Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca3-18-03298/USCOURTS-ca3-18-03298-0/pdf.json

Nature of Suit Code: 375
Nature of Suit: False Claims Act
Cause of Action: 

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 18-3298

_____________

UNITED STATES OF AMERICA and STATE OF NEW 

JERSEY ex rel. VICTORIA DRUDING; BARBARA BAIN; 

LINDA COLEMAN; RONNI O’BRIEN

 

v.

CARE ALTERNATIVES

Victoria Druding, Barbara Bain, Linda Coleman, and Ronni 

O’Brien

Appellants

______________

On Appeal from the United States 

District Court for the District of New Jersey 

(D.C. Civ. Action No. 1-08-cv-02126)

District Judge: Honorable Jerome B. Simandle

______________

Argued September 10, 2019

______________

Before: HARDIMAN, GREENAWAY, JR. and BIBAS, 

Circuit Judges.

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(Opinion filed: March 4, 2020)

Ross Begelman

Marc M. Orlow

Regina D. Poserina

Begelman Orlow & Melletz

411 Route 70 East

Suite 245

Cherry Hill, NJ 08034

Russell D. Paul [ARGUED]

Sherrie R. Savett

Berger Montague

1818 Market Street

Suite 3600

Philadelphia, PA 19103

Counsel for Appellants

Charles W. Scarborough [ARGUED]

United States Department of Justice

Appellate Section

Room 7244

950 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Counsel for Amicus Supporting Appellants

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William H. Jordan

Jason Popp [ARGUED]

Alston & Bird

1201 West Peachtree Street

One Atlantic Center

Suite 4900 

Atlanta, GA 30309

Counsel for Appellee

______________

OPINION

_______________

GREENAWAY, JR., Circuit Judge.

This case requires us to consider whether and when 

clinical judgments can be considered “false” in the context of 

the False Claims Act (“FCA”), 31 U.S.C. §§ 3729–3733 

(2009). It is a matter of first impression in this Court.

Victoria Druding, Linda Coleman, Barbara Bain, and 

Ronni O’Brien (collectively, “Appellants”), each of whom is a

former employee of Appellee Care Alternatives, brought this 

FCA action alleging that Care Alternatives admitted patients 

who were ineligible for hospice care and directed its employees 

to improperly alter those patients’ Medicare certifications to 

reflect eligibility. In support of their position, Appellants

retained an expert. The expert opined in his report that, based 

on the records of the forty-seven patients he examined, the 

patients were inappropriately certified for hospice care thirtyfive percent of the time.

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Care Alternatives’ expert disagreed and testified that a 

reasonable physician would have found all of the patients 

reviewed by Appellants’ expert hospice-eligible on each 

occasion that Appellants’ expert had deemed certification 

inappropriate. In considering Care Alternatives’ summary 

judgment motion, the District Court determined that a mere 

difference of opinion between experts regarding the accuracy 

of the prognosis was insufficient to create a triable dispute of 

fact as to the element of falsity. In fact, the District Court 

required Appellants to instead provide evidence of an objective 

falsehood. Upon finding Appellants had not adduced such 

evidence, the District Court granted summary judgment in 

favor of Care Alternatives.

Today, we reject the District Court’s objectivefalsehood requirement for FCA falsity. Since we find that 

Appellants’ expert testimony created a genuine dispute of 

material fact as to falsity, we will vacate the judgment and 

remand to the District Court for further proceedings consistent 

with this opinion.

I. BACKGROUND

Care Alternatives provides hospice care to patients 

throughout New Jersey. It employs a team of clinicians known 

as “interdisciplinary teams,” (“IDTs”) consisting of registered 

nurses, chaplains, social workers, home health aides, and 

therapists working alongside independent physicians who 

serve as hospice medical directors. The IDTs meet twice a 

month to review patient care plans and to identify any 

particular needs as well as discuss patients who are up for 

recertification of their need for hospice care.

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Appellants are former employees of Care Alternatives, 

many of whom were clinicians that participated in IDTs. They 

brought this action under the FCA alleging, among other 

things, that Care Alternatives admitted ineligible patients and 

directed its employees to alter Medicare certifications to 

increase the number of eligible patients.

Before reaching the essential question of whether expert 

testimony may suffice to generate a genuine dispute as to a 

Medicare claim’s falsity, we will review the requirements that

hospice care providers must meet to qualify for Medicare 

reimbursement and the circumstances leading to this appeal.

