Full opinion text
ORDER PARTIALLY GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING THE UNITED STATES’S MOTION FOR PARTIAL SUMMARY JUDGMENT MEANS, District Judge. Pending before the Court are two motions: (1) defendants’ Motion for Summary Judgment [doc. #277-1], filed November 15, 2002; and (2) plaintiff United States of America (“United States”)’s Motion for Partial Summary Judgment [doc. # 272-1], filed November 18. Having carefully considered the motions, responses, replies, and supplemental information, the Court concludes that the United States’s motion should be DENIED and the defendants’ motion should be PARTIALLY GRANTED. I. RELEVANT BACKGROUND On February 17, 1998, relators Ramon B. Carter and Michael Stockham filed a qui tam suit against the defendants in the United States District Court for the District of New Mexico, alleging violations of the False Claims Act, 31 U.S.C. § 3729 et seq. (“the relators’ suit”). Specifically, the relators claimed that between 1994 and 1996 the defendants knowingly over-billed the Medicare program for an anti-bedsore device known as the ROHO Mattress Overlay. On June 5, 2000, the United States filed a complaint in this Court, which was given the style and number set out above, alleging various claims against the defendants, including claims for common-law unjust enrichment and payment by mistake. Thereafter, on February 23, 2001, the United States District Court for the District of New Mexico transferred the rela-tors’ suit to this Court. In an order dated April 11, this Court consolidated the rela-tors’ suit with the suit filed by the United States. Thereafter, on August 18, 2002, the Court granted the United States’s motion to intervene into the relators’ suit. The defendants, in their motion, seek summary judgment on all claims against them. The United States, in its motion, seeks summary judgment only on its claims for common-law payment by mistake and partnership liability. A. Overview of the Medicare Program Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395ggg, establishes the Health Insurance for the Aged and Disabled Program, which is commonly known as “the Medicare program” or, just “Medicare.” Medicare is administered by the Secretary of the United States Department of Health and Human Services (“the HHS”) through the Health Care Financing Administration (“the HCFA”). Medicare is comprised of two parts, Part A, which is not at issue in this case, and Part B, which provides federal government funds to help pay for, among other things, certain durable medical equipment (“DME”) and supplies for Medicare beneficiaries. Part B is funded by the United States and by insurance premiums that are paid by enrolled Medicare beneficiaries. Eligible individuals who are age 65 or older or disabled may enroll in Part B to obtain benefits in return for payments of monthly premiums. The United States provides reimbursement for Medicare claims through the HCFA. The HCFA, in turn, contracts with private insurance carriers to administer, process, and pay Part B claims from the Federal Supplementary Medical Insurance Trust Fund. In this capacity, the carriers act on behalf of HCFA. Prior to 1993-94, nearly three dozen different local Medicare carriers had the responsibility for processing DME reimbursement claims. As a result of this multiplicity of carriers, significant disparities developed over time between the various carriers’ medical policies and coverage criteria for particular DME items. In 1993, the HCFA, in an effort to promote greater uniformity and consistency in DME reimbursement, consolidated the responsibilities for DME reimbursement into four regional carriers, called the Durable Medical Equipment Regional Carriers (“the DMERCs”). In addition to creating the four DMERCs, the HCFA also established the Statistical Durable Medical Equipment Regional Carrier (“the SAD-MERC”) to assist the DMERCs. The SADMERC’s function was to coordinate the coding decisions by the four DMERCs to ensure that they were consistent across the country. The Medicare Region C DMERC was Blue Cross/Blue Shield of South Carolina, which does business under the name of Palmetto Government Benefits Administrators (“Palmetto”). In addition, HCFA awarded Palmetto the contract to act as the SADMERC for all four DMERC regions. The contract between HCFA and Palmetto, which was effective January 1, 1993, stated: “The SADMERC shall perform the following tasks: ... Operate a [Health Care Procedure Coding System (“HCPCS”) Hotline] ... to provide [Durable Medical Equipment, Prosthetics, Orthotics, and Supplies] coding advice (as agreed upon by all 4 DMERCs). The SADMERC will provide coding guidance to ... suppliers ... and all other callers during the year. The SADMERC will develop coding advice in conjunction with all the 3 other DMERCs. All coding guidance must be reflective of all the DMERCs. If necessary, request supporting documentation and consult the medical director’s work-group. For example, if a supplier calls to ask how a given device should be coded, the SADMERC must contact the other 3 DMERCs and reach consensus (if possible) on how the item should be coded. The SADMERC must then provide this coding advice to the supplier. In those rare instances where the DMERCs are unable to reach consensus, the SADMERC must inform the supplier how to code in each region.” (Pis.’ App. at 641 — 43.) In addition, in its September 1993 Supplier’s Manual, Palmetto stated: Palmetto Government Benefits Administrators has implemented a Total Quality Environment (TQE) team approach to its claims processing and customer service areas. Medicare receives inquiries through telephone calls, -written correspondence and personal interviews. Dedicated Work Teams have been developed to handle claims from start to finish, including all of the various types of pre-payment and post-payment inquiries. Teams provide productive and satisfying ways to manage work. Processing a claim involves much more than making coverage determination, data entry and pricing. It also includes determining if other insurance is involved, answering telephone and written inquiries, processing adjustments, appeals, overpayments, as well as initiating medical reviews. Our dedicated work teams have been developed to complete all of these tasks. What does this mean to you, the supplier? When you need to communicate with Palmetto GBA you will contact the team assigned to you. This puts you in contact with the team that is familiar with your Medicare billing needs. This team concept fosters communication and a more direct relationship between suppliers and the DMERC, promoting a higher quality of service to you. You have the opportunity as a supplier to get to know the individuals who have taken responsibility for your claims and inquiries. All incoming calls from beneficiaries and suppliers are handled by the Dedicated Work Teams. The team members answer coverage questions and specific questions regarding claim disposition. ... Our team members can help you with coding and billing questions, allowed charge amounts, and medical coverage criteria. (Region C DMERC Supplier Manual at 9.1 (emphasis added); Defs.’ App. at 111, 114.) In order for a DME supplier to obtain reimbursement, the supplier must comply with certain statutes, regulations, and guidelines. A DME supplier has a duty to familiarize itself with these statutes, regulations, and guidelines. In addition, a DME supplier must meet certain obligations, including not making false statements or misrepresentations of material facts, to receive payment from HCFA. In order to obtain reimbursement, a DME supplier is required to provide certain information to HCFA on a form called the HCFA 1500 form. This form, in box 24d, requires a DME supplier to identify its products using a coding system known as the Healthcare (formerly HCFA) Common Procedure Coding System (HCPCS) for DME products. B. HCPCS Codes HCPCS is a national coding system used by Medicare and private insurers. Because of the large number of DME products reimbursed by Medicare, HCFA created the HCPCS as a shorthand way of communicating to the carrier what item or service has been furnished to the Medicare beneficiary. The purpose of the HCPCS codes is to put structurally and functionally similar products together into categories, and products are assigned to codes based upon their characteristics. The HCPCS is maintained by a panel, known as the HCPCS Alpha-Numeric Editorial Panel (“the HCPCS Panel”), that decides whether a new code should be created for a type of DME product or whether a DME product fits within an existing code. The HCPCS Panel is made up of representatives from HCFA, the Blue Cross and Blue Shield Association, and the Health Insurance Association of America. Within HCFA, a group known as the Alpha-Numeric Workgroup formulates HCFA’s policies regarding HCPCS codes and makes coding recommendations to the HCPCS Panel. Each HCPCS code used to identify rented DME is assigned a monthly reimbursement amount, also called an allowable or a fee schedule amount, on a state-by-state basis. Each HCPCS code for a DME has a descriptor that describes a category of DME products. DME products with characteristics matching a HCPCS code descriptor are billed to Medicare under that code. DME products with characteristics that do not match the descriptor of a specific HCPCS code are billed using code E1399, which has a descriptor that states “DME, Miscellaneous, not elsewhere classified.” The amount of reimbursement for DME coded E1399 is based upon the carrier’s or the DMERC’s analysis of the specific product. C. Medica-Rents and the HCPCS Codes Defendant Medica-Rents is a family-owned partnership headquartered in Fort Worth, Texas, that has been engaged in the business of renting DME to hospitals, nursing homes, and individual patients since 1966. The other defendants are either general or limited partners of Medi-ca-Rents. From 1991 through 1996, Medica-Rents rented a support surface known as the ROHO Mattress Overlay to Medicare beneficiaries. The ROHO Mattress Overlay is a non-powered, mattress overlay flotation-therapy device that is placed on top of a standard hospital mattress to aid in the prevention and healing of pressure ulcers or bed sores. In 1991 and 1992, ROHO, Inc. applied with the HCFA for a new HCPCS code for the ROHO Mattress Overlay because ROHO, Inc. believed that there was no existing HCPCS code that applied to the product. In its May 9, 1991, application, ROHO, Inc. submitted twelve pages of detailed information on the ROHO Mattress Overlay. In December 1992, the HCFA initially declined to recommend a new code for the ROHO Mattress Overlay, suggesting that it was already adequately described by code E0197 (“air pressure pad for mattress”). (Pis.’ App. at 449.) In his deposition, Jonathan McCausland, the administrative manager for Crown Therapeuties/ROHO, Inc. and the former committee chairman of the Health Industry Manufacturers Associations’s Support Surface Task Force, testified that ROHO, Inc. was also “advised that the opinion of the [HCPCS Panel] was that it was an opinion, and that [ROHO, Inc.] could — that the local carriers had full right and authority to make their own determinations based on their particular observations or decisions.” (McCausland Dep.; Defs.’ App. at 470.) In addition, because code E0197 applied to a simple mattress product and paid a very minimal reimbursement rate, ROHO, Inc., in a letter dated February 20, 1992, protested and appealed the HCFA’s determination. (Pis.’ App. at 450-55.) In April 1992, Medica-Rents sent a letter, apparently to various Medicare carriers, emphasizing the benefits of the ROHO Mattress Overlay and requesting the creation of a new HCPCS code for the overlay. (Pis.’ App. at 457-60.) Medica-Rents believed that the characteristics of the ROHO Mattress Overlay did not match the descriptor of any existing HCPCS billing code. (Pis.’ App. to Resp. at 514-16; 578.) In July 1992, Charles Spalding of the HCFA sent a note to Charles R. Booth that stated: ROHO, Inc. submitted a request for the addition of a level II (alpha-numeric) HCPCS code for its “dry flotation mattress system.” On July 14, 1992, the HCPCS Alpha-Numeric Editorial Panel determined that a HCPCS code already exists that describes this item. The Panel initially believed, because of the presence of the words “dry” and “mattress” in the product name, that this item should be coded as an E0184 (dry pressure mattress). However, after further discussion and review of the information submitted by ROHO, the Panel was undecided as to whether this item should be coded as a pressure mattress or a pressure pad for mattress (mattress overlay). It was also unclear as to whether this item should be coded as a dry pressure device or an air pressure device. As a result, the Panel decided to postpone a final decision on this code request pending the outcome of a meeting (OCEP has tentatively scheduled the meeting for August 11) with ROHO to look at the item. Subsequently, a decision will be made as to the correct code to use in classifying this item. We are not aware of any adjustment in payment for E0184 or any other pressure mattress code.... The upshot of all this is HCFA will probably consider this device to be an air pressure pad for overlay on a mattress (E0197), we will pay $166 for purchase in 1993 and ROHO will still want a new code and $4,000. (Pis.’ App. at 480 (emphasis added).) After attending a complete demonstration of the ROHO Mattress Overlay and reviewing ROHO, Inc.’s application, HCFA’s Alpha-Numeric Workgroup agreed with ROHO, Inc.’s request for the ROHO Mattress Overlay to remain unclassified and billed under code E1399. (Pis.’ App. to Mot. for Partial Summ. J. (“Pis.’ App.”) at 217-19.) Before December 1993 (and prior to the consolidation of DME-reimbursement responsibility into the four regional DMERCs), Medica-Rents submitted claims for reimbursement for the ROHO Mattress Overlay to several carriers, including Blue Cross/Blue Shield of Texas. Beginning in December 1993, Medica-Rents submitted claims for reimbursement under part B of the Medicare program to Palmetto Government Benefits Administrators (“Palmetto”), the Medicare Region C DMERC. 1. The ROHO Mattress System and Code E1399 Code E1399 is a miscellaneous HCPCS billing code that is used for a wide variety of medical products. According to Laura Godfrey, manager of the HCPCS unit at SADMERC from 1993 to 1997, claims coded E1399 were administratively difficult for the carriers to process because every claim submitted had to be individually reviewed instead of processed electronically. (Godfrey Dep.; Defs.’ App. at 195-96.) The claims-processing problems associated with code E1399 appeared to be even more difficult when used with the ROHO Mattress Overlay because it was a capped-rental item and E1399 was not a capped-rental code. (Sherietta Thompson Dep.; Defs.’ App. at 915; Godfrey Dep.; Defs.’ App. at 198.) In other words, if code E1399 were used in billing for a capped-rental product like the ROHO Mattress Overlay, the carrier had to determine the appropriate reimbursement rate and manually track the number of months that payments had previously been made. (Godfrey Dep.; Defs.’ App. at 198.) 2. The ROHO Mattress Overlay and Code E0277 In November 1991, the HCPCS Panel approved a new capped-rental code, E0277, that had a descriptor of “Alternating Pressure Mattress” and became effec-five in January 1992. (Kaiser Dep.; Defs.’ App. at 304, 334-42; Pis.’ App. at 448.) According to 21 C.F.R. § 880.5550 (2002), an “alternating pressure air flotation mattress is a device intended for medical purposes that consists of a mattress with multiple air cells that can be filled and emptied in an alternating pattern by an associated control unit to provide regular, frequent, and automatic changes in the distribution of body pressure.” The device is used to prevent and treat decubitus ulcers (bed sores). According to the plaintiffs, in order to qualify as an alternating pressure mattress a product must be; (1) powered and (2) a mattress. (Pis.’ Mot. for Partial Summ. J. (“Pis.’ Mot.”) at 11-12.) In early 1992, HCFA discovered that some carriers were mistakenly billing under code E0277 for non-powered overlay products. (Pis.’ App. to Resp. at 259-63.) In an effort to correct this error, Charles Spalding of the HCFA, sent out a letter, dated April 24, to the “RO DME Contacts.” The letter referred to several products that could be billed under code E0277. (Pis.’ App. to Resp. at 261.) The HCFA mistakenly included a low-air-loss mattress-system product in the list, even though it was not technically an alternating-pressure system. (Pis.’ App. to Resp. at 261.) However, because they are similar products and both are powered, the HCFA ultimately decided to allow both types of products to be billed under E0277. (Pis.’ App. to Resp. at 261.) Section 15.40 of the July 1995 DMERC Region C Suppliers’ Manual, which referred to several HCPCS codes relating to alternating pressure-pads or mattresses, including E0277, stated: “The alternating pressure pad fits on the existing mattress and adjusts automatically to changes in a patient’s weight distribution.” (Defs.’ App. at 508.) Palmetto’s September 1995 and April 1996 DMERC Medicare Advisory to its suppliers continued to describe code E0277 as an “alternating pressure mattress.” (Defs.’ App. at 67, 466.) Effective January 1, 1998, the descriptor for code E0277 was apparently revised to “Powered Pressure-Reducing Air Mattress.” (Defs.’ App. at 728.) 3. Mediea-Rents and the Local Carriers in 1992-93 In accordance with HCFA’s instructions in 1992 that ROHO and its suppliers could approach individual carriers to seek authorization to use some code other than E0197 in submitting claims for the ROHO Mattress Overlay, ROHO, Inc. and Medi-ca-Rents contacted a number of local carriers in 1992 to determine whether they would approve the use of another billing code, such as E1399 or E0277. Theses inquiries produced a wide variety of responses. For example, Pittman received a letter dated June 1, 1992, from Connecticut General Life Insurance Company, the Medicare provider in Tennessee, that stated, “After much research and investigation of other carriers, we have concluded that your item would be code[d] E0197, Air Pressure Pad for a Mattress.” (Defs.’ App. at 461.) Furthermore, in a letter written on August 2, 1993, to Paul Metz-ger, DMERC Medical Director of Region A, Robert Graebe, president of ROHO, Inc. stated that “[cjurrently the ROHO Mattress System is being reimbursed by the Kentucky Medicare under code E0277, at approximately $603.66 per month. It was the decision of representatives of the Kentucky carrier, after evaluation of the product, that the ROHO Mattress System was the therapeutic equivalent to other products within that category and that it did qualify for reimbursement under the code.” (Defs.’ App. at 518.) In addition, the Florida carrier advised Medica-Rents to use code E0184, Blue Cross/Blue Shield of Arkansas advised Medica-Rents to use code E0190, Blue Cross/ Blue Shield of'Alabama advised Medica-Rents to use code E0197 in June 1992; Louisiana Medicare Services initially used E1399 and later authorized billing under E0277 in October 1993. In addition, during the 1992-through-1993 period, there appears to have been widespread uncertainty throughout the industry over what products fell within the new E0277 code. (Defs.’ App. at 243, 318-27.) In his deposition, Kaiser, of the HCFA, admitted that “there was confusion within HCFA and among the DMERCs over what types of support surfaces could be coded under E0277 in the 1993 to 1995 time period.” (Defs.’ App. at 316.) However, Kaiser also testified that the HCPCS panel never determined that E0277 was the correct code to use for the ROHO Mattress Overlay. (Defs.’ App. at 316.) Furthermore, in June 1994, the HCFA stated in response to a support-surface manufacturer’s inquiry that it was unable to provide a definition for code E0277 and that the DMERC medical directors were attempting to establish a new medical policy for support surfaces that would better define this code. (Defs.’ App. at 222-23.) Furthermore, other manufacturers of support-surface products expressed concerns over what products could be coded E0277 and the inconsistent changes in the use of code E0277 that were occurring. (Defs.’ App. at 225-26; 975-77.) In late 1995, the HCFA established a new descriptor and definition for code E0277, “Powered Pressure-Reducing Air Mattress,” which became effective on January 1, 1996. (Defs.’ App. at 67-68; 462-67; see also Defs.’ App. at 728.) The plaintiffs claim that “[s]ince 1992, Walsh and former Medica-Rents general manager Dennis Dees knew that code E0277 did not apply to the ROHO Mattress Overlay, and that the correct code for Medicare claims for the ROHO Mattress Overlay until April 1996 was code E1399.” (Pis.’ Resp. at 4.) To support this position, the plaintiffs rely on the deposition testimony of Shirley McAdoo, Robert Pittman, and David Senseman. The plaintiffs also allege that Walsh attempted to hide this knowledge during discovery. (Pis.’ Resp. at 4.) D. Medica-Rents’s Billings Under Code E0277 1. Winter 1993-94: Medica-Rents Begins to Submit Claims Under E0277 In October 1993, Medica-Rents received five separate letters from the Louisiana carrier (prior to the DMERC’s consolidation) in connection with claims submitted for various Medicare beneficiaries stating: We have found more can be allowed on the services. More is being allowed because more data was received. You will receive an explanation of medicare benefits/remittance advice soon. The procedure code for this service, E1399 and E0192, was changed to code E0277, in order to allow payment. (Defs.’ App. at 168; 800-821.) In her deposition, Mary Edwards, R.N., the Medical Review Manager for Louisiana Medicare Services, testified that she made the decision to changes these claims submitted under E1399 to E0277. (Defs.’ App. at 163.) She testified that the decision to make this change was not initiated by Medica-Rents and that she made her decision “[ujsing what [she] had at hand in the way that [her] desk procedures were written for miscellaneous codes and for the information attached to the claims that [she] actually sought review, the information that [Medica-Rents] submitted gave [her] a clear idea of what they were billing for.” (Defs.’ App. at 163.) After receiving these letters, Karen Mayes, Medica-Rents’s assistant office manager, claims that she contacted Louisiana Medicare to verify that it was appropriate for them to use code E0277 on future claims. (Mayes Dep., Defs.’ App. at 356, 358-62, 377.) She testified that she spoke with a man who identified himself as a member of the team assisting with the transition to the Palmetto DMERC, and that he told her to use code E0277 when submitting claims for the ROHO Mattress Overlay. (Mayes Dep., Defs.’ App. at 356, 358-66.) Mayes testified that she spoke with him on at least two occasions to verify this information and thinks “that at some point [she] actually faxed him information to be sure that he was referring to the same product.” (Mayes Dep., Defs.’ App. at 356-66, 372-73.) Upon receiving this confirmation, Mayes contacted the local carrier in Texas, Blue Cross/Blue Shield of Texas, to inquire if Medica-Rents could use code E0277 for billing purposes when filing claims with them in Texas pending transition to Region C DMERC. (Mayes Dep., Defs.’ App. at 361, 388.) Mayes testified that Debbie Medford of Blue Cross/Blue Shield of Texas informed her that Medica-Rents could not use code E0277 in Texas. (Mayes Dep., Defs.’ App. at 361; Craig Dep., Defs.’ App. at 20-21.) Furthermore, Craig testified that the local carrier in Tennessee also informed Medica-Rents that they could not file under code E0277 for the ROHO Mattress Overlay. (Craig Dep., Defs.’ App. at 21.) In several calls with Palmetto on various topics following the January 1994 transition, Mayes informed Palmetto’s employee representatives that she had previously been instructed by the local carrier in Louisiana to use code E0277 in billing for the ROHO Mattress Overlay. (Mayes Dep., Defs.’ App. at 374-76.) Craig, who also called Palmetto during January 1994, claims that Palmetto advised both her and Mayes that Medica-Rents should continue to use code E0277 when billing for the ROHO Mattress Overlay. (Craig Dep., Defs.’ App. at 22-24, 27-29.) Medica-Rents also had obtained information from Crown Therapeutics, ROHO’s supplier subsidiary in Kentucky, that Palmetto had instructed Crown Therapeutics to continue to use code E0277 when submitting claims for the ROHO Mattress Overlay. (Defs.’ App. at 486-506). In addition, on December 7, 1993, Debra Harrington, a former SADMERC helpline representative and HCPCS reviewer, wrote a letter to Rabson Medical Sales, LTD that stated: This is in response to our recent telephone conversation regarding the correct HCPCS code for the Jay Fluid Mattress. The product information on this product has been received and reviewed. As I explained to you on the telephone, the Medical Directors of the four DMERCs (Durable Medical Equipment Regional Carrier) are currently reviewing the policy for mattresses and overlays. The resulting decisions, from this review, will be released to all suppliers by the DMERCs as soon as possible after the review is complete. The correct code to use at this time remains E0277. Should the Medical Directors determine that another existing code or a new code is more appropriate, the information will be passed along to suppliers and providers by the DMERCs. (Defs.’ Supplemental App. at 1.) In May 1994, relator Ramon Carter, who was working as a consultant for Medi-ca-Rents, allegedly called Dan Anderson for advice on what code to use when billing for the ROHO Mattress Overlay. (Defs.’ App. at 3-4.) Dan Anderson, who served on a Palmetto Advisory Committee contacted his acquaintance Cheryl Heller, the Texas Palmetto ombudsman. Anderson claims that Heller confirmed that E0277 was an appropriate code for billing for the ROHO Mattress Overlay. (Defs.’ App. at 3-6.) Heller, however, claims that she has no recollection of telling Anderson this and states that “any such advice would have been contrary to [her] understanding at the time.” (Pis.’ App. to Resp. at 662.) In August 1994, McCausland, the administrative manager for Crown Therapeutics/ROHO, had a conference call with Richard Walsh. McCausland, documenting his conversation with Walsh in a memorandum to Graebe, owner and a founder of ROHO, Inc., wrote: The key point of discussion regarded our letter to Dr. Tallón of June 7, 1994 where we attempted to outline how we felt the allowable for K0155 should be structured. In this letter we mentioned that a “Medicare allowable for K0155 of about $500.00 per month ... is appropriate for products in this code.” It is my understanding that Mr. Walsh opposes this position based on the following: It was his understanding that we were communicating the desire for an $840.00 allowable. He is currently billing and being reimbursed under E0277 at an allowable of approximately $683.00 per month. A consultant of his in San Antonio (who is apparently on the advisory board for Palmetto — DMERC Region C) has suggested that his current billings and payments have set a precedent and that an allowable of approximately $683.00 is quite possible unless the manufacturer should request less. As a result Mr. Walsh believes that we should send a follow-up letter to Dr. Tallón and the other DMERC’s “clarifying our position” and attempting to minimize the “$500.00 per month” references in previous correspondence with medicare. During our call I attempted to verbalize some other key points that I believe should be considered, however, these did not appear to carry any weight with Mr. Walsh. Those points are: With a suggested retail price of $5000.00 we have no support for requesting an allowable commensurate with current allowables for E0277 (i.e. $683.00 approx.) let alone $840.00 which represents our current standard rental price.... The current allowable for E0277 is an aberration and is certainly not based on the pricing structure for our product, or even low air loss overlays. When E0277 was originally created it was supposed to be designed for an alternating pressure mattress (i.e. Pegasus which has a retail price of $9600.00). Because the descriptor was vague it became subject to interpretation by local medicare carriers. Initially it was expanded to cover all powered mattress replacement systems (i.e. low air loss). Some carriers even extended it to other products that were therapeutically equivalent to the mattress replacement systems.... This therapeutic equivalence is how we gained approval from Medicare B in Kentucky to bill under E0277. Up to that point MedicaRents had never succeeded in getting approval to bill under E0277 from any of their local carriers. They utilized our success in Kentucky to gain approval in other states. The fact that we were given permission by some local carriers to bill under E0277 has no bearing on what we would be allowed to bill under via the DMERC’s. As the transition to the DMERCs started I contacted