Court Opinion

ID: 9963949
Source: CourtListenerOpinion
Date Created: 2024-04-26 16:01:43.56463+00
Date Added: 2024-06-11T08:25:05.360122
License: Public Domain

NOT FOR PUBLICATION                          FILED
                      UNITED STATES COURT OF APPEALS                     APR 26 2024
                                                                     MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA EX                     No.    22-16571
 REL. ERIC JAMES STENSON,
                                                 D.C. No.
                   Plaintiff-Appellant,          2:19-cv-00306-TUC-JGZ (EJM)

    v.
                                                 MEMORANDUM*
 RADIOLOGY LIMITED, LLC,

                   Defendant-Appellee.

                     Appeal from the United States District Court
                              for the District of Arizona
                      Jennifer Zipps, District Judge, Presiding

                      Argued and Submitted November 7, 2023
                                 Phoenix, Arizona

Before: HAWKINS and COLLINS, Circuit Judges, and SEEBORG,** District
Judge.
Partial Concurrence and Partial Dissent by Judge COLLINS.

         Appellant-Relator Eric Stenson appeals the dismissal of his qui tam action

alleging violations of the False Claims Act (“FCA”). See 31 U.S.C. § 3729(a)(1).

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
         **
            The Honorable Richard Seeborg, Chief United States District Judge for
the Northern District of California, sitting by designation.
Stenson also appeals the denial of his motion for leave to amend his first amended

complaint (“FAC”). We have jurisdiction under 29 U.S.C. § 1291, and for the

reasons below, we affirm in part and reverse in part.

        Stenson, an Arizona-based information technology executive, sued Appellee-

Defendant Radiology Limited, LLC (“Radiology Limited”), a radiology facility in

Tucson, Arizona, alleging that it violated the FCA by submitting false claims to the

Centers for Medicare and Medicaid Services (“CMS”). In the simplest terms,

Stenson avers Radiology Limited charged CMS over six million dollars for

diagnostic readings that did not qualify for Medicare reimbursement because they

were conducted on non-medical grade Dell computer monitors.1 The district court

found these allegations failed to sufficiently state any of Stenson’s five FCA claims

and dismissed the FAC. The district court also denied Stenson’s motion for leave

to amend the FAC with prejudice, finding amendment would be “futile.”

          We review de novo the grant of a motion to dismiss for failure to state a

claim for which relief can be granted. Lee v. City of Los Angeles, 250 F.3d 668,

679 (9th Cir. 2001); Fed. R. Civ. P. 12(b)(6). “In reviewing the dismissal of a

complaint, we inquire whether the complaint’s factual allegations, together with all

reasonable inferences, state a plausible claim for relief.” United States ex rel.

Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 (9th Cir. 2011).

1
    Hereinafter, “the Dell Monitors.”

                                         2                                    22-16571
Although we need not accept conclusory statements of law, we presume that all

factual allegations in the operative complaint to be true and view them in the light

most favorable to Stenson. Lee, 250 F.3d at 679. Rule 12(b)(6) dismissal is proper

when there is either a “lack of cognizable legal theory or the absence of sufficient

facts alleged.” UMG Recordings, Inc. v. Shelter Cap. Partners, LLC, 718 F.3d

1006, 1014 (9th Cir. 2013) (internal punctuation omitted) (quoting Balistreri v.

Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)).

      Because the FAC alleges fraud, Stenson must also plead claims with requisite

“particularity under Federal Rule of Civil Procedure 9(b).” Winter ex rel. United

States v. Gardens Reg’l Hosp. & Med. Ctr., Inc., 953 F.3d 1108, 1116 (9th Cir. 2020)

(internal punctuation omitted).    That is, it must “state with particularity the

circumstances constituting fraud or mistake, including the who, what, when, where,

and how of the misconduct charged.” Ebeid ex rel. United States v. Lungwitz, 616

F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and alterations omitted).

While Stenson need not “allege the details of every false claim submitted to the

federal government for reimbursement,” United States ex rel. Solis v. Millennium

Pharms., Inc., 885 F.3d 623, 628–29 (9th Cir. 2018), any allegations made on

“information and belief” must state the factual basis for such belief, Neubronner v.

