As we previously reported here, DOJ is appealing its defeat in AseraCare, in which the district court concluded that “expressions of opinion, scientific judgments, or statements as to conclusions about which reasonable minds may differ cannot be false,” and that the government had marshaled nothing more than a difference of opinion between its own expert and the defense’s. On appeal to the Eleventh Circuit, DOJ is arguing forcefully for rejection of the view that disputes about medical necessity cannot serve as the basis for an FCA claim.
DOJ’s position is essentially that whether a particular treatment was medically necessary – and therefore whether a claim for treatment was “false” – is a factual determination that can appropriately be made by a factfinder. Under the government’s view, the district court had an “erroneous belief” that evidence of a good faith disagreement over a patient’s eligibility for hospice precludes those claims from being false. According to DOJ, such good faith disputes may weigh on questions of scienter, i.e., whether defendants knowingly submitted false claims, but they do not touch upon falsity itself. This is so because the government defines falsity simply as claims submitted for services that were not reimbursable. Therefore, even if experts disagree about whether the services were reimbursable, the jury can objectively evaluate the services provided, conclude that one expert is more credible, and accordingly find that the claims were false. Indeed, DOJ notes that were it otherwise, medical malpractice suits could never proceed, because they often involve competing experts.
By way of analogy, DOJ argues that cases involving disputes about medical necessity are no less actionable than cases involving disputes about the interpretation of allegedly ambiguous statutes or regulations. In the latter category of cases, DOJ notes, courts decide between competing views of the statute to determine which is “correct,” but defendants may nevertheless escape liability if they did not “knowingly” violate that interpretation because the statute was ambiguous. Likewise, DOJ contends, in medical necessity cases a defendant may be able to prevail by showing that its view that the services were medically necessary was held in good faith – but it is well within the competence of courts and juries to make a determination as to whether the services were, in fact, medically necessary. Accordingly, DOJ urges the Eleventh Circuit to uphold the jury’s original verdict in favor of the government on falsity, and to send the case back to the district court for a trial as to the other elements.
The outcome of this case will have important implications in a broad range of FCA cases based on disputes about medical necessity. A copy of DOJ’s brief can be found here.