La Fleur et al v. GenomeDX Biosciences Corp.

COMPLAINT with Jury Demand against GenomeDX Biosciences Corp. (Filing Fee $400, Receipt Number CAS094697.), filed by Stephanie La Fleur, Corinne Vause.

Southern District of California, casd-3:2017-cv-01959

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9 FILED UNDER SEAL PURSUANT TO 31U.S.C.§3730{b)(2) SEALED IN THE UNITED STATES DISTRICT COURT 17 SEP FOR THE SOUTHERN DISTRICT OF CALIFORNl:\;; • 26 PH 3::,g __ · -,:--: r,.:;u;;; T. ._ __ · '.,A-:...~ iJiik;A UNITED STATES OF AMERICA and THE ST ATE OF CALIFORNIA ex rel. Stephanie La Fleur and Corinne Vause, and DOCKET NO. STEPHANIE LA FLEUR and CORINNE VAUSE, individually, FILED UNDER SEAL PURSUANT TO Plaintiffs, 31 u.s.c. § 3730(b)(2) v. JURY TRIAL DEMANDED GENOMEDX BIOSCIENCES CORP., Defendant. 17CV 19.59 L WVG COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiffs and qui tam Rclators Stephanie La Fleur and Corinne Vause, by and through their undersigned counsel JTB Law Group, LLC and Law Office of Mann & Elias, allege of personal knowledge as to their observations and actions, and on information and belief as to all else, as follows: I. PRELIMINARY ST ATEMENT I. Relators Stephanie La Fleur and Corinne Vause ("Relators") bring a qui lam '! • ...~... ' action on behalf of the United States of America (the "United States") under the False Claims Act, 31 U.S.C. §§ 3729 el seq. (the "FCA"), the Anti-Kickback Statute, 42 U.S.C. § J 320a-7b(b) (the "AKS"), and the common law to recover treble the damages actually sustained by, and civil penalties and restitution owed to, the United States as a result of a scheme by Defendant to commit fraud. 2. Rclators also bring a qui tam action on behalf of the State of California (''California") under the California Insurance Frauds Prevention Act, Cal. Ins. Code §§ 1871 et 9 FILED UNDER SEAL PURSUANT TO 31U.S.C.§3730(b)(2) seq. (the "CIFPA") and the common law to recover treble the damages actually sustained by, and civil penalties and restitution owed to, California and other insurers as a result of a scheme by Defendant to commit fraud. 3. Defendant GenomeDx Biosciences Corp. {"GenomeDX") is a biotechnology company that provides genomic testing for the purpose of assessing patients' risk for diseases. 4. Defendant has submitted claims to and received payments from Medicare and other insurers for performing its genomic tesls. 5. A substantial amount of these payments were obtained through fraudulent means because Defendant submitted claims for tests that were: a. conducted without meeting the requirements necessary for health insurance coverage; b. not medically necessary; and/or c. induced by offers of remuneration in violation of the AKS. 6. In carrying out this fraud, Defendant knowingly (a) presented or caused to be presented false claims to obtain payments; (b) made or caused to be made or used folse records or statements material to these false claims; (c) conspired to cause these claims to be presented and/or these records or statements to be made or used; and (d) made, used, or caused to be made or used, a false record or statement material to an obligation to pay or transmit money or property, or knowingly concealed or knowingly and improperly avoided or decreased an obligation to pay or transmit money or property. 7. This Complaint has been tiled in camera and under seal pursuant to 31 U.S.C. § 3730(b)(2). It will not be served on Defendant unless and until the Court so orders. A copy of the Complaint, along with written disclosure of substantially all material evidence and information that Rclators possesses, has been served upon the Attorney General of the United 2 9 FILED UNDER SEAL PURSUANT TO 31 U.S.C. § 3730(b)(2) States and on the United States Attorney for the Southern District of California pursuant to 31 U.S.C. § 3730(b)(2) and Fed. R. Civ. P. 4(d). and on the San Diego County District Attorney and the California Insurance Commissioner pursuant to Cal. Ins. Code§ I 87 I .7(e)(2). JI. JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331, because this action is brought for violations of the False Claims Act, 31 U.S.C. §§ 3729 et seq. (as amended), a federal statute. 