Milken, 6 F.3d 666, 672 (9th Cir. 1993). When read together, Rules 8(a) and 9(b)

compel relators to allege “enough fact[s] to raise a reasonable expectation that

                                         3                                   22-16571
discovery will reveal evidence of [the misconduct alleged].” Cafasso, 637 F.3d at

1055 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

      I.     Motion to Dismiss

      The district court granted Radiology Limited’s motion to dismiss after finding

that Stenson failed to state a claim under the False Claims Act. The FCA was

“intended to reach all types of fraud, without qualification, that might result in

financial loss to the Government.” United States v. Neifert-White Co., 390 U.S.

228, 232 (1968) (emphasis added). A successful FCA claim “requires: (1) a false

statement or fraudulent course of conduct, (2) made with scienter, (3) that was

material, causing (4) the government to pay out money or forfeit moneys due.”

United States ex rel. Rose v. Stephens Inst., 909 F.3d 1012, 1017 (9th Cir. 2018)

(internal punctuation omitted). The district court found that Stenson failed to plead

the first two elements––falsity and materiality.

             A.    Falsity

      To prove falsity, Stenson proceeded under a “false certification” theory,

which required him to allege that Radiology Limited “falsely certifie[d] compliance

with a statute or regulation as a condition to government payment.” United States

v. United Healthcare Ins. Co., 848 F.3d 1161, 1173 (9th Cir. 2016). There are two

kinds of false certification: express and implied. Express false certification occurs

when “the entity seeking payment [falsely] certifies compliance with a law, rule or

                                          4                                   22-16571
regulation as part of the process through which the claim for payment is submitted.”

Rose, 909 F.3d at 1017 (quoting Lungwitz, 616 F.3d at 998).           Implied false

certification, by contrast, “occurs when an entity has previously undertaken to

expressly comply with a law, rule, or regulation [but does not], and that obligation

is implicated by submitting a claim for payment even though a certification of

compliance is not required in the process of submitting the claim.” Id.

      Each time Radiology Limited submits claims for reimbursement, it expressly

certifies its compliance with applicable Medicare rules, regulations, and policies.

Radiology Limited also impliedly certifies its compliance with applicable “Medicare

laws, regulations[,] and program instructions” through its annual Medicare

Enrollment Agreement. Thus, both false certification theories are implicated on

appeal.

      Stenson alleges that Radiology Limited falsely certified its compliance with

CMS’s policy of only reimbursing medical devices with a particular degree of

approval from the Food and Drug Administration (“FDA”), and the general

Medicare statute’s requirement that claimed services be “reasonable and necessary.”

On appeal, he also alleges that Radiology Limited charged CMS for diagnostic

readings using billing codes that falsely implied the use of more sophisticated

technology.   Only his allegations concerning the general Medicare statute are

sufficiently pleaded in the FAC.

                                         5                                   22-16571
      FDA Approval. To the extent that Stenson alleges that Radiology Limited’s

claims were false because the Dell Monitors lack specific approval from the FDA,

dismissal was appropriate. “Claims are not ‘false’ under the FCA unless they are

furnished in violation of some controlling rule, regulation or standard.” United

States v. Prabhu, 442 F. Supp. 2d 1008, 1026 (D. Nev. 2006) (citing United States

ex rel. Local 342 v. Caputo Co., 321 F.3d 926, 933 (9th Cir. 2003)).

      CMS requires medical suppliers to obtain FDA approval before introducing

their devices into the stream of commerce. See Int’l Rehab. Scis. Inc. v. Sebelius,

688 F.3d 994 (9th Cir. 2012); see also Medicare Program; Revised Process for

Making Medicare National Coverage Determinations, 68 FR 55634-01. However,

outside of the mammography context, CMS has no policies regarding the kinds of

monitors that medical providers like Radiology Limited must use when conducting

diagnostic readings. Compare 42 C.F.R. § 410.32(b)(2) (explaining that FDA-

approved monitors must be used for mammographs) with 42 C.F.R. § 410.32(a),

(b)(1) (explaining that only physicians can administer other kinds of diagnostic

readings).

      Radiology Limited cannot expressly or impliedly misrepresent its compliance

with CMS rules and policies that do not apply to its allegedly fraudulent conduct.

Thus, the FAC fails to plead falsity on this basis.