A. Medicare Hospice Benefit

In 1983, Congress established the Medicare Hospice 

Benefit (“MHB”). See 48 Fed. Reg. 56,008 (Dec. 16, 1983)

(codified at 42 C.F.R. pts. 400, 405, 408, 409, 418, 420, 421, 

489). This regulation expanded the Health and Human 

Services Secretary’s statutory authority to reimburse 

contractors that provide hospice care to eligible persons. 42 

U.S.C. §§ 1395h (2006), 1395kk-1 (2015). Hospice care is 

considered palliative care, meaning it is “patient and familycentered care that optimizes quality of life by anticipating, 

preventing, and treating suffering.” 42 C.F.R. § 418.3 (2019). 

It aims to “mak[e a terminally ill] individual as physically and 

emotionally comfortable as possible.” 48 Fed. Reg. at 56,008.

A patient who has been certified as eligible for hospice care 

and elects to receive the MHB waives the right to Medicare 

payment for “curative” care that is designed to help improve 

the individual’s condition. See 42 U.S.C. § 1395d(d)(2)(A)

(2005); 42 C.F.R. § 418.24(e) (2019); 72 Fed. Reg. 50,452, 

50,452 (Aug. 22, 2014).

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The Medicare provisions thatset forth the conditions for 

payment of the MHB require that an individual be certified

within a ninety-day period by one or more physicians as 

terminally ill. 42 U.S.C. § 1395f(a)(7)(A)(i). The patient must 

also be recertified in a similar manner for each additional sixtyor ninety-day period during which he or she remains in hospice

care.

1 Id. § 1395f(a)(7)(A)(ii). An individual is considered

“terminally ill” when the individual has a medical prognosis 

1 In relevant part, the statute states that:

payment for services furnished an individual may be made . . . 

only if . . . in the case of hospice care provided an individual—

(A)(i) in the first 90-day period—

(I) the individual’s attending physician . . . , and 

(II) the medical director . . . of the hospice care 

program providing (or arranging for) the care, 

each certify in writing at the beginning of the 

period, that the individual is terminally ill . . . 

based on the physician’s or medical director’s 

clinical judgment regarding the normal course of 

the individual’s illness, and 

(ii) in a subsequent 90- or 60-day period, the medical 

director or physician described in clause (i)(II) 

recertifies at the beginning of the period that the 

individual is terminally ill based on such clinical 

judgment . . .

§ 1395f(a)(7)(A); see also § 1395f(a)(7)(B)–(E) (providing the 

other statutory prerequisites).

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that the individual’s life expectancy is six months or less, if the 

illness runs its normal course. Id. § 1395x(dd)(3)(A) (2018); 

42 C.F.R. § 418.3.

Regulations promulgated by the Secretary add another 

requirement. See 42 C.F.R. § 418.20. The regulations provide 

that, “[i]n order to be eligible to elect hospice care under 

Medicare, an individual must be . . . (b) Certified as being 

terminally ill in accordance with § 418.22.” Id. Section 418.22, 

in turn, imposes certain obligations on hospices regarding the 

timing, content, and source of a certification, in addition to a 

maintenance-of-records requirement. Among these is the 

requirement that

[c]linical information and other documentation that 

support the medical prognosis must accompany the 

certification and must be filed in the medical record 

with the written certification as set forth in paragraph 

(d)(2) of this section. Initially, the clinical information 

may be provided verbally, and must be documented in 

the medical record and included as part of the hospice’s 

eligibility assessment.

§ 418.22(b)(2) (2011).

Therefore, in order for a patient to be eligible to receive 

the MHB and for a hospice provider to be entitled to bill for 

such benefits, an individual’s certification of terminal illness

must be signed by at least one physician, and be accompanied 

by “[c]linical information and other documentation that 

support the medical prognosis” of terminal illness in the 

medical record. Id. Indeed, while the Center for Medicare & 

Medicaid Services, the agency responsible for administering 

health benefits, has recognized that “making a prognosis is not 

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an exact science,” it has explained that this inexactitude “does 

not negate the fact that there must be a clinical basis for a 

certification[:] [a] hospice is required to make certain that the 

physician’s clinical judgment can be supported by clinical 

information and other documentation that provide a basis for 

the certification of 6 months or less if the illness runs its normal 

course.” 79 Fed. Reg. at 50,470 (emphasis added); see also 70 

Fed. Reg. 70,532, 70,534–35 (Nov. 22, 2005) (“A hospice 

needs to be certain that the physician’s clinical judgment can 

be supported by clinical information and other documentation 

that provide a basis for the certification of 6 months or less if 

the illness runs its normal course. A signed certification, 

absent a medically sound basis that supports the clinical 

judgment, is not sufficient for application of the hospice

benefit under Medicare.”).

