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The common-law definition of fraud permits a finding that subjective opinions may be considered false and that medical opinions can be false and are not shielded from scrutiny. Therefore, a difference of medical opinion is enough evidence to create a triable dispute of fact regarding False Claims Act falsity. This does not mean that objectivity is never relevant for False Claims Act liability. However, objectivity speaks to the element of scienter, not falsity. The text and application of the False Claims Act require that the elements of falsity and scienter be analyzed separately.
Victoria Druding, Linda Coleman, Barbara Bain, and Ronni O'Brien (collectively, "Appellants"), each of whom is a former employee of Appellee Care Alternatives, brought this FCA action alleging that Care Alternatives admitted patients who were ineligible for hospice care and directed its employees to improperly alter those patients' Medicare certifications to reflect eligibility. In support of their position, Appellants retained an expert. The expert opined in his report that, based on the records of the forty-seven patients he examined, the patients were inappropriately certified for hospice care thirty-five percent of the time. Care Alternatives' expert disagreed and testified that a reasonable physician would have found all of the patients reviewed by Appellants' expert hospice-eligible on each occasion that Appellants' expert had deemed certification inappropriate. In considering Care Alternatives' summary judgment motion, the District Court determined that a mere difference of opinion between experts regarding the accuracy of the prognosis was insufficient to create a triable dispute of fact as to the element of falsity. In fact, the District Court required Appellants to instead provide evidence of an objective falsehood. Upon finding Appellants had not adduced such evidence, the District Court granted summary judgment in favor of Care Alternatives.
Can clinical judgments be considered "false" in the context of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733 (2009)?
The court held that the district court erred in granting summary judgment in favor of Care Alternatives because a claim for reimbursement for Medicare Hospice Benefit could be considered "false" under the False Claims Act on the basis of medical-expert testimony that opined that accompanying patient certifications did not support patients' prognoses of terminal illness, and appellants' expert testimony created a genuine dispute of material fact as to falsity.