Healthcare Law

• Publication year: 2020

Healthcare Law

Kathryn Dunnam Harden

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Healthcare Law

by Kathryn Dunnam Harden^*

I. Introduction

This Article serves as a review of significant healthcare developments in the United States Court of Appeals for the Eleventh Circuit during this past survey period and builds upon Mercer Law Review's past two Healthcare Articles¹ in Volumes 69 and 70. Specifically, this Article will cover cases and trends involving Healthcare Fraud.

II. New Falsity Standard in Hospice Eligibility Certification Cases

On September 9, 2019, the Eleventh Circuit issued its long-awaited opinion, United States v. AseraCare, Inc.² As previously reported, the decision was much anticipated as the case dealt with the legal standard for the "falsity" element under the False Claims Act (FCA)³ with regard to hospice eligibility certifications, which has been "[o]ne of the undecided areas of law in the Eleventh Circuit."⁴

A. Underlying Litigation

At the district court level, the Government brought an action under the FCA against AseraCare, inc. (AseraCare), alleging that AseraCare submitted false claims to Medicare on behalf of 123 hospice patients.⁵ The Federal Regulation governing hospice Medicare eligibility requires

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certification of the patient's terminal illness.⁶ "The certification must specify that the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course."⁷ The FCA provides, in relevant part, that if a person:

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; [or] (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim . . . is liable to the United States Government [for civil penalties].⁸

In 2015, the United States District Court for the Northern District of Alabama bifurcated the trial into two phases, with the "falsity element" to be tried first.⁹ Upon AseraCare's motion, the court subsequently granted a new trial because the court did not instruct the jury that "a mere difference of opinion, without more, is not enough to show falsity."¹⁰

In 2016, the district court granted, sua sponte, summary judgment in favor of AseraCare.¹¹ The court explained that the Government must provide "proof of an objective falsehood" in prosecuting a FCA violation.¹² In making this "falsity" determination, the court disagreed with the Government's argument that the lack of "clinical information" in the patients' medical records supporting their hospice eligibility warranted the claims for those patients as "false."¹³ "When 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."¹⁴ Indeed, the district court cautioned that if:

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[A]ll 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.¹⁵

Therefore, the district court held that the Government failed to prove falsity as a matter of law and granted, sua sponte, summary judgment for AseraCare.¹⁶

B. Eleventh Circuit

On appeal, as the Eleventh Circuit aptly synopsized: "This appeal requires us to consider how Medicare's requirements for hospice eligibility—which are centered on the subjective 'clinical judgment' of a physician as to a patient's life expectancy—intersect with the FCA's falsity element."¹⁷ In its opinion, the Eleventh Circuit first provided a practical and thorough background of hospice care in the United States and the availability of the federal government's Medicare benefits in this regard.¹⁸ The Eleventh Circuit then structured its discussion and legal analysis by "defining the contours of the hospice-eligibility framework and clarifying the circumstances under which a claim violates the requirements for reimbursement."¹⁹ Then, it "consider[ed] the ways in which a hospice claim might be deemed 'false' for purposes of the FCA."²⁰

1. The Hospice-Eligibility Determination Centers on Clinical Judgment

With regard to the first prong of its analysis, the Eleventh Circuit explained that "[t]he language of the statute and implementing regulations makes plain that the clinical judgment of the patient's [physician or medical director] lies at the center of the eligibility

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inquiry."²¹ The pertinent regulation states in relevant part: "clinical information and other documentation that support the medical prognosis . . . accompany the certification" and are "filed in the medical record."²² In addition, "[t]his 'medical prognosis' is, itself, 'based on the physician's . . . clinical judgment.'"²³ "Importantly, none of the relevant language states that the documentary record underpinning a physician's clinical judgment must prove the prognosis as a matter of medical fact."²⁴ "Rather, the framework asks a physician responsible for the patient's care to exercise his or her judgment as to the proper interpretation of the patient's medical records."²⁵

While there is no question that clinical judgments must be tethered to a patient's valid medical records, it is equally clear that the law is designed to give physicians meaningful latitude to make informed judgments without fear that those judgments will be second-guessed after the fact by laymen in a liability proceeding.²⁶

Thus, the Eleventh Circuit rejected the Government's argument on appeal that "supporting documentation must, standing alone, prove the validity of the physician's initial clinical judgment."²⁷

2. Objective Falsity: More Than a Reasonable Difference in Clinical Judgment

With regard to the second prong of its analysis, the Eleventh Circuit agreed with the district court's decision 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."²⁸ As long as "the underlying clinical judgment does not reflect an objective falsehood," then the claim will not be false "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

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