B. Factual and Procedural Background

Appellants brought this suit under the qui tam provision 

of the FCA, which encourages actions by private individuals, 

called relators, who are entitled to a portion of the amount 

recovered, subject to certain limitations. See 31 U.S.C. § 

3730(b), (d). Pursuant to the qui tam provision, Appellants

filed their complaint under seal and provided the Government 

with the information upon which they intended to rely so that 

the Government could make an informed decision as to 

whether it should intervene and take over the case. Id. 

§ 3730(b)(2). Appellants alleged that Care Alternatives 

submitted false hospice-reimbursement claims to Medicare 

and Medicaid between 2006 and 2007, in violation of the FCA, 

which finds liable any person who knowingly submits to the

United States a false claim for payment or approval. 31 U.S.C. 

§§ 3729(a)(1)(A), 3730(b)(1).

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Seven years after the complaint was filed, the 

Government notified the District Court of its decision not to 

intervene in this action. Appellants opted to proceed 

independently and served the First Amended Qui Tam 

Complaint upon Care Alternatives.

During discovery, the parties produced extensive 

evidence addressing whether Care Alternatives admitted 

ineligible patients. This included dueling expert opinions. 

Appellants’ expert, Dr. Jayes, prepared a report as to whether

patient certifications were accompanied by supporting 

documentation. He examined the records of forty-seven

patients and opined that the documents did not support a 

certification of need for hospice in thirty-five percent of these 

patients’ hospice certification periods. In his view, for those 

periods, any reasonable physician would have reached the 

conclusion he reached. He also found that the medical records 

were incomplete for at least three patients.

Care Alternatives’ expert, Dr. Hughes, disagreed. For 

each certification that Dr. Jayes reviewed, Dr. Hughes opined 

that a physician could have reasonably determined that the 

prognosis for each patient was six months or less.

Care Alternatives moved for summary judgment 

arguing that Appellants could not make out the four prima facie

elements of a claim under the FCA: falsity, causation, 

knowledge, and materiality. 2 See United States ex rel. 

2 Care Alternatives had also moved to dismiss the amended 

complaint for failure to comply with the statutory requirements 

of 31 U.S.C. § 3730(b)(2), which, among other things, requires 

a relator to submit a “written disclosure of substantially all 

material evidence and information the person possesses” in 

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Petratos v. Genentech Inc., 855 F.3d 481, 487 (3d Cir. 2017).

Most relevant to this appeal were Care Alternative’s arguments 

that Appellants had not produced sufficient evidence of 

falsity. The Government submitted a statement of interest 

urging the District Court to reject the argument that the FCA 

requires evidence of an “objective falsehood.”

The District Court granted summary judgment to Care 

Alternatives based solely on failure to show falsity. Relying 

on two district court decisions from Alabama and Texas, it 

rejected the Government’s assertions and held that a “mere 

difference of opinion between physicians, without more, is not 

enough to show falsity.” Druding v. Care Alternatives, Inc., 

346 F. Supp. 3d 669, 685 (D.N.J. 2018) (emphasis in original) 

(internal citation omitted). In doing so, it relied on the premise 

that medical opinions are subjective and cannot be false. Id.

(quoting United States ex rel. Riley v. St. Luke’s Episcopal 

Hosp., 355 F.3d 370, 376 (5th Cir. 2004) (finding that 

“scientific judgments about which reasonable minds may differ 

cannot be ‘false’” (internal citation omitted))). 

Regarding the element of falsity, the District Court 

adopted a standard not previously embraced or established by 

this Court, which required Appellants to show evidence of “an 

objective falsehood,” that the physician’s prognosis of terminal 

order for the Government to decide whether it will intervene in 

an action or move to dismiss the complaint. 31 U.S.C. 

§ 3730(b)(2), (c)(2)(A). The District Court denied the motion. 

Druding v. Care Alternatives, Inc., 346 F. Supp. 3d 669, 683–

84 (D.N.J. 2018).

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illness was incorrect, in order to prevail on the element of 

falsity. Id.

