Dentist Medicaid Fraud Lawsuits, Dentist Office Medicaid Fraud Whistleblower Lawsuits, Dentist Unnecessary Work Medicaid Fraud Lawsuits, Medicare Upcoding Fraud Lawsuits, Dental Upcoding Medicaid Fraud, Dentist Double Billing Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits by Texas Dentist Medicaid Fraud Whistleblower Lawyer Jason S. Coomer

Dentist Medicaid Fraud is on the rise and it is important that Dentist Medicaid Whistleblowers and Dentist Medicare Whistleblowers come forward and blow the whistle on Dentists that are committing Medicaid fraud and Medicare fraud.  These Dentist Medicaid Fraud Whistleblower Lawsuits and Dentist Medicare Fraud Whistleblower Lawsuits can result in large recoveries for not only the government, but also for the brave whistleblower that becomes a successful relator and is able to collect a portion of the recovered money. 

If you are aware of Dentist Medicaid Fraud, Dentist Medicare Fraud, Dental Clinic Medicaid Fraud, Orthodontist Medicare Fraud, or other government fraud and are the original source with special knowledge and evidence of the fraud and want to be a whistleblower and an American Hero, please feel free to contact Dentist Medicaid Whistleblower Fraud Lawyer Jason Coomer via e-mail message or use our submission form to contact us about a potential Dentist Medicaid Fraud Qui Tam False Claim Whistleblower lawsuit, Dentist Medicaid Fraud, Dental Clinic Medicaid Fraud lawsuit, Dental Medicaid Fraud lawsuit, or Dentist Medicare Fraud Lawsuit or Clinic Medicaid Fraud lawsuit.

Dentist Medicaid Fraud Lawsuits in the News, Dentist Alleged to Have Committed Medicaid Fraud, and  Unnecessary Dental Work Medicaid Fraud, Dental Upcoding Medicaid Fraud, and Dentist Office Qui Tam Whistleblower Lawsuits

Several Dentists, Dental Management Companies, Dental Clinics, and Dentist Office Professionals, have been the subject of Dentist Medicaid Fraud Whistleblower Lawsuits and Government crackdowns on Dental Medicaid Fraud and Dental Medicare Fraud.  These Dental Medicaid Fraud Whistleblower Lawsuits, Dentist Medicare Fraud Whistleblower Lawsuits, and government crackdowns have uncovered unnecessary dental treatments, dentist Medicaid fraud, Medicaid fraud kickbacks, dental Medicare fraud, and other dental Medicaid fraud that were endangering children and costing taxpayers millions of dollars.

National Dental Management Company Pays $24 Million to Resolve Fraud Allegations Medically Unnecessary Dental Services Allegedly Performed on Children

WASHINGTON - The United States today announced that it has settled False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as "Small Smiles Centers." Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments. FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.

The United States alleged that FORBA was liable for causing the submission of claims for reimbursement for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

"We have zero tolerance for those who break the law to exploit needy children," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety."

Assistant Attorney General West praised the collaborative efforts of the federal and state agencies that made this result possible. The Justice Department’s Civil Division and the U.S. Attorneys’ Offices for the District of Maryland, the Western District of Virginia, the District of South Carolina, and the District of Colorado handled these cases. The Civil Division led the nationwide investigation, which was conducted by the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the National Association of Medicaid Fraud Control Units.

To resolve the allegations against it, FORBA will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the states’ Medicaid share is $9,714,355.25. In addition, as part of the settlement, FORBA has agreed to enter into an expansive five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter. Specifically, FORBA must engage external reviewers to monitor its quality of care and reimbursement processes. In addition, the chief dental officer must develop and implement policies and procedures to ensure that the Small Smiles clinics provide services consistent with professionally recognized standards of care. FORBA has also agreed to cooperate in the government’s continuing investigation of individual dentists.

"We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense," said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. "This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program."

"Health care providers must be held accountable when they mistreat patients and overcharge insurers," said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. "We are committed to using our affirmative civil enforcement authority to protect patients from inadequate care and protect governmental health coverage programs from fraudulent charges."

The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. These actions are pending in the U.S. District Courts for the District of Maryland, the Western District of Virginia, and the District of South Carolina. As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

"In this case, FORBA put greed and profits before the well-being of children," said Timothy J. Heaphy, U.S. Attorney for the Western District of Virginia. "It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars. Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department."

This settlement with FORBA is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Department of Justice has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.


(LAREDO, Texas) - A federal indictment charging a Laredo dentist and his orthodontist wife with 17 counts of health care fraud has been unsealed, United States Attorney Tim Johnson and Texas Attorney General Greg Abbott announced today. Both defendants, who were arrested yesterday without incident, appeared before United States Magistrate Judge Diana Saldana today. During that hearing the issue of bond was raised. The court has taken the matter under advisement and the defendants were ordered to remain in custody pending her decision.

Carlos Armin Morales-Ryan, 33, and his wife, Nelia Patricia Garcia-Morales, 30, are the owners and operators of Orthogenesis International Centre, a Laredo dentistry and orthodontics business. The indictment alleges that from January 2005 to at least July 2008, the defendants fraudulently submitted claims to the Texas Medicaid program for payment for dental and orthodontic services they did not and could not have rendered because they were not in their offices, in the state of Texas or in the continental United States on the dates and times claimed. Physical presence of the provider is a prerequisite under applicable Texas law and Medicaid regulations for a claim to be submitted and paid for services rendered to a Medicaid beneficiary. The defendants are accused of executing the scheme and defrauding the Medicaid program of a total of $768,215.

Texas Medicaid is a health care program funded in part by the federal government through payroll taxes and in part by the State of Texas.

Each count of health care fraud carries a maximum sentence of 10 years imprisonment without parole and a maximum fine of $250,000 upon conviction.

The investigation leading to the charges was jointly conducted by the FBI, Department of Health and Human Services Office of the Inspector General and the Texas Attorney General Medicaid Fraud Control Unit. The case is being prosecuted by Assistant United States Attorneys Don J. Young and Michael Elliot.


LUBBOCK, Texas — James Crow, 65, of Brownwood, Texas, has been indicted by a federal grand jury in Lubbock on numerous felony offenses involving health care fraud, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Crow, who practices general dentistry in Brownwood, is charged with six counts of false statements involving a health care matter and 18 counts of health care fraud. It is expected that Crow will make his initial appearance in federal court in Lubbock later this month.

The indictment alleges that from January 2004 through December 2007, Crow, a dentist enrolled with Medicaid, filed, and caused to be filed, Medicaid claims for payment of services that he did not render and for payment of services that were billed with improper billing codes. The indictment alleges Crow billed Medicaid for numerous resin-based composites restorations (cavity fillings), when in fact, either no such fillings were performed, or he instead performed other dental services reimbursed at lower rates.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. However, if convicted, each false statement count carries a maximum statutory sentence of five years in prison and a $250,000 fine. Each of the health care fraud counts carries a maximum statutory sentence of 10 years in prison and a $250,000 fine. In addition, the indictment includes a forfeiture allegation which will require Crow, if convicted, to forfeit a money judgment of the gross proceeds, obtained directly or indirectly, as a result of the offense, of at least $1 million,

The case is being investigated by the Texas Medicaid Fraud Control Unit and the FBI. Assistant U.S. Attorneys Amy Burch and Denise Williams of the U.S. Attorney’s Office in Lubbock are in charge of the prosecution.

Heartland Dental To Pay $3 Million In Civil Settlement Includes $1.3 Million for DEA Registration Violations

APR 14 -- (Springfield, IL) - An Illinois company that manages dental practices in 12 states and its chief executive officer have agreed to a $3 settlement million to the United Stated and Illinois under terms of two settlement agreements. Heartland Dental, Incorporated, which is headquartered in Effingham, Illinois, and Richard E. Workman, Heartland’s CEO, have agreed to pay $1,650,000 to resolve allegations of improper billing to Illinois Medicaid. In a related settlement, Heartland Dental will pay the U. S. $1,350,000 to resolve allegations that newly hired dentists issued prescriptions prior to registration with the DEA as a means to generate revenue for Heartland.

The $1.3 million settlement will resolve allegations that Heartland Dental allowed newly hired dentists to use the DEA resigration number of other Heartland dentists to issue prescriptions. Under the Controlled Substances Act, a DEA registration number allows healthcare providers, including dentists, to distribute and prescribe controlled substances. The allegation that Heartland misused DEA registration numbers resulted in pharmacies unwittingly submitting claims to Medicaid for invalid prescriptions. There were no allegations the prescriptions at issue were not otherwise medically necessary or that any patients were injured as a result of the prescriptions.

“We take seriously the abuse and misuse of DEA registration numbers in the prescribing of controlled substances,” stated Gary G. Olenkiewicz, Special Agent in Charge of DEA’s Chicago Field Division.

“The DEA appreciates our law enforcement partnership and commitment with the FBI, Illinois State Police, the Illinois Attorney General’s Office, U.S. Dept of Health and Human Services and the United States Attorney’s Office that made this a successful investigation.”

Under terms of a five-year consent decree with DEA, Heartland Dental is prohibited from violating the Controlled Substances Act and agrees to permit DEA investigators to conduct administrative inspections as necessary to confirm compliance with the act without requiring the investigators to obtain administrative inspections warrants.

In addition to the DEA violations, under terms of the settlements, while denying the allegations and legal claims, Heartland resolves allegations that from August 1999 through October 2005, it falsely billed Illinois Medicaid for certain procedures: submitting claims for crown buildups, non-covered services, as restorations and claims for surgical extractions which were or should have been simple extractions.

U.S. Attorney for the Central District of Illinois, Rodger A. Heaton stated, “This multi-million dollar settlement is the latest successful result by our outstanding health care fraud team. We remain committed to work together with our partners to recover monies that have been improperly diverted from Medicare and Medicaid, and where appropriate, seek criminal and civil penalties for those who benefit from the unlawful diversion.”

According to FBI Special Agent in Charge Karen E. Spangenberg, health care fraud investigations are among the highest priority investigations within the FBI’s White Collar Crime Program. The FBI conducts between 2,000 and 3,000 new health care fraud investigations each year, by using resources in both the private and public arenas, through partnerships with various federal state and local agencies.

Heartland Dental will pay $1.65 million to the U.S. and Illinois related to a “whistle blower” qui tam lawsuit filed in 2003 by Lori Jamison under the federal False Claims Act and Illinois’ Whistleblower Reward and Protection Act. These acts permit private citizens to bring lawsuits on behalf of the United States or the State of Illinois and receive a portion of the employee proceeds of any settlement or judgment awarded against a defendant. Ms. Jamison, a former employee of one of Heartland’s predecessor entities, will receive $412,500 as her share of the settlement. Heartland has further agreed to pay Jamison an additional $325,000 for dismissal of additional claims, including expenses, attorney’s fees and related costs.

The investigation and negotiations with Heartland Dental were conducted by the U.S. Attorney’s Office for the Central District of Illinois, the Drug Enforcement Administration, the Office of the Inspector General of the U.S. Department of Health and Human Services, the Illinois State Police Medicaid Fraud Control Unit, the Illinois Attorney General’s Office, and the Federal Bureau of Investigation.

North Carolina Dental Services Chain Pays $10 Million to Resolve False Claims Allegations

WASHINGTON – Medicaid Dental Center (MDC), a privately-owned chain of dental clinics in North Carolina previously known as Smile Starters and Carolina Dental Center, has reached a settlement with the United States and North Carolina to resolve False Claims Act allegations, the Justice Department announced today. Under the agreement, MDC agreed to pay $10,050,000 to resolve allegations that it caused false or fraudulent claims for payment to be presented to the North Carolina Medicaid program by billing for medically unnecessary dental services performed on indigent children.

The United States and the state of North Carolina alleged that MDC and its ownership, including Michael A. DeRose , DDS, P.A., and Letitia L. Ballance, DDS, were liable under the False Claims Act for submitting claims for reimbursement for performing pulpotomies that were not medically necessary. Pulpotomies are considered medically necessary in pediatric dental cases when an infection in a tooth spreads into the pulp chamber of the tooth, requiring the pulp’s removal. This procedure is often referred to as a “baby root canal.”

MDC and its ownership also were alleged to have submitted claims for reimbursement for placing stainless steel crowns that were not medically necessary and for failing to obtain informed consent for all medical procedures and services. The settlement is limited to claims submitted to the North Carolina Medicaid program and does not involve any other states.

“These dentists subjected their child patients to invasive and sometimes painful procedures, often for the sake of obtaining money from the North Carolina Medicaid program,” said Jeffrey S. Bucholtz, the acting Assistant Attorney General for the Department’s Civil Division.

Both Dr. DeRose and Dr. Ballance have been disciplined by the North Carolina Board of Dental Examiners. Both entered into consent orders with the Board on December 8, 2005. Under the terms of these consent orders, each of the dentists agreed not to contest allegations that dentists employed and trained by MDC performed excessive treatment on seven of MDC’s pediatric patients by performing pulpotomies and placing stainless steel crowns when they were not warranted or supported by x-rays or appropriate diagnostic documentation. As part of today’s settlement, the Office of Inspector General for the U.S. Department of Health and Human Services has expressly reserved its exclusion authority against MDC and Drs. DeRose and Ballance.

“Health care professionals who abuse their positions and engage in excessive treatment regimens and excessive billing practices will not be tolerated,” said Gretchen C.F. Shappert, U.S. Attorney for the Western District of North Carolina. “The North Carolina Medicaid Program was not created for self-enrichment. It is a public trust. Individuals who use their professional skills to take advantage of that trust will be investigated and held to account for their actions.”

