United States: Eleventh Circuit: Expert Disagreement With Clinical Judgment Of Care Provider Not Necessarily An Indication Of Fraud

(October 17, 2019) -  The Eleventh Circuit’s recent decision in United States v. Aseracare, Inc., No. 16-13004 (11th Cir. Sept. 9, 2019) makes clear that reasonable minds can disagree in the exercise of clinical judgment without constituting actionable fraud in medical certifications for reimbursement by Medicare. The False Claims Act (FCA) allows the state and federal governments to prosecute healthcare providers and collect double or triple damages for healthcare fraud or abuse by providers in the Medicaid and Medicare programs. An actionable claim under the FCA requires a false and material statement made with scienter (knowledge of wrongdoing), causing the government to pay a claim. Thus, a reimbursement claim violates the FCA when the claim is not reimbursable under the Medicare and Medicaid regulations or was not rendered as claimed.

In AseraCare, the government prosecuted the defendant healthcare providers, alleging a false certification theory of liability (i.e. falsely asserting or implying compliance with a statutory or regulatory requirement without actually complying with it.) The defendant healthcare providers were hospice facilities providing end-of-life care for Medicare beneficiaries. To receive payment for services provided, Medicare required the beneficiaries to receive a medical certification that they were terminally ill (i.e. they had six months or less to live). The first certifications were valid for 90 days and had to be recertified every 60-90 days.

The government alleged that the defendants violated the FCA by submitting documents falsely certifying that certain beneficiaries were terminally ill when they were not. Thus, reimbursement for Medicare hospice benefits was based largely on the clinical judgment of the patient’s attending physician.

To support its case, the government retained an expert witness that reviewed 223 patient records selected by the government. The patient records selected were a particular subset of patients that had received hospice benefits for at least one continuous year. The expert witness determined that 123 of the 223 patients certified as terminally ill were not terminally ill and did not qualify for Medicare’s hospice benefits.

Notably, the government did not allege the presence of phantom (i.e. fictional) patients, forged documents, or defendants intentionally lying or omitting critical information from the certification process. Instead, the government’s theory was that the patients were, as a medical fact, not terminally ill and, therefore, that the certification was false. Thus, the sole question was whether the care provided by the defendants was reimbursable under the Medicare regulatory framework.

The Eleventh Circuit concluded there was a difference between actionable “false” facts and non-actionable “wrong” clinical judgments. The court held that the Medicare regulations did not require medical documentation to demonstrate the conclusions of the physician’s clinical judgment, but only needed to support the conclusions of the clinical judgment. A provider’s clinical judgment about the “normal course of the individual’s illness” was not “wrong or right” and, therefore, could not be false for purposes of FCA liability.

The court provided distinguishing examples of objective falsehood and reasonable differences of opinion for the FCA:

Examples of Falsity

• A physician fails to review patient records or familiarize himself with the patient prior to certifying the patient as terminally ill.
• A physician certifies a patient as terminally ill, even though his subjective clinical judgment is that the patient is not terminally ill.
• A physician could not have objectively concluded that the patient was terminally ill based on the relevant medical records.

Examples of Disagreement

• A physician reviewing medical records after the fact disagrees with the treating provider’s clinical determinations.
• A properly formed and sincerely held clinical judgment, even if the judgment is wrong.

Key Takeaway:  something is considered a falsity when the clinical judgment is flawed based on objective, verifiable facts.

The Eleventh Circuit’s decision holds promise for healthcare providers who care for Medicaid and Medicare patients and require extensive use of clinical judgment for treatment and reimbursement. The AseraCare decision maintains a higher standard for FCA liability and hampers government prosecutions based largely on the armchair quarterbacking of expert reviews. However, healthcare providers should be cautious that the decision will likely lead lawmakers and regulators to revisit the reimbursement requirements for services involving clinical judgment in order to emphasis or require the use of objective patient records or materials for reimbursement certification.

Providers should make sure to stay ahead of the curve by incorporating an annual review of Medicaid and Medicare reimbursement requirements and service limits to make sure their practice is complying with all reimbursement requirements. They should also make sure billing and clinical staff take changes to reimbursement requirements and service limits into consideration when going through their daily workflow, making sure all clinical and administrative documentation is present to support a claim in case of a future audit. Finally, providers should also consult with their legal counsel and independent review organizations to ensure actual compliance with the government’s requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.