Qui tam plaintiffs can make money under the False Claims Act if they can show that a defendant caused the submission of false claims to the government. As we have discussed before, some qui tam plaintiffs, usually former sales reps, have tried to turn allegations of off-label promotion into false claims cases. In United States ex rel. Bennett v. Medtronic, Inc., 2010 WL 3909447 at *1 (S.D. Tex. Sept. 30, 2010), the court considered “the question of when a manufacturer’s promotion of a medical device for an ‘off-label’ use may provide the basis for a qui tam action by private plaintiffs suing under the False Claims Act.” The court answered this question in a careful, thorough opinion, which we recommend to anyone interested in this area.
The relators in Bennett were not exactly classic whistleblowers. Bennett was a sales rep for Boston Scientific for all of four months and then filed five qui tam actions against seven medical device companies, including Medtronic. Fellow relator Boone had worked for a couple of device companies. Neither ever worked for Medtronic. They claimed that they were “industry insiders” with knowledge of unlawful activities by a company they never worked for. The government was not too impressed with their evidence and declined to intervene in their suit, which is a pretty good sign that the government didn’t feel that it had been defrauded.
The device at issue was Medtronic’s Cardioblate system, which the FDA had approved for ablating tissue to control bleeding and to coagulate cardiac tissue during general surgery. The relators claimed that Medtronic promoted the Cardioblate for the off-label use of surgical ablation to treat atrial fibrillation.
But off-label use or even promotion of off-label use does not amount to a False Claim Act violation, the court said. Off-label use of medical devices is an accepted medical practice and may be eligible for Medicare and Medicaid reimbursement if medically necessary. Id. at *3-5. Off-label promotion is unlawful, but does not amount to an FCA violation. Id. at *14, 28. An FCA violation requires a showing that the defendant caused the submission of false claims to the government. Id. at *2.
The relators tried to get around these problems, but sometimes efforts to get around something look a lot like turning in circles. They claimed that Medtronic’s off-label promotion of the Cardioblate system for atrial fibrillation caused physicians and hospitals to submit claims falsely stating that the Cardioblate was medically necessary. And why was it false for those doctors and hospitals to claim that Cardioblate treatments for atrial fibrillation were medically necessary? Because the Cardioblate had never received FDA approval for the treatment of atrial fibrillation, i.e., it was an off-label use. Id. at *26. In other words, off-label promotion causes off-label use, which leads providers to submit reimbursement claims to the government for that off-label use. And those claims are false, according to relators, simply because the use is off-label.
Sounds tautological to us – and yet another attempt to criminalize the mere fact of off-label use.
The court was not persuaded. “The decision on medical necessity is made by individual physicians exercising independent professional judgment based on knowledge of their particular patients. The cases recognize that off-label use of a drug or medical device is distinct from a medically unnecessary use of that drug or device.” Id. (citing Buckman and several other cases). So even if a drug or device manufacturer engaged in off-label promotion, “that is insufficient to plead that the manufacturer caused physicians or hospitals to submit false claims for reimbursement.” Id. at *28. For good measure, the court pointed out that the relators did not identify any Medtronic employee who engaged in off-label promotion or any physician who either received off-label promotions or submitted an allegedly false claim to the government. Id. at *28.
The relators also alleged that Medtronic told physicians and hospitals to use the wrong (more expensive) Medicare code, known as “upcoding,” when seeking reimbursement for certain procedures using the Cardioblate. That’s a serious charge, and Rule 9(b) requires plaintiffs making the serious claim of fraud to back it up specific facts, which helps separate the real from the not so real. The relators fell on the wrong side of that divide. Their complaint did not identify any Medtronic sales rep or employee who actually encouraged upcoding, nor did they identify any physician or hospital who actually upcoded. That ended that claim as well.
The relators’ last gasp was to claim that Medtronic provided remuneration to physicians and hospitals to encourage them to use the Cardioblate system in violation of the antikickback statute. But that allegation, even if it were true, would not prove an FCA violation, the court said. So the relators tried this creative theory: (1) Medtronic allegedly paid unlawful remuneration to doctors and hospitals; (2) those doctors and hospitals made reimbursement claims to Medicare; (3) in making those reimbursement claims, the doctors and hospitals had to explicitly or implicitly certify their compliance with the antikickback statute; and (4) Medtronic’s alleged payment of remuneration would have caused the certifiers not to be in compliance. Again, that pesky requirement of Rule 9(b) tripped up relators, as they did not allege that Medtronic actually caused any physician to make a false certification of compliance, nor did they allege any actual physician or hospital that falsely certified compliance. Id. at *33-34. The court therefore rejected this unfounded theory as well. Id.
As we said the other day, facts are stubborn things.
Having concluded that all of the relators’ theories were either legally incorrect or factually unsupported, the court dismissed the complaint, albeit with leave to amend the complaint. If the relators had any factual basis for their claims, we suspect they would have included it in their complaint. If they try again, we’ll let you know what happens.