“This settlement with the Medicaid Dental Center demonstrates the commitment of the Office of Inspector General and our law enforcement partners to protect our Nation’s children,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “The Medicaid program is intended to assist the most vulnerable Americans and to help ensure that they receive necessary health services, not to unjustly enrich others at the expense of indigent persons.”

The investigation and settlement of the case was conducted by the U.S. Attorney’s Office for the Western District of North Carolina and the Department’s Civil Division, along with the Federal Bureau of Investigation, the U.S. Postal Service’s Office of Postal Inspection, the Department of Health and Human Services Office of Inspector General, and the North Carolina Attorney General’s Medicaid Fraud Investigations Unit.

Dentist Medicaid Fraud Lawsuits, Dental Medicaid Fraud Lawsuits, Medicaid Fraud Dentist Office Federal False Claims Act Whistleblower Lawsuits, Unnecessary Dental Work Medicaid Fraud, Dental Upcoding Medicaid Fraud, and Dentist Office Qui Tam Whistleblower Lawsuits

Dentists, Dental Clinics, Dentist Groups, and other health care professionals that take Medicaid and Medicare payments including Federal Medicaid Benefits and State Medicaid Benefits are becoming more common.  These Dental and Orthodontic Groups take payments from federal and state funded programs for providing basic dental services to individuals and families.  However, in order to increase profits some of these dental clinics, dental groups, orthodontists, dentists, and orthodontic groups provide false billing statements to the government including double billing, triple billing, billing for services not provided, upcoding, or billing for unnecessary services.  This billing fraud is dental Medicaid Billing Fraud, orthodontic Medicaid Billing Fraud, dental Medicare Billing Fraud, and orthodontic Medicare Billing Fraud.

It is important for families with children needing dental care or orthodontic care to be able to obtain these services as well as elderly people to be able to obtain dental care and orthodontic care, but it is also important that health care fraud including Medicare Fraud and Medicaid Fraud are stopped.  Dental Medicaid Fraud Whistleblowers, Dentist Medicare Fraud Whistleblowers, Orthodontist Medicaid Fraud Whistleblowers, Orthodontic Medicaid Fraud Whistleblowers, and other Medicare Fraud and Medicaid Fraud Whistleblowers are an essential necessary part of identifying and stopping health care fraud.

Dentist Medicaid Fraud Lawsuits, Dental Clinic Medicaid Fraud Lawsuits, Orthodontist Medicaid Billing Fraud Lawsuits, Double Billing Medicaid Fraud and Unnecessary Dental Work Medicaid Fraud Lawsuits, Dental Upcoding Medicaid Fraud Lawsuits, and Dentist Qui Tam Whistleblower Lawsuits

As Medicaid and Medicare spending increases, some health care providers including dentists and orthodontists are making false claims for services including billing for services not provided, upcoding services, double billing, and providing unnecessary services.  As such, it is important for Dentists, Orthodontists,  Dentist Office Managers, Orthodontics Office Managers, Medicaid Billing Clerks, Medicaid Coders, and other Dental Professionals to become Medicaid whistleblowers to seek compensation on the government's behalf from companies and people that have defrauded taxpayers out of government money.  Qui Tam Dental Medicaid Fraud Whistleblower Lawyer Jason Coomer helps Medicaid Fraud whistleblowers and Medicare Fraud Whistleblowers determine if they may have a viable Dental Medicaid Fraud lawsuit, Orthodontics Medicaid Fraud lawsuit, Dentist Medicare Fraud Lawsuit, or Orthodontic Medicaid Fraud lawsuit.

Lawmaker arrested in Medicaid fraud scheme
By Christopher Sherman
Published: 10:58 p.m. Wednesday, June 23, 2010

"MCALLEN — Federal marshals on Wednesday arrested a state representative who was one of four South Texas dentists indicted on federal charges of taking kickbacks for Medicaid referrals."

"Prosecutors accuse Schwarz of paying 15 percent kickbacks to dentists who sent him Medicaid patients, then billed Medicaid for services that never happened or for services performed by unlicensed employees."

Medicaid Billing Fraud Lawsuits, Medicare Billing Fraud Lawsuits, and the Increase in Medicare and Medicaid Spending

Medicaid is a public health care problem in the United States that provides health care, dental care, and orthodontic care for eligible individuals and families with low incomes and resources. The Medicaid Program is jointly funded by state and federal governments, but is managed by the states.  Medicaid is the largest source of funding for medical and health-related services for people with limited income in the United States and the Medicaid program has been increasing.  The fastest growing aspect of Medicaid is nursing home coverage and this is expected to continue as the Baby Boomer generation begins to reach nursing home age. 

Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system.  Each state's Medicaid Program must conform to federal guidelines in order for the state to receive matching funds and grants.  For many states Medicaid has become a major budget issue as on average the state's matching costs of the Medicaid program is about 16.8% of state general funds. According to CMS, the Medicaid program provided health care services to more than 46.0 million people in 2001. In 2008, Medicaid provided health coverage and services to approximately 49 million low-income children, pregnant women, elderly persons, and disabled individuals. Federal Medicaid outlays were estimated to be $204 billion in 2008.  Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. The Federal Government pays on average 57 percent of Medicaid expenses.

Texas Dentist Medicaid Fraud Lawsuits, Texas Dental Medicaid Fraud Lawsuits, Texas Orthodontist Medicaid Billing Fraud Lawsuits, South Texas Medicaid Orthodontic Group Medicaid Billing Fraud, South Texas Medicaid Billing Fraud Whistleblower Lawsuits, Texas Medicaid Fraud Double Billing Lawsuits, Texas Unnecessary Dental Work Medicaid Fraud, South Texas Dental Upcoding Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits

The Medicaid program in Texas spend about $10 Billion annually on providing health care benefits to the poor.  The Texas Medicaid program includes dental work including check ups, fillings, and braces.  Of the Medicaid services provided, it is thought that there is an increasing amount of Medicaid Billing Fraud that could be costing tax payers hundreds of millions of dollars each year.

As such, it is vitally important for Texas Medicaid Fraud Whistleblowers to step up and blow the whistle on Medicaid Billing Fraud.  Texas Medicaid Whistleblowers, Texas Orthodontic Medicaid Fraud Whistleblowers, and Texas Dentist Medicaid Billing Fraud Whistleblowers need to step up and blow the whistle to stop this Medicaid Fraud.  By filing  Texas Dentist Medicaid Fraud Lawsuits, Texas Dental Medicaid Fraud Lawsuits, Texas Orthodontist Medicaid Billing Fraud Lawsuits, South Texas Medicaid Orthodontic Group Medicaid Billing Fraud, South Texas Medicaid Billing Fraud Whistleblower Lawsuits, Texas Medicaid Fraud Double Billing Lawsuits, Texas Unnecessary Dental Work Medicaid Fraud, South Texas Dental Upcoding Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits, Texas Whistleblowers can save the Texas and the United States hundreds of millions of dollars and may be able to recover tens of millions of dollars themselves if they are successful relators.