Appellants appealed, and the Government submitted an 

amicus brief advancing substantially the same argument as it 

had before the District Court.

II. JURISDICTION & STANDARD OF REVIEW

The District Court had jurisdiction pursuant to 28 

U.S.C. § 1331 and 31 U.S.C. § 3732, and we have jurisdiction 

pursuant to 28 U.S.C. § 1291. “Our review of a district court’s 

decision at summary judgment is plenary,” so, viewing “all 

facts in the light most favorable to the non-moving party and 

draw[ing] all inferences in that party’s favor,” “[w]e determine 

whether the moving party has established that there is no 

genuine dispute of material fact . . . .” Forrest v. Parry, 930 

F.3d 93, 105 (3d Cir. 2019) (citations omitted).

III. DISCUSSION

The central question on appeal is whether a hospicecare provider’s claim for reimbursement can be considered

“false” under the FCA on the basis of medical-expert testimony 

that opines that accompanying patient certifications did not 

support patients’ prognoses of terminal illness. The answer is 

a straightforward yes. In coming to this conclusion, we decline 

to adopt the District Court’s “objective” falsity standard, as the 

test is inconsistent with the statute and contrary to this Court’s 

interpretations of what is required for legal falsity. The District 

Court also erred in its determination that clinical judgments 

cannot be “false” for the purposes of FCA liability. In light of

this analysis, we find Appellants’ medical testimony creates a 

genuine dispute of material fact as to the element of falsity.

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A.

In analyzing the statute’s text, we find the premise of 

the District Court’s holding—that a “mere difference of

opinion” is insufficient to show FCA falsity—is at odds with

the meaning of “false” under the statute. Druding, 346 F. 

Supp. 3d at 685. We also conclude that the District Court’s 

“objective” falsity standard improperly conflates the elements 

of falsity and scienter, inconsistent with the application of the 

FCA.

As with any statutory interpretation question, our 

analysis begins with the text. United Health Servs., Inc. v. 

United States ex rel. Escobar, 136 S. Ct. 1989, 1999 (2016). 

The FCA provides that any person who “knowingly presents, 

or causes to be presented, a false or fraudulent claim for 

payment or approval” is liable to the United States for a civil 

penalty between $5,000 and $10,000 as well as treble damages. 

31 U.S.C. § 3729(a)(1)(A) (emphasis added). It also imposes 

liability on any person who “knowingly makes, uses, or causes 

to be made or used, a false record or statement material to a

false or fraudulent claim.” Id. § 3729(a)(1)(B) (emphasis 

added).

Since Congress did not define what makes a claim 

“false” or “fraudulent” under the FCA, the Supreme Court has 

looked to common law to fill the definitional gap. Escobar, 

136 S. Ct. at 1999–2000 (“[A]bsent other indication, Congress 

intends to incorporate the well-settled meaning of the 

common-law terms it uses.” (citation omitted)). Under the 

common law, an opinion can be considered “false” for 

purposes of liability. See Omnicare, Inc. v. Laborers Dist. 

Council Constr. Indus. Pension Fund, 575 U.S. 175, 183–86

(2015) (finding that an opinion may be a “false statement” in 

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determining liability under the securities laws); Herskowitz v. 

Nutri/Sys., Inc., 857 F.2d 179, 184 (3d Cir. 1988)

(“An opinion or projection . . . will be deemed untrue for 

purposes of the federal securities laws if it is issued without 

reasonable genuine belief or if it has no basis.”); see also 

Restatement (Second) of Torts §§ 525 cmt. c, 539 cmt. a (1977) 

(instructing that an opinion may be false when the speaker 

makes an express statement contrary to the opinion he or she 

actually holds). Since there are circumstances in which an 

opinion may be considered “false” under common law, we find 

that the District Court’s premise—an opinion is subjective and

a difference of opinion is not enough to show falsity—is

inconsistent with the meaning of “false” under the FCA.

Moreover, the District Court’s “objective” falsity 

standard conflates the elements of scienter and falsity. 

Although the common law cases involving false opinions are 

often accompanied by a finding related to scienter, the plain 

language of the FCA denotes scienter as an element 

independent of falsity. 31 U.S.C. § 3729(a)(1)(A) (requiring 

“knowledge” separate from a “false or fraudulent claim”); see

Petratos, 855 F.3d at 487 (stating an FCA violation has four 

elements: falsity, causation, knowledge, materiality). 

