Eleventh Circuit Holds Differences in Clinical Judgment Do Not Create FCA Liability for Hospice Provider

The Eleventh Circuit agreed with the trial court that the government must do more than present expert evidence that a physician’s clinical judgment was inaccurate to establish falsity under the False Claims Act.  Nonetheless, the appellate court remanded for the trial court to consider additional evidence that, the government contends, establish falsity even under the standard now set by the Eleventh Circuit.

At issue was whether AseraCare Inc. had falsely certified that Medicare recipients were “terminally ill,” which made their hospice care reimbursable.  The case was already in the unusual (for an FCA case) position of proceeding to trial when the court made the apparently unprecedented decision to bifurcate the trial into a phase on falsity and a second phase on AseraCare’s knowledge of falsity. During the falsity trial, the government’s expert gave the opinion, based on a review of medical records, that the hospice patients were not in fact terminally ill.  A jury agreed with the government on 104 out of 123 patients.

Following the verdict, however, the court agreed with AseraCare that it had committed reversible error by failing to instruct the jury that a difference of reasonable opinion among physicians was not enough to show falsity.  The court then took the additional step of sua sponte considering summary judgment and, following additional briefing and a hearing, granted summary judgment to AseraCara.

The Eleventh Circuit affirmed the trial court’s view of falsity, holding that a reasonable difference of clinical opinion, “without more,” does not constitute falsity.  But it vacated the grant of summary judgment and remanded for a consideration of whether there was something more in this case, noting that the government had intended to put on evidence in the second phase of trial that AseraCare had knowledge of falsity, and had managed to put on some evidence in the first phase that AseraCare had a “deliberate practice” of not providing the certifying physician with complete (or any) clinical information. If the physician does not actually hold the opinion that a patient is terminally ill, then it would be objectively false to certify that opinion to the government.

The long-pending case (first filed in 2008) now returns to the district court.  The decision protects hospice and other providers that make certifications based on reasonable and genuinely held clinical judgments.

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