The Increase in Government Health Care Spending including Medicare Spending, VA Spending, Tricare Spending, and Medicaid Spending is creating More Health Care Fraud, Medicare Fraud, Medicaid Fraud, and VA Medical Fraud and the need for more Medicaid Billing Fraud Whistleblower Lawsuits, Medicare Billing Fraud Whistleblower Lawsuits, and other Health Care Fraud Whistleblower Lawsuits

The United States government as well as several state governments are stepping up efforts to crackdown on Health Care Fraud, Medicare Fraud, and Medicaid Fraud that are costing taxpayers hundreds of billions of dollars.  These efforts include encouraging Medicaid Fraud Whistleblowers and Medicare Fraud Whistleblowers to come forward as well as setting up task forces that are taking down criminals that are involved in Medicaid Fraud and Medicare Fraud.

Health Care Fraud costs United States Tax Payers approximately $90 billion each year through Medicare, Medicaid, and other government health care programs.  Because the Medicare budget, the Medicaid Budget, the VA Budget, the TRICARE Budget, Medicaid Fraud, and Medicare Fraud are continuing to increase each year, it is vitally important that Medicare Fraud Whistleblowers, Medicare Fraud Upcoding Fraud Whistleblowers, Medicare Medicaid Fraud Hospital Whistleblowers, Hospice Medicare Fraud Whistleblowers, and Medicare Medicaid Fraud Nursing Home Whistleblowers continue to step forward and blow the whistle on health care fraud.

For more information on Medicare Fraud and Medicaid Fraud, please go to the following pages on Health Care Fraud, Medicare Fraud, and Medicaid Fraud Health Care Fraud and Abuse Control Program Report and Medicaid Fraud Interagency Coordination Report shows that tens of millions of dollars of Medicaid over payments are made each year.  These overpayments are often the results of double billing, false billing, upcoding, and other types of Medicaid Fraud that costs Tax Payers significant amounts of money.

Medicare is Different from Medicaid, but both Medicare Billing Fraud Whistleblowers and Medicaid Billing Fraud Whistleblowers are needed to File Medical Billing Fraud Lawsuits

In 2009, the Medicare program covered an estimated 45 million persons and this number is expected to grow as about 7,000 people a day are reaching retirement age.  As millions of people are added to the Medicare budget each year, the cost of the Medicare budget is expected to grow. 

The Medicare program consists of four distinct parts which are funded differently:

  • Part A (Hospital Insurance, or HI) covers inpatient hospital services, skilled nursing care, and home health and hospice care. The HI trust fund is mainly funded by a dedicated payroll tax of 2.9% of earnings, shared equally between employers and workers.

  • Part B (Supplementary Medical Insurance, or SMI) covers physician services, outpatient services, and home health and preventive services. The SMI trust fund is funded through beneficiary premiums (set at 25% of estimated program costs for the aged) and general revenues (the remaining amount, approximately 75%).

  • Part C (Medicare Advantage, or MA) is a private plan option for beneficiaries that covers all Part A and B services, except hospice. Individuals choosing to enroll in Part C must also enroll in Part B. Part C is funded through the HI and SMI trust funds. 

  • Part D covers prescription drug benefits. Funding is included in the SMI trust fund and is financed through beneficiary premiums (about 25%) and general revenues (about 75%).[27]

Spending on Medicare and Medicaid is projected to grow dramatically in coming decades. While the same demographic trends that affect Social Security also affect Medicare, rapidly rising medical prices appear to be a more important cause of projected spending increases.

Economic Incentives for Whistleblowers Lawsuits, Government Fraud Lawsuits, and Qui Tam Lawsuits

When a government imposes a penalty, for the doing or not doing an act, and gives that penalty in part to whistleblowers that will sue for the same, and the other part of the recovery goes to the government, and makes it recoverable by action, such actions are called "qui tam actions", the plaintiff is suing on their own behalf as well for the government and taxpayers.

Qui tam provisions of the False Claims Act are based on the theory that one of the least expensive and most effective means of preventing frauds on taxpayers and the government is to make the perpetrators of government fraud liable to actions by private persons acting under the strong stimulus of personal ill will or the hope of gain.

The strong public policy behind creating an economic gain for whistleblowers is that  the government would be significantly less likely to learn of the allegations of fraud, but for persons in certain positions with specialized knowledge of fraud that has been committed. Congress has made it clear that creating this economic incentive is beneficial not only for the government, taxpayers, and the realtor, but is an efficient method of regulating government to prevent fraud and fraudulent schemes.

The central purpose of the qui tam provisions of the False Claims Act is to set up incentives to supplement government regulation and enforcement by encouraging whistleblowers with specialized knowledge of fraud going on in the government to blow the whistle on the crime.

The whistleblower's share of recovery is a maximum of 30 percent and the government's prior knowledge of fraud now does not necessarily bar a whistleblower from collecting lost revenue. If the government takes over the lawsuit, the relator can "continue as a party to the action." The defendant is also required to pay for the relator's attorney fees. The whistleblower is also protected from retaliatory actions by his or her employer. As a result a 1986 amendment to the False Claims Act, qui tam lawsuits have increased dramatically.   Though the amendment was first made for corrupt defense contractors, the amendment has uncovered billions of dollars in health care fraud and will probably apply to fraudulently obtained TARP and Bail Out Funds.

Dentist Medicaid Fraud Lawsuits, Dentist Office Medicaid Fraud Whistleblower Lawsuits, Dentist Unnecessary Work Medicaid Fraud Lawsuits, Medicare Upcoding Fraud Lawsuits, Dental Upcoding Medicaid Fraud, Dentist Double Billing Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits


THEODORE B. OLSON Solicitor General Counsel of Record PETER D. KEISLER Assistant Attorney General MICHAEL S. RAAB DOUGLAS HALLWARD-DRIEMEIER Attorneys Department of Justice Washington, D.C. 20530-0001 (202) 514-2217


1. Whether the Inspector General Act prohibits the Inspector General of the Department of Health and Human Services from conducting an audit or investigation of potential fraud or abuse by a Medicare provider absent a referral from the providers' Medicare carrier or other particularized evidence of fraud.

2. Whether the Inspector General's decision to undertake an investigation of potential fraud or abuse by recipients of Medicare funds is final agency action subject to judicial review prior to any enforcement action.




The opinion of the court of appeals (Pet. App. 1a-32a) is reported at 347 F.3d 57. The opinion of the district court (Pet. App. 35a-69a) is not reported.


The judgment of the court of appeals was entered on October 17, 2003. A petition for rehearing was denied on December 18, 2003 (Pet. App. 70a-71a). A petition for a writ of certiorari was filed on March 16, 2004. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).


