## Facts

- R & F Properties of Lake County, Inc. operated a family medical practice in Florida serving Medicare Part B patients.
- Karyn L. Walker, a nurse practitioner, filed a qui tam action under the False Claims Act (FCA) after the United States declined to intervene.
- Walker alleged that nurse practitioners often treated patients when no physician was physically present in the office suite, though physicians could be reached by phone or pager.
- The practice billed these nurse-provided visits as “services incident to the service of a physician,” seeking higher reimbursement under physicians’ provider numbers.
- Walker contended Medicare guidance and industry understanding required “incident to” services to be performed under direct, in-person physician supervision (physician present in the office suite).
- In January 2002, Congress amended the statute to define “incident to” services as those provided under direct, in-person physician supervision; Walker argued the amendment reflected existing expectations.
- Walker presented evidence including agency manuals, carrier instructions, and training materials suggesting an established interpretation requiring in-person supervision.
- The practice allegedly continued the challenged billing both before and after the 2002 amendment.

## Issues

1. Whether alleged ambiguity in Medicare’s pre-2002 “incident to” requirements barred FCA falsity as a matter of law, or whether the relator’s evidence created a triable issue.
2. Whether the district court improperly limited discovery to the period of the relator’s employment.
3. Whether the amended complaint sufficiently stated an FCA claim to survive a Rule 12(b)(6) motion to dismiss.

## Decision

- Reversed the grant of summary judgment for the defendant on the FCA claims.
- Reversed the order limiting discovery to the relator’s employment period.
- Affirmed the denial of the defendant’s motion to dismiss the amended complaint.
- Remanded for further proceedings.

## Legal Principles

- Regulatory or statutory ambiguity does not automatically defeat FCA liability at summary judgment when there is evidence of an authoritative agency interpretation and claims inconsistent with that interpretation.
- Agency manuals, carrier instructions, educational materials, and administrative practice may be relevant evidence of how a Medicare billing requirement was understood and applied for purposes of FCA falsity and scienter.
- FCA “knowledge” includes actual knowledge, deliberate ignorance, and reckless disregard; evidence of exposure to applicable agency guidance and training may support an inference of scienter.
- Discovery in FCA cases may extend beyond a relator’s employment period when relevant to proving a pattern of conduct, the defendant’s understanding of requirements, and the scope of allegedly false claims.

## Conclusion

The Eleventh Circuit held that the relator produced sufficient evidence to create fact questions about the meaning of Medicare’s “incident to” supervision requirement and the defendant’s knowing noncompliance, rejected a categorical ambiguity bar to FCA falsity, required broader discovery, and allowed the case to proceed beyond pleading and summary judgment stages.


United States ex rel. Walker v. R & F Props. of Lake Cnty., Inc., 433 F.3d 1349 (11th Cir. 2005)