to other health care professionals and to the patient and/or family. 54. In fact, LSI surgeons do not provide pre-service, intra-service, or post-service care at the level billed. Given the amount oftime LSI surgeons are pressured to spend in the operative suite, they do not have the time, nor the incentive based on their salary and bonus structure, to provide pre-operative or post-operative care as required by the standard of care or to justify the level billed. The surgeons rely entirely on a non-surgeons' assessment and diagnosis. The 15 0 PageID 16 surgeons routinely spend no more than 10-15 minutes with their patients, and this is routinely done immediately prior to their admission to the operative suite. Following the surgery, the surgeon turfs the care of the patient back to their primary care physician and provides no follow- up care whatsoever. Should a patient require hospital transfer, the surgeon rarely, if ever, provides any further care because few LSI surgeons actually have hospital privileges at hospitals in the vicinity of LSI facilities. 55. With regard to surgical procedures. Dr. Flood and other surgeons were instructed to utilize CPT Code 63047 for a higher reimbursement rate even if the appropriate billing code was CPT Code 63030. 56. The descriptor for CPT Code 63030 states: "Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of hemiated intervertebral disk; one interspace, lumbar (including open or endoscopically-assisted approach)." A laminotomy is a surgical procedure for treating hemiated discs wherein a portion ofthe lamina and ligaments are removed, usually unilaterally. This is the most common procedure performed at LSI, typically labeled as an "LFD" with discectomy. LFD stands for laminotomy,foraminotomy, with decompression of the nerve root. 57. The descriptor for CPT Code 63047 states: "Laminectomy, facetectomy and foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root(s) [e.g., spinal or lateral recess stenosis]), single vertebral segment, lumbar." A laminectomy is a surgical procedure for treating spinal stenosis by relieving pressure on the spinal cord. The surgeon removes the lamina to widen the spinal canal and create more space for the spinal cord and spinal nerves. A laminectomy is appropriate where the first-listed diagnosis for a patient is spinal stenosis. 16 0 PageID 17 58. During Dr. Flood's time at LSI, the surgeons did not perform the work required to justify a billing of CPT Code 63047, but nevertheless were encouraged and pressured to do so. 59. Frequently, LSI surgeons performed procedures which were not listed in the CPT codes. When reporting such a service, the appropriate *^inlisted procedure" code may be used to indicate the service, identifying it by "special report." A service that is rarely provided, unusual, variable, or new may require a special report in determining the medical appropriateness of the service. Pertinent information must include an adequate definition or description of the nature, extent, and need for the procedure, and the time, effort, and equipment necessary to provide the service. The report must be submitted to the American Medical Association (AMA) for consideration and Code Identification with the AMA Board of Directors and Board of Physicians. Rather than provide a special report, LSI would improperly utilize a CPT code it knew would result in reimbursement. 60. Percutaneous or endoscopic spinal surgical techniques were, and many still are, considered investigational and not medically necessary by Medicare and third party payers. Dr. Flood learned LSI overcame this problem by requiring its endoscopic surgeons to "use" surgical loupes in all cases, whether or not the loupes were actually worn or used. LSI also encouraged surgeons to place microscopes in the operative suite, and note the use of the microscope, for additional reimbursement. Dr. Perry and LSI also required surgeons to include the words "direct visualization" in their operative reports, even if the surgery was performed under "indirect visualization" through the use of an endoscope. 61. For years, LSI utilized Joimax for imaging the lumbar spine for procedures utilizing percutaneous endoscopy. Joimax is a medical instrumentation set which includes the endoscope and instruments to remove disc material. Spine procedures performed by 17 0 PageID 18 percutaneous endoscopy were considered unproven, investigational and experimental. With this in mind, LSI, through Dr. Perry, Dr. Weiss, and Ryan Fulcher, Vice President of Operations, approved and required the use of inappropriate CPT codes in order to obtain payment for such procedures. 62. Dr. Flood observed other instances ofupcoding: a. The prescription ofa "compounded" pain cream, in order to charge $1,000-$2,000 per prescription. b. The prescription of"custom" back braces for post-surgical patients, although all braces utilized at LSI are pre-fabricated. 