United States of America et al v. Stanford Healthcare Billing Office et al

Central District of California, cacd-2:2017-cv-08726

FIRST AMENDED COMPLAINT against Defendants Frederick Dirbas, Does, Stanford Health Care, Stanford Health Care Advantage, Stanford Healthcare Billing Department, The Board of Directors of the Lucile Salter Packard Childrens Hospital at Standord, The Board of Directors of the Stanford Health Care, The Board of Trustees of Stanford University, The Leland Junior University, Debra Zumwalt amending Complaint - (Discovery), {{1}}, filed by Plaintiff Emily Roe

Interested in this case?

Current View

Full Text

24 Page ID #:294 ~~ f~Jll~22 AMil~~4 l ~. = ~ ~ ~:; 2 ~,, -- ~ -, 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE CENTRAL DISTRICT OF CALIFORNIA 9 WESTERN DIVISION 10 11 UNITED STATES OF AMERICA No. CV 17-08726-DSF(AFMx) ex rel.[UNDER SEAL], et al 12 Plaintiffjs], [FILED UNDER SEAL PURSUANT 13 v. TO THE FALSE CLAIMS ACT,31 14 [UNDER SEAL], U.S.C. §§ 3730(b)(2) AND (3)] IS Defendant[s]. 16 FIRST AMENDED COMPLAINT 17 JUDGE: Hon. Dale S. Fischer ~~ 18 19 20 21 22 2; 24 25 26 27 - ~- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3] USC § 3729(a)) 28 24 Page ID #:295 r" ~ ~ ~ LJ Gloria Juarez, Esq. SBN 109115 .= . ._~. ~ LAW OFFICES OF GLORIA JUAREZ 2 P.O. Box 4591 ~ Montebello, California 90640-9997 3 Telephone (213)598-4439 4 Attorneys for Relator, Emily Roe 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE CENTRAL DISTRICT OF CALIFORNIA 7 WESTERN DIVISION 8 THE UNITED STATES OF AMERICA; CASE NO.: CV17-08726-DSF 9 and THE STATE OF CALIFORNIA; JUDGE: Hon. Dale S. Fischer 10 ex. Relator Emily Roe., an individual; [FILED UNDER SEAL PURSUANT 11 Plaintiffs, TO FALSE CLAIMS ACT,31 U.S.C. §§ 3730(b)(2) AND (3)] 12 vs. 13 STANFORD HEALTHCARE BILLING JURY TRIAL DEMANDED DEPARTMENT, STANFORD 14 HEALTH CARE (FORMERLY FIRST AMENDED COMPLAINT 1 5 KNOWN AS STANFORD HOSPITALS FOR CIVIL DAMAGES AND CLINICS), DR. FREDERICK 16 DIRBAS, DEBRA ZUMWALT, THE 1. VIOLATION OF 31 U.S.C. §§ 17 BOARD OF DIRECTORS OF THE 3729-33 FALSE CLAIMS ACT STANFORD HEALTH CARE, THE "QUI TAM ACTION" 18 BOARD OF DIRECTORS OF THE 19 LUCILE SALTER PACKARD 2. VIOLATION OF CAL. CHILDREN'S HOSPITAL AT INSURANCE CODE §1871 et.seq. 20 STANFORD, THE LELAND JUNIOR 21 UNIVERSITY, THE BOARD OF 3. VIOLATION OF CAL. GOVT TRUSTEES OF STANFORD CODE §§§ 12650-12656 FOR MEDI- 22 UNIVERSITY, STANFORD HEALTH CAL FALSE CLAIMS ?; CARE. ADVANTACTE, and DBES ? -1.0, inclusive, Complaint Filed: Dec. 4, 2017 24 First Amended Complaint: Defendants. 25 June 20, 2018 26 27 - 2- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:296 1 STATEMENT OF COMPLAINT 2 1. This is a False Claims Action (herein "FCA"), brought on behalf of -, Plaintiffs, the United States of America and the State of California, (herein 4 "Plaintiffs") against defendants Stanford et al. for false surgical billing. This case 5 is filed under seal on behalf of Plaintiffs, ex relations Relator Emily Roe pursuant 6 to the qui tam provisions of the Civil False Claims Act including 31 U.S.C.§§ 7 3729-33, Cal. Gov't Code §§ 12650-12656, and the California Insurance Frauds 8 Prevention Act (herein "IFPA") pursuant to Insurance Code § 1871 et. seq. 9 10 2. Evidence incorporated infra was uncovered through proprietary data 1] mining of thousands of adjudicated Medicare claims. Claims analysis showed that 12 defendants Stanford et. al and its surgeons freely took advantage of a flawed 13 medical payment system by habitually upcoding and unbundling major surgical l4 codes for breast cancer surgery as well as unbundling and charging exorbitant fees 15 for otherwise "free" services, considered part of the global surgery fees. 16 Additionally, Stanford customarily released "ever-changing" medical records 17 which were not only variable depending on the requestor, but also indecipherable 18 and purposely ambiguous records. For example, a single 23hour mastectomy 19 hospitalization at Stanford resulted in 500 pages of medical records which were 20 at best, unintelligible and internally contradictory as to the services performed. 21 '~ 3. The herewith FCA is based on Stanford's identified billing schemes 22 ~; and habitual submission of false, fraudulent and/or misleading healthcare bills to the government and private insurers, whereas Stanford: 24 (1) Unbundled and billed pre- and post-operative visits and facility 25 fees in violation of global surgery fee rules; 26 f►•yI - ~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:297 1 (2) Upcoded units of exorbitant surgical supplies and medical goods 2 like breast implants or artificial skin substitute- i.e. whereby Stanford billed double or more number of units than the actual units used, and 4 units recorded in the surgeon's reports; 5 (3)Unbundled and upcoded tissue pathology exam codes in violation 6 of the "one tissue, one code" rule- i.e. a single surgical pathology 7 specimen was charged as two or three pathology codes and multiple 8 facility or technical charges; 9 (4) Habitually upcoded physician office visits and time codes to the l0 highest paying level codes (CPT 99205 and 99215) without 11 documentary support; 12 (5) Freely upcoded mid-level providers (physician assistants and 13 nurse practitioners) visits to the highest paying physician codes in 14 violation of "incident to" guidelines- thereby also fraudulently 15 misreporting the actual provider of services; 16 (6) Unlawfully billed for unsupervised and unlicensed pYactice of 17 medicine, and diagnostic testing and procedures by unlicensed 18 personnel; and 19 (7) Egregiously instructed and required that its medical billers and 20 coders always bill at the maximum level andfees, re m _ar of the 21 lack of medical necessity, lack of substantiating medical records, and 22 failure to adhere to national Correct Coding Initiatives. 2; 24 SUMMARY 25 4. Stanford Healthcare is very expensive, particularly for women's health 26 and mastectomy surgery. For example, when national benchmarks fora "one-and- 27 -4- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:298 done" single stage mastectomy cost an average of $34,839-$78,000, Stanford bills 2 a staggering $153,488.68 for the same surgery.(Exh. E, p. 95) ~,t jam. J ___,: ~ _.` K.~ ' a`~ ~ '"~ `. ~ 4 - _.e ..~ _.~_,t. _ ~.. ~ yr ~ << v =~ i ~, m, i 3 ~ or,d r:..;, a ~~:~~,3 e .Nr~!rr i v d nK:r et (SPi' 9~;. tf {~:, yfC~ &N. ~ k~ ~~rr. .~,t u. ~ '.i~o t.. ? a'va cr. v 5 a~~cs,.91 n ct, --~;r ra VGu f~..m~xs~s i~w~ ire tJ.,rts...~, .~~,r r t~lD~'1t-~ ..~U;~ir, F~c i'm~.. ~a~araw Atc_'~,..r 6 7 5. Stanford's fraudulent billing regularly targeted women's health. 8 Defendants' upcoding and unbundling affected particularly women who underwent 9 cancer treatment at the Stanford Cancer Center located on Blake Wilbur Drive in 10 Palo Alto. This facility is also known as the Wilbur Drive Cancer Center or "Blake ]l Wilbur". l2 6. Of interest in this action, are Stanford's upcoding schemes in breast LU surgery, mastectomy, surgical departments, hospital surgical supplies, and 14 countless procedures including pelvic floor testing at the "Stanford Cancer Center". 15 Breast surgery 16 Mastectomy Reconstruction 17 Surgical Departments 18 Pelvic Floor Testing 19 Stanford Women's Cancer Center 20 Stanford Cancer Center on Blake Wilbur Drive 21 Stanford Hospital 22 Stanford Pathology Department and Laboratory 23 24 25 26 Explanation of Benefits attached fora 23-hour hospitalization for a single stage "one-and-done" mastectomy at Stanford totaling approximately $150,000 billed. 27 -5- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:299 l 7. Stanford institutionally bills much higher and quantities of codes for 2 the same or similar procedures. Industry standards show that Stanford deliberately ~ lacks transparency in its healthcare billings, and its billing ledgers are 4 indecipherable. 5 8. Stanford habitually takes advantage of a flawed medical payment 6 system and capitalizes by upcoding and unbundling surgeries, medical services, ~ and upcoding units of surgical supply codes. g 9. For example, Stanford typically bills 2 or 3 units when in fact one unit 9 is used. Stanford exercises its billing schemes regularly in the expanding field of 10 breast cancer surgery and mastectomy, where one implant costs several thousand >> dollars, and one artificial surgical tissue used is billed at $17,300 per unit. Several ~2 hundred million dollars of Stanford's annual revenues are a result of upcoding and ' ~ unbundling, and estimated to be recoverable pursuant to FCA. ~4 10. Herein Stanford's key six (6) categoric billing schemes have IS been elucidated and are demonstrated prima facie within the attached Complaint ~6 and exhibits. (¶3) However, the extent of Stanford's capacious upcoding remains ~~ to be fully fleshed out. ~g 11. Stanford's ongoing schemes to defraud the government and ~9 private payers is motivated by Stanford's ability to "game the system" by 20 unbundling global surgical fees, churning the abundantly high volume of breast 21 cancer and surgical patients into a larger number of procedures, and using 22 multiplicitous misappropriation of CPT codes for unearned enrichment and big 23 ~r~fts. 24 12. In 2016 alone, Stanford collected $3.9 billion dollars in total ~5 healthcare revenues. Stanford's billed amount was in excess of Stanford's 26 27 -6- FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:300 1 collections. Of the nearly $4 billion dollars collected, $755.7 million was from 2 Medicare. 13. In the first quarter of2018, Stanford reported collections of$1.16 4 billion dollars, up from $1.09 billion dollars in 2017. In 2016 and 2017, while other 5 California providers experienced decreased revenues because of the 6 implementation of the Affordable Care Act, Stanford reported a sizeable income 7 increase and only single digit increase in expenses. 8 14. Of Stanford's total annual healthcare billings, it is demonstrated 9 herein that 11-15% of all its billed CPT codes are habitually and fraudulently [~ ~; manufactured through institution wide schemes including pattern upcoding and unbundling. 12 15. Stanford Health Care —which includes Stanford Hospital, Lucile L3 Packard Children's Hospital, and three affiliated medical groups — is among the 14 most expensive providers in California, making affordable care access 15 increasingly difficult to provide to commercial carriers. 16 16. On point, Blue Shield recently unilaterally terminated its contract 17 with Stanford citing: "Stanford Health Care's rates are among the most expensive 18 in California and its high costs are not consistent with our mission."(Accessed 19 at https://calhealthnews.com/blue-shield-to-drop-stanford-health-care-from-ifp- 20 network/)."As part of our continuing efforts to help make access to health care 21 more affordable for our members,Blue Shield of California is removing Stanford 22 Health Care from our Individual and Family Plan(IFP)Exclusive PPO Network, 23 effective January i, 2Cib." ~ htt~s:iiw-~vw.blueshi~idca.uo~Y1j 24 17. In relevant background, Medicare sets and publicly publishes 25 national fee schedules for all medical, surgical, and laboratory services based on 26 standard CPT codes. Hence, Medicare's fees and allowed CPT reimbursements 27 - 7- FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:301 1 vary only slightly based on geographic factors. Thus, other than to employ creative 2 billing schemes, it is not possible to justify how Stanford routinely churns a one(1) -, day mastectomy hospitalization into a $150,000 bill when the benchmark for 4 similar services is far, far under $100,000. (https://www.cros.gov/apps/physician- 5 fee-schedule/license-agreement) 6 18. Stanford receives the lion's share of its profits and operating 7 revenues from healthcare Federal funds. Stanford's willful implementation of 8 these unlawful billing schemes is intended to override lower health care 9 reimbursements, and to circumvent reduced Medicare fee schedules. l0 19. Commercial carriers, Medi-Cal, and healthcare providers 11 typically all use the Medicare fee schedule as a benchmark for their reimbursement 12 schedules. It is industry standard that carriers state their fee schedule globally as 13 "80% of the Medicare fee schedule" or some percentage of the Medicare fee 14 schedule. Over the past decade, Medicare has gradually reduced its fee schedule 15 particularly for high ticket items like radiology, surgeries, labs, and pathology. 16 Accordingly, there has been a general reduction in health care revenues for the 17 same level of services CPT code. 18 20. For example, notwithstanding annual inflation and similar 19 adjustments in medical supplies and costs, over the past 10 years Medicare began 20 slashing health care reimbursements and targeting high dollar CPT codes like 21 surgeries. Hence, the same surgery that reimbursed $3000 in 2008 may now be 22 only paying $1200. Therefore, surgeons or pathologists would have to produce far 23 greater work product tG ~USi l~Zc~if2tuif2 i11~ii earrings at priar t'zar's i2V2iS. 24 21. However, Stanford nearly doubled its Medicare revenues in just 25 four years from 2012 ($460.4 million) to 2016 ($755.7 million) without an 26 explainable, reasonable, or proportionate increase in expenses or overhead. In fact, 27 - ~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:302 l Stanford reported exceedingly low overhead expenses averaging 14% in the 2 pathology clinical laboratory. Through various artifices and schemes, Stanford 3 freely billed and collected unjust enrichment from Medicare, Medicaid, 4 commercial insurance carriers, and individual payers through deductibles and co- 5 pays. 6 2012 2016 7 Stanford collected Stanford collected 8 $460.4 million $755.7 million 9 Medicare funds Medicare funds 10 11 22. Stanford reported doubled healthcare revenues amidst a nominal 12 expense ratio. While profits are not improper and typically could signal a healthy 13 and thriving organization, Stanford's unconscionable profits signal a willful course 14 of conduct through unbundling and upcoding. 15 23. Stanford's disparity in massive healthcare production and 16 doubled earnings and purported extremely low annual expenses simply defies 17 belief, especially in an era when comparable hospitals are struggling, very few post 18 any profit, and many have been forced to restructure or close. 19 24. Stanford's hospital expansion plans broke ground around 2011 20 and expanded facilities are expected operational in mid to late 2018. However, 21 between 2012 and 2016 Stanford had not undergone expansion. In fact its' hospital 22 campus was under heavy construction resulting in lost space and work delays. 2'~ H~ne~, Stanford ~~~as expanding ~~~her~ the healthcare dollar vas being deeply cut 24 by Medicare, commercial carriers, and Obamacare plans. Stanford was motivated 25 and required large amount of funds to expand, remodel, add beds, establish 26 dominance in the elite healthcare space, and pay salaries of high price tag faculty. 27 - ~- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:303 1 25. An example on point for reduction is Medicare reimbursement 2 per CPT is code "88307" for tissue pathology. In 2018 Medicare reimburses this -, at an average of $240.71, in 2016 paid $288.50, and paid even more at $292.61 in 4 2013.2 Medicare's gradual decline in CPT 88307 reimbursement would in effect 5 deduce lower earnings and higher overhead since there is an expected reciprocal 6 increase in costs of supplies, staffing, facilities, and the like. 7 2013 2018 8 Medicare paid $292.61 Medicare pays $240.71 9 CPT 88307 Pathology CPT 88307 Pathology to 11 26. As previously shown by Stanford's FCA settlement and the 12 multi- million-dollar 2015 Stanford Lucille Packard's Children's Hospital payment 13 to California State for upcoded anesthesia block billing practices, Stanford harbors 14 a deep proclivity toward aggressive billing and maximizing profits. 15 27. Stanford has an established penchant toward upcoding and 16 pushing the envelope, and has already been heavily sanctioned for false claims 17 pursuant to Cal. Insurance Code § 1871. Stanford has also been hit with additional 18 Medicare cuts as penalties for substandard patient care and above average 19 healthcare acquired infections (herein "HAI").(Exh. T, p. 188) 20 28. Moreover, during the same time Stanford's own surgeon testified 21 under oath that he would not refer patients to Stanford because "Stanford was 22 without good plastic surgery, without a good plastic surgeon"(Depo. Dr. Dirbas p. 2; 207, 2-8). 24 25 26 2 Referenced Medicare fee lookup at https://www.cros.gov/apps/physician-fee-schedule/search/search- results.aspx?Y=0&T=0&HT=O&CT=1 &H1=88307&C=2&M=4 27 - io- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:304 1 29. In unrelated but concurrent Stanford matters, Stanford's 2 employees testified under oath that Stanford was improperly staffed, lacked proper supervision for female procedures, maximized healthcare codes and billing despite 4 contrary medical records, failed to maintain required emergency crash carts and 5 instructed staff to call 911 instead, and for example caused contaminated anal 6 probes to be erroneously inserted into women's vaginas with false readings, but 7 still billed carriers and Medicare as the intended procedure.(Exh. T) 8 30. Despite being under construction, Stanford ended the first 9 quarter of fiscal year 2018 with a remarkable operating income of $74.3 million, 10 more than double the operating income of$28 million it reported in the first quarter 11 of fiscal year 2017. (Reference 12 https://www.beckershospitalreview.com/finance/stanford-health-care-s-operating- 13 income-more-than-doubles-in-q l.html) 14 15 2016 2017 16 Stanford 1st quarter income Stanford l st quarter income $28 million $74.3 million 17 18 19 31. As a U.S. non-profit entity, Stanford ironically enjoys rank as 20 one of the top five most profitable healthcare entities in the U.S. Stanford is 21 required to publicly disclose its income statements and does so at 22 https://stanfordhealthcare.org/about-us/bondholder-general-financial- ?'z informati~n/audited-financial-starements.html. ~ranf~rd iscuec bonds and hence 24 has complete disclosures ofStanford Healthcare's census, assets, earnings, salaries, 25 and expenses. Moreover, Stanford posts its healthcare utilization reports detailing 26 the number of annual surgeries, discharges, and patient days. Thomas E. Malm, 27 -~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:305 1 Treasurer of Stanford Healthcare is listed for contact and report access at 2 tmalm@stanfordhealthcare.org. 3 32. Based on evidence herein, it is estimated that in 2016 alone, 4 ($468 million) a rather conservative estimated 11-15% of Stanford's annual 5 revenues were statutorily upcoded, unbundled, or fraudulent, and hence 6 recoverable pursuant to FCA. 7 33. At a glance, Stanford reported to the State that it performed 8 34,046 surgeries in 2016, which was up from 32,956 surgeries in 2015, and up from 9 30,751 surgeries in 2014. At a very conservative estimate that 13% ofthe total in 10 2016 surgeries were preceded by an unbundled pre- or post-op visit, that totals 4426 11 surgeries where typically a high complexity office visit code(CPT 99214 to 99215) 12 was wrongly billed, and hence subject to FCA. 13 34. Moreover, in addition to the upcoding of professional fees, 14 Stanford's facility fees were similarly affected as well as were upcharges for the IS quantity billed of durable surgical supplies, such as breast implants, artificial tissue 16 (Alloderm), and tissue expanders (herein "TE"),Implants and TE, which are billed 17 at thousands of dollars per breast, carry a great billable and profit margin, especially 18 when they are double billed to multiple patients for the same product. For example, 19 Stanford fully admitted that it upcoded and billed double units of high dollar 20 artificial tissue($17,300 per unit for Alloderm)used in surgery, when the surgeon's 21 report and deposition under oath showed that only one unit was used.(Exh. D,E,K) 22 35. In simple calculation, extrapolating Stanford's conservative ~;i number or unnundied pre-operative visits in 2u i ti muitipiied ey ~~4'1.y% per 24 captured pre-operative visit results in unjust enrichment to Stanford of 25 $1,513,559.22 in professional fees plus facility fees, in 2016 alone. 26 27 - I2- PIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:306 36. This action alleges that Stanford's violation of FCA likely began 2 prior to 2010 and are continuing. Hence the base damages for Stanford's -, unbundling of professional fees for pre-operative visits, extrapolated by the number 4 of years, is easily $IS million dollar's. That figure can double once the technical or 5 facility fees are added. Stanford captured improper facility fees for unbundled pre- 6 operative visits which are also subject to FCA. Hence, FCA entitles Plaintiffs to 7 penalties in addition to the base earnings recovery. 8 37. Stanford was put on formal notice and has been aware of its 9 unbundling billing compliance since at least November 2016 and again on March [I I 2017. Stanford and their executive Vice President and Chief Compliance Officer Ms. Zumwalt's response was not to respond or to investigate, but rather to do what 12 Stanford does well when caught red handed- suppress and conceal. In response to 13 notice of noncompliant surgical billing practices, Stanford cause to be filed a 14 motion in limine to suppress their joint billing frauds. IS 38. In March 2018, Stanford billing compliance officers, including 16 Ms. Debra Zumwalt as General Counsel, and their outside counsel have been 17 aware of their billing non-compliance for more than a year. The same parties have 18 since independently and consistently conceded in writing to Stanford's unbundled 19 pre-operative visits and up coded units of surgical products. (Exh. J). If fact, 20 Stanford sent relator a check 2 months ago refunding the $341.97 from the 2] unbundled 2012 pre-operative visit. (Exh. K, L) 22 T~ ~,Tzo+~ 1op,~'":.~ .~ f•a~wlA~l'r cf~~ YFIIiYY ri+t ~urr.lM~ti~T. X rMs Nta niw+(~f.cvmlY WCl1u EN 1. ~ C~r~ck encNCLI(lu No nciE~ (:HUK.et c0~ on ' ~ J ua k~ra,,,e~k,,.a onrE z32tiG7 ~ Tl.~'('{}N1) ra0 y _ ~ k~fa~r ~,ce ran ~t~n G'1i25.t8 r,~.i .r::i~:rs: N or hb ~ wu,c~s e 24 m -.tea c~ .~ —,_..... 34t.97 t ~i y;i i _ ___ ~ ~ ?5 PkY THREE N!JNC~RED FORTY OfJE.ANC 37. 101--- -- ---- -- ---- -- --~— 60 9i7F 0~6 A11u ti 26 1 27 - ~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:307 1 39. Stanford also wrote to relator in June 2018 that Stanford was in 2 process of sending another check to relator for upcoded and unbundled services. 3 (Exh. J). In June 2018, Stanford Counsel also conceded that Stanford General 4 Counsel was aware of the pathology tissue fraud allegations. 5 40. For example, Stanford's Medicare payment ledgers for 6 thousands of surgeries show that upcoding and unbundling was routine. A typical 7 Stanford surgeon Dr. Amanda Wheeler billed Medicare $1,494,584.50 or 8 approximately $1.5 million over afour-year period from 2013 to 2017. $778103.5 9 50% of that amount was breast surgery. Of that subtotal, 11-20% of claims were 10 upcoded and/ or unbundled. 11 41. As another example, Dr. Nguyen billed Medicare $2,695,000.65 l2 is a five-year span from 2012 to 2017. Dr. Dung H. Nguyen, M.D. PharmD is the 13 Director of Breast Reconstruction at Stanford Women's Cancer Center and she 14 billed CPT 15777 (biologic or artificial tissue implant procedure) 23 times from 15 2013 to 2017; the majority of those were billed as bilateral procedures and at least 16 2 units ofthe artificial tissue were billed by Stanford,regardless of how many units 17 were used. 18 42. Pursuant to Internal Revenue Code, Defendants' tax returns are 19 of public record. This FCA has examined Stanford's disclosed tax records and 20 public filings with the State. Defendants' self-reported disparity of 21 unconscionable double digit increases in health care revenues and very low 22 expense increases is often reflective of the fact that creative coding schemes are ~;i at play. operating expenses required for more production and services reasonably 24 necessities more supplies, gauze, needles, paper towels, syringes, table paper, 25 utilities, staffing, and the like. Hence expenses would be expected to also climb 26 proportionately. For example, Stanford's doubling of Medicare revenues without 27 - 14- FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(x)) 28 24 Page ID #:308 1 explicable increases in expenses simply defies belief. Stanford's purported public 2 "successes" in healthcare of a $1.1 billion dollar profit the first quarter of 2018 3 amidst decreasing Medicare nationally set fee schedules also defy belief. 