September 25, 2021

Volume XI, Number 268

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September 23, 2021

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Supreme Court Declines to Weigh in on Requiring Objective Falsity in FCA Medical Necessity Cases

As our readers know, we have long been closely watching False Claims Act (FCA) cases across the country alleging the submission of false claims based on the lack of medical necessity, particularly as a possible circuit split seemed to be developing with respect to requiring “objective falsity” to allege such FCA violations.  And we have likewise been waiting to see if the issue will be decided by the Supreme Court.  On February 22, 2021, we got an answer – at least for now – when the Supreme Court denied a petition for certiorari in RollinsNelson LTC Corp. et al v. U.S. ex rel. Winters, a FCA case out of the Ninth Circuit in which the defendant was accused of submitting claims to Medicare for medically unnecessary hospital admissions (which we have been following since last year).

This case was brought by a former hospital director who alleged that the defendant (which owns a hospital management company in California) engaged in a scheme to force the admission of nursing home patients to the hospital, even when it was not medically necessary (e.g., for infections ordinarily treated with oral antibiotics).  RollinsNelson had prevailed in its motion to dismiss at the district court level, with the district court finding that “to prevail on an FCA claim, a plaintiff must show that a defendant knowingly made an objectively false representation,” and thus a statement implicating a doctor’s clinical judgment can never state a claim under the FCA because “subjective medical opinions . . . cannot be proven to be objectively false.”

The Ninth Circuit Court of Appeals, however, sided with the relator, reinstating the case and finding that a “plaintiff need not allege falsity beyond the requirements adopted by Congress in the FCA” and observing that Congress did not impose objective falsity requirement in the FCA and the panel had no authority to add such a requirement.  The panel also held that a doctor, like anyone else, can express an opinion that s/he knows to be false or makes in reckless disregard of its truth or falsity and thus a false certification of medical necessity can give rise to FCA liability.  (This opinion also discusses many of the opinions from other circuits that we have covered in our previous posts, including AseraCare and Polukoff.) 

In its petition for certiorari, RollinsNelson argued that the Ninth Circuit had relied on an incorrect pleading standard and reinforced a circuit split on this issue, but the Supreme Court declined to weigh in on the matter.  As always, we will continue to monitor new cases that address this issue and to wait to see if the Supreme Court will decide to take it up.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 55
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About this Author

Samantha P. Kingsbury Associate Health Care Compliance, Fraud & Abuse, and Regulatory Counseling
Associate

Samantha’s practice focuses on health care enforcement defense matters. These matters often involve criminal and administrative actions brought against health care providers and companies by state and federal governmental and regulatory agencies. She also has experience in assisting clients with internal investigations of potential violations of the federal anti-kickback statute, the Stark law, and the False Claims Act, among other statutes and regulations. Samantha also has experience preparing self-disclosures and other reports relating to such enforcement matters, as well as developing...

617-348-1829
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