                                          6                                 22-16571
      Misleading Billing Codes. Likewise, to the extent that the FAC alleges that

Radiology Limited used misleading billing codes, it also fails to plead falsity. The

FAC and Stenson’s briefs fail to identify any controlling rule, regulation, or standard

that Radiology Limited violates by submitting “misleading” billing codes. In the

absence of controlling authority, there can be no violation.

      General Medicare Statute. However, to the extent the FAC alleges that

Radiology Limited falsely certified its compliance with the general Medicare statute,

dismissal, at least at this stage, was not warranted. CMS regulations require that all

reimbursed services be “reasonable and necessary.” 42 U.S.C. § 1395y(a)(1)(A).

And, in this Circuit, “a false certification of medical necessity can give rise to FCA

liability.” Winter, 953 F.3d at 1118. Medicare contractors determine whether

services are reasonable and necessary by assessing whether the service is “(1) safe

and effective; (2) not experimental or investigational, . . . and (3) appropriate.” See

Centers for Medicare & Medicaid Services, Medicare Program Integrity Manual §

13.5.1 (2015) (cleaned up) (describing protocols for local coverage determinations);

see also id. § 13.3 (incorporating § 13.5.1’s standards for individual claim

determinations).

      Even if no federal rule, regulation, or law requires radiologists to use FDA-

approved devices outside of the mammography context, the general Medicare statute

nevertheless requires all physicians to provide services that meet minimum efficacy

                                          7                                    22-16571
standards. Stenson alleges that by using less sophisticated, non-FDA approved

monitors, Radiology Limited knowingly submits claims for diagnostic readings that

fall below this federally mandated minimum standard of care.

      This argument plausibly pleads falsity under Rule 12(b)(6), and we reject the

idea that the existence of CMS regulations in the mammography context means that

Radiology Limited has no obligation to use appropriate technology under the general

Medicare statute’s “reasonable and necessary” requirement.          “CMS guidance

makes clear that safety and efficacy determinations are based on ‘authoritative

evidence’ or ‘general[ ] accept[ance] in the medical community.’” Dan Abrams Co.

LLC v. Medtronic Inc., 850 Fed. Appx. 508, 509 (9th Cir. 2021).            The FAC

specifically alleges that the Dell Monitors are far less technologically sophisticated

(and, therefore, less effective) than the picture archiving and communication systems

(“PACs”) typically used by radiologists.

      Stenson’s “reasonable and necessary” theory also meets the particularity

requirement under Rules 9(b) and 8(a). The FAC makes a general argument that

radiologists can detect cancer in images displayed on diagnostic-grade monitors but

cannot detect cancer when the same images are displayed on lower-grade displays,

like the Dell Monitors. This point is supported by sufficiently credible physician

testimony and, thus, gives rise to a reasonable inference that the technological

quality of radiologists’ monitors has some bearing on the efficacy of their diagnostic

                                           8                                  22-16571
readings. The FAC applies this inference to the instant case by suggesting that

when Radiology Limited conducted diagnostic readings on the Dell Monitors, it was

“not actually providing the [claimed] services at all.”

      The FAC supports this allegation with sufficient particularity by pointing to

minutes from an Arizona Medical Board meeting where a Radiology Limited

physician was issued an advisory warning for failing to identify a 6mm mass in a

patient’s kidney. The FAC also notes that Dell does not market the Monitors for

diagnostic use, nor does it endorse their use in medical settings unless they are

equipped with PerfectLum software, which Radiology Limited does not use.

Discovery might produce additional evidence of improper diagnoses. Additionally,

experts might testify to the Dell Monitor’s efficacy or conduct testing to establish

that the Dell Monitors do not safely, effectively, or appropriately diagnose diseases.

Thus, Stenson has sufficiently pleaded that Radiology Limited falsely certifies its

compliance with the general Medicare statute by submitting claims for diagnostic

readings conducted on the Dell Monitors. The existence of regulations in the

mammography context does not impact that conclusion.

             B.    Materiality

      Under the FCA, “material” means “having a natural tendency to influence, or

be capable of influencing, the payment or receipt of money or property.” 31 U.S.C.

§ 3729(b)(4). “The materiality standard is demanding.” United States ex rel.