4 43. Stanford's schemes are to routinely upcode to the highest level 5 paying code for a given class or time of service, regardless of the true service 6 provided. Stanford also upcodes the number of units for supplies and services, as 7 well as improperly unbundles surgical services for unconscionable healthcare 8 profits. 9 44. Stanford has only approximately 613 licensed beds in its main 10 hospital and 311 licensed beds in the Children's Hospital. At a glance, Stanford's 11 combined 924 patient inpatient beds purportedly generate 40-50% ofthe healthcare 12 giant's annual healthcare revenues. (Ref. Dr. Brent Tan, MD,PhD Director of 13 Laboratory Informatics, Stanford Department of Pathology- accessed at 14 http://www.executivewarcollege.com/wp-content/ uploads/TAN.tue_ IS .7am.Fina1_.pdf). As a simple ballpark calculation, Stanford reports a striking 16 revenue of $2,110,389 per patient bed per year. Of Stanford's annual healthcare 17 revenues, it is therefore estimated that $468 million dollars is recoverable through 18 this false claims action. 19 20 21 22 ~z 24 25 26 27 -,~- FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:309 1 ^~~ ~' .+~ ~ St~snloicl _ 2 summary Sum~ar 3 ~~~~r~~~c~ c~ a~, _ ~~ ~~ Adu6t Acute Care -- ~~6 Aatue $eds 4 - 111 Petira~ric 5~rvi~es 59 Intensive Care — 8 Cr~ronary Cafe — 8~ Intensive Care Neuvb4rr~ Nursery S I — 369 Genera! NledicallSurgery 6 — 3Q Acute PsychiaCrc 44 IntenSiVe Gare Surgical Services — 2 Perinatal S~rvices~ 7 — 33 Operating Suites — 31 1Nain DR 35 l~nspeci ied Genera Acute Dare 8 12 Ambulatory Surgery 14 bath-Angie Suites .Su~~ica6 Se~ic~s 9 ~ C~utp~tient Surgery Units ~t 7 ~perafing Sui#es Red~~a~d City 10. Transplant Center, Level 1 l"raurn~ Center, ~ Cesarean Section OR Sui(es 11 Ccarnprehensiue Cancee Center 3 Am~~lat~ry Pracetl~re Raams 12. ~r~~z ~~~ ~~,~~ 2ao — EfR: 1~ ' ~ _(k` e '—~~ _ ~ . 14 15 45. Stanford began an extensive hospital expansion project on May 1, 16 2013 which is anticipated to be completed in 2018 and lead to an additional 144 17 patient beds at Stanford. However, it is notable that when Stanford posted these 18 remarkable doubling of Medicare revenues between 2012 to 2016, the hospital had 19 the same or decreased access, and expansion was not actualized. The Hospital 20 expansion project broke ground in mid-2013, hence that date does not support 21 Stanford's basis for a near doubling of profits. Creative billing schemes would 22 however, substantiate the types of increases in healthcare revenues reported at ~z Stanford from 2012 to 2016. Inset below are schematics of Stanford's new 24 "Arcade".. 25 26 27 -16- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:310 ~ c~ ~`H ~tx3 n fr~rd 2 3 4 rr~~ _ ' 5 ~~ ~~.~v », ~~ 6 a 7 Vie~rQt [he rJew Stanford Hospital from Welch Road g 9 l~"""...~»~ ]0 Il -~ ~- . 12 13 14 Arcade at New Stat}card Ho,pitai IS 16 46. Of note are that Stanford's healthcare billings are habitually 17 contradictory to the actual healthcare services provided for patients, and the l8 medical records are contradictory to the CPT codes billed. Stanford generates 19 volumes of paper for a simple hospitalization, for example in a 1 day mastectomy 20 hospitalization, Stanford's medical records were 500 pages. In many instances the 21 doctor's surgical notes are contradictory to the nursing records for surgical supplies 22 used, and the billing for units of surgical supplies are habitually at the maximum ~~ possible codes. The doctor's surgical records contradict the doctor's testimony 24 under oath, and there are different version of surgical reports depending on who 25 requests the records. Stanford billers are routinely instructed to unbundle and 26 upcode services for maximal reimbursement despite that Stanford knows that the 27 - 17- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:311 l billed codes are also contradictory to national Correct Coding Initiatives (herein 2 "CCI"). 47. Hence Stanford's habitual false coding led to false billing, which 4 in turn led to unjust and exorbitant healthcare revenues for Stanford. Itemized 5 Medicare billing ledgers for tens of Stanford surgeons, and accordingly thousands 6 of Medicare beneficiaries demonstrate that Stanford habitually violated national 7 CCI. Stanford's exorbitant healthcare billings were not only unsupported by 8 Stanford's own surgical and medical records, but the coding which led to the 9 collected revenues was also knowingly in direct violation of CCI's. ]0 48. In FY 2016, Stanford (also Stanford Healthcare or "SHC") treated approximately 71,500 patients in its emergency room, admitted more than 12 25,700 inpatients and recorded nearly 697,000 outpatient transactions. 3 Stanford 13 reported to the State that it performed 34,046 surgeries in 2016, which was up from l4 32,956 surgeries in 2015, and up from 30,751 surgeries in 2014. 15 49. In 2016 California commercial carriers like Blue Shield 16 unilaterally terminated their contracts with Stanford based on recognizance of 17 Stanford's disproportionate and "expensive" billings. Many carriers including 18 Medicare and Anthem Blue Cross have not yet terminated Stanford contracts. 19 50. Stanford freely promotes and incentivizes institution wide 20 upcoding and unbundling to achieve maximal healthcare profits. Stanford 21 fraudulently upcodes claims to maximize profits particularly in high ticket 22 women's health services including mastectomy and breast cancer. ~~ 5 i. defendants coliectiveiy herein "Stanford" devised Willing 24 schemes to artificially inflate medical and surgical revenues over at least an eight 25 26 li 3 https://www.treasurer.ca.gov/chffa/meeting/2017/20171207/staff/430.pdf 27 18 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:312 1 (8) year period from 2010-2018, resulting in hundreds of millions of dollars of 2 recoverable overpayments. 3 52. This action makes prima facie showing that Stanford knowingly 4 used artifices to violate correct coding initiatives and upcode standardized 5 healthcare fee schedules for a profit motive. (Exhibits- excel spreadsheets of 6 Stanford billing codes per surgeon) 7 53. For example, on 12/12/12 Stanford billed a commercial carrier 8 $153,488.68 fora 23-hour mastectomy surgery hospitalization (facility fee and 9 professional fees). $153,488.68 is expensive by local hospital standards for a less 10 than 1-day hospitalization. 11 54. On 3/23/18 (five years later) Stanford conceded in writing that 12 $17,758 (approximately 13%)of that total bill was upcoded and unbundled, hence 13 rendering the service fraudulent pursuant to Cal. Ins. Code § 1871 et. seq. (Exh. [[~I MM). Stanford habitually upcoded number of units of surgical supplies, including IS CPT code 15121 As detailed herein, Stanford received and retained at least 13% 16 unjust enrichment from Anthem Blue Cross. 17 STANFORD'S CODING CORRECT CODING l8 CPT 15171 (2 units) $34,600 CPT 15171 (1 units) $17,300 19 CPT 99215 (pre-op visit) $458 CPT No Charge Pre-op $0 20 21 Stanford Fee $35,058 Correct Fee $17,300 22 ~~ ». t'~n 3une 2G, 2u i8 Aninem Biue dross therein ABA;j 24 telephonically confirmed that Stanford's Dec 12, 2012 claim had been adjudicated 25 and paid for 2 units of Alloderm, and that Stanford had submitted no refunds of any ~~ type since claim processing in Jan. 2013 by ABC. 27 l7 FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:313 1 56. As another example, on 06/29/16 Stanford billed Medicare 2 $3729 in total professional fees for two office visits and a mastectomy. Stanford -, violated global surgical fees because the pre-operative visits the day before surgery 4 was unbundled. Hence, pursuant to 31 §§U.S.C. 3279-3733, $263(7%)ofjust the 5 professional fees was fraudulently billed on 6/28/16 for apre-operative visit. 6 Incorporating the related fraudulent facility and operating room fees, Stanford 7 received and retained at least 13-17% in unjust total enrichment from Medicare. 8 (Billing National Provider Identification (herein "NPI") 1437292927, Rendering 9 NPI 1154457091). l0 11 STANFORD'S CODING CORRECT CODING 12 CPT 99215 (pre-op visit) $263 CPT No Charge Pre-op $0 13 Stanford Fee $263 Correct Fee $0 14 15 57. In many cases, Stanford surgeons' operative reports don't 16 support the number of surgical durable good billed, and the nursing records don't 17 support the surgeon's operative report. In other words,the evidence contradicts the 18 billings, and the billings are contradictory to the medical records. In other cases, 19 Stanford mid-level providers' medical records don't support Stanford's physician 20 service codes billed, and the billed high fees aren't supported by standard 15-20% 21 reduced fee schedules for mid-level providers. 22 58. The full extent of Stanford's billing schemes has not been ~;i elucidated. Stanford has paid out on prior FCA suits. However due to Stanford's 24 influence and power and under their direction, those FCA have largely been either 25 26 27 - ~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford el. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:314 1 kept under seal or concealed4 from public court files. Stanford Children's Hospital 2 anesthesia time block upcoding settled for monetary payment to the State Insurance 3 Commissioner by Stanford on or about mid-2013. However, Stanford negotiated to 4 suppress the FCA files from public access. 5 6 STANFORD'S SIX (6)BILLING SCHEMES 7 8 FIRST 9 [~ ~ 59. First scheme,Stanford freely and habitually unbundled pre- operative visits in violation of simple global surgical fee rules. A "pre-surgery" 12 visit is not separately chargeable. Once the decision for surgery is made, another 13 visit cannot be stacked on top of the global surgery fee. Stanford unbundled pre-op 14 visits and collected Medicare and non-Medicare money. Stanford did this through 15 two separate unlawful charges, neither of which were allowed. 16 (1) Stanford billed a professional fee for the surgeon's pre-op visit. 17 (2 Stanford billed additionally a facility fee for the institution. 18 60. For example, a correctly coded mastectomy professional 19 component pays approximately $1000. The global surgery fee includes pre-op and 20 post-op visits. 21 61. After the decision for surgery was made, Defendants required 22 most patients to return a day or two before surgery. Defendants then separately 2~ tacked uti a "(;uITIpI`C~1zII51V~ I`~tUi`Il v151~" before su~gc~y at $268-$491. Stanf~rd'S 24 25 4 Although Stanford paid money to settle the case, Stanford negotiated to conceal from public court access the False 26 Claim Action case filed pursuant to Calif Insur. Code § l 871.4 ex Relator Rockville Recovery Associates for fraudulent anesthesia timeblock billing by Stanford Children's Hospital. 27 - 21- FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:315 1 unbundling scheme resulted in the mastectomy professional fee of roughly $1268- 2 1491, a 26%-49% increase per claim. 3 62. Facility fees pay richly thousands of dollars for global surgery 4 codes. Stanford's pre-operative visit unbundling scheme added hundreds and 5 thousands of dollars in facility fees per claim. 6 7 SECOND 8 63. Second scheme, Stanford upcoded a majority of midlevel 9 provider office visits. Care was provided by mid-level providers like physician l~. assistants (herein "PA") without the supervising doctor but Stanford billed under the physician (National Provider Identification herein "NPI") 12 64. A PA office visit pays approximately $80, but Stanford's scheme 13 resulted in pay out of $100-$110 because Stanford falsely coded that doctors 14 provided the service. But for Stanford upcoding services with a false NPI, CMS 15 would have paid 80-85% of fees if a midlevel provider rendered professional 16 service. 17 65. Stanford uses many mid-level providers throughout its surgical 18 departments but billed exclusively under the surgeons' NPI even when the surgeon 19 was on vacation. Defendants' PA's total billings show less than 20 visits per annum 20 in cases reviewed, whereas all other visits were improperly billed under the doctor. 21 Stanford also violated "incident-to" rules by freely billing new patient visits 22 provided entirely by the PA, under the doctor's NPI. The doctor would sign off a 2~ i~utc iha~ ile revic~vcd the uliaii ~viil~~u~ evei being ii~v~ived in the dirCct care ~fthe 24 patient. "I have reviewed the Physician Assistant's note and agree with..."This is 25 incorrect use of the non-physician practitioner and incorrect billing under the 26 "incident to" guidelines. 27 -22- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:316 2 THIRD 3 66. Third scheme, Stanford freely and fraudulently upcoded billed 4 quantities and units of exorbitant medical and surgical supplies. For example, 5 throughout its hospitals and operating rooms, if one breast implant was used, 6 Stanford billed 2 units resulting in thousands of dollars of unjust enrichment. The 7 surgeon's notes and operating room nurse notes showed one unit, but upcoding 8 regularly resulted in billing more units than used.(Exh. MM- Stanford admission) 9 67. Stanford fraudulently billed another patient for the unused 10 second implant or surgical tissue that was already billed to another patient's carrier. 11 68. This case demonstrates a congregation of Defendant's billing, 12 medical records, and nursing records which when examined together show the 13 fraud. 14 69. For example, this case shows that Defendant surgeon only used 15 1 sheet (1 unit) of artificial tissue and Stanford freely billed 2 units. In the case of 16 Alloderm, each unit costs $17, 300 (CPT 15171). Stanford performed some 220 17 mastectomies and hundreds more surgeries involving artificial tissue in one year, 18 at an estimate that 100 of those cases had upcoded Alloderm units, that estimates 19 to $1,700,000 per annum of false and fraudulent charges in just one medical 20 supply code for mastectomy. Alloderm is also used in other surgeries and flaps and 21 grafts, hence fraudulent billing for units of Alloderm is estimated at $2.5 million 22 dollars a year. Stanford's true usage of durable goods can be reconciled with the ~~ number or uniis purchased from the manufacturer annually. 24 25 FOURTH 26 27 - 23- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:317 70. Fourth Scheme, Stanford upcoded and improperly billed 21 related testing, procedures, and ancillary services including: -, • Codified disproportionate percentage of visits as CPT 99215, consecutive high- 4 level visits amounting to 40 minutes of face-to-face physician time, when the 5 documentation did not support the coding: a correctly coded level visit pays $80 6 whereas Stanford's upcoding pays $120 or $150; 7 • Billed for the unlicensedpractice ofmedicine by interns and students when no 81 attending signed the notes (Dirbas deposition); 9 ~ Billed for medical services and office visits by students and unlicensed interns ]0 but no- attending or licensed physicians on premises or co-signed the intern 11 and student notes (See Dirbas Deposition- Exh. JJ); 12 • Billed for diagnostic testing and medical procedures when no attending 13 physician was on premises (See Dirbas Deposition, and Exh. KK Quigia 14 Young Complaint ¶175- on pelvic floor testing and billing without required IS physician on site). 16 • Billed the maximum level and highest code possible per encounter. 17 • Instructed its coders to always code the highest level of service and time per 18 procedure regardless of controverting and unsupported medical records. 19 20 FIFTH 21 22 71. Fifth Scheme, Stanford upcoded and improperly billed ~;i anesthesia time block billing, and postoperative time billing including: f►.LlI • Codified disproportionate time block billing for anesthesia services and "post 25 anesthesia care"; 26 27 - GY - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:318 • Charged more than $1000 per 15 minutes of post anesthesia care and upcoded 2 the units of time billed which were not supported by the medical records (for J example in relator's claim Defendant reported an unsubstantiated 13 units of 4 post anesthesia care on 12/12/12 which would translate to 195 minutes or 3 '/4 5 ', hours spent in the recovery room); 6 • Unbundled and charged tens of thousands of dollars for "anesthesia time"; 7 ~ Unbundled and charged nearly one hundred thousand dollars per 8 hours for"OR 8 time"(or roughly $10,000 per hour of operating room time); 9 • Failed to show supporting documentation to support the coding; 10 • Billed the maximum level and highest codes possible per encounter. 11 • Instructed its coders to always code the highest level of service and time per 12 procedure regardless of controverting and unsupported medical records. l3 ~ For example, unbundling of the "OR room" resulted in charges of $69,685 plus 14 $16,848.00 plus $14,870 totaling $101,403.00 15 16 SIXTH 17 18 72. Sixth Scheme,("Tissue Fraud") Stanford upcoded units and 19 improperly billed pathology laboratory tests including: 20 • Upcoded and unbundled a single mastectomy surgery breast specimen as three 21 separate pathology services; 22 • Failed to correctly bill the number of specimens per the surgeon's operative ?~, report; 24 • Habitually billed the maximum level and highest codes possible per encounter; 25 • Freely violated the "one specimen, one code pathology" rule; and 26 27 - 25- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:319 • Received unjust enrichment of45-76% by the described tissue fraud schemes. 2 73. Stanford's Anatomical Pathology and Clinical Laboratories is -, very profitable. Stanford bills both a technical(tissue requisition and preparation) 4 and professional (physician interpretation service) component for anatomical 5 pathology. Through an imperfect payment system, the reimbursable technical 6 component is often 3 to 4 times the professional component. For example, in 2016, 7 according to CMS the technical component(or facility fee) for mastectomy tissue 8 was a whopping $288.50 and the professional component was $98.27. 9 74. According to Stanford, "At the Stanford University Medical 10 Center, approximately 31,000 surgical specimens originating from the Stanford Health Services Operating Rooms, Stanford University Clinics, other area clinics, or ti~ from the private and independent Palo Alto Surgicenter are accessioned yearly." 13 "Another 13,000 cases are reviewed either when patients, whose pathology specimens 14 were originally examined elsewhere, are referred to Stanford for treatment or when 15 other pathologists refer difficult cases for second opinions." (Accessed at l6 http://surgicalpathology.stanford.edu/ (Exh. CC)) 17 75. Case in point is CPT 88307 for tissue pathology which reimburses 18 $240.71 in 2018, but paid $288.50 in 2016, and paid even more at $292.61 in 2013.' iL•ll The demonstrated declines in the reimbursement for pathology codes would infer 20 higher overhead calculations and lower profits. While there is an expected reciprocal 21 increase in costs of supplies, staffing, facilities, and the like, Stanford posts 22 astonishing profits that are neither in line with community standards nor with ~; revenues. 24 25 26 5 Referenced Medicare fee lookup at https://www.cros.gov/apps/physician-fee-schedule/search/search- results.aspx?Y=0&T=0&HT=O&CT=1 &H1=88307&C=2&M=4 27 - 26- FIRST AMENDED COMPLAINT United States et. a[., vs. Stanford et. a[. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:320 76. In 2012 alone, Stanford labs billed out charges of $1.0 billion 2 gross billings for over 5.3 million billable tests. 60f the 1 billion dollars, 41% of the fees were generated from SHC inpatient fees, such as the pathology schemes 4 described here. Remarkably, Stanford reported that expenses were a fraction ofthe 5 billables at $142 million dollars. Simply calculating Stanford's percent overhead 6 in billings versus expenses, that places Stanford's lab overhead at astonishingly 7 low 14% overhead. Such fantastic billing is virtually unheard of in the medical:E ~ space where overheads typically range from 35% to 75% of billings. Stanford's 9 "superhero" low overhead supports creative billing schemes. 10 11 Anatomic Patho~la►gy and Clinical ~;.;~o~,~.~R~ 12 Lab€~ratvres Sats~cs l3 S)1~ rz~ SL'f~rl~;e: ~tar~fOtd F11E;~aItP~ G~fe, Sta~fc4f'd CIl1Id[en's I"iE,, ~,s and R ~ ~ r`~ '=1 ~ ' y xr ~.~ ~ ~.' 1 14 r ~. FOP J ~ ~i~I~~d0t1 ~B~Ir~~~E ~v'S~S [[1 ~~'1'~~i} ~~ ~,j ~~ 1 15 Locations ~ ~ - Cote Laf~orafory {SHG), 16 Tf81"Y5~U5t6ft SECVICE? (SHC} r •:, Anatomic Pathalt~gy tSHC 8~ Ndllui~w} ~ - 17 SpecaPty laboratories (HiElvie~a} ~~^~ 12 Poi ent Service Centers ' 18 ~~ ~ ~, ~s Over X1.0 Billion Gcass charges in FY~012 41°t~ SHG Inpatient ~«~~~~„ 19 E 58~~ LP~H, S~1C Qutp~tien# ~ RefsrraE Testing ~ ~' • ": ~ '~ ~ 20 • S' ~ Million Ex~ertses ~ ~~, r ~~.~ r rS.> 2] r~ ~ a::~ F `r s 22 ':^~ ~~~UII'~, „ Irtli,.d. ' . l FCC'-,: ~ 24 25 26 ~ (Ref. Dr. Brent Tan, MD, PhD Director of Laboratory Informatics, Stanford Department of Pathology 2015- accessed at http://www.executivewarcollege.com/wp-content/ uploads/TAN.tue .7am.Final_.pdf) 27 - 27- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:321 1 77. For example, of one of the upcoding schemes, Stanford's 2 surgical records for relator demonstrate that on 12/12/12 a sin le right breast tissue -, si was sent to the Stanford lab for pathology examination. Hence a b pathology 4 code should have been billed. However, Stanford manufactured unsupported 5 charges of $3342.00 and unbundled and upcoded the one tissue into three separate 6 pathology codes. 7 78. For instance, as exemplified here Stanford's schemes involved 8 upcoding a single (1) mastectomy specimen as three (3) pathology codes. 9 1~ 11 12 79. The surgeon's operative report [inset below] stated only one (1) 13 specimen was sent to the lab for each breast. 14 15 16 17 18 19 20 2l 22 ~: 24 25 26 27 - GO - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:322 Official Copy STANFORD HOSPITAL 2 ~ 1 '~~, I' (~1~ 3 450 BROADWAY STREET REDWOOD CITY, CA 94063 Sex: F Adm12/12/2012 SURGERY REPORTS (continued) 4 OPERATIVE REPORT Icontlnuedl DATE pF aPERATION: 12/12/2012 5' PREQPERATIVE DIAGNOSES: 1. Fibrocystic changes, right and left breast 6~ POSTOPERATIVE DIAGNOSES: 7 1. Fibrocystic changes, right and left breast g OPERATION PERFORMED: 1. Prophylactic nrpple-sparing right total mastectomy. 2. Prophylactic nipple-sparing left total mastectomy. 9 SURGEON'. Frederick M Dirbas, MD 10 ASSISTANT: Jon Gerry, MD 11 ESTIMATED BLOOD LOSS: 50 mL. I V FLUIDS 2 L crystalloid. ~2 SPECIMEN: 13 1 Right breast with double stitch at the ductal tissue underneath the nipple and single stitch at the axillary tail. 2. Left breast with double stitch at fhe ductal tissue underneath the nipple and single stitch at the axillary tail. noninic 14 80. Nothing in the Stanford surgeon's reporter his testimony under 15 oath supported the total number of pathology specimens billed.(Depo Dr. Dirbas 16 p.154-159). Stanford billed for 6 pathology codes for a total of$6600. Four of the 17 l8 codes in the pathology billing were not supported by the operative reports, and two 19 of the codes were unsupported by any record or nursing notes. 20 81. Even the Stanford pathologist's report reflects a total of four (4) 21 specimens, but Stanford billed for (6) specimens. It is illegitimate for Stanford to 22 have billed for purported "surgical specimens" which have no accounting in the 2; surgeon's operative reports or surgical nursing records. 24 82. In many cases, Stanford unbundled and upcoded billed out three 25 levels of pathology including 88305, 88307, and a "breast biopsy code" for one 26 contiguous mastectomy surgical tissue removed together which when billed 27 - 29- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:323 1 correctly results in mandatory bundling into one code. The signed surgical report 2 showed only two specimens were removed. (Inset below- Exh. 12/12/12 Op. J report) 4 O;: c al Copp ''`~ e ~ ~, i:' r 3 I ~ ~ ~ STAhlFORD FiaSPPTAL 5 450 BRORBV~JAY BTREEI' REDWOOD CITY, CA 94063 Sex: F' Rdm:12.7i 2.720'72 6 SURGERY REPbRT5 (car4tinued) 7 OPERATIVE FtEFpRT(conFin~edY GATE QF OF'~RA71QN: 12/42;2Q72 g Ff7~4PERATIVE D1,AGNC)SES' 1. Fibrocyst~c changes; right and ieft ~s~ast. 9 10 PC~STC~PERFITIV~ DdAGIV4SES. t Filarocyst~c ci~anges, nigh and #eft I~reasl I1 oPE~.A7l~7t~ PERFORNiE[}: 12 1. ProphyFactic r~ippl~:-spar€ng right total rnas~e~tomy, 2 Prophylactic Hippie-sparing left total mastecfomy. 