United States of America ex rel. Michael I. Levine v. Vascular Access Centers

Background

Michael I. Levine, M.D., sued under the False Claims Act on behalf of the United States. The remaining defendants were Joseph Shams, M.D., and Robert, Daniel, and Albert Matalon, M.D. The complaint alleged that the defendants participated in schemes involving referrals to vascular-access centers for medically unnecessary procedures and follow-up appointments, and that they caused or submitted false claims for Medicare and Medicaid reimbursement. The complaint asserted two False Claims Act counts: presenting, or causing the presentation of, false claims, and making, using, or causing the use of false statements or records.

The case originally included other defendants. The United States intervened against the Vascular Access Centers defendants, and those claims were settled. Levine later dismissed the other defendants and continued against Dr. Shams and the Matalon Defendants. He filed an amended complaint after defendants challenged the earlier pleading.

Motions and jurisdiction

The defendants moved to dismiss under Rule 12(b)(6) for failure to state a claim and under Rule 9(b), which requires fraud allegations to describe the circumstances of the alleged fraud with particularity. Dr. Shams also moved under Rule 12(b)(1), which concerns the court’s subject-matter jurisdiction, arguing that the False Claims Act’s former public-disclosure bar prevented the court from hearing the claims.

The court denied Dr. Shams’s Rule 12(b)(1) motion. It held that the public information on which he relied did not identify him or provide enough information to identify him as a participant in the alleged fraud. The court therefore concluded that the public-disclosure bar did not eliminate subject-matter jurisdiction, including for claims that might have arisen before the 2010 amendment to the False Claims Act.

Dr. Shams

The court dismissed both counts against Dr. Shams under Rule 9(b). The complaint alleged aggregate billing and procedure data from 2012 through 2017, but it did not identify particular false claims, such as a specific patient’s identifying information or dates of service. The court found that generalized billing figures and conclusions about the medical necessity of procedures were not enough.

The complaint also described a 2009 telephone call concerning patient RG’s scheduled follow-up appointment. But RG did not attend the appointment, so the complaint did not allege that the appointment resulted in a fraudulent bill. The court also noted that the call occurred three years before the alleged period at issue and that the other described patients were not alleged to have been treated by Dr. Shams. The court found no allegations providing notice of specific false claims submitted by him.

Matalon Defendants

The court also dismissed both counts against the Matalon Defendants under Rule 9(b). As to Albert and Daniel Matalon, the complaint relied on broad allegations that the Matalon Defendants knew about and allowed unnecessary procedures, but it did not provide sufficient facts describing either individual’s conduct. The allegations that they would have reviewed patient charts or would have known about the procedures were too general and conclusory.

As to Robert Matalon, the complaint alleged that he allowed or failed to stop referrals, directed transportation to Dr. Shams and a Beth Israel facility, and made statements suggesting that referral decisions depended on personal benefit. The court found that these allegations did not identify particular instances showing where and when he committed fraud. The complaint also did not establish which Matalon Defendant treated or referred the identified patients. The court therefore found the allegations insufficiently specific as to Robert Matalon as well.

Ruling

Judge Lorna G. Schofield granted the defendants’ motions to dismiss. The court denied leave to amend because Levine had already received opportunities to correct the Rule 9(b) deficiencies and had declined another opportunity before the ruling. The conclusion states that the complaint was dismissed with prejudice, and the Clerk was directed to close the specified motions and the case.