February 15, 2017

Medical Necessity Claims Fail to Satisfy FCA Falsity Standard

Client Alert
David Bridgers | Wells Trompeter | Drew Warth

A federal court in Utah recently dismissed a qui tam False Claims Act case alleging that surgical procedures performed by a cardiologist were medically unnecessary and subsequent Medicare and Medicaid reimbursement for the procedures amounted to false claims as a result.

In United States ex rel. Polukoff v. St. Mark’s Hospital et al., U.S. District Court Judge Jill N. Parrish noted that the the relator, Dr. Gerald Polukoff did not allege that Dr. Sherman Sorenson and two hospitals, Intermountain Medical Center and St. Mark’s Hospital, did not bill the government “for phantom services that were never provided—i.e. a ‘factually false’ claim” but rather that the “defendant’s claims for payment were legally false” on the grounds that the procedures were not medically reasonable or necessary.” Polukoff based his claims on guidelines published in 2006 by the American Heart Association/American Stroke Association (AHA/ASA) regarding the surgical procedure. It is critical to note, however, that Medicare has not issued a National Coverage Determination on the procedure.

Citing an unpublished opinion from the Tenth Circuit, however, Judge Parrish held that “liability ‘must be predicated on an objectively verifiable fact.’” Judge Parrish further cited a 2016 case from the Northern District of Alabama, United States v. AseraCare Inc., which noted that a “mere difference of opinion between physicians, without more, is not enough to show falsity.”

The court dismissed the complaint concluding that even if the relator “could show that Dr. Sorensen did not comply with the relevant AHA/ASA standards, this does not support a claim that Dr. Sorensen’s certification that the PFO closures were medically necessary was objectively false.” Judge Parrish also characterized Dr. Polukoff’s equation of the AHA/ASA standards with Medicare’s medical necessity standard “a false equivalence.”

A copy of the court’s opinion can be found here.

Waller attorneys, David Bridgers, Drew Warth and Wells Trompeter, represented St. Mark’s Hospital and its owner, Hospital Corporation of America (HCA), in the case.

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