Differences With Respect to Clinical Judgments

Differences With Respect to Clinical Judgments.

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  Several courts have held that claims cannot be deemed “false” under the FCA with respect to clinical judgments where reasonable minds can differ. This principle has particular significance in the context of differing views due to reasonable variations in clinical judgment regarding medical necessity and/or patient eligibility for certain services.
  

1. United States ex rel. Wall v. Vista Hospice Care, Inc., 778 F. Supp. 2d 708, 718 (N.D. Tex. 2011).

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  Court held that “an FCA complaint attacking defendant’s clinical judgment must be predicated on the presence of an objectively verifiable fact at odds with the exercise of that judgment, not a matter of subjective clinical analysis.”
  

1. United States ex rel. Morton v. A Plus Benefits, Inc., 139 F. App’x 980, 983 (10th Cir. 2005).

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  “Expressions of opinion, scientific judgments, or statements as to conclusion about which reasonable minds may differ cannot be false. . . . We agree that liability under the FCA must be predicated on an objectively verifiable fact.”
  

1. United States v. Prabhu, 442 F. Supp. 2d 1008, 1026 (D. Nev. 2006).

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  “[C]laims are not “false” under the FCA when reasonable persons can disagree regarding whether the service was properly billed to the Government.” Id.
  
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  “The Government . . . failed to prove falsity as a matter of law, by failing to dispute the overwhelming evidence that [the defendant] was following the instructions he received from his carrier in billing for pulmonary stress tests as part of his pulmonary rehabilitation program.” Id. at 1027.
  

3. Quality of Care.

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  The Seventh Circuit recently cast doubt on the worthless services theory of FCA liability. See United States ex rel. Absher v. Momence Meadows Nursing Ctr., Inc., 764 F.3d 699 (7th Cir. Aug. 20, 2014). As the Seventh Circuit explained, “[i]t is not enough to offer evidence that the defendant provided services that are worth some amount less than the services paid for” to establish falsity under this theory. Thus, “[s]ervices that are ‘worth less’ are not ‘worthless.’”
  
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  See also United States ex. rel. Campie v. Gilead Sciences, Inc., No. C-11-0941 EMC, 2015 WL 3659765, at *8 (N.D. Cal. June 12, 2015)
  
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  “To have a factually false certification claim based on worthless services, the services must be medically worthless. . . . In the instant case, Relators have made allegations that suggest reduced medical value, but have failed to adequately plead no medical value at all.”
  

4. Sampling.

The government alleged in Martin that a large, multi-state SNF provider defrauded the government by providing medically unnecessary rehabilitation therapy to its patients. The government sought to extrapolate its findings with respect to a sample of 400 patients to a larger universe of patients at 85 of the provider’s SNFs.

The nursing home provider argued that it would be improper to allow the government to prove its FCA case through sampling for several reasons. The provider argued that the government should be required to prove that each claim at issue had actually been submitted to the government. Rejecting this argument, the court responded that the provider offered no authority to support its argument that proving up claim submission could not be accomplished through sampling and extrapolation.

After gaining traction last year, 2015 has seen continued attempts by qui tam relators and the government to rely on statistical sampling and extrapolation in establishing both liability and damages in False Claims Act cases. Although the trend seemed to be that federal district courts would approve of sampling in FCA litigation involving large numbers of claims, a district court recently rejected this approach in a healthcare case involving more than 10,000 claims. See United States ex rel. Michaels v. Agape Senior Community, Inc., No. 12-3466, 2015 WL 3903675, at *8 (D.S.C. June 25, 2015). The Michaels court reasoned that statistical sampling is not appropriate in healthcare FCA cases in which proving liability and damages requires a “highly fact-intensive inquiry involving medical testimony after a thorough review of the detailed medical chart of each individual patient.” Id. at 17. The Fourth Circuit recently decided to take up this question for interlocutory review.

5. Defense—Public Disclosure Bar.

After PPACA's enactment, § 3730(e)(4) provides that a “court shall dismiss an action or claim” when the provision applies. The few district courts to have addressed the issue are split as to whether the public disclosure provision remains jurisdictional in nature. Compare United States ex rel. Paulos v. Stryker Corp., No. 11–0041–CV–W–ODS, 2013 WL 2666346, at *3 (W.D.Mo. June 12, 2013) (“After the 2010 amendment, the bar does is [sic] not described as jurisdictional in nature.”) and United States v. Chattanooga–Hamilton Cnty. Hosp. Auth., 1:10–CV–322, 2013 WL 3912571, at *7 n. 6 (E.D.Tenn. July 29, 2013) (“[T]he pre-PPACA language made the public disclosure bar jurisdictional in nature whereas the post-PPACA language still provides a basis for dismissal but that basis is no longer jurisdictional.”), with United States ex rel. Beauchamp v. Academi Training Ctr., Inc., No. 1:11cv371, 2013 WL 1189707, at *9 (E.D.Va. Mar. 21, 2013).

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