In United States ex re. Bookwalter v. UPMC, 946 F. 3d 162 (3d Cir. 2019), the court ruled that the relators stated a Stark Act claim and violations of the False Claims Act (FCA) against a hospital and multiple neurosurgeons by asserting that they submitted false claims for hospital services to Medicare and Medicaid, and made false records or statements concerning those services. The neurosurgeons worked for the University of Pittsburgh Medical Center. Each surgeon had a base salary and an annual work-unit quota. Every medical service is worth a certain number of work units. The longer and more complex the service, the more work units it is worth. Work units are one component of relative value units (RVUs), which are the basic units that Medicare uses to measure how much a medical procedure is worth. Surgeons were rewarded or punished in compensation based on how many work units they generated. The relators accused the surgeons of fraudulently increasing their work units. Most reported total work units that put them in the top 10 percent of neurosurgeons nationwide. Relatedly, the relators pled that as the surgeons performed more procedures, the procedures required the attendant hospital and ancillary services to increase. These are referrals for designated health services under the Stark Act. According to the court, "[t]he surgeons' suspiciously high compensation suggests that it took into account the volume and value of their referrals." Moreover, the court determined that it could be plausibly inferred that the hospitals knew or recklessly disregarded that the surgeons' compensation took into account their referrals. Then, by submitting false claims to Medicare and other federal health programs, the defendants knowingly or recklessly presented false claims for payment to the government in violation of the FCA.
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