United States of America, ex rel. v. Mayo Clinic Ambulance

Background

Ashley Mothershed worked in Mayo Clinic Ambulance’s billing department during two periods between November 2020 and May 2022. She alleged that Mayo had practices that caused it to submit false claims to federal and Minnesota healthcare payors. According to the complaint, Mothershed reported these practices to supervisors, who told her to continue billing in the same manner. The United States and Minnesota declined to intervene, meaning they did not take over the action.

Mothershed brought four counts under the federal False Claims Act and the Minnesota False Claims Act. Counts 1 and 2 arose under the federal law, while Counts 3 and 4 arose under the Minnesota law. Because the Minnesota law mirrors the federal law, the court analyzed the parallel counts together.

The alleged billing schemes were:

Legal standard

Mayo moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. Because the claims alleged fraud, the complaint also had to satisfy Rule 9(b), which requires fraud to be pleaded with particularity, including the basic details of who, what, when, where, and how.

The court held that Mothershed could satisfy Rule 9(b) either by providing representative examples of allegedly fraudulent conduct or by alleging detailed information about the schemes based on her firsthand knowledge and reliable indications that false claims were submitted. The court found her position in Mayo’s billing department comparable to the position of a relator whose firsthand knowledge had previously been found sufficient.

Court’s analysis

Medical-necessity theory. The court held that Mothershed’s four examples did not adequately show that Mayo submitted medically unnecessary transports as medically necessary transports. The examples involved 911 calls and injuries or acute illnesses for which medical necessity could be presumed under the applicable guidance. The court also held that alleging a general failure to review medical necessity did not complete the necessary connection to false claims submitted to government payors. The complaint did not establish that the failure to review resulted in false claims being submitted to the government. The court therefore granted Mayo’s motion as to the medical-necessity theory in Counts 1 and 3 and dismissed that theory without prejudice.

Emergency-transport theory. The court held that Mothershed adequately alleged falsity through three examples of scheduled hospital-to-hospital transfers marked “No lights & sirens” but billed as emergency transports. An emergency response requires both an immediate response and a qualifying emergency call or equivalent. The court concluded that Mayo could not rely only on the quick dispatch response when the nature of the calls was scheduled and did not indicate an emergency. The court also held that Mothershed adequately alleged knowledge because she repeatedly warned Mayo supervisors about the practice, and they allegedly directed her to continue or change the billing codes. The court characterized those allegations as showing at least reckless disregard for whether the claims were false.

Basic-life-support/advanced-life-support theory. The court held that Mothershed adequately alleged falsity through two examples in which an advanced-life-support crew responded, but an emergency medical technician trained at the basic level performed the assessment and no advanced-life-support intervention occurred. The court concluded that these allegations plausibly showed the transports should have been billed as basic-life-support services. The court also found sufficient allegations of knowledge because Mayo supervisors allegedly reviewed the claims and ignored Mothershed’s repeated warnings.

Counts 2 and 4. Counts 2 and 4 were based on the False Claims Act provision requiring a separate false record or statement connected to a false claim. The court held that Mothershed did not identify that separate record or statement with the required particularity. The billing forms submitted to government payors were the alleged false claims themselves, and the complaint did not clearly explain what additional supporting materials, certifications, or internal billing forms were allegedly false. The court also held that Counts 2 and 4 were entirely duplicative of Counts 1 and 3.

Disposition

The court ordered that Mayo’s motion to dismiss was granted in part and denied in part. The motion was granted as to Counts 2 and 4, and those counts were dismissed without prejudice. The motion was also granted as to the Counts 1 and 3 theory based on falsity concerning medical necessity. In all other respects, the motion was denied, and Counts 1 and 3 remained in the action based on the alleged upcoding of non-emergency transports as emergency transports and basic-life-support services as advanced-life-support services.