                                          9                                   22-16571
Campie v. Gilead Scis., Inc., 862 F.3d 890, 905 (9th Cir. 2017) (quoting Universal

Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 194 (2016)).

“[R]egulatory, and contractual requirements are not automatically material, even if

they are labeled conditions of payment.” Escobar, 579 U.S. at 191. See also Rose,

909 F.3d at 1019. Instead, “materiality ‘look[s] to the effect on the likely or actual

behavior of the recipient of the alleged misrepresentation.’” Escobar, 579 U.S. at

193 (alteration in original). Because Stenson failed to plead falsity on his FDA-

approval and misleading-billing-code theories, we only consider whether he has

sufficiently pleaded materiality as to his “reasonable and necessary” argument. We

determine he has.

      Compliance with the “reasonable and necessary” requirement is an essential

part of the government’s decision to reimburse Radiology Limited’s claims––

indeed, as Stenson notes, “by statute, CMS cannot pay a claim that violates it.” See

Dkt. 14 at 48 (quoting 42 U.S.C. § 1395y(a)(1)(A) (“[N]o payment may be made

under part A or part B for any expenses incurred for items or services . . . which, . . .

are not reasonable and necessary for the diagnosis or treatment of illness or injury”)).

Nevertheless, without more, mere violations of the requirement are not necessarily

material under the FCA. Under the Supreme Court’s guidance in Escobar, we must

also consider CMS’s actual or likely response to Radiology Limited’s claims for

diagnostic readings had it known the readings were conducted on the Dell Monitors.

                                           10                                    22-16571
579 U.S. at 195 (explaining that materiality is not a bright-line rule and providing

non-dispositive examples of evidence that might support materiality, such as proof

the government routinely refuses to pay claims for the alleged violations.).

      If the Dell Monitors are as inadequate as Stenson alleges, it seems likely that

CMS would deny Radiology Limited’s claims for at least some diagnostic readings.

In the context of radiological diagnostic readings, the display technology used is “so

central” to the medical service provided that conducting a reading on wholly

inadequate technology is effectively the same as not providing the service at all.

Winter, 953 F.3d at 1121 (“For a false statement to be material, a plaintiff must

plausibly allege that the statutory violations are ‘so central’ to the claims that the

government ‘would not have paid these claims had it known of these violations.’”).

Given that CMS routinely declines to reimburse medical providers for services they

did not actually administer or administered below a federally prescribed quality of

care, we are persuaded that the FAC sufficiently pleads materiality at this stage of

litigation. See, e.g., United States v. Mackby, 261 F.3d 821, 827 (9th Cir. 2001)

(declining to reimburse claims for services administered without required physician

supervision); United States ex rel. Ormsby v. Sutter Health, 444 F. Supp. 3d 1010,

1085–86 (N.D. Cal. 2020) (providers’ use of false diagnostic billing codes was

“material” where the codes were the only factor CMS used to determine the amount

of a beneficiary’s Medicare Advantage payments); Winter, 953 F.3d at 1112

                                         11                                    22-16571
(physician’s false certifications concerning the medical necessity of patients’

hospitalizations were material to CMS’s decision to reimburse underlying claims).

       In sum, we affirm the district court’s dismissal of the FAC to the extent that

it alleges that the Dell Monitors lack required FDA approval. However, we reverse

its findings regarding the general Medicare statute’s “reasonable and necessary”

requirement.     Although Stenson did not raise his argument concerning the

misleading billing codes to the district court, he has not presented a viable theory of

that claim on appeal. Thus, although this theory fails for the same reason as

Stenson’s FDA-approval theory, dismissal with prejudice would not be similarly

proper.

       II.     Motion for Leave to Amend

       Finally, we consider the district court’s refusal to allow Stenson to amend the

FAC.      We review decisions regarding amendment for abuse of discretion but

consider the futility of amendment de novo. Carvalho v. Equifax Info. Servs., LLC,

629 F.3d 876, 893 (9th Cir. 2010); Foman v. Davis, 371 U.S. 178, 182 (1962) (leave

to amend should be freely given in the absence of undue delay, bad faith, repeated

failure to cure deficiencies, prejudice, or futility).

