DOJ Joins A Qui Tam False Claims Act Lawsuit Against Fresenius and Azura Vascular Care

On August 12, 2022, the Department of Justice (“DOJ”) filed its Amended Intervenor Complaint (the “Intervener Complaint”), intervening in a qui tam action originally filed in 2014 by two nephrologists who referred patients at Fresenius Vascular Care d/ b/a Azura Vascular Care Clinics (“Azura”), Dr John Pepe and Dr Richard Sherman (“Relators”). The Relators filed their Fourth Amended Complaint (“Amended Complaint”)1 against Fresenius Medical Care North America (“FMCNA”), Azura, and several other FMCNA-affiliated entities on August 7, 2020, alleging violations of the Federal False Claims Act ( “FCA”) and the Federal Anti-Kickback Statute (“AKS”).2 The U.S. District Court for the Eastern District of New York unsealed the action on May 9, 2022. FMCNA is one of the two most major dialysis providers in the United States, operates more than 2,500 dialysis units nationwide, and treats more than 200,000 dialysis patients each year.Azura operates more than 60 vascular care facilities nationwide.

In the intervenor’s complaint, the DOJ alleges that Azura: (i) repeatedly performed and billed Medicare, Medicaid, and other government health care programs for medically unnecessary vascular access procedures, and ( ii) falsified referrals to give the impression that the patients’ nephrologists referred the patients for these unnecessary procedures. On April 18, 2022, the Department of Justice (“DOJ”) elected to intervene in the FCA claims, but declined to intervene in the AKS claims. The AKS claims have since been voluntarily denied.

Medically Unnecessary Vascular Access Procedures The DOJ’s primary allegations relate to the performance of medically unnecessary dialysis vascular access procedures provided to patients with end-stage renal disease (ESRD). In its intervener complaint, the DOJ alleges that the defendants engaged in a scheme to receive government payments for unnecessary surgical procedures and tests. Patients with ESRD usually require a surgically created access point in the patient’s arm or abdomen. The DOJ further asserts that under Medicare program rules, a patient’s dialysis clinic is responsible for monitoring the patient’s fistula and overall vascular access, and is responsible for making referrals for diagnostic procedures to determine if a fistula is working effectively or if the patient has a condition or blockage interfering with its functioning.

The DOJ alleges that during the period from 2012 to 2018, after a patient’s treating nephrologist referred the patient to an Azura clinic to treat a clinically significant stenosis, Azura would routinely schedule follow-up appointments or so-called “timed clinical evaluations” (“CTE”) every two to four months without consulting the patient’s dialysis clinic or referring nephrologist.

The DOJ also claims that during these appointments, Azura staff performed a brief visual examination and documented a pretext indication of impaired vascular access, justifying the fistula, which was then often followed by angioplasty, for which Azura staff exaggerated the degree of vascular narrowing or stenosis. The DOJ further alleges that Azura did not request any information regarding a patient’s recent dialysis treatment from that patient’s treating nephrologist or the dialysis clinic responsible for administering the patient’s dialysis. The DOJ asserts that, in many cases, records documenting the administration of dialysis at the patient’s clinic in the days prior to a CTE have demonstrated with quantifiable and objective measures that the patient was on dialysis without any problems. The DOJ estimates that these practices accounted for approximately seventy percent of all fistulas performed by Azura Clinics.

According to the DOJ, as a result of these medically unnecessary procedures, Azura Clinics would document the observation of patients with stenosis ranging from sixty to eighty percent blockage and, based on this observation alone and against guidelines professionals from the Kidney Disease Outcomes Quality Initiative (KDOQI).3 According to the responder’s complaint, Azura would recommend additional follow-up, thereby referring every patient indefinitely for follow-up appointments and additional procedures at the Access Center. During these follow-up appointments, the DOJ alleges that Azura’s providers performed inappropriate angiograms on patients, as well as invasive surgical procedures called angioplasties, without evidence that these procedures were medically necessary and without a recommendation for treatment. a nephrologist. Accordingly, the DOJ alleges that the defendants had no reasonable basis to perform these proceedings, and that the defendants were submitting or causing to be submitted fraudulent claims for government reimbursement.

In their amended complaint, the Relators previously argued that Dr. William Rodino, an interventionist at Azura, admitted to performing “surveillance angiograms,” stating that these procedures would identify issues missed by routine monitoring. However, Relators argued that under Medicare program rules, “vascular studies are not covered as a separately billable service if used to monitor a patient’s vascular access site,” and that Access site monitoring is included in ESRD’s Prospective Payment System (PPS) bundled payments. 4 Thus, by charging for these services separately from the bundled payment, Relators alleged that Azura Clinics were billing Medicare and Medicaid for these medically unnecessary procedures in violation of the FCA.

Download – DOJ Joins Qui Tam Misrepresentation Act Lawsuit Against Fresenius and Azura Vascular Care

Footnotes

1 United States ex rel. Pepe and Sherman c. Fresenius Medical Holdings, Inc., et al., No. 14-CV-3505 (ED New York).

2 The FCA allows individuals to bring qui tam actions on behalf of the federal government to recover funds it has paid through government reimbursement based on misrepresentation. See 31 USC § 3730. The reporter may receive between fifteen and twenty-five percent of the recovered amount if the federal government pursues the action. Since 1986, lawsuits have recovered billions of dollars on behalf of the federal government.

3 The complaint cites KDOQI guidelines, noting that fistula surgery should only be performed if the stenosis is “hemodynamically significant,” including “both greater than 50% narrowing and other clinical symptoms of support, abnormal physical results and throughput measurements”.

4 The reviewers cite the Medicare Benefit Policy Manual, ch. 11, § 40.H.

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