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Winter ex rel. United States v. Gardens Reg'l Hosp. & Med. Ctr., Inc.

United States Court of Appeals for the Ninth Circuit

September 13, 2019, Argued and Submitted, Pasadena, California; March 23, 2020, Filed

No. 18-55020

Opinion

 [*1112]  BENNETT, Circuit Judge:

Appellant-Relator Jane Winter ("Winter"), the former Director of Care Management at Gardens Regional Hospital ("Gardens Regional"), brought this qui tam action under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33. Winter alleges Defendants2 submitted, or caused to be submitted, Medicare claims falsely certifying that patients' inpatient hospitalizations were medically necessary. Winter alleges that the admissions were not medically  [*1113]  necessary and were contraindicated by the patients' medical records and the hospital's own admissions criteria. The district court dismissed Winter's second amended complaint ("the complaint") for failure to state a claim. The district court held that "to prevail on an FCA claim, a plaintiff must show that a defendant knowingly made an objectively false representation," so a statement that implicates a doctor's clinical judgment can never state a claim under the FCA because "subjective medical opinions . . . cannot be proven to be objectively false."

] We have jurisdiction under 28 U.S.C. § 1291. We hold that a plaintiff need not allege [**5]  falsity beyond the requirements adopted by Congress in the FCA, which primarily punishes those who submit, conspire to submit, or aid in the submission of false or fraudulent claims. Congress imposed no requirement of proving "objective falsity," and we have no authority to rewrite the statute to add such a requirement. A doctor's clinical opinion must be judged under the same standard as any other representation. A doctor, like anyone else, can express an opinion that he knows to be false, or that he makes in reckless disregard of its truth or falsity. See 31 U.S.C. § 3729(b)(1). We therefore hold that a false certification of medical necessity can give rise to FCA liability.3 We also hold that a false certification of medical necessity can be material because medical necessity is a statutory prerequisite to Medicare reimbursement. Accordingly, we reverse and remand.

BACKGROUND

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953 F.3d 1108 *; 2020 U.S. App. LEXIS 8986 **

JANE WINTER, ex rel. United States of America, Plaintiff-Appellant, v. GARDENS REGIONAL HOSPITAL AND MEDICAL CENTER, INC., DBA Tri- City Regional Medical Center, a California corporation; ROLLINSNELSON LTC CORP., a California corporation; VICKI ROLLINS; BILL NELSON; S&W HEALTH MANAGEMENT SERVICES, INC., a California corporation; BERYL WEINER; PRODE PASCUAL, M.D.; RAFAELITO VICTORIA, M.D.; ARNOLD LING, M.D.; CYNTHIA MILLER-DOBALIAN, M.D.; EDGARDO BINOYA, M.D.; NAMIKO NERIO, M.D.; MANUEL SACAPANO, M.D., Defendants-Appellees.

Prior History:  [**1] Appeal from the United States District Court for the Central District of California. D.C. No. 2:14-cv-08850-JFW-E. John F. Walter, District Judge, Presiding.

United States v. Gardens Reg'l Hosp. & Med. Ctr., Inc., 2017 U.S. Dist. LEXIS 221356 (C.D. Cal., Dec. 29, 2017)

CORE TERMS

patients, alleges, inpatient, medical necessity, falsity, fraudulent, district court, medically necessary, clinical, scienter, false certificate, medical record, false claim, hospitalization, admitting, certification, falsehood, fraudulent claim, false statement, reimbursement, diagnosis, knowingly, illness

Business & Corporate Compliance, Labor & Employment Law, Employer Liability, False Claims Act, Governments, Federal Government, Claims By & Against, Labor & Employment Law, False Claims Act, Scope & Definitions, Qui Tam Actions, Scope & Definitions, Burdens of Proof, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Appeals, Standards of Review, De Novo Review, Pleadings, Heightened Pleading Requirements, Fraud Claims, Legislation, Interpretation, Pleading & Practice, Heightened Pleading Requirements