1. a. Title XVIII of the Social Security Act (Medicare Act), 42 U.S.C. 1395 et seq., establishes a federally subsidized health insurance program primarily for persons over age 65. The program is administered by the Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), within the Department of Health and Human Services (HHS). CMS, in turn, contracts with insurance companies throughout the nation, called carriers, which are responsible for communicating Medicare policy in the locale they serve, processing and paying claims, and conducting post-payment audits. The Medicare program has two principal parts. This case relates to circumstances in which these two parts overlap, presenting a risk that Medicare providers will bill the program twice for the same services.

Part A of Medicare, 42 U.S.C. 1395c-1395i, provides insurance for the costs of institutional care. Part A payments contribute to the costs of training residents and interns, including their salaries and the salaries of teaching physicians. 42 U.S.C. 1395ww(d) and (h). In 1996, Medicare Part A paid over $8 billion to teaching hospitals for the costs of training their residents and interns, or approximately $100,000 per resident or intern. C.A. App. A309.

Part B of Medicare, 42 U.S.C. 1395j-1395w, provides insurance to reimburse for specific medical services provided to a patient. Because Medicare already contributes to teaching supervision through Part A, teaching physicians may not seek reimbursement under Part B for merely providing general supervision to residents. Rather, in order to receive compensation under Part B, a teaching physician must "render[] sufficient personal and identifiable physicians' services to the patient to exercise full, personal control over the management of the portion of the case for which the payment is sought." 42 U.S.C. 1395u(b)(7)(A)(i)(I).

During the time period covered by the audits here at issue, the Secretary's regulations authorized payment under Medicare Part B only where the teaching physician both was the "attending physician" and "furnishe[d] personal and identifiable direction to interns or residents who [we]re participating in the care of the patient." 42 C.F.R. 405.521(b)(1) (1993). The Secretary interpreted that regulation, together with a general requirement that Medicare will pay only where "[t]he services are personally furnished for an individual patient by a physician," 42 C.F.R. 405.550(b)(1), to require that the teaching physician must at least be physically present at the time the services were performed in order to be eligible for payment under Part B. See, e.g., Centers for Medicare & Medicaid Services, HHS, Carriers Manual § 8201(A) (visited May 19, 2004) <http://www.cms.> (if teaching physician did not personally perform the service, medical record should indicate that the "physician was physically present when the service" was rendered).1

b. Congress enacted the Inspector General Act (the IG Act), 5 U.S.C. App. 1 et seq., at 12, in 1978 in order to curb "fraud, abuse and waste in the operations of Federal departments and agencies and in federally-funded programs." S. Rep. No. 1071, 95th Cong., 2d Sess. 4 (1978). The IG Act created an Office of Inspector General (OIG) for numerous agencies, into which Congress consolidated various audit and investigation responsibilities, see 5 U.S.C. App. 2(1), 3(a), 9(a), at 12, 13, 32. In the case of HHS (then the Department of Health, Education, and Welfare), Congress had previously created an Inspector General (IG), with responsibilities and powers similar to those conferred by the IG Act. Act of Oct. 15, 1976, Pub. L. No. 94-505, Tit. II, 90 Stat. 2429. The IG Act, as amended by Pub. L. 100-504, transferred that pre-existing office to a new HHS OIG. 5 U.S.C. App. 9(a)(1)(F), at 32.

Sections 4 and 6 of the IG Act vest the IG with broad authority to "conduct, supervise, and coordinate audits and investigations relating to [HHS] programs," such as Medicare, 5 U.S.C. App. 4(a)(1), at 15, as well as to conduct activities designed to "promot[e] economy and efficiency" and "prevent[] and detect[] fraud and abuse" in the agency's "programs and operations," 5 U.S.C. App. 4(a)(3), at 15. See also 5 U.S.C. App. 2(1) and (2), at 12 (same). The IG enjoys broad discretion "to make such investigations * * * relating to the administration of the programs and operations of [HHS] as are, in the judgment of the Inspector General, necessary or desirable." 5 U.S.C. 6(a)(2), at 19.

c. In 1996, an audit by the HHS OIG of the University of Pennsylvania Health System revealed a dramatic lack of documentation that teaching physicians were physically present during services for which Medicare had been billed and, further, that Medicare was being billed for a more complex level of care than was actually provided. The University of Pennsylvania audit resulted in a $30 million settlement. Pet. App. 7a. In light of that audit, the HHS OIG developed the Physician at Teaching Hospital (PATH) initiative to focus on the two forms of potential over-billing discovered at the University of Pennsylvania. Id. at 8a. PATH audits are conducted by HHS-OIG at its own cost. Alternatively, if a provider so chooses and OIG agrees, the provider may hire an independent reviewer to conduct a "self-audit" and report the findings to the HHS OIG. Ibid.

In 1996, the HHS OIG informed petitioners and other teaching hospitals of its intent to conduct a PATH audit of their Medicare reimbursements. After certain providers objected that the Secretary and his carriers had not sufficiently made clear the "physical presence" requirement for teaching physicians, the HHS OIG conducted a broad review of the guidance that the agency and carriers had provided on the subject. Pet. App. 7a-8a. The HHS OIG found that the Secretary and the "overwhelming majority" of regional carriers had "consistently * * * read [the regulatory language] to require the attending physician's physical presence when a resident performed a service," in order to qualify for Part B reimbursement. C.A. App. A322. The HHS OIG acknowledged, however, that "some carriers did not enforce a 'physical presence' standard." Ibid. The HHS OIG therefore announced that it would undertake PATH audits "only where carriers * * * issued clear explanation[s] of the rules regarding reimbursement for the services of teaching physicians." Id. at A323.

In response to the teaching hospitals' objections, HHS's General Counsel, Harriet Rabb, also reviewed the issue of Part B payments to teaching physicians. On the same day that the HHS OIG issued its PATH Overview, the General Counsel sent a letter to the Association of American Medical Colleges and the American Medical Association (the Rabb Letter), responding to their concerns. The letter endorsed the approach adopted by the HHS OIG-to investigate those providers whose carriers had provided clear instruction of the physical presence requirement. Pet. App. 9a.

The Rabb Letter first observed that no physician could reasonably have believed he could be compensated under Medicare Part B for a merely supervisory role. "It would be absurd to assert that physicians could receive the significant remuneration that characterizes Part B reimbursement for supplying the same level of services that qualifies and was paid for as Part A services." Pet. App. 109a. The Rabb Letter noted several HCFA publications that had specifically referred to the physical presence requirement, but recognized that the standard had been stated in various ways. Id. at 110a-112a. In the General Counsel's view, because HCFA's own guidance was "not unambiguously clear," providers would have had to look to the carriers for clarification, and "that guidance would be controlling." Id. at 113a. "[I]ndeed," the General Counsel observed, "carriers across the country did provide very clear guidance on this subject," and she quoted several that stated the "physician's presence" requirement quite explicitly. Ibid. The Rabb Letter further stated the General Counsel's agreement with the HHS OIG's decision only to undertake PATH audits where the carrier had adopted a clear position that the treating physician's physical presence was required. Id. at 115a.

