Can Your Medical Opinion Subject You to Criminal or Civil Liability?

When providing health care services that are reimbursed by federal health care programs (i.e., Medicare and Medicaid), or other third party payers, providers must comply with a number of health care fraud and abuse laws, including the False Claims Act and a number of criminal statutes, including a statute specifically addressing healthcare fraud. The False Claims Act (FCA) imposes civil liability on those who present, or cause to be presented, a false or fraudulent claim for payment to the federal government.¹ While the FCA imposes civil liability, there are separate criminal statutes that can be used by the government to prosecute false claims and healthcare fraud.²

Beginning in the early part of this decade, both the government and qui tam relators began scrutinizing hospices, which has created a unique body of law concerning the intersection of subjective clinical judgments and the objective falsity required in civil and criminal false claim cases.³

Coverage for hospice services was added to the Medicare program in 1985. For patients covered by Medicare to be eligible for the hospice benefit, the patient must elect to forego all curative treatment for the terminal illness and must obtain a certification from two physicians that he or she has a prognosis of a life expectancy of six months or less if the illness runs its normal course.⁴ Only allopathic and osteopathic physicians can certify or re-certify that a patient has a life expectancy of six months or less.⁵

Section §1814(a)(7) of the Social Security Act specifies that certification of terminal illness for the hospice benefit shall be based on the clinical judgment of the hospice medical director or physician member of the hospice interdisciplinary group and the patient’s attending physician, if he or she has one, regarding the normal course of the patient’s illness. In 1990, the federal government added the phrase “if the illness runs its normal course” to the definition of terminal illness based on a report by the federal Government Accountability Office.⁶ This report concluded that physicians were reluctant to certify patients for hospice because they were required to state in their certification that the patient had a life expectancy of six months or less.⁷ The GAO Report concluded that, “[t]he statement seemed to require certainty of prognosis, whereas the establishment of long-term prognoses always involves some uncertainty.”⁸ CMS made the change to its regulation to prevent physicians from being discouraged to make the necessary certifications of terminal prognosis.⁹ CMS later stated that the addition of this phrase was recognition of “the fact that making medical prognostications of life expectancy is not always exact.”¹⁰

Thereafter, the number of persons electing the hospice benefit increased (as intended).¹¹ As with most dramatic utilization and spending increases, hospice services became a target for greater scrutiny, and the government began reviewing these services to determine if coverage requirements were being met. The United States Department of Health and Human Services Office of Inspector General (OIG) issued a report in 2009 detailing its investigation of hospice services for beneficiaries in skilled nursing facilities, which revealed additional issues that led to subsequent reviews by the OIG, Centers for Medicare & Medicaid Services (CMS), and CMS’s audit contractors.¹²

Qui tam relators took note of the government investigations, leading to several actions brought against hospices under the FCA. In 2008, a qui tam suit was filed against hospice AseraCare, Inc., by three former employees. The government intervened and ultimately filed a complaint in federal court alleging that AseraCare falsely certified patients as eligible for hospice services.¹³ The case proceeded to a jury, and the government’s evidence included testimony from only one expert witness who testified that the medical records for the patients did not support a medical prognosis of a life expectancy of six months or less.¹⁴ As a part of its defense, AseraCare called its own expert and three referring physicians, who contradicted the government’s expert.¹⁵ The government did not present any evidence that AseraCare staff falsified records or withheld information from the certifying physicians or misrepresented the patients’ conditions to the physicians.¹⁶ Despite this, the jury rendered a verdict in favor of the government.

Following the jury verdict, AseraCare made a motion for a new trial, which the court ultimately granted.¹⁷ In its Memorandum Opinion, the district court indicated that it was granting a new trial because the government’s only evidence of falsity was a physician’s expert opinion testimony based on his clinical judgment. The court held that a mere difference of opinion amongst physicians, without more, was not enough to establish objective falsity under the FCA.¹⁸ The court cited to a number of cases holding that “[e]xpressions of opinion, scientific judgments, or statements as to conclusions about which reasonable minds may differ, cannot be false.”¹⁹ Because the court had not instructed the jury on this point, it granted a new trial.²⁰

Six months later, on March 31, 2016, the district court granted summary judgment in favor of AseraCare.²¹ In granting summary judgment, the court noted its concern that “allowing a mere difference of opinion among physicians alone to prove falsity would totally eradicate the clinical judgment required of the certifying physicians.”²² Significantly, the court stated that “[i]f the court were to find that all the Government needed…in a hospice provider case was one medical expert who reviewed the medical records and disagreed with the certifying physician, the hospice providers would be subject to…liability any time the Government could find a medical expert who disagreed with the certifying physician’s clinical judgment.”²³ The district court’s holding in AseraCare was consistent with holdings from numerous other district courts.²⁴

