August 10, 2020

Volume X, Number 223

August 07, 2020

Subscribe to Latest Legal News and Analysis

Eighth Circuit Affirms Summary Judgment Grant Based on Reasonable Interpretation of Ambiguous Regulation

The US Court of Appeals for the Eighth Circuit today issued a decision affirming a district court’s grant of summary judgment against a False Claims Act (FCA) relator in United States ex rel. Donegan v. Anesthesia Associates of Kansas City, PC, on which we previously posted.  The case involved a dispute over whether a regulation required an anesthesiologist to be present in the operating room when the patient “emerges” from anesthesia, and the district court had granted summary judgment on the grounds that the defendant had reasonably interpreted the regulation as not requiring presence in the operating room.  The district court’s decision was important because it made clear that the defendant’s interpretation of an ambiguous regulation need not be the “most reasonable” interpretation.

The Eighth Circuit agreed with the district court, holding that the relator could not establish scienter because the regulation was ambiguous, and that the defendant’s interpretation was objectively reasonable.  The court held:

Here, the question is whether AAKC’s reasonable interpretation of the ambiguous regulation precludes a finding that it knowingly submitted false or fraudulent claims, even if CMS or a reviewing court would interpret the regulation differently. Relator simply failed to submit evidence refuting AAKC’s strong showing that its interpretation was objectively reasonable. Relator’s experts expressed their opinions that emergence as referred to in Step Three should end before an AAKC patient is transferred to the PACU. But Relator’s contention that the Medicare regulations be interpreted in this fashion is a claim of regulatory noncompliance, not an FCA claim of knowing fraud.  (internal citations and quotations omitted)

This result underscores the fact that an FCA case based on alleged noncompliance with a regulation that is subject to multiple, reasonable interpretations can be a risky endeavor for a relator.

© 2020 McDermott Will & EmeryNational Law Review, Volume VI, Number 225

TRENDING LEGAL ANALYSIS


About this Author

Laura McLane, mcdermott will emery, SEC, healthcare, litigation
Partner

Laura McLane is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Boston office.  Laura represents clients in securities, healthcare and other government enforcement matters, both civil and criminal. She also represents clients in professional liability cases, products liability cases and complex commercial disputes, and she routinely conducts internal investigations for clients.

1 617 535 4410