Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
By Eric Topor
A Florida hospital system has been was spared a trial with a False Claims Act whistle-blower because there was no evidence showing an improper relationship with referring physicians ( United States ex rel. Bingham v. BayCare Health Sys. , 2017 BL 126597, M.D. Fla., No. 8:14-cv-73, 4/18/17 ).
The U.S. District Court for the Middle District of Florida adopted a magistrate judge’s recommendation to grant Clearwater, Fla.-based BayCare Health System’s motion for summary judgment on all FCA counts brought by whistle-blower Thomas Bingham. Bingham, a real estate appraiser who is unaffiliated with BayCare, alleged that BayCare tried to induce Medicare referrals from physicians located in a medical office next to a BayCare hospital by allowing those physicians and their patients free use of a BayCare parking garage. He also alleged BayCare bestowed the garage’s tax exemptions to another physician practice group in a separate BayCare-owned medical office building.
Bingham’s allegations that BayCare utilized compensation through real estate sources to induce Medicare referrals to a provider is somewhat unusual, though the Stark physician self-referral law does include specific real estate and lease requirements as an acknowledgment that they can be avenues for fraudulent relationships. The Department of Justice has, in past FCA prosecutions, aggressively pushed legal arguments that physician compensation levels alone can be an indicator of an intent to induce referrals. In this case, however, the court found no evidence that BayCare had any such intent.
Judge Steven D. Merryday’s brief one-paragraph ruling adopted the magistrate judge’s recommendation to find in favor of BayCare due to lack of any evidence of a direct or indirect compensation arrangement between BayCare and the referring physicians that was based on or intended to induce Medicare referrals. Trial had been tentatively scheduled to begin this month, and the parties were in the final stages of submitting trial briefs and jury instruction recommendations when Merryday issued his ruling.
Jonathan Kroner represented Bingham and told Bloomberg BNA April 19 that the magistrate judge’s report “was very fact specific to the unique circumstances surrounding these medical office buildings,” suggesting that the application of this ruling to other FCA cases will be limited. Kroner, a solo practitioner who represents FCA whistle-blowers in Miami, declined to comment on whether an appeal would be forthcoming.
Bloomberg BNA contacted the representative counsel for BayCare for comment on the court’s decision but didn’t receive any response.
Merryday didn’t elaborate on Magistrate Judge Julie S. Sneed’s recommendation in his order adopting the report, but Sneed made clear that Bingham failed to find any evidence tying the compensation paid to the physicians receiving the alleged improper parking and tax benefits to any Medicare referrals they made to BayCare.
Sneed noted that the lease provision granting free parking to physicians and their patients was included in a ground lease between BayCare and the medical office building’s owner, which was the landlord of the physicians employer. Sneed said there was no direct financial relationship between BayCare and the referring physicians that might implicate the Stark law in this respect.
Sneed further rejected the notion that an improper indirect financial relationship was created through the parking concessions because the physicians’ compensation wasn’t based in any way on how many referrals were made to BayCare. Bingham made the argument that the parking concessions made the office lease terms with the physician practice well below market rate, but Sneed said the only evidence of market value came from BayCare’s expert showing that the building lease terms took parking into account.
There wasn’t any evidence that the tax abatement credits at issue, which were found to have been improperly granted by the county assessor, were intended to induce referrals either, Sneed said. Sneed noted that the physician practice’s lease required the practice to pay any property taxes owed (abated or not) which it had been doing since the assessment was corrected.
Weidner & Associates APC, Jonathan Kroner in Miami and the Warren-Benson Law Group represented Bingham. Baker, Donelson, Bearman, Caldwell & Berkowitz PC represented BayCare Health System.
To contact the reporter on this story: Eric Topor in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Peyton Sturges at email@example.com
The opinion is at http://src.bna.com/n4l.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)