13 SU~2GE0~1; Frederick M [3frbas, NiD 14 ASSEST'i~CJi'e Jon Gerry, Mtn 15 ESTihrtATED BLC30t3 L05S: 5t3 mL, !V FLLl9DS: 2 L crysiafl~Ed. 16 SPEC#MEN; 17 1. Ftighk breas[ v~rifh c4oubde stitch at the ductal(issue underneath t€~e nippl€: aid sirtgie stiE~h at the a7cillaay tail_ 2 Left breast wifh dpble sfitch at tha ductal tissue underneath the Hippie ansf sing[ stf~h ~t the axllary tai(.. 18 19 CULT+JRES: Kane 20 21 83. However,for this operative date showing only two(2)pathology 22 ?; specimens generated Stanford Hospital charged (herein "HC") and upcoded a staggering $6600 for six (6) units of high level pathology codes. 24 25 26 27 - ~„- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:324 t' .; _. 3i r ~~~..,r.,r\ ~~;cp ~:: Cr v ~ Y ~ ~\' 1 Lt~ i~T~~~~~~.' '~-p.-~- -h--j~. ~.; ~ .~.>,-~~. e~,~,s,. s~~'r~~~~r~' ~~acc~~~~~ i J _ ___ __ ~os,~ei~a. ~~ ~c~r~~!ea 21 ~~~t ~~~t ~.~~ 1.~h~„~,~ a: _.~.. r~osaira~.s~a~er~Er~? y e~..-.„k r ~v r< .in.'s r~~~.~rm T t n case: ~ e~ +owe .r *c _ ~" um~t,4t ., a~GN 3 4 ~ 4 _. _.. . _... . .. _.... .... ... . ..... w.... __ ...~..,. ~.....~...~ti.-.... tiP.a ..,. . 5 ~ u ~.;~ ~ 1 ~, s.,,~:_ ~ _ _ 6 ~Q ~~ ~ ~-~~ 7 _.,_..~ ~~__e ~,,.,~ --~ 61Akr CnRok FaynbFt TU ~=.a i Dt91.t~d:,'al. LOit!W, - g ! 7 ivu sr n t. ~~ U> cxnc' cnri C9tn~~ cairn i7~ tnvene 616ti. ~:ytxi~r j5 6 ~fi~f~r t .....~,! ~ o~-,~ 0.,4~ ttte ~CQUf~'Y 1fVLiJOER ai /~U d~^k es es~j turn v,1Ui ~Jtu ~~:~c.1'ctt G7'SL4 s¢a*a~.a,~ jjj,Qo, LEI~th= ~ -~7i.L'~C Gt4`E S. ~ ~ .. . '.7 C~~ 'Pt~'~16:rN tu, n}'P'~N. 'surd -> ~ ~ .l'.1:t r' AL .• r J ~- .~._ial 3 ~_Cy. 7f~~.J.. ~t ~~ 1.+t_.}'t. ~'?.";U~ ~'.rF'.(": t:..:`J ~. ..r j b.~ ^ ~Q 1~ 12x21:' "f~?'::13~~ ~i`~' ~r ^~>;'t:+R "7? R,a ~ 1 695a~ . t~Ci L ~'7.:~1.« 3r~~~.~~4f=~ k{~ ~I~~.2tiS:; PC).;'t Ti~,.~_, GFt"r.F; t-,'~q~N:,r'i3 '_,~µr,'. i;G 11 2: 212 3~.~1.~ ~~3G6 IM:~I~ IsF,t.h;.~*J?.'k~: .._"_~ 2 346dtJ.t3~ ~4 -5 ~} 2~T 1 t 2 3~,qdC ^~ i^?.b t ~9 a ~~1~ .~ t;fi 'T'~tJ''. 8 Fi:; yy * rsr et ~LT ': 3.48~}7 py G~r. Dq h 1. Gy.i '{ Ei. 1 [. ~J. 1 q~n$~~}. 6c~a~ V~Y ry n>G 3 y3p~~..n. CfSt I L' !"-.'t ~'~ ._C^~}'1}~~r~ ys~ {pC K ~G ry J J(~ V~\ c}~ i i.1~ n U ~~ 16 dw 1.~ .~}G 4W JJtiL 116 ~lY l`~. 3:Id+~ ~ r~41a AAfLs 1.fV _] L: J 3Vti VV 171 12 52Q252~4 H SF BF.EA;":' ]3It~ASY—TAR 2, ~.67~.(lt3 13 84. Stanford's upcoded pathology charges resulted in $6684 of 14 technical fees ("HC" Hospital charges) for the Stanford whereas Stanford was 15 entitled to only bill for 2 units of pathology, totaling approximately $827.52 per 16 the benchmark Medicare fee schedule. 17 STANFORD'S CODING I CORRECT MEDICARE ALLOWED 18 CPT 88305 Level IV (2 units) $1700 CPT 88307(2 units) $827.52 19 CPT 88307 Level V (2 units) $ 3306 20 CPT 88303 Level II (2 units) $ 1678 21 Stanford Billed $6684 Correct Total Revenue $827.52 22 ~; 85. As illustrated below, the surgeon's report(¶71) showed one 24 complete mastectomy specimen from each breast. However, Stanford coded 3 25 26 27 - ~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford el. al. QUI TAM (31 USC § 3729(x)) 28 24 Page ID #:325 1 pathology specimen codes per breast, which was contrary to the surgeon's 2 operative report that showed only one specimen was surgically removed. 3 4 Correct Coding 5 6 ~, 7 8 9 10 1 surgical specimen = 1 pathology code 11 12 1 3 ~ Stanford's Coding 14 15 l6 .s 17 18 ~ I ~ 19 1 Surgical specimen 3 pathology codes 20 21 86. A "double" or bilateral preventative skin and nipple sparing 22 mastectomy involves the surgical removal of both breasts. In the presented ~; ~Xa111~71G~ L~7C jL11~C1~11J~ TG~7V1~ ~~Il1W~~ l~1aL tWU J~7Cl:lII7ZTIS WC1-C ~CI1CIatCU. 1110 24 surgical report also stated that no nipple tissue was removed, and no other tissue 25 was collected. 26 27 >L FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QU[ TAM (31 USC § 3729(a)) 28 24 Page ID #:326 ~~ 1 __ ~, ~ 2 ~~ ~~. '~ 3 4 ~.~-rte. a ~~ ~;~r ~_~`~..~;, ~ #f 5 i yam. 6 ~.~ 7 8 9 87. Here, on 12/12/12 the Stanford surgeon's operative report 10 correctly recorded that there were only two (2) surgical specimens generated in I1 total by the surgeon:"SPECIMENS: 1 and 2",one right breast and one left 12 breast. 13 14 15 Correct: 2 specimens from bilateral mastectomy 16:~ 17 .x l0 F M .., `'~ ~ "r .~ 3.. . .....a.. w. •~.:. F .. ~ .:..yp: 19 20 21 ~~~I 88. Stanford surgeon Dr. Dirbas testified in deposition that his ?3 ~perativ~ report stated only 2 nath~logy specimens, His Surgical report speciftally 24 listed only 2 tissues, 1 right breast and 1 left breast. (Exh.F Dr. Dirbas Depo p.154- 25 159)He later testified under oath that he sent 2 extra tissues, 1 from the nipple and 26 one from the flap. He also testified that the patient had not consented to a nipple 27 - ~~- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:327 1 cording or biopsy, and no where in his operative report was it recorded that he took 2 any additional tissue other than the entire breast- right and left.(Exh. F Dr. Dirbas 3 Depo p.154-159) 4 5 89. However, on 12/12/12, Stanford surreptitiously fabricated on its 6 pathology requisition form an additional2 pathology specimens (for a total offour 7 breasts specimens). The purported four specimens were contradictory to the 8 surgeons' transcribed, signed, and verified surgical report. 9 10,:~~ . ~x x .. 11 4~ ~ r a~;,tt:::~ . IZ ~~f ~~ ~ ~rt,` ~; 13 14 ., a> s„ !Mir 15 .r~' t ~ ~ . ~~^ ~ ~ 16 L:~.~~ ..;~;.: _ .~.' ~.. 17 LA}3G~PtiI-1'f'URY QL' SURGICAL PRTHULCJuY. ~g S'L'7-1.NEUl''L] F30SY.S:':l']lI, ..._C"LLN:LC:;3 FtCC7M 1'i-21~-0, S7`.~~'Of~D, t;"A.T,,:Cf•C~RNLR 3~] q`> 19 ~r~Z..;_,;i (~50) 72.3--7~:L:1 N'~Lu ~t l E;Sc'~) 7~s-79os 7v1. f't. }~icnc~.ri,c~k,o~;, M. L). F2. I,. F4~rn~:an3~3,:~. D. R.K. Si1~=Lc~y, M. T?. 2~ Ca-Ly~x~ec~tars,:~ua.c~i.c:a~_ ~aL- ho~c~c~y, Li~p~ o~ ~~k:YioloyY 21 22 ~~ 24 25 26 27 - 34- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:328 1 Pathology Results (12118/12 - 12!16/12) SURGICAL PROCEDURE (4113805931 ResuEted 12/161t21S06 Result Status Final result 2 ! c uli r..~ l...ib SU N~UEST LAB .'p:„men: 12/12/12 1450 "d;ar~ ~e!I ~+r~. Accession No' SHS•12-46585 SPECIMEN SUBMITTED J A. RIGHT BREAST B. LEFT6REAST C. RIGH7 UPPER MASTECTOMY SUBCUTANEOUS r'LAP 0. LEFT BASE OF NIPPLE 4 5 6 GROSS D~SCRIPTIQN~ Four specimens are received Eabeled with the patienf's Warne and rnedicaf record number. 7 1"k~e firs# specimen lade€ed "right breast" is received fresh and 8 placed ir~ta #arrna€in an 12113Ji2 at 9;a4 am. 1# consists of a 632 g, 2Q x 22 x 3 cm righf nipple-sparing mastectomy. Na axiilary 9 contents are aktachad. No skin or nipple is present on the specimen, The breast €s oriented by the surgeon end is inked in the usual manner such #hat deep is black, anteriorJsuperior is blue, 10 ar~teriorlinterior is green, and hippie bed is yellow. No masses are paEpated. The specimen ks serially se~tianed from medial la lateral 11 into Q.8 cm thick sections. T'he 25 macros~ctians are laid out fla# such tt~a# deep is a# 9 o'clock and superior is at 12 o'clock, The 12 s~riaf sections reveal predominantly white rubbery breast tissue wi#h ~a masses, biopsy cavifies, ar other abnormalities. The 13 S~]~CIR1Efl IS C~CIfO9C~0~S8tf t0 f~VBaI fly Cllf}S, calcif€cations, ar masses. Represenlati~e sections are s~rbrx~itted as fo!la+ars: 14 15 ]6 17 18 19 20 21 22: ~ 24 25 26 27 - »- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) CG~:~ 24 Page ID #:329 Pathology Results (121'1817 2 - 1 2118112)(continued) SURGICAL PROCEDURE [411380593](continued _ ....._..__....._..,_..w...~....___..._d._.._:.,......,. -._.._~,..,__~. .:~.:.~..~...____._,_.~,...~,...._..~-,~,~_..~.Resulted 12!16/12 1506 Result Status: Final resu _~'_~,...:.......,,_...~.~..._____:......._.~:.:e_..: ._. intramammary node. The second specimen labeled "left breast" is received in fresh and placed info formalin on 12/13/12 at 9:44 am. It consists of a 613 J g, 18.5 x 18 x 3.5 cm left nEpple-sparing mastectomy. No axillary contents are attached. fro skin or nipple is present on the specimen. The breast is oriented by the surgeon and rs inked in the usual manner such that deep is bleak, anEerkodsuperior Is 61ue, anfertor/inferior vs green. and the nipple bed is inked yellow. No messes are palpated. The specimen is serially sectioned from lateral 5 to modial into 0.8 cm thick seclions. . The 22 macrosections are laid out Aat such that deep is at 9 o'clock and superior is at t2 ❑'clock, There are two palpable well-circumscribed nodules within 6 the while rubbery breast tissue. The first nodule is located in macroseciion 10, measures 1.2 x 1 cm, and is faceted 2 cm from the anferior margin and 2.2 cm from the deep margin. A secontl nodule measures 1 x 1 x 0.6 cm and is located in macrosection 12. This 7 lesion is 2.5 cm from the nearest anterior margin and 2.4 cm from the deep margin. The remaining breast tissue is predominantly Fafly with no biopsy sites or masses. The specimen is radiographed to g reveal no clips, calcifications, or masses. Representative sections are submifted as follows_ 6~ macrosection 1, latera{ margin 9 92 macrosection 9, outer lower quadrent B3 macrosection 10 mid pate ~, first nodule B4 macrosecl{on 12, mid puler, second nodule 10 BS macrosedion 13, nipple bed BG macrosection 15, lower inner quadran€ 67 macrosection 18, inner upper quadrant ~ ~ Be macrosectiorz 19, inner lower quadrant 69 macrosection 22, medial margin. The third specimen labeled "right upper mastectomy subcutaneous 12 flap" is received in formalin and consists of multiple tregments of yellow tabulated fibroadipose tlssue measuring 4 x 3.5 x 1 cm in aggregate. The specimen is inked black and serially sectioned at ~~ 0.3 cm intervals to reveal no masses, hemorrhage, or other a bnormalities. Representative sectlons are submiFted in cessefle C1. 14 Th? fourth specimen labeled "left base of nipple" is received in formalin and consists o! mWtipls }ragments of yellow tabulated IS libroadipose tissue measuring 3 x 2 x 9 cm in aggregate. White rubbery breast tissue is identified in one of the fragments, and Ibis area is serially sectioned and entirely submitted in cassette 16 D1. Oek (12/14/2012) 17 i have reviewed the specimen and agree with the interpre~ation above. KRfSTIN C JENSEIV, M.D. ~g Pa!hologist Electronically signed 32/1812012 2:36 PM ~9 Testin Performed B Lab -Abbreviation _..... ._,__.._ ...__Y_,__. Name Director Address Valid Dafe Ran e _ _~ _..____--_. _.~.. __.__-- —~.._._._. ._~.~. _.. __._._.__~_._...~...___._. .... _,.~_._.....~.,...,.... _~.__ ~_ t4 -Unknown SUNQUEST LAB dr.Dan Arher 30o Pasteur Drive 05/3 /12 0917 -Present 2~ Palo Alto CA 21 90. Stanford's surreptitious schemes in adding an unexplained 2 22 pathology specimens resulted in three pathology codes including 88305, 88307, ~; and a "breast biopsy code"for one contiguous mastectomy surgical tissue removed 24 together which correctly results in mandatory bundling into one code. 25 26 27 - 36- FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:330 Lw" ~b 4~i ~#:7~~v~E S~1r~ IG2.14~i*..~ta 91 I ~'~7 f.a 4+~~i+4 {~ fe ~Ci; J I~\r iSJ ~~~~ ~~.,~ii~4#C~r~4~~~. ~ ~1 ~a ffa~~' x rer~~v~d }r, ~errr~alin ~~~ ~c~~s~st~ ~f m~ltip~~ ~r~gm~~ts ~P y~~l~~,+~ ~~~~~ated ~i~~r~~d~p~s~ tis~~r~ rneast~~rr~~ ~ x 3.~ ~ ~ cm ~r~ 3 a~~regar~. "Ct~~ sp~cirn~n is inK~d #~i~ck ~~~ s~rta~iv ~~ct~c~et~ ~~ 4 fl_ cm ir~~~.r~ra~s to r~~~ai n~ m~~ses, h~m~rr~~g~, c~~ other abn~rma~it ~s. 2~p~~senf~tiv ~~~ti~~~~ ~r ~ta~mi4t~d ire c~ss~#~ 5 ~. 6 ' ~~ f~ur~t~ s~~ ~,~r~~n l~t~~l~d "left ~~se ~~ r~~~l~" is r~G~Ev~~t ~ 7 farma~sr+ ~rrd cnr?~Ests of m~,~!fip~`~ fr~~rr~ent~ ref y~E~c;nPr (~b~~a~~d 8 f~b~oaa~~c;s~ !~s~ue r~~eas~,sti~~ 3 x ~ x 1 ~~r;~ ~~~r~gaf~ `vv~~?~ ~ ~~~r~~ b~~:as* t~svu~~ ~s id~rt ~ie~ it one ~f t~E f~~~~'7? ~#, a~~ 9 t#~~~ area is sir ai,y s~ct~cn~~ ~~t~ er.t3;~1y su~~i ~ ~~ in ~~ss~tfe 10 '~~. t"~~k ~'~2~14~2~?~j ll 12 13 Of~1c~a1 Cody 14 ~ ~ ~ '~w ~' w ~ ~~ s ~~ s r~Rr~r~c~~~ r~~s~rr~~ ~~~~. 45C1 ~F20ADV',l~Y STREET REDV1IC1flL? CITY, CA 9~fJ63 Sex:F 15 Adrn: E211 212012 16 PLQWSHEETS (continued} Afl Ffo~~sht~~t +data ~13117;~2 0044--12/13112 ZJ3B! tcontinuadl 17 1 0 ... YP.=_ 19 _ .. ~a ~ .. ... 2~ 21 Pathology - A{I Qrti~rs 22 su~~rcaL ~~oc~ouR~ ta~~~sas~ g,J - _—_ .,. ~Ol~~v. ~,au~~s, ~':c l~:rc~~tr1 lrnacal 321121fi2 i4~C Lirt;asp~Fr~aerr~it, 7~ $t31ld3ru;: i ~, ~rci a21?~112 t45E7 - 1 C' R@ffiUlis, 5h~ 1TtC414litlg GItTY€G£~i 92112,i~7 945E3 24 25 26 27 -„- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:331 1 2 -, Official Copy ~ ~° ~ ~ ~,~ ~ ~ ~,~ ~ ~ STANFORD HOSPITAL 4 ~ ~ 450 BROADWAY STREET REDWOOD CITY, CA 94063 Sex: F 5 Adm:12/11/2012 6 SURGERY REPORTS (continued) Progress Notes (continued) 7 According to the AMA's CPT coding manual, CPT codes in surgical 8 pathology (88300 through 88309)represent services. The higher the code, the 9 greater the fee. l0 • CPT 88305 is reduction mammoplasty /biopsy not requiring evaluation of 11 margins. CPT 88307 is a breast excision with evaluation of margins as in a partial 12 or simple mastectomy. CPT 88309 is a radical or modified radical mastectomy 13 with regional lymph nodes. 14 • The code "reflects the physician work involved." The unit of service is the 15 specimen. The CPT coding manual defines a specimen "as tissue or tissues that 16 is (are) submitted for individual and separate attention, requiring individual 17 examination and pathologic diagnosis." 18 • Dr. Dirbas testified under oath that Stanford nurses filled out the pathology slips. 19 (Exh. F, Depo Dirbas p. 171- inset below) 20 2] 22 ~; 24 25 26 27 - ~o- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:332 l E Ij1~:1)J:HIc'h; I)[2if:l~. ~t.13. ti uti't+i~ihc~~~ 1?.Z~113 2,I ~ ~ 1. A. I+Io. 4 ~ g. Ga you ksGc~=~r rrahc~ ~ ~t~eci it?' 5 3 A, It locsks like a,~ was a nurses, I think that 6 says rrRN ~~ at the End. 7 5 ¢~. Right. d~~a you know ~iha that is, b~; sa~~nature ~ that yr~u're famili~z {aitl-s? 8 7 A. No. 9 Q. So what c~i~ ~c~u une~~rsLan~i this dccume~z~ ~o l0 a L~~? ~ ~ 1.) A. It loalts l 3ca the patholo~3Y slzp, we call. i.t, l2 11 pathology farm, that goes along with a specimen, 13 1'.' accompanies the specimen ~o pathology to identify 1~ spacimen. 14 1 -~ ~. oka~~. ~~ is phis. ~r~ ~ssenc.~, ~;~h~~t~ ~~~~ ~a 15 L:~ ~a~.t~zologitF ~c~ st=ay, "~-Iey, 1.~~~:, ~a~~~e`s tie r' ssLe from 16 1~ r.h:i. ~ ~?r. c~c~~~,ire; ~a1.~ ~s~ ~x~m.a r:~; r, l c>^k ~,~t c_=~r~c~~r ~~~c~ 17 18 1 A. Yes_ And it also indicates -- I forgot that 19 1.~ vae hid put two sutures at ~h~ base ~f the nipple, just 2CJ sa that would be orianted a~ well, fir the 20 21 ga~holagist. 21 22 ~~ 24 FACTS COMMON TO ALL CAUSES OF ACTION AND PLAINTIFFS 25 26 27 - 39- FIRST AMENDED COMPLAINT United States el. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:333 91. This is an action brought on behalf ofPlaintiffs, the United States 2 of America, and the State of California (herein "Plaintiffs") pursuant to the Civil 3 False Claims Act, 31 U.S.C.§§ 3729-33 for Medicare and Medicaid, California 4 Insurance Frauds Prevention Act (Section 1871 et seq. of the California 5 Insurance Code), and Government Code §§12650-12652 for Medi-Cal, jointly 6 referred to herein as the "False Claims Action" (herein "FCA") or "Complaint". 7 92. Relator Emily Roe by and through its undersigned, on behalf of 8 Plaintiffs United States of America et al. alleges as follows for its Complaint 9 against Defendants collectively "Stanford," which are comprised of 10 STANFORD HEALTH CARE (herein "Stanford" OR "SHC"), THE BOARD ]1 OF DIRECTORS OF THE STANFORD HEALTH CARE, DR. FREDERICK 12 DIRBAS, MD (herein "DIRBAS"), MS. DEBRA ZUMWALT, THE BOARD 13 OF DIRECTORS OF THE LUCILE SALTER PACKARD CHILDREN'S 14 HOSPITAL AT STANFORD, STANFORD HEALTH CARE ADVANTAGE, 15 AND THE BOARD OF TRUSTEES OF LELAND JUNIOR UNIVERSITY, 16 and DOES 1-10 who are agents, employees, or business associates of 17 Defendants, based upon personal knowledge and relevant documents. 18 93. As a direct, proximate and foreseeable result of Defendants' 19 habitual fraudulent schemes set forth herein and conducted as standard operating 20 practice on a large scale, Stanford knowingly submitted, and caused to be 2l submitted, hundreds ofthousands of false or fraudulent statements, records, and 22 claims for health care services from on or about before 2010 through current 23 date. 24 94. The practices complained of herein are continuing. As detailed 25 infra, Defendants' actions and omissions have caused many years of improper 26 27 YV FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:334 1 and false billings to the United States through the Medicare and Medicaid 2 program, and the State of California through non-Medicare programs. 3 95. Defendant's schemes have been purposeful and intended to result 4 in unjust enrichment to Stanford more than the standard reimbursement which is 5 allowed to other California providers. Stanford perpetuates its schemes with the 6 intent to deceive payers and receive unjust enrichment. 7 96. Stanford while purportedly operating as a U.S. "non-profit", is 8 one ofthe top 5 most profitable hospitals in the U.S. Stanford also demonstrated 9 that it had doubled its annual Medicare revenue in a four-year period from l0 20120-2016 without any reciprocal increase or doubling of its expenses, 11 overhead, staff, or supplies.(See EXH. TT Stanford Form 990-Tax returns) 12 97. As detailed below, Defendants' deliberate actions and omissions 13 have caused many years ofimproper and false billings to the U.S. and California 14 through Medicare and non-Medicare programs. Damages to the State, U.S., and 15 commercial insurance carriers are hundreds of millions of dollars. Defendant's 16 upcoding and unbundling practices demonstrated herein are continuing. 17 98. Defendants' false claims acts are especially egregious given that 18 Defendant are concurrently willfully fraudulently billing the government for 19 healthcare and circumventing the tax laws by claiming "tax exempt" status. 20 99. Defendants have also freely misappropriated tax advantage 21 dollars afforded by their designation as an Internal Revenue Code for 503(c) 22 "non-profit" for improper profits. Defendants have a model of habitually ~z siphoning and co-mingling Yunds trom government grants, Medicare and 24 Medicaid subsidies, and private donations for ulterior artifices. Defendants' 25 healthcare and billing entities are deliberately ambiguous as Defendants operate 26 under multiple alter egos, institutions and facilities, and their land is similarly 27 - 41- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:335 l owned by various alter egos. Stanford freely admits that its various alter egos 2 co-mingle certain departments, managed care contracting, materials, operating 3 room, laboratory, and interventional radiology. 4 100. As of 2016 Stanford has nearly doubled its Medicare net 5 revenue from 2012. Whereas in 2012 Stanford received $460.4 million in 6 Federal funds from the Medicare Program, in the most recent year (2016), 7 Stanford received $755.7 million in Federal funds from the Medicare Program 8 accounting for a remarkable 64% four-year increase. 9 10 fI►J 13 14 15 16 17 18 19 20 101. As of Jan. 1, 2016 Stanford, in fact lost a major carrier due to its 21 healthcare billing practices. Blue Shield of California unilaterally terminated all 22 managed care contracts with Stanford because of allegations of "exorbitant ~z costs." Despite the major carrier and contract loss in X016, Stanford inexpiicabiy 24 posted a substantial profit and revenue increase in 2016. 25 102. It stands to reason that a medical facility that increases its 26 revenue and production through legitimate services would be expected to require 27 - 42- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:336 i more expenses like table paper, disposable supplies, gauze, syringes, gloves, and 2 the like. However, a doubling of revenue without any significant increase in -, expenses is highly suspect for billing schemes and artifice as the basis for such 4 a remarkable profit. Although Stanford has nearly doubled its Medicare 5 revenues in the four-year period from 2012 to 2016, Stanford has not doubled its 6 expenses, staff, bed count, facilities, or services in that time to substantiate this 7 increase in enrichment.(See Stanford Form 990, non- profit U.S. tax filing) 8 103. Stanford executives and department managers are known to push 9 aggressive billing and maintain a culture of pushing profits at any cost. 10 104. Stanford General Counsel and Vice President Ms. Debra 11 Zumwalt is the designated medical and coding Compliance officer for all 12 Defendants. Ms.Zumwalt and her office are known to harbor a general proclivity 13 to turn a blind eye and suppress reports of improper billing allegations, as was 14 done for more than one year in this case. 15 16 Sent: Sunday, September:l0, 2017 1;27 PM To: Frederick M. Dirbas <dirbas@stanford.edu> 17 Cc: Debra L Zumwalt <zumwalt@stanford.edu> Subject: Re: Dr. Dirbas CMS Billing Audit and Advisory 18 19 September 10, 2017 20 21 I Dr. Dirabs and Ms. Zumwalt, 22 Since we did not receive timely or any correspondence or acknowledgement from you following last week's communication, it will be assumed that you are both uninterested and/or unwilling to ?3 f~-drtic~ Pate it the ~ pP~rtun~tY N resentc~ t~ rcvicw •Y~' cur bill~n- S~did correct c~~in- s initiative compliance. Thus, we'll similarly assume that you decline the opportunity to meet and 24 confer on this matter. 25 Regards, 26 27 - 43 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:337 ~~ 4 1 O5. Exhibits attached hereto are multiple emails between Relator and 5 General Counsel Ms. Zumwalt. Relator notified Ms. Zumwalt and her office on 6 several occasions of the significant, institutional non-compliant billing issues. 7 8 g Sent: Friday, September 8, 2017 5:53:33 AM To: dirbas@stanford.edu 10 Cc: zumwalt@stanford.edu Subject: Dr. Dirbas CMS Billing Audit and Advisory 11 Dear Dr. Dirbas and Ms. Zumwalt, 12 Please find the following correspondence attached for your review and response. ]; As you know, Evid. Code section 1152 protects the content of any settlement-related communications, whether written or oral. 14 As you are also aware, Stanford and Dr. Dirbas are listed as defendants in the civil litigation suit Does vs .Hong et al. 15 I n accordance with ABA Model Rules 4.2 as well as ABA Formal Opinion 11-461,parties in 16 litigation are free to communicate directly. Thus, such open dialogue is permissible to facilitate resolution of matters that may otherwise not ~~ be as openly communicated. ~g Your response is requested this Friday by the close of business at 5. Regards, 19 J. D 20 21 22 ~; 106. Ms. Zumwalt personally acknowledged receipt of billing non- compliance notice communications from Relator. Yet, Ms. Zumwalt failed to act 24 ethically or properly, or to ensure that Stanford complied with its correct coding 25 obligations. 26 2'7 - 44 - FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:338 2 RE: Dr. Dirbas CMS Billing Audit and Advisory Debra L Zumwalt <zumwalt@stanford.edu> 4 Reply 6 ... ~ Frederick M. Dirbas (dirbas@stanford.edu) 1`ou ~~e~lied ors 9;'1y/2f~~17 ~ 1:~6 A~~1. g Risk Management is looking into the issues you raised. 9 ******************~********** Debra L. Zumwalt ~~ Vice President and General Counsel Stanford University ~~ Office of the General Counsel Building 170, 3rd Floor, Main Quad 12 P.Q. Box ZC13£~6 13 Stanford, Cfi, 943(75 ?038 http://www.stanford,edu/depUlepal ]4 Phone - (650) 723-6397 Fax - (650) 723-4323 IS E-mail - . .. -+ 16 <..,.~...>.,...4..<.,,.~~..........~..~,.,~.<,.., CONFIDENTIALITY NOTICE: The information contained in this e-mail message may be privileged, confidential and protected from disclosure. !f 1'] you are not the intended recipient, any use, disclosure, dissemination, distribution or copying of any portion of this message or any attachment is strictly prohibited. If you think you have received this e-mail message in error, please notify the sender at the above e-mail address, and delete this e-mail along with any attachments. Thank you. lg 19 20 107. On Sept 11, 2017 Ms. Zumwalt replied to relator that Ms. Zumwalt 21 would reply further later. However, she failed to do so at any time. 22 108. In fact, Relator's final email to Ms. Zumwalt came after the ~:~ Stanford billing office had again initiated contact and astonishingly billed Relator in 24 error on or about 3/22/18 for further $341 due for the 12/1 U12 (5-year-old date of 25 service) pre-operative visit. In fact, Stanford conceded that it owed Relator $341.97 26 27 _ ~„_ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:339 1 from 2012, an amount which Stanford had concealed and failed to correct in its 2 accounts despite notice by the commercial carrier of the unbundling. 