On March 31, 2016, in United States v. AseraCare, Inc, No. 2:12-cv-245-KOB, 2016 U.S. Dist. LEXIS 42986 (N.D. Ala. Mar. 31, 2016), the district court granted summary judgment for AseraCare and emphasized that contradicting expert opinions over medical necessity, alone, cannot constitute falsity under the False Claims Act (“FCA”). This is a significant win for the defense bar and has broad implications for FCA litigation in the healthcare space.
In this case, the government alleged that AseraCare, a for-profit hospice provider, improperly billed Medicare for hospice benefits provided to individuals who were not properly certified as terminally ill. This case has been making headlines for the past year for several reasons. First, the district court permitted the government to prove liability through statistical sampling. In the past, the use of statistical sampling was limited to proving damages. Additionally, the court took the unusual step of bifurcating the trial into two phases: one relating to proving objectively false billing, and the other to demonstrate that the false billing was done knowingly, as required by the FCA. Then, last November, the district court vacated the jury’s verdict that most of the patient records in the government’s sample did not meet hospice eligibility. The court explained that its jury instructions were erroneous because they failed to clarify that “a mere difference of opinion, without more, is not enough to show falsity.” The court then sua sponte considered summary judgment for AseraCare, inviting the government to direct the court to objective evidence of falsity, beyond the difference of opinion created through the testimony of each side’s expert.
In granting summary judgment for AseraCare, the court disagreed with the DOJ’s assertion that retrospective clinical disagreement alone can establish falsity under the FCA. The court expressed concern over the implications of the government’s proposition that it can conjure up proof of falsity through the testimony of one medical expert who disagrees with a patient’s treating physician. The result would be to subject hospice providers to potential FCA liability “any time the Government could find a medical expert who disagreed” with a treating physician, and the court “refuse[d] to go down that road.”
The court concluded that the DOJ cannot prove fraud based simply on one medical expert’s disagreement with AseraCare’s diagnoses of terminal illness. The court explained that when two clinicians “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 opinion emphasizes the importance of providing objective evidence of falsehood. It also recognized the importance of a “doctor’s clinical judgment” in the process and that “medical prognostications” are not always exact.
The opinion supports many defense arguments in suits involving issues of medical necessity or other judgment calls, and if upheld by the Eleventh Circuit, will have major repercussions in a wide array of situations where the government is pursuing FCA theories involving medical necessity or appropriateness.