The Law Doesn’t Forbid Submitting False Claims

An Eighth Circuit decision provides a reminder that the False Claims Act doesn’t forbid submitting false claims: it forbids knowingly submitting false claims.   That made all the difference in an appeal of summary judgment in favor of a physician group that, according to the relator, failed to comply with Medicare regulations.  The court found that the regulations were ambiguous and that the group’s interpretation was reasonable.

Medicare anesthesia regulations require that an anesthesiologist “personally participates in the most demanding aspects of the anesthesia plan including, if applicable, induction and emergence.”  A former employee alleged that the anesthesiologists weren’t in the operating room during the “emergence” of patients from anesthesia, instead not seeing them post-surgery until they were recovering in the post-anesthesia care unit (PACU).  He alleged that even “the broadest definition of ‘emergence’” ends when the patient is turned over to the PACU staff.

The district court gave the group summary judgment, ruling that the term “emergence” hadn’t been defined by CMS and that the group, in interpreting the term as a process that includes PACU recovery time, had acted reasonably.  Therefore, the group hadn’t knowingly submitted false claims.  The Eighth Circuit agreed and affirmed summary judgment for the group.

Interestingly, the government filed an amicus brief, not in support of either party, but to challenge what it characterized as the district court’s “sweeping rule that a defendant’s reasonable interpretation of an ambiguous regulation precludes FCA liability, regardless of the defendant’s state of mind.”  The Eighth Circuit found that characterization overbroad, because the district court’s ruling left open the possibility of liability when there is evidence that the government had provided guidance warning a defendant away from an otherwise reasonable interpretation of an ambiguous regulation.

The case is U.S. ex rel. Donegan v. Anesthesia Assocs. of Kansas City, No. 15-2420 8^th Cir. Aug. 12, 2016).