District Court Dismisses FCA Allegations Based Upon Difference of Medical Opinion

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This month, the United States District Court for the District of Utah dismissed a relator’s allegations that a cardiac surgeon and two hospitals based in Utah violated the federal False Claims Act (FCA) by billing Medicare and Medicaid for thousands of heart procedures that were medically unnecessary. The court ruled that the relator could not rely on a subjective difference of medical opinion to establish that the procedures were medically unnecessary.

The procedure in question was a patent foramen ovale (PFO) closure, whereby a surgeon closes a small opening in the wall of the heart. The opening, which is present in about 25 percent of the population, is usually asymptomatic but can sometimes lead to stroke. The American Heart Association (AHA) recommends a PFO closure for patients suffering from recurring cryptogenic stroke. Defendant Dr. Sherman Sorenson allegedly performed thousands of PFO closures, at a rate much higher than other physicians, based on his opinion that patients with an elevated risk of stroke should undergo the procedure as a preventative measure.

The relator, Dr. Gerald Polukoff, asserted that Dr. Sorenson and the two Utah-based hospitals where he performed the procedures violated the FCA by billing Medicare and Medicaid for thousands of medically unnecessary PFO closures. Dr. Polukoff relied heavily on the AHA standards to support his claims that the procedures were not medically necessary. The court, in an opinion granting defendants’ motions to dismiss, rejected the relator’s argument and explained that “opinions, medical judgments, and conclusions about which reasonable minds may differ cannot be false” for purposes of the FCA. The court reasoned that equating the AHA standard with Medicare’s standard of medical necessity is a false equivalence, since Medicare does not require compliance with industry standards. The government did not intervene in the case.

In a related development, Secretary of HHS nominee Rep. Tom Price (R-GA) recently weighed in on the issue of medical necessity audits. Testifying before the Senate Finance Committee last week, Rep. Price suggested that regulators should focus on monitoring billing in real time—likely a reference to data mining—rather than “trying to determine whether every single incident of care is necessary.”

The case is United States, ex rel. Polukoff v. St. Mark's Hosp., No. 2:16-cv-00304 (D. Utah, Jan. 19, 2017). Please click here for a copy of the court’s opinion.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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