On September 1, 2016, the U.S. Court of Appeals for the Seventh Circuit reversed the dismissal of an FCA lawsuit by the U.S. District Court for the Eastern District of Wisconsin, and in doing so, evaluated the particularity required to survive a motion to dismiss under Rule 9(b) as it relates to both a relator’s obligation to plead specific claims and the specifics of the underlying fraudulent conduct at issue.

Continue Reading Seventh Circuit Rejects Specific Claims Requirement for 9(b), Maintains a High Bar for Medical Necessity Allegations

The United States District Court for the Northern District of Texas recently released a noteworthy FCA opinion, one that includes a key ruling on the use of statistical sampling and extrapolation. In United States v. Vista Hospice Care, Inc., No. 3:07-CV-00604-M, 2016 WL 3449833 (N.D. Tex. June 20, 2016), the relator brought claims alleging, among other things, that the defendant violated the False Claims Act by certifying patients as eligible for hospice, when the patients were not terminally ill or their records lacked documentation supporting the requisite six-month life expectancy prognosis.  In deciding a motion to strike and a motion for summary judgment, the district court issued two very favorable defense rulings.

Statistical Sampling/Extrapolation

The relator relied on the expert testimony of a hospice physician, who reviewed 291 patient files and concluded that a large portion of the patients were not eligible for hospice for at least some of the days. An expert statistician, in turn, extrapolated from the physician’s testimony to conclude that defendants had submitted false claims on approximately 12,000 patients.

Continue Reading Court Rejects Relator’s Use of Statistical Sampling

On March 31, 2016, the district court granted summary judgment for hospice provider AseraCare in a case alleging that it had submitted false claims to Medicare by certifying patients as eligible for service who did not have a prognosis of six months or less to live if their terminal illness ran its normal course. U.S. ex rel. Paradies v. AseraCare Inc., 2106 WL 1270521 (N.D. Ala. Mar. 31, 2016). In its opinion, the district court reiterated that “the submission of a false claim is the sine qua non of a False Claims Act violation,” and held a “contradiction based on clinical judgment or opinion alone cannot constitute falsity under the FCA as a matter of law.” The district court further explained that when hospice certifying physicians and 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.”

Continue Reading Failure to Establish Objective Falsity Dooms Government’s Hospice Case

The Sixth Circuit recently became the first appellate court to consider and reject FCA liability based on a healthcare provider’s alleged false attestation of compliance with the Health Information Technology for Economic and Clinical Health Act (HITECH) Act’s meaningful use objectives. U.S. ex rel. Sheldon v. Kettering Health Network, 2016 WL 861399 (6th Cir. March 7, 2016). The HITECH Act was designed to encourage the adoption of Electronic Health Record (EHR) technology by healthcare providers through the creation of incentive payments for eligible providers.  As a condition of receiving those incentive payments, the HITECH Act requires healthcare providers to meet meaningful use objectives and compliance measures concerning the adoption of EHR technology.

Continue Reading Sixth Circuit Affirms Dismissal of FCA Action Related to HITECH Meaningful Use Payments