Judge Tosses Fired Doctor’s False-Claims Suit Over Airlifts

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Law360 (January 22, 2024, 9:34 PM EST) — A federal judge has rejected a neurologist’s claims that his former hospital in Delaware defrauded the federal government by transferring stroke patients to Philadelphia-based Jefferson Healthcare System via helicopter, finding the suit didn’t provide the billing details necessary to make such transfers a violation of Medicare regulations.

Because the arrangement between Jefferson and Beebe Healthcare in Delaware was not a financial one, and the hospitals didn’t submit illegal billing for airlifting patients to Philadelphia rather than a closer facility, U.S. District Judge Timothy J. Savage said Dr. Abraham Scheer’s claims that he was fired for blowing the whistle fell apart.

“Scheer misapprehends what the regulation covers. It does not — as he believes — require a hospital to transfer a patient to the nearest hospital. It governs only reimbursement for transportation services,” Judge Savage wrote in his opinion Thursday. “There is no regulation or law that requires transfer to the closest hospital or facility. Thus, any agreement to transfer patients to Jefferson instead of to closer hospitals did not violate Medicare regulations and cannot supply a legal basis for Scheer’s [False Claims Act] substantive causes of action.”

The court dismissed Scheer’s amended complaint against Beebe and Jefferson, which had included allegations of False Claims Act violations, illegal kickbacks, referrals that violated the Stark Act, conspiracy, and retaliation against him. The judge denied Scheer permission to amend his complaint again.

Scheer had claimed that since 2010, Beebe had a deal with Jefferson that it would automatically transfer patients suffering from certain strokes to Jefferson’s facilities via medical helicopters, instead of moving them to facilities that were closer but still capable of treating the patients.

In exchange for extending Jefferson’s reach into Delaware and giving it dibs on stroke patients for whom it could claim bigger reimbursements, Scheer said, Jefferson let Beebe use a “telehealth robot” controlled by a Jefferson physician and able to remotely evaluate stroke patients at Beebe — which Scheer said also gave the hospital a pretext for eventually eliminating his position.

The United States declined to intervene in the suit in December 2022, court records show.

Judge Savage said the Medicare regulations Scheer cited don’t require patients to be transferred to the closest hospital; they say Medicare will only pay for transportation to the nearest hospital. And Scheer’s lawsuit allegedly didn’t show that Beebe or Jefferson billed Medicare for more than the cost would have been for transfer patients to a Delaware hospital.

“Scheer has alleged no facts showing that Jefferson billed the government for the extra transportation distance from a closer appropriate facility and Jefferson,” the opinion said. “He assumes it did.”

The telehealth arrangement did not count as a kickback, the court said. The use of the robot was a program for collaboration on treating stroke patients, not a kind of payment to Beebe, nor did the continued existence of Scheer’s neurology program for nine years after the robot’s introduction support his claim that Beebe saved money by replacing him and his colleagues with Jefferson’s robotic doctor, the opinion said.

The court followed similar reasoning to dismiss Scheer’s claim that the arrangement violated the Stark Act, which prohibits physicians from getting Medicare reimbursement for most referrals to institutions where they have a financial relationship.

“The Stark Act prohibits a physician from referring a Medicare patient to a hospital for medical services if he or she has a financial relationship with the hospital,” the opinion said. “There is nothing in the amended complaint showing that any referring physician had a financial relationship with Jefferson or received compensation for referrals. Nor was there a financial relationship between Jefferson and Beebe. Neither one had a financial interest in the other.”

Without an FCA violation, a Stark Act violation or a kickback scheme, there could not be a conspiracy as Scheer had claimed, the judge said.

Because Scheer did not present evidence that the hospitals were actually submitting fraudulent bills to Medicare, he could not have reasonably believed there was a violation and his complaints to administrators were not protected whistleblower activity, the court reasoned.

There was nearly a decade between his initial complaints to his bosses in 2011 and the elimination of his job in 2020, which did not suggest the two were linked, and Scheer himself had tried to claim in a state-court lawsuit that his firing was due to his age and disability status, rather than his whistleblowing, the opinion said.

Counsel for the parties did not immediately respond to requests for comment Monday.

Scheer is represented by Seth D. Carson of Derek Smith Law Group PLLC.

Beebe Healthcare and Beebe Medical Group are represented by Cecil J. Jones, Arthur Fritzinger and Stephen Aaron Miller of Cozen O’Connor and Mark J. Swerdlin and Bruce S. Harrison of Shawe Rosenthal LLP.

Jefferson Health System Inc. is represented by Frederick P. Santarelli and Stewart J. Greenleaf Jr. of Elliott Greenleaf PC.

Jefferson Health is represented by Marc S. Raspanti and Michael A. Morse of Pietragallo Gordon Alfano Bosick & Raspanti.

The case is United States ex rel Dr. Abraham Scheer v. Beebe Healthcare et al., case number 2:20-cv-06117, in the U.S. District Court for the Eastern District of Pennsylvania.

–Additional reporting by P.J. D’Annunzio. Editing by Linda Voorhis.

Update: This article has been updated with additional counsel information.

By: Matthew Santoni