63. Durotomies, or dural tears, are a known risk of surgery. Ideally, durotomies are identified and repaired during surgery. Dr. Perry, however, advised and pressured surgeons not to repair the durotomy intraoperatively, even if identified while in the operative suite. If the patient was taken back to the operating suite after the initial surgery, the dura leak repair was then billable. 64. LSI, through Dr. Perry, instructed surgeons to dictate they visualized the dura and that the dura was pulsating, whether or not that actually occurred. 65. Despite the fact lasers were rarely used, the benefit to LSI of the word "laser" as a marketing tool outweighed any concern of misperception. In fact, LSI does not even own lasers powerful enough to provide laser assistance in the surgeries it advertises on its website. In the rare event a laser was actually used to perform the surgery, surgeons were instructed to use the phrase "thermal ablation" rather than laser, as reimbursement would likely be denied because the use oflasers for spine surgery is unproven. 18 0 PageID 19 66. Coflex is an FDA approved titanium medical implant for the lumbar spine. When this procedure was performed at LSI, LSI "unbundled" and billed for separate procedures which were included within the proper code for a Coflex procedure. 67. When Dr. Flood voiced his concerns over the aforementioned practices, he was vilified and accused of not being a "team" player. His contract with LSI, which expired in June ofthis year, was not renewed. 68. The activities described above allowed LSI to bill and be reimbursed for services not provided and collect moneys to which it was not entitled. 2. The Provision of Worthless Services 69. LSI sought and continues to seek reimbursement for services so deficient that for all practical purposes they are the equivalent of no performance at all. 70. On its website, LSI represents one of its advantages is the fact its surgeons are board certified and complete a rigorous, proprietary fellowship. In reality, LSI employs surgeons lacking in qualifications, training, and experience. The rigorous fellowship touted on the LSI website is a farce. It is not accredited. There is no research requirement. It is led by Dr. Weiss, despite the fact he never completed an accredited fellowship. When Dr. Flood offered to lead the fellowship program (he actually completed an accredited fellowship), he was turned down. 71. LSI provides inadequate care and performs substandard surgeries, many of which not only fail to accomplish their main goal, but too often leave patients in a much worse condition, that includes severe, significant, and permanent injuries. LSI falsifies and glosses over any complications by promising patients nothing will go wrong, that they will be up and walking immediately after surgery, and enjoying life better than ever before. 19 0 PageID 20 72. LSI billed Medicare and third party payers for services so grossly substandard as to be effectively worthless. For example, in circumstances where a surgery is terminated due to a dural tear which requires hospital transfer and additional surgeries, LSI bills for the procedure as if it were fully completed. As a result of these practices, LSI received overpayment from Medicare and third party payors which is subject to recoupment. IV. QUITAM PROCEDURAL COMPLIANCE 73. Pursuant to 31 U.S.C. §3730(b)(2), this qui tarn Complaint was filed in camera and underseal for a period of at least sixty(60) days, was not served on Defendant, and will not be served until the Court so orders. 74. Pursuant to 31 U.S.C. § 3730(b)(2), the United States Government may elect to intervene and proceed with this action within sixty (60) days of receipt of this Complaint and a statement of the material evidence and information in this action. 75. Pursuant to 31. U.S.C. §3730(b)(2), Relator has provided a copy of the Complaint and a statement of the material evidence and information to the Attorney General of the United States and to the United States Attorney for the Middle District of Florida. The statement of the material evidence and information supports Relator's information and belief concerning Defendant's submission offalse claims to third-party payers. Medicare and Tricare. V. THE FALSE CLAIMS ACT 76. The federal False Claims Act ("FCA") as amended, provides in pertinent part that: [A]ny person who (A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; ... or(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or 20 0 PageID 21 decreases an obligation to pay or transmit money or property to 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 and an additional penalty ofthree(3)times the amount of damages suffered by the Government caused by the act of that person. 31 U.S.C. § 3729(a)(1). 77. The terms "knowing" and "knowingly" mean "that a person, with respect to information:(1) has actual knowledge of the information^ (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no specific intent to defraud is required. 31 U.S.C. § 3729(b)(1) (Emphasis added.) VI. GOVERNMENT HEALTH INSURANCE PROGRAMS A. THE MEDICARE PROGRAM 78. The United States of America, through Health and Human Services ("HHS"), administers the Medicare Program under Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395ccc. Medicare is a federally subsidized health insurance system. Entitlement is based on age, disability, or affliction with end-stage renal disease. 42 U.S.C. §§ 426, 426-1. 79. Reimbursement for Medicare claims is made by the United States through the Centers for Medicare and Medicaid Services ("CMS"), which is directly responsible for the administration of the Medicare Program. CMS contracts with private companies known as "fiscal intermediaries" to administer and pay claims from the Medicare Trust Fund. 42 U.S.C. § 1395(u). In this capacity, the fiscal intermediaries act on behalf of CMS. 42 C.F.R. § 413.64. Fiscal intermediaries review, approve, and pay Medicare claims received from medical providers with federal funds. 80. There are two primary components of the Medicare Program, Part A and Part B. Part A provides payments for institutional care, including hospitals and home health care. See 42 21 0 PageID 22 use. §§1395c-1395i-5. Part B is a federally subsidized, voluntary insurance program that covers a percentage ofthe fee schedule for physician services as well as a variety of medical and other services to treat medical conditions or prevent them. See 42 U.S.C. §§ 1395j-1395w-5. The allegations herein involve Part B for services billed by Defendant or its agents to Medicare. 81. To participate in the Medicare Program, a health care provider must file a provider agreement with the Secretary of HHS. 42 U.S.C. § 1395cc. The provider agreement requires compliance with certain requirements that the Secretary deems necessary for participating in the Medicare program and for receiving reimbursement from Medicare. 1. Medical Necessity Requirements 82. An important requirement for participating in the Medicare Program is that the medical goods and services which provide the basis for claims submitted to Medicare must be (1) shown to be medically necessary, and (2) are supported by necessary and accurate information. 42 U.S.C. § 1395y(a)(l)(A), (B); 42 C.F.R., Part 483, Subpart B; 42 C.F.R. § 489.20. 83. Various claims forms, including, but not limited to, the Health Insurance Claim Form, require that the provider certify that the medical care or services rendered were medically "required," medically indicated and necessary, and that the provider is in compliance with all applicable Medicare laws and regulations. 42 U.S.C. § 1395n(l)(2); 42 U.S.C. § 1320c-5(a); 42 C.F.R. § 424.24. 84. The practice of billing goods or services to Medicare and other federal health care programs that are not medically necessary is known as "overutilization." 2. Refund Obligations 22 0 PageID 23 85. As another condition of participation in the Medicare Program, providers are affirmatively required to disclose to their fiscal intermediaries any inaccuracies of which they become aware in their claims for Medicare reimbursement (including in their cost reports). 42 C.F.R. §§ 401.601(d)(iii), 411.353(d); 42 C.F.R. Part 405, Subpart C; see also 42 C.F.R. §§ 489.40, 489.31. Under 42 U.S.C. § 1320a-7b(a)(3), providers have a clear, statutorily-created duty to disclose any known overpayments or billing errors to the Medicare earner, and the failure to do so is a felony. Providers' contracts with CMS carriers or fiscal intermediaries also require providers to refund overpayments. 42 U.S.C. § 1395u; 42 C.F.R. § 489.20(g). 86. Accordingly, if CMS pays a claim for medical goods or services that were not medically necessary, a refund is due and a debt is created in favor of CMS. 42 U.S.C. § 1395u(l)(3). In such cases, the overpayment is subject to recoupment. 42 U.S.C. § 1395gg. CMS is entitled to collect interest on overpayments. 42 U.S.C. § 13951(j). B. THE TRICARE PROGRAM,formerly known as GRAMPUS 87. TRICARE provides civilian medical benefits to specified categories of individuals, including retirees, their dependents, and dependents of active-duty personnel, who are qualified for those benefits by virtue of their relationship to one of the seven Uniformed Services. 10 U.S.C. §§ 1079, 1086; 32 C.F.R. § 199. Congress funds the Department of Defense TRICARE program through appropriated funds. 10 U.S.C. § 1100. These funds are further disbursed by fiscal intermediaries and managed care contractors under contracts negotiated by the Director solely to review and to pay TRICARE claims. 88. Although TRICARE is administered by the Secretary of Defense, the regulatory authority establishing the TRICARE program provides reimbursement to individual health care providers applying the same reimbursement requirements and coding parameters that the 23 0 PageID 24 Medicare program applies. 