United States v. Centra Health, Inc.

548 F.Supp.3d 568

UNITED STATES of America & The Commonwealth of Virginia, EX REL. Dwight OLDHAM, Plaintiff,

v.CENTRA HEALTH, INC., Defendant.

Case No. 6:18-cv-00088

United States District Court, W.D. Virginia, Lynchburg Division.

Signed July 12, 2021

Justin Michael Lugar, United States Attorneys Office, Roanoke, VA, for Plaintiff United States of America.

Kimberly Murphy Bolton, Office of the Attorney General of Virginia, Richmond, VA, for Plaintiff Commonwealth of Virginia.

John Reed Thomas, Jr., Mia Yugo, Hafemann Magee & Thomas, LLC, Roanoke, VA, for Plaintiff Dwight Oldham.

Elizabeth Guilbert Perrow, John Benjamin Rottenborn, Joshua F.P. Long, Joshua Richard Treece, Woods Rogers PLC, Roanoke, VA, Joseph Walton Milam, III, Rosenwood Rose and Litwak, PLLC, Charlotte, NC, for Defendant.

MEMORANDUM OPINION

NORMAN K. MOON, SENIOR UNITED STATES DISTRICT JUDGE

In late 2017, Centra Health, Inc. banned Dr. Oldham, an experienced physician who worked at the Lynchburg Hematology Oncology Clinic, from its premises. Dr. Oldham brought this suit against Centra, alleging that Centra retaliated against him because he investigated the organization's unusually high utilization rates for several forms of oncology testing. Specifically, Dr. Oldham contends that Centra (1) violated the anti-retaliation provisions of the False Claims Act and the Virginia Fraud Against Taxpayers Act, and (2) committed common law breach of contract. Centra filed a motion to dismiss Dr. Oldham's amended complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons discussed, the Court will grant Centra's motion in part and deny it in part.

I. FACTUAL ALLEGATIONS

A. Centra's Merger with the Oncology Clinic

Dr. Oldham worked at the Lynchburg Hematology Oncology Clinic ("LHOC") for several decades prior to its merger with Centra in 2014. Dkt. 19 ¶ 24. After the merger, he worked under a professional services agreement ("PSA") that became effective on September 1, 2014. Id. ¶¶ 25–26. At the time of LHOC's merger, Dr. Oldham was the medical director of LHOC, a role which he held until Centra split the position in two in June 2017. Id. ¶ 29. Following the split, Dr. Oldham was responsible for supervising the implementation of the Oncology Care Model ("OCM") outlined in the Affordable Care Act. Id. ¶ 64.

B. Improper Pre-Authorization Forms and Circumvention of Physician-Ordered Imaging

The Medicare Benefit Policy Manual outlines the proper parameters for diagnostic imaging and testing in Chapter 15 Section 80. Id. ¶ 35. More specifically, Sections 80.6.1 to 80.6.4 cover the appropriate ordering of follow-up diagnostic imaging studies. Id. ¶¶ 35, 38. CMS updated Section 80 to stop the routine ordering of follow-up testing by radiologist-interpreting physicians because of the unnecessary testing that resulted. Id. ¶ 37.

Centra uses nurses, known as "breast navigators," who are assigned to each patient to assist them through the course of breast cancer treatment. Id. ¶ 34. Dr. Oldham alleges that breast navigators control the referrals of new patients and Centra "used their control of the referral process to exclude certain physicians from seeing breast cancer patients ... [and to] intimidate[ ] physicians who participated in the breast program into tolerating overutilization of imaging by Centra." Id. ¶ 34.

This was done, in part, through Centra Breast Imaging's "Mammography Appointment Request Form," used at all Centra Breast Imaging locations. Id. ¶ 33. Completed forms are sent to the ordering physician for a signature and each form includes a section with a pre-checked box with the statement, "Any diagnostic breast exam procedure deemed necessary." Id. Centra's form is not specific, and it allows the radiologist at Centra Breast Imaging (an interpreting physician), not the treating physician, to choose what diagnostic imaging and testing should occur—in violation of the Medicare Benefit Policy Manual. Id. ¶ 38.

C. Inappropriate Use of Breast Ultrasounds and Breast MRIs

National Coverage Determination 220.4 contains the Medicare policy for screening mammography, covering assisted detection and screening digital breast tomosynthesis. Id. ¶ 40. Screening services do not require an ordering physician. Id. There is also an exception that allows an interpreting physician to order a diagnostic mammogram with an abnormal screening study, pursuant to 42 C.F.R. 410.32. Id. Medicare does not recognize a screening breast ultrasound. Id. ¶ 41. Moreover, the National Cancer Center Network, a group that develops guidelines for appropriate cancer drug therapy, specifically recommends against the routine use of breast ultrasound for screening women with dense breasts due to high number of false positive tests leading to unnecessary breast biopsies. See Dkt. 19-3. However, Dr. Oldham alleges that Centra routinely used diagnostic breast ultrasounds to screen women with increased breast density in an inappropriate manner as a means to follow-up on specifically identified abnormalities. Dkt. 19 ¶¶ 47–48.

