News & Events

Related Attorneys

Media Contact

Diana L. Courson

Suit Against Zuckerman Spaeder LLP Client Axiom Worldwide Inc. Dismissed

May 28, 2009

U.S. District Judge Virginia Hernandez Covington has dismissed, with prejudice, a federal lawsuit alleging false claims against Axiom Worldwide Inc, a Zuckerman Spaeder LLP client represented by Tampa-based partners Morris “Sandy” Weinberg Jr. and Marcos E. Hasbun. The lawsuit, filed by former Axiom employee Greg Westfall and his wife on behalf of the United States under the federal False Claims Act, had been pending in the U.S. District Court for the Middle District of Florida, Tampa Division, since 2006.

Greg Westfall is a former independent sales representative for Axiom Worldwide, and Suzanne Westfall is his wife. In their Second Amended Complaint, the Westfalls alleged that officers of Axiom devised a sales scheme to fraudulently promote the sale of Axiom’s DRX spinal decompression devices. The Westfalls alleged that the DRX decompression devices could only be billed using Current Procedural Terminology (“CPT”) Code 97012, and that the alleged scheme purportedly involved misrepresenting to physicians that the DRX decompression devices could in fact be billed using CPT codes 97140 and 97530. The Westfalls alleged that CPT Code 97012 only provided for reimbursement of $15 per treatment session, while CPT Codes 97140 and 97530 provided for a higher level of reimbursement of approximately $156 per session. The Westfalls claimed that Axiom falsely represented to physicians that the DRX devices could be billed using the higher paying codes to induce those physicians to purchase the DRX devices, and that, as a result, Axiom caused physicians to submit false claims for payment when they submitted claims for reimbursement using the higher paying codes.

To support their allegations that false claims were submitted, the Westfall’s identified two physicians who had purchased a DRX device, and who had submitted eighteen claims for reimbursement using CPT codes 97530 and 97140. The court agreed that the second amended complaint lacked the requisite indicia of reliability because the Westfalls did not, nor were they able to, allege what services were actually rendered by the two physicians in connection with those eighteen claims for reimbursement.

In dismissing the second amended complaint, the court noted that qui tam suits “are motivated primarily by prospects of monetary reward, rather than public good” and “raise a high risk of abusive litigation.” In its conclusion, the court wrote, “[t]his court roundly refuses to open the door to discovery and litigation when, after three attempts, [the Westfalls] failed to file a complaint in compliance with Rule 9(b) of the Federal Rules of Civil Procedure. Thus, upon due consideration, this Court dismisses this case with prejudice.”

Download Full PDF: