Intermountain Drops Supreme Court Challenges to False Claims Act with Settlement of Whistleblower Suit

Healthcare system drops petition to the U.S. Supreme Court to challenge the constitutionality of the whistleblower provisions of the False Claims Act

Last month, several media outlets reported that Intermountain Health, a Utah-based health system that operates 22 hospitals and dozens of group clinics, urgent care facilities, a home healthcare agency, and a health plan, has reportedly settled a whistleblower lawsuit alleging it had violated the False Claims Act by billing Medicare and Medicaid for medically unnecessary procedures. Although the details of the settlement are not yet known, the fact that the case has settled is in itself significant because it means that Intermountain has abandoned its petition to the U.S. Supreme Court in which it sought to challenge the constitutionality of the whistleblower provisions of the False Claims Act.

As previously reported on Monitor Monday, the case was brought in 2012 by whistleblower Dr. Gerald Polukoff, a former cardiologist at one of Intermountain’s hospitals, in which he accused Intermountain of performing medically unnecessary cardiac and vascular procedures, which are not reimbursable by Medicare and Medicaid. Dr. Polukoff filed his case under the False Claims Act, a federal law that allows private citizens to report fraud and misconduct in government contracts and programs, with the promise of a potential whistleblower reward of between 15 and 30 percent of the government’s recovery.

Specifically, Intermountain was accused of executing unnecessary patent foramen ovale procedures, which are meant to cure a certain birth defect that causes a hole between two heart chambers. According to Dr. Polukoff, a single Intermountain doctor billed for 861 such procedures in 2010. By way of reference, the Cleveland Clinic billed for 37 during the same time period.

Since its filing in 2012, the case has taken an interesting procedural route through the federal courts.

In 2017, the district court granted Intermountain’s motion to dismiss Polukoff’s case citing Polukoff’s inability to objectively prove that the alleged false claims were indeed unnecessary. The district court cited a lack of CMS guidance in the area, and the need for professional, medical judgment to evaluate the necessity of the procedures at issue.

In 2018, Dr. Polukoff appealed that decision to the Tenth Circuit Court of Appeals, with the Department of Justice filing a friend of the court supporting his position. In 2018, the Tenth Circuit overturned the District Court’s decision and revived Dr. Polukoff’s claims, holding that healthcare providers cannot hide behind their professional opinions as a method to avoid False Claims Act liability and noted that medically unnecessary billing is punishable under the False Claims Act.

Intermountain responded by appealing the Tenth Circuit’s ruling to the U.S. Supreme Court asking the Court to clarify the level of particularity with which fraud must be plead, and challenging the constitutionality of the FCA’s “qui tam” or whistleblower provisions, the provisions that allow private persons to bring suit on behalf of the government.

The reported settlement of this case, which has been confirmed by lawyers for both Dr. Polukoff and Intermountain, has occurred before the U.S. Supreme Court was able to consider Intermountain’s petition, which is now moot.  

Dr. Polukoff’s whistleblower case against the two remaining defendants, St. Mark’s Hospital and Dr. Sherman Sorensen, the doctor alleged to have performed the unnecessary heart procedures, continues in the district court. We will keep Monitor Monday listeners apprised as we learn more about the specifics of the Intermountain settlement and the remaining case as it moves forward. However, for now, whistleblowers can breathe a sigh of relief as the latest challenges to the False Claims Act have fallen away.

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