On 8 October 2019 a judge in the US District Court for the Central District of California granted a stay and certified two questions for interlocutory appeal in relator Integra Med Analytics' False Claims Act (FCA) suit against Providence Health & Services, its affiliates and JA Thomas and Associates, Inc (JATA), a clinical documentation consultant.(1)
The case involved allegations that Providence had perpetrated an upcoding scheme whereby it trained its doctors to describe medical conditions with language that would support increasing the severity levels of diagnosis-related groups that Providence reported to Medicare, leading to inflated Medicare reimbursements.
On 16 July 2019 the court granted in part and denied in part the defendants' motion to dismiss. In so ordering, the court decided that it did not have enough data to decide whether information about JATA's business practices (available from online sources) constituted 'news media' within the definition of the term in the FCA's public disclosure bar, at 31 USC § 3730(e)(4)(A)(iii). Therefore, the court denied the motion to dismiss based on the public disclosure bar. In response, the defendants asked the court to certify two questions for interlocutory appeal:
- Was all of the online information disclosed from the news media such that it would fall under the public disclosure bar of the FCA?
- Did the relator adequately alleged falsity under the FCA?
The court certified both questions and granted the motion to stay.
In analysing the motion for the appeals, the court listed the three elements that the moving party must satisfy to obtain certification:
- the order giving rise to the appeal must involve a controlling question of law;
- there must be substantial ground for differences of opinion; and
- an immediate appeal from the order may materially advance the termination of the litigation.
With regard to the news media question, the court found that the order involved a controlling question of law. First, the question involved an issue of law because resolving the issue required an analysis of statutory construction – how the courts define the news media provision in the FCA. Further, the question involved a controlling issue of law, because if the JATA business practice information came from the news media, the litigation would be materially advanced towards termination, because the public disclosure bar would apply to the claims.
Second, the court found that the news media question had room for substantial differences of opinion. After all, the order on the motion to dismiss acknowledged that its approach represented a departure from the general consensus in the federal courts.
Third, the court found that the news media question, if resolved, would materially advance the termination of the litigation, because it could mean avoiding a "quite high" potential discovery burden on the defendants, given the quantity and complexity of the documents at issue. In addition to the possible discovery burden, the defendants would have to coordinate with the government, outside experts and their affiliates.
The court also certified the falsity question, which involved whether the relator adequately alleged falsity under the FCA through allegations that, based on statistical analyses, defendants' hospitals used the billing code for a 'major complication or comorbidity' for certain diagnoses at rates disproportionate to other hospitals. The court found that the issue, a mixed question of law and fact, satisfied the first element of the certification test because it constituted a legal question material to the order.
Although mixed, the question nevertheless involved application of the legal standard for falsity to defendants' statistical analyses. Further, the question was material to the order: if a relator cannot "state a claim for falsity, its FCA claims fail".
Next, the court held that there was substantial ground for differences of opinion. The defendants pointed to a US District Court for the Western District of Texas case in which the court dismissed the same relator's FCA claims because it did not believe the relator had adequately pleaded falsity with its statistical analyses.
Finally, the court found that the falsity question, if resolved, would materially advance termination of the litigation because whether a relator has properly pleaded falsity is dispositive in an FCA case.
A copy of the Central District of California's order can be found here.
(1) For further details on this case see "Court Establishes a Test to Determine the Scope of the FCA's "News Media" Provision",
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