       The district court’s futility determination was proper to the extent that Stenson

alleged Radiology Limited violated the FCA by falsely certifying its compliance

                                            12                                  22-16571
with FDA regulations. However, Stenson’s other theories are either sufficiently

pleaded or might be established upon the pleading of additional facts.

      Thus, we affirm the district court’s denial of the motion for leave to amend in

part and reverse in part. On remand, the district court should grant Stenson leave

to amend the FAC to the extent that he wishes to proceed on grounds other than his

FDA-approval theory.

      AFFIRMED in part and REVERSED in part. Each party shall bear

their own costs on appeal.

                                        13                                    22-16571
                                                                            FILED
                                                                            APR 26 2024
United States ex rel. Stenson v. Radiology Ltd. LLC, No. 22-16571        MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

COLLINS, Circuit Judge, concurring in the judgment in part and dissenting in part:

      To plead a claim under the False Claims Act (“FCA”) with the particularly

required by Federal Rule of Civil Procedure 9(b), a relator must plead, inter alia,

“particular details of a scheme to submit false claims paired with reliable indicia

that lead to a strong inference that claims were actually submitted.” Godecke v.

Kinetic Concepts, Inc., 937 F.3d 1201, 1209 (9th Cir. 2019) (citation omitted). The

district court here concluded that relator Eric Stenson failed to plead sufficient

facts to establish that Defendant Radiology Ltd., LLC (“Radiology”), by using

monitors not approved by the Food and Drug Administration (“FDA”) in

performing radiological services, thereby submitted false claims for reimbursement

for such services under the Medicare program. The court also concluded that

further amendment would be futile, and it therefore dismissed the complaint with

prejudice. I agree that the operative complaint is inadequate, but I believe that the

district court erred in declining to allow a further attempt at amendment. I

therefore would affirm the dismissal of the operative complaint, but I would

reverse the denial of leave to amend. Because the majority instead finds the

current complaint to be adequate, I respectfully dissent in part.

      I agree with the majority that Stenson’s FCA claims fail as a matter of law to

the extent that they rest on the theory that Radiology allegedly falsely certified
compliance with the Federal Food, Drug, and Cosmetic Act (“FDCA”) and the

regulations promulgated under that Act by the FDA. Stenson has not identified

any provision of law that required Radiology, as a condition of payment under

Medicare, to certify that it, as a user of the challenged monitors, had itself

complied with the provisions of the FDCA or with FDA regulations.

      The question, instead, is whether Stenson adequately pleaded that Radiology

falsely certified that radiology services that were performed using such unapproved

monitors were eligible for reimbursement under the Medicare Act and the

implementing regulations issued by the Centers for Medicare and Medicaid

Services (“CMS”). Because Stenson has not pointed to any CMS regulation that

specifically addresses the quality of monitors that are used for the particular

radiological services at issue here, Stenson must rely on the more general

specification in § 1862(a)(1)(A) of the Medicare Act that CMS will not reimburse

any service that is not “reasonable and necessary.” 42 U.S.C. § 1395y(a)(1)(A).

Because Stenson’s complaint made no effort to identify any particular claims that it

alleged to be false, it instead had to plead sufficient facts concerning the general

practices of Radiology to support a “strong inference” that a particular type of false

claim was “actually submitted.” Godecke, 937 F.3d at 1209. Stenson’s complaint

failed to do so.

                                           2
      Stenson argues that CMS regulations categorically establish that radiology

services that use non-FDA-approved monitors are not “reasonable and necessary,”

but that is wrong. Stenson relies on the CMS regulation providing that “Medicare

payment is not made for medical and hospital services that are related to the use of

a device that is not covered because CMS determines the device is not ‘reasonable’

and ‘necessary’ under section 1862(a)(1)(A) of the Act or because it is excluded

from coverage for other reasons.” 42 C.F.R. § 405.207(a). To show that this

regulation bars all claims for radiology services using non-FDA-approved

monitors, Stenson could point to an across-the-board determination by CMS that

such monitors are “noncovered device[s]” in that either CMS has determined that

they are not “reasonable and necessary” or CMS has “excluded [them] from

coverage for other reasons.” Id.; cf. also Int’l Rehab. Servs. v. Sebelius, 688 F.3d