10 U.S.C. §§ 1079G)(2)(institutional providers),(h)(1)(health care professionals)(citing 42 U.S.C. §§ 1395, et seq.). 89. The TRICARE regulation's definition of fraud includes "a deception or misrepresentation by a provider ... with the knowledge (or ... reason to know or should have known) that the deception or misrepresentation could result in some unauthorized CHAMPUS benefit... or payment." 32 C.F.R. § 199.2. It is presumed that if a CHAMPUS claim is filed, the person responsible for the claim had the requisite knowledge. 32 C.F.R. § 199.2. 90. TRICARE will only pay for "medically necessary services and supplies required in the diagnosis and treatment of illness or injury." 32 C.F.R. § 199.4(a)(l)(i). TRICARE prohibits, inter alia, the submission of claims for services that are not medically necessary, consistently fumishing medical services that do not meet accepted standards of care, and failing to maintain adequate medical records. 32 C.F.R. §§ 199.9(b)(3)-(b)(5). CAUSES OF ACTION COUNT I Federal False Claims Act (31 U.S.C.§ 3729(a)(1); 31 U.S.C.§ 3729(a)(1)(A)) 91. Relator realleges and incorporates by reference the allegations made in Paragraphs 1 through 89 of this Complaint as if fully set forth herein. 92. Through the acts described above. Defendant, its agents and employees, in reckless disregard for or in deliberate ignorance of the truth or falsity of the information involved, or with actual knowledge of the falsity of the information, presented or caused to be presented, and are still presenting or causing to be presented, to the United States Government and states participating in the Medicare and TRICARE programs, false and fraudulent claims, records, and statements in order to obtain reimbursement for healthcare services that were falsely 24 0 PageID 25 billed and/or not medically necessary, in violation of 31 U.S.C. § 3729(a)(1); 31 U.S.C. § 3729(a)(1)(A). 93. As a result of Defendant's actions, the United States and the state governments participating in Medicare and other government sponsored insurance programs, have been, and continue to be, damaged, and are therefore entitled to treble damages under the False Claims Act, plus a civil penalty for each claim of not less than $5,500 and not more than $11,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990. COUNT II Federal False Claims Act (31 U.S.C.§ 3729(a)(1); 31 U.S.C.§ 3729(a)(1)(B)) 94. Relator realleges and incorporates by reference the allegations made in Paragraphs 1 through 89 ofthis Complaint as if fully set forth herein. 95. Defendant, in reckless disregard or deliberate ignorance of the truth or falsity of the information involved, or with actual knowledge of the falsity of the information, knowingly made, used, or caused to be made or used, and may still be making, using, or causing to be made or used, false records or statements material to the payment of false or fraudulent claims, in violation of 31 U.S.C. § 3729(a)(2) 96. As a result of Defendant's actions, the United States and the state governments participating in the Medicare and TRICARE programs have been, and may continue to be, damaged. By virtue of Defendant's conduct, the United States suffered damages and therefore is entitled to treble damages under the False Claims Act, plus a civil penalty for each claim of not less than $5,500 and not more than $11,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990. 25 0 PageID 26 COUNT III Federal False Claims Act (31 U.S.C.§ 3729(a)(1); 31 U.S.C.§ 3729(a)(1)(G)) 97. Relator realleges and incorporates by reference the allegations made in Paragraphs 1 through 89 of this Complaint as iffully set forth herein. 98. Defendant, its employees and agents, knowingly made, used, or caused to be made or used, false records and statements material to obligations to pay or transmit money to the government, or knowingly concealed, improperly avoided, or decreased their obligation to pay money to the United States government that they improperly or fraudulently received. 99. Defendant failed to disclose to the government material facts that would have resulted in substantial repayments by them to the federal and state governments in violation of31 U.S.C. § 3729(a)(1)(G). 100. At all relevant times. Defendant had an ongoing legal obligation to report and disclose overpayments to the government pursuant to 42 C.F.R. §§ 401.601(d)(iii); 411.353(d); 42 C.F.R. Part 405, Subpart C; 42 C.F.R. §§ 489.40, 489.31; 42 U.S.C. § 1320a-7b(a)(3); 42 U.S.C. § 1395u; and 42 C.F.R. § 489.20(g), and failed to do so. 101. As a result of Defendant's actions, the United States of America has been, and may continue to be, damaged. By virtue of Defendant's conduct, the United States suffered damages and therefore is entitled to treble damages under the False Claims Act, plus a civil penalty for each claim of not less than $5,500 and not more than $11,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990. 