On March 31, 2016, the United States District Court for the Northern District of Alabama in U.S. ex rel. Paradies v. AseraCare, Inc. dismissed a major False Claims Act case against a national hospice provider after ruling that a mere difference of medical opinion is not enough to prove a claim is false.
The case involved allegations that hospice provider AseraCare had submitted false claims to Medicare by certifying patients as eligible for hospice care even though they did not have “a life expectancy of 6 months or less if the terminal illness runs its normal course” as required by federal regulations. The court had previously decided to bifurcate the trial into two phases: phase one would focus on whether the claims were legally false, and phase two would focus on all remaining issues, including AseraCare’s mental intent and the Government’s alleged damages.
At the completion of phase one of the trial, the jury found that AseraCare had submitted false claims for 104 of the 121 patients at issue for some or all of their hospice stays. However, after that verdict, the court granted AseraCare’s motion for a new trial after finding that it had committed a “major reversible error” in the jury instructions on falsity. Specifically, the court found that it had erred by failing to instruct the jury that “[a] mere difference of opinion between physicians, without more, is not enough to show falsity.” The court stated that “expressions of opinion, scientific judgment, or statements as to conclusions about which reasonable minds may differ cannot be false.”
In addition to ordering a new trial, the court ordered the Government to direct the court to admissible, objective evidence from phase one of the trial, other than the Government’s medical expert’s testimony, that would show that AseraCare had actually submitted false claims to Medicare. The Government was unable to meet this burden. As the court noted, the Government had no evidence that AseraCare had forged physicians’ signatures on the hospice certifications, billed for services that were not rendered, or submitted claims for fictitious patients. Instead, the Government’s proof that the underlying claims were false was based exclusively on the testimony of its medical expert who had examined the patients’ medical records and concluded that they were not eligible for hospice care. However, as the court noted, AseraCare’s medical experts had examined the very same medical records and reached the opposite conclusion. Further, the Government’s witness from Palmetto GBA had testified that “two doctors using their clinical judgment could come to different conclusions about a patient’s prognosis and neither be right or wrong.”
After examining this evidence, the court granted summary judgment to AseraCare and dismissed the case because the Government had not met its evidentiary burden. The court noted that, “[w]hen 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.” The court continued: “If the court were to find that all the Government needed to prove falsity in a hospice provider case was one medical expert who reviewed the medical records and disagreed with the certifying physician, hospice providers would be subject to potential FCA liability any time the Government could find a medical expert who disagreed with the certifying physician’s clinical judgment. The court refuses to go down that road.”
Stayed tuned on this case. Both the Government and the whistleblowers are expected to appeal, so this is not the final word on this groundbreaking FCA case.