Eleventh Circuit Rejects Expert Challenge to Clinical Judgment Decision in Hospice False Claims Act Litigation

On September 9, 2019, the U.S. Court of Appeals for the Eleventh Circuit issued an important decision for health care providers, especially those in the hospice industry. In U.S. v. AseraCare, Inc., No.16-13004, Slip. Op. (11^th Cir. September 9, 2019), the Court held that a “reasonable disagreement between medical experts” about prognosis for a terminally ill patient, without more, cannot establish falsity. Slip. Op. at 3. The case began in 2008 as a qui tam action when former AseraCare company employees filed a False Claims Act lawsuit alleging that AseraCare submitted documents that falsely certified some Medicare patients were “terminally ill” and eligible for hospice care. The Government intervened. While the Eleventh Circuit remanded to the District Court to review its ruling in favor of AseraCare, the Eleventh Circuit upheld the lower court’s ruling that differing medical opinions do not qualify as “objective” evidence of falsity required by the False Claims Act.

In this case, both the U.S. Department of Justice  and AseraCare relied heavily on expert testimony. The Government’s expert focused on 125 patients from a pool of nearly 2,200 hospice patients and concluded that the patients were not eligible for hospice care. Slip. Op. at 24. Significantly, the Government did not allege that the documentation provided for hospice qualification was insufficient, contained any false diagnosis or other false certifications. Rather, the Government tried to satisfy the “falsity element” alone with expert testimony that challenged the treating physician’s clinical judgments. Slip. Op. at 26. The Eleventh Circuit, in rejecting this approach, emphasized that the Medicare regulations themselves explain how the prognosis is a matter of “clinical decision” that should be granted deference. Slip. Op. at 31, 33.

The AseraCare decision is important for health care providers beyond the hospice sector. The Eleventh Circuit appropriately emphasized that clinical judgment about hospice eligibility made in good faith and in accordance with proper methodology and records, cannot be the basis of a False Claims Act violation without some objective evidence of falsity infecting records or the basis for the clinical determination. Expert testimony that criticizes and reaches a different clinical diagnosis alone does not convert reasonable decisions into false statements. Nor can the falsity “be inferred” by describing corporate practices that are not directly related to the specific claims. Slip. Op. at 15.

This ruling should apply beyond the hospice sector so that health care providers who make reasonable clinical judgments to use, for example, certain testing protocol or criteria eligibility for medical procedures, should not be exposed to False Claims Act violations. However, careful documentation of the reasoning and basis for the clinical decision remains essential.

If you have any questions about the information in this alert, please contact Jonathan Feld (312-627-5680 or jfeld@dykema.com), Eric Klein (248-203-0891 eklein@dykema.com), or your Dykema relationship attorney.