Tuesday’s ruling by the United States Court of Appeals for the Eleventh Circuit in United States v. AseraCare is a win for hospice and other health care providers who have long argued that a mere difference of clinical opinion among physicians is not enough to prove falsity under the False Claims Act. While the AseraCare ruling specifically applied in the context of hospice reimbursement, it is in line with prior rulings regarding provider judgment and will clearly impact other cases nationwide.
Here are some of the important takeaways.
The Court held that in order to show the required “falsity” under the FCA, the Government must show “something more than the mere difference of reasonable opinion[.]” In fact, the Court recognized that hospice regulations themselves state “predicting life expectancy is not an exact science,” and further held that “in some cases patients with an initial prognosis of terminality can improve over time and it allows such patients to exit hospice without losing their Medicare coverage to treat illness.” This is key language to address “live discharge” and patients who may roll on an off hospice over an extended period of time. The Court also agreed with AseraCare that LCDs are non-binding guidance, and not binding “checklists” for eligibility.
The Court effectively rejected the Government’s claim that its ruling would essentially bar any claim that a medical certification was improper. The Court noted that nowhere in the statute did Congress require that a terminal prognosis be retroactively proven accurate, only that the physician's good faith best estimate be true at the time. The Court acknowledged that it might be difficult for the Government to prove claims that a physician exercised no clinical judgement by not reviewing the medical record before certifying. But Congress created the standard based on clinical judgment, and it is Congress’s job – not the Court’s – to establish a different one if it chooses.
Having ruled that differences in clinical judgment could not themselves establish falsity, the Court held that the Government or a relator alleging that a patient was falsely certified for hospice care must identify facts and circumstances surrounding the certification that are inconsistent with the proper exercise of clinical judgment. The Court returned the case to the district court to provide the Government the opportunity to prove its allegations of a “corporate climate that pressured sales,” imposed improper “quotas,” and “discouraged meaningful physician involvement in eligibility determination.” Importantly, the Court directed that the Government must link any alleged falsity to the specific records reviewed, rather than rely on corporate “climate” and general practices alone. It remains to be seen whether there will be another chapter in this long running court saga, or whether the Government and defendants will settle.
The decision provides important specific clarification on a core medical eligibility issue for hospice providers and their clinicians. More broadly, we find that a number of our cases involve similar questions of reasonable provider judgment and choices. For example, in light of AseraCare, would homebound status in home healthcare eligibility be sufficiently objective to justify a similar approach? The AseraCare ruling is important precedent to combat a claim that a good faith medical opinion can be “false” for purposes of FCA liability, both in hospice and potentially beyond.
Contributors to this article include Jennifer Z. Belveal, Melissa B. Coffey, Thomas F. Carlucci, Jaime Dorenbaum, Pamela L. Johnston, Kristen M. Maryn, Michael P. Matthews, Byron J. McLain, Lori A. Rubin, Michael J. Tuteur, and Judith A. Waltz. For more information on the False Claims Act, and additional articles and information as well as representative experience, please click here.