4 J D new Accounting Statement Received Stanford for DOS 12/11/12 5 Rebly 6:~. 7 dirbas@stanford.edu; zumwalt@stanford.edu 8 `~; gent_ ~er:~, 9 ~~ EXH AAA p. 1 STANFORD BILI $341.97 Statement 03 07 2018 (11 Redacted a.pdf 11 56g K8 12 2 attachments (739 KBl Download all Save all to OneDrive -Personal ~3 Dear Dr. Dirbas and Ms. Zumwalt, 14 We received a new bill from Stanford this week for "date of service 12/11/12 Dr. Dirbas" for ~ 5 $341.97 due. 16 This amount was disbursed by the patient in 2013 to Stanford, and no reprocessing notice 1 ~ or refund has been received at any time. 1 8 The recent invoice is attached in redacted form for your reference. As you recall, this date of service has been the subject of multiple prior correspondences ranging from at least March 19 2017 to 2018 to Ms. Zumwalt, Dr. Dirbas, as well as Stanford billing. 20 Could you let us know the basis for this new invoice for an unbundled office visit from more than 5 21 years ago? 22 Thank you in advance for your anticipated cooperation and understanding. ~~ Sincerely, 24 JD 25 26 27 -46- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:340 109. On April 9, 2018 Stanford counsel Ms. Northrup then emailed 2 Relator acknowledging Relator's telephonic communication to Ms.Zumwalt's office, 3 and that Ms. Zumwalt had declined to respond. 4 5 Carolyn Northrop <carolyn.northrop@dbtlaw.org> 6 ~ i Reply; 8 `~ 9 Angelina Feto (angelina.felo@dbtlaw.org); Daniels Stoutenburg (daniela.stoutenburg@dbtlaw.org); 10 Sheryl Rodacker (sheryl.rodacker@dbtlaw.org) Ms. Doe, 11 u nderstand from Debra Zumwalt's office that you contacted her office today to speak with her. Please be 12 advised that she has chosen to have all communications go through outside counsel for SHC, which is our 13 office. Therefore, if you have something you need to discuss with Ms. Zumwalt, you'll need to communicate it to our office. 14 look forward to hearing from you. 15 Carrie 16 ('AROC,YN L. NOR'I"HROP; ESQ. 17 DUMMIT,BUCHHOLZ & TRAPP www.dbt.law 18 ~I SACRAMti~"i'U LOS ANUELES SAN' DIEGO RNERSIDE;SAN 166(Darden Hi~~hway 11755 Wilshire Blvd, ISth Floor 101 West Broadway, Suite IA00 BERNARDINO 2~ ~ Sacratnentq CA 9583 Los Angeles, LA 9002 San Diego, LA 92101 11801 Pierce St., 2"~ Floor (916)929-9600 (310)479-0944 (619)231-7738 Riverside, CA 92505 21 (916)927-5368-f AX (9~1)710-:1277 22 TINS IS A PR[VfLFGF.,D AND CONFIDE NTfAI.. COMMUNICATION fNTGNDLD ON1.,Y FOR THE ABOVIS-NAMF.,D RFCIPILiNT_ RL-CEIPT OF THTS COMvtUNICATfON BY .ANOTHL-R DOGS NOT CONSTITUTE WAIVER OF THF., ATTORNEY-CI.,IFNT AND ATTORNrY WORK PRODUCT 7: rRiVii.~Fi~F,S. i~T~i':i ~iS,Si-,ifiTdr"iTii~id, Ci~P`r' OR DiSii.vSL?Tn'i-., vTnEii TnAiv $Y TnE iTdTEATDEu RF~~:,i?ii:',iiT, iS STRiCTi.,Y PR7nioiiED. iF YOU HA VI3 KL-CrIVED THIS COMMUNICATION IN EKROR, YLEASE IM1~~DIATELY NOTIFY US VIA RETLTFZN E-MAIL AND DFLE"I'E T'H1S COMMUNIGA'CION ~V17'HOU I' MAKINU ANY COPIES.'I`HANK YVU FOR YOUR COOPERA'(ION. 24 I 1lIS DOCUMENT'MAY COTv'1'AIN [NFORMA'I'IC~N COVERED UNDER THE PRIV,4CY ACT,5 iJSC Si3(Aj, HEAL'T'H INSURANCE PORTABlLI"I'Y A ND ACCOUN"T A13ILTTY ACT,PUBLIC LAW I Od-191, AND DOD DIRECTIVE 6025.18_ IT MliST 6E F'ROTECTGD IN .4CCORDANC6 WfTH 25 THOSE PROV~S[ONS. 26 27 _ .,, _ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (3] USC § 3729(a)) 28 24 Page ID #:341 1 110. Stanford Hospital and Clinics located in Santa Clara County is one 2 of the top three most profitable hospitals in the U.S. by patient-service surplus. In J 2013, patient care surplus at Stanford was $224,661,648, and surplus per adjusted 4 discharge was $1,339.49. 5 1 11. In a more recent year (2016), Stanford received a total of net 6 patient service revenue of $3,893,005,000 and $3,393,413,000 in the prior year 7 (2015). On average Stanford receives 1/3 of its Gross Patient Service revenue from 8 Medicare. 9 1 12. Of the total $3,893,005,000 funds collected by Stanford in 2016, to 34% of funds were from Medicare, 4% from Medi-Cal, 55% from Managed care- 11 "Discount Fee for Services", and 7% Self-Pay or Indemnity. 12 13 2016 Stanford Collections $3,893,005,000 14 15 16 17 ~~ Medicare ~g M edi CaI 19 M anaged Care Self-Pay or Indemnity 20 5596 21 22 ~~ GJ 24 1 13. At the end of the fiscal year in August 31, 2016 Stanford has 25 account receivables of 12%from Medicare, 18%from Blue cross, and 11%from Blue 26 Shield. SHC did not believe significant credit risks exist with these three payers. 27 - YO FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. a[. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:342 114. Stanford reported that SHC's Medicare cost reports have been ~~ audited by the Medicare administrative contractor through August 31, 2006. -, 1 15. More significantly, the Stanford schemes that have resulted in false 4 billings to Medicare and the State that began in at least 2010, and most likely earlier, 5 as alleged more specifically infra, include but are not limited to the following: 6 • upcoding patients' office visits to artificially inflate the base Medicare 7 reimbursement paid for professional medical services by Stanford physicians 8 and health care providers; 9 • artificiall_y unbundlin~T~t ~re-operative visit and inflating the global fees l0 paid through surgical services rendered to patients to qualify for high adjustment 11 payments of 10-20% greater funds per surgical procedure; 12 • fraudulent and false patient pre-operative evaluations scheduled on the 13 day or days before surgery and unbundled to reflect a distinct and separate 14 evaluation and management service; and 15 • failing to mitigate or cease the conduct once put on notice and demanded to 16 cease unlawful billing. 17 1 16. Further, Defendants Stanford conspired to violate the FCA by 18 causing the submissions of false or fraudulent claims, conspired to make and use, or 19 cause to be made or used,false records material to false or fraudulent claims, and once 20 put on notice of the unlawful billing, conspired to not return Medicare and non- 21 Medicare overpayments from being returned to the government, and respective 22 carriers. ~; LJ 117. Stanford Health Care Advantage (herein "SHCA") is anew 24 Medicare Advantage plan offered by Stanford Health Care for Santa Clara and 25 Alameda County Residents. Stanford upcodes and unbundles services for this plan, 26 causing similar schemes to result in very expensive health care costs to the Federal 27 - 49- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:343 Government. Scheme perpetuators like Frederick Dirbas, M.D. and other surgical oncology surgeons are on the panel for SHCA. 1 18. Stanford healthcare is expensive. While in 2015 California commercial carriers like Blue Shield publicly unilaterally terminated their contracts 5 with Stanford based on recognizance of Stanford's disproportionate and "expensive" 6 billings, the Medicare program and other carriers like Anthem Blue Cross have not. 7 1 19. According to Stanford, Blue Shield unilaterally terminated its' 8 contract with Stanford. "In early October 2015, Blue Shield made a unilateral 9 decision that Stanford Health Care would be excluded from their Individual and 10 Family plan networks in 2016. This was unrelated to the contract renegotiation in May 11 2015 for the general agreement with Blue Shield." (Accessed at 12 https://stanfordhealthcare.org/content/dam/SHC/patientsandvisitors/billing/docs/201 13 6-covered-California-fags-for-shc.pd~ 14 120. Blue Shield recognized Stanford's unlawful and exorbitant billings. 15 Effective Jan. 1, 2016 Blue Shield of California terminated Stanford Hospitals from 16 its' networks. Blue Shield kicked out two Stanford Hospitals including Stanford 17 Health Care, Stanford Medical Group, and Stanford's University Health Alliance, and 18 Lucile Packard Medical Group out of its PPO network because of"high costs". 19 121. As a result, Medicare overbillings by Stanford revealed in an audit 20 certification conducted by Plaintiffs was covered up and the billing schemes in place 21 at Stanford that resulted in the false billings identified by Plaintiffs continued 22 unabated, resulting in additional false or fraudulent claims to Medicare. ?; 24 ~ "in early October 2015, Blue Shield made a unilateral decision that Stanford Health Care would be excluded from 25 their Individual and Family plan networks in 2016. This was unrelated to the contract renegotiation in May 2015 for the general agreement with Blue Shield." Accessed at 26 https://stanfordhealthcare.org/content/dam/SHGpatientsandvisitors/billing/docs/2016-covered-cal ifornia-fags-for- shc.pdf 27 -50- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:344 122. By these actions and the other actions detailed herein, the ~~ Defendants have violated several laws, including without limitation, the Federal and State False Claim Statutes. Defendants' fraudulent conduct has had a dramatic 4 negative financial impact on Medicare, Medicaid, and commercial carriers. 5 6 DEFENDANTS 7 123. Defendants have innumerable alter egos and names including 8 Stanford Health Care which includes Stanford Hospital, Lucile Packard Children's 9 Hospital, Stanford Medical Group, Lucile Packard Medical Group, and University l0 Healthcare Alliance. 11 124. Stanford Health Care (herein "SHC") operates as anon-profit, I2 hence circumventing taxes on its sizeable healthcare earnings. As a California 13 corporation, Stanford is organized as a "tax-exempt" institution under section 14 501(c)(3) ofthe Internal Revenue Code.Its governing board is The Board ofDirectors IS of Stanford Health Care. 16 17 18 NATIONAL PROVIDER IDENTIFIER"NPI" 19 125. The Centers for Medicare (herein "CMS")and Federal health care 20 programs utilize the National Provider Identifier (herein "NPI"). NPI's are assigned 21 to institutions as well as individual health care providers. Billing CMS requires 22 utilization of both the institution's NPI and the individual rendering providers. ~^ ~~ 126. NPI 1437292927 is registered to Stanford Health Care located at 24 300 Pasteur Drive Stanford, California 94305. 25 26 27 - 51- FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:345 l 127. NPI Number 1437292927 has the "Organization" type of 2 ownership and has been registered to the following primary business legal name 3 (which is a provider name or healthcare organization name) -Stanford Health Care. 4 The enumeration date of this NPI Number is 02/14/2007. NPI Number information 5 was last updated at 03/07/2017. 6 128. Stanford's other registered legal business name is Stanford Hospital 7 and Clinics. Stanford surgical providers' reimbursement data was obtained and 8 analyzed for representative ones below and attached hereto as exhibits. 9 NPI PROVIDER MEDICARE 10 BILLINGS 11 1.437292927 STANFORD HEALTH CARE 12 1 154457091 FREDERICK DIRBAS, M.D. Billed 13 $1,618,328.50 from 14 approximately 2011-2017 15 16 1881725638 CANDICE SCHULTZ,PA $414 Annual billing to Medicare 17 18 1 104951508 IRENE WAPNIR, M.D. Billed $1,818,659.75 from 19 1/2008 to 10/2017 20 1437292927 ERIC SOKOL,MD 21 22 ~: 1326009572 ~ GORDON LEE, M.D. Billed 24 $5,629,251.95 from 2010-2016 25 26 27 - 52- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:346 1 1891830881 GEOFFREY GURTNER, $961,810.00 2 MD FACS (Breast) Uses CPT 15777 (biologic artificial tissue) 4 19340, 19342, 19371 5 1205978806 Billed 6 CARL BERTELSEN, M.D. $2783156.35 to 7 (General surgery) Medicare from 1/2014 to 8 10/2017 9 at average of $60,503 per month 10 11 1477697563 PETER LORENZ, M.D. 12 (Plastic Surgery) 13 14 1760681191 DUNG NGUYEN,MD, $2,695,000.65 PHARM.D (Plastics) Billed 15 Medicare from 16 1 1/2012 to 10/2017; Lot of 19340, 17 19371, 19370, 18 19340, few 19342, lots 15777; 19 Very aggressive 20 billing. All visits 99204 or 99205 21 22 1346401841 NAZERALI, MD Billed $2,299,493.26 to, r Medicare 24 1437327046 GEORGE A. POULTSIDES, MD 25 26 27 J _J FIRST AMENDED COMPLAINT United States et. a[., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:347 l 1083678726 MARTIN I. BRONK, M.D. 2 1447446190 NATALIE KIRILCUK, M.D. (Pelvic Floor Testing) 4 1477749752 AMANDA J. WHEELER $1,494,584.50 5 (Surgical Oncology) billed to Medicare 6 From 09/2013 to 10/2017 7 Lot of 99205, 8 99215, 99214 billed pre-op visits 9 l0 1689636680 PETER NARUNS, MD 11 1 184823205 KIRK A. CHURUKIAN MD, 12 Plastic Sur e 1053513473 DERRICK WAN,NID FACS 13 Plastic 14 15 129. Stanford recognized additional fees for its hospital services. SHC 16 recognized $55,195,000 and $103,667,000 in net patient service revenue under these 17 programs and $45,809,000 and $73,585,000 in other expense for California Hospital 18 Quality Assurance Fee Program (herein "HQAF") to the California Department of 19 Health Care Services for the years ended August 31, 2016 and August 31, 2015, 20 respectively. 21 22: ~ 24 25 26 27 - ~~+ - FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:348 __ Sfianford revenues for Hospi#ai Services ~~ 3 2016 HbspiCal Services 4, .Y696~ 2015 Hospital Services .r.:~ ._ 5 2016 California Hospital 6 Quality Assurance Fee Program 2015 California Hospital 7 Quality Assurance Fee Program g 9 130. Defendants' main business address where they receive payments l0 for medical services is in Los Angeles, California. Stanford Billing Office receives all 11 by mail payments and checks at the Address of P.O. Box 740715 Los Angeles, CA 12 90074-0715. The insurance carrier as well as Relator also submitted payments to the ~J main billing company address in the Central District.(Exh. N accessed Nov. 26, 2017 14 @https://stanfordhealthcare.org/content/dam/SHC/patientsandvisitors/billing/images 15 /shc-billing-statement-summary-2016.jpg) 16 131. Stanford as a registered medical service provider is registered as 17 physically located (Business Practice Location) at 300 Pasteur Drive Stanford, CA 18 94305. Phone 650-723-4000 and Fax 650-498-5840. 19 132. The provider's official mailing address is: 1804 Embarcadero 20 Road, Suite 100 Stanford, CA 94305-3341 US The contact numbers associated with ~ 21 the mailing address are: Phone 650-723-4000 Fax 650-498-5840 The authorized 22 official registered with the "1437292927" NPI Number is Mr. David J. Connor. The ~; authorized official title (position) is ChiefFinancial Officer. He can be reached as the 24 authorized official at the following phone number 650-497-0391. 25 26 27 - 55- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:349 133. Lucile Salter Packard Children's Hospital ("LPCH") at Stanford is 2 also a nonprofit, California corporation. It is atax-exempt institution under section J 501(c)(3) ofthe Internal Revenue Code.Its governing board is The Board ofDirectors 4 ofthe Lucile Salter Packard Children's Hospital at Stanford. 5 134. The two hospitals are legal corporations separate from the 6 University and from each other. Stanford also owns and operates multiple other 7 satellite hospitals and facilities including Stanford Outpatient Clinics and Surgery at 8 Redwood City. 9 135. Stanford Medicine is a term that encompasses all the healthcare ]0 entities, including both hospitals and their foundations and the School of Medicine. It 11 replaces the term "Stanford University Medical Center." Stanford Medicine and 12 Stanford University Medical Center are not legal entities. 13 136. Professional services are reimbursed based on a fee schedule in 14 Federal funds from the Medicare Program. Medicare payments accounted for a 15 significant percentage of Stanford's net service revenues, second only to Blue Cross. 16 137. Stanford recognized additional fees for its hospital services. SHC 17 recognized $55,195,000 and $103,667,000 in net patient service revenue under these 18 programs and $45,809,000 and $73,585,000 in other expense for California Hospital 19 Quality Assurance Fee Program (herein "HQAF") to the California Department of 20 Health Care Services for the years ended August 31, 2016 and 2015, respectively. 21 138. The State of California enacted legislation in 2009 which 22 established a Hospital Quality Assurance Fee("HQAF")Program and a Hospital Fee ~; Prugrarri. These programs irr~poseci a provider fee on certain California general acute 24 care hospitals that, combined with federal matching funds, would be used to provide ~i 25 supplemental payments to certain hospitals and support the State's effort to maintain 26 27 - ~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (3l USC § 3729(a)) 28 24 Page ID #:350 1 health care coverage for children. The effective period of this Hospital Fee Program 2 was April 1, 2009 through December 31, 2010. 3 139. In 2016 and 2017, while other California providers experienced 4 decreased revenues because of the implementation of the Affordable Care Act, 5 Stanford reported a 38% income increase and only modest 4% increase in expenses. 6 140. Hence in one year alone, Stanford increased its income by large 7 double digits without substantive changes in its payer mix or services to account for 8 the exorbitant health care revenue. 9 141. In a recent year(2016), Stanford received $755,658,000 in Federal l0 funds from the Medicare Program. This Net Patient Service Revenue is a net of 11 contractual allowances (but before provision for doubtful accounts), by major payor 12 for the years ended August 31, 2016. 13 142. In the prior year(2015), Stanford received $732,377,000 in Federal 14 funds from the Medicare Program. Medicare payments accounted for a large 15 percentage of Stanford's net service revenues. In the prior years (2013), Stanford l6 received $519,403,000 in Federal funds from the Medicare Program. Medicare 17 payments accounted for a large percentage of Stanford's net service revenues. 18 143. In the preceding year (2012) Stanford received $460,442,000 in 19 Federal funds from the Medicare Program. 20 144. In 2013, Medicare and Medicaid's fee-for-service model 21 incentivized hospitals to conduct more tests and procedures in order to earn more 22 money. Stanford did more than that with schemes to unbundle codes and charge ~~ exornitani charges for manufactured charges. For example, when on a niiaterai simple ~ 24 mastectomy only two tissue specimens were generated, Stanford artifices resulted in 25 charges for 6 pathology codes in violation of the one specimen, one pathology code 26 rule. 27 -~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (.il USC § 3729(a)) 28 24 Page ID #:351 21 STANFORD'S CODING 1 TISSUE CORRECT CODING -, Three(3) or more pathology codes billed One (1)pathology code billed 4 5 CPT 88307, 88305, 88303 CPT 88307 6 Stanford Fee $3400 Correct Fee $600 7 s ~ "~,. 9 io 145. For example, fraudulent upcoding was uncovered in Stanford's 11 bills with respect to Stanford's tissue pathology (CPT 88300-88309) billing on 12 12/12/12. While Dr. Dirbas's operative report reflects 2 specimens, pathology billed 13 for SIX specimens, hence violating the one specimen, one code rule. 14 146. Either Dr. Dirbas's operative report was false and he failed to note 15 that he submitted 2 additional specimens, one under the left nipple and one under the 16 right breast tail, or the pathology department upcoded and unbundled 2 surgical 17 specimens into 6.(Exhibits certified Stanford Medical records p. 102 and 109) 18 147. Plaintiffs estimate that damages caused to the Medicare program by 19 Defendants' violations of the causes of action herein exceed hundreds of millions of 20 dollars cumulatively as of the date the original complaint was filed. 21 148. Stanford processes very few billing inquiries at its billing office 22 location, 4700 Bohannon Drive, 2nd Floor Menlo Park Ca 94025. Most billing and ~; coding is handled in the Los Angeles center, and Stanford's billing operations call 24 center for consumers is in Texas. 25 26 27 -58- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:352 149. Stanford conducts business and receives significant enrichment 2 through its billing entity address at P.O. box 743447 in LOS ANGELES,CA 90074- 3 3447. 4 150. Stanford conducts business through the state of Texas with a 5 division of its billing and collection service in that State. 6 151. Stanford has numerous satellite offices and hospitals including 7 • Patient Financial Services, Valley Memorial Center 1111 E. Stanley Blvd. 8 Livermore, CA 94550, Telephone 925.264.6500, Email: 9 billin~ValleyCare(a~STANFORDhealthcare.or~ ]0 • Stanford Medicine Outpatient Center and Stanford Medicine Redwood City; 450 11 Broadway, Redwood City, CA 94063. Phone:(650) 721-7332 12 • Stanford Health Care Advantage which received Federal Medicare funds and 13 administrates a Medicare Advantage plan - PO Box 72530, Oakland, CA 94612- 14 8730 15 16 17 JURISDICTION AND VENUE ]8 152. This District Court has jurisdiction over the subject matter of this 19 action pursuant to 28 U.S.C. § 1331, 28 U.S.C. § 1367 and 31 U.S.C. § 3732, the last 20 of which specifically confers jurisdiction on this Court for actions brought pursuant 21 to 31 U.S.C. §§ 3729 and 3730. 22 153. Under 31 U.S.C. §3730(e)(4)(A), there has been no statutorily 2, relevant public disclosure of~ substantially the same "allegations or transactions" 24 alleged in this Complaint. 25 154. Even to the extent there has been any such public disclosure, 26 Plaintiff meets the definition of an original source, as that term is defined under 31 27 - 59- FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(x)) 28 24 Page ID #:353 U.S.C. § 3730(e)(4)(B). Specifically, Plaintiff voluntarily disclosed to the ~~ Government the information upon which allegations or transactions at issue in this complaint are based prior to any purported public disclosure under 31 U.S.C. §§ 4 3730(e)(4)(A). 5 155. Alternatively, Relator has knowledge that is independent of and 6 materially adds to any purported publicly disclosed allegations or transactions, and, 7 Relator voluntarily provided the information to the Government before filing its 8 complaint. Relator therefore qualifies as an "original source" of the allegations in this ►!. Complaint such that the so-called public disclosure bar set forth at 31 U.S.C.§ l0 3730(e)(4) is inapplicable. 11 156. Relator concurrently served upon the Attorney General of the 12 United States, the United States Attorney for the District of California, and the State 13 of California the original complaint and a written disclosure summarizing the known 14 material evidence and information in the possession of Plaintiff related to the original 15 Complain, in accordance with the provisions of 31 U.S.C. §3730(b)(2). The 16 disclosure statement is supported by material evidence, and documentary evidence 17 has been produced with the disclosure. The documents referenced in the disclosure 18 statement, and those produced in connection therewith or subsequently, are 19 incorporated herein by reference. 20 157. Plaintiff shall serve any amended complaints upon the Attorney 21 General of the United States, United States Attorney for the District of California, the 22 Attorney General for the State of California, and the California Insurance ~: commissioner. 24 158. This Court has personal jurisdiction and venue over the Defendants 25 pursuant to 28 U.S.C. §§ 1391(b) and 31 U.S.C. § 3732(a) because those sections 26 authorize nationwide service of process and because each Defendant has minimum 27 -,,,, - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:354 contacts with the United States. Moreover, Defendants can be found in, reside, and/or 2 transact business in this District. Stanford's central collection and billing center for -, all payments and primary billing location is in Los Angeles, California. All 4 statements direct payments to be remitted to the Central California office, hence 5 venue is proper. 6 159. Venue is proper in this District pursuant to 31 U.S.C. § 3732(a) 7 because Defendants collect a significant portion of their enrichment at the billing 8 offices in Los Angeles. Thus, each Defendant transacts business in this judicial 9 district, and acts proscribed by 31 U.S.C. § 3729 and the California codes have been 10 committed by Defendants in this District. Therefore, venue is proper within the ]1 meaning of28 U.S.C. §1391(b) and (c) and 31 U.S.C. § 3732(a). 12 lU PARTIES 14 160. The real parties in interest ("Plaintiffs") to the False Claim Act 15 (herein "FCA")Qui Tam claims herein are the United States of America and the State 16 of California. Accordingly, at this time, Relator is pursuing its cause of action on 17 behalf of the United States on the FCA Qui Tam claims set forth herein. See, e.g., 31 18 U.S.C. § 3730(b)(1), and the State of California pursuant to the California Insurance 19 Frauds Prevention Act § 1871.4 of the Insurance Code, and Cal. Gov't Code §12650- 20 12656. 