On July 1, 2014, a United States District Court in the Middle District of Florida granted in part, denied in part summary judgment in favor of Halifax Hospital Medical Center in connection with the non-intervened claims brought by Relator Elin Baklid-Kunz (Relator) under the False Claims Act (FCA). As reported in our March 10, 2014, Health Headlines newsletter available here, Halifax Hospital Medical Center and certain other defendants (collectively, "Halifax") previously agreed to pay $85 million to settle allegations that Halifax compensated a group of physicians in a manner not permitted by the Stark Law, including that three neurosurgeons were allegedly paid in excess of fair market value and that six oncologists allegedly received bonuses based on the oncology department's operating volume. The Court's July 1 order relates to a trial, separate from the $85 million settlement, that focuses on allegations that Halifax engaged in a decade-long practice of admitting patients to the hospital for unnecessary short-stays, and then billing federal healthcare programs for such admissions.
In its motion for summary judgment, Halifax raised the following issues:
- whether the Relator has provided sufficient evidence as to damages;
- whether a failure to abide by certain Medicare "conditions of participation" can render Medicare claims "false" for purposes of the FCA, 31 U.S.C. §§ 3729 et seq.; and
- whether some of the Relator's claims are barred by the statute of limitations (i.e., all claims earlier than October 16, 2007).
The Court granted summary judgment on Halifax's first two issues finding that with respect to the issue of damages, "assuming Relator is able to prove that patients were improperly admitted, the proper measure of damages would be the difference between what Halifax billed Medicare for those claims and what Halifax could have billed on an outpatient basis. As Relator has failed to produce evidence from which a reasonable jury could determine this amount, Halifax is entitled to summary judgment insofar as Relator is attempting to recover damages." With respect to the issue whether Medicare conditions of participation can invoke FCA liability, the Court concluded that "Relator will not be permitted to argue that a claim is false solely on the basis of a lack of an admission order, or to present evidence in support of such an argument" because the existence of such admission orders are conditions of participation, not conditions of payment.
The Court did not grant summary judgment based on the statute of limitations because Halifax did not raise the affirmative defense until its proposed jury instructions less than a month before trial as opposed to asserting the defense in its pleadings. The Court also reasoned that although Relator may not have identified in her pleadings any specific claims occurring prior to 2007, Relator generally asserted that the alleged conduct had been going on "since at least 2000." The Court also noted that although Halifax's motion is titled as one for summary judgment, the latter two issues are the subject of motions in limine and are construed as such.