ELEVENTH CIRCUIT COURT OF APPEALS RULES ON LACK OF MEDICAL NECESSITY CASES

The Eleventh Circuit Court of Appeals recently weighed in on whether the Government could sustain a False Claims Act case. In this specific case, allegations centered around whether the services provided to the patient and billed to Medicare were “medically necessary.”

In vacating the district court’s grant of summary judgment, the Eleventh Circuit held that these so-called “medical necessity” cases are viable False Claims Act cases. They also held that the Government should have been given an opportunity to present all of the available evidence of the falsity of the claims.

The case in question, United States v. AseraCare, was considered by many to be a bellwether case. The ruling would help determine how future courts would decide these types of questions. Currently, False Claims Act cases that alleged lack of medical necessity were hotly contested cases. In addition, there were strongly held opposing views on both sides of the courts.

UNDERSTANDING THE CASE 

The AseraCare case was filed by three former AseraCare employees. These whistleblowers alleged that the hospice care provider knowingly overbilled Medicare for hospice services. They did this by hiding information from doctors, so they could obtain hospice eligibility for patients who were not terminally ill.

In United States v. AseraCare, attorneys for the Government and the whistleblowers obtained a substantial partial verdict against AseraCare, a for-profit home hospice company. The Government argued, and the jury agreed, that AseraCare was deliberately enrolling and billing Medicare for patients who were not eligible for hospice care. They argued that there was a lack of medical necessity.

The district court, however, set aside the jury’s verdict stating that it had erred in its jury instructions. They ultimately granted summary judgment in favor of AseraCare.

UNDERSTANDING MEDICARE FRAUD 

Medicare fraud is the claiming of Medicare health care reimbursement for fraudulent purposes. Billing for unnecessary services, upcoding and unbundling, and false patient billing are all examples of Medicare fraud. It is estimated that Medicare fraud costs more than $47 billion.

In 2009, the Affordable Care Act provided an additional $350 million to pursue fraudulent Medicare claims. In addition, the healthcare reform laws provided for stricter penalties to help deter fraud.

HOW THIS CASE IMPACTS FUTURE CASES

In the case against AseraCare, the court ruled that a claim could not be false under the False Claims Act simply based on a difference in clinical judgment. In order to prove fraud, there must be objective proof of falsehood.

In vacating the summary judgment, the Eleventh Circuit provided a roadmap for whistleblowers and the Government to prove the falsity of a defendant’s claim for payment in lack of medical necessity False Claims Act cases. It is important that whistleblowers and Government lawyers alike read this opinion closely and follow this roadmap in drafting medical necessity False Claims Act complaints and designing case strategy.

As the Eleventh Circuit explained, the Government may show objective falsehood in a variety of ways, including:

• By showing that certifying physician “failed to review a patient’s medical records or otherwise familiarize himself with the patient’s condition before asserting that the patient was terminal.”
• By showing that the certifying physician did not “subjectively believe that the patient was terminally ill at the time of certification.”
• By proving through expert evidence that “no reasonable physician could have concluded that a patient was terminally ill given the relevant medical records.”

This is by no means an exhaustive list. As the Eleventh Circuit made clear, to demonstrate falsity in this type of Medicare fraud cases, the Government and whistleblower simply need to identify the facts and circumstances surrounding the patient’s certification. Most specifically, the ones that are inconsistent with the proper exercise of a physician’s clinical judgment.

CONTACT OUR FALSE CLAIMS ACT ATTORNEYS TODAY

At Price Armstrong, we have extensive experience litigating Medicare fraud cases under the False Claims Act. We help maximize recovery for whistleblowers and understand that they face an uphill battle and that the fear is real. We work hard to protect whistleblowers every step of the way under the False Claims Act. Contact us for a free initial consultation and review of your case.