21 161. Relator Emily Roe is an individual. Relator brings this Qui Tam 22 action based upon direct and unique information obtained about Defendants, or ~~ those with whom the Defendants conduct business. The identity ofthese individuals 24 has been provided in the pre-filing Disclosure Statements) produced to the United 25 States pursuant to the Federal FCA, and to the State of California. 26 27 - 61- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:355 1 162. Defendants are Stanford et. al, its multiple alter egos, and DOE 2 defendants herein whereas DOES 1-10 inclusive are employees, agents, and/or -, J business associates of Defendants whose real names are currently not known to 4 Plaintiffs. 5 ` ~ !' • # 6 ~~ ~ 7 8 • 4 Bay area hospitals 9 Stanfr~rd Health Gyre Alliance 10 network —over 54Q RCPs 11 • lJniversity Medical Group Stanford Express Cary i2 • C{ickwell Care {canline ~C~ 13 • Aetna partnership • Sfianfard Heath Plan 14 SU School of Medicine 15 163. Defendant Stanford Healthcare is anon-profit foundation based in 16 California. However, Stanford currently provides healthcare services to patients 17 in California and nationwide, portions of which are provided through their 18 telemedicine portals. Stanford's anatomical pathology lab and consultation service 19 also renders health services throughout California, as well as to other states. 20 164. Stanford provides health services and bills throughout Southern 21 California through its telemedicine portals. For example, according to advisory.com 22 in 2015 Stanford Medicine Clinic provided 60% of its visits as "virtual visits", 23% ~~ of which were video visits and 37% were video visits. Only 40% of Stanford's 2015 24 visits of more than 6500 visits were "in-person visits". Thus, Stanford renders 25 26 27 - 62- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:356 medical services through California as well as other states, making venue in this 2 District Court proper. -, 165. As of 2016 Stanford has nearly doubled its Medicare net revenue 4 from 2012. Whereas in 2012 Stanford received $460.4 million in Federal funds from 5 the Medicare Program, in the most recent year (2016), Stanford received $755.7 6 million in Federal funds from the Medicare Program accounting for a remarkable 39 7 increase over four years. 8 2012 2016 9 $460.4 million $755.7 million to Medicare Funds to Stanford Medicare Funds to Stanford 11 12 166. Of this tremendous increase in enrichment through Medicare 13 payments, several tens of millions of dollars are likely profited because of what is 14 believed with certainty be a wide spread practice institution-wide at Stanford of over- 15 billing via the schemes described earlier. 16 167. Stanford executives and department managers are known to push 17 aggressive billing and maintain a culture of pushing profits at any cost. Stanford has 18 a "conceal and suppress" culture in healthcare billing whereby any evidence or 19 complaints of non-compliance by Stanford are swiftly quashed. 20 168. Stanford has achieved astounding profitability from 2012 to 2016 2l through deceptive billing and unsupported coding practices. Stanford pushes billers 22 and coders to upcode all services to the highest code possible, and disregard correct ~; coding initiatives and rules.(see Decl.(Jaines on ~tantord billing practices in ~~15). 24 169. Defendants were the subject of prior successful False Claims 25 Actions which resulted in monetary disgorgement by Stanford. Although Stanford 26 27 VJ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:357 l was required to remit penalties to the State of California however Stanford pre- 2 emptively negotiated to keep that FCA Complaint out of public view. 170. For example, Stanford was also the subject of a prior successful 4 FCA prosecution in California for habitual false anesthesia time block billing in the 5 Lucille Packard Children's Hospital. The Stanford Children's Hospital improper 6 billing case was settled by Defendants for monetary penalties and restitution to the 7 State of California on or about 2013. Upon information and belief, that case was 8 brought by relator Rockville Recovery Associates, a medical billing audit firm that 9 reported Stanford's unscrupulous billing practices and double-charging of surgical l0 patients. 11 171. Although Stanford has astonishingly nearly doubled its Medicare 12 revenues in the four (4) year period from 2012 to 2016, Stanford has not doubled its 13 expenses or staff, bed count, facilities, or services in that period to substantiate this 14 increase in enrichment. 15 172. Defendants collectively herein "Stanford" devised four key 16 unlawful billing schemes to increase Defendants' revenues, especially Medicare 17 dollars. Stanford intended this scheme to obtain unjust enrichment in violation of 18 national fee schedules. From 2012 to 2016 Stanford nearly doubled their Medicare 19 revenues. 20 173. Through these various schemes, Defendants collected and retained 21 unjust enrichment from Medicare, Medicaid, commercial insurance carriers, and 22 individual payers. 23 174. C7ne ofStanford's key schemes was upcoding and unbundled billing 24 for high reimbursing surgical and anesthesia services. 25 26 27 VY FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:358 1 175. Subject of this specific action is the four schemes executed by the 2 surgical departments including the Stanford hospital in Palo Alto and the "Stanford 3 Cancer Center" on Blake Wilbur Drive. 4 176. Stanford executives with knowledge of the fraudulent billing 5 activities alleged herein include General Counsel and Vice president Ms. Debra 6 Zumwalt, who is the head ofcompliance at Stanford. From 2017 through March 2018, ~ Ms. Zumwalt was notified of the demonstrated schemes and institution's billing g noncompliance. 9 177. Stanford billing compliance officer Ms. Chantel Susztar is the ~~ Director of Hospital Integrity. She is another executive with knowledge of the ~1 fraudulent billing activities demonstrated herein. Ms. Susztar signed the 12 correspondence dated "Feb. 7, 2018" which admitted to unbundling and improper ' ~ billing of surgical preoperative visits on 12/11/12. (Exh. L) 14 ~~a tl ~f7T'C 15 ~!F~~rH cr~~ 16 17 18 19 20 21 22 ~~ 24 25 26 2'7 - 65 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:359 1 r~,,~,~ .,r R 7~77fi 2 Fri: Fi~furi~~ ~~t r,,.^,r'~i 4 Gear ~!~ 5 ~~ ~'i c~~. CC~7;7 ~'~ YC C)l1f ~?"E~r~.~t (°` iF~d~ .~.`EQ' ttl ci t~'J~fi~` i?`r, ~.'f~ l ~>:n b•1 " ..:r ~ r _, ... ~' _ r~ .~a l.~~# t 6 '~'I$!i i'~(1 ~E-C'"tl Eti ~.t" ~1 'fI s ~z~ tiic~~ iz. ~,~?fi F..:l~~`~x 1.,~::~t .`;e i" O" ~t"~^' 'd,lt:,-: ~ ~:,3 ~_1. 3c.' Ci ~:"° .~ .~i}; ~iiilirfk ifi ~',~:7r, slrafht rn Blue Crt,cS ~1~PcCte~~ ~;t~uf^*~ F~ ?nth C~~s t `r, li' ~'-5. t _,, _ ~,.r +~~ _s ~y~~'~~ 7 ii C~~i tdZf~~i FAG)`i~C3F 871 Ct t1d) l'1U ~-fJ ~-~1 C~'~.IC~'t CI~~l.1C ~t~ .t~_ (_','1.~P f t_~ C.i i'~> ft^r 4~R~L "_ t~`I~C, 1, C ~~~ .~~'Y' _"'t T~"T a ~~iuunt o? $3~1= 97 ~+~ ~ucl~~, erclo5e~s ~~:~iTh itti_; ~~,rr~<~~4„~-}~r~ ~, a c~ t~r ~ ~`~.n:. .,,.;-~- b;-r:~ 8 ~/C1U ~Jdl(~ 111 th1S (e~~3 fC1. A~tfllS 11 Ttl A~ b;~E Ci~~l$(1'~Cf c~;> P.'~t~t~ ~~,~,`n`':J ~~ '?fir ~i~. ?J~'.~ "3: ~;~> ti ~'~ Est ~~=" 9 _, 'tilt " • . ~n::r3~;.5 Gr f t f185 0 50 tOCI1P 20 OUf dLYPfI[IOII tf'I~fY,Z111t1~leRl BIi1~ ~.Cr:::~s~: atl3f.~S%"• ';e ~~{~ Alloderm witf, respect to the surgery you urrar-R~:~r~.' at;tar;fv ~' rir;~i }~ .~~~ ~ u~<~`~ per ~', ~ ~__ 10 d urinte~r~al review, only one package of Ailode~rr~ _~ ~~=~~:Ia fl~ti- • 15~en'-~if4~d ~~ h~r~ K[~~ ~;~ ~~~_~~ v.~e have contacted Anthem Blue Cross and hav? asl~;~~ tl~er~~~ t~~ r~~op~n the<, r t ~° ~ r,~ry a l ~~~,~,r 11 amended/reduced charges to reflect this change.:':~e ~~ti~ait a r~-ad}uJ«ati~.~r, f t ~,is,. - r~ .n ~, -art^gin'= E Cross to determine if any ai~~ount~ should aisp be r~irnE~u~sed t~ ~,+~~ii ~~~~d ~~r tn's ~i1~a~t~ E'"~". 12 Sincerely, 1~ ~r.~r_~~ ~F 14 ~a.,,~~ Cry. ~~.~~r~ ~~~ .~., ~~u~r, c~~r t'~r~:. 15 Chanted M. D. Susztar, RHIT, CQIP, CCS, CCS-P, CHC 16 Director, Hos{~[tal Billing Integrity Compliance Department 17 Stanford Health Care 18 3Q0 Pasteur Drive MC5780 Stanford, CA 94305 19 er~~.l~,su re 20 21 178. General Counsel and Vice president Ms. Debra Zumwalt was 22 -, assisted by Stanford counsel Ms. Carolyn Northrup and Ms. Daniella Stoutenburg, ~~ and Stanford University faculty and professors including Dr. Frederick Dirbas and 24 Dr. Roy Hong, who were accomplices in the billing frauds. 25 26 27 - 66- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:360 RELATOR 2I 179. Relator is a U.S. trained and certified professional medical coder and biller, as certified by the American Academy of Professional Coders (herein 4 "AAPC"). As such, Relator has specialized training and expertise in coding guidelines 5 and an auditor for insurance billing. 6 180. Relator is an actively practicing U.S. Board certified physician and 7 surgeon, licensed by the Medical Board of California in good standing. Relator is an 8 appointed expert for the California Department of Consumer Affairs and is an 9 appointed expert for the California Board of Medical Quality Assurance. In the l0 capacity as a designated expert, Relator has been retained as an expert and testified 11 on behalf of the State and the California Department of Consumer Affairs in matters 12 involving medical coding. 13 181. In December 2012, Relator underwent a major surgery at Stanford. 14 In November of 2016 while auditing the chart and billing records for that service, 15 Relator uncovered a course of conduct of at least four upcoding and unbundling 16 billing schemes. 17 1 82. Relator's surgery resulted in more than $17,700 of upcharges that 18 became known to Relator, Ms. Zumwalt, and Stanford executives.(Exh K,L) ~~~ 183. In December 2012 Stanford billed Relator and her commercial 20 carrier nearly $150,000 fora 23-hour total hospitalization and mastectomy. 21 184. In March 2018, Stanford Compliance Officer Ms. Chantel Susztar 22 admitted to falsely billing nearly 10% ofthe total billed fees for Relator.(Exh. MM). 23 185. On March2"7, 201 ~, more than five years after the service date, 24 Stanford voluntarily sent Relator a refund check for the fraudulently unbundled and 25 upcoded 12/11/12 preoperative visit. 26 27 -~, - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:361 186. Stanford's $341.97 check dated "1/25/18" was postmarked and 2 mailed on 3/27/18.(Exh. K,L) 3 187. On June 15, 2018 Stanford counsel Ms. Stoutenburg corresponded 4 with relator, admitted her personal knowledge that the pre-operative visit on 12/11/2 5 had been unbundled, and admitted that Stanford had double charged for 2 units of 6 Alloderm when they had used only one. Stanford counsel wrote that Stanford was in 7 process of reissuing a new a refund check to relator for the 2012 overbilling. Counsel 8 also sternly directed relator, an active Stanford medical account holder and active 9 patient, to not contact Stanford or Ms. Zumwalt. 10 11 nu,_~n~~ v F~ .~• ~ >..- ~V ~ vFasv r~tr ~ursfun7iv cY ner9 r+La nTO~+s_ sFctmit'+' DOCUMENT.. ~ GHEC%6RCIC~',kUUND AREArNar~r~to ~ O~.oH v ~2 ~ l 1 ~ l 1 1 }l~ ~ ~ ~a.,kotAmeC{F.a .~nn~satiP' D sburseme3~t e 70.?~;k ~ F~~~,r 232~Q7 7t9 iL 1.15"a, ~~ J v arthh;^e - .: lil~e~pis s 13 .,. i t .... ~a5 ~,i ~ } __ S:5 14 ~ O,L1 r PAY ih'RE< J,'Ur,1r~Re~ ~Of~TY OtVE ANO 971100--z— -------------_ __,_----- -------.— ------- a ---~— r.n~, Leo p~Y~ X 15 t l6 ~~f~~~_ _-- _ .- ~~ ~:.: 17 ~. 18 '~ `~ 19 20 FIRST SCHEME: UNBUNDLED PRE-OPERATIVE VISITS 21 22 188. Stanford habitually and freely unbundled surgical fees and charged 23 countless patients for "preoperative visits" the day or two before surgery. 24 189. For example, here on date of service 12/11/12 Stanford unbundled 25 and billed for apre-operative visit for $458 and upcoded services which were 26 provided by the physician assistant (herein "PA"). No attending physician ever ' 27 - 68- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:362 cosigned the dictation and no indicator showed that the billing attending was present 2 at the 12/11/12 visit. Since major surgery was scheduled for 12/12/12, a "pre- J operative visit" charge was not either allowed nor should have ever been charged 4 pursuant to global fee schedule rules. 5 190. Stanford records demonstrate that PA Schultz provided the 6 12/ll/12pre-operative services, unbundled the charge, and then wrongly billed under 7 Dr. Dirbas's NPI. There was no statement or signature from Dr. Dirbas that he 8 provided any ofthe 12/11/12 visit, although Stanford billed high level visits under Dr. 9 Dirbas rather than the true mid-level provider's NPI.(Exh. E, N Stanford Records) 10 11 12 SECOND SCHEME: UPCODING MID-LEVEL PROVIDERS 13 191. Stanford habitually upcodes and bills high level physician codes 14 under the physician NPI's for services rendered by Stanford's full-time mid-level 15 providers including physician assistants (herein "PA")and nurse practitioners (herein 16 «~P~, 17 192. Medicare has a standard "payment differential" and lower fee 18 schedule for mid-level providers whereby amid-level is paid at 80-85% of the 19 physician allowable fee for the same CPT code. For example, Medicare reimburses 20 approximately $87 for a physician CPT 99213 visit, whereas they may reimburse 21 roughly $69 for amid-level providing 99213. Hence, Stanford circumvents CMS's 22 lower payment differential by almost never billing under the mid-level's NPI. ~~ ~~ 193. For example, Stanford employs several full-time "advanced 24 practice providers" who are mid-level providers (PA, RNP) in the department of 25 plastic surgery. Stanford, however, is known to bill the majority of mid-level services '~ 26 27 - 69- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(x)) 28 24 Page ID #:363 1 under the higher paying physician NPI, regardless of the correct rendering provider 2 or "incident to" rules. (Exh. Q) -, 194. According to CMS, Kathryn Kamperman, RNP received total 4 Medicare payments totaling $7618 over four years, from 2012 through 2015. Also 5 according to CMS, Jennifer Seither, RNP billed and received grand total payments 6 of $1640 in 2014, and $2702 in 2013 for her Medicare patient services. Ms. Seither 7 purportedly only saw a total of 11 Medicare patients in 12 months, at an average 8 reimbursement per patient visit of $31.22. 9 195. For example, Ms. Candice L. Schultz, a PA works full-time at 10 Stanford department of surgery at about 2000 hours annually. However, in 2012 11 Medicare showed that Schultz,PA only billed 12-total visit in one year under her own 12 NPI. The rest of her visits were billed under the physician NPI Dr. Dirbas who billed 13 and collected $63,201 for 143 patient encounters. CMS data would incredulously 14 mean that Ms. Schultz only saw 12 patients independently for an entire 12 months. IS That calculates to Ms. Schultz spent 166 hours per patient encounter. 16 196. In 2015, Medicare shows that Stanford PA Ms. Schultz billed and 17 received a grand total payment of $905 for 22 patients under her own NPI. Again 18 calculating Ms. Schultz's full-time Stanford employment hours of 2000 hours per 19 annum, reflects that she spent 90.9 hours per patient encounter and billed $41 per 20 encounter. These figures simply defy belief and show that Stanford habitually refuses 21 to properly bill CMS under its rendering mid-level providers. 22 197. For example, Stanford falsely billed the 12/11/12 pre-operative G3 visit under the physician Dirbas's NPI, whereas physician assistant Candice Schultz, 24 PA-C entirely provided the service without the doctor on premises. 25 198. Even if the 12/11/12 unbundled visit was chargeable, which it was 26 not, Stanford was obligated to bill under the rendering mid-level provider's NPI(not 27 -,~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:364 the doctor's), which would result in about 15-20% less reimbursement$ to Stanford 2 per encounter. (Ref. https://www.cros.gov/Regulations-and- 3 Guidance/Guidance/Manuals/Downloads/clm 104c12.pd~ 4 199. Because of its unbundling on 12/11/11, Stanford billed an extra 5 $458 and received unjust enrichment for CPT code "99215","comprehensive patient 6 exam" for apre-operative visit before major surgery with Dr. Dirbas codified as a 7 double mastectomy CPT code "19304". 8 200. On the day before the surgery (pre-op) was unbundled as an 9 "unrelated" visit and up-coded for $458. Hence, in 2013, Stanford invoiced and 10 collected unjust enrichment of$341 directly from the Relator. 201. In March 2018, four months after the filing of this action, and 5 fI►J years after the date of service Stanford admitted in correspondence its upcoding and 13 unbundling. On 3/27/18 Stanford mailed Realtor a check for $341 and stated it would 14 continue to process the additional refund for the upcoded ($17,300) units of Alloderm. IS 202. Relator learned that Stanford bills exclusively under the physicians 16 with the intent to receive higher reimbursement even when the mid-level providers j 17 provide independent care without the supervising physician on site. 18 203. Stanford employee, Physician Assistant (herein "PA") named 19 Candice Schultz, NPI Number 1881725638 provided the entirety of the pre-operative 20 office visit service to Relator on 12/11/12. Not only was the unbundled billing 21 fraudulent on its own basis, but also the PA did not bill the service under her own NPI ~ 22 23 24 8 1 10 -Physician Assistant (PA) Services Payment Methodology (Rev. 2656, Issuance: 02-07-13, Effective: 02-19-13, 25 implementation: 02-19-13) See chapter 15, section 190 of the Medicare Benefit Policy Manual, pub. 100-02, for coverage policy for physician assistant (PA) services. Physician assistant services are paid at 80 percent of the lesser of 26 the actual charge or 85 percent of what a physician is paid under the Medicare Physician Fee Schedule. There is a separate payment policy for paying for PA assistant-at-surgery services. See section 110.2 of this chapter. 27 - 71 - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford el. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:365 1 number. Had the PA billed the service correctly under her own NPI, the 2 reimbursement was reduced by 15-20% fora "mid-level provider". 3 204. Upon information and belief, Stanford Physician Assistant("PA") 4 Candice Schultz, PA NPI Number: 1881725638 billed a total of only 12 services to 5 CMS for a grand total of $195. Whereas Ms. Schultz worked more approximately 6 2000 hours per annum, Stanford failed to properly capture and codify the care 7 provided by the PA. Instead, Stanford fraudulently billed all services under the 8 physician NPI for greater reimbursement. (Ref. last accessed 4/21/18 9 https://data.cros.gov/utilization-and-payment-explorer) l0 11 The screenshot below accessed in October 2017 reflects the billings of Ms. 12 Schults on behalf of Stanford. 13 14 IS ~ _ .~ cr~s .,. 16 ~ ~~d =re~~,—~r~r~r~ ~7 Ig 19 2~ 21 22 ~z 205. Hence, it defies belief that Sta~farU's full time PA's working 2000 24 hours per year only provided several hundred dollars ofservices as billed to Medicare. 25 206. For example, Ms. Schultz PA-C provides the bulk of medical 26 services for Dr. Dirbas's patients when Dirbas is on vacation, off-site, and/or he is 27 - 72- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. a[. QUi TAM (3 I USC § 3729(a)) 28 24 Page ID #:366 operating in surgical suites in the Stanford Hospitals. Hence, it simply defies belief 2 that working full time, Ms. Schultz's NPI shows only 12 encounters in one annum. 3 Exh. 4 207. Had Stanford billed correctly, the PA would be billed at a reduced 5 fee schedule, and with the correct coding fora "global surgery fee" with the global 6 codes would not have resulted in any extra enrichment for the pre-op visit. 7 8 STANFORD'S UPCODING AND UNBUNDLING IS A 9 DEMONSTRABLE COURSE OF CONDUCT l0 208. Relator obtained billing and payment ledgers for multiple surgeons 11 in the Stanford Department of Surgery. Adjudicated claims ledgers demonstrated that 12 Stanford had an institution wide custom and practice of unbundled billing of pre- 13 operative visits. The reports examined were for dates of service from 2010 through 14 2017 for approximately ten surgeons in the Stanford Departments of surgery and 15 Plastic surgery. 16 209. Relator requested Stanford's Medicare reports in November 2016 17 but did not receive all the full reports until on or about late 2017. 18 210. On or about February 2017 and on March 9,2017 Relator contacted 19 Stanford billing managers to discuss billing noncompliance issues. 20 211. On March 14, 2017 Relator directly emailed Dr. Dirbas, and later' 21 other Stanford executives including the Stanford Office of the General Counsel and 22 Vice President and Chief Legal Officer Debra Zumwalt regarding Stanford's 23 upcoded and unbundled services. 24 212. On March 15, 2017 Relator notified Stanford counsel Ms. ~ 25 Stoutenburg and Ms. Northrup, as well as Defendant Dr. Dirbas ofthe Medicare and 26 non-Medicare billing noncompliance. 27 -,~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:367 t ' 213. On September 8, 2017 Relator directly notified Ms. Debra 2 Zumwalt, General Counsel to Stanford vis-a-vis electronic communication at 3 zumwalt@stanford.edu of her institutions' non-Medicare and Medicare billing 4 claims non-compliance. Ms.Zumwalt confirmed receipt ofRelator's communication 5 but declined to intervene or respond to the billing discrepancies. 6 214. On September 10, 2017 Relator again notified Ms. Debra Zumwalt 7 (herein "Zumwalt" or "Stanford General Counsel"), General Counsel to Stanford at 8 zumwalt@stanford.edu, as well as Dr. Frederic Dirbas at dirbas@stanford.edu ofthe 9 billing noncompliance and asked to begin discussions with Stanford on new billing l0 processes to ensure compliance. 11 215. Shortly thereafter, Ms. Zumwalt replied to Relator and confirmed l2 receipt of the email regarding Stanford's noncompliant billing practices. 13 216. Relator contacted Stanford general counsel Ms. Zumwalt at 14 zumwalt@stanford.edu and Dr. Dirbas dirbas@stanford.edu several more times by 15 email from 2017 through 2018, without any acknowledgement by these parties. 16 217. Relator filed and served the Qui Tam Complaint on or about 17 December 4, 2017. 18 218. From 2012 to March 2018, Defendants and their representatives 19 had not only failed to acknowledge or to take steps to mitigate their unjust enrichment 20 in Relator's account, but they filed motions in limine in Court to suppress evidence 2] oftheir billing fraud. 22 219. Astonishingly on March 8,2018(which was more than 5 years after ~z the date of service, and 3 months after filing this under seal l;omplaint in this actionj, 24 Stanford sent a new bill to Relator for Dr. Dirbas's unbundled pre-operative visit. 25 220. On March 7, 2018 Stanford invoiced Relator for another $341.97 26 for DOS Dec. 11, 2012.(inset below) 27 /Y FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:368 1 ~~~ri~~~'~ titkf.Tti C1'~RE Mar~thiy Staxement Pale 1 of5 2 ..,, ~ataf Cha~~ SA5~.4ti ytrtan~~.t Date ~~:`,'iald 3 f~itenS Payments $0,+34 Guarantor Name Irt~n~rance Paymartt~ ~@.6D GUararotc:r 1p# IG(137 Inau ranse Adry s!mcnts $ 17fi~3 4 Aceaunt NumLrers taeatec7 c,~fc~'f~~u€r~~{xage~ rather Ad(u+tmanYs Sn,CK7 Payment Ous Dale 4J~,J~FiL4 gyI+J.I P1T fWEtJU4Y 5>d 1.?+I 5 vas ~,~sr,n ~ >~r~, as;.a 6 P,~ ~,~,.:, ~, ~,~~ ..._,~. . ~ .::,.~ . rl o cce the ena s ee a mia x<sume~u +ar M E _ - ~-ygx ~.ein~ ~~ and ad~l1~onA13n[OY I~wt nn firt nLWf AxY1>2nnCe. 7 v ~_ '~-+LAHt 8 CEeawx uaY Yau GIII I+,ic o~ a.•~1Yfl tar9'ai NlmS bdWnl vC mrFeaNx~.-n~,i~dn..nn~,e~.~.elA•r., twtlaih~wkiw aaniwm ~?fd~~L/~l~~ll V AccNss i ~ . ~. .,; ~~ne an5 Ypa Myl4walthucaa~~a. ~+it~gxcusaeMr Pk4S-8 A ..~:~~T~ ~.,~~. .., 9 aep~ ravunza a~. ~~rt€aa[ma~mwc~ u~ ~ r~~ "a,.> ~ .. .. . .. _, ' . . ... ~ Sfie~,.,~.i 1~ Thank you far choasrng Sfanlord Health Cara. ~ .,xa~,~n, n Via xvaar~ nmva., s~ iz~ca.~enwma,t »a~n cfi'~s~„ 1 t ~{ Sta~zfnrd r acv $'34197 ~`;~~ . ~ ~ ~ "+~~saar~-cr~xt~ 12 13 E~ti~tu~dPl~Ei~lli~~n~~~+i[~"P~~~lltluli~ l4 ~, F ~~ iJtr~tARE. IS vw.<+«~e~mn crci.cmeroe.w,w,wa~nwmww~ ror ~~eai.e.mar,~~,n..cm=w.+sra a.. .. ivAe.~~ .,...,,sir«arwnn~..n.:~s+oiaa~.,4 ~`<tts u4 vlb .~.,~,.y. ~ .ei a ~.... L ~sdB FAtli a~GW '4 W 7~ty ~l"k}ESi 16 Pam a#5 ~7 6,: .