US v. AseraCare: Eleventh Circuit Holds That Contradictory Clinical Judgments Alone Cannot Trigger FCA Liability
September 11, 2019
Despite overturning a grant of summary judgment for hospice chain AseraCare Inc., the opinion preserved the lower court’s decision to grant a new trial to the hospice based on faulty jury instructions. The opinion also clarified the FCA falsity standard. To prove falsity, FCA plaintiffs must show something more than the “mere difference of reasonable opinion concerning the prognosis of a patient’s likely longevity.”
Background
The AseraCare litigation originated in 2008, with an FCA suit filed by former AseraCare employees. Among the allegations were claims that AseraCare had knowingly submitted false claims to Medicare for patients who were not terminally ill. In 2012, the Department of Justice (DOJ) announced its intervention.In 2015, the U.S. District Court for the Northern District of Alabama split the trial into two phases: one to focus specifically on the falsity requirement under the FCA, and one to focus on all other remaining issues. As part of the first phase, a jury examined medical records of about 120 patients and found that AseraCare submitted false or unsupported claims for just over 100 of them.
The trial’s second phase never took place. Instead, the court granted a new trial to AseraCare based on improper jury instructions. Specifically, the court failed to instruct that claims cannot be false when reasonable people can disagree over whether hospice care was properly billed.
The court then granted summary judgment in favor of AseraCare, noting that “when hospice certifying physicians and medical experts look at the very same medical records and disagree about whether the medical records support hospice eligibility, the opinion of one medical expert alone cannot prove falsity without further evidence of an objective falsehood.” The DOJ appealed.
Eleventh Circuit’s Decision
The Eleventh Circuit set out to answer the question: “When can a physician’s clinical judgment regarding a patient’s prognosis be deemed ‘false’?”- Objective Falsehood
An objective falsehood requires “a flaw that can be demonstrated through verifiable facts,” such as:
- A certifying physician fails to review a patient’s medical records or otherwise become familiar with the patient’s condition before asserting that the patient is terminal;
- A physician did not, in fact, subjectively believe that the patient was terminally ill at the time of certification (e.g., basing a clinical judgment on information that the physician knew, or had reason to know, was incorrect); or
- When expert evidence proves that no reasonable physician could have concluded that a patient was terminally ill given the relevant medical records.
- Link to Specific Claims
Conclusion
Overall, hospices can take comfort in the court’s statement that “the FCA is an inappropriate instrument to serve as the Government’s primary line of defense against questionable claims for reimbursement of hospice benefits.” FCA plaintiffs attempting to prove falsity cannot rely on contradictory opinions based on the same medical records, but rather they must identify facts surrounding a hospice’s certification of a terminal illness that are inconsistent with the proper exercise of a physician’s clinical judgment and then link those facts to actual submitted claims.
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