Eleventh Circuit Raises the Bar on the False Claims Act.

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The Eleventh Circuit dealt a win for providers in United States v. AseraCare, ruling that a mere difference of clinical opinion among physicians is not enough to prove “falsity” under the False Claims Act.  The Eleventh Circuit’s decision emphasizes that reasonable differences of opinion between physician reviewers of medical documentation are not sufficient to suggest that the judgments concerning a particular patient’s eligibility for Medicare’s hospice benefit, or any claims submitted based on such judgments, are false for purposes of the False Claims Act.

While the matter was before the District Court, the Government alleged based on sampling, that AseraCare incorrectly diagnosed patients as terminally ill and, therefore, improperly certified those patients as being eligible for hospice care.  The Government conducted a medical review of 223 patients out of 2,180.   The Government then relied on the opinion of a medical expert who testified that 123 of those 223 patients at issue were not terminally ill at the time of certification.  A jury eventually determined that AseraCare had submitted false claims for 104 of the 123 patients, but the verdict was vacated by the District Court.  The District Court then granted summary judgment to AseraCare finding that a mere difference of opinion between experts cannot be the basis of a claim under the False Claims Act.

On appeal, the Eleventh Circuit held that when a hospice provider submits a claim that certifies that a patient is terminally ill based on the physician’s or medical director’s clinical judgment, such a claim cannot be subject to liability under the False Claims Act simply because the Government presents testimony from an expert that disagrees with the diagnosis.  Instead, the Eleventh Circuit held that the Government has to prove that AseraCare’s judgment reflected “an objective falsehood.”  The Eleventh Circuit went on to provide examples of circumstances that could indicate an “objective falsehood,” including instances where (1) the certifying physician does not examine the patient’s medical records, (2) the certifying physician does not subjectively believe the patient is terminally ill, or (3) no reasonable physician could have concluded a patient was terminally ill based on relevant medical records.

This Eleventh Circuit holding runs against the holdings of two recent decisions, United States v. Paulus, 894 F.3d 267 (6th Cir. 2018) and United States ex rel. Polukoff v. St. Mark’s Hospital, 895 F.3d 730 (10th Cir. 2018), which otherwise lowered the Government’s burden in cases based on medical necessity.