Friday, October 3, 2014

District Court Approves FCA Extrapolation in NFs

Dianne De La Mare

In a recent decision, the US District Court, Eastern District of Tennessee, has held that the federal government can extrapolate from a small sample of billing statements to hold a nursing facility (NF) operator liable for Medicare fraud under the False Claims Act (FCA). This litigation is important because to date, there are relatively few cases that discuss the question of whether or not extrapolation is appropriate under the FCA.

Further, extrapolation can significantly increase the number of claims considered fraudulent without individualized proof. In this case, the NF operator is alleged to have billed for unnecessary care from 2006 to 2012. The federal government has now received permission to examine a random sample of patient admissions and extend its findings of false billing to more than 50,000 additional admissions. The Judge made this determination based on the fact that “If Congress intended to preclude statistical sampling from being used in this context, it has had ample opportunity to have that intention reflected in the language of the FCA.”

Noting that FCA cases often involve substantial amounts of billing, the Judge also said that it would be too burdensome to force the government to develop a distinct case for every allegedly false claim. AHCA will continue to monitor this important litigation. (US Ex Rel Martin v Life Care)

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