The HHS OIG has informed this Office that, pursuant to the PATH initiative, it has undertaken audits of 32 teaching hospitals. Of those audits, 29 have been completed. The HHS OIG has also informed this Office that PATH audits have recovered nearly $130 million for the Medicare program, in addition to another roughly $100 million recovered in non-PATH audits that encompassed PATH-related issues.

d. In 1997, the HHS OIG reviewed the written policies of petitioners' Medicare carrier and determined that they showed a clear policy of requiring a teaching physician's physical presence as a condition for reimbursement under Medicare Part B. See, e.g., C.A. App. A285 ("The supervising physician * * * should personally provide all services reported for Medicare Part B payment or be present when the resident renders the services.") (emphases added). The HHS OIG also determined that petitioners had adequate notice of the carrier's interpretation through manuals that directed the providers to the appropriate publication for guidance concerning Part B payments to teaching physicians. Ibid.

Petitioners initially agreed to cooperate with the PATH audits and voluntarily elected to employ an independent auditor, rather than having the HHS OIG conduct the audit directly. Instead of going forward with the audits, however, petitioners filed this action, challenging the audits. The HHS OIG subsequently issued administrative subpoenas to petitioners to produce the necessary documents, and counter-claimed to enforce the subpoenas. Pet. App. 11a.

2. The district court dismissed petitioners' suit and granted the government's motion for enforcement of the subpoenas. Pet. App. 39a-69a. The district held that petitioners' challenge to the HHS OIG's audit failed to satisfy at least three separate requirements for review under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq. First, the IG's decision to initiate an audit was neither "final agency action" nor ripe for review, because it was merely the beginning of an investigation without immediate impact on petitioners' day-to-day operations. Pet. App. 52a-53a, 56a-57a. Further, petitioners had an adequate alternative remedy because any challenge to the IG's interpretation of the Medicare regulations could be raised in defense against any enforcement action, if one were ever brought. Id. at 54a-55a. Finally, the IG Act committed the decision whether to perform an audit to the HHS OIG's sole discretion. Id. at 55a-56a. In granting the government's motion to enforce the administrative subpoenas, the court found that the investigation was within the authority conferred on the IG by Section 6(a)(2) of the IG Act. Id. at 56a, 64a-68a.

3. The court of appeals affirmed. Pet. App. 1a-32a. The court held, as petitioners conceded, that the HHS OIG's statutory charge "to prevent and detect fraud and abuse" in the Medicare program encompassed the authority to audit not only the agency's own operations, but also to audit directly the recipients of Medicare funds. Id. at 17a. The court rejected petitioners' attempt to circumscribe that authority to instances where "the inspector general has received a referral from a carrier, or is otherwise responding to a specific allegation of fraud." Ibid. The court held that "[t]he inspector general's mandate to prevent and detect fraud and abuse is not limited by HHS's-or its agents' -own efforts to prevent and detect fraud and abuse." Id. at 19a.

The court further held that it lacked jurisdiction over petitioners' challenge to the standard that the IG intended to use in her audit. Two members of the panel held, following FTC v. Standard Oil Co., 449 U.S. 232 (1980), that the IG's decision to conduct an investigation and to utilize a particular standard in her audit was not sufficiently ripe or final for judicial review. The court recognized that the decision to initiate an investigation is "a preliminary step-non-final by definition-leading toward the possibility of a 'final action' in the form of

an enforcement" that may never materialize. Pet. App. 24a. In response to petitioners' reliance on the immediate need to comply with the IG's audit requests, the court observed that "[a]lthough this burden certainly is substantial, it is different in kind and legal effect from the burdens attending what heretofore has been considered to be a final action." Id. at 28a (quoting Standard Oil, 449 U.S. at 242).

Judge Ambro concurred. Pet. App. 31a-32a. He declined to join the majority's analysis concerning finality but viewed the IG's decision to undertake an audit as unreviewable because it was "committed to agency discretion," 5 U.S.C. 701(a)(2), by Section 6(a)(2) of the IG Act, which authorizes the IG "to make such investigations * * * relating to the administration of the programs and operations of [HHS] as are, in the judgment of the [IG] necessary or desirable." Pet. App. 32a.


The decision of the court of appeals is correct and does not conflict with any decision of this Court or any other court of appeals. Accordingly, the petition for a writ of certiorari should be denied.

1. a. Petitioners argue that the HHS OIG may audit Medicare providers only when there has been a fraud referral from a carrier. Pet. 11-24. That contention lacks merit. The IG Act provides that the inspector general is "to provide leadership * * * for activities designed * * * to promote economy, efficiency, and effectiveness * * * and * * * to prevent and detect fraud and abuse" in her agency's programs. 5 U.S.C. App. 2(2), at 12. See also 5 U.S.C. App. 4(a)(3), at 15 ("It shall be the duty and responsibility of each Inspector General * * * to conduct, supervise, or coordinate * * * for the purpose of promoting economy and efficiency in the administration of, or preventing and detecting fraud and abuse in [the agency's] programs."). The IG Act thus assigns to the inspectors general an active and leading role in combating fraud, waste and abuse, and, more generally, in promoting economy and efficiency in their respective agency's programs. In fulfilling that mission, an inspector general must exercise independent initiative to investigate possible fraud and abuse, rather than wait for other offices or individuals to bring such accusations to her. The statute's use of the verbs "prevent" and "detect" also necessarily signify authority to investigate potential fraud or abuse even when the IG has no specific evidence that fraud or abuse has occurred. The court of appeals correctly held that Congress did not restrict the IG to acting only when another office or individual had discovered evidence of fraud.

Petitioners also argue (Pet. 11-24) that the HHS OIG's PATH audits are unlawful because HHS's carriers audit providers to ensure that reimbursement complies with the Medicare Act, and Section 9(a)(2) of the IG Act prohibits the IG from exercising agency "program operating responsibilities." Nothing in that Section, however, precludes the IG from exercising her mandated functions whenever her investigatory authority overlaps with that of the carrier.

Section 9(a)(1) immediately transferred into the newly-created inspector general offices numerous pre-existing investigative offices. 5 U.S.C. App. 9(a)(1), at 32. Section 9(a)(2), in turn, provides that "[t]here shall be transferred * * * to the office of Inspector General * * * such other offices or agencies, or functions, powers, or duties thereof, as the head of the establishment involved may determine are properly related to the functions of the Office * * *, except that there shall not be transferred to an Inspector General under paragraph (2) program operating responsibilities." 5 U.S.C. App. 9(a)(2), at 32-33. As is clear from the plain text, Section 9(a)(2)'s reference to "program operating responsibilities" imposes a limit only on the agency head's ability to "transfer[] to an Inspector General under paragraph (2)" additional offices or functions beyond those already conferred by Congress. 5 U.S.C. App. 9(a)(2), at 33. It is inconceivable that Congress, which created the OIG precisely because of the failure of agencies to combat fraud and abuse effectively, would then make the IG's authority to investigate waste depend upon the agency's own ability to detect it.