Dr. Oldham raised concerns about the use of screening ultrasounds in August 2016, and another physician, Dr. Perroto, acknowledged Centra's use of screening ultrasound in an August 14, 2016 email. Dkt. 19-4 at 2. Additionally, published CMS data for 2016 and 2017 showed Centra's utilization of ultrasound and MRI, after a screening mammography, to be significantly higher than the national average.¹ Dkt. 19 ¶ 51.

In addition to the allegedly improper and excessive use of breast ultrasounds, Dr. Oldham alleges that Centra misused breast MRIs. Neither the National Cancer Center Network guidelines nor the American College of Breast Surgeons’ guidelines recommend the routine use of breast MRIs prior to surgery. Id. ¶ 54. Nonetheless, Centra radiologists, without an order by the treating physician, routinely ordered breast MRIs. Id. ¶ 57. In 2016, Centra's use of breast MRIs after a cancer diagnosis was 74%—over twice the national average. Id. ¶ 58.

During Dr. Oldham's tenure as the medical director, he participated in a weekly Breast Conference, attended by medical oncology, radiation oncology, surgery, breast navigators, pathology, breast imaging, and mammography. Id. ¶ 65. During those meetings, he raised concerns about the number of MRIs being ordered. Id. ¶ 66. He also objected to individual patients receiving a breast MRI in instances where it would be wasteful and unhelpful. Id.

D. Centra's Participation in the Oncology Care Model ("OCM")

At Dr. Oldham's request, Centra agreed to participate in the OCM model in 2015—a Medicare Advanced Payment Model. Id. ¶ 67. Part 1 of the OCM provides participating organizations with a monthly payment of $160 per patient per month to invest in quality improvements. Id. ¶ 68. The goal of Part 1 is to ensure that participants take certain quality care measures. Id. Part 2 of the OCM requires organizations to demonstrate cost savings as a result of quality improvement activities. Id. Groups that show cost savings become eligible for additional performance-based payment. Id.

In assessing costs for the OCM, Dr. Oldham identified an unusually high number of diagnostic breast imaging studies. Id. ¶ 69. He subsequently held two meetings—the "Oncology Service Line" meetings—to develop a plan to make Centra eligible for performance-based payment under the OCM Part 2. Id. ¶ 71. This included efforts to reduce unnecessary utilization of breast imaging. Id. Dr. Oldham successfully held two "Oncology Service Line" meetings in the fall of 2016 before Centra cancelled subsequent meetings. Id. ¶ 75. Even so, Dr. Oldham later organized an effort to boycott the signing of pre-authorization requisition forms that Centra Breast Imaging provided, which had the preselected option of unlimited additional testing. Id. ¶ 76.

E. Centra's Response to Dr. Oldham's Actions and Continued OCM-Related Issues

In the fall of 2016, Dr. Oldham met with E.W. Tibbs, the former CEO of Centra Health, to discuss OCM. Id. ¶ 77. Tibbs assured Dr. Oldham at the meeting "that he would take corrective action" as to the lack of progress in meeting financial targets under the model. Id.

After the meeting, Dr. Oldham alleges, upon information and belief, that Tibbs took the following steps: (1) promoted Curt Baker (Vice President of Oncology) to Chief Nursing Officer; (2) demanded Dr. Oldham be removed as Medical Director for Medical Oncology as part of LHOC's contract negotiation for renewal of its PSA with Centra;² and (3) failed to make changes at Centra Breast Imaging or take action as to Carol Riggins (Managing Director of Pearson Cancer Center). Id. ¶ 78. Baker and Riggins were the two administrators responsible for the breast navigators and Centra Breast Imaging. Id. ¶¶ 72–73.

Approximately a year later, in August 2017, Riggins filed a complaint against Dr. Oldham for disruptive behavior with Centra Human Resources. Id. ¶ 79. Dr. Oldham met with a subcommittee of the Centra Medical Staff Executive Committee ("MEC"), at which time Dr. Oldham agreed that he had made unkind remarks about Riggins outside her presence. Id. ¶ 80. He received a letter of reprimand from the MEC, but did not respond to it. Id. ¶ 81.

In November of 2017, Dr. Oldham reviewed the preliminary financial data for the OCM and found that Centra was not eligible for any performance-based payment. Id. ¶ 83. Yet, Centra continued to participate in the OCM and collect Part 1 payments, despite improperly utilizing imaging and other services. Id.

Later that month, on November 23, the Centra Medical Oncology Office was closed for patient care. Id. ¶ 84. Dr. Oldham went to the office and reviewed files and old emails because he planned on filing "complaints" related to "the Oncology Service Line Meetings and over-utilization of breast imaging" with the "Centra Board of Directors, The Joint Commission on Accreditation of Hospitals, and Medicare." Id. Katie Kirby, the Director of Practice Operations for...