The appellee in United States ex rel. Druding v. Care Alternatives, Inc., 952 F.3d 89 (3d Cir. 2020) has sought rehearing of the Third Circuit’s holding that “objective falsehood” is not a requirement under the False Claims Act (“FCA”). In reaching this holding, the Third Circuit considered whether a hospice-care provider’s claim for Medicare reimbursement can be considered “false” under the FCA where there were differences in expert opinion as to whether the accompanying patient certifications supported a terminal-illness prognosis. The district court applied an objective falsity requirement to the FCA, holding that a “mere difference in opinion” among medical experts is insufficient to show falsity under the FCA. The Third Circuit disagreed. Relying on the statutory text and Third Circuit precedent, the court held that falsity under the FCA includes both factual and legal falsity, and that disagreement among medical professionals as to a patient’s prognosis is evidence of legal falsity. In so holding, the court expressly rejected the rule that a doctor’s clinical judgment cannot be “false” under the FCA.
In seeking rehearing, Care Alternatives, Inc. has argued that the Eleventh Circuit’s opinion in United States v. AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019)—with which the Third Circuit acknowledged a conflict—provided the better reasoning. In AseraCare, the Eleventh Circuit had held that “a reasonable difference of opinion among physicians reviewing medical documentation ex post is not sufficient on its own to suggest that those judgments—or any claims based on them—are false under the FCA . . . .” Id. at 1297. According to Care Alternatives, AseraCare and similar decisions do not stand for the proposition that opinions can never be false, or that physicians are immune from FCA liability, as the Third Circuit seemed to fear. Rather, they merely establish the standard for proving falsity where, as in this case, a physician’s good-faith subjective opinion is not in dispute: the opinion must be objectively unreasonable, or based on false facts.
We will continue to watch this case work its way through the Third Circuit and report back.