~ . ~g ~9 f?atienT (Kam' Withheld] Service Provider. DirhaS, Fredenck IN States Uue Upon Receipt Location. Blake Wilfr.ir Clinic 2~ i e;:,. ~,: `vr~vivivivii tiir E~i F,n.TkE~ .; C~ei"JTRAG7UAL AC~J - E°~LUL l.:;J ~ $-118.:13 21 TOEats $4ri8.dfl $-116.U8,"SQ-RQ $341.97 ~at~errt,~atance $0.00 $341:87 22 Balance 53~47.9i Due 7: 24 25 26 27 ~~ - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:369 l 221. On March 23, 2018 the following screenshot was captured from 2 Relator's Stanford billing account from "Stanford MyHealth". The ledger reflected -, that on Jan. 23, 2018 Stanford had internally reprocessed the unbundled 2012 claim 4 and ordered a refund check. However, Relator had not received any refund from 5 Stanford. 6 Recent Payments g P'aymenfis from '1/1/2011 to /3'l/20~ 9 DATE DLSCPIP"PION C 10 11 01/25/2018 PATIENT REFUND AP CHK Refund 12 02/14/2013 ' TRXF PT PMT FR HB TO PB HB/PB Transfer(#V l3 02/12/2013 PBO/PFS PATIENT ACCOUNT BALANCE CC-VISA 14 PAYMENT IS 01/18/2013 ' PBO/PFS PATIENT ACCOUNT BALANCE Check(#023820) PAYMENT 16 17 12/12/2012 SMO POS ACCOUNT PAYMENT CC-VISA (#visa/22 18 12/05/2012 TRXF PT PMT FR HB TO PB HB/PB Trans~er (#237481 19 20 222. On March 27, 2018 Stanford sent Relator a letter from its billing 21 compliance officer admitting that the first two upcoding schemes described herein 22 were 100% accurate and true.(Exh. K) ~z 223. On March 27, 2018 Stanford sent Relator a check for $341.97 for 24 the 2012 unbundled visit. However, according to Anthem Blue Cross there was no 25 patient responsibility for the unbundled visit and Anthem notified Stanford on Jan. 26 27 - 76- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:370 20, 2013 of the disallowed the unbundled code but Stanford failed to refund the 2 ~ account. (Exh. L- inset below) 4 n/_x1ALl.Y F~~~' T'~ ~.. l'fPE71NE AUiMN~~CT1' ~X i*+~S ~91~ T lYlliE SECVRRY D~J411YtFNT ~ CHfC% G~Ckt:ROUNO Af1EA ~H~~lGfi91,1)1 OR (:H D~~TE NO Z~2~}d7 ! - 5 ~ t3a~Rotnrr~er~~a see rt,. "Jni l;i:~,r.,4 II I~~~r.i9 t 6 4 ..... •3a1 97~ ...s.,,.z ~~,i - — tfl~~v~~;f3 7 P;;Y TNRE~ N'J~'J-:`i~El~ f-ORi Y CfJE ANC ?7i100--------- ': - - - - -- - -- - ~—_~ ~- - ttt0 D~Y~' ~. y~~d Attec L 8 9 224. On March 27, 2018 Relator received the following letter dated 10 "2/7/ 18" but postmarked 3/26/18 from Stanford Health Care. (Exh. K) The letter 11 admitted the preoperative unbundling practice alleged in this action and offered a 12 refund to Relator nearly six (6) years after the occurrence. 13 Stanford "Director, Hospital Billing Integrity and Compliance Department" wrote 14 "It has come to our^ attention that we inadvertently billed in error for a IS preoperative established patient c visit on DecembeY 11, 2012 that is 16 generally included as part ofthe global surgical package." "Our records 17 indicate that you made a payment in the amount of X341.97. As such, 18 enclosed with this corYespondence is a check fog a Yefund in full of the 19 amount you paid in this regard." 20 21 225. Stanford's March 27, 2018 letter also fully admitted the second 22 upcoding scheme described herein,fraudulent upcoding ofnumber ofunits ofsurgical 23 prosthesis and parts. 24 "It has also come to our attention that Anthem Blue Cross was inadvertently billea for two packages ofAlloderm with respect to the surgery you underwent at Stanfo~a 25 Health Care on December 12, 2012. B, our internal review, only one package o~ 26 Alloderm should have been billed to Anthem Blue Cross." 27 - „- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:371 2 Sincerely, 3 4 Chantel M. D. SusztaY, RHIT, CDIP, CCS, CCS-P, CHC 5 6 226. On April 15, 2018 Relator obtained the following claims ledger 7 through production from Defendants' subpoena to Anthem Blue Cross (herein 8 "ABC"). ABC's ledgers show that on 1/30/13 Anthem reprocessed and denied 9 Defendant's 12/11/12 claim for the unbundled pre-operative visit. ABC assigned the 10 pre-op visit as a mandatory write off as "provider responsibility". However, Stanford 11 billed relator for $341 and never reprocessed the claim. At the time that Stanford 12 billed the individual insured for $341, Stanford knew or should have known they were 13 not entitled to continue billing but did not do so. A true and correct screenshot with 14 minor redaction of non-Stanford parties of the ABC subpoena ledger is inset below. 15 ABC remitted these payments to Stanford as indicated below. 16 17 Claim# Date Billed $ Entity Paid $ l8 ~V= ~Il,~i~l~~! 19 ..t, ... .,,., .. Zo ~ ~~ ~~ ~~ ~~ .. ~, ~ ... 21 ~~~~ ~ ._. ~f~ ~'~~ ~~ ~~~ i 22 LJ l ~ ~+ f~' f~'I _ ...a .a s~ it lE[i iFi~ 1i 24 25 26 27 -,o- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:372 1 Claim# Date Billed $ Entity Paid $ ...,........, -,-~-,, .._ .~ u,. ~ ~.__.. ., 2 ~~; ~~~~~ ~~~ ~~~~ J W~E~I~ ~~~~ {~ ($341z9~ ~QQ ~~0 X00; ~4l,9~ ~~D ~ O ~~N~ 4 s 1~1 ~11I11~1~ ~I1 12 ~~4~~0 l~ll?~:St~II~I SP11~~1 L Q ~~ ~~ u~~r~n►w ~~+~ ~~,~~., ~^~, .. _.. _,_ .._ 6 ~~~~ ~o ~ ~., . ~ s ~~o s ~~t~ ~lf~l~ ~l~l~ X11 13 ~f i f~~E~(~4,~4 qty. ~9~ 0~ 9 10 1~ BREAST SURGERY BACKGROUND 12 DEFENDANTS VIOLATED SPECIAL FEDERAL LAW PROTECTIONS FOR WOMEN UNDERGOING MASTECTOMY AND 13 BREAST RECONSTRUCTION 14 IS 227. For general perspective, about 1 in 8 U.S. women (about 12%) will 16 develop invasive breast cancer over a lifetime. In 2017, an estimated 252,710 new 17 cases of invasive breast cancer are expected to be diagnosed in women in the U.S., 18 along with 63,410 new cases of non-invasive (in situ) breast cancer. (Ref. 19 https://seer.cancer.gov/statfacts/html/breast.html) 20 228. Data released by the Agency for Healthcare Research and Quality 21 (AHRQ) show that while breast cancer rates have remained constant, the rate of 22 women undergoing mastectomies increased 36 percent between 2005 and 2013, ~: including a more than tripling of double mastectomies. (Ref. 24 https://www.ahrq.gov/news/newsroom/press-releases/2016/mastectomy-sb.html) 25 229. Medicare is the expected primary payer for 44.5% of all hospital- 26 based ambulatory surgery center unilateral mastectomies, and 14.7% of all bilateral 27 - 79- FIRST AMENDED COMPLAINT United States et. a[., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:373 mastectomies. Non-Medicare is the payer for about 50% of mastectomies and 2 reconstructions. 3 230. For instance, a query with California's Office of Statewide Health 4 Planning and Development (herein "OSHPD")showed that Stanford discharged 224 5 mastectomy patients in 2012, and 217 patients in 2013. Stanford's upcoded and 6 unbundled claims for units of surgical products likely targeted these patients.(Exh I) 7 231. For example, Stanford surgeon Dr. Dirbas billed Medicare 8 $1,618,328.50 in a 5-year period. Dr. Dirbas billed non-Medicare (commercial 9 carriers and Medi-Cal) much more than $1.6 million in the same time. Stanford 10 surgeon Dr. Gordon Lee had similar billings in the millions of dollars. 11 232. Stanford billed and received more than $700 million dollars in 12 Federal funds from Medicare. Stanford was asked to reply with institutional timely 13 compliance with correct coding initiatives. Stanford failed to reply. [! f 233. Corrective action because of this Action will result in immense 15 benefit to beneficiaries and save federal and state healthcare dollars. This suit is also 16 grounds for institutional awareness and improved coding through Stanford's 17 awareness of the foregoing CMS and Federal guidelines for correct coding. ~' 18 234. In 2017, informational copies of the aforementioned records were 19 made available to Stanford executives, Stanford Counsel, Dr. Dirbas, and Ms. 20 Zumwalt Vice President of Stanford University and the Stanford Office of the 21 General Counsel for the purpose of alerting Stanford and the department of Surgery 22 to urgently correct the unbundling of any preoperative visits moving forward, and to ~~ also timely institute a billing compliance plan, both of which Stanford declined to do. 24 235. The upcoding and unbundling in this action are of public interest 25 and impact a large portion of healthcare spending. Stanford's fraudulent coding 26 identified through this action demonstrates institutional areas for change. Defendant's 27 - 80- FIRST AMENDED COMPLAINT United States et. a[., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:374 1 ', institutional upcoding and unbundling "errors" have not been corrected by 2' Defendants. 3 4 STATUTORY BACKGROUND 5 THE MEDICARE PROGRAM 6 236. Congress established the Medicare Program in 1965 when it 7 enacted Title XVIII of the Social Security Act. Medicare is a federal health care 8' program as defined at 42 U.S.C.'1320b-7b(~ and is a health care benefit program as 9 defined at 18 U.S.C.'24(b). Medicare provides free or below-cost health care benefits l0 to certain eligible beneficiaries, primarily persons sixty-five years of age or older. 11 Individuals who receive Medicare benefits are often referred to as Medicare 12 beneficiaries. 13 237. Medicare consists of four distinct parts: Part A provides hospital 14 insurance with coverage for inpatient hospital services, skilled nursing care, and home 15 health and hospice care; Part B provides supplementary medical insurance for 16 physician services, outpatient services, and certain home health and preventive 17 services; Part C is a private plan option for beneficiaries that covers all Part A and B 18 services, except hospice; and Part D covers prescription drug benefits. 19 238. The Centers for Medicare and Medicaid Services (herein "CMS") 20 is a federal agency within the United States Department of Health and Human 21 Services (herein "DHS"). CMS administers the Medicare program through its 22 contractors. ~; 239. CMS contracts with public and private organizations, usually health 24 insurance carriers, to process Medicare claims and perform administrative functions. 25 CMS currently contracts with Noridian administer and pay Part B claims from the ~ 26 Medicare Trust Fund. The Medicare Trust Fund is a reserve of monies provided by 27 - 81 - FIRSTAMENDED COMPLAINT United States e[. al., vs. Stanford et. al. QUI TAM (~ 1 USC § 3729(a)) 28 24 Page ID #:375 1 the federal government. 2 240. Enrolled providers of medical services to Medicare recipients are -, eligible for reimbursement for covered medical services. By becoming a participating 4 provider in Medicare, enrolled providers agree to abide by the rules,regulations, 5 policies and procedures governing reimbursement, and to keep and allow access to 6 records and information as required by Medicare. 7' 241. The American Medical Association has established certain codes to 8 identify medical services and procedures performed by physicians, which is known 9 as the Physicians Current Procedural Terminology (herein "CPT") system. CPT 10 codes are widely used and accepted by health care providers and insurers, including 11 Medicare and other health benefit programs. 12 242. Medicare maintains a Unique Physician/Practitioner Identification l3 Number (AUPIN@) System. The purpose of the system is to provide a unique 14 identifier for each physician, non-physician practitioner, or medical group practice 15 requesting or receiving Medicare payment, and to provide beneficiaries and other 16 interested entities with the identification of each physician or non-physician 17 practitioner assigned a UPIN and who are participating in the Medicare program. 18 243. Providers of health care services to Medicare beneficiaries seeking ~, 19 reimbursement under the program must submit a claim form ("HCFA1500") 20 containing certain required information pertaining to the Medicare beneficiary, 21 including the beneficiary's name, health insurance claim number (herein "HIC), date 22 the subject service was rendered, location where the service was rendered, type of ~3 ~ services provided, the CPT code, number of services rendered, an ILIA-9 code ~ 24 reflecting the patient's diagnosis, charges for each service provided, the provider's 25 UPIN, and a certification that such services were personally rendered by the provider. 26 244. Medicare providers are entitled to be paid only for medically- 27 OG - FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:376 t necessary services provided to eligible Medicare beneficiaries. Medicare requires 2 providers to maintain complete and accurate medical records documenting each 3 patient's care and treatment and the specific services provided to each patient. 4 5 1)FIRST SCHEME: UNBUNDLED PRE-OPERATIVE VISITS 6 7 STANDARD MEDICARE AND "CMS" GLOBAL SURGERY FEE RULE 8 245. "CPT" is Correct Procedural Terminology and is the set of codes 9 that standardize and codify standard medical services and surgeries. CPT designates l0 separate codes for visits and separate codes for procedures. Office visits are coded as 11 five-digit codes beginning with "992_ _". There are only five levels of service. 12 13 CPT CODES OFFICE VISITS New Patient Return Patient 14 Low Level Complexity 99201 99211 15 99202 99212 16 Mid-Level Complexity 99203 99213 l7 99204 99214 18 Highest Level Complexity 99205 99215 19 20 21 246. CPT code 9920_ codes specify a new patient visit, or one not seen 22 by the provider in three years. 23 247. CPT code 9921_ codes designate a return patient visit. 24 25 248. CPT's St" digit for office visits designates the level of complexity, 26 from 1 (the lowest complexity and least priced service) to 5 (the highest complexity 27 - o~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:377 1 and most expensive service). For example, Defendants in this action coded nearly all 2 visits as 99205 or 99215, which demanded the highest payments. From 2010 to 2016, 3 Defendants billed Medicare from $379 to $653 for a new patient CPT code 99205 4 visit .They billed Medicare $263 to $458 for a return patient, CPT code 99215 visit. 5 6 249. Defendant Dirbas testified under oath that he did not sign the pre- 7 operative visit note for Relator's records.(Dirbas Depo p.74) 8 SURGERY REPORTS Progress Notes 9 "~"~~~~~~~.~~.~~~~~~~~~V...._...._._~~—~,____ ~.~^Flletl 6~~~Schultz, Y Candice, PA~at 1211 ~I20'12 8:23 MJ ~rak: Not Eleclronlcally Signed ~ PM~~~~~ 'Stale=. Unsigned Transcription ~0 I 12 13 O#tical GopY 14 Ft~C3Wt~C3D G1TY, CA 94D6~3 F IS Enc Date 1218/12 Scan on 1211 91201 2 1 1'-34 AM (betow) 16 N~~c a ~~ra I"~lC3q~~;~~-I ~~ 17 Sianfaed Hospital and s-r~M~ar~4 ~+c?snfT~.~ Clirrlcs aso ~rzo~owaY sr~t~r~r w~nn rvi~oaeAi rzceo€tos nncszcxo s~x:~ 18 Unsi. ned ___ _ . ... . . ......._ .___.._. .....__..__------- -__.. ____ Cm:3z1 <_.__ y a207 t>uEflrr: 5chviiz, Candice. PA Se2rvie¢; (nn~naa) Autlicss iAtry~ici~n Ass~stanz. ... .. . . ~y~~ 19 r~t~~~: ~2~~s~i2aoa~ r~~c~ t~r~~r+~~srtn rr~~,~~n. s~vz~~~~d~ Terre. s:uru nur114n a~i~IIn, I1~llIR c~a t~(E 'i^~tei~ Un~vaad~bi~ 151358 2~ sxan~s ~ 1 !l~Id iIMI! ~qll ![~Cp ~I~T~ 117[1 ~p~flE 21 22 23 24 25 26 27 OY - FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:378 1 2' Offdcial Co~Y ~ `~ `l ~ ~ ~~ ~ } l~ ~ ~ agoa~o~QwAYs3RE~~,, ~~awt~ca~ ciTv, ca s4osa F 4 Esc. aac~ ~ zrza~~ z Scan an 12i19i2di2 61 ~3~ AM (below) 5 r~~~~ i ~~° z !~~ i ~i 1 W ~~ ~ ~ ~~ t ~ 6 Stan#orb HvspiLal and s'~ArvFo~to Mos~iTAL GIinF~s a5t~ s€~oaow~v ss~r~~~~ rtir,n Nt~t~acai acc~r~ns nnc5zac~ sax.F es ~rrtGn~rtnn n~fiv f^e ma r~r u ___.. 7 UnsJgn od ___. ____. ____. _____ ___. _ _______ —— ___. _. ~+rthcsr: uc~xuiir Qan Jrc-b. PR leruice~ (nar~~7,aut!•,c7a Fr~ys~ci8n Rss sta nt TY~~ 8 ~iieU. '17,171(1? 2.023 tVarc Tifne: 'f 1J1 ?l9,"~ 'l Ei1 CJ "frart5 tf-). ~5542~738Q4 I lNNI HOtIk7R! °DIY 1'fIf 11!11 iRl° 71Mf Trans Ur~av~ilabfct Z r~~~~~ 4zf~tu5 9 ~!tr~~r~i~~i~i~~~s~~nDuitrmurs ~E 10 11 Official Copy IZ STANFORD HOSPITAL 450 BROADWAY STREET l3 REDWOOD CITY, CA 94063 Sex:F Adm:12/1112012 14 SURGERY REPORTS (continued) Ptopress Noles Icontinuedl 15 > 12l~ v20~2 023 PM Schalk, Candice, PA Unsigned Transcrivlion 7217112072 8:13 PM Schultz, Cantlice, PA Unsigned Transcription 1 2/1112012 7-.10 PM Schultz, Candice, PA Unsigned Transuiplion 16 17 l8 5 Q. And in meeting with Dr. A, did you create a 19 6 note of that meeting with Dr. A? 20 7 MS. POLLARA: I'm sorry, I'm confused as to 21 8 what date you're referring to. 22 9 MS. STOUTENBURG: Right. That's part of the 2J 10 problem. 24 11 MR. DOLAN: I'll cure it. Let's not 25 12 characterize it as -- I've been pretty good. I'll 26 27 - OJ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:379 1 13 take care of it. 2 14 Q. So as part of your preoperative meeting with J 15 Dr. A -- pardon me. 4 16 Did you create some sort of record of that 5 17 interaction? 6 18 A. I believe my PA wrote a note, which I then 7 19 signed off. 8 20 Q. Was your PA named Candice Schultz? 9 21 A. Yes. 10 22 Q. How long had Candace Schultz been your PA? 11 23 A. I think she started working with us that 12 24 year, but I don't recall exactly. 13 25 Q. Did you form an understanding that Dr. A was 14 IS 250. Defendant Dirbas testified under oath that he failed to document 16 medical records when he examined Relator.(Dirbas Depo p.171) 17 18 19 20 21 22 t~. ~ c~, ~r~ct~r, c~th~r. ~r~u s~~a fix. r~ i.n ~h mc~ra-~ .7~g ?;~ ~ac~s~c~~~~~tiv~. d~c~ ~a a 1;.-~~~•- a:~ry r,c~~ ~ c~~ ti ~~ ~~sa,~': 22 ~ A~ Z dicl nat mike any -- I did ~,ot ma3c~ any ?3 5 notes. 24 25 ~3Cid~et \~i(lo~ ~:l~vn~it~tc i ~l l a! 7.37-K71t1 26 27 - OV FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:380 l 14 t~~. I?~L:wY~; ~. Yc~•~r resie~n~ ~rr~ulc~ kae 2 15 Cyr. k:a ~a~tr~? 1 ~~ Vii. Yes. 3 17 t~. end it inda~at~s t it,~h~ ~a n~:~z~r ~xc~gr~ss 4 3~ n~~.e air Uec~rri~~r 133~h ~t 8:4~ ~,m.; correct? 5 7.9 A. That appears ~o be ce~rrec~. 6 2t~ And t~~ ya~ar 1:az~wl~dc~e, e~ c~ ~rc~u sign ~~e note 7 21 a~ =all, ~~. ~Qm~ pr~i~~t in time? 8 ~". G ~. ~ ~~3.C3~.~y WQI.l~.C~. z G~OiI"~ S2~ IRS` S1.C,j'Fl3'~Llx`6~ 9 ~3 my el.ectranic signature hers. 10 (p.174 Depo Dirbas) 11 12 LU 1.1 n~ r3 ~~aLF make ~G-r~~ r,~re at-~~,j~r~er~ c~~ ~r~u l4 1~ evral?~at~e~~~ of the ~re~st and its c~.~~~ Sian of ~~~.Ti~~~ 15 1 ~ w~~<~~: yc~u thc~uq~~ ~T~s por~nr~,~~ly ~~~r.om~.s~c~ 16 14 ~,~~sU~a~at~~re? 17 1~ A. Well, I talked to my residents that day. I 18 p. 202 Dirbas Depo 19 251. In comparison, from 2010-2016 Defendant DIRBAS billed 20 Medicare CPT code 99211 (the lowest service) only once. The charge for CPT 99211 21 was $23. 22 252. The "global surgical package", also called global surgery fee, -, L.3 includes all the necessary services normally furnished by a surgeon before, during, 24 and after a procedure. CMS assigns a fixed total or "global"fee for a codified surgery. 25 26 27 - s~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:381 The global fee payment for a code encompasses the work required to perform the ~~ surgery as well as the before and after-care for the surgery. 253. Physicians who furnish the surgery and furnish all usual pre-and 4 post-operative care may bill for the global package by entering the appropriate CPT 5 code for the surgical procedure only. Separate billing is not allowed for visits or other 6 services that are included in the global package. Thus, a surgeon cannot unbundle and 7 bill separately for the pre-operative visit the day before surgery. 8 254. Office visits or "Evaluation and Management" services (herein 9 "E/M" or "visits") the day before surgery are included in the surgical fee package, 10 and not separately billable. I1 255. Dr. Dirbas testified under oath that he routinely made patients come 12 in for several preoperative visits at Stanford, and the Stanford billing records show 13 he unbundled these and charged for them.(p.221 Dirbas Deposition) 14 15 16 5 a sc~~.ssP~.~ i.~ dtiriizg cane cif the pre4pera~ .=e ~.r,s ts. 17 e~ P~-ok~a~.,7t,; at: the € Est visit, ~c~ul~ n~~ b~ l~k~~~~ ~Y~~t i I ~9~uld ha~~e dine i~ the aye I~~f~r~ ~ua-geryl. ~a~' ~r 18 19 n nn~ ra r~rrnna ~,~z .-., ..i,. s. 2~ 256. The national global surgery policy became effective for surgeries 21 performed on and after January 1, 1992. A national definition of a "global surgical 22 package" has been established to ensure that payment is made consistently for the ?; same services across all A/B MAC (B) jurisdictions, thus preventing Medicare 24 payments for services that are more or less comprehensive than intended. 25 (Reference https://www.cros.gov/Outreach-and-Education/Medicare-Learning- 26 Network-MLN/MLNProducts/Downloads/GloballSurgery-ICN907166.pd~ 27 - 88- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:382 257. Medicare established a national definition of a "global surgical package" to ensure that Medicare Administrative Contractors (MACS) make payments for the same services consistently across all jurisdictions. 258. Medicare payment for a surgical procedure includes the pre- 5 operative, intra-operative, and post-operative services routinely performed by the 6 surgeon or by members of the same group with the same specialty. Physicians in the 7 same group practice who are in the same specialty must bill and be paid as though 8 they were a single physician. 9 259. Medicare includes the following services in the global surgery l0 payment when provided in addition to the surgery: Pre-operative visits after the 11 decision is made to operate. For major procedures, this includes preoperative visits 12 the day before the day of surgery. lU 260. The Medicare approved amount for these procedures includes 14 payment for the following services related to the surgery when furnished by the 15 physician who performs the surgery. Therefore, a global fee paid for performing a 16 mastectomy (a major surgery) already includes in that total fee an amount for pre- 17 operative and post-operative visits. Thus, the surgeon is not entitled to unbundle and 18 bill separately for pre-operative visits. 19 261. These services are not billable for payment: 20 • For minor procedures, this includes pre-operative visits the day of surgery. 2l • Intra-operative services that are normally a usual and necessary part of a '~ 22 surgical procedure ~z • All additional medical or surgical services required of the surgeon during the 24 post-operative period of the surgery because of complications, which do not 25 require additional trips to the operating room. 26 27 - o~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:383 • Follow-up visits during the post-operative period of the surgery that are 2 related to recovery from the surgery 3 • Post-surgical pain management by the surgeon. 4 262. Global surgery applies in any setting, including an inpatient 5 hospital, outpatient hospital, Ambulatory Surgical Center (ASC), and physician's 61 office. When a surgeon visits a patient in an intensive care or critical care unit, 7~ Medicare includes these visits in the global surgical package. 8 263. Major procedures have a 90-day post-operative period which by 9 definition includes one day pre-operative. Also, the day of the procedure is generally 10 not payable as a separate service. Thus, the total global period is 92 days, counting 1 11 day before the day of the surgery, the day of surgery, and the 90 days immediately 12 following the day of surgery. 13 264. Pursuant to CMS, codes with "090" are major surgeries (90-day [~ f post-operative period). l5 265. Medicare has multiple national contractors that administrate its 16 plans. Palmetto GBA and Noridian are such carriers. Palmetto provides a simple tool 17 for providers to lookup CMS global days. (Ref. 18 https://www.palmettogba.com/palmetto/globa190.nsf/Front?OpenForm#step 1) 19 266. For example, entering CPT code "19302" into CMS's search tool 20 reflects this is a major surgery code for mastectomy with a 90-day global period. Thus, 21 the pre-operative visit before this surgery must not be unbundled and is not separately 22 chargeable.(Screenshot inset below.) 23 Code: 19302 24 Description: P-mastectomy w/lymph node removal Modifier: 25 Global Days: 90 days 26 27 -90- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:384 1 267. For example, entering the CPT code "19125" into this search tool 2 reflects that this is a major surgery code for mastectomy with a 90-day global period. -, J Thus, the pre-operative visit before this surgery must not be unbundled and is not 4 separately chargeable.(Screenshot inset below.) 5 Code: 19125 6 Description: Excision breast lesion Modifier: 7 Global Days: 90 days 8 268. Similarly, the following major surgery codes used by Defendants 9 also have a 90-day global code which precludes Defendants from unbundling and 10 billing separately for any pre-operative orpost-operative visits: 19125, 19342, 19340, I1 19120. 