Combining the two elements into “falsity” reads the scienter 

element out of the text of the statute.

That scienter serves a distinct purpose under the FCA 

further supports separating the falsity and scienter analyses. 

Scienter helps to limit the possibility that hospice providers 

would be exposed to liability under the FCA any time the 

Government could find an expert who disagreed with the 

certifying physician’s medical prognosis. See United States ex 

rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 743 (10th Cir. 

2018) (noting scienter requirements are “rigorous” and can be 

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used to address excessive liability concerns). Indeed, the 

Supreme Court has instructed as much. Escobar, 136 S. Ct. at 

2002 (“[I]nstead of adopting a circumscribed view of what it 

means for a claim to be false or fraudulent, concerns about fair 

notice and open-ended liability can be effectively addressed 

through strict enforcement of the [FCA]’s materiality and 

scienter requirements.” (internal quotations and citations 

omitted)).

By requiring “factual evidence that Defendant’s 

certifying doctor was making a knowingly false 

determination,” the District Court’s “objective” falsity 

standard conflates scienter and falsity. Druding, 346 F. Supp. 

3d at 688 (emphases added). In finding that Appellants could 

not prove falsity because they had not produced evidence that 

any physician lied and “received a kickback to certify any 

patient as hospice eligible” or “certif[ied] any patient whom 

that physician believed was not hospice eligible,” the District 

Court incorporated a scienter element into its analysis 

regarding falsity that was inconsistent with the text and 

application of the statute. Id. at 687.

B.

The District Court’s “objective” falsity standard is also 

at odds with this Court’s cases that have interpreted falsity to 

encompass a theory of liability based on non-compliance with 

regulatory instructions and not just objectively verifiable facts.

As the District Court itself recognized, a claim can be 

proven “false” in two ways: factually, when the facts 

contained within the claim are untrue, and legally, “when the 

claimant . . . falsely certifies that it has complied with a statute 

or regulation the compliance with which is a condition for 

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Government payment.” Druding, 346 F. Supp. 3d at 682

(quoting United States ex rel. Wilkins v. United Health Grp., 

Inc., 659 F.3d 295, 305 (3d Cir. 2011)) (emphasis added) 

(internal quotation marks omitted); see also Petratos, 855 F.3d 

at 487 (“[A] claim can be false if it does not comply with 

statutory conditions for payment . . . .”); Polukoff, 895 F.3d at

741 (noting legal falsity can be express, such as a false 

affirmative statement of compliance with a statutory, 

regulatory, or contractual prerequisite, or it can be implied—

for instance, the absence of a material disclosure that would 

have prevented compliance with a statutory, regulatory, or 

contractual prerequisite). Although legal falsity necessarily 

encompasses situations of factual falsity, for instance, where a 

physician’s lies about medical test results would render 

certifications for reimbursement inaccurate and non-compliant 

with regulations, cf. United States v. Paulus, 894 F.3d 267, 273 

(6th Cir. 2018), the District Court nevertheless limited its 

analysis to factual falsity. 

According to the District Court, a medical expert’s 

opinion is false for purposes of FCA liability only when there 

is evidence of factual inaccuracy. In other words, opinions 

being subjective, a differing medical conclusion regarding a 

patient’s prognosis alone is not enough to show the certifying 

physician’s determination of terminal illness was factually 

incorrect.

We disagree with the District Court’s decision to 

circumscribe FCA falsity to findings of factual falsity. This 

runs contrary to the cases in this Court, which have recognized 

falsity to include legal falsity. See, e.g., Petratos, 855 F.3d at 

486; Wilkins, 659 F.3d at 305; United States ex rel. Quinn v. 

Omnicare Inc., 382 F.3d 432, 441 (3d Cir. 2004); see also 

United States v. Neifert-White Co., 390 U.S. 228, 232 (1968) 

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(observing that the FCA “was intended to reach all types of 

fraud, without qualification, that might result in financial loss 

to the Government”). In other words, our cases instruct that 

FCA falsity simply asks whether the claim submitted to the 

government as reimbursable was in fact reimbursable, based 

on the conditions for payment set by the government. See

Wilkins, 659 F.3d at 305 (explaining that “[a] legally false FCA 

claim is based on a ‘false certification’ theory of liability” 

(citations omitted)); see also United States ex rel. Walker v. 

R&F Props. of Lake Cty., Inc., 433 F.3d 1349, 1356 (11th Cir. 

