By Russell Paul
Courts have recently grappled with the issue of whether a Relator can maintain a case under the False Claims Act (“FCA”) where she retains an expert that says the medical services provided were not medically necessary and the defendant’s medical service provider or its retained expert says the exact opposite – that the service was medically necessary. Can a False Claims Act case go forward where the only evidence of whether the services at issue were medically necessary are two competing and opposing medical opinions?
Previous Case Rulings
In AseraCare I, AseraCare II and Vista Hospice, the district courts held that a difference of medical opinion of two physicians, one for the Relator and one for the defendant, is insufficient to create a triable issue of fact as to whether the services (in these cases, hospice services) were medically necessary and whether the resulting Medicare claims were false under the FCA. These courts required a further showing that the claims submitted to Medicare were objectively false.
These decisions held that a relator’s expert’s opinion that “certain of Defendants’ patients were ineligible for hospice is insufficient to create a fact issue as to whether physician certifications [from physicians employed by defendants] and resulting claims were false,” Vista Hospice, 2016 WL 3449833, at *18. These courts held that “[w]hen hospice certifying physicians and [relators’] medical experts 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.” AseraCare II, 176 F. Supp. 3d at 1283.
These cases are wrongly decided, and courts are starting to disapprove them.
New Case Rulings
First, “proof of an objective falsehood is not the only means of establishing an FCA claim” because, in enacting the FCA, “Congress wrote expansively, meaning ‘to reach all types of fraud, without qualification, that might result in financial loss to the Government.’” Robinson, 2015 WL 1479396, at *5. Thus, while “FCA liability must be based on an objectively verifiable fact…, facts that rely upon clinical medical judgment are not automatically excluded from liability under the FCA.” U.S. ex rel. Landis v. Hospice Care of Kansas, LLC, 2010 WL 5067614, at *4 (D. Kan. Dec. 7, 2010).
Second, no Circuit Court has adopted the Aseracare holding and two recent Circuit Courts, the Sixth Circuit in U.S. v. Paulus and the Tenth Circuit in U.S. ex rel. Polukoff v. St. Mark’s Hosp., have rejected it.
In Paulus, defendant was charged criminally with healthcare fraud for exaggerating the degree of cardiac stenosis in order to justify inserting a stent into patients’ arteries and billing Medicare for that procedure. The district court concluded that the amount of stenosis in an artery is a “subjective medical opinion, incapable of confirmation or contradiction.” U.S. v. Paulus, 2017 WL 908409, at *9 (E.D. Ky. Mar. 7, 2017), rev’d in part, vacated in part, 894 F.3d 267 (6th Cir. 2018) In rejecting this conclusion, the Court of Appeals observed that “scientific measurements may sometimes be imprecise.” 894 F.3d at 275 And, the Court emphasized, “it is up to the jury—not the court—to decide whether the government’s proof is worthy of belief.” Id.
In Polukoff, a doctor was alleged to have performed, and billed to Medicare, medically unnecessary heart surgeries that he believed, in his own scientific judgment, would cure migraine headaches or prevent strokes, a view that was not commonly accepted in the medical community. Polukoff, 895 F.3d at 737. The district court held that relator’s FCA claim rested upon his allegations that defendant’s representation to Medicare that the surgeries were medically reasonable and necessary and that this representation was false. The district court dismissed the FCA claim because “[o]pinions, medical judgments, and ‘conclusions about which reasonable minds may differ cannot be false’ for the purposes of an FCA claim.” U.S. ex rel. Polukoff v. St. Mark’s Hosp., 2017 WL 237615, at *8 (D. Utah Jan. 19, 2017) The Tenth Circuit reversed, holding that “[i]t is possible for a medical judgment to be ‘false or fraudulent’ as proscribed by the FCA” and that “‘claims for medically unnecessary treatment are actionable under the FCA.’” U.S. ex rel. Polukoff, 895 F.3d at 742.
Third, district courts have found that medical evidence can create a triable issue of fact on the issue of medical necessity in a False Claims Act case, even where the parties produce competing expert opinions.
