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11th Circuit Relieves Providers of FCA Liability When Claims for Payment Are Based on Physicians’ Legitimate Clinical Opinions


A recent federal appellate court ruling clarified an important issue in False Claims Act cases. In an extremely important case for healthcare providers, the 11th Circuit noted that a difference in medical opinion does not constitute a false claim.

Healthcare providers do not submit a false claim when they rely on a physician’s validly-reasoned clinical judgment of a patient’s diagnosis, the 11th Circuit Court of Appeals recently ruled. In the case, United States v. AseraCare, the government alleged that hospice provider AseraCare submitted false claims to the government based on the assertion that patients were not terminally ill as defined in Medicare’s hospice requirements for certifying a terminal illness. The case originated in the Northern District of Alabama.1

The 11th Circuit examined the question of what makes a claim “false.” Specifically, if the government is able to provide an expert opinion that a physician’s clinical judgement was incorrect, is a claim that is based on such clinical judgement “false?” Or, is a provider entitled to rely on the valid clinical judgement of its physicians in submitting claims for payment to Medicare?

In reaching its decision, the appeals court acknowledged what many of us have long known: two different physicians, each applying their own valid and well-reasoned clinical judgement can reach entirely different conclusions as to many subjective medical standards, and neither physician will be wrong. In AseraCare, the Court acknowledged further that a certification of a patient’s terminal illness--that a patient will die within six months—is not a certainty for any physician making a certification of terminal illness under 42 CFR 418.22 saying:

“The legal framework signals, and CMS itself has acknowledged, that no such certitude can be expected of physicians in the practice of treating end-of-life illness. All the legal framework asks is that physicians exercise their best judgment in light of the facts at hand and that they document their rationale.”

The court then determined that, when a hospice provider submits a claim “that certifies that a patient is terminally ill “based on the physician’s or medical director’s clinical judgment regarding the normal course of the individual’s illness,” 42 U.S.C. § 1395f(7), 42 C.F.R. § 418.22(b), the claim cannot be “false”—and thus cannot trigger FCA liability—if the underlying clinical judgment does not reflect an objective falsehood.”

The court held that unless the government can show an objective falsehood in the physician’s opinion (for example, that the certifying physician made a deliberate misrepresentation in the medical record or had not reviewed the patient’s record) then the claim should not be considered false. The Court stated, “In so holding, we agree with the district court’s conclusion that, in order to show objective falsity as to a claim for hospice benefits, the Government must show something more than the mere difference of reasonable opinion concerning the prognosis of a patient’s likely longevity.”

Caution is warranted insofar as AseraCare does not suggest that hospitals are not liable for an overpayment where the government’s medical experts disagree with the clinical judgment of a provider or physician. It does provide relief, since it relieves hospitals from FCA liability – including fines and treble damages – by preventing the government from second-guessing physicians’ legitimate clinical judgment.2

For more information:

United States v. AseraCare, Inc. (2019 WL 4251875) (11th Cir. September 9, 2019)

[1] AseraCare overturned the U.S. District Court for the Northern District of Alabama’s sua sponté post-verdict summary judgement in favor of AseraCare. This was due to a complex procedural posture where the District Court had split the trial to consider as separate issues 1) whether the claims submitted by AseraCare were “false” and 2) whether AseraCare had “knowledge” of any falsity, and in doing so, the 11th Circuit found that the District Court had inappropriately failed to consider evidence of one element in the corresponding trial related to the second element. In overturning the summary judgment grant however, the 11th Circuit praised the District Court for its “diligent, conscientious, and thoughtful[ness]”, especially in relation to the District Court’s consideration of the issues of what makes a claim “false.” This was evident when the District Court itself determined that it had given a jury the incorrect instructions on what makes a claim “false”, and the District Court ultimately determined it necessary to order a new trial. This question as to “falsity” is precisely what also makes this case so important for providers.
[2] It is also worth noting that the Court did not actually side with AseraCare and instead reversed the dismissal of the case and remanded the case for further consideration as to whether AseraCare had “knowledge” of any false claim—a wholly separate question from whether a claim was false. In this respect, the Court’s finding as to reliance on the clinical opinions of physicians was a binding, but essentially academic discussion insofar as there was some evidence that the physician certifications in this case were not actually legitimate certifications.