2005) (“Medicare claims may be false if they claim 

reimbursement for services or costs that either are not 

reimbursable or were not rendered as claimed.”). 

Under legal falsity, Appellants must show that Care 

Alternatives failed to meet at least one of the two regulatory 

requirements: (1) that a physician certified the patient is 

terminally ill and (2) that the certification is in accordance with

section 418.22, which requires that “[c]linical information and 

other documentation that support the medical prognosis []

accompany the certification . . . .” 42 C.F.R. §§ 418.20, 

418.22(b)(2). Based on this theory, we find that disagreement 

between experts as to a patient’s prognosis may be evidence of 

the latter; its relevance need not be limited to evidence of the 

accuracy of another physician’s judgment.

This interpretation is also supported by the Tenth 

Circuit, which recently reversed a similar district court 

decision that had adopted an “objective” falsity requirement 

for FCA claims. Polukoff, 895 F.3d at 743, 745–46. In 

Polukoff, the Tenth Circuit considered whether a cardiologist 

falsely represented in his claims for Medicare reimbursement 

that the procedures he was performing were reasonable and 

necessary. Id. at 735, 738–39. In finding it “possible for a 

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medical judgment to be ‘false or fraudulent’ as proscribed by 

the FCA,” the Tenth Circuit emphasized that liability is not 

premised on factual falsity alone, but a certification is false 

simply “if the procedure was not reasonable and necessary 

under the government’s definition of the phrase.” Id. at 742–

43. There, the Tenth Circuit adopted the view that FCA falsity 

is based on legal falsity—that falsity is simply a question of 

whether the claim is reimbursable, that is, compliant with the 

Medicare reimbursement instructions. Id. at 742–43. In so 

doing, it found that the plaintiff-physician’s opinion that the 

defendant-cardiologist’s procedures were not “reasonable and 

necessary” was a cognizable allegation as to whether the 

cardiologist’s reimbursement claims were “false” for failing to 

comply with Medicare procedures. Id. at 743–44.

So, based on our cases and the Tenth Circuit’s rationale

in Polukoff, we will not limit our inquiry to factual falsity and 

instead apply a theory of legal falsity.

C.

Moreover, we reject the District Court’s bright-line rule 

that a doctor’s clinical judgment cannot be “false.” In United 

States v. Paulus, the Sixth Circuit reversed a cardiologist’s 

acquittal for healthcare fraud based on expert testimony that he 

recorded severe arterial blockage in patients’ medical records 

when the angiograms showed only mild or no blockage. 894 

F.3d at 276–77, 280. In doing so, the Sixth Circuit stressed 

that medical “opinions are not, and have never been, 

completely insulated from scrutiny.” Id. at 275. For example, 

“opinions may trigger liability for fraud when they are not 

honestly held by their maker. . . .” Id. Such was the case in 

Paulus where the defendant was charged with lying about the 

results of angiograms he conducted and billed taxpayers for 

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procedures conducted based on those results. Id. at 272–73. 

As the Sixth Circuit explained, a good faith medical opinion is 

not punishable, but a bright-line rule that medical opinions can 

never be false fails to hold accountable a physician who “saw 

one thing on the angiogram and consciously wrote down 

another, and then used that misinformation to perform and bill 

unnecessary procedures.” Id. at 276. The court concluded that 

whether the defendant was acting in good faith or committing 

fraud by misrepresenting the angiogram results was an 

appropriate question for the jury. Id. at 276–77; see also

United States v. Rockwell, 781 F.2d 985, 990 (3d Cir. 1986) 

(“The law will not countenance a usurpation by the court of the 

function of the jury to decide the facts and to assess the 

credibility of the witnesses.”). In weighing that decision, the 

jury could consider evidence of different doctors who had 

interpreted the angiograms differently. Paulus, 894 F.3d at 

276–77.

We can apply these same principles to our civil FCA 

case. The “reliability and believability of expert testimony . . . 

is exclusively for the jury to decide.” Id. at 277 (citations 

omitted). Contrary to the District Court’s reasoning, medical 

opinions may be “false” and an expert’s testimony challenging 

a physician’s medical opinion can be appropriate evidence for 

the jury to consider on the question of falsity. 

D.

In adopting and applying an “objective” falsity 

standard, the District Court relied on United States v. 

AseraCare Inc., 153 F. Supp. 3d 1372 (N.D. Ala. 2015)

(“AseraCare I”) and United States v. AseraCare Inc., 176 F. 