- U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., 2014 WL 68603, at *7-8 (M.D. Fla. Jan. 8, 2014) (denying summary judgment in FCA case, alleging hospital submitted false Medicare claims for hospital stays when patients did not meet the medical criteria for admission, concluding that medical expert’s “report provides sufficient evidence to establish the existence of a genuine issue of material fact as to the medical necessity of at least some of the admissions at issue”);
- U.S. ex rel. Armfield v. Gills, 2013 WL 371327, at *8 (M.D. Fla. Jan. 30, 2013) (“Since the parties proffer competing expert opinions with regard to … the medical necessity of [the medical procedure at issue] for Medicare purposes, the weight to be afforded those opinions will involve a credibility determination inappropriate for summary judgment.”);
- Robinson, 2015 WL 1479396, at *5, 6, 11 (denying summary judgment in FCA case alleging defendant gave medically unnecessary eye exams for nursing home patients, concluding that “proof of an objective falsehood is not the only means of establishing an FCA claim,” that the government’s expert’s “opinion testimony at the very least creates a genuine dispute concerning the necessity of the 30 claims he reviewed,” and that “when reviewing the facts and drawing all reasonable inferences in favor of the non-moving party, there are clearly triable facts at issue in this case. . . Because issues involving conflicting testimony, the weight of evidence, and the credibility of testimony are issues for a jury to decide, [defendant] has not met his burden for purposes of summary judgment.”) (emphasis added);
- Graves v. Plaza Med. Centers, Corp., 276 F. Supp. 3d 1335, 1342 (S.D. Fla. 2017) (“The relator’s expert. . . testified that [Defendant] Dr. Cavanaugh diagnosed many patients with certain conditions, for instance COPD and diabetes, without testing and without treating them. . . Material issues of fact exist as to whether the diagnoses that are refuted by the medical record were a valid exercise of Dr. Cavanaugh’s clinical judgment or made to achieve a desired result, that is, higher MRA scores [Medical Risk Adjustment [“MRA”] score of Medicare Advantage patients]. Summary judgment should be denied on this ground.”);
- U.S. v. Bertram, 2017 WL 4355679, at *5 (E.D. Ky. Sept. 29, 2017), aff’d, 900 F.3d 743 (6th Cir. 2018) (defendants charged under the FCA for testing, and billing for, frozen urine samples months after the samples’ initial collection; in the face of conflicting expert testimony on whether delayed testing of frozen urine samples was medically necessary, the court upheld the jury’s determination of medical necessity);
- U.S. ex rel. Ruckh v. CMC II LLC, 2016 WL 7665187, at *1 (M.D. Fla. Dec. 1, 2016) (defendant’s motion for summary judgment denied where relator claimed “false inflation of ADL scores to increase RUG scores (and, hence, to falsely increase Medicare payments)” in the face of opposing medical expert opinions).
Fourth, in other types of litigation, the appropriateness of a medical service or procedure often rests on medical records and expert opinions. See, e.g., Titchnell v. U.S., 681 F.2d 165, 166 (3d Cir. 1982) (“Pennsylvania case law requires a plaintiff in a medical malpractice action to prove by expert testimony (1) the prevailing standard of medical care accepted by the medical profession, and (2) that the care provided plaintiff deviated from and fell below such accepted standard.”); U.S. v. Persaud, 866 F.3d 371, 372, 380-84 (6th Cir. 2017) (affirming criminal health care fraud conviction of physician who systematically over-tested his patients and prescribed unnecessary procedures based in part on medical experts’ opinions, supported by review of patient medical record); U.S. v. MacKay, 715 F.3d 807, 827 (10th Cir. 2013) (“To be sure, the jury heard conflicting evidence as to whether Defendant prescribed [the medications] outside the usual course of medical practice and not for a legitimate medical purpose. But conflicting evidence does not per se create a reasonable doubt. Where the evidence conflicts, we accept the jury’s resolution of conflicting evidence and its assessment of the credibility of witnesses.”) (quotation marks omitted) (emphasis added).
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 U.S. v. AseraCare, Inc. (“AseraCare I”), 153 F. Supp. 3d 1372 (N.D. Ala. 2016), appeal docketed, No. 16-13004 (11th Cir. May 27, 2016), U.S. v. AseraCare, Inc. (“AseraCare II”), 176 F. Supp. 3d 1282 (N.D. Ala. 2016), appeal docketed, No. 16-13004 (11th Cir. May 27, 2016), and U.S. v. Vista Hospice Care, Inc., 2016 WL 3449833, at *18 (N.D. Tex. June 20, 2016), reconsideration denied sub nom. U.S. ex rel. Wall v. Vista Hospice Care, Inc., 2017 WL 5483747 (N.D. Tex. Nov. 14, 2017), and appeal dismissed sub nom. U.S. ex rel. Wall v. Vista Hospice Care, Inc., 2018 WL 3054767 (5th Cir. Jan. 11, 2018)