12 13 FEW EXCEPTIONS TO GLOBAL SURGICAL SERVICE FEES 14 269. In this action, Defendants habitually and freely upcoded, 15 unbundled, and billed for pre-operative visits. Pre-operative visits are included in 16 the payment for the global surgery fees. There is no evidence here that any 17 exceptions applied to any cases. All cases were unbundled pre-operative visits 18 which were charged after the decision for surgery was made. Some visits were 19 billed for post-operative visits which were also included in the global surgery fee. 20 270. However, it is noted that the following services are not included 21 in the global surgical payment. These services may be billed and paid for 22 separately: •Initial consultation or evaluation of the problem by the surgeon to ~~ ~~ determine the need for major surgeries. This is billed separately using the modifier 24 "-57" (Decision for Surgery). This visit may be billed separately only for major 25 surgical procedures. 26 27 -91 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:385 271. Evaluation and Management services (herein "E/M" or "visit") 2 on the day before major surgery, or on the day of major surgery that result in the 3 initial decision to perform the surgery are not included in the global surgery 4 payment for the major surgery. Therefore, these services may be billed and paid 5 separately. 6' 7 DEFENDANTS FREELY "UNBUNDLED" AND VIOLATED GLOBAL 8 SURGERY FEE RULES 9 272. Defendants performed major surgery services codes with "090" 10 which qualify as global fees with a 90-day post-operative period. 11 273. Defendants unlawfully and knowingly unbundled and separately 12 coded for pre-operative visits which they knew or should have known were part of 13 the global surgery fee for major surgeries. 14 274. Defendants unlawfully and willfully unbundled and coded for 15 pre-operative visits the day before major surgery. This unbundling practice yielded 16 Defendants upwards of 20-50% greater and unjust enrichment from the surgery. 17 275. For example, a mastectomy surgery is coded as "19301" and 18 reimbursed approximately $900. Rather than accept $900 for the surgery, Stanford 19 surgeon deliberately upcoded the service to receive enrichment of $1200 for the 20 same surgery. This increased revenue was obtained when the surgeon unlawfully 21 unbundled and charged a separate fee for an extensive or comprehensive pre- 22 operative office visit, which lawfully would have not been separately reimbursable. 23 Had the surgeon billed and coded correctly, CMS would have paid him only $9U0 24 in total for the surgery and the pre-and postoperative visits. 25 26 27 - ~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUl TAM (31 USC § 3729(a)) 28 24 Page ID #:386 l 276. Here, the surgeons upcoded and billed for unbundled services, 2 causing CMS to pay Defendants a total of$1200. Thus, Defendants obtained unjust enrichment through submitting false claims. 4 5 ~ REPRESENTATIVE UNBUNDLED GLOBAL FEE CASES: 6 7 A. DEPARTMENT OF SURGERY 8 1. FREDERICK DIRBAS, M.D.(NPI 1154457091) 9 277. Representative cases of Stanford's improper and unbundled 10 billings are inset below. li • Here, Stanford unlawfully unbundled and billed for apre-operative visit on 12 the day before surgery, which was part of the global surgery fee. 13 • 99205 and 99214 are evaluation and management ("EM") or "office visit" 14 codes. 15 • 19301 is a mastectomy code, a major surgery under CMS rules which has a 16 90 day "global" period. 17 Date of Service CPT Code Modifier 18 19 1/24/2012 1/24/2012 2 1 99205 330 /21/2012 /21/2012 2 1 99214 330 20 /22/2012 /22/2012 2 19301 T GC 330 21 /4/2012 /4/2012 22 19301 58 T GC 2330 278. In the aforementioned case, on 2/22/12 CMS beneficiary 22 underwent a major surgery CPT 19301. Code 19301 includes the day before and 23 90 days afterwards as a global surgical fee. On 1/24/12 CMS was billed and paid 24 for a comprehensive, high level, new patient E&M code as CPT 99205. The 25 decision for surgery was made at that first visit. 26 27 - »- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:387 On 2/21/12 CMS was wrongly billed and paid Stanford for a separate ~~ extended evaluation and management `B&M" service as 99214. This was one 3 day before surgery. The 2/21/12 professional services were included in the 4 global fee paid to Stanford for the surgery code. 5 279. According to CMS, is it improper for a surgeon to charge a visit 6 the day before major surgery, when the surgeon already made a decision for 7 surgery, and scheduled surgery less than 30 days prior. If a surgeon prefers to meet 8 with the patient the day or two before surgery to touch base and answer questions 9 before surgery, that "pre-op" encounter is not separately chargeable and is 10 encompassed in the global surgery code and fee. I1 280. As another example, Defendant Dr. Dirbas unlawfully billed and 12 received payment from CMS for an unbundled pre-operative visit the day before 13 he performed a major surgery on the same Medicare beneficiary. 14 Date Place CPT Code IS 9/1/2015 9/1/2015 2 1 99214 16 9/2/2015 9/2/2015 2 2 19125 T GC 17 281. Pursuant to CMS guidelines, the 9/1/15 visit was included in the 18 global surgery fee paid to the surgeon for the surgery performed on 9/2/15. Thus, 19 Stanford's unjust enrichment from unbundling the 9/1/15 pre-op visit was 20 unlawful, must be reimbursed to CMS, and subjects Stanford to FCA recovery. 21 282. CPT codes 19120 and 19125 are used for excision of breast 22 lesions, where attention to surgical margins and assurance of complete tumor 23 resection is unnecessary. CPT code 99214 is an extended evaluation and 24 management service, or office visit. 25 26 27 -7~.- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:388 i 283. As a third example, Defendants Dirbas and Stanford unlawfully 2 billed and received CMS payment for apre-operative visit the day before major surgery on the same beneficiary. 4 5 Date of Service CPT code Modifier 6/9/2016 99205 6 6/28/2016 99215 7 6/29/2016 19302 LT 8 On 6/29/16 surgery was performed. Pursuant to CMS, the pre-operative 9 visit 6/28/16 visit was included in the global surgery fee. Defendant unlawfully 10 unbundled and collected fees for the 6/28/16 visit. The fee was unlawful and must 11 be reimbursed to CMS. 12 CPT code 99215 is the highest reimbursed return patient visit, a 13 comprehensive evaluation and management code. It is unlawful to separately bill 14 this code for apre-operative visit. CPT 19302 is a major surgery code with a 90- IS day global fee basis. Medicare also requires the burden of "medical necessity" 16 and there is no indication that a comprehensive level visit was even medically 17 necessary. 18 19 284. A fourth example, on 5/19/16 Defendants Dirbas and Stanford 20 billed a new patient visit. On that date a decision for mastectomy was made. 21 Date of Service CPT code Description 22 ew patient comprehensive exam on May 19, 2016 and 5/19/2016 99205 decision for sur er was made. Sure scheduled on 6/6/16. ?; edicare was unlawfully charged fora pre-operative visit as a high level comprehensive return visit. By CME rules, this 24 6/2/2016 99215 isit 4 days before surgery is not separately chargeable. 25 26 27 - 7~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:389 1 Surgery date where Global surgery code for modified radical 6/6/20 16 l 9307 mastectomy including removal of under arm lymph nodes has 2 a 90-da lobal eriod and includes the re-o visit. -, 4 On 6/2/16, Defendants then unbundled and unlawfully billed apre-operative 5 visit. On 6/6/16 Defendants performed a modified radical mastectomy surgery. 6 Per CMS,the 6/2/16 visit was included in the mastectomy global fee. 7 Thus, Defendants were not entitled to "double dip" and collect unjust 8 enrichment for a visit which was calculated and included in CMS global surgery 9 fee. 10 285. A fifth example, Defendants unlawfully billed and received 11 reimbursement for apre-operative visit on 6/21/16. 12 Date of Service CPT code Description 13 New patient comprehensive exam charged on June 7, 2016 and decision for surgery was made. Surgery 14 6/7/2016 99205 scheduled for 6/22/16. Medicare was unlawfully charged fora pre-operative visit IS as a high level comprehensive return visit. By CME rules, 16 this visit 1 day before surgery is not separately chargeable. 6/21 /2016 99215 17 Global surgery code for Partial mastectomy or lumpectomy of breast is a major surgery code with a 90-day global fee 18 6/22/2016 19301 and includes the re-o erative and ost-o care. 19 20 CPT code 99215 is the highest paying return patient office visit. 21 Defendant's unbundling resulted in unjust enrichment of approximately $200. 22 Had it not been for Defendants' unconscionable billing, CMS would have paid at 23 least 20% less for the total surgical care of this beneficiary. 24 286. A sixth example, on 1 1/29/12 Defendants Dirbas and Stanford 25 unbundled and received CMS payment for apre-operative visit. 26 27 - 70- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:390 i Date of Service CPT code Descrintion efendants charged a new patient visit code for the highes 2 1 1/20/2012 99205 level and highest paying code. The decision to proceed with sure was made and was scheduled for 12/l 7/12. 3 Defendants unlawfully unbundled and billed for a pre- 1 ]/29/2012 9921.4 4 o erative visit before sur er. This mastectomy code is a major surgery with a 90-day global 5 1 2/17/2012 19301 service. The global fee reimbursement includes the pre o erative and osto erative care. 6 7 CPT code 99214 is the 2"d highest paying office visit code for a return 8 patient. Defendant's illegal unbundling resulted in unjust enrichment of 9 approximately $1.30. Had it not been for Defendants' unlawful upcoding CMS 10 would have paid at least 20% less for the global care of this beneficiary. 11 287. A seventh example, Defendants Dirbas and Stanford unlawfully 12 charged a pre-operative visit on 8/14/12. 13 14 15 Date of Service CPT code Modifier Description ew patient comprehensive visit charged and decision fo 8/2/2012 99205 GC 16 sur er made. Sure scheduled for 8/22/]2. efendants unlawfully billed for apre-operative visit. 1 7 8/14/2012 99215 The coded it as the hi hest a in com rehensive visit. 1 8 8/22/2012 atient underwent surgery (mastectomy), a major surge 19301 LT code with a 90-da (obal. 19 Open excision of lymph nodes is also a 90-day global 8/22/2012 38525 5] code. Thus, the pre-operative visit was included in this 20 fee. 21 288. An ~e ht example, Defendants Dirbas and Stanford unlawfully 22 upcoded and unbundled a pre-operative visit on 2/7/2013. 23 24 Date of Service CPT code ew patient comprehensive code billed. Decision fo 25 1/24/2013 99205 sure made and mastectom scheduled for 2/20/13. 26 27 - ~,- FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:391 l nlawfully billed apre-operative visit. Used the highes 2/7/2013 99215 2 a in code. 2/20/2013 38525 m h node Dissection with a 90-da lobal fee service. astectomy major surgery code with a 90-day global fee 2/20/2013 19303 4 service 5 CPT code 99215 is the highest paying office visit code for a return patient. 6 Defendant's illegal unbundling practice resulted in unjust enrichment of 7 approximately $200 to Defendants. Had it not been for Defendants' unlawful 8 upcoding, would have paid at least 20% less for the care of this beneficiary. 9 (Inset from Exhibit "B": CMS production of billing and payment records to ]0 Defendant Dirbas and Stanford) 11 12 289. A ninth example, Defendants Dirbas and Stanford unlawfully 13 billed apre-operative visit on 9/1/2015. 14 Claim ID Date of service Code 217 I6820 104331574 6/30/2015 1 99205 IS 8 0 217 I6820 104331574 9/1/2015 1 99214 16 8 0 217 V438 9/2/2015 2 19125 R GC 17 2 T 18 19 CPT code 992]5 is the highest paying office visit code for a return patient. 20 Defendant's illegal unbundling resulted in unjust enrichment of approximately 21 $200. Had it not been for Defendants' unconscionable billing, CMS would have 22 paid at least 20% less for the global surgery of this beneficiary. ?; 29C. A tenth example, Defendants unlawfully billed an affice visit for 24 9/28/10 in the global post-operative period. 25 Date of Service CPT code Modifier Dia nosis Provider UPIN 9/9/2010 1 99204 2330 OOG589351 26 9/20/2010 2 19125 RT 2330 OOG589351 27 70 - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (3l USC § 3729(a)) 28 24 Page ID #:392 1 9/20/2010 2 19126 59 2330 OOG589351 2 9/28/2010 1 99213 79380 OOG589351 Per CMS,the major surgery codes including CPT 19125 and 19126 have 4 a 90-day global period. Thus, the 9/28/10 charge was only 10 days after surgery 5 and should not have been billed. (Inset from Exhibit B) 6 291. An eleventh example, CMS records showed that on June 2016 7 Defendants persisted in their course of conduct and schemes. 8 Date of service Codes billed 9 6/9/2016 6/9/2016 22 1 99205 l0 6/28/2016 6/28/2016 22 1 99215 11 6/29/2016 6/29/2016 22 2 19302 LT 12 On 6/28/16 Defendant Dirbas and Stanford billed and received unjust 13 enrichment from Medicare for a CPT 99215, an extensive office visit, billed the 14 day before a major mastectomy surgery on 6/29/16. Defendants unbundled the 15 pre-operative visits performed by a mid-level provider, billed the visits under the 16 physician NPI, and did so with intent to increase profits. 17 18 292. A twelfth example, Defendants unbundled a "preoperative visit" 19 as a high code "99215" to Medicare on June 21, 2016, resulting in $263 of false 20 ~ claims and fraudulent billing. 21 Billing NPI Paid Date Check# Diagnosis Service Date CPT DR. NPT Billed$ 22 1437292927 6 3/2016 0890157581 C50911 5/19/2016 99205 1154457091 458.00 23 1437292927 6/22/2016 0890223673 C50911 6/2/2016 99215 1154457091 263.00 1437292927 75/2016 0890266751 C50412 6/6/2016 19307 1154457091 3924.00 24 25 293. A thirteenth example, Defendants unbundled and billed two pre- 26 operative visits after the decision for surgery was made on 7/19/16 and 7/28/16. 27 FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:393 1 Defendant fraudulently billed at least $512 in just professional fees to Medicare. 2 Defendants also billed fraudulent facility and durable medical goods (prosthesis 3 and artificial tissue) fees in the tens of thousands of dollars. 4 Billing NPi Paid Date Check# Diagnosis Service Date CPT DR. NPI Billed$ 5 1437292927 g~17 2016 0890437334 C50912 A77115 7 19/2016 99205 OOG589351 458.0 ] 1437292927 g~22~2016 0890451982 C50912 7/2g/2016 99215 OOG589351 263.0 ] 6 1437292927 g~Z2~2016 0890451982 C50912 E57089 g~2~2016 99215 OOG589351 263.0 ] 7 1437292927 9/6/2016 0890504876 C50912 E57089 g~16 2016 99215 OOG589351 263.0 ] 1437292927 0890551469 C50812 19301 OOG589351 1452.0 7 8 9/16/2016 8/22/2016 1437292927 9/16/2016 0890551469 C50812 9/22/2016 38525 OOG589351 1277.0 2 9 10 ', 11 294. A fourteenth example, Defendants unbundled and billed a pre- 12 operative visit after the decision for surgery was made in blatant violation of global 13 surgery fees. 14 Billing NPI Paid Date Check# Diagnosis Service Date CPT DR. NPI Billed$ 1437292927 3/21/2016 0889863483 N62 I26240 2~g~2016 99205 OOG589351 458.00 15 1437292927 4/4/2016 0889917583 N62 I26240 225/2016 99215 OOG589351 263.00 16 1437292927 4/18/2016 0889975531 D0501 3/15 2016 19125 OOG589351 4238.00 17 l8 295. A fifteenth example, on 8/31/16 Defendants unbundled and 19 billed a pre-operative visit after the decision for surgery was made in blatant 20 violation of global surgery fees. Billing NPI Paid Date Check# Diagnosis Service Date CPT DR. NPi Billed$ 21 1437292927 7~z0/2016 0890330050 C50911 6/23/2016 99205 OOG589351 458.00 22 1437292927 g~31 2016 0460624744 C50912 7 19 2016 99215 OOG589351 263.00 23 143~29~927 9/1%2016 0890494148 C50811 7~z0/2016 38525 OOG589351 2554.00 24 25 26 27 - loo - FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (3l USC § 3729(a)) 28 24 Page ID #:394 l i 296. A sixteenth example, on 3/31/16 Defendants unbundled and 2 billed apre-operative visit after the decision for surgery was made in blatant violation of global surgery fees. 4 Billing NPI Paid Date Check# Diagnosis Service Date CPT DR. NPI Billed$ 5 1 437292927 5/6/2016 0890052014 C5091 1 3/3 U2016 99215 OOG589351 263.00 1437292927 5/3/2016 0890036036 R591 4/1/2016 38525 OOG589351 1277.00 6 7 8 297. A seventeenth9 example, Defendants unbundled and upcoded 9 bills to a commercial carrier (Anthem Blue Cross) for apre-operative visit on l0 12/1 U12 as CPT 99215 $458. 11 Date of Service CPT code Billed Amount 12 1 1/8/2012 99205 $653 12/11/2012 99215 $458 13 12/12/2012 19303 $3370 14 12/12/2012 19303 $3370 15 STANFORD'S CODING CORRECT CODING 16 17 CPT 99215 (pre-op visit) $458 CPT No Charge Pre-op $0 18 19 Stanford Fee $458 Correct Fee $0 20 21 Relator underwent major surgery CPT 19303 on 12/12/12. Defendants 22 already charged a new patient visit on Nov. 8, 2012 CPT 99205 and had made a ?; decision for surgery. Defendants directly collected $341.97 from the patient for 24 12/11/12 for an assigned insurance deductible. Defendant concealed their 25 26 9 Relator's Explanation of Benefits from Stanford and Anthem Blue Cross 27 - 101 - FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(x)) 28 24 Page ID #:395 fraudulent unbundling from the insurance carrier through schemes of improper 2 modifiers. Thus, in December 2012 the carrier was unable to detect the unbundled pre-operative visit, and unable to deny the service as a provider responsibility. 4 Defendants also upcoded and unbundled multiple other services as 5 referenced for relator's services on 12/12/12. Stanford habitually upcoded and 6 unbundled pathology bills whereby Defendants violated the standard one 7 specimen, one code rule. Here, Stanford billed three codes for one simple 8 mastectomy specimen. For example: 9 10 STANFORD'S CODING I CORRECT CODING 11 CPT 88305 Level IV (2 units) $ 1700 CPT 88307(2 units) $1600 12 CPT 88307 Level V (2 units) $ 3306 LU CPT 88303 Level II (2 units) $ 1678 14 Stanford Fee $6684 Correct Fee $1600 15 16 17 2. DR. AMANDA WHEELER,M.D. (NPI 1477749752) 18 19 298. Amanda J. Wheeler, M.D. is a surgeon employed by 20 Defendants. Dr. Wheeler's NPI is 1477749752 in the Surgical Oncology 21 Department at Stanford. 22 299. From 09/2013 to 10/2017 Stanford billed $1,494,584.50 just to 23 Medicare for Dr. Wheeler's professional services. That total does not include 24 Stanford's facility fees, surgical supplies, durable medical goods, and non- 25 Medicare fees which Stanford charged for this provider. 26 27 - 1 VL FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:396 1 300. Dr. Wheeler habitually unbundled and billed pre-op visits in 2 violation of global surgery fees. She also billed a disproportionate number of high level codes 99205 and 99215. 4 301. As an example, on Jan 25, 2017 Stanford and Dr. Wheeler 5 unbundled a preoperative visit before surgery on Jan 26, 2017. 6 ICN Billing NPI Paid Date Check# Diagnosis Service Date CPT Billed$ 7 0217027740710 1437292927 020217 0534596634 C50911 1/25/2017 99214 186.00 0917037248060 1437292927 030217 0891153581 C50511 1/26/2017 19303 3574.00 8 9 STANFORD'S CODING CORRECT CODING to CPT 99214 (pre-op visit) $186 CPT No Charge Pre-op $0 11 12 Stanford Fee $186 Correct Fee $0 13 14 302. As another example, on April 19, 2017 Stanford and Dr. Wheeler 15 unbundled a preoperative visit before surgery on April 20, 2017. ICN Billing NPI Paid Date Check# Diagnosis Service Date CPT Billed$ 16 0217115892980 1437292927 050917 0891403538 C50912 4/19/2017 99214 186.00 17 0917137314440 1437292927 053117 0891483685 C50412 4/20/2017 19303 7148.00 18 19 STANFORD'S CODING CORRECT CODING 20 CPT 99214 (pre-op visit) $186 CPT No Charge Pre-op $0 21 Stanford Fee $186 Correct Fee $0 22 23 24 303. As a third example, on May 17, 2017 she unbundled a preoperative 25 visit before surgery on May 18, 2017. 26 27 IUJ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:397 1 iCN Billing NPi Paid Date Check# Diagnosis Service Date CPT Billed$ 2 0917076019270 1437292927 033117 0891261518 29013 3/15 2017 99214 186.00 0217082778740 1437292927 040717 0891286967 D0511 3/16/2017 14000 3741.00 0217082778740 1437292927 040717 0891286967 D0511 3/16/2017 19120 6971.00 4 5 STANFORD'S CODING CORRECT CODING 6 CPT 99214 (pre-op visit) $186 CPT No Charge Pre-op $0 7 Stanford Fee $186 Correct Fee $0 8 9 304. As a fourth example, on May 17, 2017 Stanford and Dr. Wheeler ]0 unbundled a preoperative visit before surgery on May 18, 2017. 11 ICN Billing NPI Paid Date Check# Diagnosis Service Date CPT 12 0217157894180 1437292927 062017 0891553881 C50912 6/5/2017 99214 186.00 13 0217166811200 1437292927 062917 0891588092 D0512 6/6/2017 14000 3741.00 0217166811200 1437292927 062917 0891588092 D0512 6/6/2017 19301 1452.00 14 15 STANFORD'S CODING CORRECT CODING 16 CPT 99214 (pre-op visit) $186 CPT No Charge Pre-op $0 17 18 Stanford Fee $186 Correct Fee $0 19 20 305. As a fifth example, on May 17, 2017 she unbundled a preoperative 21 visit before surgery on May 18, 2017. ICN Billing NPi Paid Date Check# Diagnosis Service Date CPT 22 0917138171240 1437292927 060117 0891489014 C50911 5/17/2017 99214 7; 0217149664050 1437292927 061217 0891525828 C50811 5/18/2017 19301 RT 24 25 STANFORD'S CODING CORRECT CODING 26 27 - ~~~,- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:398 CPT 99214 (pre-op visit) $186 CPT No Charge Pre-op $0 2 Stanford Fee $186 Correct Fee $0 4 5 SECOND SCHEME: STANFORD UPCODED LEVEL OF SERVICE 6 TO HIGH CODES CPT 99205 AND 99215. 7 8 306. In the examples,the surgeon always upcoded maximum fees and 9 high-level codes as a 99205 for new patients, and 99215 or 99214 for return 1 0~ patients. 1 1 I~ 307. Examples of Defendants' upcoding is demonstrated in the visits. 12 Notwithstanding that Defendants fraudulently unbundled global surgery fees, but 13 they also habitually coded a significant portion of visits as the highest-level codes, 14 CPT 99215 and 99214. 15 308. Medical necessity is a requirement of the CMS program and 16 Defendants' medical records have not justified that a level 5 code was always 17 medically necessary. 18 309. Defendants' medical records have also failed to demonstrate why 19 a pre-operative level 5 code the day before surgery was medically necessary. 20 310. Defendants' medical records failed to demonstrate that the 21 attending surgeon who billed under his NPI provided the services. 22 311. Defendants' medical records failed to substantiate the "incident 23 to rules" where a PA or RNP provided the office visits but never billed under the 24 PA or RNP's own NPI. 25 26 27 - ~ „~ - FTRST AMENDED COMPLAINT United States et. al., vs. Stanford el. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:399 l 312. Defendants' CMS payment legers and medical records have also 2 failed to demonstrate any compliance with incident to billing for mid-level 3 providers. For incident to billing, the doctor must be on site in the same location as 4 the PA and directly supervising. 5 313. Here, the surgeons were operating in the main hospital at 300 6 Pasteur Drive and the PA's were seeing patients in the cancer center building at 7 875 Blake Wilbur Drive Wilbur Street. 8 9 ]0 875 6iake 4'~ilh ~ ~:~ri~:~~C7 I1 12 s< Lame 6~~ilc~ing(+ 13 dviap C t~ _ ~li!f; ro~si' 14 15 Accessed at Google, the route from the hospital to the clinic is 4 min drive time 16 via Welch Rd and Pasteur Dr. 17 314. Defendants habitually refused to properly billed under the mid- 18 level provider's NPI. Had Defendant billed under the correct PA or RNP provider, 19 Defendant would have been paid 15-20% less than if a physician had provided the 20 21 services. 22 315. Defendants' medical records have also failed to demonstrate that 2~ a pre-operative level five(5) code the day before surgeYy was medically necessary. 24 316. CPT code 99205 is the highest paying office visit code for a new 25 patient. CPT codes 99215 is the highest paying office visit code for a return patient. 26 27 - ~ „~ - FiRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:400 1 317. Defendants' illegal unbundling and upcoding resulted in unjust 2 enrichment of approximately $200-$500 per patient. Had it not been for J Defendants' unlawful upcoding and unconscionable billing, CMS would have paid 4 at least 15-20% less for the care of each beneficiary. 5 6 THIRD SCHEME: UPCODED MID LEVEL PROVIDERS 7 8 DEFENDANTS FREELY UPCODED AND FALSELY BILLED UNDER 9 THE PHYSICIAN NPI WHEN MID LEVEL PROVIDERS INDEPENDENTLY RENDERED SERVICES. l0 11 318. For instance, Defendant surgeon Dr. Dirbas routinely used a mid- 12 level provider Candance Schultz, PA (physician assistant) to provide for much of 13 patients' initial, pre-operative, and postoperative services. Stanford exclusively 14 charged all services under the surgeon's NPI although the mid-level provider IS rendered the services, especially the immediate pre-operative charges. 