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Supp. 3d 1282 (N.D. Ala. 2016) (“AseraCare II”).

3 Since the

Eleventh Circuit issued its opinion affirming both AseraCare I 

and AseraCare II’s adoption of the “objective” falsity standard

shortly before oral argument in this case, we briefly discuss our 

reasons for departing from our sister circuit. United States v. 

AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019) (“AseraCare 

III”).

In AseraCare, former employees of the defendant 

hospice provider brought a qui tam suit alleging that AseraCare

had a practice of knowingly submitting unsubstantiated 

3 It also relied on United States ex rel. Wall v. Vista Hospice

Care, Inc., No. 3:07-CV-00604-M, 2016 WL 3449833 (N.D. 

Tex. June 20, 2016) (“Vista Hospice”), an unreported case 

from the Northern District of Texas whose relevant facts and 

holding are nearly identical to those in AseraCare I and 

AseraCare II. Like Appellants here and the plaintiffs in 

AseraCare, the plaintiff-relator in Vista Hospice was also a 

former employee of the defendants, which are hospice care 

providers in fourteen states. Vista Hospice, 2016 WL 

3449833, at *1. The qui tam suit alleged that the defendants 

violated the FCA by “causing patients who were not eligible 

for the MHB to be certified as eligible, and then submitting 

claims for ineligible patients[.]” Id. As here, the district court 

granted summary judgment in favor of defendants, finding that 

a report by the relator’s expert, a hospice physician, 

insufficient to create a genuine dispute of material fact 

regarding the element of falsity. Id. at *5, *17–18 (holding that 

“[a] testifying physician’s disagreement with a certifying 

physician’s prediction of life expectancy is not enough to show 

falsity” (citing AseraCare II, 176 F. Supp. 3d at 1283)). 

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Medicare claims in violation of the FCA. Id. at 1284. The 

Government chose to intervene. Id. In deciding AseraCare’s 

first motion for summary judgment, the district court declined 

to adopt a “reasonable doctor” standard for the assessment of 

falsity, which would have required the Government to show 

that a reasonable physician could not have held the opinion that 

the patient was certifiably ill. Id. at 1285–86. The case 

proceeded to a bifurcated trial where the falsity element was

tried first, followed by the remaining elements and the other 

common law claims in the second phase. Id. at 1286. During 

the first phase, the parties presented dueling expert opinions

from two doctors about whether, based on their own clinical 

judgment, the medical records of particular patients supported 

AseraCare’s certifications that the patients were terminally ill.

Id. at 1287. The question was then put to the jury to decide 

which expert’s testimony was more persuasive. Id. at 1288–

89. Following the partial verdict in which the jury found some 

of the medical records supported AseraCare’s certifications 

and some did not, AseraCare moved for judgment as a matter 

of law, arguing that the court had articulated the wrong 

standard for falsity in its instructions to the jury. This time, the 

district court agreed that it had committed reversible error and 

that it should have advised the jury that the FCA’s falsity 

element requires proof of an objective falsehood and that “a 

mere difference of opinion [between physicians] , without 

more, is not enough to show falsity.” AseraCare I, 153 F. 

Supp. 3d at 1384. 

The district court then took the extra step of considering 

summary judgment sua sponte and, after additional briefing

from the parties, granted summary judgment in AseraCare’s 

favor based on the district court’s newly adopted “objective”

falsity standard. AseraCare II, 176 F. Supp. 3d at 1284, 1286. 

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On appeal, the Eleventh Circuit affirmed the district 

court’s adoption of the “objective” falsity test. AseraCare III, 

938 F.3d at 1296–97. In setting up its discussion of FCA 

falsity, the Eleventh Circuit rejected the Government’s framing 

of the falsity inquiry as a question of “whether the clinical 

information and other documentation accompanying a 

certification of terminal illness support[s] . . . the physician’s 

certification.” Id. at 1294. Instead, it concluded that the 

supporting documentation requirement is only designed to 

address the mandate that there be a medical basis for 

certification. Id. at 1296–97. In deciding a claim’s eligibility 

is therefore premised on the physician’s clinical judgment and 

decision to certify a patient as terminally ill, the Eleventh 

Circuit limited the relevant inquiry to whether the Government 

had adduced sufficient evidence of “the accuracy of the 

physician’s clinical judgment regarding terminality.” Id. at 

1294, 1296.

