Source: https://www.fcaupdate.com/2017/02/the-fca-and-medical-necessity-an-increasingly-tenuous-relationship/
Timestamp: 2019-04-19 09:22:31+00:00

Document:
In Polukoff, the relator alleged that the defendant physician, Dr. Sorensen, performed and billed the government for unnecessary medical procedures (patent formen ovale (PFO) closures). The relator also alleged that two defendant hospitals had billed the government for associated costs. Specifically, the relator alleged that PFO closures were reasonable and medically necessary only in highly limited circumstances, such as where there was a history of stroke. Medicare had not issued a National Coverage Determination (NCD) for PFO closures or otherwise indicated circumstances under which it would pay for such procedures. However, the relator held up medical guidelines issued by the American Heart Association/American Stroke Association (AHA), which, essentially, stated that PFO closures could be considered for patients with “recurring cryptogenic stroke despite taking optimal medical therapy” or other particularized conditions.
The relator alleged that Dr. Sorensen performed more PFO closures than other physicians throughout the country and that part of the reason for this outlier status was that Dr. Sorensen believed that PFO closures could be used as a “preventative measure for patients who had not yet suffered a stroke, but who had an elevated risk of a stroke.” Dr. Sorensen was also alleged to perform the procedures to treat chronic migraines. Notably, one defendant hospital (where relator had performed these procedures) was alleged to have disciplined and ultimately revoked the physician’s privileges.
The defendants moved to dismiss on various grounds, including failure to satisfy Rule 9(b), as well as Rule 12(b)(6) for failure to plead an objectively false claim submitted to the government. For Rule 9(b), the court ruled that in US ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163 (10th Cir. 2010), the Tenth Circuit had stepped away from the more stringent pleading standards in US ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702 (10th Cir. 2006), and no longer required specific allegations regarding the bills submitted to the government, so long as there was an otherwise “adequate basis for a reasonable inference that false claims were submitted.” The court then held that relator had met the specificity requirements as to Dr. Sorensen and for one of the defendant hospitals.
Significantly, however, Court ruled that relator had not adequately alleged a fraudulent scheme against the second hospital. Relator alleged that the hospital had conducted an internal investigation and took action to stop Dr. Sorensen from performing the procedure on pre-stroke patients, which ultimately led to Dr. Sorensen relinquishing his privileges. In language that will ring true to compliance officers everywhere, the court observed that the hospital’s “efforts to curb Dr. Sorensen’s use of PFO closures is not evidence of a fraudulent scheme.” In addition, the court ruled that the relator had otherwise failed to provide sufficiently individualized details regarding “who, what, when, where” about the hospital’s knowledge to survive Rule 9(b).
With respect to Rule 12(b)(6), the court dismissed the remainder of the case on the ground that the relator could not establish that an objectively false claim had been submitted to the government. The court further denied a request to amend on the ground that “in the absence of an objective standard created by the government,” FCA claims premised on a medical necessity standard must fail.
Noting that the FCA requires “proof of an objective falsehood” and that FCA liability “must be predicated on an objectively verifiable fact,” the court pointed to the reasoning of AseraCare, that a “mere difference of opinion between physicians, without more, is not enough to show falsity.” The court went on to hold that the relator could not demonstrate that defendants’ representations regarding the reasonability and necessity of the PFO closures could “be proven to be objectively false”: “Opinions, medical judgments, and ‘conclusions about which reasonable minds may differ cannot be false’ for the purposes of an FCA claim.” The court further held that the relator’s assertion that some of the procedures were not reasonable or necessary because they were performed on patients who had not suffered a stroke was a subjective medical opinion that could not be proven objectively.
Polukoff is welcome news for health care providers. In cases where the FCA is used by the government and relators to monitor and attempt to punish allegedly “fraudulent” conduct that, in reality, involves questions of physician judgment, Polukoff’s adoption of AseraCare’s logic gives added weight to arguments against liability premised on disagreements over clinical decision-making.
Tags: AHA, American Heart Association, American Stroke Association, AseraCare, False Claims Act, falsity, FCA, government investigation, Medicaid, Medical Necessity, Medicare, PFO closures, Polukoff, Polukoff v. St. Mark’s et al., President Trump, Rule 12(b)(6), Rule 9(b), scienter, Secretary of Health and Human Services, Senate Finance Committee, Sikkenga v. Regence Bluecross Blueshield of Utah, US ex rel. Lemmon v. Envirocare of Utah Inc, US v. AseraCare Inc.

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