9. The Court has subject matter jurisdiction over the CIFPA claims pursuant to 31 u.s.c. § 3732(b). l 0. The Court has subject matter jurisdiction over the common law claim pursuant to 28 u.s.c. § 1345. 11. The Court has personal jurisdiction over Defendant because Defendant (a) is a resident of, and is licensed to transact and does transact business in, this District; and (b) has carried out its fraudulent scheme in this District. 12. Venue is proper in this District pursuant to 3 I U.S.C. § 3 732(a) and 28 U.S.C. § 1391 (b)(2), because Defendant can be found in, is licensed to do business in, and transacts or has transacted business in this District, and the events and omissions that give rise to these claims have occurred in this District. 13. The Complaint has been filed within the period prescribed by 3 l U.S.C. §§ 3731 (b) and 3730(h)(3), and Cal. Ins. Code 1871 .7(1). 3 9 FILED UNDER SEAL PURSUANT TO 31 U.S.C. § 3730(b)(2) III. NO PUBLIC DISCLOSURE; DIRECT AND INDEPENDENT KNOWLEDGE OF VIOLATIONS OF THE FALSE CLAIMS ACT 14. There has been no public disclosure, relevant under 31 U.S.C. § 3730(e), or Cal. Ins. Code§ I 87 I .7(h)(2)(A), or of the "allegations or transactions" in this Complaint. 15. Relators make the allegations in this Complaint based on their own knowledge, experience and observations. 16. Relators arc the original source of the information on which the allegations herein arc based, have direct and independent knowledge of such infonnation, and have voluntarily disclosed such information to the United States and the State of California before filing this action. IV. THE PARTIES A. Plaintiff the United States 17. Plaintiff the United States of America brings this action by and through Relators Stephanie La Fleur and Corinne Vause. At all times relevant to this Complaint, the United States, acting through the Centers for Medicare & Medicaid Services (''CMS"), has reimbursed Defendant for the provision of various medical services and treatments for eligible individuals through the Medicare program. Thus, the United States brings lhis action on behalf of its agencies, CMS and HHS, and on behalf of the Medicare program. B. Plaintiff the State of California 18. The California Insurance Fraud Prevention Act (the "CIFPA'') allows any interested person to bring a civil lawsuit for violations of Cal. Pen. Code § 550 on behalf of that person and the State of California. Accordingly, Plaintiffs and Relators La Fleur and Vause 9 FILED UNDER SEAL PURSUANT TO 31U.S.C.§3730(b)(2) allege that Defendant has violated Cal. Pen. Code § 550 and bring this action on behalf of the State of California. C. Plaintiffs nnd Relators La Fleur and Vause 19. Relators La Fleur and Vause also bring this action on behalf of themselves, the United States, and the State of California. 20. La Fleur and Vause are citizens of the United States, and at all relevant times have been residents of San Diego County, California. 21. La Fleur has been employed in Defendant's member and regulatory appeals department since December 2015. Starting approximately April 2017, her job duties expanded to include provider appeals and prior authorizations. She is currently a supervisor of regulatory clinical appeals. 22. Vause has been employed by Defendant as a billing manager since December 2016. E. Defendant 23. Defendant GcnomcDx Biosciences Corp. is a corporation organized and existing under the laws of the State of Delaware. 24. The address of Defendant's principal office in the State of California is I0355 Science Center Drive, Suite 240, San Diego, CA 92121. 25. The address of Defendant's headquarters is 201-1595 West ya Avenue, Vancouver, BC Canada V6J !J8. 5 9 FILED UNDER SEAL PURSUANT TO 31U.S.C.§3730(b)(2) v. DEFENDANT'S FRAUDULENT ACTS A. Defendant's Decipher Test 26. Defendant's flagship service is the Decipher post-operation genomic test (herein, "Decipher Post-op") also referred to as "Decipher GC" and "Decipher assay," which measures the activity of genes in prostate tumors to assess the risk of cancer recurrence. 