We depart from this framing of FCA falsity. As 

previously articulated, limiting falsity to factual falsity is 

inconsistent with our case law, which reads FCA falsity more 

broadly as legal falsity, encompassing circumstances where a 

claim for reimbursement is non-compliant with requirements 

under the statute and regulations. The MHB regulations state 

two requirements: (1) that a physician certifies the patient as 

terminally ill and (2) that clinical information and 

documentation supporting the prognosis accompany the 

certification. 42 C.F.R. §§ 418.20, 418.22(b)(2). Under a legal 

falsity theory, a medical opinion that differs from the certifying 

physician’s opinion is therefore relevant evidence of the latter 

requirement, whether there was documentation accompanying 

the certification that supported the medical prognosis.

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The Eleventh Circuit also determined that clinical 

judgments cannot be untrue. AseraCare III, 938 F.3d at 1297. 

(“[A] reasonable difference of opinion among physicians 

reviewing medical documentation ex post is not sufficient on 

its own to suggest that those judgments . . . are false under the 

FCA.”). We again disagree. In reaching the opposite 

determination, we invoke the principles previously 

articulated—that the common-law definition of fraud permits 

a finding that subjective opinions may be considered false and 

that medical opinions can be false and are not shielded from 

scrutiny. Paulus, 894 F.3d at 276–77. We therefore find that 

a difference of medical opinion is enough evidence to create a 

triable dispute of fact regarding FCA falsity.

This does not mean that objectivity is never relevant for 

FCA liability. However, we find that objectivity speaks to the 

element of scienter, not falsity. As discussed above, the text 

and application of the FCA require that the elements of falsity 

and scienter be analyzed separately. In fact, AseraCare III

supports this position. The Eleventh Circuit affirmed the 

adoption of the “objective” falsity test, but it reversed the 

District Court’s sua sponte grant of summary judgment in 

favor of the defendants and remanded for further consideration 

of evidence the Government had intended to present to show 

“knowledge of the falsity of the claim.” AseraCare III, 938 

F.3d at 1302. Although the Eleventh Circuit instructions on 

remand were to consider all of the evidence “to determine 

whether a triable issue existed regarding falsity,” id. at 1303 

(emphasis added), we make clear that in our Court, findings of 

falsity and scienter must be independent from one another for 

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purposes of FCA liability.

4 More than a formality, we seek to 

avoid the precise outcome in AseraCare II, where the district 

court folded the element of scienter into its “objective” falsity 

test, but failed to fully consider evidence of scienter and, as a 

result, prematurely granted summary judgment.

For these reasons, we are persuaded that the District 

Court’s reliance on AseraCare II was misplaced.

E.

Since the District Court’s decision to grant summary 

judgment in favor of Care Alternatives was based solely on its 

analysis of the falsity element, our decision is limited to the 

same. So, regarding FCA falsity, we reject the objective 

falsehood standard. Instead, we hold that for purposes of FCA 

falsity, a claim may be “false” under a theory of legal falsity, 

where it fails to comply with statutory and regulatory 

requirements. We also find that a physician’s judgment may be 

scrutinized and considered “false.”

We therefore find that a physician’s expert testimony 

challenging a hospice certification creates a triable issue of fact 

for the jury regarding falsity. Since Dr. Jayes’s expert report 

4 We acknowledge that the Seventh Circuit’s view differs 

somewhat from our instruction to keep falsity and scienter 

separate. United States ex rel. Yannocopoulos v. Gen. 

Dynamics, 652 F.3d 818, 836–37 (7th Cir. 2011) (citing United 

States ex rel. Lamers v. City of Green Bay, 168 F.3d 1013, 1018 

(7th Cir. 1999) (requiring an objective falsehood based on a 

test that conflates an analysis of the falsity and knowledge 

elements)).

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has done just that, we conclude the report was sufficient 

evidence to create a genuine dispute of material fact. Having 

found that Appellants adduced enough evidence to overcome 

summary judgment as to the element of falsity, we need not 

address Appellants’ other arguments regarding whether the 

evidence they submitted met the District Court’s erroneous

“objective” falsity test. Nor do we opine as to Appellants’ odds 

of surviving summary judgment on the other prima facie

elements, which the District Court did not reach.

IV. CONCLUSION

We therefore reverse the District Court’s grant of 

summary judgment in favor of Defendant and remand for 

consideration of the other elements of FCA liability, consistent 

with this opinion.

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