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United States v. Berkeley Heartlab, Inc.

United States District Court, D. South Carolina, Beaufort Division

December 1, 2017

United States of America, et al., Plaintiffs,
Berkeley Heartlab, Inc., et al, Defendants. ex rel. Scarlett Lutz, et al., Plaintiffs-Relators,



         This matter is before the Court on the BlueWave Defendants' Motion for Clarification (Dkt. No. 763) of this Court's prior Order on the Government's Motions in Limine (Dkt. No. 736). The Court has reconsidered and clarified its prior Order as set forth below.

         I. Background

         In its Motion in Limine, the Government asked the Court to exclude testimony from physician witnesses not disclosed as expert witnesses about the medical necessity of laboratory tests. (Dkt. No. 588.) The Court ruled as follows on that issue:

Under Rule 26(a)(2)B) of the Federal Rules of Civil Procedure and this Court's Scheduling Order, Defendants were required to identify and disclose all experts by February 6, 2017, including the subject matter on which the expert was expected to testify and a summary of the expert's opinions. The BlueWave Defendants have disclosed and provided an expert report from Dr. Robert Fishberg on the issue of medical necessity of laboratory tests. The Government did not move to exclude Dr. Fishberg. Defendants disclosed no other experts to testify on the issue of medical necessity. Later, in their pre-trial disclosures, Defendants identified several physicians they intend to call at trial, including Dr. Joseph McConnell, Dr. Tauqueer Alam, Dr. Joe Hollins, Dr. Rex Butler, Dr. John Eberly, Dr. Samual Fillingane, and Dr. Szilard Voros. (Dkt. Nos. 563 at 3-4; 583 at 4.) The BlueWave Defendants also stated that they intended to present the deposition testimony of Dr. Tara Dall, HDL's former Chief Medical Officer. Defendants claim that these physicians may testify as lay witnesses because they are treating physicians.
To the extent that these physicians would testify about the medical necessity of laboratory tests either in routine clinical practice or for a particular patient, that testimony is based on "scientific, technical, or other specialized knowledge" so falls in the category of expert testimony. FRE 701, 702. The testimony of treating physicians that involves "diagnosis, prognosis, and future medical care is opinion testimony that falls under Rule 26(a)(2)(A)'s expert disclosure requirement." See, e.g., Stogsdill v. S.C. Dep't of Health & Human Servs., Civ. A. No. 3:12-0007-JFA, 2017 WL 3142497, *15 (D.S.C. July 25, 2017) (appeal pending); Ingram v. ABC Supply Co., Civ. A. No. 3:08-1748-JFA, 2010 WL 233859, *2 (D.S.C. Jan. 14, 2010). If it is true, as Defendants claim, that the physicians' testimony is "a far cry from utilizing medical training and expertise to evaluate an individual patient's symptoms, course of treatment, and medical history, offer a diagnosis or prognosis..." (Dkt. No. 642 at 15), then the physicians' testimony is not probative of any material issue in this case.
For these reasons, any probative testimony these physicians would provide falls under the disclosure requirements of Rule 26. Defendants did not comply with Rule 26, and their argument that their failure to do so is justified or harmless fails. Defendants have offered no justification for their failure to identify these physicians as expert witnesses earlier, and the Government would be prejudiced by the introduction of expert testimony for which it had no opportunity to procure a rebuttal report. While the Government did have the opportunity to depose some of these physician witnesses, it did not at the time of those depositions have notice of the facts and opinions those physicians would introduce at trial if they testified as expert witnesses. Because Defendants failed to comply with Rule 26 and their failure was neither justified nor harmless, they may not introduce the testimony of these physician witnesses about the medical necessity of laboratory tests. Defendants will have the opportunity to introduce the expert testimony of their [expert] Robert Fishberg about the medical necessity of laboratory tests, so the Court is not concerned that its decision to exclude certain testimony from these physicians is unfairly prejudicial. For the reasons set forth above, the Government's motion to exclude the physician testimony discussed in the parties' briefs is granted.

(Dkt. No. 736 at 14-16.)

         Defendants have asked the Court to clarify or reconsider this portion of its prior Order to allow them to introduce testimony from treating physicians regarding their personal knowledge of essential facts in this case and their reasons for making diagnosis and treatment decisions for particular patients. Defendants anticipate that the physicians' testimony would cover the following issues:

(1) background information on their medical practices, patient populations and their reasons for ordering lab tests; (2) Blue Wave's sales and marketing practices; (3) process and handling (P&H) agreements between the physicians and labs HDL and/or Singulex; (4) P&H fees paid to the physicians; (5) waiver of copayments and deductibles for TRICARE beneficiaries; (6) testing services and test panels of the labs; (7) the process and handling work involved to prepare blood samples for shipment; (8) relationships and communications with the Defendants, entities owned or controlled by any defendant and sales representatives; (9) their intent to file, or cause or conspire with any Defendant to file, fraudulent claims to Medicare or TRICARE; (10) the impact, if any, of the Defendants' conduct on the medical judgment of the physician; (11) topics which the witnesses have information relevant to the allegations in the United States' Complaint in Intervention and defendants' Answers thereto; and, (12) topics which may be brought out in the Government's case-in-chief of which the witnesses have relevant information.

(Dkt. No. 763 at 2-3.)

         II. Discussion

         The Court has reconsidered its prior Order, specifically its finding about risk of prejudice to the Government that could result from allowing Defendants to call these physicians as trial witnesses. Although the Government had the opportunity to depose several of these treating physicians, the Court indicated in its prior Order that the Government would still be prejudiced because it did not have the opportunity to review an expert report and procure a rebuttal report. However, treating physicians are not necessarily required to provide an expert report under Rule 26 of the Federal Rules of Civil Procedure:

The requirement of a written report in paragraph (2)(B), however, applies only to those experts who are retained or specially employed to provide such testimony in the case or whose duties as an employee of a party regularly involve the giving of such testimony. A treating physician, for example, can be deposed or called to testify at trial without any requirement for a written report. By local rule, order, or written stipulation, the requirement of a written report ...

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