The AseraCare decision was followed by two other similar hospice cases: U.S. ex rel. Wall v. Vista Hospice Care and Druding v. Care Alternatives, Inc.²⁵ Both were qui tam cases filed by former employees alleging that hospices falsely certified patients for hospice.²⁶ In both cases, the courts granted summary judgment to the hospices. In Vista, the court explained that because a certification for hospice is based on a physician’s clinical judgment, an FCA claim “must be predicated on the presence of an objectively verifiable fact at odds with the exercise of that judgment, not a matter of questioning subjective clinical analysis.”²⁷ While the relators had included testimony regarding falsification of some patient records, their experts had not reviewed those particular patient charts and the relators had failed to connect those records to any false claim. In Druding, the court noted that the relators failed to present evidence that the physicians had either received a kickback or did not otherwise honestly believe the patients had a life expectancy of six months or less, or that there had been alteration or falsification of patient records.²⁸

The AseraCare decision was ultimately appealed to the Eleventh Circuit Court of Appeals.²⁹ The Eleventh Circuit issued its much-anticipated decision on September 9, 2019.³⁰ The court concurred with the district court’s determination “that a clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for purposes of the [FCA], when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion, with no other evidence to prove the falsity of the assessment.”³¹ In explaining its conclusion, the court indicated that while a physician’s clinical judgment must be tethered to a patient’s valid medical records, “the law is designed to give physicians meaningful latitude to make informed judgments without fear that those judgments will be second-guessed after the fact by laymen in a liability proceeding.”³² The court then held that in order to properly state a claim under the FCA, the plaintiff must identify facts and circumstances that are inconsistent with the proper exercise of a physician’s clinical judgment (i.e., phantom patients, falsified records, information withheld from the physician, the certifying physician did not review the patient’s records or condition, the physician did not subjectively believe the patient was terminally ill, or no reasonable physician could have concluded that a patient was terminally ill).³³

The court also addressed recent cases involving cardiologists, which had been cited by the government in supplemental memoranda. One such case was U.S. v. Paulus, 894 F.3d 267 (6th Cir. 2018). The Paulus case involved a cardiologist convicted of healthcare fraud for systematically overestimating the degree of arterial blockage to justify costly stenting procedures. Although a jury convicted him, the district court entered a judgment of acquittal and granted him a new trial, reasoning that angiogram interpretations are not facts subject to proof or disproof.³⁴ On appeal, the Sixth Circuit reversed. The court stated that while opinions “are almost never false[,]” it went on to say that “opinions may trigger liability for fraud when they are not honestly held by their maker, or when the speaker knows of facts that are fundamentally incompatible with his opinion.”³⁵ The court noted that while a doctor could not be faulted for misreading an angiogram, there can be liability where the government shows the doctor repeatedly and systematically saw one thing on an angiogram and consciously wrote down another.³⁶ The court even cited the district court’s holding in AseraCare that “certain good-faith medical diagnoses by a doctor cannot be false[.]”³⁷ However, unlike hospice eligibility, coronary artery blockage “actually exists as an aspect of reality,” such that the degree of blockage can be objectively true or false.³⁸

The other case cited by the government in AseraCare was U.S. ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730 (10th Cir. 2018)—an FCA case alleging that a cardiologist performed medically unnecessary heart surgeries. In that case, the Tenth Circuit overturned the lower court’s dismissal of the action, holding that a doctor’s certification that a procedure is “reasonable and necessary” can be false if the procedure was not “reasonable and necessary” under the government’s definition of that phrase in the Medicare Program Integrity Manual.³⁹ In AseraCare, the Eleventh Circuit distinguished this case because the evidence in Polukoff showed the physician was falsely representing that the procedure was being performed based on indications set forth in applicable guidelines, when he knew they were being performed outside of those guidelines. Additionally, the Eleventh Circuit noted that, unlike the surgeries at issue in Polukoff, the hospice benefit was clearly tied to a physician’s genuinely-held clinical opinion.⁴⁰

The Eleventh Circuit’s decision in AseraCare provides some clarification regarding liability when there are conflicting clinical opinions, certainly with respect to hospice eligibility cases. It gives some assurance that honestly-held clinical opinions made by physicians based upon a patient’s medical records and condition cannot be second-guessed and subject a physician to liability for false claims. However, it remains to be seen how other federal appeal courts will handle this issue or how the government will respond.⁴¹ The government and its contractors continue to pursue hospice eligibility cases despite the decision. As more cases are pursued, this area of the law will undoubtedly evolve as more decisions are issued.