A California whistleblower’s contention that doctors’ medical decisions should be subject to False Claims Act could have new life, if an appeals court agrees to hear the case.
The lawsuit relates to the now-shuttered Tri-City Regional Medical Center, in Los Angeles. Jane Winter, the hospital’s former director of care management, alleges that the provider defrauded Medicare by improperly admitting skilled nursing residents as hospital inpatients, despite the fact that they didn’t require such levels of care.
A federal trial court had previously tossed the complaint because she couldn’t prove that the hospital knowingly made a false representation to the government, Bloomberg Law reports. But she’s now asking the U.S. Court of Appeals to reconsider that decision. The case is being “closely watched,” attorneys tell Bloomberg, as the issue of medical necessity of care is “extremely controversial,” and could have wide-reaching implications for the industry.
Providers have argued that medical decisions are judgment calls, which can not be deemed to be knowingly fraudulent. The American Health Care Association and California Association of Health Facilities have both filed opinions in the defense of the hospital, given the potential “far-ranging consequences” to its long-term providers in the case. In its court brief, filed over the summer, AHCA noted that tying False Claims Act allegations to the medical necessity of services “imposes a significant burden on members of the healthcare industry that goes largely unseen by the public.” Cases can often take years to resolve, and cost thousands of dollars in legal fees.
“Fraud against the government is unacceptable. However, the cure is not to be found in effectively criminalizing the reasonable exercise of clinical judgment by imposing potentially ruinous financial liability” against providers, AHCA wrote in its court brief.
If judges side with the whistleblower, the decision would affect providers in the Ninth Circuit, which includes California and nine other states, Bloomberg noted. Other jurisdictions could then follow suit.
