Court Opinion

ID: 4512608
Source: CourtListenerOpinion
Date Created: 2020-03-04 18:00:14.172661+00
Date Added: 2024-06-11T09:37:19.839430
License: Public Domain

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.
               (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

                                2
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 thirty-
five percent of the time.

                               3
       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 objective-
falsehood 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.

                               4
       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 family-
centered 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).

                               5
        The Medicare provisions that set 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 sixty-
or 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).

                                    6
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

                                7
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).

                                 8
       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

                               9
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).

                               10
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 hospice-
care 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.

                                11
                            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

                               12
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

                              13
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

                                14
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)

                               15
(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

                                16
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

                               17
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.
18
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)).

                               19
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.

                                20
        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.

                               21
        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

                               22
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)).

                                23
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.

                              24