26 0 PageID 27 COUNT IV Federal False Claims Act (31 U.S.C.§ 3729(a)(3)(2006); 31 U.S.C.§ 3729(a)(1)(C)(2012) Conspiracy to Submit False Claims 102. Relator realleges and incorporates by reference the allegations made in Paragraphs 1 through 89 of this Complaint as if fully set forth herein. 103. Defendant entered into agreements with vRad and Rose Radiology and conspired to defraud the United States by submitting false or fraudulent claims for reimbursement from the United States, acting through its programs, Medicare and TRICARE, for money to which they were not entitled, in violation of 31 U.S.C. § 3729(a)(3) (2006) and 31 U.S.C. § 3729(a)(l)(C)(2012). 104. As part of the schemes and agreements to obtain reimbursement from the United States in violation of federal laws. Defendant conspired to file or cause to be filed billings for payment for unnecessary services, services not rendered, and/or upcoded services, and to cause the United States to pay claims for health care services based on false claims, false statements, and false records that the services were provided in compliance with all laws regarding the provision of health care services when they were not so provided. 105. As a result of Defendant's conspiracy to defraud the United States, the United States suffered damages and is therefore entitled to treble damages under the False Claims Act, plus a civil penalty for each claim of not less than $5,500 and not more than $11,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990. 27 0 PageID 28 COUNT V Payment under Mistake of Fact 106. Relator realleges and incorporates herein paragraphs 1 through 89 of the Complaint. 107. Relators submit that Defendant was aware of the fraudulent acts set forth herein, specifically, the billing of Medicare and Tricare for uncovered services and medically unnecessary treatments. These billing procedures resulted in Defendant receiving a greater amount of money than Defendant was entitled to have. 108. Through these billing practices. Defendant was receiving monies, by and through the Medicare and Tricare programs, wherein the program managers were operating on the mistaken belief that the services Defendant was billing for were medically necessary and qualified for reimbursement under Medicare or Tricare. 109. As a result of this mistake of fact, the Medicare and Tricare programs paid moneys to Defendant that Defendant was not entitled to, thereby damaging the Treasury of the United States of America. COUNT VI Unjust Enrichment 110. Relator realleges and incorporates herein paragraphs 1 through 89 of the Complaint. 111. Relator submits that in performing the acts set forth herein. Defendant, through the acts of its employees, were paid monies by and through the Medicare and Tricare programs for which the United States received no benefit and to which Defendant was not entitled. 28 0 PageID 29 112. By reason ofthese payments Defendant has been unjustly enriched at the expense ofthe Treasury ofthe United States of America. 113. Relator is entitled to damages in the amount that Defendant was unjustly enriched. PRAYER FOR RELIEF WHEREFORE,Relator prays for judgment against Defendant as follows; 1. That Defendant cease and desist from violating 31 U.S.C. § 3729 et seq. 2 That the Court enter judgment against Defendant in an amount equal to three times the amount of damages the United States Government sustained as a result of Defendant's actions, as well as a civil penalty against Defendant of $11,000 for each false claim, and a civil penalty against Defendant of $15,000 for each individual with respect to whom false or misleading information was given pursuant to 42 U.S.C. § 1320a-7a, together with the costs of this action, with interest, including the cost to the United States government for its expenses related to this action. 3. That Relator is awarded the maximum amount allowed pursuant to 31 U.S.C. § 3730(d)of the False Claims Act. 4. That Relator is awarded all costs and expenses of this action, including attorneys' fees. 5. That the United States of America receive all such other relief, both in law and in equity, as the Court deems just and proper. 29 0 PageID 30 DEMAND FOR JURY TRIAL Pursuant to Rule 38 ofthe Federal Rules of Civil Procedure, Relator demarrds a jury trial in this cause. Dated this day of July, 2017. Respectfully submitted, Jan/es J. Cusack, Esq. FBN 236853 C. Steven Yerril E^.FBN 207^94 JamesJ/Cusack, P.A. Heather N. BamW/Esq. FBN 85522 THE YERRID LAW FIRM 1 Tampa City Center Suite 2880 101 E. Kennedy Boulevard, Suite 3910 Tampa, FL 33602 Tampa,PL 33602 Telephone:(813)222-8222 Telephone:(813)223-1276 Facsimile:(813)222-8224 Facsimile;(813)226-0159 hbames@yerridlaw.com Jimcusack.tampa@gmail.com syerrid@yerridlaw.com Attorneysfor Relator, Mark A. Flood, D.O. 30