16 319. Had Stanford billed correctly under the mid-level provider, 17 Stanford would receive 15-20% less per service. (See CMS Chapter 110 - 18 Physician Assistant (PA) Services Payment Methodology (Rev. 2656, Issuance: 19 02-07-13, Effective: 02-19-13,Implementation: 02-19-13.) ~ ° 20 320. Stanford regularly charged for the highest level of office visit for 2l new patients as CPT "99205". By time requirements alone are this level code is a 22 very lengthy 60-minute visit. Therefore, Stanford's surgeons billed fees for an ?; office visit code "99205" in one day would amount to 1 hour (60 minutes) per 24 patient. If the surgeon's charges were to be believed, he would, on a 7-hour work 25 26 'o Accessed https://www.cros.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/c1m104c12.pdf 27 - 107 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:401 1 day, have only an ability to see and bill 7 patients in this type of exam, and would 2 not have time to see other lower level patients or do any operations. -, 321. Defendants not only unlawfully billed pre-operative visits in 4 violation ofCMS global surgery fee rules, Defendants also illegally billed for these 5 upcoded services under his NPI which were provided by a PA or unlicensed 6 intern.' ~ 7 322. Stanford improperly billed for services and invasive testing when 8 no physician was on site. 9 323. Stanford billed for tens of thousands of dollars per patient claim 10 of surgical supplies which were never used. 11 324. Stanford surgery department fraudulently billed Medicare, Medi- 12 Cal, and commercial insurance for pelvic floor testing by non-licensed assistants 13 even though the purported supervising Stanford Cancer Center surgeon was no 14 longer employed by Stanford. 15 325. Stanford continued to bill Medicare, Medi-Cal, and commercial 16 carriers for procedures and testing which cannot be billed unless the responsible 17 physician is on site. Stanford billed all procedures by unlicensed staff, students, 18 and interns as though a physician had been present for the Pelvic Floor testing. 19 (See Young Complaint ¶156 "Stanford Health Care Defendants Continued to 20 Fraudulently Bill Patients and Their Insurance, Including Medical Patients, For 21 Pelvic Floor Testing with A Physician Present, Although No Physician Was 22 Present for Testing After the Cancer Center Surgeon Was Forced Out." -, L~ 326. Stanford leadership including LEO David Entwistle, COO 24 Quinn McKenna, and CFO Linda Hoff valued profits above safety. Staff was kept 25 26 "Accessed same site, under 100.2 -Interns and Residents (Rev. 1, 10-01-03)B3-2020.8, B3-8030 27 - 108 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:402 1 lean and profits continued to soar, resulting in the doubling of revenues from 2012 2' to 2016. Stanford utilized unlicensed and non-qualified staff to perform tests and -, procedures, examine post-operative patients before hospital discharge, and other 4 maneuvers which endangered patients and subjected them to inferior care. 5 327. Stanford habitually pushed aggressive and unsubstantiated 6 billing. Stanford ordered and required its coders and billers to upcode services in 7 disregard of required supportive medical documentation. Stanford's schemes were 8 habitual, purposeful, and expressly intended to maximize healthcare profits. 9 Stanford billers are instructed to maximize coding and billing regardless of the 10 medical documentation and records.(See also Gaines vs. Stanford, 3:16-cv-02831 11 Cali£ Northern District Court, False Claims Acts) 12 13 FOURTH SCHEME: VIOLATION OF "INCIDENT-TO" BILLED FOR 14 NEW PATIENTS 15 328. Stanford assigned mid-level providers to evaluate and examine 16 new patients. However, Stanford "upcoded" and billed the services under the 17 physician's NPI rather than the mid-level providers. Stanford's upcoding was done 18 with intent to capture 15-20% greater insurance fees per patient encounter. 19 329. A "mid-level" provider is defined as a licensed physician 20 assistant or nurse practitioner. Stanford habitually failed to bill services under the 21 true mid-level rendering provider, aprofit-driven practice which constitutes false 22 claims. 23 33U. For example, a physician level 3 visit for a new patient coded as 24 CPT 99203 reimburses an average of $100 with a second carrier. The same visit 25 coded as a physician assistant visit pays roughly $82. Hence, Stanford's improper 26 27 - X 09 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:403 1 upcoding of rendering provider generated an average of 18-20% extra per new 2 patient encounter who was seen by the mid-level provider. 41 DEFENDANTS' CONDUCT IS CONTINUING,AND MUST BE 5 RESTRAINED 331. Stanford's practices complained of herein are continuing. As 6 detailed above, the Defendants' actions and omissions have caused many years of 7 improper and false billings to the United States through the Medicare program, and 8 the State of California through non-Medicare programs. 9 332. For example, CMS evidence showed that on June 2016, 10 Defendants were still unbundling pre-operative visits performed by a mid-level 11 provider, billing the visits under the physician NPI, and doing so with intent to 12 increase revenues. On 6/28/16 Defendant Dirbas billed and received unjust 13 enrichment from Medicare for a CPT 99215, an extensive office visit, billed the 14 day before a major mastectomy surgery on 6/29/16. 15 Date of service CPT codes billed 16 6/9/2016 99205 17 6/28/2016 99215 18 6/29/2016 19302 LT 19 20 ~ B. DEPARTMENT OF UROGYNECOLOGY 21 333. Stanford employee Dr. Eric Sokol NPI 1437292927 is a provider 22 at Stanford Department of Urogynecology. On information and belief, Plaintiffs 23 allege providers in the urogynecology department also engaged in the schemes 24 described herein, with unbundling of pre-operative visits, upcoding for mid-level 25 providers, and improper number of surgical devices and prosthesis. 26 27 - iio- FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:404 1 C. DEPARTMENT OF GENERAL SURGERY 2 334. Brendan Visser, M.D. Department of General Surgery NPI 1 134210628 is an employee at Stanford. On information and belief, Plaintiffs 4 allege providers in the general surgery department also engaged in the schemes 5 described herein, with unbundling of pre-operative visits, upcoding for mid-level 6 providers, and improper number of surgical device and prosthesis. 7 8 D. DEPARTMENT OF GASTROINTESTINAL ONCOLOGY 9 335. Dr. Natalie Kirilcuk, M.D. is registered under NPI 144744619. 10 Dr. Kirilcuk was an employee of Stanford in the relevant period and headed the 11 pelvic floor clinic and unit. On information and belief, Plaintiffs allege that 12 Stanford through Dr. Kirilcuk and providers in this department also engaged in the 13 schemes described herein, in particular with unbundling of pre-operative visits, 14 upcoding of office visits, upcoding for mid-level providers, and upcoded number 15 of surgical devices and prosthesis, and improper billing of procedures without ]6 licensed physician presence or supervision. 17 18 FIRST CAUSE OF ACTION 19 CIVIL FALSE CLAIMS ACT,31 U.S.C. §§ 3729-33("FCA");"QUI TAM 20 ACTION." 21 By Plaintiff United States of America 22 Against all STANFORD Defendants and DOES 1 through 10 23 336. Plaintiff U.S. incorporates by reference and reallege the preceding 24 paragraphs. 25 26 27 - ~„- FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:405 1 337. This is a claim for damages and penalties under the Civil False 2 Claims Act, codified at 31 U.S.C. §§ 3729-33 brought by the United States of 3 America. 4 338. It is illegal to: 5 (1)Knowingly present or cause to be presented any false or fraudulent claim for the 6 payment of a loss or injury, including payment of a loss or injury under a contract 7 of insurance. 8 (2)Knowingly present multiple claims for the same loss or injury, including 9 presentation of multiple claims to more than one insurer, with an intent to defraud. 10 (3)Knowingly prepare, make, or subscribe any writing, with the intent to present or 11 use it, or to allow it to be presented, in support of any false or fraudulent claim. 12 (4)Knowingly make or cause to be made any false or fraudulent claim for payment 13 of a health care benefit. 14 339. It is also illegal to "knowingly assist or conspire with any person" 15 to do any of the following: 16 (1)Present or cause to be presented any written or oral statement as part of, or in 17 support of or opposition to, a claim for payment or other benefit pursuant to an 18 insurance policy, knowing that the statement contains any false or misleading 19 information concerning any material fact. 20 (2)Prepare or make any written or oral statement that is intended to be presented to 21 any insurer or any insurance claimant in connection with, or in support of or 22 opposition to, any claim or payment or other benefit pursuant to an insurance policy, 23 knowing that the statement contains any false or misleading information concerning 24 any material fact. 25 26 27 - 112 - FiRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:406 340. Civil False Claims Act, 31 U.S.C. §§ 3729-33 ("FCA") or "Qui 21 Tam" actions provide that every person who violates this code section is subject to 3 civil penalties of tens of thousands of dollars of penalties per act. 4 341. By the acts described above, Stanford violated FCA and submitted 5 false, fraudulent or misleading bills to payors by regularly and freely unbundling and 6 separately charging for pre-operative visits which were part of a global fee schedule, 7 and thus not eligible for separate billing. 8 342. Stanford Defendants submitted false,fraudulent, or misleading bills 9 to CMS through use oftime-based or complex level billing ofthe highest level paying 10 codes designating comprehensive visits for pre-operative services. These separate I1 pre-operative charges for visits implied that the patient is being billed separately for 12 "free" visits before or after surgery when in fact all such services are captured in other LU codes or in the surgeon's separate bill. 14 343. Stanford Defendants submitted false, fraudulent or misleading bills 15 to payors by inflating the bills through unjustified pre-operative visit, thereby 16 rendering illusory any global surgery fees that CMS set, or the insurers had negotiated 17 with the Stanford Defendants, either on their own or through national correct coding 18 guidelines. 19 344. Because of the above-described conduct, Plaintiffs are entitled to 20 damages as provided for by 31 U.S.C. §§ 3729-33. 21 22 ~~ SECOND CAUSE OF ACTION 24 CALIFORNIA INSURANCE FRAUDS PREVENTION ACT ("IFPA"), 25 PURSUANT TO INSURANCE CODE SECTION 1871 et. seq. 26 27 - ll3- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:407 l By Plaintiff The State of California Against all STANFORD Defendants and ~ DOES 1 through 10 ~ 345. Plaintiff,The State of California, incorporates by reference and 4 realleges the preceding paragraphs. 5 346. This is a claim for damages and penalties under the Insurance 6 Frauds Prevention Act, codified at Cal. Ins. Code § 1871.7, brought by the State of ~ California. g 347. IFPA does not require proof that the insurer paid the fraudulent 9 claim to justify the assessment of penalties. It only requires proof that the unlawful ~~ act led to the fraudulent claim. >> 348. Insurance Code section 1871.7(b) provides that every person who 12 violates false claim is subject to civil penalties of between $5,000 and $10,000, plus ~3 an assessment of not more than three times the amount of each claim for 14 compensation. 15 349. By the acts described above, Stanford violated IFPA whereby 16 Stanford habitually submitted false, fraudulent or misleading bills to Payors by ~~ unbundling and upcoding schemes. Stanford's institutional schemes are summarized ~g in ¶2, but they include unbundling of pre-operative and post-operative visits that are ~9 already captured in other revenue codes or in the surgeon's separate bills. 20 350. Unbundling is a practice whereby a healthcare vendor separately 21 charges for pre-operative visits or per-surgical services which are by definition part 22 of a "global fee" schedule, and thus not eligible for separate billing. For example, major surgery codes like mastectomy are considered "global" such that the surgeon 24 and institution are paid a "flat fee" which encompasses all related services after the 25 decision for the surgery has been made, through the surgical service, and for 90 days 26 after the surgery. 2~ - 114 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:408 351. Therefore, a mastectomy patient would not be charged fora pre- 2 operative visit with the surgeon the day before surgery since the surgeon's "flat fee" or global fee includes monetary consideration for the before and after surgery. 4 352. For example, Stanford billed a commercial carrier nearly $500 for 5 an unbundled pre-operative visit the day before mastectomy surgery. The carrier 6 reimbursed Stanford $341.97 for the unbundled visit. Even though the carrier shortly 7 thereafter caught Stanford's unbundling and disallowed that claim, Stanford is still 8 liable for IFPA since Stanford willfully billed for the wrongful charges. ~~ 353. Stanford additionally submitted false, fraudulent, or misleading 10 bills to payors through use oftime-based or complex level decision making and doing 11 so by billing the highest level paying codes for pre-operative services. 12 354. Stanford's unbundled charges for pre-operative visits demonstrates LU that Stanford was and continues billing patients for what are "free" visits before or 14 after surgery when in fact all such services are captured in global major surgical codes 15 and the facilities' separate bill. 16 355. Stanford in illusory fashion habitually inflated at least 11-15% of 17 all its billings, including but not limited to the global fee schedules. Stanford 18 submitted false, fraudulent or misleading bills to payors through unbundling the pre- 19 operative visit, thereby willfully violating Correct Coding Initiatives (CCI). Stanford 20 habitually demanded additional unbundled fees on top of its global surgical fees; 2l Stanford was lawfully required to accept the global fees as payment in full. 22 356. Because of the above-described conduct, Plaintiffs are entitled to 23 damages as provided for by California Insurance Code ~ 1871.7. 24 25 THIRD CAUSE OF ACTION 26 CALIFORNIA FALSE CLAIMS ACT("CFCA") FOR MEDI-CAL 27 - ~~~- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:409 1 (ARTICLE 9 OF CAL. GOVT CODE §§§ 12650-12656) 2 By Plaintiffs State of California and United States Against All Defendants, and DOES 1-10 4 357. Plaintiffs incorporate by reference and reallege the preceding 5 paragraphs and allege that Stanford also violated the California False Claims Act 6 (herein "CFCA") for Medi-Cal(Cal. Gov't Code §§ 12650-12656). 7 358. Medi-Cal (also "Medical") and Medi-Caid (also "Medicaid") are 8 funded by both federal and state sources. CMS contributes federal funds to these 9 programs. Rampant insurance fraud contributes substantially to rising healthcare ~[~l premium costs, and the government instituted the referenced statutes to obtain 11 assistance to prosecute insurance fraud. l2 359. Stanford was a provider of healthcare services to Medi-Cal and 13 Medi-Caid beneficiaries and collected unjust enrichment pursuant to the billing 14 upcoding and unbundling schemes described herein the preceding paragraphs. 15 16 360. CFCA like the federal False Claims Act, allows private individuals 17 "qui tam plaintiffs" to bring an action on behalf of the government against an entity 18 or person who "knowingly" has defrauded the government out of"money, property 19 or services" through submitting a false claim, false record or false statement to the 20 government for payment. 21 361. The statute provides for treble damages, civil penalties of up to ~~~I $10,000 for each false claim, and litigation costs including attorney's fees imposed L~ -~ on those who violate the CFCA. 24 362. CFCA also allows the Attorney General to intervene up to the time 25 ofjudgement, and grants up to 50% share of recoveries to the relator. 26 27 - I 16- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUT TAM (31 USC § 3729(a)) 28 24 Page ID #:410 1 363. The State of California will continue to suffer damage ifDefendants 2 continue their fraudulent activities, as health care costs and insurance rates will continue to increase more than they otherwise would or should. 4 364. As described above, Defendants used schemes to defraud the State 5 from health care funds through upcoding and unbundling. 6 7 FOURTH CAUSE OF ACTION 8 DECLARATORY AND INJUNCTIVE RELIEF, PURSUANT TO 9 CALIFORNIA INS. CODE SECTION 1871.7(B) t o By Plaintiff The State of California Against All Defendants, and DOES 1-10 ]1 12 365. Plaintiffs incorporate by reference and reallege the preceding 13 paragraphs. 14 366. Insurance Code Section 1871.7(b) empowers the Court "to grant 15 other equitable relief, including temporary injunctive relief: as is necessary to prevent ]6 the transfer, concealment, or dissipation of illegal proceeds, or to protect the public." 17 367. The California Insurance Commissioner seeks equitable relief ~ 18 pursuant to Ins. Code section 1871.7(b). Unless equitable and injunctive relief is 19 granted, Defendants are likely to continue their unlawful conduct after the conclusion 20 of this litigation. If Defendants are not restrained from their fraudulent activities, the 21 I State and its people will continue to suffer damages, as health insurance premiums 22 will continue to increase more than they otherwise would or should. 23 368. It is alleged that in addition to the upcoding and unbundling billing 24 schemes described above, Stanford has used and continues to use contractual 25 provisions to prevent challenges to their fraudulent billings. These contractual 26 27 - 117 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:411 provisions are contrary to Insurance Code and public policy and should therefore be 21 declared unenforceable pursuant to Civil Code section 1667. 3 4 PRAYER 5 FOR PLAINTIFF THE UNITED STATES OF AMERICA 6 WHEREFORE,the United States prays for judgment against Defendants as 7 a. Judgment in an amount equal to three times the amount of each 8 claim for compensation submitted by the Defendants from the commencement 9 of the statutory period through the time of trial; l0 b. Liability to the United States Government for a civil penalty of not less than 11 $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties 12 Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104- 13 410 [1]), plus 3 times the amount of damages which the Government sustains 14 because of the act ofthat person from the commencement ofthe statutory period IS through the time of trial; 16 c. Disgorgement of profits unlawfully acquired by Defendants; 17 d. An award to Relator of the maximum amount allowed pursuant to Civil False 18 Claims Act, 31 U.S.C. §§ 3729-33;Attorneys' fees, expenses and costs of suit 19 herein incurred, pursuant to Civil False Claims Act, 31 U.S.C. §§ 3729-33; 20 e. An injunction against each of the defendants for any continuing conduct 21 violating the Civil False Claims Act, 31 U.S.C. §§ 3729-33; 22 f. An order directing Defendants to cease and desist from violating Civil False 23 Claims Act, 31 U.S.C. §§ 3729-33; 24 g. An order and findings declaring that any contractual provisions used by 25 Defendants to prevent challenges to fraudulent billings are against the public 26 policy ofthe United States of America and therefore unenforceable; and 27 - tis- FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. a[. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:412 1 Such other and further relief as the Court deems just and proper. 2 3 FOR PLAINTIFF,THE STATE OF CALIFORNIA 4 WHEREFORE,the State of California prays for judgment against Defendants 5 as 6 a. Judgment in an amount equal to three times the amount of each 7 claim for compensation submitted by the Defendants from the commencement 8 of the statutory period through the time of trial; 9 b. A civil penalty of $10,000 for each violation ofInsurance Code § 1871.7 from 10 the commencement of the statutory period through the time of trial; 11 c. Disgorgement of profits unlawfully acquired by Defendants; 12 d. An award to Relator of the maximum amount allowed pursuant to Insurance 13 Code § 1871.7; Attorneys' fees, expenses and costs of suit herein incurred, 14 pursuant to Insurance Code section 1871.7; 15 e. Declaratory and Injunctive Relief(Ins. Code Section 1871.7(b)) 16 f. An injunction against each of the defendants for any continuing conduct 17 violating Insurance Code § 1871. 7(b); 18 g. An order directing Defendants to cease and desist from violating California 19 Insurance Code § 1871.7; 20 h. An award of damages and punitives pursuant to Cal. Gov't Code §§ 12650- 21 12656. 22 i. An order and findings declaring that the contractual provisions used by ~; Defendants to prevent challenges to fraudulent billings are against the public 24 policy of the State of California and therefore unenforceable; and Any such 25 other and further relief as the Court deems just and proper. 26 27 - 119 - FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (3l USC § 3729(a)) 28 24 Page ID #:413 l 2 ON BEHALF OF PLAINTIFF STATE OF CALIFORNIA 3 WHEREFORE, The State of California prays for Declaratory and Injunctive Relief 4 to halt Defendants' fraudulent conduct as follows: 5 a. An injunction against each of the defendants for any continuing conduct 6 violating the False Claims Acts; and 7 b. An order directing each of the defendants to cease and desist from violating 8 False Claims Acts. 9 Damages Sought Will Be in Amounts to Be Proven at Trial. l0 I1 JURY TRIAL DEMANDED 12 13 On behalf of Plaintiffs the United States of America, the State of California, and 14, ex. relator Emily Roe. 15 16 17 18 19 20 21 22 ?; 24 25 26 27 - ~ ~~ - FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (31 USC § 3729(a)) 28 24 Page ID #:414 1 s/ Gloria Juarez 2 Date: June 20, 2018 3 4 GLORIA JUAREZ 5 LAW OFFICE OF GLORIA JUAREZ 6 Attorneys for Relator, Emily Roe 7 8 9 10 ]l 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 - «~ - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:415 l Date: June 20, 2018 _, ~, 2 GLORIA JUAREZ J/ 3 / ~ Attorneys for Relator, Emily Roe 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1 L1~ FIRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:416 2 ELECTRONIC SERVICE LIST United States Attorney General for the District of California 3 NICOLA T. HANNA United States Attorney 4 Ms. DOROTHY A. SCHOUTEN Assistant United States Attorney 5 Chief, Civil Division DAVID K. BARRETT(SBN 149882) 6 Assistant United States Attorney Chief, Civil Fraud Section 7 BRENT A. WHITTLESEY(SBN 73493) Assistant United States Attorney 8 Room 7516, Federal Building 300 N. Los Angeles Street 9 Los Angeles, California 90012 Tel: (213 894-0522 10 Fax:(213 894-7819 Email: David.Barrett@usdoj.gov 11 Brent.Whittlesey@usdoj.gov 12 State of California 13 Agent for Service of Process to 14 California Department ofInsurance 300 Capitol Mall, Suite 1700 15 Sacramento, CA 95812. 16 Service of court filings must be directed to the following address: custodianofrecords@insurance.ca.gov 17 Diane.Pinney@insurance.ca.gov 18 Nicholas Campins, Esq. 19 California Department ofInsurance 20, Fraud Liaison Bureau 45 Fremont Street, 21st Floor 21 San Francisco, CA 94105 22 (415) 538-4149 Direct Telephone, ~~ Nicholas.Campins@insurance.ca.gov Summer.Volkmer@insurance.ca.gov 24 Lori.Higa@insurance.ca.gov 25 Attorney General of California ~~~ Mr. Xavier Becerra, Attorney General ~I - l 22 - FTRST AMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUI TAM (31 USC § 3729(a)) 28 24 Page ID #:417 1 Siobhan A. Franklin, Deputy Attorney General 2 1455 Frazee Rd. Suite 315 San Diego, CA 92108 -, Telephone (619)688-6071 4 Facsimile (619)688-4200 Siobhan.Franklin@doj.ca.gov 5 6 California Department of Justice Attn: False Claims Unit 7 455 Golden Gate Avenue, Suite 11000 8 San Francisco, CA 94102-7004 9 Los Angeles County District Attorney 1 0 Healthcare Fraud Division 300 N. Los Angeles St. Room 751 1 1 Los Angeles, CA 90012-3308 12 Office of District Attorney 1 3 210 W Temple St 18FL 14 Los Angeles, CA 90012 MS. JACKIE LACEY,District Attorney 1 5 MR. JOHN NIEDERMANN, Assistant Head Deputy District Attorney 16 Email jniedermann@da.lacounty.gov 17 1 8 Attorney General of the United States 950 Pennsylvania Avenue, Northwest 1 9 Washington, DC 20530 20 Phone General US OAG #202-514-2000, press 0/ 800-447-8477 21 False claim DHS OIG 22 Email askdoj@usdoj.gov (no attachments) 23 24 25 26 27 - 123 - FIRSTAMENDED COMPLAINT United States et. al., vs. Stanford et. al. QUi TAM (3l USC § 3729(a)) 28