Frank White, Ombudsman for Region C and a personal friend, and Dr. Tallón to discuss the issue. We pointed out that since there was no existing code for the ROHO Mattress System we, and Medi-caRents, had contacted each local carrier to determine how we should bill our product. We explained that this had resulted in us billing under different codes in different states, and in some states prevented us from accepting assignment at all. The interim agreement that was reached allowed us to continue billing existing patients and accepting new patients under the code approved by the local carrier prior to conversion to the DMERC (i.e. E0277 in Kentucky, E1399 in Texas, etc.) In addition, we agreed that we would not expand our program to other states prior to the support surface policies being finalized .... While the current format in Region C has allowed us some “limited” access to E0277 it was never meant to be long term. In addition, Region C only represents 25% of the United States, the other three regions have not allowed any billing by us under E0277. The focus of our efforts must be national in scope. The current “interim” structure with Region C sets no precedent for national coverage or pricing. In fact, I have avoided pointing out that Region C has allowed us to do some billing under E0277 when communicating with HCFA or the other DMERCs for fear that pressure would be applied for them to discontinue the practice, or even worse, implement post payment audits. Since our conference call on the 29th I have had discussions with other employees of MedicaRents and have found out some additional information which may clarify Mr. Walsh’s position: MedicaRents is billing all their states under E0277 regardless of what they had billed under via the local carrier. This is contrary to our agreement with Region C. I know that MedicaRents has had many conversations with Region C since my initial discussions with Frank White, however, they have not informed us of any expansion to our original agreement. In addition, you may recall that Dennis Dees called me during the spring to discuss how the conversion of Texas to the DMERC should be handled because they were billing the local Texas carrier under E1399. He was concerned regarding billing the DMERC under E1399 as he was already billing them under E0277 in Tennessee and, I believe, Mississippi. We came to no decision, however, I agreed that billing under E1399, with the Texas allowables, would put our position at risk.... MedicaRents is taking assignment and billing under code E0277 for all patients with a single stage II ulcer located anywhere on the body. This is especially worrisome! As I mentioned earlier it is difficult to get medicare to change even when the mistake is obvious.... MedicaRents is not apparently billing for preventative patients, however, they are clearly taking advantage of an interim situation which allows for much more flexibility, and abuse, with regards to what patients qualify for coverage under E0277.... I am quite concerned that Mr. Walsh’s position is based on desires that are contradictory with our efforts to date and are directly tied to his expansion of billing under E0277 to all states he operates in and to all patients with any stage II decubitus. In our meetings with him in Dallas he stated that he would be satisfied with an allowable over $300.00 per month, now an allowable of $500.00 is not “asking for enough.” (Pis.’ Sealed App. to Resp. at 741-45.) 2. The 1994-95 Investigation of Medi-ca-Rents’ Billings In August 1994, Palmetto’s Program Integrity Unit, after receiving a complaint, began an investigation of Medica-Rents’s submission of claims for the ROHO Mattress System under code E0277. (Defs.’ App. at 345.) The investigation was headed by Peggy Walker and focused on Medi-ca-Rents’s raising of its actual charges following the transition to Palmetto as well as whether the ROHO Mattress Overlay was being properly billed under code E0277. (Defs.’ App. at 865-80.) In a letter dated December 29, 1994, Peggy Walker, as representative for Palmetto (the Region C DMERC), sent a letter to Medica-Rents stating: We selected you for review due to the irregularities in billing of the code E0277. Several beneficiary complaints have been received in regards to code E0277 product description versus the product that is in use in the home. Medicare needs to confirm what product you are providing under code E0277. (Defs.’ App. at 860.) Walker also requested that Medica-Rents send Palmetto specific information relating to the ROHO Mattress Overlay and indicated that she was performing an audit of the beneficiaries that Medica-Rents had served from September 1, 1994, to December 1, 1994. (Defs.’ App. at 860.) In a letter dated January 17, 1995, Craig, transmitting the information that Palmetto had requested, stated: Medica-Rents was instructed by your representative during the transition period in January 1994 to submit all ROHO Claims under E0277. It was our understanding that all ROHO Claims would be submitted under E0277 until the new revised support surface regulations were published. (Defs.’ App. at 563.) During the winter and spring of 1995, Palmetto’s Medical Review Department conducted a comprehensive investigation of Medica-Rents’s claims under E0277. In early February, each of Medica-Rents’s E0277 claims were diverted from normal claims processing by means of a computer edit, so that each claim could be individually examined by Palmetto’s Medical Review Department. (Defs.’ App. at 865-78.) In a letter dated February 21, 1995, to McCausland, administrative manager for Crown/ROHO, Inc., Deborah Geddings, the HCPCS coordinator for SADMERC, stated: I am writing to you about your coding request for the nonpowered Adjustable Zone Pressure-Reducing Air Mattress overlay. The Durable Medical Equipment Regional Carriers (DMERCs) have reviewed and decided HCPCS code E1399 — (not otherwise classified durable medical equipment) should be used for the billing of your product. You will need to give a complete description of this product when billing. However, once the Support Surfaces Medical policy is finalized, it may turn out that your product could fall under a new coding structure. All coverage and pricing concerns should be addressed directly to the individual DMERCS. (Defs.’ App. at 224.) Robert Smith, president of Crown Therapeutics, Inc. faxed this letter to Richard Walsh on March 1, 1995. (Defs.’ App. at 497-504.) After receiving the letter, Mayes testified that Medica-Rents called Palmetto in an attempt to clarify the billing situation. (Mayes Dep., Defs.’ App. at 879-80.) She claims that Medica-Rents was “told to proceed with the 0277.” (Mayes Dep., Defs.’ App. at 880.) On April 20, 1995, Mayes called Palmetto to determine why Medica-Rents’s claims submitted under code E0277 for the ROHO Mattress Overlay were not being paid. She spoke with Earline Jackson, an employee in Palmetto’s customer service department. Jackson informed Mayes that 0277 “wasn’t for the ROHO Mattress.” ' (Defs.’ App. at 121.) Jackson then told Mayes to call SADMERC to find out what code Medica-Rents should be using. Mayes called Shannon Ross of the SAD-MERC and was told that the ROHO Mattress Overlay should be billed under code E0197. (Defs.’ App. at 121.) On that same day, Medica-Rents also apparently received a “copy of a letter from SAD-MERC that ROHO was being placed in E1399.” (Defs.’ App. at 924.) On April 20 and 21, Medica-Rents apparently re-transmitted over 1700 open claims with the code E1399. (Defs.’ App. at 382-83, 924.) Also on April 21, Elaine Myers, the manager of professional relations at the Palmetto DMERC, informed Mayes that code E1399 could not be used for capped-rental items. In response, Mayes sent Myers a copy of the February 21, 1995, SADMERC letter that had instructed ROHO, Inc. to use E1399 for the ROHO Mattress Overlay. Palmetto began to deny many of the resubmitted claims. On April 27, Medica-Rents again called Palmetto to clarify the situation and discovered that Palmetto “customer service knew nothing about the 1399 code.” (Defs.’ App. at 925; see Defs.’ App. at 384-85, 924-25.) Throughout the rest of April and into June, Medica-Rents had various conversations with Myers and Sherietta Thompson, the Palmetto Ombudsman for Texas suppliers, in an attempt to get their unprocessed claims paid. (Defs.’ App. at 923-28.) Myers and Thompson informed Medica-Rents that they were working on correcting the errors in denying the claims and that Medi-ca-Rents would receive further denials before the situation could be corrected. (Defs.’ App. at 923-28.) In addition, Medi-ca-Rents discovered that Palmetto had changed the code for some of the claims to E0186, which Myers admitted was incorrect. (Defs.’ App. at 122-23, 173-74, 547, 926-29.) 3. Late Spring 1995: Use of Codes E0277 and 1399 On May 15, 1995, the National Coalition for Wound Care wrote a letter to the HCFA and the four DMERC medical directors that stated: The National Coalition for Wound Care (NCWC) is a multidisciplinary coalition of organizations and associations dedicated to preserving and effecting quality care for patients at risk for or suffering from wounds of the skin. Over the past two years, the NCWC has been working closely with HCFA and the DMERC Medical Directors during the development and review of regional medical policies for support surfaces.... We are writing to express our concern that these important policies, which were targeted to be released first in March and then in June, appear to have become less of a priority to HCFA and the DMERC. To be clear, the lack of policies is having a serious impact on the wound care community.... Next there is the existing problem with the DMERC medical policies that are currently in effect. Prior to the establishment of the DMERCs, a HCPCS code was created “E0277 — alternating pressure mattress,” which was intended for a specific product to address the needs of patients with multiple and/or advanced stage wounds. Unfortunately this HCPCS code, like many others, was interpreted in various ways by local carriers regarding what products qualify for reimbursement under the HCPCS code and what the patient coverage criteria should be. Within the proposed support surface policy is language which would clarify the products qualifying for reimbursement and the clinical conditions that are reimbursable under E0277. Since these draft policies have not been finalized, the situation under code E0277 remains confusing. To further add to the confusion, it appears that several DMERC offices and SADMERC have recently advised suppliers to submit claims for products that have been previously coded under E0277 into code E1399 (a miscellaneous code category). This is in direct conflict with written directives given by the Medicare operations branch in April, 1992 to all carriers. This written directive lists products that could be coded under E0277. No new written update to this product listing has occurred and this recategorization appears to be random and inconsistent.... (Defs.’ App. at 541-42.) The NCWC requested that the HCFA bring “clarity and consistency” to these DMERC policies by finalizing the draft support surfaces policy. (Defs.’ App. at 541-43.) Furthermore, in a letter dated May 18, 1995, which was sent to the medical directors of each of the four regional DMERCs, the Health Industry Manufacturers Association (“HIMA”) stated: The Health Industry Manufacturers Association (HIMA) would like to bring to your attention our members’ concerns about the appropriate coding of low air loss products.... Unfortunately, the lack of policy is having a severe impact on the wound care community. Over the past six months, there has been a change in verbal instructions from the SADMERC on the appropriate codes to use for the billing of low air loss products. Previously, local carriers had instructed providers and manufacturers to use E0277; however, we are now told that E1399 is the appropriate code to use. Historically, the E0277 code was used for the filing of claims for powered dynamic support systems other than integrated beds.... We have grave concerns over the dramatic shift in direction of coding these products. First of all, there is confusion and frustration on the part of both manufacturers and suppliers since there is not a verbal consensus by HCFA, the SADMERC or the DMERC staff on whether to use 1399 or E0277 to bill these products... (Defs.’ App. at 229-30; see Defs.’ App. at 200-02.) In its letter, the HIMA suggested, until the new support-surface policy was finalized, either allowing low-air-loss products to be coded under E0277 or assigning them a temporary code. (Defs.’ App. at 229-30.) On June 15, 1995, representatives of the SADMERC, the four DMERCs, and Nancy Schmidt of HCFA’s Dallas Regional Office held a conference call to discuss the problem of coding low-air-loss products under E0277. Laura Godfrey and Deborah Geddings, both involved with the HCPCS of SADMERC, wrote minutes from this meeting that stated: Support Surfaces — E0277 vs E1399— Per a morning conference call with the DMD’s and HCFA CO a decision was made to allow those mahufaeturers/sup-pliers who have been filing their low air loss product under E0277 to continue to do so. Secondly, those manufacturers/suppliers who have been told to file E1399 may begin using E0277 for new patients claims. The DMERCs will not accept requests for adjustments for previously filed claims under E1399 even if the claim was denied. Lastly, new inquiries should be told of the dilemma and advised they have a choice to file using either code. It is critical that staff at the DMERCs, HCFA and SADMERC follow this same script. (Defs.’ App. at 250.) On June 19, 1995, Debra Herrington of the SADMERC issued a memorandum instructing that low-air-loss-mattress and overlay products be coded using E0277 or E1399. (Defs.’ App. at 888.) This memorandum was sent by Godfrey to Robin Robertson, the director of the professional relations department of the DMERC. (Defs.’ App. at 207-08.) However, according to notes made by Mayes, she received a phone call from Geddings on June 23, in which Geddings stated that “E1399 code [was] still correct and valid until the new support surfaces policy comes out.” (Pis.’ App. to Resp. at 627.) 4. July 1995: The Palmetto DMERC Authorizes Medica-Rents to “Revert to Using Code E0277”: On July 11, 1995, a policies-and-procedures (“PAP”) meeting was held at the Palmetto DMERC to resolve some billing and claims-processing issues. At this meeting, the PAP committee decided that Medica-Rents should be allowed to use E0277 to bill for the ROHO Mattress Overlay until the new support-surface policy was finalized. (Defs.’ App. .at 551-56, 885-86; Pis.’ App. at 605-06.) Myers sent an email with a subject line titled “ear on medicarents (081988001)” to several people, including Peggy Walker, that stated: the ear on this supplier is still active, as we discussed in pap yesterday, Rodney’s team will be correcting claims and processing under e0277 but he can’t make the change or have the supplier switch to billing e0277 until the ear is deactivated, is it possible to have this done today as the supplier is waiting to transmit more claims. (Defs.’ App. at 889.) After being notified of this decision, Walker objected and reasserted her view that the ROHO Mattress Overlay should be coded under E1399, rather than E0277, because the ROHO mattress was not a low-air-loss product. (Defs.’ App. at 890-91, 930-32.) Walker sent several emails to SADMERC and DMERC managers describing the features of the ROHO Mattress Overlay and to various Palmetto managers disputing the use of E0277 for the ROHO mattress. (Defs.’ App. at 850-58, 893, 898.) Ultimately, Palmetto determined that Medica-Rents should be allowed to bill for the ROHO Mattress Overlay under code E0277. (Defs.’ App. at 550, 858-59.) In accordance with this decision, on July 17, Palmetto removed the computer edit that had diverted all of Medica-Rents’s claims to be processed by hand and began paying Medica-Rents’s claims under code E0277. (Defs.’ App. at 858, 959.) On July 18, Sherietta Thompson, the Palmetto ombudsman, sent a letter to Mediea-Rents’s general manager, Dennis Dees, that stated: As a result of this meeting, it has been determined by Palmetto Government Benefits Administrators in accordance with the SADMERC that the Low Air-loss Mattresses and Overlay products should be coded using HCPCS code E0277. Therefore, effective immediately you may revert to using code E0277 when billing for the nonpowered adjustable zone pressure-reducing air mattress overlay.... These instructions supersede any previous billing instructions provided by Palmetto GBA staff. When the Medical Policy for Support Surfaces is completed and released, you will receive further coding instructions for the above referenced products. (Defs.’ App. at 263-65.) However, according to Thompson, she did not know that Medica-Rents had received the February 21, 1995, letter from the SADMERC to ROHO, Inc. stating that the ROHO Mattress Overlay should be billed under code E1399 when she wrote this letter. (Pis.’ App. to Resp. at 507.) In addition, according to Schmidt, who was employed with HCFA, “[a]t no time, including from 1993 through 1996, has Palmetto had the discretion to instruct a supplier of a non-powered mattress overlay to bill Medicare using a HCPCS code for an alternating pressure mattress.” (Pis.’ App. to Resp. at 667.) In a letter to Medica-Rents dated August 4, Thompson of Palmetto further stated: Currently, you have been instructed to bill the nonpowered adjustable zone pressure-reducing air mattress overlay with HCPCS code “E0277” which requires a completed DMERC CMN 01.01 be sent with the claim. (Defs.’ App. at 662.) 5. Winter 1996: The Support Surfaces Policy is Adopted The DMERC’s Medical Policy for Support Surfaces was promulgated in late 1995, with an effective date of January 1, 1996. (Defs.’ App. at 312.) In a letter dated January 8 to ROHO, Inc., Godfrey wrote: This letter is to confirm that a new code is being established effective April, 1996. The new code description is: Nonpowered adjustable zone pressure-reducing air mattress overlay This code will be a Group 2 support surface with regards to DMERC policy. The code will be published and additional information will be provided in the March/April DMERC bulletins. The ROHO Dry Flotation Mattress System will be appropriately billed using this code. At this time, the product is appropriately billed using the miscellaneous code, E1399 — Durable Medical Equipment, Miscellaneous. Claims received on or after January 1, 1996 will be processed and reviewed according to the Pressure Reducing Support Surfaces-Group 2 policy recently published by the DMERCs. (Defs.’ App. at 273.) Code K0413, with a descriptor of “non powered pressure-reducing mattress overlay” was officially promulgated in March 1996. (Defs.’ App. at 329.) In addition, the definition of code E0277 was changed to be a “powered pressure reducing mattress (alternating pressure, low air loss, or powered flotation without low air loss).” (Defs.’ App. at 328-31.) On April 1, 1996, Mediea-Rents began billing Palmetto for the ROHO Mattress Overlay under code K0413. 6. September 1997: Palmetto Decides Not to Pursue an Overpayment Action Against Mediea-Rents In approximately January 1996, the Program Integrity Unit reassigned primary responsibility for the Mediea-Rents investigation to analyst Audrey Shivar. (Defs.’ App. at 833, 970.) She obtained from the SADMERC a printout of all of Mediea-Rents’ claims for the ROHO Mattress Overlay that had been paid under code E0277. On September 9, 1997, she even drafted an overpayment letter which, if sent, would have demanded that Medica-RENTS repay Palmetto $2,113,547.37, the difference between the E0277 and the E1399 payment amounts. However, before sending the letter, Shivar consulted Geddings, the HCPCS Coordinator for SADMERC. Shivar summarized the results of their discussion in a computerized file entry, dated September 22, 1997, that stated: Analyst called Deborah Geddings, SADMERC HCPCS Coordinator, who indicated that as of 1/1/97, the ROHO mattress in question was assigned code K0413. Claims before then — due to the definition of E0277 and clarification issues with support surface policy — were to be filed with the HCPCS the supplier thought best fit the item in question. She stated that E0277 would have been acceptable at that time. Again, she mentioned the situation of the policy of support surfaces prior to 1/1/97. (Defs.’ App. at 10; see also Defs.’ App. at 836.) As a result, Shivar determined, based on the information in the case file, that she was not going to proceed with the overpayment investigation. (Defs.’ App. at 831, 837; Pis.’ App. to Resp. at 492-93.) II. SUMMARY-JUDGMENT STANDARD Summary judgment is proper when the record establishes “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). An issue is considered “genuine” if “it is real and substantial as opposed to merely formal, pretended, or a sham.” Bazan v. Hidalgo Cty., 246 F.3d 481, 489 (5th Cir.2001) (citing Wilkinson v. Powell, 149 F.2d 335, 337 (5th Cir.1945)). Facts are considered “material” if they “might affect the outcome of the suit under governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To determine whether there are any genuine issues of material fact, the Court must first consult the applicable substantive law to ascertain what factual issues are material. Lavespere v. Niagara Mach. & Tool Works, 910 F.2d 167, 178 (5th Cir.1990). Next, the Court must review the evidence on those issues, viewing the facts in the light most favorable to the nonmoving party. Id.; Newell v. Oxford Mgmt. Inc., 912 F.2d 793, 795 (5th Cir.1990); Medlin v. Palmer, 874 F.2d 1085, 1089 (5th Cir.1989). In making its determination on the motion, the Court must look at the full record including the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits. See Fed. R. Civ. P. 56(c); Williams v. Adams, 836 F.2d 958, 961 (5th Cir.1988). Rule 56, however, “does not impose on the district court a duty to sift through the record in search of evidence to support” a party’s motion for, or opposition to, summary judgment. Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n. 7 (5th Cir.1992). Thus, parties should “identify specific evidence in the record, and ... articulate” precisely how that evidence supports their claims. Forsyth v. Barr, 19 F.3d 1527, 1536 (5th Cir.1994). Further, the Court’s function is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249, 106 S.Ct. 2505. To prevail on a motion for summary judgment, the moving party has the initial burden of demonstrating that there is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A defendant moving for summary judgment may submit evidence that negates a material element of the plaintiffs claim or show that there is no evidence to support an essential element of the plaintiffs claim. See Celotex Corp., ATI U.S. at 322-24, 106 S.Ct. 2548; Crescent Towing and Salvage Co. v. M/V Anax, 40 F.3d 741, 744 (5th Cir.1994); Lavespere, 910 F.2d at 178. To negate a material element of the plaintiffs claim, the defendant must negate an element that would affect the outcome of the action. See Anderson, 477 U.S. at 247, 106 S.Ct. 2505. If the defendant moves for summary judgment alleging no evidence to support an essential element of the plaintiffs claim, the defendant need not produce evidence showing the absence of a genuine issue of fact on that essential element. Rather, the defendant need only show that the plaintiff, who bears the burden of proof, has adduced no evidence to support an essential element of his case. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548; Teply v. Mobil Oil Corp., 859 F.2d 375, 379 (5th Cir.1988). When the moving party has carried its summary-judgment burden, the respondent must go beyond the pleadings and by his own evidence set forth specific facts showing there is a genuine issue for trial. Fed.R.Civ.P. 56(e). This burden is not satisfied by creating some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). If the evidence is merely colorable or is not significantly probative, summary judgment may be granted. See Anderson, 477 U.S. at 249-50,106 S.Ct. 2505. III. ANALYSIS A. False Claims Act The False Claims Act states: Any person who— (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; (B) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid; is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person ... 31 U.S.C.A. § 3729(a) (West 2003). Under all of these sections, the basic elements of a False Claims Act violation include proving that: (1) the claimant presented, caused to be presented, or conspired to have presented to an agent of the United States a claim for payment; (2) the claim was false or fraudulent; and (3) the claimant knew the claim was false or fraudulent. See United States ex rel. Wilkins, 173 F.Supp.2d at 618. In addition, most Courts, including those in the Fifth Circuit, require a fourth element: materiality. “Liability for both a ‘false claim’ and a ‘fraudulent claim’ implicitly requires a showing that what makes the claim either false or fraudulent is material to the asserted claim of entitlement to receive money or property from the government.” United States ex rel. Wilkins, 173 F.Supp.2d at 630. The first disputed issue is whether the defendants submitted false or fraudulent claims. The term “false or fraudulent” is not defined in the FCA. The Court in Mikes v. Straus, 274 F.3d 687, 696 (2d Cir.2001), discussed the definitions, stating: A common definition of “fraud” is “an intentional misrepresentation, concealment, or nondisclosure for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right.” Webster’s Third New International Dictionary 904 (1981). “False” can mean “not true,” “deceitful,” or “tending to mislead.” Id. at 819. The juxtaposition of the word “false” with the word “fraudulent,” plus the meanings of the words comprising the phrase “false claim,” suggest an improper claim is aimed at extracting money the government otherwise would not have paid. See Clarence T. Kipps, Jr. el al., Materiality as an Element of Liability Under the False Claims Act, A.B.A. Center for Continuing Legal Educ. Nat’l Inst. (1998), WL N98CFCBABA-LGLED B-37, B-46 (“[A] claim cannot be determined to be true or false without consideration of whether the decisionmaker should pay the claim — that is, a claim is ‘false’ only if the Government or other customer would not pay the claim if the facts about the misconduct alleged to have occurred were known.”) See also United States ex rel. Watson v. Connecticut General Life Ins. Co., No. CIV.A. 98-6698, 2008 WL 303142, at *4 (E.D.Pa. Feb.11, 2003). Based on a review of the record, the Court concludes that there is no genuine issue of material fact as to whether the defendants submitted false or fraudulent claims. Rather, it is clear that they did not. The government, in an oversimplification of the issue, claims that the “defendants’ claims under E0277 were false because the ROHO Mattress Overlay was neither an alternating pressure mattress nor ... a low air loss mattress,” the two types of mattresses that the HCFA permitted to be billed under E0277. (Pis.’ Resp. at 29.) The premise behind the government’s position is that the official descriptor for code E0277 was “alternating pressure mattress.” Because the ROHO Mattress overlay was not an alternating-pressure mattress, since it was neither powered nor a mattress, the government claims that the defendants’ use of code E0277 was false. The government then states that the DMERCs also allowed low-air-loss mattresses, which are non-alternating pressure products, to be billed under code E0277. In other words, the government admits that certain products, such as low-air-loss mattresses, that did not meet the official descriptor definition for E0277 were also allowed to be billed under E0277. Based on these facts, the government wants the Court to conclude that the defendants’ use of code E0277 was false or fraudulent because the ROHO Mattress Overlay did not match the descriptor definition or another definition that was deemed acceptable by HCFA and the DMERCs. However, this attempt by the government to simplify the issue of whether the defendants submitted false or fraudulent claims when billing for the ROHO Mattress Overlay fails to take into account the extremely convoluted factual history of this case and the complexities of the Medicare HCPCS coding and billing determinations. As noted by one Court, Medicare regulations are “among the most completely impenetrable texts within human experience.” Rehab. Ass’n v. Kozlowski, 42 F.3d 1444, 1450 (4th Cir.1994); see also DeWall Enters., Inc. v. Thompson, 206 F.Supp.2d 992 (D.Neb.2002) (detailing a long history of contradictory coding instructions provided to a DME supplier). Although the government disagrees, the facts are crystal clear on one point: the scope of code E0277 was, at best, unclear and ambiguous. This is evident by the contradictory instructions and guidance given by both HCFA, the Medicare local carriers, and Palmetto concerning code E0277 between 1992 and 1996. The confusion that existed