MEMORANDUM AND ORDER John Pepe, M.D., and Richard Sherman, M.D., (“Relators”) brought this qui tam action against Defendants Fresenius Medical Care Holdings, Fresenius Vascular Care, Inc., and Gregg Miller, M.D. (“Defendants”), on behalf of the United States of America and the States of New York, New Jersey, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Michigan, Nevada, North Carolina, Rhode Island, Tennessee, Texas, and the Commonwealths of Massachusetts and Virginia (the “States”), alleging claims under the False Claims Act (“FCA”), 31 U.S.C. §3729, et seq., analogous state laws (“State FCA laws”), and the California Insurance Fraud Protection Act (“CIFPA”). The United States partially intervened as to the federal FCA counts, pursuant to 31 U.S.C. §3730. The States of New York, New Jersey, and Georgia filed a consolidated complaint-in-intervention, and the California Department of Insurance intervened on behalf of the State of California as to CIFPA claims. The remaining 15 states declined to intervene.1 Defendants Fresenius Vascular Care and Gregg Miller, M.D. move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Relators’ nationwide FCA claims and non-intervened state FCA claims. BACKGROUND2 I. Factual Background Relator John Pepe, M.D., is a board-certified internist and kidney specialist, who works as an attending physician at Richmond University Medical Center and Staten Island University Hospital in New York. (Relators’ Fourth Amended Complaint (“Compl.”) 15, ECF No. 29.) Relator Richard Sherman, M.D., is a kidney specialist who serves as professor emeritus of medicine at Rutgers University and Medical Director of Dialysis at the Robert Wood Johnson University Hospital in New Jersey. (Id. 16.) Defendant Fresenius Vascular Care, Inc. (“FVC”) is one of the largest clinic networks for interventional radiology in North America. (Id. 26.) In 2011, FVC’s parent company, Fresenius Medical Care North America (“FMCNA”), acquired American Access Care Holdings (“AAC”), a clinic network that included 28 freestanding outpatient centers providing vascular access treatment to dialysis patients in New York and elsewhere in the United States. (Id.
26, 28.) Following the acquisition, AAC clinics were operationally integrated into the FVC chain. (Id. 29.) According to its website, FVC operates 66 vascular access clinics in approximately 25 states and Puerto Rico, including 12 in New York State and four in New Jersey. (Id.) Approximately 76 percent of FMNCA’s patient base is covered through Medicare and Medicaid. (Id. 108.) Defendant Gregg Miller, M.D., has been FVC’s Vice President of Operations since 2015. (Id. 31.) Previously, Defendant Miller was FVC’s Chief Medical Officer, and prior to that, he operated AAC of Brooklyn. After FMNCA’s 2011 acquisition of AAC, Defendant Miller was appointed Chief Medical Officer of FVC. (Id. 131.) Defendants own and operate several health care facilities that perform, among other things, fistulagrams, angiograms, and angioplasties. (Id. 118.) Fistulagrams are x-rays of fistula, angiograms are x-rays of blood vessels, and angioplasties are the widening of blood vessels by inserting and inflating a small ballon. (Id.) When properly administered, these procedures can improve the efficacy of dialysis treatments. (Id.) Medical staff monitor patients on dialysis to ensure that the treatment functions effectively. (Id. 119.) Specifically, medical staff monitor blood flow, blood vessel pressure, and waste removal measures, among other metrics. (Id.) If medical staff determine that a patient’s vascular access is so compromised that it interferes with dialysis, the staff may refer that patient to one of Defendants’ clinics for a onetime procedure to restore sufficient vascular access. (Id. 123.) In Spring 2011, Defendant Miller approached Relator Pepe in an unsuccessful attempt to purchase his dialysis practice. (Id. 129.) During their discussions, Defendant Miller told Relator Pepe that if a dialysis center were owned by AAC or its new parent, FMNCA, the company could self-refer patients from its dialysis center to its vascular access clinics. (Id. 130.) Defendant Miller has made several public presentations to physicians on behalf of Fresenius endorsing the use of surveillance fistulagrams. (Id. 131.) For example, during one presentation, Defendant Miller represented that patients should return for scheduled follow-up elective fistulagrams after access intervention. (Id.) Defendant Miller also incorrectly stated that Medicare does not reimburse the dialysis center for fistula monitoring. (Id.) During another presentation, Defendant Miller stated that follow-up fistulagrams should be performed at intervals that are “ideally…just before” clinical measures of dialysis function decline. (Id. 133.) However, Defendant Miller also stated that it is not possible to predict when the dialysis treatments will become inefficient. (Id.) Beginning in at least October 2011, through at least August 2020, Defendants regularly scheduled follow-up visits with patients after they performed a referred procedure. (Id.
