After granting a new trial based on error in a jury instruction and sua sponte re-opening summary judgment, on March 31, 2016, the U.S. District Court for the Northern District of Alabama granted summary judgment to AseraCare on all remaining counts in U.S. ex rel. Paradies v. AseraCare, Inc. The outcome is significant because it confirms that mere difference of clinical judgment—here, regarding conditions for a medical certification of hospice eligibility—is not enough to show that the claims are objectively false under the False Claims Act (FCA).
The turn of events is a significant win for AseraCare, as a jury had determined last October that 104 of 123 hospice claims submitted by AseraCare for Medicare payment were false. (The trial was bifurcated into falsity and scienter phases.) However, after that jury verdict, on October 29, 2015, the court granted AseraCare’s motion for a new trial on the issue of falsity after expressing concern that it had “committed major reversible error in the jury instructions.”
As the court explained in a subsequent order, the FCA case was based on a false certification theory: specifically, that the underlying medical records did not support the physicians’ certifications of hospice eligibility, rendering the associated claims false. In reviewing its jury instructions, the court held that it should have advised the jury that the FCA requires proof of an “objective” falsehood. It also added that a proper instruction should have stated that a difference of opinion between doctors, without more, is insufficient to show that a Medicare hospice claim is false. The court sua sponte re-opened summary judgment and invited the government to point to evidence, other than its expert’s clinical opinion, that the certifications for the claims in question were false.
In the March 31 summary judgment, the court made clear that it was not satisfied with the government’s proffer, observing that the government only pointed to its own conclusions about the underlying medical records and its expert’s disagreement with AseraCare’s certification. In granting summary judgment, the court again confirmed that mere differences in clinical judgment are not enough to establish FCA falsity: “If the court were to find that all the Government needed to prove falsity in a hospice provider case was one medical expert who reviewed the medical records and disagreed with the certifying physician, hospice providers would be subject to potential FCA liability any time the Government could find a medical expert who disagreed with the certifying physician’s clinical judgment. The court refuses to go down that road.”