United States District Court, E.D. Missouri
UNITED STATES OF AMERICA, ex rel. PAUL CAIRNS, et al., Plaintiff,
D.S. MEDICAL, L.L.C., et al., Defendants.
MEMORANDUM AND ORDER
G. FLEISSIG UNITED STATES DISTRICT JUDGE.
qui tam action under the False Claims Act, 31 U.S.C.
§§ 3729-33 (“FCA”) is before the Court
on the joint motion (ECF No. 240) of Defendants to preclude
evidence of “lack of medical necessity.” For the
reasons set forth below, the motion will be denied.
operative complaint (ECF No. 26) claims that the four
Defendants in the case - Dr. Sonjay Fonn, a neurosurgeon;
Midwest Neurosurgeons, LLC (“Midwest
Neurosurgeons”), a company formed and operated by Dr.
Fonn; Deborah Seeger, Dr. Fonn's fiancée; and D.S
Medical, LLC (“DSM”), a company formed by Seeger
for the distributorship of spinal implant devises - violated
the FCA by submitting or causing to be submitted to the
federal Medicare and Medicaid programs false claims for
reimbursement for Dr. Fonn's services in performing
spinal surgeries at St. Francis Medical Center
(“SFMC”) in Cape Girardeau, Missouri, between
December 2008 and March 2012, and for the purchase of implant
devices used in those surgeries. The claims for reimbursement
were allegedly false because they did not disclose that they
were the result of alleged kickbacks that violated the
federal criminal Anti-Kickback Statute (“AKS”).
complaint alleges that Dr. Fonn would select the devices he
would use during surgeries at SFMC, based, at least in part,
on the fact that DSM would serve as the local distributor for
the manufacturer of those devices. DSM would then be paid
commissions by the manufacturers, and DSM and Seeger would in
turn share those commissions with Dr. Fonn. The alleged
illegal kickbacks are from Seeger and DSM to Dr. Fonn, and
from spinal manufacturers to DSM and Dr. Fonn. The complaint
also asserts state common law claims for payment by mistake
of fact, unjust enrichment, and fraud.
motion under consideration, Defendants move to prohibit the
introduction of evidence relating to any allegation of lack
of medical necessity for the surgeries performed by Dr. Fonn
and/or for the devices he used, such as statistical and
anecdotal evidence of differences in medical practices
between Dr. Fonn and other doctors at SFMC, and of changes in
the number of devices used by Dr. Fonn after DSM came into
existence. It is undisputed that the government has no
medical expert who will testify on the question of lack of
medical necessity or overutilization of implant
devices.Defendants argue that without medical
there is no way for the Government to properly argue that Dr.
Fonn's number of surgeries or utilization of spinal
implants was impacted by his relationship with Ms. Seeger/DSM
instead of being driven by the health and medical condition
of each individual patient. Unless [the Government] can put
on evidence of the health condition of the patients and have
an expert testify as to the necessity or lack of necessity of
any particular procedure, the Government is merely attempting
to allow the jury (which will not possess the proper medical
background) to speculate as to why any medical procedure was
ECF No. 240 at 9.
argue that, moreover, the evidence in question should be
excluded under Federal Rule of Evidence 403 because its
probative value is substantially outweighed by a danger of
unfair prejudice to Defendants, and of confusing and
misleading the jury by “suggesting corrupt or
manipulative treatment of patients by Dr. Fonn.”
Id. at 15.
response, the government explains that its theory of the case
is that the claims submitted (and caused to be submitted) by
Defendants were false not because they were for
medically-unnecessary services, but because the claims
violated the AKS, in that they included items or services
that were referred or recommended in exchange, directly or
indirectly, for remuneration. Thus, the government maintains,
it does not intend to prove at trial that any such items or
services were medically unnecessary. But the government
argues that its evidence, testimonial and otherwise, of
“comparative utilization, ” suggesting that Dr.
Fonn used a higher number of, and more expensive, spinal
devices in his surgeries than his peers, is “probative
of whether he stood to profit from those practices, whether
he ordered through [DSM] in exchange for that profit, and
whether he acted knowingly and willfully in doing so.”
ECF No. 242 at 2. According to the government,
Defendants' arguments go to the weight of that evidence,
not its admissibility.
is relevant if it “has any tendency to make a fact more
or less probable than it would be without the evidence,
” and if “the fact is of consequence in
determining the action.” Fed.R.Evid. 401. Under Rule
403, a court “may exclude relevant evidence if its
probative value is substantially outweighed by a danger of .
. . unfair prejudice, confusing the issues, [or] misleading
the jury . . . .” Fed.R.Evid. 403. “Rule 403 does
not offer protection against evidence that is merely
prejudicial in the sense of being detrimental to a
party's case. The rule protects against evidence that is
unfairly prejudicial, that is, if it tends to suggest
decision on an improper basis.” United States v.
Hawley, No. C 06-4087-MWB, 2011 WL 10483390, at *6 (N.D.
Iowa Oct. 13, 2011) (civil FCA case) (citation omitted). The
Advisory Committee Notes to Rule 403 explain that a decision
on an “improper basis” is “commonly, though
not necessarily, an emotional one.” Fed.R.Evid. 403,
Advisory Committee Notes.
prevail on its claim under the FCA, the government will have
to prove (1) a false or fraudulent claim; (2) which was
presented, or caused to be presented, by the defendant to the
government for payment or approval; (3) with the knowledge
that the claim was false. McNutt ex rel. United States v.
Haleyville Med. Supplies, Inc., 423 F.3d 1256, 1259
(11th Cir. 2005). This Court and others have held that a
claim to a federal healthcare program for reimbursement for
items or services that involved a violation of the AKS
constitutes a false claim for purposes of the FCA. See,