Physicians' Difference of Opinion Not Enough for FCA Liability

The Eleventh Circuit raised the bar for whistleblowers and the government in False Claims Act cases. Hogan Lovells attorneys say it confirms that a mere difference of opinion between medical experts does not establish falsity, and evidence of objective falsity must be linked to specific claims.

In the long-pending False Claims Act (FCA) litigation against hospice provider AseraCare, the Eleventh Circuit affirmed that a mere difference of opinion between medical experts does not establish falsity under the FCA.

It found that "a clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for purposes of the False Claims Act, when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion, with no other evidence to prove the falsity of the assessment."

The Eleventh Circuit also rejected the government's argument that a physician's certification of terminal illness must be supported by documentation that, standing alone, supports the certification. The court did remand the case, finding that the government should have been allowed to rely on the entire record in making its case that disputed issues of fact existed.

However, the court instructed that in future proceedings, the government must be able to link any evidence of improper practices relating to certification of terminal illness to the 123 claims specifically at issue.

These holdings raise the bar for relators and the government in FCA actions against medical professionals.

Life Expectancy Not an Exact Science

The government alleged that AseraCare had submitted unsubstantiated hospice claims for patients who were not, in the government's view, terminally ill. Certification of terminal illness—defined as having a life expectancy of 6 months or less if the illness runs its normal course–is required for Medicare reimbursement for hospice care.

In a bifurcated trial, a jury found that the majority of the sample claims were false. But, the district court then ruled that its jury instructions on falsity were incomplete, ordered a new trial, and sua sponte reopened and granted summary judgment. The district court found that with regard to the evidence of falsity, "all that exists is a difference of opinion" and that was simply not enough to establish that a claim is false.

The Eleventh Circuit agreed with the district court's analysis on that key issue. In doing so, it rejected the government's argument that eligibility for Medicare reimbursement turns not just on the physician's certification of terminal illness, but also on whether clinical information and other documentation accompanying a physician's certification of terminal illness support, as a factual matter, the physician's certification.

Rather, the physician's clinical judgment need only be a "reasonable interpretation of the relevant medical records." The Eleventh Circuit emphasized that the legal framework asks only that "physicians exercise their best judgment in light of the facts at hand and that they document their rationale." It does not require certainty, because, as CMS has recognized, "[p]redicting life expectancy is not an exact science."

The Eleventh Circuit made clear that "[a] properly formed and sincerely held clinical judgment is not untrue even if a different physician later contends that the judgment is wrong." Accordingly, in order to properly state a claim under the FCA in the context of hospice reimbursement, a plaintiff alleging that a patient was falsely certified for hospice care must identify an objective and knowing falsehood.

The court explained that objective falsity can be inferred where

  1. the certifying physician fails to examine the underlying medical records,
  2. the certifying physician did not subjectively believe that the patient was terminally ill, or
  3. if expert evidence proves that no reasonable physician could have concluded that a patient was terminally ill.

Despite largely agreeing with the district court's analysis, the Eleventh Circuit did agree with the government that the district court should have considered all the evidence, both in the trial record and the summary judgment record, to determine whether a triable issue existed regarding falsity.

The court acknowledged there may be evidence of improper certification practices that could support a finding that AseraCare presented objectively false claims. However, in another holding that may be even more significant for the broader issue of FCA liability, the court admonished that, on remand, the government must be able to link any evidence of improper certification practices to the 123 claims specifically at issue. The Eleventh Circuit stated that "[s]uch linkage is necessary to demonstrate both falsehood and knowledge."

This instruction could have wide-ranging impact in FCA litigation. The court's caution may be aimed at an approach relators and the government frequently invoke in health care cases–alleging that evidence of a "corporate scheme" and evidence of false claims can support an inference of causation and then a basis for extrapolation. Here, the Eleventh Circuit states that "untethered" evidence of corporate atmosphere is not sufficient.

For FCA defendants, the AseraCare decision was worth the wait.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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