No Specialty Requirement: Sixth Circuit Clarifies Physician Qualification and Evidentiary Threshold under the False Claims Act

1. Introduction

In United States ex rel. Robert C. O’Laughlin, M.D. v. Radiation Therapy Services, P.S.C. et al., the Sixth Circuit confronted an expansive qui tam action alleging widespread Medicare fraud in the provision of radiation-therapy and chemotherapy services at three Kentucky cancer centers. After nearly a decade of litigation, numerous amended complaints, and protracted discovery, the district court dismissed portions of the case and granted summary judgment on the remainder. On appeal, the court of appeals affirmed in full, establishing two central propositions:

• Medicare does not require that radiation services be performed or supervised by a board-certified radiologist or radiation oncologist; thus, billing by other physicians is not inherently false.
• A relator must provide specific, reliable evidence of at least one fraudulent claim; generalized “triangulation,” un-audited schedules, or speculative inferences will not satisfy Rule 9(b) or survive summary judgment under the False Claims Act (FCA).

The decision offers significant guidance on FCA pleading standards, the concept of materiality after Universal Health Services v. Escobar, and the evidentiary burden relators face when challenging complex healthcare-billing practices.

2. Summary of the Judgment

• The district court’s dismissal of five radiation-services counts and its grant of summary judgment on all chemotherapy-services counts were upheld.
• The court rejected Dr. O’Laughlin’s “false-certification” theory because CMS manuals expressly permit any physician to perform radiation professional services, and state-law restrictions were not conditions of Medicare payment.
• The relator’s “absent-physician” and chemotherapy theories failed because he could not tie a single identified Medicare claim to an actual absence of a qualified provider.
• Because no underlying FCA violation survived, the associated conspiracy count also failed.

3. Detailed Analysis

3.1 Precedents and Authorities Cited

• Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) – Core materiality test for implied-certification liability.
• United States ex rel. Ibanez v. Bristol-Myers Squibb Co., 874 F.3d 905 (6th Cir. 2017) – Requirement for representative false claims.
• United States ex rel. Prather v. Brookdale Senior Living, 838 F.3d 750 (6th Cir. 2016) – Rule 9(b) particularity in healthcare FCA cases.
• Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir. 2011) – Distinction between regulatory non-compliance and material prerequisites to payment.
• United States ex rel. Marlar v. BWXT Y-12, LLC, 525 F.3d 439 (6th Cir. 2008) – “Sine qua non” requirement of an actual fraudulent claim.
• Medicare Claims Processing Manual, ch. 13; 42 C.F.R. § 410.26; various Kentucky statutes and regulations (201 KAR 46 series).

3.2 The Court’s Legal Reasoning

3.2.1 Radiation-Service Counts (False Certification)

1. The relator argued that only radiologists or radiation oncologists may perform or supervise radiation therapy.
   Key holding: CMS’s own manual (ch. 13, § 20.1) explicitly states that any physician may furnish professional radiation services “regardless of specialty.” Therefore, the alleged specialty requirement does not exist.
2. Reliance on 42 C.F.R. § 410.26(b)(7) failed because that regulation governs “incident-to” services not separately listed in the Medicare Act; radiation therapy has its own statutory benefit category (§ 1395x(s)(4)).
3. Even assuming Kentucky required specialty supervision, the relator never demonstrated that such state-law compliance was a material precondition to Medicare payment under Escobar.

3.2.2 “Absent-Physician” Radiation Billing

• The relator pleaded that physician names were placed on claims when no physician was present. Fatal defect: he failed to cite any law making on-site presence a billing prerequisite for the technical CPT codes at issue, and he abandoned opposition to defendants’ arguments—constituting waiver.

3.2.3 Chemotherapy Counts (Summary Judgment)

1. Weekday claims. Relied on “Master Schedules” and assumption that only two physicians covered three centers. Testimony revealed several locum tenens physicians and showed schedules were unreliable; thus, no triable issue.
2. Thursday “Tumor-Board” claims. Evidence showed meetings were sporadic, attendance optional, and physicians remained available; schedule “blocks” were tentative and not dispositive. No reasonable jury could find fraud.
3. Weekend Leukine injections. Leukine coded outside the chemotherapy CPT range; even plaintiff’s expert conceded it is not a chemotherapy drug. Therefore, physician supervision not required and claims were proper.

3.2.4 Conspiracy Count

Without a viable substantive FCA violation, the alleged conspiracy to violate the FCA necessarily collapsed.

3.3 Impact of the Decision

• Clarifies CMS Policy: Establishes binding Sixth-Circuit precedent that Medicare does not impose a specialty-specific supervision requirement for radiation services, limiting future false-certification theories premised on specialty distinctions.
• Elevates Evidentiary Expectations: Charts, schedules, or statistical “triangulation” not independently verified cannot substitute for concrete, claim-specific proof. Relators must tie each alleged false claim to verifiable facts.
• Restricts State-Law Bootstrapping: State-law licensing requirements will not trigger FCA liability unless expressly incorporated as conditions of Medicare payment and shown to be material under Escobar.
• Practical Guidance for Providers: Facilities may rely on CMS manuals when determining compliance; disagreement over state-law nuances is unlikely, by itself, to support FCA liability.
• Strategic Implications for Whistleblowers: Encourages early retention of billing experts and acquisition of exemplar claims data; discourages over-reliance on anecdotal staff statements or internal scheduling documents.

4. Complex Concepts Simplified

• False Claims Act (FCA): A federal statute imposing civil liability (plus treble damages) on anyone who knowingly submits, or causes submission of, false claims for government money. Includes qui tam provisions allowing private whistleblowers (“relators”) to sue on the government’s behalf.
• Qui tam Action: From Latin “who as well,” allowing a private person to step into the government’s shoes; relator may receive up to 30% of recovered funds.
• Materiality (under Escobar): A misrepresentation is “material” if it has a natural tendency to influence the government’s payment decision—it must be “so central” that the agency would refuse to pay if aware of the non-compliance.
• Professional vs. Technical Components: Many radiology CPT codes split payment into a “professional” part (physician interpretation) and a “technical” part (use of equipment and staff). Only the professional portion necessitates a physician’s personal service; technical services can be performed by ancillary staff under supervision.
• HCPCS & CPT Codes: Universal healthcare billing codes. Level I (CPT) describes medical procedures; Level II describes drugs, supplies, and certain services. Classification often dictates reimbursement level and supervision requirements.
• Locum Tenens Physician: A temporary physician hired to fill staffing gaps; their presence undermined the relator’s theory that centers were understaffed.

5. Conclusion

The Sixth Circuit’s opinion reinforces the demanding pleading and proof standards applied to FCA healthcare cases. By affirming dismissal and summary judgment, the court made three enduring contributions to FCA jurisprudence:

1. It unequivocally rejected specialty-based false-certification theories absent an express Medicare requirement.
2. It underscored that relators must furnish specific, verifiable evidence of at least one fraudulent claim—speculation or “bare-bones” charts will not suffice.
3. It emphasized the Escobar materiality filter, cautioning that regulatory or state-law infractions do not always translate into FCA liability.

Going forward, healthcare fraud litigants in the Sixth Circuit must navigate these clarified standards, and providers can rely on the ruling to defend against inadequately supported allegations. For whistleblowers, the case is a reminder: thorough billing data, corroborated by competent expert analysis, is indispensable to survive both Rule 9(b) scrutiny and summary judgment.