The PATH initiative is undertaken pursuant to HHS OIG's independent authority to detect and prevent fraud. The carriers have not relinquished their powers to conduct routine compliance audits, nor has the Secretary transferred that function to the IG.

The 1989 Opinion of the Office of Legal Counsel (OLC) upon which petitioners rely, Pet. 13-14 (citing 13 Op. Off. Legal Counsel 54 (1989)), explicitly disclaims any application to investigations such as the PATH audits. The OLC opinion both begins and concludes by stressing that "[t]he significant investigat[ory] authority granted to Inspectors General * * * includes the authority to investigate recipients of federal funds * * * to determine if they are complying with federal laws and regulations." 13 Off. Legal Counsel at 54; id. at 66 (same). OLC expressly limited its opinion to "investigations pursuant to statutes that provide the Department with regulatory jurisdiction over private individuals and entities that do not receive federal funds," id. at 54 (emphasis added), such as the Fair Labor Standards Act of 1938 and Occupational Safety and Health Act of 1970, "which impose restrictions on individuals and entities * * * who are not * * * recipients of federal funds distributed by the Department," id. at 55-56. In fact, the OLC opinion specifically defined the term "regulatory investigation"-a phrase petitioners attempt to invoke here-as "investigations [that] generally have as their objective regulatory compliance by private parties," as distinguished from investigations aimed at eliminating "waste and fraud among * * * recipients of federal funds." Id. at 54 n.1.

The legislative history of the IG Act also is fully consistent with the court of appeals' decision. Petitioners cite a House Report that states that the IGs will not have direct responsibility for conducting audits such as those "conducted by USDA's Packers and Stockyards Administration in the course of its regulation of livestock marketing" or Department of Labor investigations aimed at "enforcing the Fair Labor Standards Act." Pet. 4 (quoting H.R. Rep. No. 584, 95th Cong., 1st Sess. 12-13 (1977)). The salient characteristic of those two examples is that they, like the investigations discussed in the OLC opinion, concern the enforcement of regulatory schemes that, unlike benefit programs, do not involve the potential for "waste of federal funds." See 13 Op. Off. Legal Counsel at 60-61 (discussing House Report).

Moreover, the legislative history of the IG Act specifically endorses the kind of investigative initiative undertaken by the HHS OIG here. The Senate Report commended the HEW Inspector General's "Project Integrity," in which the IG "spearhead[ed] a nationwide effort to deal systematically with Medicaid fraud." S. Rep. No. 1071, supra, at 8. "Using computer screening to identify doctors and pharmacists performing services which appeared unusual when compared with certain norms," the IG had identified over 1000 cases warranting criminal or administrative action. Ibid. That initiative, which Congress held up as an example, is indistinguishable in salient respects from the present PATH audits.

b. Petitioners also argue that the court of appeals' decision conflicts with Burlington Northern Railroad Co. v. Office of Inspector General, Railroad Retirement Board, 983 F.2d 631 (5th Cir. 1993), and Truckers United for Safety v. Mead, 251 F.3d 183 (D.C. Cir. 2001). Pet. 17-24. That is not correct.

Burlington Northern did not endorse petitioners' construction of the IG Act. As the Fifth Circuit explained in the subsequent case of Winters Ranch Partnership v. Viadero, 123 F.3d 327 (1997), Burlington Northern held only that an agency may not "relinquish its own performance of [a] function" such that there is an effective "transfer of function" that would be precluded by Section 9(a)(2). Id. at 334-335 (explaining that, in Burlington Northern, the Railroad Retirement Board had "never exercised its statutory duty" to investigate railroad companies' payment of taxes to an employee insurance account, and the IG "assumed the agency's primary duty" in its place, including adopting a plan to "conduct[] regular tax collection audits of substantially all major railroads on a continuing long-term basis"); accord United States v. Chevron U.S.A., Inc., 186 F.3d 644, 648 (5th Cir. 1999) (Burlington Northern inapplicable where agency "continues to keep the relevant records" and "subpoenas do not displace any agency responsibilities").

Petitioners do not suggest that the Medicare carriers have "relinquish[ed their] own performance of [the audit] function." Winters Ranch, 123 F.3d at 334. Nor could they. The carriers continue to have primary responsibility for ensuring that Medicare providers are entitled to the reimbursement they claim. The PATH initiative covers only a specified period of time in the past, is directed at a small subset of providers (teaching hospitals), and focuses only on two discreet issues that the HHS OIG has reason to believe were susceptible to large-scale fraud and abuse.

The D.C. Circuit's decision in Truckers United for Safety is similarly inapposite. There, the IG was engaged in a joint program with the Office of Motor Carriers within the Department of Transportation "to create a greater deterrence to motor carrier violations of * * * Safety Regulations." 251 F.3d at 187. The target companies received no federal funds, and the IG was not "engaged in an investigation relating to abuse" of DOT's programs. Id. at 189. Like the safety investigations at issue in the 1989 OLC opinion, the DOT IG's investigation was merely "to determine whether individual trucking companies were complying with federal motor carrier safety regulations." Ibid. Truckers United has no application to the investigation of fraud and abuse by recipients of federal Medicare funds.2

2. Petitioners also argue that the court of appeals erred in concluding that the IG's interpretation of the Medicare Act and regulations as requiring physical presence of an attending physician was not subject to judicial review at this time. Pet. 24-29. That contention also lacks merit.

One of several "prerequisite[s]" for judicial review under the APA is that the challenged conduct constitute "final agency action." Dalton v. Specter, 511 U.S. 462, 469 (1994); 5 U.S.C. 704. "[T]he action must mark the 'consummation' of the agency's decisionmaking process-it must not be of a merely tentative or interlocutory nature"-and "must be one by which 'rights or obligations have been determined,' or from which 'legal consequences will flow.'" Bennett v. Spear, 520 U.S. 154, 177-178 (1997) (citations omitted).

In Standard Oil, supra, the Court held that the FTC's issuance of an administrative complaint, which alleged that the Commission had "reason to believe" that the respondents were engaged in unfair trade practices, was not "final agency action." 449 U.S. at 234, 238. The decision to investigate served only to initiate the matter; it was not a definitive ruling, and had no legal force or practical effect on Standard Oil's day-to-day operations other than the costs and disruptions of the proceeding, which were similar to those that accompany any major litigation. Id. at 241-242.

Based on those same considerations, the court of appeals correctly held that the HHS OIG's decision to undertake a PATH audit is not final agency action. Pet. App. 23a-29a. Moreover, in this case, unlike in Standard Oil, the IG's decision to undertake a PATH audit does not even amount to a threshold determination of "reason to believe" that petitioners are in violation of Medicare law, let alone any definitive determination of petitioners' liability. Indeed, it is still quite uncertain whether any enforcement action will be taken against petitioners. In the past, in a third of the then-completed PATH audits, "no enforcement action was taken." C.A. App. A251-A252; Physicians at Teaching Hospitals (PATH) Audits: Hearing Before a Subcomm. of the Senate Comm. on Appropriations, 105th Cong., 1st Sess. 396 (1998) (PATH reviews have been terminated at institutions where few errors have been identified during audits).

