WINTER 202 0 TODAY’S GENER AL COUNSEL
Compliance
Eleventh Circuit Decision Will Impact FCA Healthcare Investigations By Kathleen McDermott
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he U.S. Court of Appeals for the Eleventh Circuit issued its muchawaited decision in United States v. AseraCare, Inc., powerfully debunking the government’s flawed theory that mere differences in clinical opinion can support punitive False Claims Act (FCA) liability. The decision is significant for hospice providers, but also for all healthcare providers that have battled government enforcers for the last decade on its theory that evidence of subjective lack of medical necessity is fraud. The decision should be a bellwether for the Department of Justice (DOJ), as well as an opportunity for
the DOJ to revisit its enforcement initiatives related to medical necessity. The healthcare industry should not misunderstand, however, the import of AseraCare and assume that hospice eligibility or medical necessity challenges for other health services cannot morph into big health care fraud investigations or audits. One good judicial decision does not allow for complacency in clinical oversight of key services to patients — whether those services are hospice, therapy or interventional. Rejecting DOJ’s signature theory of liability — that falsity may be established by mere clinical disagreement
divined from a cold retroactive review of the record — the court held that the trial court was right to grant a new trial to AseraCare. Its decision was based on erroneous jury instructions that allowed mere clinical disagreement to be the only evidence of falsity to find punitive FCA liability against the national hospice provider. The district court had granted a new trial on the basis that the instructions were wrong, and the Eleventh Circuit agreed. The court further held that the summary judgment subsequently granted to AseraCare should be vacated and reconsidered to give the government an opportunity to present any other