994, 998–999 (2012) (reviewing categorical determination by the Medicare

Appeals Council that a particular device was not “reasonable and necessary” for

treatment). Stenson has not identified any such CMS determination that would

support this claim. Although the complaint alleges that CMS “require[s] that

medical diagnostic displays be used by” Radiology, the only support provided for

this legal assertion is a citation of an article published by the Society for Imaging

Informatics in Medicine that summarizes best practices in accordance with

standards established by the National Electrical Manufacturers Association and the

                                           3
American Association of Physicians in Medicine. As the district court correctly

noted, “[t]his article is not derived from a governmental agency,” and therefore has

no independent legally binding force. Nor does the article support a plausible

inference that, as a factual matter, FDA-approved monitors are required in order to

actually provide reasonable and necessary services. On the contrary, as the district

court observed, the article expressly states that its recommendations concerning

monitors do “not imply” that a monitor used for radiology services “has to be an

FDA-listed display product in every instance.”

      Nor has Stenson otherwise pleaded sufficient facts to establish that, as a

factual matter, services using such monitors must be classified as not “reasonable

and necessary.” In reaching a contrary conclusion, the majority relies on three

facts alleged in the complaint, but even taken together, these allegations are

insufficient to plausibly support such an inference.

      First, the complaint alleges that the particular type of software that

Radiology uses with its Dell monitors is not the one that the FDA has specifically

cleared for use on such monitors under § 510(k) of the FDCA. But nothing in the

complaint provides any basis for inferring that, even without FDA clearance, the

different software program that Radiology uses is not of sufficient quality that

radiology services performed using it can still be deemed “reasonable and

necessary.”

                                          4
      Second, the complaint alleges that, in 2018, the Arizona Medical Board

issued an “Advisory Letter” to a Radiology doctor “for failing to identify a 6mm

calculus near the ureteropelvic junction of the left kidney on a CT scan,” but that

says nothing about whether the error in that particular case was even due to the

quality of the monitors used. Indeed, the complaint concedes that Stenson has “no

knowledge as to how many patients’ diagnoses were incorrect or incomplete as a

result of Defendant using Dell Non-Diagnostic Monitors as opposed to FDA-

approved diagnostic-grade monitors.”

      Third, the complaint states that Stenson himself put together a test scenario

in which he asked a non-Radiology radiologist to examine, on a “non-diagnostic

monitor setup,” a “CT study” that, unbeknownst to the doctor, contained a known

cancer mass, and that the doctor was unable to detect the mass. The complaint,

however, wholly fails to plead any facts that would tie this example to Radiology’s

situation. In particular, there is no basis for plausibly inferring that the setup that

Stenson contrived matches the conditions that Radiology uses or that Radiology

would have used that particular setup under those circumstances.

      Accordingly, the complaint does not plead any facts that would support a

plausible inference that the monitors that Radiology uses are so inadequate that

Radiology’s use of them must have led to the submission of false claims. The

complaint’s allegations about Radiology’s practices are simply too vague, and its

                                            5
proffered inferences too speculative, to raise a “strong inference” that false claims

of a particular type “were actually submitted.” Godecke, 937 F.3d at 1209. The

operative complaint was therefore properly dismissed.1

      In denying leave to amend, the district court relied dispositively on the view

that the complaint’s viability “turn[ed] on the incorrect legal conclusion that

radiologists must use a particular type of monitor to read general radiological

images” and that, as a result, Stenson “cannot allege any additional facts that could

save his complaint.” This reasoning was flawed. Although the district court was

correct in concluding that Stenson failed to identify any law or regulation that

specifically required the use of an FDA-approved monitor as a legal matter,

Stenson could also attempt to rely on the alternative theory that, as a factual matter,

the monitors used by Radiology were so deficient for the particular purposes for

which they were used that the services performed using them were not “reasonable

and necessary” within the meaning of the Medicare Act. Accordingly, I would

reverse the district court’s denial of leave to amend.

      For these reasons, I concur in the judgment in part and dissent in part.

1
  I decline to address Stenson’s theory that Radiology’s “claims were misleading
because the billing codes [Radiology] used falsely implied that approved medical-
grade displays were used in providing the services.” This theory was not pleaded
in the operative complaint, nor was it addressed in the district court’s order.

                                          6