The IG's initiation of an audit does not determine any rights or obligations or have legal consequences for petitioners' primary conduct or day-to-day operations. "[A]n administrative investigation adjudicates no legal rights." SEC v. Jerry T. O'Brien, Inc., 467 U.S. 735, 742 (1984). Even assuming that the IG refers petitioners for proceedings to assess administrative penalties or commencement of a False Claims Act case, petitioners will have ample opportunity to raise all their arguments as defenses to an enforcement action. "[T]he extent to which the respondent may challenge the complaint and its charges proves that the averment of reason to believe is not 'definitive' in a comparable manner to the regulations in Abbott Laboratories [v. Gardner, 387 U.S. 136 (1967)]." Standard Oil, 449 U.S. at 241.

The court of appeals' decision also is consistent with the decisions of other courts that have dismissed pre- investigation challenges to the PATH initiative on ripeness and finality grounds. Association of Am. Med. Colls. (AAMC) v. United States, 217 F.3d 770, 781 (9th Cir. 2000); Temple Univ. v. Brown, No. 00-CV-1063, 2001 WL 185535 (E.D. Pa. Feb. 23, 2001), aff'd sub nom. Temple Univ. v. Rehnquist, No. 01-3862, 2002 WL 31012237 (3d Cir. Aug. 20, 2002) (46 Fed. Appx. 124) (not precedential); Greater N.Y. Hosp. Ass'n v. United States, No. 98 Civ. 2741 (RLC), 1999 WL 1021561, at *5-*7 (S.D.N.Y. Nov. 9, 1999). As the Ninth Circuit succinctly stated, "[a]n investigation, even one conducted with an eye to enforcement, is quintessentially non-final as a form of agency action." AAMC, 217 F.3d at 781.

Abbott Laboratories, upon which petitioners rely (Pet. 24-26), is not to the contrary. That decision involved final agency action in the form of formally issued regulations that forced drug manufacturers to risk serious penalties for noncompliance, or undertake costly changes in labeling and advertising materials. See Standard Oil, 449 U.S. at 242. Petitioners make no claim that the HHS OIG's decision to undertake a PATH audit, which focuses exclusively on past conduct (billings prior to 1996), has any impact on petitioners' present or future primary conduct. Petitioners are simply required to cooperate with the audit, an entirely reasonable aspect of participating in receiving large amounts of federal funds under the vast Medicare program. Standard Oil makes clear that the initiation of an investigation-even one in which the cost and burden of responding is "substantial"-does not qualify as the kind of immediate impact on day-to-day activities that will satisfy the Abbott Laboratories finality requirement. See id. at 243 (such costs are no more "than the disruptions that accompany any major litigation"). "[T]he expense and annoyance of litigation is part of the social burden of living under government." Id. at 244. Finally, even if the HHS OIG's initiation of the investigation constituted final agency action, neither that initiation nor the IG's interpretation of the Medicare Act and regulations would be ripe for judicial review at this stage. See, e.g., Ohio Forestry Ass'n v. Sierra Club, 523 U.S. 726, 732-737 (1998).3

b. Even if the IG's determination of how to conduct her investigation constituted final agency action and were ripe for review, the decision whether and how to investigate recipients of Medicare payments is one "committed to agency discretion by law," 5 U.S.C. 701(a)(2), and therefore not subject to judicial review. Pet. App. 32a (Ambro, J., concurring); Webster v. Doe, 486 U.S. 592, 599-600 (1988).

The IG Act confers on the IG authority "to make such investigations and reports relating to the administration of the programs and operations of [HHS] as are, in the judgment of the Inspector General, necessary or desirable." 5 U.S.C. App. 6(a)(2), at 19 (emphasis added). See NASA v. FLRA, 527 U.S. 229, 239 (1999) (Section 6(a)(2) confers "discretion" on the Inspectors General in the conduct of their investigations).

The language of Section 6(a)(2) is similar to the grant of discretion that barred APA review in Webster, supra. See 486 U.S. at 600 (statutory language authorizing the Director of Central Intelligence to terminate an employee "whenever the Director 'shall deem such termination necessary or advisable in the interests of the United States,'" foreclosed APA review). Section 6(a)(2) of the IG Act similarly reflects Congress's intent to foreclose review. Other provisions of the Act reinforce that conclusion. See, e.g., 5 U.S.C. App. 3(a), at 13 (prohibiting agency head from interfering with IG audit, investigation, or subpoena), 5 U.S.C. App. 6(a)(4), at 19 (granting IG broad subpoena power to obtain evidence "necessary in the performance of the [IG's] functions").


The petition for a writ of certiorari should be denied.

Respectfully submitted.


MAY 2004

1 The Secretary revised the regulations effective July 1, 1996. The current regulation eliminates the "attending physician" requirement, but carries forward and makes explicit in the text of the regulations themselves the requirement that "services * * * furnished by a resident [must be performed] in the presence of a teaching physician." 42 C.F.R. 415.170 (2002).

2 It also is not clear that Truckers United remains good law on its own facts. Congress subsequently enacted legislation to clarify that the DOT IG can investigate any fraud on the agency by an entity regulated by DOT. Act of Oct. 9, 1999, Pub. L. No. 106-69, 113 Stat. 1013; Motor Carrier Safety Improvement Act of 1999, Pub. L. No. 106-159, § 228(a) and (b), 113 Stat. 1773. The D.C. Circuit declined to address whether the DOT IG could, in the future, undertake similar investigations in light of this new statutory authority. Truckers United, 251 F.3d at 191-192.

3 Petitioners also err in asserting (Pet. 27) a conflict between the court of appeals' decision and the D.C. Circuit's decisions in General Electric Co. v. EPA, 290 F.3d 377 (2002), and Mountain States Tel. & Tel. Co. v. FCC, 939 F.2d 1035 (1991). Those decisions did not involve instigation of an IG audit but simply permitted judicial review when a regulated entity was required to comply with a new regulation adopted by the agency. General Elec., 290 F.3d at 381-382 (review of EPA Guidance Document that "purports on its face to bind both applicants and the Agency" with respect to clean up and disposal of PCB waste); Mountain States, 939 F.2d at 1038-1039 (review of "new accounting rules" adopted by the FCC after notice and comment). Moreover, in each case, the D.C. Circuit noted that the relevant judicial review provisions required petitioners to seek judicial review within sixty days of the new rule's adoption. See General Elec., 290 F.3d at 381 (Toxic Substances Control Act, 15 U.S.C. 2618(a)(1)(A)); Mountain States, 939 F.2d at 1040 (Hobbs Act, 28 U.S.C. 2344).

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