United States v. Krizek

George Krizek (defendant) was a psychiatrist. George’s wife, Blanka Krizek (defendant), handled the office’s billing operations, including submitting payment claims to Medicare and Medicaid. Under the required Medicare and Medicaid procedures, the Krizeks submitted these reimbursement requests on a specific government form and used one or more numerical codes called Current Procedural Terminology (CPT) codes to describe the treatment provided to a patient. The federal government (plaintiff) filed a civil lawsuit against the Krizeks, alleging that they had violated the False Claims Act (FCA). The government claimed that the Krizeks had submitted approximately $250,000 of false claims for treatments that were either more extensive than the services the patient actually received or medically unnecessary. The government counted each incorrect CPT code as a separate false claim for a total of over 8,000 allegedly false claims. The government then requested a $10,000 civil penalty for each false claim, for a total of $81 million in civil penalties. The district court found that the Krizeks had acted with reckless disregard as to the truth or falsity of their billing submissions and, therefore, that they had violated the FCA. The district court also limited the number of false claims to just the times the Krizeks had billed for more than 24 patient-treatment hours in a day, which had occurred 11 times. The court entered a judgment that the Krizeks owed total damages of $168,000, which included a $10,000 penalty for each of the 11 false claims, approximately $47,000 in actual damages for the Krizeks’ overbilling, and $11,000 for the costs of a special master. Both sides appealed.