27. Defendant conducts this test on tissue samples obtained during radical prostatectomics ("RPs"). 1 28. The Medicare Administrative Contractor ("MAC") for Jurisdiction E, Noridian Healthcare Solutions, LLC, 2 has granted the Decipher Post-op limited Medicare coverage pursuant to 42 U.S.C. I 395ff(t)(2)(B). 3 29. Noridian granted coverage under Local Coverage Determination ("LCD") ID L36343, titled "Mo!DX-CDD: Decipher® Prostate Cancer Classifier Assay," attached hereto as Exhibit A. 30. The Decipher Post-op is the only test Defendant conducts which is covered by Medicare. B. Defendant Obtained Payments for Decipher Post-op Tests That Did Not Meet Coverage Hcquircmcnts 31. Under the LCD, Noridian will pay for the Decipher Post-op test only when certain conditions are met, including the requirement that the "Patient must have achieved initial PSA [prostate-specific antigen] nadir (defined as undetectable PSA) within 30 days of RP [radical ' A radical prostatcctomy is the surgical removal of the prostate gland and surrounding tissue. ~ A MAC is a private health care insurer awarded a geographic jurisdiction to process medical claims for Medicare beneficiaries MAC jurisdictions can be found at https: 1 www.cms.gov. Medicare. Medicare-Contracting/Medicare· Adm inistralivc-Contractors>Downloads AB-MA C-Jurisdiction-Map-Dec-2015 .pdf. 1 Defining a local coverage dctem1ination as "a determination by a fiscal intermediary or a carrier under part A or part B, as applicable, respecting whether or not a particular item or service is covered." 6 9 FILED UNDER SEAL PURSUANT TO 31U.S.C.§3730(b)(2) prostatcctomy] surgery." Exhibit A, at 4. In other words, Medicare will only pay for the test when it is conducted on a patient whose prostate-specific antigens have dropped to undetectable levels within 30 days of his surgery. 32. Despite this requirement, Defendant routinely conducted and billed Medicare and other insurers for Decipher Post-ops without evidence that the patient had met this condition. 33. Many of these patients failed to actually achieve PSA nadir. See Exhibit B (emails discussing billing, dated Aug. 28, 2017). 34. Furthermore, the LCD also requires that the Decipher Post-op be performed ''on a patient's RP specimen." Exhibit A, at 4. In other words, Medicare will pay only for tests performed on tissue samples obtained from radical prostatectomies. 35. Disregarding this requirement, Defendant has routinely billed Medicare and other insurers for tests conducted on pre-surgical biopsy samples. 36. Defendant refers to the test as the "Decipher Biopsy" when conducted on prc- surgical biopsy tissue samples. See Exhibit C (Decipher brochure). 37. Defendant has sought but not yet obtained a Local Coverage Determination for the Decipher Biopsy. As of the filing of this Complaint, the Decipher Biopsy is not covered by Medicare. 38. Nevertheless, Defendant has knowingly and intentionally submitted claims to Medicare and other insurers for Decipher Biopsies. 39. In making these claims, Defendant took steps to mislead Medicare and other insurers into believing that the Decipher Biopsies were actually Decipher Post-ops that were covered by Medicare. 7 9 FILED UNDER SEAL PURSUANT TO 31 U.S.C. § 3730(b)(2) 40. Defendant submits claims for both the Decipher Post-op and the Decipher Biopsy under Current Procedural Terminology ("CPT'') 4 code 81479, which is used to identify "Unlisted molecular pathology procedurc[s]." See Exhibit A, at 5. Thus, the MAC and other insurers are not able to tell from the coding which claims should be paid and which should not. 41. To further disguise its fraud, Defendant supports its Decipher Biopsy claims (and its appeals of denials of claims) with documentation that the claims are for the Decipher Post-op. Relator La Fleur observed and reported to Defendant's director the submission of these misleading documents, stating: I also noticed that all the documents such as the LCD,